Atlantic Union Bankshares Corporation (NYSE:AUB) reported fourth-quarter adjusted results on Thursday that came in ahead of market expectations, supported by lower deposit costs and smooth integration of its Sandy Spring Bancorp acquisition.
The regional lender’s shares were up 0.23% in pre-market trading following the release.
Adjusted operating earnings reached $0.97 per share, beating the analyst consensus of $0.86. Revenue totalled $391.79 million, comfortably above the $379.01 million expected by the market. Net interest income rose to $330.2 million, an increase of $11 million from the prior quarter.
The bank’s net interest margin expanded by 13 basis points quarter on quarter to 3.96% on a fully taxable equivalent basis, largely reflecting lower funding costs after Federal Reserve rate cuts. The cost of funds declined 14 basis points to 2.03% during the quarter.
“Atlantic Union had a strong fourth quarter, reflecting disciplined execution and a successful integration of the Sandy Spring Bancorp, Inc. acquisition,” said John C. Asbury, president and chief executive officer. “We believe that the adjusted operating results for the quarter showcase the organization’s earnings capacity.”
Total loans held for investment grew at a 6.3% annualized pace from the previous quarter to $27.8 billion, driven by expansion in commercial real estate, commercial and industrial lending, and multifamily real estate. Asset quality remained robust, with nonperforming assets falling 7 basis points to 0.42% of total loans.
Capital metrics also improved, with the common equity Tier 1 ratio rising to 10.10% from 9.92% in the previous quarter. Atlantic Union also lifted its quarterly dividend by 8.8% to $0.37 per share.
Asbury added that the group has completed its transformation “from a Virginia community bank to the largest regional bank headquartered in the lower Mid-Atlantic, with operations in Virginia, Maryland, and a growing presence in North Carolina.”