Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-39325
ATLANTIC UNION BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Virginia
54-1598552
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
4300 Cox Road
Glen Allen, Virginia 23060
(Address of principal executive offices) (Zip Code)
(804) 633-5031
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, par value $1.33 per share
AUB
The New York Stock Exchange
Depositary Shares, Each Representing a 1/400th Interest in a Share of 6.875% Perpetual Non-Cumulative Preferred Stock, Series A
AUB.PRA
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The number of shares of common stock outstanding as of April 28, 2026 was 143,115,672.
INDEX
ITEM
PAGE
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 (audited)
2
Consolidated Statements of Income (unaudited) for the three months ended March 31, 2026 and March 31, 2025
3
Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2026 and March 31, 2025
4
Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2026 and March 31, 2025
5
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2026 and March 31, 2025
6
Notes to the Consolidated Financial Statements (unaudited)
8
Report of Independent Registered Public Accounting Firm
52
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
53
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
84
Item 4.
Controls and Procedures
87
PART II - OTHER INFORMATION
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
88
Item 5.
Other Information
Item 6.
Exhibits
89
Signatures
90
Glossary of Acronyms and Defined Terms
In this Quarterly Report on Form 10-Q, except as otherwise indicated or the context suggests otherwise, references to the “Company” refers to Atlantic Union Bankshares Corporation, a Virginia corporation, and the terms “we”, “us” and “our” refer to the Company and its direct and indirect subsidiaries, including Atlantic Union Bank, which we refer to as the “Bank.” The “Federal Reserve” refers to the Board of Governors of the Federal Reserve System, our primary federal regulator.
“Our common stock” refers to the Company’s common stock, par value $1.33 per share, and the term “depositary shares” means the Company’s depositary shares, each representing a 1/400th ownership interest in a share of the Company’s Series A preferred stock, with a liquidation preference of $10 thousand per share of Series A preferred stock (equivalent to $25 per depositary share). “Series A preferred stock” refers to the Company’s 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share.
“Sandy Spring” refers to Sandy Spring Bancorp, Inc., which we acquired on April 1, 2025, pursuant to the Agreement and Plan of Merger dated October 21, 2024, by and between the Company and Sandy Spring, which we refer to as the “Sandy Spring merger agreement.”
The “Forward Sale Agreements” refers to the forward sale agreements between the Company and Morgan Stanley & Co. LLC, as forward purchaser (the “Forward Purchaser”), each dated as of October 21, 2024, in connection with which the Forward Purchaser or its affiliate borrowed from third parties an aggregate of 11,338,028 shares of our common stock for sale in a registered public offering.
ACL
–
Allowance for credit losses
AFS
Available for sale
ALLL
Allowance for loan and lease losses, a component of the ACL
AOCI
Accumulated other comprehensive income (loss)
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
BOLI
Bank owned life insurance
bps
Basis points
CDI
Core deposit intangible
CECL
Current expected credit losses
CFPB
Consumer Financial Protection Bureau
CRE
Commercial real estate
EPS
Earnings per common share
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corporation
FRB
Federal Reserve Bank of Richmond
FHLB
Federal Home Loan Bank of Atlanta
FOMC
Federal Open Market Committee
FTE
Fully taxable equivalent
GAAP
Accounting principles generally accepted in the United States
HTM
Held to maturity
LHFI
Loans held for investment, net of unearned income
LHFS
Loans held for sale
MBS
Mortgage-Backed Securities
NDFI
Non-depository financial institutions
NPA
Nonperforming assets
NYSE
New York Stock Exchange
PCD
Purchased credit deteriorated
RUC
Reserve for unfunded commitments
SEC
U.S. Securities and Exchange Commission
SOFR
Secured Overnight Financing Rate
TLM
Troubled loan modification
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2026 AND DECEMBER 31, 2025
(Dollars in thousands, except share data)
March 31,
December 31,
2026
2025
ASSETS
(unaudited)
(audited)
Cash and cash equivalents:
Cash and due from banks
$
451,370
234,257
Interest-bearing deposits in other banks
321,302
706,014
Federal funds sold
7,456
26,191
Total cash and cash equivalents
780,128
966,462
Securities available for sale, at fair value
4,011,410
4,194,301
Securities held to maturity, at carrying value
870,288
884,216
Restricted stock, at cost
177,513
190,200
20,776
18,486
27,946,424
27,796,167
Less: allowance for loan and lease losses
291,100
295,108
Total loans held for investment, net
27,655,324
27,501,059
Premises and equipment, net
162,549
166,752
Goodwill
1,754,875
1,733,287
Amortizable intangibles, net
300,099
315,544
675,816
672,890
Other assets
906,233
942,557
Total assets
37,315,011
37,585,754
LIABILITIES
Noninterest-bearing demand deposits
6,843,726
6,844,629
Interest-bearing deposits
23,547,530
23,627,007
Total deposits
30,391,256
30,471,636
Securities sold under agreements to repurchase
144,605
75,432
Other short-term borrowings
385,000
650,000
Long-term borrowings
774,982
771,860
Other liabilities
566,852
610,428
Total liabilities
32,262,695
32,579,356
Commitments and contingencies (Note 8)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value
173
Common stock, $1.33 par value
188,940
188,563
Additional paid-in capital
3,890,335
3,888,841
Retained earnings
1,251,356
1,184,908
Accumulated other comprehensive loss
(278,488)
(256,087)
Total stockholders' equity
5,052,316
5,006,398
Total liabilities and stockholders' equity
Common shares issued and outstanding
142,060,496
141,776,886
Common shares authorized
200,000,000
Preferred shares issued and outstanding
17,250
Preferred shares authorized
500,000
See accompanying notes to consolidated financial statements.
-2-
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025
(Dollars in thousands, except share and per share data)
Three Months Ended
Interest and dividend income:
Interest and fees on loans
419,628
271,515
Interest on deposits in other banks
2,146
2,513
Interest and dividends on securities:
Taxable
41,008
23,648
Nontaxable
8,953
8,160
Total interest and dividend income
471,735
305,836
Interest expense:
Interest on deposits
141,779
115,587
Interest on short-term borrowings
5,227
909
Interest on long-term borrowings
12,356
5,176
Total interest expense
159,362
121,672
Net interest income
312,373
184,164
Provision for credit losses
2,737
17,638
Net interest income after provision for credit losses
309,636
166,526
Noninterest income:
Service charges on deposit accounts
12,116
9,683
Other service charges, commissions and fees
1,938
1,762
Interchange fees
3,326
2,949
Fiduciary and asset management fees
20,178
6,697
Mortgage banking income
2,026
973
Bank owned life insurance income
5,200
3,537
Loan-related interest rate swap fees
3,975
2,400
Other operating income
6,024
1,162
Total noninterest income
54,783
29,163
Noninterest expenses:
Salaries and benefits
113,413
75,415
Occupancy expenses
13,202
8,580
Furniture and equipment expenses
5,555
3,914
Technology and data processing
15,602
10,188
Professional services
5,768
4,687
Marketing and advertising expense
7,328
3,184
FDIC assessment premiums and other insurance
6,846
5,201
Franchise and other taxes
4,705
4,643
Loan-related expenses
2,851
1,249
Amortization of intangible assets
15,446
5,398
Merger-related costs
9,034
4,940
Other expenses
10,060
6,785
Total noninterest expenses
209,810
134,184
Income before income taxes
154,609
61,505
Income tax expense
32,444
11,687
Net Income
122,165
49,818
Dividends on preferred stock
2,967
Net income available to common shareholders
119,198
46,851
Basic earnings per common share
0.84
0.53
Diluted earnings per common share
0.52
Dividends declared per common share
0.37
0.34
Basic weighted average number of common shares outstanding
141,901,606
89,222,296
Diluted weighted average number of common shares outstanding
142,280,978
90,072,795
-3-
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Dollars in thousands)
Net income
Other comprehensive income:
Cash flow hedges:
Change in fair value of cash flow hedges (net of tax, $594 and $2,747 for the three months ended March 31, 2026 and March 31, 2025, respectively)
(1,982)
10,336
AFS securities:
Unrealized holding (losses) gains arising during period (net of tax, $5,833 and $4,188 for the three months ended March 31, 2026 and March 31, 2025, respectively)
(20,538)
15,754
Reclassification adjustment for (gains) losses included in net income (net of tax, $1 and $21 for the three months ended March 31, 2026 and March 31, 2025, respectively) (1)
(1)
81
Bank owned life insurance:
Unrealized holding gains (losses) arising during the period
323
(10)
Reclassification adjustment for gains included in net income (2)
(203)
(190)
Other comprehensive (loss) income:
(22,401)
25,971
Comprehensive income
99,764
75,789
(1) The gross amounts reclassified into earnings are reported as "Other operating income" on the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense.
(2) Reclassifications into earnings are reported in "Salaries and benefits" expense on the Company’s Consolidated Statements of Income.
-4-
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
(Dollars in thousands, except share and per share amounts)
Accumulated
Additional
Other
Common
Preferred
Paid-In
Retained
Comprehensive
Stock
Capital
Earnings
Income (Loss)
Total
Balance - December 31, 2025
Other comprehensive loss (net of taxes of $6,428)
Dividends on common stock ($0.37 per share)
(52,750)
Dividends on preferred stock ($171.88 per share)
(2,967)
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes (283,610 shares)
377
(5,302)
(4,925)
Stock-based compensation expense
6,796
Balance - March 31, 2026
Balance - December 31, 2024
118,519
2,280,547
1,103,326
(359,686)
3,142,879
Other comprehensive income (net of taxes of $6,957)
Dividends on common stock ($0.34 per share)
(30,542)
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes (228,311 shares)
304
(3,698)
(3,394)
3,451
Balance - March 31, 2025
118,823
2,280,300
1,119,635
(333,715)
3,185,216
-5-
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment
4,917
3,168
Amortization, net
6,218
6,160
Accretion related to acquisitions, net
(17,758)
(7,155)
BOLI income
(5,200)
(3,537)
Loans held for sale:
Originations and purchases
(90,346)
(44,255)
Proceeds from sales
87,420
43,803
Changes in operating assets and liabilities:
Net decrease in other assets
50,837
17,141
Net decrease in other liabilities
(33,662)
(20,749)
Net cash provided by operating activities
127,328
62,032
Investing activities:
Securities AFS and restricted stock:
Purchases
(121,441)
(131,017)
80,140
41,366
Proceeds from maturities, calls and paydowns
214,320
72,477
Securities HTM:
—
(25,436)
12,668
7,036
Net change in other investments
(9,342)
(6,694)
Net (increase) decrease in LHFI
(146,632)
53,435
Net purchases of premises and equipment
(7,019)
(2,398)
Proceeds from BOLI settlements
492
Proceeds from sales of foreclosed properties and former bank premises
874
Net cash provided by investing activities
23,186
9,643
Financing activities:
Net increase (decrease) in:
Non-interest-bearing deposits
(903)
194,125
(79,111)
(89,286)
Short-term borrowings
(195,827)
(59,257)
Dividends paid
(55,717)
(33,509)
Vesting of restricted stock, net of shares held for taxes
(5,290)
(3,684)
Net cash (used in) provided by financing activities
(336,848)
8,389
(Decrease) increase in cash and cash equivalents
(186,334)
80,064
Cash, cash equivalents and restricted cash at beginning of the period
354,074
Cash, cash equivalents and restricted cash at end of the period
434,138
-6-
Supplemental Disclosure of Cash Flow Information
Cash payments (refunds) for:
Interest
156,358
119,161
Income taxes
(6,218)
697
Supplemental schedule of noncash investing and financing activities
Transfers from bank premises to other real estate owned
6,235
-7-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank (the “Bank”), which provides banking and related financial products and services to consumers and businesses. Except as otherwise indicated or the context suggests otherwise, references to the “Company” refers to Atlantic Union Bankshares Corporation and its subsidiaries.
Basis of Financial Information
The accounting policies and practices of Atlantic Union Bankshares Corporation and subsidiaries conform to accounting principles generally accepted in the United States (“GAAP”) and follow general practices within the banking industry. The consolidated financial statements include the accounts of the Company, which is a financial holding company and a bank holding company that owns all of the outstanding common stock of its banking subsidiary, Atlantic Union Bank, which owns Atlantic Union Equipment Finance, Inc., AUB Investments, Inc., and Atlantic Union Capital Markets, Inc.
The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses (“ALLL”), the fair value of financial instruments, valuation of deferred tax assets, and valuation of acquired assets and liabilities. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other period.
Effective January 1, 2026, the Company made certain changes to its allowance methodology as part of the continued enhancement of its credit modeling practices, resulting in more dynamic and precise modeling that allows for more granularity in the monitoring of our expected credit losses. As a result of this change, the Company moved from two loan portfolio segments (Commercial and Consumer) to three portfolio segments (Commercial Real Estate (“CRE”), Commercial and Industrial, and Consumer), by reorganizing the former Commercial segment into the CRE and Commercial and Industrial segments, with no changes made to the Consumer segment. These changes were accounted for prospectively as a change in accounting estimate, did not have a material impact on the Company’s consolidated financial statements, and resulted in no changes to previously reported values. For more information on this change in estimate, see the Company’s allowance for credit losses (“ACL”) and loans held for investment (“LHFI”) accounting policies described below. For information regarding the Company’s collectively assessed prior allowance methodology, as well as the Company’s reserve for unfunded commitments (“RUC”) and the allowance for credit losses on securities policies, see Note 1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2025 Form 10-K.
Allowance for Credit Losses
The ACL primarily consists of the ALLL, RUC, and the allowance for credit losses on securities. The Company’s ACL is governed by the Company’s Allowance Committee, which reports to the Audit Committee and contains representatives from the Company’s finance, credit, and risk teams, and is responsible for approving the Company’s estimate of expected credit losses and resulting ACL. The Allowance Committee considers the quantitative model results and qualitative factors when approving the final ACL. The Company’s ACL model is subject to the Company’s model risk management program, which is overseen by the Operational Risk Committee that reports to the Company’s Executive Risk Committee and Board Risk Committee. The ALLL includes qualitative adjustments to capture the impact of factors or uncertainties not reflected in the quantitative model. These adjustments are comprised of relevant internal and external factors within the qualitative framework that adheres to the Interagency Policy Statement on Allowances for Credit Losses.
-8-
Allowance for Loan and Lease Losses: The ALLL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Changes in the ALLL are recorded as a provision for loan losses to bring the ALLL to an estimated balance that management considers appropriate to absorb expected credit losses over the expected contractual life of the loan portfolio. Loans are charged off against the ALLL when management believes the amount is no longer collectible based on an evaluation of the borrower’s financial condition, repayment capacity, collateral values, and other observable factors affecting collectability. Subsequent recoveries of previously charged off amounts are recorded as increases to the ALLL; however, expected recoveries are not to exceed the aggregate of amounts previously charged off.
Determining the Contractual Term – Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extensions or renewal options are included in the original or modified contract at the reporting date and are not unconditionally legally cancelable by the Company.
The Company’s ALLL measures the expected lifetime loss using both pooled and loan-level assumptions for financial assets that share common risk characteristics and evaluates an individual reserve in instances where the financial assets do not share the same risk characteristics.
Collectively Assessed Reserve Consideration – Loans that share common risk characteristics are considered collectively assessed. Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics.
Effective January 1, 2026, the Company now uses either a loan-level probability of default/loss given default methodology or a segment level loss rate model for its loan portfolio. The ALLL is estimated using quantitative methods that consider a variety of factors from both internal and external sources at the loan, portfolio, and macroeconomic environment levels. The Company’s quantitative models consider various macroeconomic variables including the unemployment rate, gross domestic product, home price index, and others for a reasonable and supportable forecast period. The ALLL quantitative estimate is sensitive to changes in the macroeconomic variable forecasts during the reasonable and supportable period.
The estimated loan losses that are forecasted using the methodology described above are then adjusted for changes in qualitative factors not inherently considered in the quantitative analysis. The qualitative factors include, among others, credit concentrations of the loan portfolio, economic uncertainty, model imprecision, and factors related to credit administration.
Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of estimated credit losses on loans, and therefore the appropriateness of the ALLL, could change significantly. In estimating the ALLL, the Company considers multiple forecast scenarios to address the uncertainty inherent in macroeconomic variable forecasts. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all loan types. Additionally, changes in factors and inputs may be directionally inconsistent, such that an improvement in one factor may offset deterioration in others.
Individually Assessed Reserve Consideration – Loans that do not share similar risk characteristics with any loan segments are evaluated on an individual basis. The individual reserve component relates to loans that have shown substantial credit deterioration as measured by nonaccrual status, risk rating, and/or delinquency status. In addition, the Company has elected the practical expedient that would include loans for individual assessment consideration if the repayment of the loan is expected substantially through the operation or sale of collateral because the borrower is experiencing financial difficulty. Where the expected source of repayment is from the sale of collateral, the ALLL is based on the fair value of the underlying collateral, less selling costs, compared to the amortized cost basis of the loan. If the ALLL is based on the operation of the collateral, the reserve is calculated based on the fair value of the collateral calculated as the present value of expected cash flows from the operation of the collateral, compared to the amortized cost basis. If the Company determines that the value of a collateral dependent loan is less than the recorded investment in the loan, the Company charges off the deficiency if it is determined that such amount is deemed uncollectible. Typically, a loss is confirmed when the Company is moving toward foreclosure or final disposition. The ALLL on loans individually assessed is updated, reviewed, and approved on a quarterly basis at or near the end of each reporting period.
-9-
The Company performs regular credit reviews of the loan portfolio to review the credit quality and adherence to its underwriting standards. The credit reviews include annual commercial loan reviews performed by the Company’s commercial bankers in accordance with the commercial loan policy, relationship reviews that accompany annual loan renewals, and independent reviews by its Credit Risk Review Group. Upon origination, each commercial loan is assigned an initial risk rating in accordance with the Company’s underwriting guidelines, which require newly originated loans to be rated between one and four, with ratings closer to one indicating lower credit risk. The Company’s full risk rating scale ranges from one to nine, and loans may migrate to higher risk ratings over time if their risk profile deteriorates. The risk rating scale is the Company’s primary credit quality indicator for commercial loans. Consumer loans are not risk rated unless past due status, bankruptcy, or other events result in the assignment of a Substandard or worse risk rating in accordance with the consumer loan policy. Delinquency status is the Company’s primary credit quality indicator for Consumer loans.
Refer to Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” in the Company’s 2025 Form 10-K for additional information on the Company’s policies and for further information on the Company’s credit quality indicators.
