Q1 2026 Atlantic Union Bankshares Corp Earnings Call

April 21, 2026

Speaker #1: This time all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session to ask a question during this session.

Speaker #1: You'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Operator: Good day, and thank you for standing by. Welcome to the Atlantic Union Bankshares' Q1 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bill Cimino, Senior Vice President, Investor Relations. Please go ahead, sir.

Speaker #2: Good day, and thank you for standing by. Welcome to the Atlantic Union Bankshares First Quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker #1: Please be advised that today's conference is being recorded. I would now like to end the conference over to your speaker today, Bill Cimino, Senior Vice President, Investor Relations.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone.

Speaker #1: Please go ahead, sir.

Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #2: Thank you, Michelle, and good morning, everyone. I'm Atlantic Union Bankshares President and CEO, John Asbury, and Executive Vice President and CFO, Alex Dodd, with me today.

Speaker #2: I would now like to hand the conference over to your speaker today, Bill Cimino, Senior Vice President, Investor Relations. Please go ahead, sir.

Speaker #2: Since Alex is only eight days into his job, former CFO Rob Gorman will cover the first quarter financial results and his transition capacity as a Senior Financial Advisor to the company until his September 30th retirement.

Speaker #3: Thank you, Michelle, and good morning, everyone. I've Atlantic Union Bankshares President and CEO, John Asbury, and Executive Vice President and CFO, Alex Dodd, with me today.

Bill Cimino: Thank you, Michelle, and good morning, everyone. I have Atlantic Union Bankshares President and CEO, John Asbury, and Executive Vice President and CFO, Alex Dodd, with me today. Since Alex is only eight days into his job, former CFO Rob Gorman will cover the Q1 financial results in his transition capacity as a senior financial advisor to the company until his 30 September retirement. We also have other members of our executive management team with us for the question and answer period. Please note that today's earnings release and the accompanying slide presentation we are going through on this webcast are available to download on our investor website, investors.atlanticunionbank.com. During today's call, we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures.

Speaker #2: We also have other members of our executive management team with us for the question-and-answer period. Please note that today's earnings release and the accompanying slide presentation we are going through on this webcast are available to download on our Investor website, investors.atlanticunionbank.com.

Speaker #3: Since Alex is only eight days into his job, former CFO Robert Gorman will cover the first quarter financial results in his transition capacity as a Senior Financial Advisor to the company until his September 30th retirement.

Speaker #2: During today's call, we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures. Important information about these non-GAAP financial measures including reconciliations to comparable GAAP measures is included in the appendix to our slide presentation and in our earnings release for the first quarter of 2026.

Speaker #3: We also have other members of our Executive Management team with us for the question-and-answer period. Please note that today's earnings release and the accompanying slide presentation we are going through on this webcast are available to download on our investor website, investors.atlanticunionbank.com.

Speaker #3: During today's call, we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures. Important information about these non-GAAP financial measures including reconciliations to comparable GAAP measures is included in the appendix to our slide presentation, and in our earnings release for the first quarter of 2026.

Speaker #2: We'll also make forward-looking statements which are not statements of historical fact and are subject to risks and uncertainties. There could be no assurance that actual performance will not differ materially from any future expectations or results expressed or implied by these forward-looking statements.

Bill Cimino: Important information about these non-GAAP financial measures, including reconciliations to comparable GAAP measures, is included in the appendix to our slide presentation and in our earnings release for Q1 2026. We'll also make forward-looking statements which are not statements of historical fact and are subject to risks and uncertainties. There can be no assurance that actual performance will not differ materially from any future expectations or results expressed or implied by these forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statement, except as required by law. Please refer to our earnings release and slide presentation issued today, and our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements, including factors that could cause actual results to differ from those expressed or implied in the forward-looking statements.

Speaker #2: We undertake no obligation to publicly revise or update any forward-looking statement except as required by law. Please refer to our earnings release and slide presentation issued today and our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements including factors that could cause actual results to differ from those expressed or implied in a forward-looking statement.

Speaker #3: We'll also make forward-looking statements which are not statements of historical fact and are subject to risks and uncertainties. There could be no assurance that actual performance will not differ materially from any future expectations or results expressed or implied by these forward-looking statements.

Speaker #3: We undertake no obligation to publicly revise or update any forward-looking statement except as required by law. Please refer to our earnings release and slide presentation issued today and our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements including factors that could cause actual results to differ from those expressed or implied in a forward-looking statement.

Speaker #2: All comments made during today's call are subject to that safe harbor statement. And at the end of the call, we will take questions from the research analyst community.

Speaker #2: And now I'll turn the call over to John.

Speaker #3: Thank you, Bill. Good morning, everyone, and thank you for joining us today. I am pleased to introduce Alex Dodd as our new Chief Financial Officer.

Speaker #3: All comments made during today's call are subject to that safe harbor statement. At the end of the call, we will take questions from the research analyst community.

Bill Cimino: All comments made during today's call are subject to the safe harbor statement. At the end of the call, we will take questions from the research analyst community. Now I'll turn the call over to John.

Speaker #3: Alex brings a wealth of experience having successfully helped guide a smaller institution through its transformation into a larger more complex financial organization. His background aligns well with our executive leadership team and I am confident he will add tremendous value as we continue to drive growth and innovation.

Speaker #3: And now I'll turn the call over to John.

Speaker #4: Thank you, Bill. Good morning, everyone, and thank you for joining us today. I am pleased to introduce Alex Dodd as our new Chief Financial Officer.

John Asbury: Thank you, Bill. Good morning, everyone, and thank you for joining us today. I am pleased to introduce Alex Dodd as our new chief financial officer. Alex brings a wealth of experience, having successfully helped guide a smaller institution through its transformation into a larger, more complex financial organization. His background aligns well with our executive leadership team, and I am confident he will add tremendous value as we continue to drive growth and innovation. Over the next few months, we look forward to having Alex meet many of you during our active investor relations calendar. While Rob Gorman will remain with us full-time until his retirement at the end of September, I do want to extend my sincere gratitude to Rob for his invaluable contributions and his dedication to ensuring a seamless CFO transition.

Speaker #3: Over the next few months, we look forward to having Alex meet many of you during our active investor relations calendar. While Rob Gorman will remain with us full-time until his retirement at the end of September, I do want to extend my sincere gratitude to Rob for his invaluable contributions and his dedication to ensuring a seamless CFO transition.

Speaker #4: Alex brings a wealth of experience, having successfully helped guide a smaller institution through its transformation into a larger, more complex financial organization. His background aligns well with our Executive Leadership Team, and I am confident he will add tremendous value as we continue to drive growth and innovation.

Speaker #4: Over the next few months, we look forward to having Alex meet many of you during our active Investor Relations calendar. While Rob Gorman will remain with us full-time until his retirement at the end of September, I do want to extend my sincere gratitude to Rob for his invaluable contributions and his dedication to ensuring a seamless CFO transition.

Speaker #3: Atlantic Union Bankshares reported solid first quarter financial results, reflecting disciplined execution and a successful conclusion of the integration of Sandy Spring Bank. We believe the adjusted operating financial results for the quarter showcased the organization's earnings capacity.

Speaker #3: While we had a final set of merger-related charges impact this quarter's results, the underlying operating performance supports our continued confidence in achieving the financial outlook for adjusted operating return on assets, return on tangible common equity, and efficiency ratio that we have set for 2026.

Speaker #4: The Atlantic Union Bankshares reported solid first quarter financial results, reflecting disciplined execution and a successful conclusion of the integration of Sandy Spring Bank. We believe the adjusted operating financial results for the quarter showcased the organization's earnings capacity.

John Asbury: Atlantic Union Bankshares reported solid Q1 financial results reflecting disciplined execution and a successful conclusion of the integration of Sandy Spring Bank. We believe the adjusted operating financial results for the quarter showcase the organization's earnings capacity. While we had a final set of merger-related charges impact this quarter's results, the underlying operating performance supports our continued confidence in achieving the financial outlook for adjusted operating return on assets, return on tangible common equity, and efficiency ratio that we have set for 2026. We do look forward to reporting results without the merger noise starting Q2, which we believe should more clearly demonstrate the financial strength and operational efficiency we are committed to delivering for our shareholders. Our commitment to creating shareholder value remains unwavering. We believe Atlantic Union is well positioned to deliver sustainable growth, top-tier financial performance, and long-term value for our shareholders.

Speaker #4: While we had a final set of merger-related charges impact this quarter's results, the underlying operating performance supports our continued confidence in achieving the financial outlook for adjusted operating return on assets, return on tangible common equity, and efficiency ratio that we have set for 2026.