Loans Held for Investment
Prior to January 1, 2026, the Company applied ALLL methodologies to two portfolio segments: Commercial and Consumer. As disclosed above, effective January 1, 2026, the Company made certain changes to its allowance methodology as part of the continued enhancement of its credit modeling practices, resulting in more dynamic and precise modeling that allow for more granularity in the monitoring of our expected credit losses. As a result of this change, the Company moved from two loan portfolio segments (Commercial and Consumer) to three portfolio segments (CRE, Commercial and Industrial, and Consumer), by reorganizing the former Commercial segment into the CRE and Commercial and Industrial segments, with no changes made to the Consumer segment. The Company defines the three loan portfolio segments as follows:
CRE:
Also included in this category are loans generally made to residential home builders to support their lot and home construction inventory needs. Repayment relies upon the sale of the underlying residential real estate project. This type of lending is generally viewed as carrying a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning primary and secondary market in which to finance the sale of residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region.
-10-
Commercial and Industrial:
Consumer:
-11-
The allowance methodology changes were accounted for prospectively as a change in accounting estimate, did not have a material impact on the Company’s consolidated financial statements, and resulted in no changes to previously reported values. See Note 4 “Loans and Allowance for Loan and Lease Losses” within this Item 1 of this Quarterly Report and “Critical Accounting Estimates” in Part I, Item 2 of this Quarterly Report for additional information on the change in methodology.
Adoption of New Accounting Standards – In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-10 Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This update established authoritative guidance on the accounting for government grants received by business entities. The amendments are effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company early adopted ASU 2025-10 effective January 1, 2026, on a modified prospective basis. ASU 2025-10 did not have a material impact on the Company’s consolidated financial statements.
2. ACQUISITIONS
Sandy Spring Bancorp, Inc. Acquisition
On April 1, 2025, the Company completed its previously announced acquisition of Sandy Spring, the holding company for Sandy Spring Bank, headquartered in Olney, Maryland. Under the terms of the Sandy Spring merger agreement, at the effective time of the Sandy Spring acquisition, each outstanding share of Sandy Spring common stock was converted into the right to receive 0.900 shares of the Company’s common stock, with cash paid in lieu of fractional shares, resulting in 41.0 million additional shares issued, or an aggregate transaction value of approximately $1.3 billion, based on the closing price per share of the Company’s common stock as quoted on the New York Stock Exchange (“NYSE”) on March 31, 2025, which was the last trading day prior to the consummation of the acquisition. With the acquisition of Sandy Spring, the Company acquired more than 50 branches in Virginia, Maryland, and Washington, D.C., enhancing the Company’s presence in Northern Virginia and Maryland.
Goodwill associated with the Sandy Spring acquisition totaled $540.8 million at March 31, 2026, allocated between the Company’s Wholesale Banking ($431.7 million) and Consumer Banking ($109.1 million) reporting segments, which is not deductible for tax purposes. The goodwill at March 31, 2026 was calculated based on the fair values of the assets acquired and liabilities assumed as of the acquisition date, inclusive of measurement period adjustments primarily related to loans, other assets, and other liabilities, which resulted in a $44.0 million increase in goodwill associated with the Sandy Spring acquisition compared to April 1, 2025. As of March 31, 2026, the measurement period concluded and goodwill was finalized.
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The following table provides a summary of the consideration transferred and the fair value of the assets acquired and liabilities assumed as of the date of the Sandy Spring acquisition, inclusive of the aforementioned measurement period adjustments (dollars in thousands).
Purchase price consideration
1,275,969
Fair value of assets acquired:
Cash and cash equivalents
270,211
Securities available for sale ("AFS")
1,266,925
Restricted stock
68,310
Loans held for sale ("LHFS") - CRE
1,839,638
LHFS - Non-CRE
29,152
8,572,384
Premises and equipment
59,402
Core deposit intangible ("CDI") and other intangibles
290,650
Bank owned life insurance ("BOLI")
170,482
Lease right of use ("ROU") assets
40,808
Other assets (1)
337,509
12,945,471
Fair value of liabilities assumed:
Deposits
11,227,922
272,201
560,761
Lease liabilities
108,631
12,210,323
Fair value of net assets acquired
735,148
540,821
(1) Other assets include deferred tax assets, accrued interest receivable, accounts receivable, and other intangibles, as well as other miscellaneous assets acquired from Sandy Spring.
The Company assessed the fair value for significant assets acquired and liabilities assumed based on the following methods:
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Unaudited Pro forma Impact of the Acquisition
The following table presents for illustrative purposes only certain unaudited pro forma information as if the Company had acquired Sandy Spring on January 1, 2025. These results combine the historical results of Sandy Spring in the Company's Consolidated Statements of Income and while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity. These results are not indicative of what would have occurred had the Sandy Spring acquisition taken place on January 1, 2025. No adjustments have been made to the pro forma results regarding possible revenue enhancements, provision for credit losses, or expense efficiencies. Pro forma adjustments below include the net impact of Sandy Spring’s accretion and the elimination of merger-related costs. Merger-related costs as disclosed in the Company’s Consolidated Statement of Income were related to the Sandy Spring acquisition and include costs associated with employee severance, other employee related costs, professional fees, information technology related costs, including system conversion, and lease and contract termination expenses. Merger-related costs have been expensed as incurred. The Company expects to achieve further operating cost savings and other business synergies, as a result of the Sandy Spring acquisitions, which are not reflected in the pro forma amounts below (dollars in thousands):
Pro forma
2025 (2)
Total revenues (1)
360,315
Net income available to common shareholders (3)
70,582
(1) Includes net interest income and noninterest income.
(2) Includes the net impact of Sandy Spring’s accretion adjustments of $21.0 million.
(3) Excludes merger-related costs of $4.6 million.
The Company’s operating results for the three months ended March 31, 2026, include the operating results of the acquired assets and assumed liabilities of Sandy Spring subsequent to the acquisition on April 1, 2025. Revenues and earnings since the acquisition date of the former operations of Sandy Spring have not been disclosed due to the merging of certain processes and the conversion of Sandy Spring’s systems that occurred in the fourth quarter of 2025. As a result, separate financial information is not readily available.
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3. SECURITIES AND OTHER INVESTMENTS
Available for Sale
The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of March 31, 2026 are as follows (dollars in thousands):
Amortized
Gross Unrealized
Estimated
Cost
Gains
(Losses)
Fair Value
U.S. government and agency securities
101,788
392
(77)
102,103
Obligations of states and political subdivisions
587,355
118
(115,269)
472,204
Corporate and other bonds (1)
216,280
466
(3,736)
213,010
Commercial MBS
Agency
347,910
809
(40,053)
308,666
Non-agency
111,773
104
(2,354)
109,523
Total commercial MBS
459,683
913
(42,407)
418,189
Residential MBS
2,808,181
8,408
(168,862)
2,647,727
158,214
760
(2,777)
156,197
Total residential MBS
2,966,395
9,168
(171,639)
2,803,924
Other securities
1,980
Total AFS securities
4,333,481
11,057
(333,128)
(1) Other bonds include asset-backed securities.
The amortized cost, gross unrealized gains and losses, and estimated fair values of AFS securities as of December 31, 2025 are as follows (dollars in thousands):
103,335
681
(14)
104,002
589,194
178
(101,487)
487,885
221,432
709
(4,207)
217,934
354,405
1,276
(39,806)
315,875
115,009
187
(1,905)
113,291
469,414
1,463
(41,711)
429,166
2,942,900
15,838
(165,524)
2,793,214
161,767
935
(2,558)
160,144
3,104,667
16,773
(168,082)
2,953,358
1,956
4,489,998
19,804
(315,501)
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The following table shows the gross unrealized losses and fair value of the Company’s AFS securities with unrealized losses, which are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position for the following periods ended (dollars in thousands).
Less than 12 months
More than 12 months
Fair
Unrealized
Value
Losses
Value (2)
March 31, 2026
26,206
(69)
620
(8)
26,826
4,126
(185)
455,363
(115,084)
459,489
61,260
(202)
82,663
(3,534)
143,923
45,786
(293)
160,332
(39,760)
206,118
65,561
(555)
21,320
(1,799)
86,881
111,347
(848)
181,652
(41,559)
292,999
557,665
(3,797)
827,330
(165,065)
1,384,995
54,459
(440)
28,511
(2,337)
82,970
612,124
(4,237)
855,841
(167,402)
1,467,965
815,063
(5,541)
1,576,139
(327,587)
2,391,202
December 31, 2025
6,689
(6)
737
7,426
25
473,201
473,226
37,988
(75)
98,125
(4,132)
136,113
44,536
(166)
161,001
(39,640)
205,537
39,171
(177)
22,429
(1,728)
61,600
83,707
(343)
183,430
(41,368)
267,137
359,095
(1,564)
886,626
(163,960)
1,245,721
48,559
(247)
24,868
(2,311)
73,427
407,654
(1,811)
911,494
(166,271)
1,319,148
536,063
(2,235)
1,666,987
(313,266)
2,203,050
(2) Comprised of 693 and 703 individual securities as of March 31, 2026 and December 31, 2025, respectively.
The Company has evaluated AFS securities in an unrealized loss position for credit related impairment at March 31, 2026 and December 31, 2025 and concluded no impairment existed based on several factors which included: (1) the majority of these securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the cost basis of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis.
Additionally, the majority of the Company’s mortgage-backed securities (“MBS”) are issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association, and do not have credit risk given the implicit and explicit government guarantees associated with these agencies. In addition, the non-agency mortgage-backed and asset-backed securities generally received a 20% simplified supervisory formula approach rating. The Company’s AFS investment portfolio is generally highly-rated or agency backed. At March 31, 2026 and December 31, 2025, all AFS securities were current with no securities past due or on non-accrual, and no ACL was held against the Company’s AFS securities portfolio.
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The following table presents the amortized cost and estimated fair value of AFS securities as of the periods ended, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Due in one year or less
88,280
88,670
63,692
63,993
Due after one year through five years
268,750
268,837
298,683
299,727
Due after five years through ten years
476,315
454,579
492,242
475,707
Due after ten years
3,500,136
3,199,324
3,635,381
3,354,874
Refer to Note 8 “Commitments and Contingencies” within this Item 1 of this Quarterly Report for information regarding the estimated fair value of AFS securities that were pledged to secure public deposits, repurchase agreements and for other purposes as permitted or required by law as of March 31, 2026 and December 31, 2025.
Accrued interest receivable on AFS securities totaled $13.8 million and $15.0 million at March 31, 2026 and December 31, 2025, respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the three months ended March 31, 2026 and March 31, 2025, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.
Held to Maturity
The Company reports held to maturity (“HTM”) securities on the Company’s Consolidated Balance Sheets at carrying value. Carrying value is amortized cost, which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”) prior to reclassifying the securities from AFS securities to HTM securities. The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of March 31, 2026 are as follows (dollars in thousands):
Carrying
781,389
1,689
(26,266)
756,812
2,124
(33)
2,091
28,955
(5,690)
23,265
10,919
66
(482)
10,503
39,874
(6,172)
33,768
35,085
(4,562)
30,523
11,816
(178)
11,638
46,901
(4,740)
42,161
Total HTM securities
1,755
(37,211)
834,832
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The carrying value, gross unrealized gains and losses, and estimated fair values of HTM securities as of December 31, 2025 are as follows (dollars in thousands):
793,162
4,139
(20,951)
776,350
2,255
(26)
2,229
29,074
(5,619)
23,455
11,703
103
(504)
11,302
40,777
(6,123)
34,757
35,793
(4,397)
31,396
12,229
(149)
12,080
48,022
(4,546)
43,476
4,242
(31,646)
856,812
The following table presents the amortized cost of HTM securities as of the periods ended, by security type and credit rating (dollars in thousands):
Obligations of states and political
Corporate and other
Mortgage-backed
Total HTM
subdivisions
bonds
securities
Credit Rating:
AAA/AA/A
770,694
1,690
772,384
BBB/BB/B
1,116
Not Rated – Agency (1)
64,040
Not Rated – Non-Agency (2)
9,579
21,045
32,748
86,775
782,453
1,702
784,155
1,122
64,867
9,587
22,230
34,072
88,799
(1) Generally considered not to have credit risk given the government guarantees associated with these agencies.
(2) Non-agency mortgage-backed and asset-backed securities have limited credit risk, supported by most receiving a 20% simplified supervisory formula approach rating.
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The following table presents the amortized cost and estimated fair value of HTM securities as of the periods ended by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
11,727
11,779
507
503
13,874
14,100
18,813
19,150
240,645
231,530
222,284
216,095
604,042
577,423
642,612
621,064
Refer to Note 8 “Commitments and Contingencies” within this Item 1 of this Quarterly Report for information regarding the estimated fair value of HTM securities that were pledged to secure public deposits as permitted or required by law as of March 31, 2026 and December 31, 2025.
Accrued interest receivable on HTM securities totaled $7.8 million and $9.9 million at March 31, 2026 and December 31, 2025, respectively, and is included in “Other assets” on the Company’s Consolidated Balance Sheets. For the three months ended March 31, 2026 and March 31, 2025, accrued interest receivable write-offs were not material to the Company’s consolidated financial statements.
The Company’s HTM investment portfolio primarily consists of highly-rated municipal securities and agency MBS. At March 31, 2026 and December 31, 2025, the Company’s HTM securities were all current, with no securities past due or on non-accrual. The Company’s HTM securities ACL was immaterial at March 31, 2026 and December 31, 2025.
Restricted Stock, at cost
The FHLB required the Bank to maintain stock in an amount equal to 4.75% of outstanding borrowings and a specific percentage of the member’s total assets at March 31, 2026 and December 31, 2025. The Federal Reserve Bank of Richmond (“FRB”) requires the Company to maintain stock with a par value equal to 6% of its outstanding capital at March 31, 2026 and December 31, 2025. At March 31, 2026 and December 31, 2025, restricted stock consisted of FRB stock in the amount of $141.2 million and FHLB stock in the amount of $36.3 million and $49.0 million, respectively.
Realized Gains and Losses
The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three months ended March 31, (dollars in thousands):
Realized gains (losses) (1):
Gross realized gains
14
Gross realized losses
(116)
Net realized gains (losses)
(102)
Proceeds from sales of securities
(1) Includes gains (losses) on sales and calls of securities.
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4. LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The Company’s LHFI, net, are loans stated at their amortized cost, net of the ALLL and net of unearned income. The LHFI consisted of the following as of the periods ended (dollars in thousands):
Construction and Land Development
1,748,413
1,666,381
CRE – Owner Occupied
4,319,847
4,305,796
CRE – Non-Owner Occupied
7,212,035
7,178,515
Multifamily Real Estate
2,321,504
2,418,250
Commercial & Industrial
5,384,856
5,229,728
Residential 1-4 Family – Commercial
1,053,303
1,100,157
Residential 1-4 Family – Consumer
2,839,216
2,825,259
Residential 1-4 Family – Revolving
1,257,079
1,248,284
Auto
156,843
183,720
Consumer
109,755
121,488
Other Commercial
1,543,573
1,518,589
Total LHFI, net of unearned income (1)
Allowance for loan and lease losses
(291,100)
(295,108)
Total LHFI, net
(1) Total LHFI, net of unearned income included unamortized deferred fees and costs, as well as unamortized premiums and discounts totaling $761.0 million and $803.2 million as of March 31, 2026 and December 31, 2025, respectively.
Accrued interest receivable on LHFI totaled $101.9 million and $106.5 million at March 31, 2026 and December 31, 2025, respectively. Accrued interest receivable write-offs were not material to the Company’s consolidated financial statements for the three months ended March 31, 2026 and March 31, 2025.
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The following table shows the aging of the Company’s LHFI portfolio by class at March 31, 2026 (dollars in thousands):
Greater than
30-59 Days
60-89 Days
90 Days and
Current
Past Due
still Accruing
Nonaccrual
Total Loans
1,739,577
2,866
3,299
186
2,485
4,292,079
8,223
8,767
4,362
6,416
7,188,492
5,445
4,084
1,793
12,221
2,289,801
6,944
4,195
20,564
5,341,394
10,396
10,432
3,675
18,959
1,041,327
4,076
1,161
2,786,485
22,015
1,841
4,449
24,426
1,242,063
4,094
1,218
4,340
5,364
153,466
2,212
411
239
515
109,072
268
333
70
12
1,539,884
2,714
525
450
Total LHFI, net of unearned income
27,723,640
69,253
31,233
24,470
97,828
% of total loans
99.20
%
0.25
0.11
0.09
0.35
100.00
The following table shows the aging of the Company’s LHFI portfolio by class at December 31, 2025 (dollars in thousands):
1,659,048
1,455
94
1,481
4,303
4,284,562
7,241
3,171
4,788
6,034
7,154,178
9,482
2,099
11,301
2,366,442
247
6,140
45,369
5,197,839
8,935
3,552
9,114
10,288
1,087,181
2,634
1,306
2,379
6,657
2,772,790
17,911
5,628
5,633
23,297
1,233,032
3,994
2,157
3,458
5,643
178,615
3,332
797
404
572
120,806
444
171
55
1,513,629
3,242
143
1,575
27,568,122
58,722
18,721
35,551
115,051
99.18
0.21
0.07
0.13
0.41
The following table shows the Company’s amortized cost basis of loans on nonaccrual status with no related ALLL as of the periods ended (dollars in thousands):
2,700
1,365
1,430
7,382
10,097
19,885
9,535
2,751
4,548
4,597
1,094
43,809
68,066
There was no interest income recognized on nonaccrual loans during the three months ended March 31, 2026 and March 31, 2025.
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Troubled Loan Modifications (“TLMs”)
The following tables present the amortized cost basis of TLMs for the three months ended March 31, (dollars in thousands):
Amortized Cost
% of Total Class of Financing Receivable
Term Extension
9
NM
232
0.01
Total Term Extension
241
Combination – Other-Than-Insignificant Payment Delay and Term Extension
16,048
0.22
Total Combination – Other-Than-Insignificant Payment Delay and Term Extension
Combination – Term Extension and Interest Rate Reduction
459
0.02
Total Combination – Term Extension and Interest Rate Reduction
16,748
NM = Not Meaningful
305
332
0.04
201
0.20
838
Commercial and Industrial
493
840
2,171
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The following tables describe the financial effects of TLMs on a weighted average basis for TLMs within that loan type for the three months ended March 31,:
Loan Type
Financial Effect
Added a weighted-average 1.1 years to the life of loans.
Added a weighted-average 1.6 years to the life of loans and reduced the weighted average contractual interest rate from 5.0% to 2.1%.
The Company considers a default of a TLM to occur when the borrower is 90 days past due following the modification or a foreclosure and repossession of the applicable collateral occurs. During the three months ended March 31, 2026 and March 31, 2025, the Company did not have any material loans that went into default that had been modified and designated as TLMs in the twelve-month period prior to the time of default.
The Company monitors the performance of TLMs to determine the effectiveness of the modifications. During the three months ended March 31, 2026 and March 31, 2025, the Company did not have any material loans that had been modified and designated as TLMs that were past due.
As of March 31, 2026 and December 31, 2025, there were no material unfunded commitments on loans modified and designated as TLMs.
Effective January 1, 2026, the Company made certain changes to its allowance methodology as part of the continued enhancement of its credit modeling practices, resulting in more dynamic and precise modeling that allow for more granularity in the monitoring of our expected credit losses. As a result of this change, the Company moved from two loan portfolio segments (Commercial and Consumer) to three portfolio segments (CRE, Commercial and Industrial, and Consumer), by reorganizing the former Commercial segment into the CRE and Commercial and Industrial segments, with no changes made to the Consumer segment. The Company defines the three loan portfolio segments as follows:
The allowance methodology changes were accounted for prospectively as a change in accounting estimate, did not have a material impact on the Company’s consolidated financial statements, and resulted in no changes to previously reported values. Prior year tables do not reflect the allowance methodology changes, which were effective January 1, 2026. See Note 1 “Summary of Significant Accounting Policies” in Part I, Item 1 and “Critical Accounting Estimates” in Part I, Item 2 of this Quarterly Report for additional information on the change in methodology.
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The following table shows the ALLL activity by loan segment for the three months ended March 31, reflecting the changes made to the Company’s allowance methodology effective January 1, 2026 (dollars in thousands):
Balance at beginning of period
152,477
80,336
62,295
Loans charged-off (1)
(2,198)
(703)
(2,901)
Recoveries credited to allowance
367
542
398
1,307
Provision (release) charged to operations
19,056
(19,983)
(1,487)
(2,414)
Balance at end of period
171,900
58,697
60,503
(1) In accordance with GAAP, amounts for the three months ended March 31, 2026 exclude $39.5 million of net charge-offs related to certain purchased credit deteriorated (“PCD”) loans that met the Company’s charge-off policy at the time of the acquisition. The amounts excluded for the three months ended March 31, 2026 related to measurement period adjustments recorded in the first quarter of 2026 associated with the Sandy Spring acquisition, based on additional information and evidence obtained by the Company relating to events or circumstances existing at the acquisition date.
The following table shows the ALLL activity by loan segment for the three months ended March 31, reflecting the Company’s previous allowance methodology (dollars in thousands):
Commercial
148,887
29,757
178,644
Loans charged-off
(1,847)
(1,038)
(2,885)
230
607
Provision charged to operations
15,638
1,792
17,430
162,908
30,888
193,796
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The following table presents additional information related to the acquired Sandy Spring loan portfolio at the acquisition date, including the initial ACL at acquisition on the PCD loans (dollars in thousands):
PCD Loans
April 1, 2025
Book value of acquired loans at acquisition (1)
1,642,597
Initial ACL at acquisition (2)
(28,265)
Non-credit discount at acquisition (1)
(119,513)
Purchase Price
1,494,819
Non-PCD Loans:
7,077,565
Gross contractual amounts receivable
7,676,836
Estimate of contractual cash flows not expected to be collected
130,113
(1) The Company recorded measurement period adjustments associated with the Sandy Spring acquisition, based on additional information and evidence obtained by the Company relating to events or circumstances existing at the acquisition date, reducing the book value of loans acquired at acquisition and the non-credit discount at acquisition.
(2) In accordance with GAAP, the amounts exclude $101.2 million of net charge-offs related to certain PCD loans that met the Company’s charge-off policy at the time of the acquisition.
Credit Quality Indicators
Credit quality indicators are used to help estimate the collectability of each loan class within the loan portfolio segments. For classes of loans within the CRE and Commercial and Industrial segments, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is risk rating categories of Pass (including Pass-Watch), Special Mention, Substandard, and Doubtful. For classes of loans within the Consumer segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is delinquency bands of current, 30-59, 60-89, 90+, and nonaccrual. While other credit quality indicators are evaluated and analyzed as part of the Company’s credit risk management activities, these indicators are primarily used in estimating the ALLL. The Company evaluates the credit risk of its loan portfolio on at least a quarterly basis.
CRE and Commercial and Industrial Loans
The Company uses a risk rating system as the primary credit quality indicator for classes of loans within the CRE and Commercial and Industrial segments. The Company defines pass loans as risk rated 1-5 and criticized loans as risk rated 6-9. See Note 4 “Loans and Allowance For Loan and Lease Losses” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of the Company’s 2025 Form 10-K for information on the Company’s risk rating system.
-25-
The table below details the amortized cost and gross write-offs of the classes of loans within the CRE segment by risk level and year of origination as of March 31, reflecting the changes made to the Company’s allowance methodology effective January 1, 2026 (dollars in thousands):
Term Loans Amortized Cost Basis by Origination Year
Revolving
2024
2023
2022
Prior
Loans
Pass
73,514
535,427
366,153
236,047
82,869
88,878
239,014
1,621,902
Watch
48,143
1,773
14,028
4,543
1,369
13,373
83,229
Special Mention
487
931
3,592
26,215
31,962
Substandard
315
1,918
73
598
8,416
11,320
Total Construction and Land Development
584,622
370,331
251,079
88,010
102,255
278,602
Current period gross write-off
140,517
428,309
289,757
294,767
491,493
2,251,113
46,422
3,942,378
4,226
18,427
25,421
18,394
92,522
1,706
160,696
4,261
9,814
12,325
5,990
84,089
118,505
11,272
16,359
62,081
140
98,268
Total CRE – Owner Occupied
436,796
329,270
348,872
524,293
2,489,805
50,294
225,363
939,888
504,180
772,349
1,001,773
3,215,046
104,497
6,763,096
16,095
555
22,872
27,293
87,896
100
154,811
125
1,431
4,662
36,111
141,915
184,244
6,270
18,177
85,415
22
109,884
Total CRE – Non-Owner Occupied
956,108
506,166
806,153
1,083,354
3,530,272
104,619
62,681
246,617
105,062
289,441
399,238
761,149
56,860
1,921,048
13,980
9,521
87,158
1,321
111,980
669
21,577
56,618
35,496
114,360
731
3,581
58,889
110,915
174,116
Total Multifamily Real Estate
106,462
328,579
524,266
994,718
58,181
19,742
88,554
62,509
75,344
176,551
553,968
6,078
982,746
2,675
2,188
1,542
5,659
14,382
2,956
29,402
1,073
2,662
1,211
25,124
816
1,215
834
12,913
253
16,031
Total Residential 1-4 Family – Commercial
93,118
68,574
76,886
184,255
601,441
9,287
Other Commercial (Farmland)
1,535
1,292
696
3,448
23,016
275
30,262
233
166
1,395
1,794
71
7,516
1,881
9,468
18
Total Other Commercial (Farmland)
1,525
767
3,614
31,945
2,156
41,542
Total CRE
521,817
2,240,330
1,328,953
1,668,644
2,155,372
6,893,170
453,146
15,261,432
71,139
23,176
77,843
65,576
284,722
19,456
541,912
6,196
15,063
39,566
99,930
292,786
30,122
483,663
1,131
15,136
26,283
86,914
279,758
415
409,637
2,318,796
1,382,328
1,812,336
2,407,792
7,750,436
503,139
16,696,644
Total current period gross write-off
-26-
The table below details the amortized cost and gross write-offs of the classes of loans within the Commercial and Industrial segment by risk level and year of origination as of March 31, reflecting the changes made to the Company’s allowance methodology effective January 1, 2026 (dollars in thousands):
315,733
1,121,173
633,911
388,315
444,267
523,069
1,437,684
4,864,152
161
16,077
30,642
31,728
30,030
23,945
108,461
241,044
4,991
23,020
5,247
12,875
16,192
73,023
135,348
4,661
13,131
32,560
22,372
16,323
55,265
144,312
Total Commercial & Industrial
315,894
1,146,902
700,704
457,850
509,544
579,529
1,674,433
(362)
(110)
(288)
(760)
Other Commercial (Other)
37,468
304,037
230,542
162,940
145,753
313,594
270,179
1,464,513
2,726
5,226
105
19,838
747
28,642
419
524
543
3,252
3,425
1,042
8,352
Total Other Commercial (Other)
40,194
304,580
235,768
166,716
169,016
315,383
270,374
1,502,031
(1,438)
353,201
1,425,210
864,453
551,255
590,020
836,663
1,707,863
6,328,665
2,887
35,868
31,833
49,868
24,692
269,686
5,666
73,128
135,872
5,204
35,812
25,797
17,365
55,355
152,664
356,088
1,451,482
936,472
624,566
678,560
894,912
1,944,807
6,886,887
-27-
The table below details the amortized cost and gross write-offs of the classes of loans within the Commercial segment by risk level and year of origination as of December 31, reflecting the Company’s previous allowance methodology (dollars in thousands):
2021
557,083
381,768
233,793
84,396
39,055
58,001
242,753
1,596,849
10,712
136
51
671
989
3,260
7,759
23,578
2,092
2,980
463
793
4,845
26,145
37,860
319
547
74
135
2,519
4,500
8,094
568,656
384,543
236,898
85,665
43,356
70,606
276,657
-
(40)
(3)
(43)
442,571
305,006
298,355
497,750
500,885
1,823,826
53,556
3,921,949
4,532
14,892
31,258
17,474
12,006
77,890
2,121
160,173
6,962
7,435
6,210
10,907
6,604
77,134
1,275
116,527
6,644
16,427
7,014
27,267
49,520
107,012
Doubtful
454,065
333,977
352,250
533,145
546,762
2,028,505
57,092
(147)
905,007
486,703
811,972
1,060,691
741,739
2,628,053
78,676
6,712,841
556
39,149
17,010
23,926
59,738
196
140,575
505
1,434
2,600
23,267
76,411
68,195
172,412
6,264
38,108
1,138
107,153
24
152,687
905,512
488,693
859,985
1,139,076
843,214
2,863,139
78,896
(491)
1,125,728
730,095
446,849
487,440
251,752
351,402
1,344,042
4,737,308
16,322
35,316
13,751
39,156
8,963
21,615
121,435
256,558
6,978
16,326
5,861
8,117
4,029
5,914
60,923
108,148
2,785
12,444
33,386
21,588
10,563
5,663
41,285
127,714
1,151,813
794,181
499,847
556,301
275,307
384,594
1,567,685
(1,605)
(2,483)
(197)
(34,451)
(38,815)
192,761
123,570
289,889
441,536
247,973
592,615
49,203
1,937,547
14,029
25,464
98,973
3,850
1,317
143,633
21,572
62,470
18,533
103,246
2,372
729
71,278
37,422
74,668
47,355
233,824
195,133
124,970
325,490
600,748
384,368
689,666
97,875
(47)
93,538
70,435
82,732
198,071
172,024
408,213
4,255
1,029,268
2,975
2,533
1,558
6,193
3,887
11,349
2,431
30,926
2,404
1,277
1,209
860
17,009
22,759
248
206
4,843
11,654
17,204
98,917
74,493
84,290
205,679
181,614
448,225
6,939
270,356
246,933
172,163
157,255
168,474
179,392
276,970
1,471,543
113
20,631
746
5,873
27,363
75
184
2,688
9,891
4,519
3,040
1,552
35
9,792
Total Other Commercial
270,912
176,870
180,926
170,956
192,244
279,748
(140)
(2,617)
(3,514)
(6,271)
Total Commercial
3,587,044
2,344,510
2,335,753
2,927,139
2,121,902
6,041,502
2,049,455
21,407,305
34,541
53,433
99,909
126,599
149,490
183,575
135,259
782,806
17,391
29,235
39,298
106,433
88,881
198,574
91,031
570,843
6,032
20,612
60,670
141,369
85,304
253,193
89,147
656,327
3,645,008
2,447,790
2,535,630
3,301,540
2,445,577
6,676,979
2,364,892
23,417,416
(209)
(5,100)
(50)
(4,584)
(45,999)
-28-
Consumer Loans
For Consumer loans, the Company evaluates credit quality based on the delinquency status of the loan. The following table details the amortized cost and gross write-offs of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of March 31, (dollars in thousands):
67,916
327,876
193,403
193,081
683,016
1,305,417
15,776
30-59 Days Past Due
850
3,422
2,422
15,202
60-89 Days Past Due
202
57
1,464
90+ Days Past Due
281
869
433
356
2,458
654
1,160
6,086
15,955
Total Residential 1-4 Family – Consumer
329,246
195,020
198,298
691,937
1,340,496
16,303
4,667
17,462
10,916
21,671
35,451
12,515
1,139,381
80
157
3,763
1,075
31
141
122
16
4,030
56
127
32
5,065
Total Residential 1-4 Family – Revolving
17,518
10,947
22,019
35,957
12,657
1,153,314
575
1,808
1,557
32,053
76,952
40,521
13
520
1,010
226
160
86
29
146
Total Auto
1,850
32,751
78,527
41,583
(12)
(80)
(182)
(129)
(403)
3,871
12,523
7,130
4,069
4,814
29,296
47,369
7
43
20
262
49
Total Consumer
12,630
7,174
4,107
4,891
29,663
47,419
(27)
(36)
(4)
(144)
(37)
(252)
77,029
359,669
213,006
250,874
800,233
1,387,749
1,202,526
4,291,086
938
116
3,607
16,068
3,831
28,589
258
428
1,886
1,197
3,803
299
900
640
613
2,561
4,085
9,098
324
656
1,374
6,431
16,135
5,397
30,317
361,244
214,698
257,175
811,312
1,424,399
1,217,036
4,362,893
(39)
(131)
(186)
(273)
(38)
-29-
The following table details the amortized cost and gross write-offs of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of December 31, (dollars in thousands):
334,528
195,624
203,804
688,989
596,987
736,230
16,628
393
77
2,773
2,865
1,600
10,029
174
700
124
2,186
336
1,757
452
309
376
937
3,503
180
1,146
5,233
3,501
12,690
335,446
197,033
208,156
699,649
603,361
764,209
17,405
(122)
(53)
(175)
19,309
12,011
23,625
37,365
8,604
4,873
1,127,245
21
110
3,716
11
47
123
1,976
273
3,167
59
129
91
37
5,327
19,368
12,043
24,184
37,683
4,971
1,141,431
(375)
1,987
1,770
36,214
88,117
36,540
13,987
635
1,624
284
431
221
257
147
46
2,039
37,141
90,650
37,664
14,456
(146)
(284)
(886)
(246)
(181)
(1,743)
14,244
8,307
4,691
5,986
4,856
25,883
56,839
28
30
50
19
1
69
10
14,292
8,378
4,722
6,061
4,861
26,269
56,905
(248)
(262)
(786)
(179)
(1,572)
370,068
217,712
268,334
820,457
646,987
780,973
1,200,712
4,305,243
126
3,529
4,623
2,339
10,665
3,940
25,681
736
303
2,761
1,913
1,982
8,753
468
1,011
3,233
9,550
182
1,397
5,589
3,650
12,773
5,874
29,524
371,145
219,224
274,203
834,043
654,490
809,905
1,215,741
4,378,751
(156)
(546)
(1,058)
(283)
(1,020)
(554)
(3,865)
As of March 31, 2026 and December 31, 2025, the Company did not have any material revolving loans convert to term.
-30-
5. GOODWILL AND INTANGIBLE ASSETS
The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from acquisitions. The Company has determined that its core deposit intangibles have finite lives and are amortized over their estimated useful lives, which is ten years, using an accelerated method. Other amortizable intangible assets are being amortized over the period of expected benefit, which ranges from three years to 16 years, using various methods. The Company concluded that there was no impairment to goodwill or intangible assets as of the balance sheet date. In the normal course of business, the Company routinely monitors the impact of the changes in the financial markets and includes these assessments in the Company’s impairment process.
As a result of the Sandy Spring acquisition, the Company recorded goodwill totaling $540.8 million at March 31, 2026. See Note 2 “Acquisitions” within this Item 1 of this Quarterly Report for more information on the Sandy Spring acquisition.
The following table presents the Company’s goodwill and intangible assets by operating segment as of the periods ended (dollars in thousands):
Wholesale Banking
Consumer Banking
Corporate Other
Goodwill (1)
1,281,726
473,149
Intangible Assets
49,719
249,782
1,254,979
478,308
50,916
621
264,007
Amortization expense of intangibles for the three months ended March 31, 2026 and March 31, 2025 totaled $15.4 million and $5.4 million, respectively. As of March 31, 2026, the estimated remaining amortization expense of intangibles is as follows for the years ending (dollars in thousands):
For the remaining nine months of 2026
44,837
2027
50,407
2028
41,936
2029
35,235
2030
30,719
Thereafter
96,965
Total estimated amortization expense
-31-
6. LEASES
Lessor Arrangements
The Company’s lessor arrangements consist of sales-type and direct financing leases for equipment, including vehicles and machinery, with terms ranging from 17 months to 122 months. At both March 31, 2026 and December 31, 2025, the carrying value of residual assets covered by residual value guarantees and residual value insurance was $122.4 million.
Total net investment in sales-type and direct financing leases are included in “Loans held for investment, net of unearned income” on the Company’s Consolidated Balance Sheets and consisted of the following as of the periods ended (dollars in thousands):
March 31,2026
December 31,2025
Sales-type and direct financing leases:
Lease receivables, net of unearned income and deferred selling profit
654,051
614,543
Unguaranteed residual values, net of unearned income and deferred selling profit
42,034
41,570
Total net investment in sales-type and direct financing leases
696,085
656,113
Lessee Arrangements
The Company’s lessee arrangements consist of operating and finance leases; however, the majority of the leases have been classified as non-cancellable operating leases and are for real estate leases with remaining lease terms of up to 15 years.
The tables below provide information about the Company’s lessee lease portfolio and other supplemental lease information as of and for the following periods ended (dollars in thousands):
Operating
Finance
ROU assets
94,359
8,875
98,073
9,191
115,117
10,588
118,915
10,895
Lease Term and Discount Rate of Operating leases:
Weighted-average remaining lease term (years)
8.13
10.42
8.22
10.35
Weighted-average discount rate (1)
5.73
3.71
5.69
3.63
(1) A lease implicit rate or an incremental borrowing rate is used based on information available at commencement date of lease or at remeasurement date.