Speaker #3: We do look forward to reporting results without the merger noise starting next quarter, which we believe should more clearly demonstrate the financial strength and operational efficiency we are committed to delivering for our shareholders.

Speaker #3: Our commitment to creating shareholder value remains unwavering. We believe Atlantic Union is well positioned to deliver sustainable growth, top-tier financial performance, and long-term value for our shareholders.

Speaker #4: We do look forward to reporting results without the merger noise starting next quarter, which we believe should more clearly demonstrate the financial strength and operational efficiency we are committed to delivering for our shareholders.

Speaker #3: We believe the strategic advantages gained from the Sandy Spring acquisition, combined with continued organic growth opportunities due to our robust presence and attractive markets, reinforce our status as the premier regional bank headquartered in the lower Mid-Atlantic.

Speaker #4: Our commitment to creating shareholder value remains unwavering. We believe Atlantic Union is well-positioned to deliver sustainable growth, top-tier financial performance, and long-term value for our shareholders.

Speaker #3: I'll briefly cover the Q1 2026 highlights and share market insights before Rob presents the financial review. And here are the highlights from the first quarter.

Speaker #4: We believe the strategic advantages gained from the Sandy Spring acquisition, combined with continued organic growth opportunities due to our robust presence and attractive markets, reinforce our status as the premier regional bank headquartered in the lower Mid-Atlantic.

John Asbury: We believe the strategic advantages gained from the Sandy Spring acquisition, combined with continued organic growth opportunities due to our robust presence in attractive markets, reinforce our status as the premier regional bank headquartered in the lower Mid-Atlantic. I'll briefly cover the Q1 2026 highlights and share market insights before Rob presents the financial review. Here are the highlights from Q1. Quarterly loan growth was approximately 2.2% annualized during the typically slow Q1, with total loans ending at $27.9 billion. For additional context, quarterly loan growth averaged roughly 5.9% annualized over this year's Q1. Loan production remained strong and when compared to the previous four quarters, was second only to Q4 of last year.

Speaker #3: Quarterly loan growth was approximately 2.2% annualized during the typically slow first quarter with total loans ending at 27.9 billion. For additional context, quarterly loan growth averaged roughly 5.9% annualized over this year's first quarter.

Speaker #4: I'll briefly cover the Q1 2026 highlights and share market insights before Rob presents the financial review. And here are the highlights from the first quarter.

Speaker #3: Loan production remained strong, and when compared to the previous four quarters was second only to the fourth quarter of last year. We were pleased to see record-level fundings from Atlantic Union Equipment Finance and record-level production from our North Carolina-based commercial real estate team.

Speaker #4: Quarterly loan growth was approximately 2.2% annualized during the typically slow first quarter, with total loans ending at 27.9 billion. For additional context, quarterly loan growth averaged roughly 5.9% annualized over this year's first quarter.

Speaker #3: However, we also experienced elevated payoffs late in the quarter, particularly within our commercial real estate portfolio, due to a number of property sales. This activity highlights the strength of our CRE markets, robust investor demand, and the availability of ample liquidity.

Speaker #4: Loan production remained strong, and when compared to the previous four quarters was second only to the fourth quarter of last year. We were pleased to see record-level fundings from Atlantic Union Equipment Finance and record-level production from our North Carolina-based commercial real estate team.

John Asbury: We were pleased to see record level fundings from Atlantic Union Equipment Finance and record level production from our North Carolina-based commercial real estate team. However, we also experienced elevated payoffs late in the quarter, particularly within our commercial real estate portfolio, due to a number of property sales. This activity highlights the strength of our CRE markets, robust investor demand, and the availability of ample liquidity. Q1 saw a slight increase in line of credit utilization for Q4 and was relatively flat year over year. At the end of Q1, our loan pipelines were noticeably higher than at the beginning, giving us confidence that we are pacing to meet our loan growth targets for 2026. A deeper look at the pipeline report reveals that our construction and development pipeline has achieved a record high.

Speaker #3: The first quarter saw a slight increase in line of credit utilization for the fourth quarter and was relatively flat year over year. At the end of the first quarter, our loan pipelines were noticeably higher than at the beginning, giving us confidence that we are pacing to meet our loan growth targets for 2026.

Speaker #4: However, we also experienced elevated payoffs late in the quarter, particularly within our commercial real estate portfolio, due to a number of property sales. This activity highlights the strength of our CRE markets, robust investor demand, and the availability of ample liquidity.

Speaker #3: A deeper look at the pipeline report reveals that our construction and development pipeline has achieved a record high. For those familiar with my construction lending bathtub analogy, this means our pipeline is filling up at a faster rate than it's draining, which positions us well for continued growth in construction lending balances throughout the year.

Speaker #4: The first quarter saw a slight increase in line-of-credit utilization for the fourth quarter and was relatively flat year-over-year. At the end of the first quarter, our loan pipelines were noticeably higher than at the beginning, giving us confidence that we are pacing to meet our loan growth targets for 2026.

Speaker #4: A deeper look at the pipeline report reveals that our construction and development pipeline has achieved a record high. For those familiar with my construction lending bathtub analogy, this means our pipeline is filling up at a faster rate than it's draining, which positions us well for continued growth in construction lending balances throughout the year.

Speaker #3: While forecasting loan growth remains challenging and this uncertain macroeconomic environment, particularly with the recent energy price shocks, we continue to expect 2026 year-end loan balances to range between 29 and 30 billion.

John Asbury: For those familiar with my construction lending bathtub analogy, this means our pipeline is filling up at a faster rate than it's draining, which positions us well for continued growth in construction lending balances throughout the year. While forecasting loan growth remains challenging in this uncertain macroeconomic environment, particularly with the recent energy price shocks, we continue to expect 2026 year-end loan balances to range between $29 billion and $30 billion. Our deposit base demonstrated strong customer deposit growth this quarter, nearly offsetting the planned reduction in high-cost broker deposits. Broker deposits currently represent just 2% of total deposits and play a purposeful role in our liquidity strategy. We believe this approach provides us flexibility to add broker deposits in the future if needed and depending on cost and market conditions, we anticipate any new additions, if any, would be at lower rates than those currently rolling off.

Speaker #3: Our deposit-based demonstrated strong customer deposit growth this quarter, nearly offsetting the planned reduction in high-cost broker deposits. Broker deposits currently represent just 2% of total deposits and play a purposeful role in our liquidity strategy.

Speaker #4: While forecasting loan growth remains challenging and this uncertain macroeconomic environment, particularly with the recent energy price shocks, we continue to expect 2026 year-end loan balances to range between 29 and 30 billion.

Speaker #3: We believe this approach provides us flexibility to add broker deposits in the future if needed and, depending on cost and market conditions, we anticipate any new additions if any, would be at lower rates than those currently rolling off.

Speaker #4: Our deposit-based demonstrated strong customer deposit growth this quarter, nearly offsetting the planned reduction in high-cost broker deposits. Broker deposits currently represent just 2% of total deposits and play a purposeful role in our liquidity strategy.

Speaker #3: Above all, our core customer deposit base remains the crown jewel of the franchise and our primary focus is on growing customer deposits and expanding our share of wallet.

Speaker #4: We believe this approach provides us flexibility to add broker deposits in the future if needed and, depending on cost and market conditions, we anticipate any new additions if any, would be at lower rates than those currently rolling off.

Speaker #3: Net interest margin excluding the impact of accretion income, which can be volatile, improved by four basis points quarter over quarter, matching our expectations. Our reported FTE net interest margin declined 11 basis points to 3.85%, mainly because accretion income was lower compared to the elevated level seen in Q4 '25.

Speaker #4: Above all, our core customer deposit base remains the crown jewel of the franchise, and our primary focus is on growing customer deposits and expanding our share of wallet.

John Asbury: Above all, our core customer deposit base remains the crown jewel of the franchise, and our primary focus is on growing customer deposits and expanding our share of wallet. Net interest margin, excluding the impact of accretion income, which can be volatile, improved by 4 basis points quarter over quarter, matching our expectations. Our reported FTE net interest margin declined 11 basis points to 3.85%, mainly because accretion income was lower compared to the elevated level seen in Q4 2025. Rob will provide more detail about the factors influencing NIM performance in this section. Credit quality continues to show strength and improvement. Our Q1 annualized net charge-off ratio was just 2 basis points. For the year, we are still projecting a range of 10 to 15 basis points, although we do not yet have full visibility into reaching that range. Key asset quality indicators remain robust and are improving.

Speaker #4: Net interest margin, excluding the impact of accretion income—which can be volatile—improved by 4 basis points quarter over quarter, matching our expectations. Our reported FTE net interest margin declined 11 basis points to 3.85%, mainly because accretion income was lower compared to the elevated level seen in Q4 ’25.

Speaker #3: Rob will provide more detail about the factors influencing NEM performance in this section. Credit quality continues to show strength and improvement. Our first quarter annualized net charge-off ratio was just two basis points.

Speaker #3: For the year, we are still projecting a range of 10 to 15 basis points, although we do not yet have full visibility into reaching that range.

Speaker #4: Rob will provide more detail about the factors influencing NEM performance in this section. Credit quality continues to show strength and improvement. Our first quarter annualized net charge-off ratio was just 2 basis points.

Speaker #3: Key asset quality indicators remain robust and are improving. Non-performing assets as a percentage of loans held for investment declined by six basis points to 0.36% from 0.42% in the prior quarter, bringing us closer to our historical operating levels.

Speaker #4: For the year, we are still projecting a range of 10 to 15 basis points, although we do not yet have full visibility into reaching that range.

Speaker #3: Criticized and classified assets also improved, decreasing to 4.5% of total loans from 4.7% last quarter. In looking at the most current unemployment data, the Bureau of Labor Statistics reported January Virginia's January unemployment rate remained stable at 3.7%.

Speaker #4: Key asset quality indicators remain robust and are improving. Non-performing assets as a percentage of loans held for investment declined by 6 basis points to 0.36%, from 0.42% in the prior quarter, bringing us closer to our historical operating levels.

John Asbury: Non-performing assets as a percentage of loans held for investment declined by six basis points to 0.36% from 0.42% in the prior quarter, bringing us closer to our historical operating levels. Criticized and classified assets also improved, decreasing to 4.5% of total loans from 4.7% last quarter. In looking at the most current unemployment data, the Bureau of Labor Statistics reported Virginia's January unemployment rate remained stable at 3.7%. Maryland's unemployment rate was 4.3%, and North Carolina's was 3.8%, all of which are at or below January's national average of 4.3%. We continue to expect unemployment levels in Virginia, Maryland, and North Carolina to stay manageable and comparable to or below the national average, consistent with Moody's current state-level forecast. We remain confident in our markets and consider them among the most attractive in the country.

Speaker #4: Criticized and classified assets also improved, decreasing to 4.5% of total loans from 4.7% last quarter. And looking at the most current unemployment data, the Bureau of Labor Statistics reported January Virginia's January unemployment rate remained stable at 3.7%.

Speaker #3: Maryland's unemployment rate was 4.3% and North Carolina's was 3.8%, all of which are ad or below January's national average of 4.3%. We continue to expect unemployment levels in Virginia, Maryland, and North Carolina to stay manageable and comparable to or below the national average consistent with Moody's current state-level forecast.

Speaker #4: Maryland's unemployment rate was 4.3%, and North Carolina's was 3.8%, all of which are at or below January's national average of 4.3%. We continue to expect unemployment levels in Virginia, Maryland, and North Carolina to stay manageable and comparable to or below the national average, consistent with Moody's current state-level forecast.

Speaker #3: We remain confident in our markets and consider them among the most attractive in the country. I do want to acknowledge the ongoing conflict in Iran and its potential impact on our bank and the markets we serve.

Speaker #3: We are closely monitoring the geopolitical developments and their effects on the broader economy. The most immediate consequence has been the sharp increase in petroleum prices.

Speaker #4: We remain confident in our markets and consider them among the most attractive in the country. I do want to acknowledge the ongoing conflict in Iran and its potential impact on our bank and the markets we serve.

Speaker #3: Should this trend persist over an extended period, our primary concern does not a direct credit event, given our portfolio's limited sensitivity to energy prices, but rather a possible decline in consumer and business confidence.

John Asbury: I do want to acknowledge the ongoing conflict in Iran and its potential impact on our bank and the markets we serve. We are closely monitoring the geopolitical developments and their effects on the broader economy. The most immediate consequence has been the sharp increase in petroleum prices. Should this trend persist over an extended period, our primary concern is not a direct credit event, given our portfolio's limited sensitivity to energy prices, but rather a possible decline in consumer and business confidence. At present, our loan pipelines remain strong. Business sentiments across our markets is positive, and the underlying economy in our footprint continues to be favorable. Additionally, it appears likely that defense spending will rise as a result of the geopolitical situation, which should provide a stimulative effect for certain areas or markets.

Speaker #4: We are closely monitoring the geopolitical developments and their effects on the broader economy. The most immediate consequence has been the sharp increase in petroleum prices.

Speaker #3: At present, our loan pipelines remain strong. Business sentiment across our markets is positive, and the underlying economy and our footprint continues to be favorable.

Speaker #4: Should this trend persist over an extended period, our primary concern does not a direct credit event, given our portfolio's limited sensitivity to energy prices, but rather a possible decline in consumer and business confidence.

Speaker #3: Additionally, it appears likely that defense spending will rise as a result of the geopolitical situation which should provide a stimulus to the effect for certain areas of our markets.

Speaker #4: At present, our loan pipelines remain strong. Business sentiment across our markets is positive, and the underlying economy and our footprint continues to be favorable.

Speaker #3: We remain vigilant and believe we're well positioned to navigate these challenges while supporting our clients and our communities. We have deliberately and thoughtfully built the distinctive valuable franchise outlined in our strategic plan, delivering on our commitments and establishing the banking platform we set out to create.

Speaker #4: Additionally, it appears likely that defense spending will rise as a result of the geopolitical situation, which should provide a stimulus to that effect for certain areas of our markets.

Speaker #4: We remain vigilant and believe we're well positioned to navigate these challenges while supporting our clients and our communities. We have deliberately and thoughtfully built the distinctive, valuable franchise outlined in our strategic plan, delivering on our commitments and establishing the banking platform we set out to create.

John Asbury: We remain vigilant and believe we're well positioned to navigate these challenges while supporting our clients and our communities. We have deliberately and thoughtfully built the distinctive, valuable franchise outlined in our strategic plan, delivering on our commitments and establishing the banking platform we set out to create. With a strong foundation, we believe we are well positioned to capitalize on our expanded markets, drive continued growth in Virginia, and pursue new organic opportunities in North Carolina and in our specialty lines. With disciplined execution of our prior acquisitions and no additional acquisitions currently planned during this phase of our strategic plan, our focus has shifted to demonstrating the franchise's earnings power and capital generation ability.

Speaker #3: With the strong foundation, we believe we are well positioned to capitalize on our expanded markets, drive continued growth in Virginia, and pursue new organic opportunities in North Carolina and in our specialty lines.

Speaker #3: With disciplined execution of our prior acquisitions and no additional acquisitions currently planned during this phase of our strategic plan, our focus has shifted to demonstrating the franchise's earnings power and capital generation ability.

Speaker #4: With the strong foundation, we believe we are well positioned to capitalize on our expanded markets, drive continued growth in Virginia, and pursue new organic opportunities in North Carolina and in our specialty lines.

Speaker #3: After dedicating capital to strategic investments over the past two years to complete the company, we envisioned and worked diligently to build and consistently communicated our plans to do so.

Speaker #4: With disciplined execution of our prior acquisitions—and no additional acquisitions currently planned during this phase of our strategic plan—our focus has shifted to demonstrating the franchise's earnings power and capital generation ability.

Speaker #3: We believe we are well positioned to demonstrate clear and tangible benefits from these efforts. In summary, we had a good start to 2026, and we believe that our full year results will demonstrate the differentiated financial performance compared to our peers which in turn will help build long-term shareholder value.

Speaker #4: After dedicating capital to strategic investments over the past two years to complete the

John Asbury: After dedicating capital to strategic investments over the past two years to complete the company we envisioned and worked diligently to build and consistently communicated our plans to do so, we believe we are well positioned to demonstrate clear and tangible benefits from these efforts. In summary, we had a good start to 2026, and we believe that our full-year results will demonstrate the differentiated financial performance compared to our peers, which in turn will help build long-term shareholder value. With that, I'll turn the call over to Rob for a detailed review of our quarterly financial results. Rob?

Speaker #1: The company we envisioned and worked diligently to build, and consistently communicated our plans to do so. We believe we are well positioned to demonstrate clear and tangible benefits from these efforts.

Speaker #3: With that, I'll turn the call over to Rob for a detailed review of our quarterly financial results. Rob?

Speaker #1: In summary , we had a good start to 2026 , and we believe that our full year results will demonstrate the differentiated financial performance compared to our peers , which in turn will help build long term shareholder value .