Three months ended March 31,
Cash paid for amounts included in measurement of lease liabilities:
Operating Cash Flows from Finance Leases
Operating Cash Flows from Operating Leases
6,305
3,751
Financing Cash Flows from Finance Leases
330
ROU assets obtained in exchange for lease obligations:
Operating leases
1,478
688
Finance leases
17
Net Operating Lease Cost
6,347
3,488
Finance Lease Cost:
Amortization of right-of-use assets
Interest on lease liabilities
Total Lease Cost
6,770
3,734
-32-
The maturities of lessor and lessee arrangements outstanding as of March 31, 2026 are presented in the table below for the years ending (dollars in thousands):
Lessor
Lessee
Sales-type and Direct Financing
129,878
19,145
1,376
178,638
23,313
2,027
144,059
20,494
2,064
113,306
16,154
692
87,245
12,774
565
100,521
58,671
6,783
Total undiscounted cash flows
753,647
150,551
13,507
Less: Adjustments (1)
99,596
35,434
2,919
Total (2)
(1) Lessor – unearned income and unearned guaranteed residual value; Lessee – imputed interest.
(2) Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.
-33-
7. BORROWINGS
Short-term BorrowingsThe Company classifies borrowings with original maturities of one year or less as short-term. Short-term borrowings consist primarily of securities sold under agreements to repurchase, which are secured customer transactions that generally mature on the following business day, and advances from the FHLB. The Company can also utilize federal funds purchased (secured overnight borrowings from other financial institutions), and other lines of credit, as needed.
Total short-term borrowings consisted of the following as of the periods ended (dollars in thousands):
FHLB advances
Total short-term borrowings
529,605
725,432
Average outstanding balance during the period
589,390
175,929
Average interest rate during the period
3.60
3.44
Average interest rate at end of period
3.53
3.15
Short-term borrowings are used to manage normal liquidity and support the Company’s asset and liability management strategies and can fluctuate depending on funding needs. The Company’s available unused short-term borrowings consisted of the following as of the periods ended (dollars in thousands):
Federal funds lines with correspondent banks
1,410,000
Alternative line of credit with correspondent bank
25,000
FHLB secured line of credit (1)
5,628,019
5,277,231
Federal Reserve Discount Window (2)
2,418,498
2,573,492
Other secondary sources (3)
5,084,446
4,960,331
Total available unused short-term borrowings
14,565,963
14,246,054
(1) The Company’s total credit capacity with FHLB was $11.2 billion and $11.1 billion at March 31, 2026 and December 21, 2025, respectively. Based on the amount of collateral pledged, the secured line of credit capacity was $6.0 billion and $5.9 billion at March 31, 2026 and December 31, 2025, respectively.
(2) The Company’s Federal Reserve Discount Window borrowing capacity was $2.4 billion and $2.6 billion, none of which were used at March 31, 2026 and December 31, 2025, respectively.
(3) Includes unpledged AFS securities, brokered deposits, and unrestricted cash and cash equivalents.
Refer to Note 8 “Commitments and Contingencies” within this Item 1 of this Quarterly Report for additional information on the Company’s pledged collateral. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and was in compliance with these covenants as of March 31, 2026 and December 31, 2025.
-34-
Long-term Borrowings
Total long-term borrowings consisted of the following as of March 31, 2026 (dollars in thousands):
Spread to
Principal
3-Month SOFR
Rate (3)
Maturity
Investment (4)
Trust Preferred Capital Securities (5)
Trust Preferred Capital Note – Statutory Trust I
22,500
2.75
% (1)
6.69
6/17/2034
Trust Preferred Capital Note – Statutory Trust II
36,000
1.40
5.34
6/15/2036
1,114
VFG Limited Liability Trust I Indenture
20,000
2.73
6.67
3/18/2034
619
FNB Statutory Trust II Indenture
12,000
3.10
7.04
6/26/2033
372
Gateway Capital Statutory Trust I
8,000
9/17/2033
Gateway Capital Statutory Trust II
7,000
2.65
6.59
217
Gateway Capital Statutory Trust III
15,000
1.50
5.44
5/30/2036
464
Gateway Capital Statutory Trust IV
1.55
5.49
7/30/2037
774
MFC Capital Trust II
5,000
2.85
6.79
1/23/2034
155
AMNB Statutory Trust I
1.35
5.29
6/30/2036
MidCarolina Trust I
3.45
% (2)
7.13
11/7/2032
MidCarolina Trust II
3,500
2.95
6.63
1/7/2034
109
Total Trust Preferred Capital Securities
179,000
5,542
Subordinated Debt (5)
2031 Subordinated Debt (6)
250,000
2.88
12/15/2031
2032 Subordinated Debt (7)
190,000
3.88
3/30/2032
2029 Subordinated Debt (8)
168,000
2.62
6.56
11/15/2029
Total Subordinated Debt
608,000
Fair Value Discount (9)
(17,560)
Investment in Trust Preferred Capital Securities
Total Long-term Borrowings
(1) Three-Month Chicago Mercantile Exchange Secured Overnight Financing Rate (“SOFR”) + 0.262%.
(2) Three-Month Chicago Mercantile Exchange SOFR.
(3) Rate as of March 31, 2026. Calculated using non-rounded numbers.
(4) Represents the junior subordinated debentures owned by the Company in trust and is reported in “Other assets” on the Company’s Consolidated Balance Sheets.
(5) Trust Preferred Capital Securities and Subordinated notes qualify as Tier 2 capital for the Company for regulatory purposes.
(6) Fixed-to-floating rate notes. On December 15, 2026, the interest rate changes to a floating rate of the then current Three-Month Term SOFR plus a spread of 186 bps through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after December 15, 2026.
(7) Fixed-to-floating rate notes acquired in the Sandy Spring acquisition. On March 30, 2027, the interest rate changes to a floating rate equal to the then current Three-Month Term SOFR plus a spread of 196.5 bps through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after March 30, 2027.
(8) Fixed-to-floating rate notes acquired in the Sandy Spring acquisition. On November 15, 2024, the interest rate changed to a floating rate equal to the then current Three-Month Term SOFR plus a spread of 262 bps and a 26 bps spread adjustment through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after November 15, 2024.
(9) Remaining discounts of $12.6 million and $5.0 million on Trust Preferred Capital Securities and Subordinated Debt, respectively.
-35-
Total long-term borrowings consisted of the following as of December 31, 2025 (dollars in thousands):
6.66
5.31
6.64
7.01
5.41
5.46
6.76
5.26
7.10
6.60
6.53
(20,682)
(1) Three-Month Chicago Mercantile Exchange SOFR + 0.262%.
(3) Rate as of December 31, 2025. Calculated using non-rounded numbers.
(6) Fixed-to-floating rate notes. On December 15, 2026, the interest changes to a floating rate of the then current Three-Month Term SOFR plus a spread of 186 bps through its maturity date or earlier redemption. The notes may be redeemed before maturity on any interest payment date occurring on or after December 15, 2026.
(9) Remaining discounts of $12.9 million and $7.8 million on Trust Preferred Capital Securities and Subordinated Debt, respectively.
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As of March 31, 2026, the scheduled maturities of long-term debt are as follows for the years ending (dollars in thousands):
Trust
Subordinated
Long-term
Notes
Debt
Discount (1)
Borrowings
(2,043)
(2,485)
(2,309)
165,802
(1,641)
184,542
440,000
(6,884)
617,658
Total long-term borrowings
(1) Includes discount on Trust Preferred Capital Securities and Subordinated Debt.
8. COMMITMENTS AND CONTINGENCIES
Litigation and Regulatory Matters
In the ordinary course of its operations, the Company and its subsidiaries are subject to loss contingencies related to legal and regulatory proceedings. The Company establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. When applicable, the Company estimates loss contingencies and whether there is an accruable probable loss. When the Company is able to estimate such losses and when it is reasonably possible that the Company could incur losses in excess of the amounts accrued, the Company discloses the aggregate estimation of such possible losses.
Financial Instruments with Off-Balance Sheet Risk
The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized on the Company’s Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.
The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet instruments with credit risk. The Company considers credit losses related to off-balance sheet commitments by undergoing a similar process in evaluating losses for loans that are carried on the balance sheet. The Company considers historical loss and funding information, current economic conditions, and reasonable and supportable forecasted economic conditions, among other factors in the consideration of expected credit losses in the Company’s off-balance sheet commitments to extend credit.
The Company also records an indemnification reserve based on historical statistics and loss rates related to mortgage loans previously sold, included in “Other Liabilities” on the Company’s Consolidated Balance Sheets. At March 31, 2026 and December 31, 2025, the Company’s RUC totaled $30.8 million and $26.2 million, respectively, and the Company’s indemnification reserve totaled $505 thousand and $506 thousand, respectively.
Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements.
Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.
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The following table presents the balances of commitments and contingencies as of the periods ended (dollars in thousands):
Commitments with off-balance sheet risk:
Commitments to extend credit (1)
9,718,396
9,733,175
Letters of credit
217,259
224,068
Total commitments with off-balance sheet risk
9,935,655
9,957,243
(1) Includes unfunded overdraft protection.
As of March 31, 2026 and December 31, 2025, the Company held $196.5 million and $169.5 million, respectively, in deposits in other financial institutions including $133.9 million and $124.7 million at each date, respectively, pledged as collateral for cash flow, fair value and loan swap derivatives. Uninsured deposits in other financial institutions totaled $59.8 million and $41.9 million at March 31, 2026 and December 31, 2025, respectively. The Company’s management evaluates the loss risk of its uninsured deposits in other financial institutions at least annually.
For asset/liability management purposes, the Company uses interest rate contracts to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts. For the over-the-counter derivatives cleared with the central clearinghouses, the variation margin is treated as a settlement of the related derivatives fair values. Refer to Note 9 “Derivatives” within this Item 1 for additional information.
As part of the Company’s liquidity management strategy, the Company pledges collateral to secure various financing and other activities that occur during the normal course of business. The Company maintains robust borrowing capacity at the FHLB and FRB since secured borrowing facilities provide the most reliable sources of funding, especially during times of market turbulence and financial distress. The following tables present the types of collateral pledged as of the periods ended (dollars in thousands):
Pledged Assets as of March 31, 2026
Cash
Securities (1)
Public deposits
1,270,127
573,869
1,843,996
Repurchase agreements
195,429
FHLB advances (2)
497,702
9,389
8,988,127
9,495,218
Derivatives
133,861
64,182
198,043
Federal Reserve Discount Window (3)
3,169,319
Other purposes
79,123
Total pledged assets
2,106,563
583,258
12,157,446
14,981,128
(1) Balance represents market value.
(2) The loan balance pledged to FHLB represents unpaid principal balance.
(3) The loan balance pledged to Federal Reserve Discount Window represents unpaid principal balance.
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Pledged Assets as of December 31, 2025
1,249,969
607,061
1,857,030
203,404
518,895
9,486
8,832,269
9,360,650
120,697
64,037
184,734
3,363,761
63,924
2,100,229
616,547
12,196,030
15,033,503
9. DERIVATIVES
The Company has cash flow and fair value hedges that are derivatives designated as accounting hedges. The Company also has derivatives not designated as accounting hedges that include foreign exchange contracts, interest rate contracts, and Risk Participation Agreements. The Company’s mortgage banking derivatives do not have a material impact to the Company and are not included within the derivatives disclosures noted below.
The following table summarizes key elements of the Company’s derivative instruments as of the periods ended, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):
Derivative (2)
Notional or
Contractual
Amount (1)
Assets
Liabilities
Derivatives designated as accounting hedges:
Interest rate contracts: (3)
Cash flow hedges
900,000
583
1,829
1,444
643
Fair value hedges:
62,717
652
Securities
50,000
301
294
Derivatives not designated as accounting hedges:
Interest rate contracts (3)(4)
11,020,241
99,357
155,140
10,530,098
110,311
165,860
Foreign exchange contracts
9,153
39
6,266
Cash collateral (received)/pledged (5)
(21,225)
4,250
(21,297)
3,970
(1) Notional amounts are not recorded on the Company’s Consolidated Balance Sheets and are generally used only as a basis on which interest and other payments are determined.
(2) Balances represent fair value of derivative financial instruments.
(3) The Company’s cleared derivatives are classified as a single-unit of accounting, resulting in the fair value of the designated swap being reduced by the variation margin, which is treated as settlement of the related derivatives fair value for accounting purposes and is reported on a net basis.
(4) Includes Risk Participation Agreements.
(5) The fair value of derivative assets and liabilities is presented on a gross basis. The Company has not applied collateral netting; as such the amounts of cash collateral received or pledged are not offset against the derivative assets and derivative liabilities in the Consolidated Balance Sheets. Cash collateral received is included in “Interest-bearing deposits in other banks” and cash collateral pledged is included in “Other liabilities” on the Company’s Consolidated Balance Sheets.
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The following table summarizes the carrying value of the Company’s hedged assets in fair value hedges and the associated cumulative basis adjustments included in those carrying values as of the periods ended (dollars in thousands):
Cumulative
Amount of Basis
Adjustments
Included in the
Carrying Amount
of Hedged
Amount of the
Assets/(Liabilities)
Hedged
Line items on the Consolidated Balance Sheets in which the hedged item is included:
Securities available-for-sale (1) (2)
64,928
(294)
66,763
(292)
Loans (3)
(7,874)
(7,908)
(1) These amounts include the amortized cost basis of the investment securities designated in hedging relationships for which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. The amount of the designated hedged item at March 31, 2026 and December 31, 2025 totaled $50 million.
(2) Carrying value represents amortized cost.
(3) The fair value of the swaps associated with the derivative related to hedged items was $8.0 million at March 31, 2026 and December 31, 2025.
10. STOCKHOLDERS’ EQUITY
Forward Sale Agreements
On October 21, 2024, in connection with the execution of the Sandy Spring merger agreement, the Company entered into an initial forward sale agreement with Morgan Stanley & Co. LLC (the “Forward Purchaser”) relating to an aggregate of 9,859,155 shares of the Company’s common stock. On October 21, 2024, the Company priced the public offering of shares of the Company’s common stock in connection with such forward sale agreement and entered into an underwriting agreement with Morgan Stanley & Co. LLC, as representative for the underwriters named therein, the Forward Purchaser and Morgan Stanley & Co. LLC as forward seller (the “Forward Seller”), relating to the registered public offering and sale of 9,859,155 shares of the Company’s common stock at a public offering price of $35.50 per share (before underwriting discounts and commissions). The underwriters were granted a 30-day option to purchase up to an additional 1,478,873 shares of the Company’s common stock. On October 21, 2024, the underwriters exercised in full their option to purchase the additional 1,478,873 shares of the Company’s common stock pursuant to the underwriting agreement and, in connection therewith, the Company entered into an additional forward sale agreement with the Forward Purchaser relating to 1,478,873 shares of the Company’s 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”).
On April 1, 2025, the Company physically settled in full the Forward Sale Agreements by delivering 11,338,028 shares of the Company’s common stock to the Forward Purchaser. The Company received net proceeds from such sale of shares of the Company’s common stock and full physical settlement of the Forward Sale Agreements, before expenses, of approximately $385.0 million.
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Share Repurchase Programs
The Company’s share repurchase program activity is dependent on management’s determination of its capital deployment needs, subject to market, economic, and regulatory conditions. Authorized repurchase programs allow the Company to repurchase its common stock through either open market transactions or privately negotiated transactions. There were no active share repurchase programs in the first quarter of 2026 or during 2025.
Series A Preferred Stock
The Company has 6,900,000 depositary shares outstanding, each representing a 1/400th ownership interest in a share of its Series A preferred stock, with a liquidation preference of $10 thousand per share of Series A preferred stock (equivalent to $25 per depositary share), including 900 thousand depositary shares pursuant to the exercise in full by the underwriters of their option to purchase additional depositary shares. Series A preferred stock dividends, if declared by the Board or a fully authorized committee of the Board, are paid by the Company in arrears on the first business day of March, June, September, and December of each year at a rate of 6.875% per annum.
Accumulated Other Comprehensive Income (Loss)
The change in AOCI for the three months ended March 31, 2026 is summarized as follows, net of tax (dollars in thousands):
Gains (Losses)
Change in Fair
on AFS
Value of Cash
(Losses) on
Flow Hedge
AOCI (loss) – December 31, 2025
(234,702)
(21,165)
(220)
Other comprehensive (loss) income before reclassification
(22,197)
Amounts reclassified from AOCI into earnings
(204)
Net current period other comprehensive (loss) income
(20,539)
120
AOCI (loss) – March 31, 2026
(255,241)
(23,147)
(100)
The change in AOCI for the three months ended March 31, 2025 is summarized as follows, net of tax (dollars in thousands):
on BOLI
AOCI (loss) – December 31, 2024
(317,142)
(43,078)
534
Other comprehensive income (loss) before reclassification
26,080
(109)
Net current period other comprehensive income (loss)
15,835
(200)
AOCI (loss) – March 31, 2025
(301,307)
(32,742)
334
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11. FAIR VALUE MEASUREMENTS
The Company follows ASC 820, Fair Value Measurement, to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. ASC 820 clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.
ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:
Level 1 Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3 Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.
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The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of the periods ended (dollars in thousands):
Fair Value Measurements at March 31, 2026 using
Significant
Quoted Prices in
Active Markets for
Observable
Unobservable
Identical Assets
Inputs
Level 1
Level 2
Level 3
Balance
88,830
13,273
3,222,113
Financial Derivatives (2)
100,932
157,130
(2) Includes hedged and non-hedged derivatives.
Fair Value Measurements at December 31, 2025 using
88,946
15,056
3,382,524
112,686
166,690
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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP, only when there is evidence of impairment or other triggering events and typically include LHFS, foreclosed properties, impaired long lived assets including bank premises, collateral dependent loans that are individually assessed for credit purposes, and impaired other intangibles. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets after they are evaluated for impairment. When the asset is secured by real estate, the Company measures the fair value utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data. Management may discount the value from the appraisal in determining the fair value if, based on its understanding of the market conditions, the collateral had been impaired below the appraised value (Level 3). The nonrecurring valuation adjustments for these assets did not have a significant impact on the Company’s consolidated financial statements.
The following tables summarize the Company’s financial assets that were measured on a nonrecurring basis as of the periods ended (dollars in thousands):
Individually assessed loans (1)
5,474
(1) Net of reserves of $1.2 million related to collateral dependent loans as of March 31, 2026.