Speaker #4: Well, thank you, John, and good morning, everyone. I'll now take a few minutes to provide you with some details of Atlantic Union's financial results for this first quarter of 2026.

Speaker #4: A commentary today will primarily address Atlantic Union's first quarter financial results presented on a non-GAAP adjusted operating basis which for the first quarter excludes $9 million in pre-tax merge-related costs.

Speaker #1: With that , I'll turn the call over to Rob for a detailed review of our quarterly financial results . Rob . Well , thank you , John , and good morning , everyone .

Advisor: Well, thank you, John, and good morning, everyone. I'll now take a few minutes to provide you with some details of Atlantic Union's financial results for Q1 2026. My commentary today will primarily address Atlantic Union's Q1 financial results presented on a non-GAAP adjusted operating basis, which for Q1 excludes $9 million in pre-tax merger related costs. As John noted, we don't expect to incur any additional Sandy Spring merger related costs going forward. In addition, in Q1, we finalized the fair values of assets acquired and liabilities assumed related to the Sandy Spring acquisition, inclusive of measurement period adjustments primarily related to loans, other assets, and other liabilities. The one-year measurement period related to the Sandy Spring acquisition concluded and related goodwill was finalized as of 31 March 2026 at $541 million.

Rob Gorman: Well, thank you, John, and good morning, everyone. I'll now take a few minutes to provide you with some details of Atlantic Union's financial results for Q1 2026. My commentary today will primarily address Atlantic Union's Q1 financial results presented on a non-GAAP adjusted operating basis, which for Q1 excludes $9 million in pre-tax merger related costs. As John noted, we don't expect to incur any additional Sandy Spring merger related costs going forward. In addition, in Q1, we finalized the fair values of assets acquired and liabilities assumed related to the Sandy Spring acquisition, inclusive of measurement period adjustments primarily related to loans, other assets, and other liabilities. The one-year measurement period related to the Sandy Spring acquisition concluded and related goodwill was finalized as of 31 March 2026 at $541 million.

Speaker #1: I will now take a few minutes to provide you with some details of Atlantic Union's financial results for the first quarter of 2026. To a 49.9% in the quarter. Turning to credit loss reserves at the end of the first quarter, the total allowance for credit losses was $321.9 million.

Speaker #4: As John noted, we don't expect to incur any additional CNE spring merger-related costs going forward. In addition, in the first quarter, we finalized the fair value assets acquired and liabilities assumed related to the CNE spring acquisition, inclusive of measurement period adjustments primarily related to loans, other assets, and other liabilities.

Speaker #4: The one-year measurement period related to the CNE spring acquisition concluded and related goodwill was finalized as of March 31st at $541 million. In the fourth quarter, reported net income available to common shareholders was $119.2 million and earnings per common share were $84 cents.

Speaker #4: Adjusted operating earnings available to common shareholders were $126.2 million or $89 cents per common share for the first quarter which resulted in an adjusted operating return on tangible common equity of $19.6%, an adjusted operating return on assets of 1.41%, and an adjusted operating efficiency ratio of 49.9% in the quarter.

Advisor: In Q4, reported net income available to common shareholders was $119.2 million, and earnings per common share were $0.84. Adjusted operating earnings available to common shareholders were $126.2 million, or $0.89 per common share for Q1, which resulted in an adjusted operating return on tangible common equity of 19.6%, an adjusted operating return on assets of 1.41%, and an adjusted operating efficiency ratio of 49.9% in the quarter. Turning to credit loss reserves at the end of Q1. The total allowance for credit losses was $321.9 million. Please note that effective 1 January 2026, the company made certain changes to its allowance for credit losses methodology as part of the continued enhancement of its credit modeling practices, resulting in the company moving from two loan portfolio segments, commercial and consumer, to three loan portfolio segments, commercial real estate, commercial and industrial, and consumer.

Rob Gorman: In Q4, reported net income available to common shareholders was $119.2 million, and earnings per common share were $0.84. Adjusted operating earnings available to common shareholders were $126.2 million, or $0.89 per common share for Q1, which resulted in an adjusted operating return on tangible common equity of 19.6%, an adjusted operating return on assets of 1.41%, and an adjusted operating efficiency ratio of 49.9% in the quarter. Turning to credit loss reserves at the end of Q1. The total allowance for credit losses was $321.9 million. Please note that effective 1 January 2026, the company made certain changes to its allowance for credit losses methodology as part of the continued enhancement of its credit modeling practices, resulting in the company moving from two loan portfolio segments, commercial and consumer, to three loan portfolio segments, commercial real estate, commercial and industrial, and consumer.

Speaker #4: Turning to the the credit loss reserves at the end of the first quarter, the total allowance for credit losses was $321.9 million. Please note that effective January 1st, 2026, the company made certain changes to its allowance for credit losses methodology as part of the continued enhancement of its credit modeling practices.

Speaker #4: Resulting in the company moving from two loan portfolio segments, commercial and consumer, to three loan portfolio segments, commercial real estate, commercial industrial, and consumer, these models enhancements enabled more dynamic and precise modeling and allowed for more granularity in monitoring our estimated credit losses.

Speaker #1: Please note that effective January 1st , 2026 , the company made certain changes to its allowance for credit losses methodology as part of the continued enhancement of its credit modeling practices , resulting in a company moving from two loan portfolio segments commercial and Consumer , to three loan portfolio segments .

Speaker #4: As a result, and paired with portfolio mix changes, the total allowance for credit losses as a percentage of total loans held for investment decreased one basis point to $115 basis points at the end of the first quarter.

Speaker #1: Commercial , real estate , commercial and and consumer . These models enhancements enable more dynamic and precise modeling and allow for more granularity in monitoring our estimated credit losses As a result , in with portfolio mix changes , the total allowance for credit losses as a percentage of total for investment decreased one basis point to 115 basis points at the end of the first quarter .

Advisor: These model enhancements enable more dynamic and precise modeling and allow for more granularity in monitoring our estimated credit losses. As a result, and paired with portfolio mix changes, the total allowance for credit losses as a percentage of total loans held for investment decreased one basis point to 115 basis points at the end of Q1. The allowance for loan losses as a percentage of total loans held for investment decreased by two basis points from the prior quarter to 104 basis points, while the Reserve for Unfunded Commitments coverage ratio increased one basis point to 11 basis points on 31 March, which was primarily driven by higher construction and land development unfunded commitments. As John mentioned, net charge-offs were $1.6 million, or only two basis points annualized in Q1. Now turning to the pre-tax, pre-provision components of the income statement for Q1.

Rob Gorman: These model enhancements enable more dynamic and precise modeling and allow for more granularity in monitoring our estimated credit losses. As a result, and paired with portfolio mix changes, the total allowance for credit losses as a percentage of total loans held for investment decreased one basis point to 115 basis points at the end of Q1. The allowance for loan losses as a percentage of total loans held for investment decreased by two basis points from the prior quarter to 104 basis points, while the Reserve for Unfunded Commitments coverage ratio increased one basis point to 11 basis points on 31 March, which was primarily driven by higher construction and land development unfunded commitments. As John mentioned, net charge-offs were $1.6 million, or only two basis points annualized in Q1. Now turning to the pre-tax, pre-provision components of the income statement for Q1.

Speaker #4: The allowance for loan losses as a percentage of total loans held for investment decreased by two basis points from the prior quarter to $104 basis points, while the reserve for unfunded commitments coverage ratio increased one basis point to 11 basis points on March 31st, which was primarily driven by higher construction and land development unfunded commitments.

Speaker #1: The allowance for loan losses as a percentage of total loans held for investment decreased by two basis points from the prior quarter to 104 basis points , while the reserve for unfunded commitments coverage ratio increased one basis point to 11 basis points on March 31st , which was primarily driven by higher construction and land development , unfunded commitments As John mentioned , net charge offs were $1.6 million or two basis points annualized in the first quarter .

Speaker #4: As John mentioned, net charge-offs were 1.6 million dollars or only two basis points annualized in the first quarter. Now turning to the pre-tax pre-provision components of the income statement for the first quarter, tax equivalent net interest income was $316.9 million which was a decrease of 17.9 million dollars from the fourth quarter primarily driven by a decrease in loan accretion income, the lower day count in the first quarter, lower average earning assets, and the full quarter impact on variable rate loan yields following the cumulative 75 basis point reduction in the Fed funds rate between September and December 2025.

Speaker #1: Now , turning to the pre-tax pre-provision components of the income statement for the first quarter , tax equivalent net interest income was $316.9 million , which was a decrease of $17.9 million from the fourth quarter , primarily driven by a decrease in loan accretion income .