1,330
(1) Net of reserves of $203 thousand related to collateral dependent loans as of December 31, 2025.
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Fair Value of Financial Instruments
ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
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The carrying values and estimated fair values of the Company’s financial instruments as of the periods ended are as follows (dollars in thousands):
Quoted Prices
in Active
Markets for
Total Fair
AFS securities
3,922,580
HTM securities
833,938
894
LHFI, net of unearned income
27,700,544
Financial Derivatives (1)
Accrued interest receivable
125,605
30,379,039
1,304,587
1,266,759
Accrued interest payable
19,660
(1) Includes hedged and non-hedged derivatives.
4,105,355
855,906
906
27,517,137
131,741
30,467,372
1,497,292
1,435,699
19,412
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The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. Borrowers with fixed rate obligations, however, are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.
12. INCOME TAXES
The Company’s effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was 21.0% and 19.0%, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 is primarily due to the Sandy Spring acquisition, which resulted in additional state income tax expense due to an expanded footprint and an overall increase in the proportion of taxable income to tax-exempt income.
As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the Company’s view regarding the future realization of deferred tax assets. The Company’s valuation allowance was $7.8 million as of March 31, 2026 and December 31, 2025, respectively.
The Company analyzed the tax positions taken or expected to be taken on its tax returns for the periods ending December 31, 2025, 2024, and 2023, and concluded the Company had no material liability related to uncertain tax positions in accordance with ASC 740, Income Taxes.
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13. EARNINGS PER SHARE
Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards and incremental shares related to the Forward Sale Agreements, while excluding any anti-dilutive weighted shares outstanding. Refer to Note 10 “Stockholders’ Equity” within this Item 1 of this Quarterly Report for more information on the Forward Sale Agreements.
The following table presents basic and diluted EPS calculations for the three months ended March 31, (dollars in thousands except per share data):
Less: Preferred stock dividends
Weighted average shares outstanding, basic
141,902
89,222
Dilutive effect of stock awards and Forward Sale Agreements
379
851
Weighted average shares outstanding, diluted
142,281
90,073
Earnings per common share, basic
Earnings per common share, diluted
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14. SEGMENT REPORTING AND REVENUE
Operating Segments
The Company has two reportable operating segments, Wholesale Banking and Consumer Banking, with corporate support functions and intercompany eliminations being presented within Corporate Other.
Segment Results
The following table presents and reconciles income before income taxes compared to the Consolidated Statements of Income. Income before income taxes for the three months ended March 31, 2026 and March 31, 2025 totaled $154.6 million and $61.5 million, respectively. The information is disaggregated by major source and reportable operating segment for the three months ended March 31, (dollars in thousands):
Interest and dividend income
426,119
231,232
(185,616)
Interest expense
265,241
122,083
(227,962)
160,878
109,149
42,346
280
2,007
160,598
107,142
41,896
Noninterest income
28,944
18,353
7,486
Noninterest expenses
93,790
104,996
11,024
95,752
20,499
38,358
296,987
156,143
(147,294)
197,647
80,359
(156,334)
99,340
75,784
9,040
15,045
2,593
84,295
73,191
11,799
14,634
2,730
55,212
67,567
11,405
40,882
20,258
365
The following table presents the Company’s operating segment results for key balance sheet metrics as of the periods ended (dollars in thousands):
Corporate Other (1)
23,294,363
5,309,769
(657,708)
Goodwill (2)
Deposits (3)
11,878,174
17,738,197
774,885
23,179,687
5,317,949
(701,469)
11,339,236
17,820,026
1,312,374
(1) Corporate Other includes acquisition accounting fair value adjustments.
(2) During the first quarter of 2026, goodwill was reallocated among reporting units as a result of measurement period adjustments associated with the Sandy Spring acquisition, resulting in a $26.7 million increase in Wholesale Banking and a $5.2 million decrease in Consumer Banking. Refer to Note 2 “Acquisitions” and Note 5 “Goodwill & Intangible Assets” within this Item 1 of this Quarterly Report for more information.
(3) Corporate Other primarily includes brokered deposits.
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Revenue
Noninterest income disaggregated by major source for the three months ended March 31, consisted of the following (dollars in thousands):
Service charges on deposit accounts (1):
Overdraft fees
6,037
5,576
Maintenance fees & other
6,079
Other service charges, commissions, and fees (1)
Interchange fees (1)
Fiduciary and asset management fees (1):
Trust asset management fees
10,613
3,826
Registered advisor management fees
7,380
Brokerage management fees
2,185
2,871
(1) Income within scope of ASC 606, Revenue from Contracts with Customers.
The following tables present noninterest income disaggregated by reportable operating segment for the three months ended March 31, (dollars in thousands):
4,411
7,705
435
1,503
17,880
2,298
Other income
4,821
18,525
3,010
6,673
396
1,366
4,771
1,926
3,622
3,696
10,048
(1) For the three months ended March 31, 2026 and March 31, 2025, other income primarily includes income from BOLI and equity method investment income.
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The following tables present noninterest expense disaggregated by reportable operating segment for the three months ended March 31, (dollars in thousands):
35,519
28,171
49,723
8,385
4,441
1,758
274
13,570
1,592
3,879
829
1,254
768
Other expenses (1)
55,224
65,320
(61,357)
59,187
Total noninterest expense
20,684
19,936
34,795
236
5,166
3,178
886
179
9,123
62
994
2,858
362
33,231
40,518
(38,911)
34,838
(1) Includes allocated expenses
15. SUBSEQUENT EVENTS
On May 1, 2026, the Company completed the sale of the Company’s interest (held by the Company’s indirect subsidiary, Union Insurance Group, LLC) in Bearing Insurance Group, LLC to an unaffiliated third party. The sale is expected to result in a pre-tax gain of approximately $32.3 million, to be recognized in the Company’s financial results for the second quarter of 2026.
On May 5, 2026, the Company’s Board authorized a share repurchase program to purchase up to $250 million of the Company’s common stock through May 5, 2027 in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended.
On May 5, 2026, the Company’s Board of Directors declared a quarterly dividend on the outstanding shares of its Series A preferred stock. The Series A preferred stock is represented by depositary shares, each representing a 1/400th ownership interest in a share of Series A preferred stock. The dividend of $171.88 per share (equivalent to $0.43 per outstanding depositary share) is payable on June 1, 2026 to preferred shareholders of record as of May 15, 2026.
The Company’s Board of Directors also declared a quarterly dividend of $0.37 per share of common stock. The common stock dividend is payable on June 5, 2026 to common shareholders of record as of May 22, 2026.
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To the Shareholders and the Board of Directors of Atlantic Union Bankshares Corporation
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated balance sheet of Atlantic Union Bankshares Corporation and subsidiaries (the Company) as of March 31, 2026, the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity and cash flows for the three-month periods ended March 31, 2026 and 2025, and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 26, 2026, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ Ernst & Young LLP
Richmond, Virginia
May 5, 2026
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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information about the major components of our results of operations, financial condition, liquidity, and capital resources. This discussion and analysis should be read in conjunction with our “Consolidated Financial Statements,” our “Notes to the Consolidated Financial Statements,” and the other financial data included in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section therein. Our results of operations for the interim periods are not necessarily indicative of results that may be expected for the full year or for any other period. Amounts are rounded for presentation purposes; however, some of the percentages presented are computed based on unrounded amounts.
In the following discussion and analysis, we provide certain financial information determined by methods other than in accordance with GAAP. These non-GAAP financial measures are a supplement to GAAP, which we use to prepare our financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. We use the non-GAAP financial measures discussed herein in our analysis of our performance. Management believes that these non-GAAP financial measures provide additional understanding of our ongoing operations, enhance the comparability of our results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in our underlying performance. Non-GAAP financial measures may be identified with the symbol (+) and may be labeled as adjusted. Refer to the “Non-GAAP Financial Measures” section within this Item 2 for more information about these non-GAAP financial measures, including a reconciliation of these measures to the most directly comparable GAAP financial measures.
FORWARD-LOOKING STATEMENTS
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 acquisition of Sandy Spring, including expectations with regard to the benefits of the Sandy Spring acquisition; statements regarding our strategic expansion into North Carolina; 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
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More information on factors that could affect our forward-looking statements is discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Form 10-K and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements made in this Quarterly Report are expressly qualified by the cautionary statements contained or referred to herein and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or our businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this Quarterly Report. Forward-looking statements speak only as of the date they are made. We do not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise, except as required by law.
CRITICAL ACCOUNTING ESTIMATES
We prepare our consolidated financial statements based on the application of accounting and reporting policies in accordance with GAAP and general practices within the banking industry. Our financial position and results of operations are affected by management’s application of accounting policies, which require the use of estimates, assumptions, and judgments, which may prove inaccurate or are subject to variations. Changes in underlying factors, estimates, assumptions or judgements could result in material changes in our consolidated financial position and/or results of operations.
Certain accounting policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the allowance for loan and lease losses, fair value measurements, valuation of deferred tax assets, and valuation of acquired assets and liabilities as accounting policies that require the most difficult, subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change. Therefore, we evaluate these accounting policies and related critical accounting estimates on an ongoing basis and update them as needed. Management has discussed these accounting policies and the critical accounting estimates summarized below with the Audit Committee of the Board of Directors.
We provide additional information about our critical accounting estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our 2025 Form 10-K.
Our significant accounting policies are discussed in Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of our 2025 Form 10-K.
Effective January 1, 2026, the Company made certain changes to its allowance methodology as part of the continued enhancement of its credit modeling practices, resulting in more dynamic and precise modeling that allow for more granularity in the monitoring of our expected credit losses. As a result of this change, the Company moved from two loan portfolio segments (Commercial and Consumer) to three portfolio segments (CRE, Commercial and Industrial, and Consumer), by reorganizing the former Commercial segment into the CRE and Commercial and Industrial segments, with no changes made to the Consumer segment. These changes were accounted for prospectively as a change in accounting estimate, did not have a material impact on the Company’s consolidated financial statements, and resulted in no changes to previously reported values. For more information on this change in estimate, see below and see Note 1 “Summary of Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report. For information regarding our prior allowance methodology, see Note 1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of our 2025 Form 10-K.
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Allowance for Loan and Lease Losses
The ALLL represents the estimated balance that we consider appropriate to absorb expected credit losses over the expected contractual life of the loan portfolio. Effective January 1, 2026, we estimate our ALLL using either a loan-level probability of default/loss given default methodology or a segment level loss rate model for our loan portfolios.
Determining the appropriateness of the ALLL is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the ALLL in future periods. There are both internal factors (e.g., loan balances, credit quality, collateral values, and the contractual lives of loans) and external factors (i.e., economic conditions such as trends in housing prices, interest rates, gross domestic product, inflation, and unemployment) that can impact the ALLL estimate.
The ALLL is estimated using quantitative methods that consider a variety of factors from both internal and external sources at the loan, portfolio, and macroeconomic environment levels. Our quantitative models consider various macroeconomic variables including the unemployment rate, gross domestic product, home price index, and others for a reasonable and supportable forecast period. The ALLL quantitative estimate is sensitive to changes in the macroeconomic variable forecasts during the reasonable and supportable period. The estimated loan losses that are forecasted using the methodology described above are then adjusted for changes in qualitative factors not inherently considered in the quantitative analysis. The qualitative factors include, among others, credit concentrations of the loan portfolio, economic uncertainty, model imprecision, and factors related to credit administration.
Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of estimated credit losses on loans, and therefore the appropriateness of the ALLL, could change significantly. In estimating the ALLL, we consider multiple forecast scenarios to address the uncertainty inherent in macroeconomic variable forecasts. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall ALLL because we consider a wide variety of factors and inputs in estimating the ALLL and changes in those factors and inputs may not occur at the same rate and may not be consistent across all loan types. Additionally, changes in factors and inputs may be directionally inconsistent, such that an improvement in one factor may offset deterioration in others.
We review the ALLL estimation process regularly for appropriateness as the economic and internal environment are constantly changing. While the ALLL estimate represents our current estimate of expected credit losses, due to uncertainty surrounding internal and external factors, there is potential that the estimate may not be appropriate over time to cover credit losses in the portfolio. While we use available information to estimate expected losses on loans, future changes in the ALLL may be necessary based on changes in portfolio composition, portfolio credit quality, economic conditions and/or other factors.
RECENT ACCOUNTING PRONOUNCEMENTS (ISSUED BUT NOT FULLY ADOPTED)
In November 2024, the FASB issued ASU No. 2024-03 Income 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.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which outlined targeted improvements to Subtopic 350-40 to increase the operability of the recognition guidance considering different methods of software development. The amendments are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are evaluating the impact of ASU No. 2025-06 on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The update to Topic 815 outlined the addition of derivative scope exceptions with underlyings that are based on the operations or activities of one of the parties to the contract. The update to Topic 606 clarified the applicability of Topic 606 and its interaction with other Topics. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. ASU No. 2025-07 is not expected to have an impact on our consolidated financial statements.
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In November 2025, the FASB issued ASU No. 2025-08 Financial Instruments – Credit Losses (Topic 326): Purchased Loans. This update expanded the population of acquired financial assets subject to the gross-up approach in Topic 326. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are evaluating the impact of ASU No. 2025-08 on our consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This update clarified certain aspects of the guidance on hedge accounting. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are evaluating the impact of ASU No. 2025-09 on our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11 Interim Reporting (Topic 270): Narrow Scope Improvements. This update improved the navigability of the required interim disclosures and clarified when that guidance is applicable. The amendments are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. ASU No. 2025-11 is not expected to have an impact on our consolidated financial statements but could have an impact on interim disclosures.
ABOUT ATLANTIC UNION BANKSHARES CORPORATION
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, North Carolina and Washington, D.C. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; AUB Investments, Inc., which provides investment services; and Atlantic Union Capital Markets, Inc., which provides capital market services.Shares of our common stock are traded on the New York Stock Exchange under the symbol “AUB”. Additional information is available on our website at https://investors.atlanticunionbank.com. The information contained on our website is not a part of or incorporated into this Quarterly Report.
RESULTS OF OPERATIONS
Economic Environment and Industry Events
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 the unemployment rate, 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.
During the first quarter of 2026, financial markets experienced increased and prolonged economic uncertainty arising from international conflicts, including those in the Middle East, and changes in the unemployment rate. These factors 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.
In March 2026, the FOMC maintained the target range for the Federal Funds rate at 3.50% to 3.75%. The FOMC noted that uncertainty about the economic outlook remains elevated, and the implications of developments in the Middle East for the U.S. economy are uncertain. In light of this continued uncertainty, it is difficult to predict how the Federal Reserve will balance possible inflationary pressure with the potential of slower economic growth and rising risks in employment.
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.
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At March 31, 2026, our LHFI increased from December 31, 2025 by $150.3 million, primarily due to an increase in the commercial and industrial portfolio, while our total deposits decreased by $80.4 million from December 31, 2025, primarily due to a $518.0 million decrease in brokered deposits, partially offset by an increase in interest bearing customer deposits. At both March 31, 2026 and December 31, 2025, noninterest bearing deposits comprised 22.5% of total deposits. As of March 31, 2026, we estimate that approximately 68.4% of our deposits were insured or collateralized, and that we maintained available liquidity sources to cover approximately 156.2% of uninsured and uncollateralized deposits. At March 31, 2026, our total borrowings decreased by $192.7 million from December 31, 2025, primarily due to higher short-term borrowings in the prior quarter that were repaid in the current quarter using funds from customer deposits.
Our regulatory capital ratios continued to exceed the standards to be considered well-capitalized under regulatory requirements. See “Capital Resources” within this Item 2 for additional information about our regulatory capital.
SUMMARY OF FINANCIAL RESULTS
Executive Overview
First Quarter Net Income & Performance Metrics
Balance Sheet
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NET INTEREST INCOME
Net interest income, which represents our principal source of revenue, is the amount by which interest income exceeds interest expense. Our net interest margin represents net interest income expressed as a percentage of average earning assets. Changes in the volume and mix of interest-earning assets and interest-bearing liabilities, as well as their respective yields and rates, have a significant impact on our net interest income, net interest margin, and net income. In addition, our net interest income includes the accretion of discounts on our acquired loans, as well as amortization of deposits and borrowings, which will also affect our net interest income and net interest margin.
We seek to fund increased loan volumes by growing our core deposits, but, subject to internal policy limits on the amount of wholesale funding, we may use other wholesale funding sources to fund shortfalls, if any, or provide additional liquidity.
The following tables show interest and dividend 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):
For the Three Months Ended
Change
Average interest-earning assets
33,377,790
22,108,618
11,269,172
165,899
Interest and dividend income (FTE) (+)
476,285
309,593
166,692
Yield on interest-earning assets
5.61
Yield on interest-earning assets (FTE) (+)
5.79
5.68
Average interest-bearing liabilities
24,828,231
16,588,367
8,239,864
37,690
Cost of interest-bearing liabilities
2.60
2.97
Cost of funds
1.94
2.23
(29)
128,209
Net interest income (FTE) (+)
316,923
187,921
129,002
Net interest margin
3.80
3.38
42
Net interest margin (FTE) (+)
3.85
40
For the first quarter of 2026, our net interest income was $312.4 million, an increase of $128.2 million from the first quarter of 2025, and our net interest income (FTE)(+) was $316.9 million, an increase of $129.0 million from the first quarter of 2025. The increases were primarily the result of a $11.3 billion increase in average interest earning assets and higher net accretion income, partially offset by a $8.2 billion increase in average interest-bearing liabilities, primarily related to the acquisition of Sandy Spring, as well as organic loan growth and lower cost of funds. The decline in cost of funds was driven by lower deposit costs, reflecting the impact of the Federal Reserve lowering the Federal Funds rates 75 bps between September and December 2025.
In the first quarter of 2026, our net interest margin increased 42 bps to 3.80% from 3.38% in the first quarter of 2025, and our net interest margin (FTE)(+) increased 40 bps to 3.85% in the first quarter of 2026 from 3.45% for the same period of 2025. The increases in net interest margin and net interest margin (FTE)(+) were primarily driven by lower cost of funds and higher earning asset yields. Our cost of funds decreased 29 bps to 1.94% from 2.23% in the first quarter of 2025, due to lower cost of deposits, primarily due to the Federal Funds rate cuts discussed above, as well as reduced brokered deposits. The lower cost of funds was partially offset by an increase in net amortization related to acquisition accounting and an increase in long-term subordinated debt with higher borrowing costs, both related to the Sandy Spring acquisition. Our earning asset yield increased 12 bps to 5.73% for the first quarter of 2026 from 5.61% in the first quarter of 2025, due to increases in loan balances and accretion income, primarily driven by the Sandy Spring acquisition.