Advisor: Tax equivalent net interest income was $316.9 million, which was a decrease of $17.9 million from Q4, primarily driven by a decrease in loan accretion income, the lower day count in Q1, lower average earning assets, and the full quarter impact on variable rate loan yields following the cumulative 75 basis point reduction in the Fed funds rate between September and December 2025. The decreases in tax equivalent net interest income were partially offset by a decrease in interest expense, primarily from lower deposit costs. As John noted, Q1's tax equivalent net interest margin declined by 11 basis points from the prior quarter to 3.85% due to lower earning asset yields, which were partially offset by lower cost of funds.

Rob Gorman: Tax equivalent net interest income was $316.9 million, which was a decrease of $17.9 million from Q4, primarily driven by a decrease in loan accretion income, the lower day count in Q1, lower average earning assets, and the full quarter impact on variable rate loan yields following the cumulative 75 basis point reduction in the Fed funds rate between September and December 2025. The decreases in tax equivalent net interest income were partially offset by a decrease in interest expense, primarily from lower deposit costs. As John noted, Q1's tax equivalent net interest margin declined by 11 basis points from the prior quarter to 3.85% due to lower earning asset yields, which were partially offset by lower cost of funds.

Speaker #4: The decreases in tax equivalent net interest income were partially offset by a decrease in interest expense primarily from lower deposit costs. As John noted, the first quarter's tax equivalent net interest margin declined by 11 basis points from the prior quarter to 3.85%.

Speaker #1: The lower day count in the first quarter lowered average earning assets, and the full quarter impact on variable rate loan yields following the cumulative 75 basis point reduction in the Fed funds rate between September and December 2025, the decreases in tax equivalent net interest income were partially offset by a decrease in interest expense, primarily from lower deposit costs.

Speaker #4: Due to lower earning asset yields which were partially offset by lower cost of funds. Earning asset yields decreased 20 basis points from the prior quarter to 5.79% primarily due to lower loan accretion income of $13 million which was inclusive of the impact of a 3.5 million dollar non-recurring loan fair value measurement period adjustment related to the CNE spring acquisition and lower yields on variable rate loans as previously noted.

Speaker #1: As John noted , the first quarter tax equivalent net interest margin declined by 11 basis points from the prior 2:45 .85 percent due to lower earning asset yields , which were partially offset by offset by lower cost of funds earning asset yields .

Advisor: Earning asset yields decreased 20 basis points from the prior quarter to 5.79%, primarily due to lower loan accretion income of $13 million, which was inclusive of the impact of a $3.5 million non-recurring loan fair value measurement period adjustment related to the Sandy Spring acquisition and lower yields on variable rate loans, as previously noted. Cost of funds decreased 9 basis points from the prior quarter to 1.94% for Q1, due primarily to lower deposit costs of 13 basis points, which reflected the impact of Fed funds rate reductions on customer deposit rates and the decline in higher costing average broker deposit balances. Of note, excluding the impact of net accretion income, our core net interest margin increased by 4 basis points to 3.45% from 3.41% in the prior quarter, which was primarily driven by lower deposit costs, partially offset by lower core loan yields.

Rob Gorman: Earning asset yields decreased 20 basis points from the prior quarter to 5.79%, primarily due to lower loan accretion income of $13 million, which was inclusive of the impact of a $3.5 million non-recurring loan fair value measurement period adjustment related to the Sandy Spring acquisition and lower yields on variable rate loans, as previously noted. Cost of funds decreased 9 basis points from the prior quarter to 1.94% for Q1, due primarily to lower deposit costs of 13 basis points, which reflected the impact of Fed funds rate reductions on customer deposit rates and the decline in higher costing average broker deposit balances. Of note, excluding the impact of net accretion income, our core net interest margin increased by 4 basis points to 3.45% from 3.41% in the prior quarter, which was primarily driven by lower deposit costs, partially offset by lower core loan yields.

Speaker #4: Cost of funds decreased 9 basis points from the prior quarter to 1.94% for the first quarter due primarily to lower deposit costs of of 13 basis points which reflected the impact of Fed funds rate reductions on customer deposit rates and the decline in higher costing average broker deposit balances.

Speaker #4: Of note, excluding the impact of net accretion income, our core net interest margin increased by 4 basis points to 3.45% from 3.41% in the prior quarter which was primarily driven by lower deposit costs partially offset by lower core loan yields.

Speaker #4: Non-interest income declined by 2.2 million dollars to 54.8 million dollars for the first quarter primarily driven by lower loan-related interest rate swap fees due to seasonally lower transaction volumes which was partially offset by higher capital markets income.

Speaker #4: Reported non-interest expenses decreased by 33.4 million to 209.8 million dollars for the first quarter primarily driven by a 29.6 million dollar decline in merger-related costs and a 2.3 million decrease in amortization of intangible assets.

Advisor: Non-interest income declined by $2.2 million to $54.8 million for Q1, primarily driven by lower loan-related interest rate swap fees due to seasonally lower transaction volumes, which was partially offset by higher capital markets income. Reported non-interest expenses decreased by $33.4 million to $209.8 million for Q1, primarily driven by a $29.6 million decline in merger-related costs and a $2.3 million decrease in amortization of intangible assets. Adjusted operating non-interest expense, which excludes merger-related costs in Q4 of 2025 and Q1 of 2026, and the amortization of intangible assets in both quarters decreased by $1.6 million to $185.3 million for Q1. This decrease was primarily due to a $3.1 million reduction in other expenses, primarily due to lower non-credit related losses on customer transactions.

Rob Gorman: Non-interest income declined by $2.2 million to $54.8 million for Q1, primarily driven by lower loan-related interest rate swap fees due to seasonally lower transaction volumes, which was partially offset by higher capital markets income. Reported non-interest expenses decreased by $33.4 million to $209.8 million for Q1, primarily driven by a $29.6 million decline in merger-related costs and a $2.3 million decrease in amortization of intangible assets. Adjusted operating non-interest expense, which excludes merger-related costs in Q4 of 2025 and Q1 of 2026, and the amortization of intangible assets in both quarters decreased by $1.6 million to $185.3 million for Q1. This decrease was primarily due to a $3.1 million reduction in other expenses, primarily due to lower non-credit related losses on customer transactions.

Speaker #4: Adjusted operating non-interest expense which excludes merger-related costs in the fourth quarter of '25 and the first quarter of '26 and the amortization of intangible assets in both quarters decreased by 1.6 millions to 185.3 million dollars for the first quarter.

Speaker #4: This decrease was primarily due to 3.1 million dollar reduction in other expenses primarily due to lower non-credit-related losses on customer transactions. A 2.3 million dollar decrease in professional services expenses related to strategic projects that occurred in the prior quarter and a 1.9 million dollar decrease in technology and data processing expenses.

Speaker #4: These decreases were partially offset by a $5 million increase in salaries and benefits expense primarily due to seasonally increases in payroll taxes and 401(k) contribution expenses.

Advisor: A $2.3 million decrease in professional services expenses related to strategic projects that occurred in the prior quarter, and a $1.9 million decrease in technology and data processing expenses. These decreases were partially offset by a $5 million increase in salaries and benefits expense, primarily due to seasonal increases in payroll taxes and 401 contribution expenses. On 31 March, loans held for investment net of unearned income were $27.9 billion, which was an increase of $150.3 million, or 2.2% annualized from the prior quarter.

Rob Gorman: A $2.3 million decrease in professional services expenses related to strategic projects that occurred in the prior quarter, and a $1.9 million decrease in technology and data processing expenses. These decreases were partially offset by a $5 million increase in salaries and benefits expense, primarily due to seasonal increases in payroll taxes and 401 contribution expenses. On 31 March, loans held for investment net of unearned income were $27.9 billion, which was an increase of $150.3 million, or 2.2% annualized from the prior quarter.

Speaker #4: The March 31st loans held for investment net amount earned income were 27.9 billion dollars which was an increase of 150.3 million dollars or 2.2% annualized from the prior quarter.

Speaker #4: The March 31st total deposits were 30.4 billion dollars which was a decrease of 80.4 million dollars or approximately 1% annualized from the prior quarter primarily due to decreases of 517.9 million dollars in broker deposits partially offset by an increase of 438.5 million dollars in interest-bearing customer deposits.

Advisor: On 31 March, total deposits were $30.4 billion, which was a decrease of $80.4 million, or approximately 1% annualized from the prior quarter, primarily due to decreases of $517.9 million in broker deposits, partially offset by an increase of $438.5 million in interest-bearing customer deposits. At the end of Q1, Atlantic Union Bankshares and Atlantic Union Bank's regulatory capital ratios were comfortably above well-capitalized levels. In addition, on an adjusted basis, we remain well-capitalized as of the end of Q1, if you include the negative impact of AOCI and held-to-maturity securities unrealized losses in the calculation of the regulatory capital ratios. AOCI increased $22.4 million during Q1 as term interest rates increased from the prior quarter.

Rob Gorman: On 31 March, total deposits were $30.4 billion, which was a decrease of $80.4 million, or approximately 1% annualized from the prior quarter, primarily due to decreases of $517.9 million in broker deposits, partially offset by an increase of $438.5 million in interest-bearing customer deposits. At the end of Q1, Atlantic Union Bankshares and Atlantic Union Bank's regulatory capital ratios were comfortably above well-capitalized levels. In addition, on an adjusted basis, we remain well-capitalized as of the end of Q1, if you include the negative impact of AOCI and held-to-maturity securities unrealized losses in the calculation of the regulatory capital ratios. AOCI increased $22.4 million during Q1 as term interest rates increased from the prior quarter.

Speaker #4: At the end of the first quarter, Atlantic Union Bankshares and Atlantic Union Banks Regulatory Capital Ratios were comfortably above well-capitalized levels. In addition, on an adjusted basis, we remain well-capitalized as of the end of the first quarter if you include the negative impact of AOCI and held the maturity securities unrealized losses in the calculation of the regulatory capital ratios.

Speaker #4: AOCI increased 22.4 million dollars during the first quarter as term interest rates increased from the prior quarter. Company paid a common stock dividend of 37 cents per share in the first quarter in line with the fourth quarter's dividend amount.

Speaker #4: And an increase of 8.8% from the previous year's first quarter dividend amount of 34 cents per common share. On a late quarterly basis, tangible book value per common share increased 24 cents or 1% to 19.93 per share 19.93 dollars per share in the first quarter despite the headwinds caused by the increase in the AOCI unrealized losses.

Advisor: company paid a common stock dividend of $0.37 per share in Q1, in line with Q4's dividend amount, and an increase of 8.8% from the previous year's Q1 dividend amount of $0.34 per common share. On a linked quarterly basis, tangible book value per common share increased $0.24 or 1% to $19.93 per share in Q1, despite the headwinds caused by the increase in the AOCI unrealized losses. We estimate that the increase in AOCI had a negative impact to our tangible book value of $0.16 per share in Q1. As noted on slide 17, we are updating our full year 2026 financial outlook for AUB to the following. We expect loan balances to end the year between $29 and $30 billion, while the year-end deposit balances are projected to be between $31 and $32 billion.

Rob Gorman: company paid a common stock dividend of $0.37 per share in Q1, in line with Q4's dividend amount, and an increase of 8.8% from the previous year's Q1 dividend amount of $0.34 per common share. On a linked quarterly basis, tangible book value per common share increased $0.24 or 1% to $19.93 per share in Q1, despite the headwinds caused by the increase in the AOCI unrealized losses. We estimate that the increase in AOCI had a negative impact to our tangible book value of $0.16 per share in Q1. As noted on slide 17, we are updating our full year 2026 financial outlook for AUB to the following. We expect loan balances to end the year between $29 and $30 billion, while the year-end deposit balances are projected to be between $31 and $32 billion.

Speaker #4: We estimate that the increase in AOCI had a negative impact to our tangible book value of 16 cents per share in the first quarter.

Speaker #4: As noted on slide 17, we were updating our full year 2026 financial outlook for AUB to the following. We expect loan balances to end the year between 29 and 30 billion dollars while year-end deposits balances are projected to be between 31 and 32 billion dollars.

Speaker #4: On the credit front, the allowance for credit losses to loan balances is projected to remain at current levels in the 115 to 120 basis points range and the net charge-off ratio is expected to fall between 10 and 15 basis points in 2026.

Speaker #4: Although we don't currently have a line of sight to reaching that range this year. Fully taxable equivalent net interest income for the full year is projected to come in between 1.34 billion and 1.35 billion dollars inclusive of accretion income of between 140 million dollars and 145 million dollars.

Advisor: On the credit front, the allowance for credit losses to loan balances is projected to remain at current levels in 115 to 120 basis points range, and the net charge-off ratio is expected to fall between 10 and 15 basis points in 2026, although we don't currently have a line of sight to reaching that range this year. Fully tax-equivalent net interest income for the full year is projected to come in between $1.34 and $1.35 billion, inclusive of increasing income of between $140 and $145 million. As a result, we are projecting that the full year tax-equivalent net interest margin will fall in a range between 3.90% and 4% for the full year, driven by our baseline assumption that the Federal Reserve Bank will not cut the Fed funds rate in 2026, and that term rates will remain stable at current levels.

Rob Gorman: On the credit front, the allowance for credit losses to loan balances is projected to remain at current levels in 115 to 120 basis points range, and the net charge-off ratio is expected to fall between 10 and 15 basis points in 2026, although we don't currently have a line of sight to reaching that range this year. Fully tax-equivalent net interest income for the full year is projected to come in between $1.34 and $1.35 billion, inclusive of increasing income of between $140 and $145 million. As a result, we are projecting that the full year tax-equivalent net interest margin will fall in a range between 3.90% and 4% for the full year, driven by our baseline assumption that the Federal Reserve Bank will not cut the Fed funds rate in 2026, and that term rates will remain stable at current levels.

Speaker #4: As a result, we are projecting that the full year tax equivalent net interest margin will fall in a range between 3.90% and 4% for the full year driven by our baseline assumption that the Federal Reserve Bank will not cut the Fed funds rate in 2026 and that term rates will remain stable at current levels.

Speaker #4: On a full year basis, non-interest income is expected to be between 220 and 230 million dollars while adjusted operating non-interest expenses estimated to fall in the range of 742 to 752 million dollars including the expense impact of our North Carolina investment and other 2026 strategic initiatives.

Advisor: On a full year basis, non-interest income is expected to be between $220 and $230 million, while adjusted operating non-interest expense is estimated to fall in the range of $742 to $752 million, including the expense impact of our North Carolina investment and other 2026 strategic initiatives. Based on these projections, we expect to generate annual growth in tangible book value per share of 12% to 15%, produce financial returns that will place us within the top quartile of our proxy peer group, and meet our objective of delivering top-tier financial performance for our shareholders. In summary, Atlantic Union delivered solid operating results in Q1, and 2026 is off to a good start. We remain firmly focused on leveraging this valuable Atlantic Union Bank franchise to generate sustainable, profitable growth and to build long-term value for our shareholders in 2026 and beyond.

Rob Gorman: On a full year basis, non-interest income is expected to be between $220 and $230 million, while adjusted operating non-interest expense is estimated to fall in the range of $742 to $752 million, including the expense impact of our North Carolina investment and other 2026 strategic initiatives. Based on these projections, we expect to generate annual growth in tangible book value per share of 12% to 15%, produce financial returns that will place us within the top quartile of our proxy peer group, and meet our objective of delivering top-tier financial performance for our shareholders. In summary, Atlantic Union delivered solid operating results in Q1, and 2026 is off to a good start. We remain firmly focused on leveraging this valuable Atlantic Union Bank franchise to generate sustainable, profitable growth and to build long-term value for our shareholders in 2026 and beyond.

As a result, we are projecting that the full year, tax, equivalent, net, interest margin will fall in range between 3.90% and 4% for the full year, driven by our Baseline assumption. That the Federal Reserve Bank will not cut. The FED funds rate in 2026 and that term rates will remain stable at current levels.

Speaker #4: Based on these projections, we expect to generate annual growth in tangible book value per share of 12 to 15% produced financial returns that will place us within the top quartile of our proxy peer group and meet our objective of delivering top-tier financial performance for our shareholders.

Speaker #4: In summary, Atlantic Union delivered solid operating results in the first quarter and 2026 is off to a good start. We remain firmly focused on leveraging this valuable Atlantic Union Bank franchise to generate sustainable profitable growth and to build long-term value for our shareholders in 2026 and beyond.

A full year basis, non interest income is expected to be between be between 220 and 230 million. Well, adjusted operating on interest expense, is estimated to fall in the range of 742 to 752 million, including the expense impact of our North Carolina investment and other 2026 strategic initiatives.

Based on these projections, we expect to generate annual growth in tangible book value per share of 12% to 15%, produced by natural returns that will place us within the top quartile of our proxy peer group and meet our objective of delivering top-tier financial performance for our shareholders.

Speaker #4: Before I transition the call back to Bill, I would like to briefly reflect on my tenure at AUB. When I joined the organization in 2012, AUB had approximately $4 billion in total assets with a market capitalization of around $360 million.