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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 $32.9 million for the first quarter of 2026, an increase of $20.3 million compared to the first quarter of 2025, 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):
Deposit
Loan
Accretion
(Amortization)
Amortization
For the quarter ended March 31, 2025
13,286
(415)
(287)
12,584
For the quarter ended March 31, 2026
35,602
366
(3,044)
32,924
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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):
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
Average
Income /
Yield /
Expense (1)
Rate (1)(2)
Assets:
Securities:
3,877,982
4.29
2,131,859
4.50
Tax-exempt
1,329,520
11,333
3.46
1,255,768
10,329
3.34
Total securities
5,207,502
52,341
4.08
3,387,627
33,977
4.07
LHFI, net of unearned income (3)(4)
27,830,037
421,299
6.14
18,428,710
272,904
6.01
Other earning assets
340,251
2,645
292,281
2,712
3.76
Total earning assets
(296,795)
(179,601)
Total non-earning assets
4,173,862
2,749,957
37,254,857
24,678,974
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts
14,701,490
79,333
2.19
10,316,955
66,688
Regular savings
2,713,336
10,894
1.63
1,029,875
501
Time deposits(5)
6,039,778
51,552
4,715,648
48,398
4.16
Total interest-bearing deposits
23,454,604
2.45
16,062,478
2.92
Other borrowings(6)
1,373,627
17,583
5.19
525,889
6,085
4.69
Total interest-bearing liabilities
Noninterest-bearing liabilities:
Demand deposits
6,755,732
4,403,603
602,825
503,158
32,186,788
21,495,128
Stockholders' equity
5,068,069
3,183,846
Net interest income (FTE)(+)
Interest rate spread
3.19
2.71
Net interest margin (FTE)(+)
(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21%.
(2) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(3) Nonaccrual loans are included in average loans outstanding.
(4) Interest income on loans includes accretion of the fair market value adjustments related to acquisitions, as disclosed above.
(5) Interest expense on time deposits includes accretion (amortization) of the fair market value adjustments related to acquisitions, as disclosed above.
(6) Interest expense on borrowings includes amortization of the fair market value adjustments related to acquisitions, as disclosed above.
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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):
2026 vs. 2025
Increase (Decrease) Due to Change in:
Volume
Rate
Earning Assets:
18,513
(1,153)
17,360
383
1,004
19,134
(770)
18,364
Loans, net(1)
142,190
6,205
148,395
409
(476)
(67)
161,733
4,959
Interest-Bearing Liabilities:
24,970
(12,325)
12,645
8,480
10,393
Time deposits(2)
12,159
(9,005)
3,154
39,042
(12,850)
26,192
Other borrowings(3)
10,788
710
11,498
49,830
(12,140)
Change in net interest income (FTE)(+)
111,903
17,099
(1) The rate-related changes in interest income on loans includes the impact of higher accretion of the acquisition-related fair market value adjustments, as disclosed above.
(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.
(3) The rate-related changes in interest expense on other borrowings include the impact of higher amortization of the acquisition-related fair market value adjustments, as disclosed above.
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NONINTEREST INCOME
Three Months Ended March 31, 2026 and March 31, 2025
2,433
25.1
176
10.0
12.8
13,481
1,053
108.2
1,663
47.0
65.6
4,862
25,620
87.9
Our noninterest income increased $25.6 million or 87.9% to $54.8 million for the quarter ended March 31, 2026, compared to the quarter ended March 31, 2025, primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the $13.5 million increase in fiduciary and asset management fees, due to assets under management increasing 125%, the $2.4 million increase in service charges on deposit accounts, the $1.7 million increase in BOLI income, and the $1.1 million increase in mortgage banking income. In addition to the acquisition impact, other operating income increased $4.9 million, primarily due to an increase in equity method investment income, and loan-related interest rate swap fees increased $1.6 million due to higher transaction volumes.
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NONINTEREST EXPENSE
Noninterest expense:
37,998
50.4
4,622
53.9
1,641
41.9
5,414
53.1
1,081
23.1
4,144
130.2
1,645
31.6
1.3
1,602
128.3
186.1
82.9
3,275
48.3
75,626
56.4
Our noninterest expense increased $75.6 million or 56.4% to $209.8 million for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the increases of $38.0 million in salaries and benefits expense, $10.0 million in amortization of intangible assets, and $4.1 million in merger-related costs, as well as the other increases in most other categories of noninterest expense.
Our adjusted operating noninterest expense(+), which excludes amortization of intangible assets ($15.4 million in the first quarter 2026 and $5.4 million in the first quarter 2025) and merger-related costs ($9.0 million in the first quarter 2026 and $4.9 million in the first quarter 2025) increased $61.5 million or 49.7% to $185.3 million for the quarter ended March 31, 2026, compared to $123.8 million for the quarter ended March 31, 2025. The increase in adjusted operating noninterest expense(+) was primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the $38.0 million increase in salaries and benefits expense, the $5.4 million increase in technology and data processing, the $4.6 million increase in occupancy expenses, the $4.1 million increase in marketing and advertising expense, the $3.3 million increase in other expenses, the $1.6 million increase in FDIC assessment premiums and other insurance, the $1.6 million increase in furniture and equipment expenses, and the $1.6 million increase in loan-related expenses. In addition to the acquisition impacts, professional services increased $1.1 million related to strategic projects that occurred during the first quarter of 2026.
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SEGMENT RESULTS
The Company has two reportable operating segments, Wholesale Banking and Consumer Banking, with corporate support functions and intercompany eliminations being presented within Corporate Other. For more information about our operating segments, see Note 14, “Segment Reporting and Revenue” in Part I, Item 1 of this Quarterly Report.
Our Wholesale Banking segment provides loan, leasing, deposit, treasury management, and capital market services to wholesale customers primarily throughout Virginia, Maryland, Washington, D.C., North Carolina, and South Carolina. These customers include CRE and commercial and industrial customers. This segment also includes our equipment finance subsidiary, which has nationwide exposure. The wealth management business also resides in the Wholesale Banking segment which provides a wide variety of financial planning, wealth management and trust services to individuals and corporations.
The following table presents operating results for the three months ended March 31, for the Wholesale Banking segment (dollars in thousands):
Noninterest expense
Wholesale Banking income before income taxes increased by $54.9 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily due to increases in net interest income and noninterest income, in each case primarily driven by the impact of the Sandy Spring acquisition. In addition, the Wholesale Banking provision for credit losses decreased as compared to the same period in the prior year, primarily due to higher uncertainty in the economic outlook in the prior year, as well as specific reserves recorded in the prior year on two impaired commercial and industrial loans.
The increase in income before income taxes was partially offset by an increase in noninterest expense, primarily due to the impact of the Sandy Spring acquisition.
The following table presents the key balance sheet metrics as of the periods ended for the Wholesale Banking segment (dollars in thousands):
At March 31, 2026, LHFI for the Wholesale Banking segment increased $114.7 million to $23.3 billion, compared to December 31, 2025, primarily due to an increase in the commercial and industrial portfolio.
At March 31, 2026, Wholesale Banking deposits increased $538.9 million to $11.9 billion, compared to December 31, 2025, primarily due to an increase in interest-bearing customer deposits.
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Our Consumer Banking segment provides loan and deposit services and retail brokerage services to consumers and small businesses throughout Virginia, Maryland, Washington, D.C., and North Carolina. Consumer Banking includes the home loan division and investment management and advisory services businesses.
The following table presents operating results for the three months ended March 31, for the Consumer Banking segment (dollars in thousands):
Consumer Banking income before income taxes for the three months ended March 31, 2026 remained relatively consistent, compared to the three months ended March 31, 2025. The increases in net interest income and noninterest income, were almost wholly offset by an increase in noninterest expense, in each case primarily driven by the impact of the Sandy Spring acquisition.
The following table presents the key balance sheet metrics as of the periods ended for the Consumer Banking segment (dollars in thousands):
At March 31, 2026, LHFI for the Consumer Banking segment decreased $8.2 million to $5.3 billion, compared to December 31, 2025, primarily due to decreases in the auto and consumer portfolios.
At March 31, 2026, Consumer Banking deposits decreased $81.8 million to $17.7 billion, compared to December 31, 2025, primarily due to decreases in savings accounts, money market accounts, and demand deposits.
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INCOME TAXES
Our provision for income taxes is based on our results of operations, adjusted for the effect of certain tax-exempt income and non-deductible expenses. In addition, we report certain items of income and expense in different periods for financial reporting and tax return purposes. We recognize the tax effects of these temporary differences in the deferred income tax provision or benefit. Deferred tax assets or liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities using the applicable enacted marginal tax rate. 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 effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was 21.0% and 19.0%, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 is primarily due to the Sandy Spring acquisition, which resulted in additional state income tax expense due to an expanded tax footprint and an overall increase in the proportion of taxable income to tax-exempt income.
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. This assessment was consistent with our conclusions in the prior period.
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
At March 31, 2026, we had total assets of $37.3 billion, a decrease of $270.7 million or 2.9% (annualized) from December 31, 2025. The decrease in total assets was primarily due to decreases in securities and cash and cash equivalents, partially offset by increases in LHFI.
LHFI totaled $27.9 billion at March 31, 2026, an increase of $150.3 million or 2.2% (annualized) from December 31, 2025, primarily due to an increase in the commercial and industrial portfolio. At March 31, 2026, quarterly average LHFI increased $9.4 billion or 51.0% from the same period in the prior year, primarily due to the addition of the Sandy Spring acquired loans. 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.
Total securities at March 31, 2026 were $5.1 billion, a decrease of $209.5 million or 16.1% (annualized) from December 31, 2025. The decrease in total securities was primarily due to principal repayments and maturities of AFS securities. AFS securities totaled $4.0 billion at March 31, 2026, compared to $4.2 billion at December 31, 2025. At March 31, 2026, total net unrealized losses on the AFS securities portfolio were $322.1 million, compared to $295.7 million at December 31, 2025. HTM securities totaled $870.3 million at March 31, 2026, compared to $884.2 million at December 31, 2025, with net unrealized losses of $35.5 million at March 31, 2026, compared to $27.4 million at December 31, 2025.
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Liabilities and Stockholders’ Equity
At March 31, 2026, we had total liabilities of $32.3 billion, a decrease of $316.7 million or 3.9% (annualized) from December 31, 2025, which was primarily due to a decrease in total borrowings of $192.7 million, as well as a decrease in total deposits of $80.4 million.
Total deposits at March 31, 2026 were $30.4 billion, a decrease of $80.4 million or 1.1% (annualized) from December 31, 2025, and was primarily due to a decline in brokered deposits, partially offset by an increase in interest-bearing customer deposits. Quarterly average deposits at March 31, 2026 increased $9.7 billion or 47.6% from the same period in the prior year, primarily due to the addition of the Sandy Spring acquired deposits. Refer to “Deposits” within this Item 2 for additional information on this topic.
Total borrowings at March 31, 2026 were $1.3 billion, a decrease of $192.7 million or 52.2% (annualized) from December 31, 2025, primarily due to the higher short-term borrowings in the prior quarter that were repaid in the current quarter using funds from customer deposits, Refer to Note 7 “Borrowings” in Part I, Item 1 of this Quarterly Report for additional information on our borrowing activity.
At March 31, 2026, our stockholders’ equity was $5.1 billion, an increase of $45.9 million from December 31, 2025. 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 and the Forward Sale Agreements.
During the first quarter of 2026, 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 2025 and the first quarter of 2025. During the first quarter of 2026, we also declared and paid cash dividends of $0.37 per common share, consistent with the fourth quarter of 2025 and an increase of $0.03 per share or 8.8% from the first quarter of 2025.
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SECURITIES
At March 31, 2026, we had total securities of $5.1 billion or 13.6% of total assets, compared to $5.3 billion or 14.0% of total assets at December 31, 2025. This decrease was primarily due to principal repayments and maturities of AFS securities. 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.
The table below sets forth a summary of the AFS securities, HTM securities, and restricted stock as of the periods ended (dollars in thousands):
Available for Sale:
Corporate and other bonds
Residential
Total MBS
Total AFS securities, at fair value
Held to Maturity:
Total held to maturity securities, at carrying value
Restricted Stock:
FRB stock
141,225
FHLB stock
36,288
48,975
Total restricted stock, at cost
5,059,211
5,268,717
The following table summarizes the weighted average yields(1) for AFS securities by contractual maturity date of the underlying securities as of March 31, 2026:
1 Year
After 1 Year
After 5 Years
Over 10
or Less
through 5 Years
through 10 Years
Years
4.40
3.97
4.47
4.34
4.36
3.05
2.00
2.24
Corporate bonds and other securities
2.12
3.64
4.62
MBS:
5.84
5.58
3.56
3.82
2.68
5.76
4.44
3.75
3.86
4.96
5.67
4.33
4.32
5.27
3.67
(1) Yields on tax-exempt securities have been computed on an estimated tax-equivalent basis.
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The following table summarizes the weighted average yields(1) for HTM securities by contractual maturity date of the underlying securities as of March 31, 2026:
4.28
4.02
3.35
4.23
6.87
3.08
3.23
3.24
3.36
3.77
Weighted average yield is calculated as the tax-equivalent yield on a pro rata basis for each security based on its relative amortized cost.
As of March 31, 2026, we maintained a diversified municipal bond portfolio with approximately 64% of our holdings in general obligation issues and the remainder primarily backed by revenue bonds. Issuances within the State of Texas represented 20% of the total municipal portfolio; no other state had a concentration above 10%. Substantially all of our municipal holdings are considered investment grade. When purchasing municipal securities, we focus on strong underlying ratings for general obligation issuers or bonds backed by essential service revenues.
LIQUIDITY
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, 2026 were $30.4 billion, a decrease of $80.4 million or 0.3% from December 31, 2025, primarily due to a decline in brokered deposits, partially offset by an increase in interest-bearing customer deposits. Refer to “Deposits” within this Item 2 for additional information on this topic.
We closely monitor changes in the industry and market conditions that may impact our liquidity and will use other borrowing means or other liquidity and funding strategies sources to fund our liquidity needs as needed. We also closely track the potential impacts on our liquidity from declines in the fair value of our securities portfolio due to changing market interest rates and developments in the banking industry that may change the availability of traditional sources of liquidity or market expectations with respect to available sources and amounts of additional liquidity.
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, 2026, our liquid assets totaled $13.7 billion or 36.8% of total assets, and liquid earning assets totaled $13.3 billion or 39.8% of total earning assets. We also provide asset liquidity by managing loan and securities maturities and cash flows. As of March 31, 2026, loan payments of approximately $12.2 billion or 43.8% of total LHFI are expected within one year based on contractual terms, adjusted for expected prepayments, and approximately $703.3 million or 13.9% of total investments as of March 31, 2026 are scheduled to be paid down within one year based on contractual terms, adjusted for expected prepayments.
Additional sources of liquidity available to us include our capacity to borrow additional funds when necessary through federal funds lines with several correspondent banks, a line of credit with the FHLB, the Federal Reserve Discount Window, the purchase of brokered certificates of deposit, a corporate line of credit with a large correspondent bank, and debt and capital issuances. We also recently increased our borrowing capacity at the FHLB and FRB since secured borrowing facilities provide the most reliable sources of funding, especially during times of market turbulence and financial distress. Management believes our overall liquidity to be sufficient to satisfy our depositors’ requirements and to meet our customers’ credit needs.
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For additional information and the available balances on various lines of credit, please refer to Note 7 “Borrowings” in Part I, Item 1 of this Quarterly Report. In addition to lines of credit, we may also borrow additional funds by purchasing certificates of deposit through a nationally recognized network of financial institutions.
Cash Requirements
Our cash requirements, outside of lending transactions, consist primarily of borrowings, leases, debt and capital instruments, which are used as part of our overall liquidity and capital management strategy. We expect that the cash required to repay these obligations will be sourced from our general liquidity sources and future debt and capital issuances and from other general liquidity sources as described above.
The following table presents our contractual obligations related to our major cash requirements and the scheduled payments due at the various intervals over the next year and beyond as of March 31, 2026 (dollars in thousands):
Less than
More than
1 year
Subordinated debt (1)
Trust preferred capital notes (1)
Leases (2)
131,406
Total contractual obligations
1,087,698
163,750
923,948
(1) Excludes related unamortized premium/discount and interest payments.
(2) Represents lease payments due on non-cancellable operating leases at March 31, 2026. Excluded from these tables are variable lease payments or renewals.
For more information pertaining to the previous table, reference Note 6 “Leases” and Note 7 “Borrowings” in Part I, Item 1 of this Quarterly Report.
Off-Balance Sheet Obligations
In the normal course of business, we are party to financial instruments with off-balance sheet risk to meet the financing needs of our customers and to reduce our own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in our Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of our involvement in particular classes of financial instruments.
Our exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit is represented by the contractual amount of these instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless noted otherwise, we do not require collateral or other security to support off-balance sheet financial instruments with credit risk.
For a summary of our total commitments with off-balance sheet risk see Note 8 “Commitments and Contingencies” in Part I, Item 1 of this Quarterly Report.
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 $753.6 million and $712.8 million, respectively, at March 31, 2026 and December 31, 2025.
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Impact of Inflation and Changing Prices
Our financial statements included in Item I “Financial Statements” of this Quarterly Report have been prepared in accordance with GAAP, which requires the financial position and operating results to be measured principally in terms of historic dollars without considering the change in the relative purchasing power of money over time due to inflation. Inflation affects our results of operations mainly through increased operating costs, but since nearly all of our assets and liabilities are monetary in nature, changes in interest rates generally affect our financial condition to a greater degree than changes in the rate of inflation. Inflation also leads to increased costs for our customers, which may make it difficult for them to repay their loans, potentially leading to increased delinquencies, increased volume of loan modifications, financial losses, and increased credit risk for us. Although interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Management reviews pricing of our products and services, in light of current and expected costs due to inflation, to seek to mitigate the inflationary impact on our financial performance.
LOAN PORTFOLIO
LHFI totaled $27.9 billion and $27.8 billion at March 31, 2026 and December 31, 2025, respectively. CRE loans represented our largest loan portfolio segment at both March 31, 2026 and December 31, 2025. We remain committed to originating soundly underwritten loans to qualifying borrowers within our markets.