Speaker #4: Currently, our assets have grown to nearly $40 billion and our market capitalization exceeds $5 billion. Establishing us as the largest regional bank headquartered in lower Mid-Atlantic.

Advisor: Before I transition the call back to Bill, I would like to briefly reflect on my tenure at AUB. When I joined the organization in 2012, AUB had approximately $4 billion in total assets with a market capitalization of around $360 million. Currently, our assets have grown to nearly $40 billion, and our market capitalization exceeds $5 billion, establishing us as the largest regional bank headquartered in Lower Mid-Atlantic. It's been a great privilege to have played a part in the company's growth and financial success over the past 14 years. Looking ahead, I'm pleased to have Alex step into the role of CFO as my successor, and I'm confident that his extensive financial leadership experience will contribute significantly to Atlantic Union's future success. I'll now turn the call over to Bill to see if there are any questions from our research analyst community.

Rob Gorman: Before I transition the call back to Bill, I would like to briefly reflect on my tenure at AUB. When I joined the organization in 2012, AUB had approximately $4 billion in total assets with a market capitalization of around $360 million. Currently, our assets have grown to nearly $40 billion, and our market capitalization exceeds $5 billion, establishing us as the largest regional bank headquartered in Lower Mid-Atlantic. It's been a great privilege to have played a part in the company's growth and financial success over the past 14 years. Looking ahead, I'm pleased to have Alex step into the role of CFO as my successor, and I'm confident that his extensive financial leadership experience will contribute significantly to Atlantic Union's future success. I'll now turn the call over to Bill to see if there are any questions from our research analyst community.

In summary, Atlantic Union, delivered solid operating results in the first quarter and 2026 is off to a good start. We remain firmly focused on leveraging. This valuable Atlantic Union, Bank franchise to generate sustainable profitable growth and to build long-term value for our shareholders in 2026 and Beyond.

Before I actually ingest the call back, the bill, I would like to briefly reflect on my tenure at AU.

Speaker #4: It's been a great privilege to have played a part in the company's growth and financial success over the past 14 years. And looking ahead, I'm pleased to have Alex step into the role of CFO as my successor and I'm confident that his extensive financial leadership experience will contribute significantly to Atlantic Union's future success.

360 million.

Currently our assets have grown to nearly 40 billion dollars and our market capitalization exceeds 5 billion. Establishing us as the largest regional Bank headquartered in lower Mid-Atlantic.

Speaker #4: I'll now turn the call over to Bill to see if there are any questions from our research analyst community.

It's been a great privilege to have played a part in the company's growth and financial success over the past 14 years.

Speaker #2: Thanks, Rob. And Michelle, we're ready for our first caller, please.

Speaker #3: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

And looking ahead, I'm pleased to have Alex step into the role of CFO as my successor, and I'm confident that his extensive financial leadership experience will contribute significantly to Atlantic Union's future success.

Bill Cimino: Thanks, Rob. Michelle, we're ready for our first caller, please.

I'll now turn the call over to Bill to see if there are any questions from our research analyst community.

Speaker #3: And our first question is going to come from the line of Russell Gunther with Stephen. Your line is open. Please go ahead.

Operator: Thank you. As a reminder to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Our first question is going to come from the line of Russell Gunther with Stephens. Your line is open. Please go ahead.

Thanks, Rob and Michelle. We're ready for our first caller, please.

Speaker #4: Good morning, Russell.

Thank you as a reminder.

Speaker #5: Hey, good morning, guys. Hey, John. Good morning. Wanted to start on the core margin, please. Nice to see that up a little bit this quarter.

Please press star, 1, 1, 1 on your telephone and wait for your name to be announced to withdraw your question. Please press star, 1, 1, 1 again.

Speaker #5: Would be helpful to get a sense for how you expect that to trend over the course of the year. And particularly touching on the direction of deposit costs from here with the Fed on pause.

Advisor: Good morning, Russell.

Rob Gorman: Good morning, Russell.

Russell Gunther: Hey, good morning, guys. Hey, John, good morning. Wanted to start on the core margin, please. Nice to see that up a little bit this quarter. Would be helpful to get a sense for how you expect that to trend over the course of the year, and particularly touching on the direction of deposit costs from here with the Fed on pause. Just wondering if you have the ability to lower further or if there's an upward bias to deposit costs.

And our first question is going to come from the line of Russell Gunther with Stevens. Your line is open. Please go ahead.

Speaker #5: Just wondering if you have the ability to lower further or if there's an upward bias to deposit costs.

Speaker #4: Yeah. Yeah. In terms of the core margin, Russell, we do expect it can grind higher from here. And we do expect that. As I mentioned, in my comments, we don't expect the Fed to cut this year.

Speaker #4: So there should be an impact on our variable rate loan yields on a negative from a negative perspective. However, it also means longer for or higher for longer rates will impact our ability to reduce deposit costs.

Good morning, Russ. Hey, good morning guys. Hey John, good morning. Um, wanted to start uh, on the core margin, please uh nice to see that up a little bit. This quarter um would be helpful to get a sense for how you expect that to Trend over the course of the year and um, you know, particularly touching on the direction of the positive cost from here with the FED on pause just wondering if you have the ability to to lower further or if there's an

Advisor: Yeah. In terms of the core margin, Russell, we do expect it can grind higher from here, and we do expect that. As I mentioned in my comments, we don't expect the Fed to cut this year, so there shouldn't be an impact on our variable rate loan yields from a negative perspective. However, it also means higher for longer rates will impact our ability to reduce deposit costs meaningfully lower from here. Basically saying that it's probably going to be stable. Maybe we may see that tick up a bit on the customer deposit side. The good news there is we do have some broker deposits that are still outstanding that are maturing this quarter and next quarter, and those broker deposits are paying about 5.15% currently.

Rob Gorman: Yeah. In terms of the core margin, Russell, we do expect it can grind higher from here, and we do expect that. As I mentioned in my comments, we don't expect the Fed to cut this year, so there shouldn't be an impact on our variable rate loan yields from a negative perspective. However, it also means higher for longer rates will impact our ability to reduce deposit costs meaningfully lower from here. Basically saying that it's probably going to be stable. Maybe we may see that tick up a bit on the customer deposit side. The good news there is we do have some broker deposits that are still outstanding that are maturing this quarter and next quarter, and those broker deposits are paying about 5.15% currently.

Offered by us to deposit costs.

Speaker #4: Meaningfully, lower from here. Basically, saying that it's probably going to be stable. Maybe there's a little we may see that tick up a bit on the customer deposit side.

Speaker #4: The good news there, we do have some broker deposits that are still outstanding that are maturing this quarter and next quarter. And those broker deposits are paying about 515 currently.

Speaker #4: So we will get a pickup on that if you look at what current broker rates are or even customer deposits, CD rates, and money market rates are.

Speaker #4: So we will get some positive out of that in the near term. The real impact of the grind higher in core net interest income or net interest margin is basically we've got the continuing backbook fixed rate loan backbook repricing and that will continue throughout the year.

Advisor: We will get a pickup on that, if you look at what current broker rates are or even customer deposit CD rates and money market rates are. We will get some positive out of that in the near term. The real impact of the grind higher in core net interest income or net interest margin is basically we've got the continuing back book, fixed rate loan back book repricing, and that will continue throughout the year. As we mentioned, we're projecting that term rates, five-year term rates will stay pretty stable going forward here. We've got about $850 or 900 million of maturing fixed rate loans on the legacy A and B side per quarter through the rest of this year. You're seeing about a pickup of, call it 90 to 100 basis points from portfolio yields on that portfolio.

Rob Gorman: We will get a pickup on that, if you look at what current broker rates are or even customer deposit CD rates and money market rates are. We will get some positive out of that in the near term. The real impact of the grind higher in core net interest income or net interest margin is basically we've got the continuing back book, fixed rate loan back book repricing, and that will continue throughout the year. As we mentioned, we're projecting that term rates, five-year term rates will stay pretty stable going forward here. We've got about $850 or 900 million of maturing fixed rate loans on the legacy A and B side per quarter through the rest of this year. You're seeing about a pickup of, call it 90 to 100 basis points from portfolio yields on that portfolio.

Yeah, um, yeah. In terms of the, the core margin uh, Russell, we do expect it can grind higher from here, um, and we do expect that. As, as I mentioned, uh, in my comments, we don't expect the FED to cut this year. Um, so there should be, uh, should be an impact on our variable rate loan yields, uh, on a negative from a negative perspective. Um, however, it also means longer for, uh, or low higher for longer. Rates will impact our ability to reduce deposit cost meaningfully, uh, lower from here, basically saying that it's probably going to be stable. Maybe there's a little, um, uh, we may see that tick up a bit on the customer deposit side. The good news there is um, we do have some broker deposits that are still outstanding that are maturing this quarter and next quarter and those uh broker deposits are paying about 5.15 currently. So uh we will get a pick up on that.