The following table presents the remaining maturities, based on contractual maturity, by loan type, and by rate type (variable or fixed), net of unearned income, as of March 31, 2026 (dollars in thousands):
Variable Rate
Fixed Rate
Less than 1
Maturities
year
1-5 years
5-15 years
15 years
680,488
862,354
743,244
113,111
5,999
205,571
121,094
13,290
71,187
355,871
1,288,271
523,499
748,343
16,429
2,675,705
1,559,603
1,096,213
19,889
1,481,782
3,266,483
2,406,344
843,676
16,463
2,463,770
1,971,156
492,614
697,323
1,175,079
935,700
238,270
1,109
449,102
329,416
119,686
1,168,963
2,209,759
1,889,831
265,874
54,054
2,006,134
1,328,130
588,840
89,164
276,981
195,306
125,781
66,441
3,084
581,016
500,466
75,661
4,889
2,276
1,362,769
1,587
43,515
1,317,667
1,474,171
28,314
192,342
1,253,515
48,985
1,103,337
54,362
97,049
951,926
104,757
4,569
38,049
62,139
5,004
151,839
151,246
593
7,129
42,478
19,684
2,826
19,968
60,148
35,112
19,629
5,407
88,849
374,208
217,383
151,560
5,265
1,080,516
557,485
407,635
115,396
4,813,651
11,880,044
6,917,415
2,570,665
2,391,964
11,252,729
6,586,591
3,044,552
1,621,586
Our highest concentration of credit by loan type is in CRE. CRE loans consist of term loans secured by a mortgage lien on the real property and include both non-owner occupied and owner occupied CRE loans, as well as construction and land development, multifamily real estate, residential 1-4 family – commercial, and other commercial (farmland) loans. CRE loans are generally viewed as having more risk of default than residential real estate loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt. The borrower’s cash flows may be affected significantly by general economic conditions, a downturn in the local economy, or in occupancy rates in the market where the property is located, any of which could increase the likelihood of default.
We perform risk assessments to identify the CRE concentration ratio based on the two-tiered guidelines issued by the federal banking regulators. The loan balances used to determine the CRE concentration ratio are as defined in the Call Report instructions, which is comprised of loans secured by 1-4 family residential construction loans, loans secured by other construction loans and all land development and other land loans, loans secured by multi-family residential properties, loans secured by other nonfarm non-residential properties, and loans to finance CRE, construction, and land development activities, and do not necessarily match the balances displayed in Note 4 “Loans and Allowance for Loan and Lease Losses” in Part I, Item 1 of this Quarterly Report.
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The two-tiered guidelines include (i) total reported loans for construction, land development, and other land represent 100 percent or more of the institution's total capital; or (ii) total CRE loans represent 300 percent or more of the institution's total capital, and the outstanding balance of the institution's CRE loan portfolio has increased by 50 percent or more during the prior 36 months.
As of March 31, 2026 and December 31, 2025, our construction and land development concentration as a percentage of capital totaled 40.6% and 39.2%, respectively, and our CRE concentration as a percentage of capital totaled 272.0% and 275.3%, respectively. Total CRE exposure increased 93.4% for the 36-month period ended March 31, 2026, primarily due to the Sandy Spring acquisition.
We seek to mitigate risks attributable to our most highly concentrated portfolios and our portfolios that pose unique risks to our balance sheet through our credit underwriting and monitoring processes, including oversight by a centralized credit administration function, approval process, credit policy, and risk management committee, as well as through our seasoned bankers that focus on lending to borrowers with proven track records in markets that we are familiar with. All construction lending risk is controlled by a centralized construction loan servicing department that independently reviews and approves each draw request, including assessing on-going budget adequacy, and monitors project completion milestones. When underwriting CRE loans, we require collateral values in excess of the loan amounts, cash flows in excess of expected debt service requirements, and equity investment in the project. As part of the CRE loan origination process, we also stress test loan interest rates and occupancy rates to determine the impact of different economic conditions on the borrower’s ability to maintain appropriate debt service.
We manage our CRE exposure through product type limits, individual loan-size limits for CRE product types, client relationship limits, and transactional risk acceptance criteria, as well as other techniques, including but not limited to, loan syndications/participations, collateral, guarantees, structure, covenants, and other risk reduction techniques. Our CRE loan policies are specific to individual product types and underwriting parameters vary depending on the risk profile of each asset class. We evaluate risk concentrations regularly in our CRE portfolio on both an aggregate portfolio level and on an individual client basis and regularly review and adjust as appropriate our lending strategies and CRE product-specific approach to underwriting in light of market conditions and our overall corporate strategy and initiatives.
The average loan size of our CRE portfolio was $1.2 million at both March 31, 2026 and December 31, 2025, and the median loan size in our CRE portfolio was $317 thousand as of March 31, 2026 and $311 thousand as of December 31, 2025.
The following table presents the composition of our CRE loan categories, including the industry classification for CRE non-owner occupied loans, and CRE loans as a percentage of total loans for the periods ended (dollars in thousands):
Hotel/Motel B&B
1,247,225
4.46
1,261,397
4.54
Industrial/Warehouse
1,336,842
4.78
1,352,848
4.87
Office
1,465,368
5.24
1,482,419
5.33
Retail
1,743,117
6.24
1,683,838
6.05
Self Storage
715,640
2.56
676,920
2.44
Senior Living
119,584
0.43
120,933
0.44
584,259
2.09
600,160
2.16
25.80
25.83
15.46
15.49
6.26
6.00
8.31
8.70
3.96
0.15
42,632
Total CRE LHFI
59.75
16,711,731
60.13
All other loan types
11,249,780
40.25
11,084,436
39.87
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Because payments on loans secured by commercial and multifamily properties are often dependent on the successful operation or management of the properties, repayment of these loans may be subject to adverse conditions in the real estate market or the economy. In particular, the repayment of loans secured by non-owner occupied commercial properties depend primarily on the tenant’s continuing ability to pay rent to the property owner, who is our borrower, or, if the property owner is unable to find a tenant, the property owner’s ability to repay the loan without the benefit of a rental income stream. If the cash flow from the project is reduced, or if leases are not obtained or renewed, the borrower’s ability to repay the loan may be impaired. Due to these risks, we proactively monitor our non-owner occupied CRE and multifamily real estate exposures and evaluate these portfolios against our established lending policies, and we believe this monitoring and evaluation helps ensure that these portfolios are geographically diverse and granular. We do not currently monitor owner-occupied CRE loans based on geographical markets as the primary source of repayment for these loans is predicated on the cash flow from the underlying operating entity, which is generally less dependent on conditions in the relevant CRE market. These loans are generally located within our geographical footprint and are generally distributed across industries.
The following table presents the distribution of our CRE non-owner occupied, multifamily real estate, and office portfolio loans by market location based on the underlying loan collateral for the periods ended (dollars in thousands):
CRE Non-Owner Occupied
Office Portfolio (1)
MultifamilyReal Estate
Carolinas
1,605,832
301,252
720,988
1,562,931
297,195
742,070
DC Metro
1,272,164
426,294
320,763
1,314,704
431,197
430,826
Western VA
989,921
154,783
260,886
998,717
157,491
272,839
Fredericksburg Area
727,681
160,201
85,114
727,918
164,866
82,413
Baltimore
705,970
128,859
158,899
670,663
131,921
161,607
Central VA
594,063
102,591
304,599
585,415
101,446
302,045
Coastal VA/NC
543,068
63,615
216,160
521,236
64,110
210,832
Other Maryland
298,865
53,286
9,676
303,323
53,787
9,742
289,366
40,229
185,855
311,824
45,622
128,444
Eastern VA
185,105
34,258
58,564
181,784
34,784
77,432
(1) The office portfolio is a subset of our CRE non-owner occupied loans included in the column to the left.
We continue to monitor our exposure to office space, within our non-owner occupied CRE portfolio. We do not currently finance large, high-rise, or major metropolitan central business district office buildings, and the office portfolio is generally in suburban markets with stronger occupancy levels than downtown office markets. The average loan size in our office portfolio was $2.1 million as of both March 31, 2026 and December 31, 2025, and the median loan size in our office portfolio was $726 thousand as of March 31, 2026 and $720 thousand as of December 31, 2025. The average loan size in our multifamily real estate portfolio was $3.6 million as of both March 31, 2026 and December 31, 2025, and the median loan size in our multifamily real estate portfolio was $863 thousand as of March 31, 2026 and $843 thousand as of December 31, 2025.
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We also continue to monitor the broader commercial lending environment, including developments affecting non-depository financial institutions (“NDFI”). Our exposures to NDFIs represent a limited portion of our other commercial (other) loans. This small portfolio of loans to NDFIs is comprised almost entirely of facilities that help fund private equity group lending to businesses. Our exposure consists of granular downstream credits held as collateral with each facility controlled with specific conservative advance rates and concentration percentages and low maximum loan amounts per credit.
The following table presents the composition of our NDFI loan exposures for the period ended (dollars in thousands):
Loans to mortgage credit intermediaries
23,988
25,382
Loans to business credit intermediaries
157,217
167,565
Other loans to non-depository financial institutions
66,246
75,007
Loans to consumer credit intermediaries
1,576
Total NDFI LHFI
247,451
269,530
NDFI loans loss reserve to total NDFI LHFI
0.82
0.46
NDFI loans to total LHFI
0.89
0.97
Average NDFI loan size
2,062
2,265
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ASSET QUALITY
Overview
At March 31, 2026 NPAs as a percentage of LHFI totaled 0.36%, a decrease of 6 basis points from December 31, 2025, and included nonaccrual LHFI of $97.8 million. Accruing past due loans as a percentage of total LHFI totaled 0.45% at March 31, 2026, an increase of 4 basis points from December 31, 2025. Net charge-offs were $1.6 million for the three months ended March 31, 2026, compared to net charge-offs of $2.3 million for the same period in the prior year.
Our ACL at March 31, 2026 increased $659 thousand to $321.9 million from December 31, 2025, comprised of an ALLL of $291.1 million and RUC of $30.8 million.
We continue to refrain from originating or purchasing loans from foreign entities, and we selectively originate loans to higher risk borrowers. Our loan portfolio generally does not include exposure to option adjustable-rate mortgage products, high loan-to-value ratio mortgages, interest only mortgage loans, subprime mortgage loans, or mortgage loans with initial teaser rates, which are all considered higher risk instruments.
Nonperforming Assets
At March 31, 2026, NPAs totaled $99.7 million, a decrease of $17.2 million from December 31, 2025. Our NPAs as a percentage of total LHFI at March 31, 2026 and December 31, 2025 were 0.36% and 0.42%, respectively. The decrease in NPAs was primarily due to the resolutions of certain Sandy Spring acquired PCD loans, which resulted in measurement period adjustments being recorded during the first quarter of 2026 associated with the Sandy Spring acquisition, based on additional information and evidence obtained by the Company relating to events or circumstances existing at the acquisition date.
The following table shows a summary of asset quality balances and related ratios as of the periods ended (dollars in thousands):
Nonaccrual LHFI
Foreclosed properties
1,856
1,826
Total NPAs
99,684
116,877
LHFI past due 90 days and accruing interest
Total NPAs and LHFI past due 90 days and accruing interest
124,154
152,428
Balances
321,928
321,269
Average LHFI, net of unearned income
25,116,692
Ratios
Nonaccrual LHFI to total LHFI
NPAs to total LHFI
0.36
0.42
NPAs & LHFI 90 days past due and accruing interest to total LHFI
0.55
NPAs to total LHFI & foreclosed property
NPAs & LHFI 90 days past due and accruing interest to total LHFI & foreclosed property
ALLL to nonaccrual LHFI
297.56
256.50
ALLL to nonaccrual LHFI & LHFI 90 days past due and accruing interest
238.03
195.95
ACL to nonaccrual LHFI
329.08
279.24
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NPAs include nonaccrual LHFI, which totaled $97.8 million at March 31, 2026, a decrease of $17.2 million from December 31, 2025. The following table shows the year-to-date activity in nonaccrual LHFI for the three months ended March 31, (dollars in thousands):
Beginning Balance
Net customer payments and other activity (1)
(33,934)
Additions
17,679
Charge-offs
(909)
Transfers to foreclosed property
(59)
Ending Balance
(1) Other activity represents measurement period adjustments related to the fair values of certain loans associated with the Sandy Spring acquisition, which impacted the nonaccrual activity for the three months ended March 31, 2026.
The following table presents the composition of nonaccrual LHFI and the coverage ratio, which is the ALLL expressed as a percentage of nonaccrual LHFI, as of the periods ended (dollars in thousands):
CRE - Owner Occupied
CRE - Non-owner Occupied
Residential 1-4 Family - Commercial
Residential 1-4 Family - Consumer
Residential 1-4 Family - Revolving
Coverage Ratio (ALLL to nonaccrual LHFI)
Past Due Loans
At March 31, 2026, past due LHFI still accruing interest totaled $125.0 million or 0.45% of total LHFI, compared to $113.0 million or 0.41% of total LHFI at December 31, 2025. The increase in past due LHFI was primarily within the multifamily real estate and CRE – owner occupied loan portfolios. Of the total past due LHFI still accruing interest, $24.5 million or 0.09% of total LHFI were loans past due 90 days or more at March 31, 2026, compared to $35.6 million or 0.13% of total LHFI at December 31, 2025.
Troubled Loan Modifications
For the three months ended March 31, 2026 and March 31, 2025, we had TLMs with an amortized cost basis of $16.7 million and $2.2 million, respectively, and no material unfunded commitments on loans modified and designated as TLMs.
Net Charge-offs
For the first quarter of 2026, net charge-offs were $1.6 million or 0.02% of total average LHFI on an annualized basis, compared to net charge-offs of $2.3 million or 0.05% (annualized) for the same quarter in the prior year.
Provision for Credit Losses
We recorded a provision for credit losses of $2.7 million for the first quarter of 2026, a decrease of $14.9 million compared to $17.6 million recorded during the same quarter of 2025. The provision for credit losses for the first quarter of 2026 reflected a
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$2.4 million release in provision for loan losses and a $4.7 million provision for unfunded commitments, primarily driven by higher construction and land development unfunded commitments. The provision for credit losses decreased as compared to the same quarter in the prior year primarily due to higher uncertainty in the economic outlook in the prior year, as well as specific reserves recorded in the prior year on two impaired commercial and industrial loans.
Effective January 1, 2026, we made certain changes to our allowance methodology as part of the continued enhancement of our credit modeling practices, resulting in more dynamic and precise modeling that allow for more granularity in the monitoring of our expected credit losses. As a result of this change, we moved from two loan portfolio segments (Commercial and Consumer) to three portfolio segments (CRE, Commercial and Industrial, and Consumer), by reorganizing the former Commercial segment into the CRE and Commercial and Industrial segments, with no changes made to the Consumer segment. The allowance methodology changes were accounted for prospectively as a change in accounting estimate, did not have a material impact on our consolidated financial statements, and resulted in no changes to previously reported values. Prior year tables do not reflect the change in methodology effective January 1, 2026. See Note 1 “Summary of Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report for additional information on the change in methodology.
At March 31, 2026, the ACL was $321.9 million and included an ALLL of $291.1 million and a RUC of $30.8 million. The ACL at March 31, 2026 increased $659 thousand from December 31, 2025.
At March 31, 2026, the ACL as a percentage of total LHFI remained relatively consistent at 1.15%, compared to 1.16% at December 31, 2025. The ALLL as a percentage of total LHFI decreased by 2 basis points, from 1.06% at December 31, 2025 to 1.04% at March 31, 2026. The RUC coverage ratio increased 1 basis point from December 31, 2025 to 0.11% at March 31, 2026.
The following table summarizes the ACL as of the periods ended (dollars in thousands):
Total ALLL
Total RUC
30,828
26,161
Total ACL
ALLL to total LHFI
1.04
1.06
ACL to total LHFI
1.15
1.16
The following table summarizes net charge-off activity by loan segment for the three months ended March 31, reflecting the changes made to the Company’s allowance methodology effective January 1, 2026 (dollars in thousands):
Recoveries
Net charge-offs
(1,656)
(305)
(1,594)
Net charge-offs to average loans (1)
(0.01)
0.10
0.03
(1) Net charge-off rates are annualized and calculated by dividing net charge-offs by average LHFI for the period for each loan category.
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The following table summarizes net charge-off activity by loan segment for the three months ended March 31, reflecting the Company’s previous allowance methodology (dollars in thousands):
(1,617)
(661)
(2,278)
0.05
The following table summarizes the ALLL activity by loan segment and the percentage of the loan portfolio that the related ALLL covers as of the period ended March 31, reflecting the changes made to the Company’s allowance methodology effective January 1, 2026 (dollars in thousands):
Loan % (1)
59.8
24.6
15.6
100.0
ALLL to total LHFI (2)
1.03
0.85
1.39
(1) The percentage represents the loan balance divided by total LHFI.
(2) The percentage represents ALLL divided by the total LHFI for each loan category.
The following table summarizes the ALLL activity by loan segment and the percentage of the loan portfolio that the related ALLL covers as of the period ended December 31, reflecting the Company’s previous allowance methodology (dollars in thousands):
232,813
84.2
15.8
0.99
1.42
The ALLL for the combined CRE and Commercial and Industrial segments as of March 31, 2026 remained relatively consistent as compared to Commercial segment from December 31, 2025. The decrease in the ALLL from December 31, 2025 for the Consumer segment is primarily due to the use of more granular and dynamic models.
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DEPOSITS
As of March 31, 2026, our total deposits were $30.4 billion, a decrease of $80.4 million or 1.1% (annualized) from December 31, 2025, driven by a decline in brokered deposits, partially offset by an increase in interest-bearing customer deposits. Total interest-bearing deposits consisted of interest checking accounts, money market accounts, savings accounts, time deposits, and brokered deposits. Our total time deposit balances with customers totaled $5.7 billion and accounted for 25.0% of total interest-bearing customer deposits at March 31, 2026, compared to $5.7 billion and 25.3% at December 31, 2025. We seek to fund increased loan volumes by growing core deposits, but, subject to internal policy limits on the amount of wholesale funding we may maintain, we may use wholesale funding sources to fund shortfalls, if any, or provide additional liquidity. We use brokered deposits purchased through nationally recognized networks as part of our overall liquidity management strategy on an as needed basis. As of March 31, 2026, brokered deposits totaled $610.3 million, down from $1.1 billion at December 31, 2025.
The following table presents the deposit balances, including brokered deposits, by major category as of the quarters ended (dollars in thousands):
% of total
Deposits:
Amount
deposits
Interest checking accounts
7,515,409
24.7
7,193,204
23.6
Money market accounts
6,985,315
23.0
6,863,981
22.5
Savings accounts
2,691,144
8.9
2,747,622
9.0
Customer time deposits of more than $250,000
1,767,455
5.8
1,737,345
5.7
Customer time deposits of $250,000 or less
3,977,869
13.1
3,956,571
13.0
Time Deposits
5,745,324
18.9
5,693,916
18.7
Total interest-bearing customer deposits
22,937,192
75.5
22,498,723
73.8
Brokered deposits
610,338
2.0
1,128,284
3.7
77.5
Total Deposits (1)
(1) Includes uninsured deposits of $10.8 billion as of March 31, 2026 and December 31, 2025, and collateralized deposits of $1.2 billion as of March 31, 2026 and December 31, 2025. Amounts are based on estimated amounts of uninsured deposits as of the reported period.
Maturities of time deposits in excess of FDIC insurance limits were as follows for the quarters ended (dollars in thousands):
3 Months or Less
381,905
409,080
Over 3 Months through 6 Months
226,935
192,388
Over 6 Months through 12 Months
199,111
142,197
Over 12 Months
58,504
101,930
866,455
845,595
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CAPITAL RESOURCES
Capital resources represent funds, earned or obtained, over which financial institutions can exercise greater or longer control in comparison with deposits and borrowed funds. Our management reviews our capital adequacy on an ongoing basis with reference to size, composition, and quality of our resources and consistency with regulatory requirements and industry standards. We seek to maintain a capital structure that will assure an appropriate level of capital to support anticipated asset growth and to absorb potential losses, while allowing us to effectively leverage our capital to maximize return to shareholders.
On May 5, 2026, we announced that our Board of Directors declared a quarterly dividend on our outstanding shares of our Series A preferred stock. The dividend of $171.88 per share (equivalent to $0.43 per outstanding depositary share) is payable on June 1, 2026 to preferred shareholders of record as of May 15, 2026. Our Board of Directors also declared a quarterly dividend of $0.37 per share of common stock, which is payable on June 5, 2026 to common shareholders of record as of May 22, 2026.
Under the Basel III capital rules, we must comply with the following minimum capital ratios: (i) a common equity Tier 1 capital ratio of 7.0% of risk-weighted assets; (ii) a Tier 1 capital ratio of 8.5% of risk-weighted assets; (iii) a total capital ratio of 10.5% of risk-weighted assets; and (iv) a leverage ratio of 4.0% of total assets. These ratios, with the exception of the leverage ratio, include a 2.5% capital conservation buffer, which is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of common equity Tier 1 to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. In March 2026, the Federal Reserve, Office of the Comptroller of the Currency and FDIC issued three proposals that would implement the Basel Committee on Banking Supervision’s 2017 revisions to the Basel III capital rules (the “Basel III endgame”). These proposals are intended to streamline capital requirements and better align regulatory capital with risk while maintaining the safety and soundness of the banking system, and if finalized as proposed, would primarily affect the largest banking organizations. The Company has reviewed these proposed rules and, if these rules are adopted as proposed, the Company estimates that its regulatory capital ratios would improve compared to current levels.
The following table summarizes our regulatory capital and related ratios as of the periods ended (2) (dollars in thousands):
Common equity Tier 1 capital
$ 3,132,588
$ 3,074,066
$ 2,074,833
Tier 1 capital
3,298,944
3,240,422
2,241,189
Tier 2 capital
997,897
992,099
619,037
Total risk-based capital
4,296,841
4,232,521
2,860,226
Risk-weighted assets
30,679,745
30,449,199
20,613,481
Capital ratios:
Common equity Tier 1 capital ratio
10.21%
10.10%
10.07%
Tier 1 capital ratio
10.75%
10.64%
10.87%
Total capital ratio
14.01%
13.90%
13.88%
Leverage ratio (Tier 1 capital to average assets)
9.31%
9.10%
9.45%
Capital conservation buffer ratio (1)
4.75%
4.64%
4.87%
Common equity to total assets
13.09%
12.88%
12.26%
Tangible common equity to tangible assets (+)
8.03%
7.85%
7.39%
(1) Calculated by subtracting the regulatory minimum capital ratio requirements from the Company’s actual ratio results for Common equity, Tier 1, and Total risk-based capital. The lowest of the three measures represents the Company’s capital conservation buffer ratio.
(2) All ratios and amounts at March 31, 2026 are estimates and subject to change pending the filing of our FR Y-9C. All other periods are presented as filed.
(+) Refer to “Non-GAAP Financial Measures” within this Item 2 for more information about this non-GAAP financial measure, including a reconciliation of this measure to the most directly comparable financial measure calculated in accordance with GAAP.
For more information about our off-balance sheet obligations and cash requirements, refer to “Liquidity” within this Item 2.
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NON-GAAP FINANCIAL MEASURES
In this Quarterly Report, we have provided supplemental performance measures determined by methods other than in accordance with GAAP. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare our financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. We use the non-GAAP financial measures discussed herein in our analysis of our performance. Management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance the comparability of our results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in our underlying performance.
We believe interest and dividend income (FTE), which is used in computing yield on interest-earning assets (FTE), provides valuable additional insight into the yield on interest-earning assets (FTE) by adjusting for differences in the tax treatment of interest income sources. We believe net interest income (FTE) and total revenue (FTE), which are used in computing net interest margin (FTE), provide valuable additional insight into the net interest margin by adjusting for differences in the tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing the yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.
The following table reconciles non-GAAP financial measures from the most directly comparable GAAP financial measures for the three months ended March 31, (dollars in thousands):
Interest Income (FTE)
Interest and dividend income (GAAP)
FTE adjustment
4,550
3,757
Interest and dividend income (FTE) (non-GAAP)
Average earning assets
Yield on interest-earning assets (GAAP)
Yield on interest-earning assets (FTE) (non-GAAP)
Net Interest Income (FTE)
Net interest income (GAAP)
Net interest income (FTE) (non-GAAP)
Noninterest income (GAAP)
Total revenue (FTE) (non-GAAP)
371,706
217,084
Net interest margin (GAAP)
Net interest margin (FTE) (non-GAAP)
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Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. We believe tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which we believe will assist investors in assessing our capital and our ability to absorb potential losses. We believe tangible common equity is an important indication of our ability to grow organically and through business combinations as well as our ability to pay dividends and to engage in various capital management strategies.
The following table reconciles non-GAAP financial measures from the most directly comparable GAAP financial measures for each of the periods presented (dollars in thousands):
Tangible Assets
Ending Assets (GAAP)
24,632,611
Less: Ending goodwill
1,214,053
Less: Ending amortizable intangibles
79,165
Ending tangible assets (non-GAAP)
35,260,037
35,536,923
23,339,393
Tangible Common Equity
Ending Equity (GAAP)
Less: Perpetual preferred stock
166,357
Ending tangible common equity (non-GAAP)
2,830,985
2,791,210
1,725,641
Average equity (GAAP)
4,446,839
Less: Average goodwill
1,733,527
1,592,391
Less: Average amortizable intangibles
307,636
277,977
81,790
Less: Average perpetual preferred stock
166,356
Average tangible common equity (non-GAAP)
2,860,550
2,410,115
1,721,647
Common equity to total assets (GAAP)
13.09
12.88
12.26
Tangible common equity to tangible assets (non-GAAP)
8.03
7.85
7.39
Adjusted operating measures exclude, as applicable, merger-related costs and gain (loss) on sale of securities. We believe these non-GAAP adjusted measures provide investors with important information about the continuing economic results of our operations. The following table reconciles non-GAAP financial measures from the most directly comparable GAAP financial measures for the three months ended March 31, (dollars in thousands, except per share amounts):
Adjusted Operating Earnings & EPS
Net income (GAAP)
Plus: Merger-related costs, net of tax
6,956
Less: Gain (loss) on sale of securities, net of tax
(81)
Adjusted operating earnings (non-GAAP)
129,119
54,542
Less: Dividends on preferred stock
Adjusted operating earnings available to common shareholders (non-GAAP)
126,152
51,575
Weighted average common shares outstanding, diluted
Earnings per common share, diluted (GAAP)
Adjusted operating earnings per common share, diluted (non-GAAP)
0.57
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Adjusted operating noninterest expense excludes, as applicable, the amortization of intangible assets and merger-related costs. This measure is similar to the measure we use when analyzing corporate performance and is also similar to the measure used for incentive compensation. We believe the adjusted measure provides investors with important information about the continuing economic results of our operations. The following table reconciles non-GAAP financial measures from the most directly comparable GAAP financial measures for the three months ended March 31, (dollars in thousands):
Adjusted Operating Noninterest Expense
Noninterest expense (GAAP)
Less: Amortization of intangible assets
Less: Merger-related costs
Adjusted operating noninterest expense (non-GAAP)
185,330
123,846
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Sensitivity
Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates, and equity prices. Our market risk is composed primarily of interest rate risk. Our asset liability management committee is responsible for reviewing our interest rate sensitivity position and establishing policies to monitor and limit exposure to this risk. Our Board of Directors reviews and approves the policies established by our asset liability management committee.
We monitor interest rate risk using three complementary modeling tools: static gap analysis, earnings simulation modeling, and economic value simulation (net present value estimation). Each of these models measures changes in a variety of interest rate scenarios. While each of the interest rate risk models has limitations, taken together, they represent a reasonably comprehensive view of the magnitude of our interest rate risk, the distribution of risk along the yield curve, the level of risk through time, and the amount of exposure to changes in certain interest rate relationships. We use the static gap analysis, which measures aggregate re-pricing values, less often because it does not effectively consider the optionality embedded into many assets and liabilities and, therefore, we do not address it here. We use earnings simulation and economic value simulation models on a regular basis, which more effectively measure the cash flow and optionality impacts, and these models are discussed below.
We determine the overall magnitude of interest sensitivity risk and then we create policies and practices governing asset generation and pricing, funding sources and pricing, and off-balance sheet commitments. These policies and practices are based on management’s expectations regarding future interest rate movements, the states of the national, regional and local economies, and other financial and business risk factors. We use simulation modeling to measure and monitor the effect of various interest rate scenarios and business strategies on our net interest income. This modeling reflects interest rate changes and the related impact on net interest income and net income over specified time horizons.
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Earnings Simulation Modeling
Management uses earnings simulation modeling to measure the sensitivity of our net interest income to changes in interest rates. The model calculates an earnings estimate based on current and projected balances and rates. This method is subject to the accuracy of the assumptions that underlie the process, but we believe it provides a better analysis of the sensitivity of earnings to changes in interest rates than other analyses, such as the static gap analysis noted above.
We derive the assumptions used in the model from historical trends and management’s outlook, including expected loan growth, loan prepayment rates, projected loan origination spreads, deposit growth rates, changes to deposit product betas and non-maturity deposit decay rates, and projected yields and rates. These assumptions may not be realized and unanticipated events and circumstances may also occur that cause the assumptions to be inaccurate. The model also does not take into account any future actions of management to mitigate the impact of interest rate changes. Our asset liability management committee monitors the assumptions at least quarterly and periodically adjusts them as it deems appropriate. In the modeling, we assume that all maturities, calls, and prepayments in the securities portfolio are reinvested in like instruments, and we base the MBS prepayment assumptions on industry estimates of prepayment speeds for portfolios with similar coupon ranges and seasoning. We also use different interest rate scenarios and yield curves to measure the sensitivity of earnings to changing interest rates. Interest rates on different asset and liability accounts move differently when the short-term market rate changes and these differences are reflected in the different rate scenarios. We adjust deposit betas, decay rates and loan prepayment speeds periodically in our models for non-maturity deposits and loans.
We use our earnings simulation model to estimate earnings in rate environments where rates are instantaneously shocked up or down around a “most likely” rate scenario, based on implied forward rates and futures curves. The analysis assesses the impact on net interest income over a 12-month period after an immediate increase or “shock” in rates, of 100 bps up to 300 bps. The model, under all scenarios, does not drop the index below zero.
The following table represents the interest rate sensitivity on our net interest income across the rate paths modeled for the balances as of the periods ended:
Change In Net Interest Income
Change in Yield Curve:
+300 bps
10.23
7.44
5.10
+200 bps
7.08
5.28
3.99
+100 bps
2.79
2.47
Most likely rate scenario
-100 bps
(3.11)
(2.53)
(3.00)
-200 bps
(6.37)
(4.97)
(7.79)
-300 bps
(8.83)
(5.77)
(13.54)
If an institution is asset sensitive its assets reprice more quickly than its liabilities and net interest income would be expected to increase in a rising interest rate environment and decrease in a falling interest rate environment. If an institution is liability sensitive its liabilities reprice more quickly than its assets and net interest income would be expected to decrease in a rising interest rate environment and increase in a falling interest rate environment.
From a net interest income perspective, we were more asset sensitive as of March 31, 2026 compared to our positions as of December 31, 2025 and March 31, 2025. This shift is due, in part, to the changing market characteristics of certain loan and deposit products. We expect net interest income to increase with an immediate increase or shock in market rates. In a decreasing interest rate environment, we expect a decline in net interest income as interest-earning assets re-price more quickly than interest-bearing deposits.
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Economic Value Simulation Modeling
We use economic value simulation modeling to calculate the estimated fair value of assets and liabilities over different interest rate environments. We calculate the economic values based on discounted cash flow analysis. The net economic value of equity is the economic value of all assets minus the economic value of all liabilities. The change in net economic value over different rate environments is an indication of the longer-term earnings capability of the balance sheet. We use the same assumptions in the economic value simulation model as in the earnings simulation model. The economic value simulation model uses instantaneous rate shocks to the balance sheet.
The following table reflects the estimated change in net economic value over different rate environments using economic value simulation for the balances as of the periods ended:
Change In Economic Value of Equity
(4.00)
(4.70)
(8.01)
(2.34)
(2.78)
(5.31)
(0.94)
(1.19)
(2.58)
(0.17)
(0.03)
(2.33)
(2.19)
(5.47)
(5.34)
(2.72)
As of March 31, 2026, our economic value of equity was slightly less liability sensitive in a rising interest rate environment compared to our positions as of December 31, 2025 and March 31, 2025, primarily due to the composition of our Consolidated Balance Sheets and also due to the pricing characteristics and assumptions of certain deposits and loans.
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ITEM 4 – CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Exchange Act, means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded as of March 31, 2026, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
In designing and evaluating the Company’s disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as such term is defined Rule 13a-15(f) of the Exchange Act) that occurred during the quarter ended March 31, 2026 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 1 – LEGAL PROCEEDINGS
In the ordinary course of our operations, we are party to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on our business, financial condition, or results of operations.
ITEM 1A – RISK FACTORS
During the quarter ended March 31, 2026, there have been no material changes from the risk factors previously disclosed under Part I, Item 1A. “Risk Factors” in our 2025 Form 10-K.
An investment in our securities involves risks. In addition to the other information set forth in this Quarterly Report, including the information addressed under “Forward-Looking Statements,” investors in our securities should carefully consider the risk factors discussed in our 2025 Form 10-K. These factors could materially and adversely affect our business, financial condition, liquidity, results of operations, and capital position and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report, in which case the trading price of our securities could decline.
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ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Sales of Unregistered Securities – None
(b) Use of Proceeds – Not Applicable
(c) Issuer Purchases of Securities
Stock Repurchase Program; Other Repurchases
As of March 31, 2026, we did not have an authorized share repurchase program in effect. On May 5, 2026, the Company’s Board authorized a share repurchase program to purchase up to $250 million of the Company’s common stock through May 5, 2027 in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended.
The following information describes our common stock repurchases for the three months ended March 31, 2026:
Period
Total number of shares purchased (1)
Average price paid per share ($)
Total number of shares purchased as part of publicly announced plans or programs
Approximate dollar value of shares that may yet be purchased under the plans or programs ($)
January 1 - January 31, 2026
1,736
35.83
February 1 - February 28, 2026
96,712
38.73
March 1 - March 31, 2026
1,500
35.50
99,948
38.63
_________________________________________
(1) For the three months ended March 31, 2026, 99,948 shares were withheld upon vesting of restricted shares granted to our employees in order to satisfy tax withholding obligations.
ITEM 5 – OTHER INFORMATION
Trading Arrangements
During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).
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ITEM 6 – EXHIBITS
The following exhibits are filed as part of this Quarterly Report and this list includes the Exhibit Index:
Exhibit No.
Description
2.1
Agreement and Plan of Merger, dated as of October 21, 2024, between Atlantic Union Bankshares Corporation and Sandy Spring Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on October 21, 2024).*
3.1
Amended and Restated Articles of Incorporation of Atlantic Union Bankshares Corporation, effective May 7, 2020 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on May 7, 2020).
3.1.1
Articles of Amendment designating the 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, effective June 9, 2020 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on June 9, 2020).
3.2
Amended and Restated Bylaws of Atlantic Union Bankshares Corporation, effective as of October 30, 2025 (incorporated by reference to Exhibit 3.2 to Current Report on Form 10-Q filed on November 4, 2025).
10.1
Employment Agreement by and between Atlantic Union Bankshares Corporation, Atlantic Union Bank and Alexander D. Dodd, dated as of February 23, 2026 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on February 24, 2026).
10.2
Management Continuity Agreement by and between Atlantic Union Bankshares Corporation, Atlantic Union Bank and Alexander D. Dodd, dated as of February 23, 2026 (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on February 24, 2026).
10.3
Relocation Agreement between Atlantic Union Bank and Alexander Dodd, dated January 29, 2026 (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on February 24, 2026).
10.4
Transition and Consulting Agreement by and between Atlantic Union Bankshares Corporation, Atlantic Union Bank and Robert M. Gorman, dated as of February 23, 2026 (incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on February 24, 2026).
15.1
Letter regarding unaudited interim financial information.
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
Interactive data files formatted in Inline eXtensible Business Reporting Language for the quarter ended March 31, 2026 pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (unaudited), (iii) the Consolidated Statements of Comprehensive Income (Loss) (unaudited), (iv) the Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (v) the Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to Consolidated Financial Statements (unaudited).
The cover page from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline eXtensible Business Reporting Language (included with Exhibit 101).
*
Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule or similar attachment to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Atlantic Union Bankshares Corporation
(Registrant)
Date: May 5, 2026
By:
/s/ John C. Asbury
John C. Asbury,
President and Chief Executive Officer
(principal executive officer)
/s/ Alexander D. Dodd
Alexander D. Dodd,
Executive Vice President and Chief Financial Officer
(principal financial and accounting officer)
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