Speaker #4: As we mentioned, we're projecting that term rates five-year term rates are pretty will stay pretty stable going forward here. And we've got about 850 to 900 million of maturing fixed rate loans on the legacy AUB side per quarter throughout through the rest of this year.

Uh, if you look at what, what current broker rates are or even customer deposits, CD rates and money market rates are so, um, we will get some positive out of that, uh, in the near term. Um, the real, uh, impact of the grind higher in court that interest income or net. Interest margin is basically. We got the, the continuing back book, fixed rate, uh, loan back, book repricing. Um, and that

Speaker #4: So you're seeing about a pickup of call it 90 to 100 basis points from portfolio yields on that portfolio of still in the 510, 515 level repricing into the 6 to 610 range.

Speaker #4: So that's really the underlying context of our thoughts that core margin will grind a bit higher.

Speaker #2: Got it. Okay. Rob, that's helpful detail. Thank you. And then last one for me would be on the expense front, solid result this quarter.

Advisor: In the 5.10, 5.15 level repricing into the 6 to 6.10 range. That's really the underlying context of our thoughts that core margin will grind a bit higher.

Rob Gorman: In the 5.10, 5.15 level repricing into the 6 to 6.10 range. That's really the underlying context of our thoughts that core margin will grind a bit higher.

Speaker #2: You lowered that guide. At the investor day in December, that deck had mentioned considering some additional branch rationalization in '26. So wondering if that is at all contemplated in the lowered guide and if not, given the lowered NII outlook, is that on the cards at all as a potential offset?

Russell Gunther: Got it. Okay, Rob. That's a helpful detail. Thank you. Last one for me would be on the expense front. A solid result this quarter. You lowered that guide. At the investor day in December, that deck had mentioned considering some additional branch rationalization in 2026. Wondering if that is at all contemplated in the lowered guide, and if not, given the lowered NII outlook, is that on the cards at all as a potential offset?

Continue. Uh, throughout the year as we mentioned, we we're uh projecting that the term rates, you know, 5 year term rates uh are pretty, stay pretty stable, going forward here. Um and we've got about 9 850 or 900 million of maturing fixed rate loans on the Legacy A and B side per quarter throughout uh, through the rest of this year. So you see about a pickup of, you know, call it 90 to 100 basis points from portfolio yields on that portfolio. So in the 5105 15 level repricing, into the 6 to 610 range. So um that's that's really the uh, underlying context of our, our our thoughts that that core marginal will will will grind a bit higher.

Speaker #4: Yeah. It's certainly not in the guidance that what we just provided in those numbers on the non-interest expense side. There's always some thoughts around that where we could be looking at that if we really thought the revenue growth was not going to materialize.

Speaker #4: But we do think we've got a pretty good handle on the expense discipline around expenses. That's why we did lower that. Part of that was this first the first quarter we came in better than we expected.

Advisor: Yeah, it's certainly not in the guidance that what we just provided in those numbers on the non-interest expense side. There's always some thoughts around that, where we could be looking at that if we really thought the revenue growth was not going to materialize. But we do think we've got a pretty good handle on the expense discipline around expenses. That's why we did lower that. Part of that was Q1 we came in better than we expected. That should continue as we go forward. As you know, we've said that Q1 is the seasonally high expense quarter for the year. Should see that stuff coming, expenses coming down, especially on payroll taxes and 401(k), which are at the high end. I mean, that was an increase of over $5 million quarter to quarter. That's going to come down over time.

Rob Gorman: Yeah, it's certainly not in the guidance that what we just provided in those numbers on the non-interest expense side. There's always some thoughts around that, where we could be looking at that if we really thought the revenue growth was not going to materialize. But we do think we've got a pretty good handle on the expense discipline around expenses. That's why we did lower that. Part of that was Q1 we came in better than we expected. That should continue as we go forward. As you know, we've said that Q1 is the seasonally high expense quarter for the year. Should see that stuff coming, expenses coming down, especially on payroll taxes and 401(k), which are at the high end. I mean, that was an increase of over $5 million quarter to quarter. That's going to come down over time.

Got it. Okay, Rob that's uh helpful detail, thank you. Uh and then last 1 for me would be on the expense front. Uh, solid result, this quarter you lowered that guide, um, at the investor day in December that deck had mentioned considering some additional Branch rationalization in 26. So wondering if that is at all, contemplated in the lowered guide and if not given the lower knee Outlook, is that on the cards at all as a potential offset.

Speaker #4: That should continue as we go forward. As you know, we've said that the first quarter is the seasonally high expense quarter. For the year, so it should see that stuff coming things coming down, especially on payroll taxes and 401(k), which are at the high end.

Speaker #4: I mean, that was an increase of over $5 million quarter to quarter. That's going to come down over time. It's just elevated due to incentive payments, etc.

Speaker #4: Which would drive those higher in the first quarter. So you should see those costs come down. Now, we did mention that we do have investments being made primarily in the North Carolina franchise opening 10 new branches not all this year.

Advisor: It's just elevated due to incentive payments, et cetera, which drive those higher in the Q1. You should see those costs come down. Now, we did mention that we do have investments being made, primarily in the North Carolina franchise, opening 10 new branches. Not all this year. Probably 3 branches will be open by year-end, another 5 or 6 next year, and then the remainder early in 2028. That expense will start coming on board later this year. Call it Q2, Q3, and Q4 will start to increase. Those are somewhat offsets to this reduced level of payroll taxes and 401 that we'll see going into the next three quarters.

Rob Gorman: It's just elevated due to incentive payments, et cetera, which drive those higher in the Q1. You should see those costs come down. Now, we did mention that we do have investments being made, primarily in the North Carolina franchise, opening 10 new branches. Not all this year. Probably 3 branches will be open by year-end, another 5 or 6 next year, and then the remainder early in 2028. That expense will start coming on board later this year. Call it Q2, Q3, and Q4 will start to increase. Those are somewhat offsets to this reduced level of payroll taxes and 401 that we'll see going into the next three quarters.

Speaker #4: Probably three branches will be opened by year-end, another five or six next year, and then the remainder early in 2028. But that expense will start coming on board later this year.

Speaker #4: Call it second, third, and fourth quarter will start to increase. So those are somewhat offset to this reduced level of payroll taxes and 401(k) that we'll see going into next three quarters.

Speaker #2: Okay. Excellent. Thanks, Rob. Thanks for grasping your retirement. Thanks, Russell. And show we're ready for our next caller, please.

Speaker #6: Hold one moment. Our next question will come from the line of Janet Lee with TD Cowan. Your line is open. Please go ahead.

Seasonally High expense quarter uh, for the year. So should see that stuff coming. Things coming down, especially on payroll taxes and 401K, which are the high end. I mean, that was an increase of over 5 million dollars a quarter to quarter. That's going to come down over time. It's just elevated. Due to uh, incentive payments Etc. Um which would drive those higher in the first quarter. So so you should see, um, those those costs come down. Now we did mention that we do have uh, Investments being made primarily in the North Carolina, um, franchise, uh, opening 10, new branches, not all this year. Probably 3, uh, branches will be open by year and another 5 or 6 next year and then, uh, the remainder early in 2028. Um, but that expense will start coming on board, uh, you know, later this year, call it, uh, second, third and fourth quarter will start to to increase. So those are somewhat of offset to this.

Russell Gunther: Okay. Excellent. Thanks, Rob. Thanks, and congrats on your retirement.

Speaker #5: Hi, Janet.

Uh, reduced level of payroll taxes and portal. Locator—that, that we'll see going into the next three quarters.

Speaker #4: Janet.

Speaker #6: Good morning. So I want to get some clarification. Much of your deposit decline in the quarter seems to be driven by a runoff of broker deposits.

Advisor: Thank you.

Rob Gorman: Thank you.

Okay, excellent. Thanks Rob. Thank you for crafting your retirement.

Bill Cimino: Thanks, Russell. We're ready for our next caller, please.

Operator: One moment. Our next question will come from the line of Janet Lee with TD Cowen. Your line is open. Please go ahead.

Thank you. Thanks, Russell, and show ready for our next caller. Please, one moment.

Speaker #6: I assume that lowered broker deposits is partly attributing to your lower deposit guide for the full year, but would be great to hear the direction of travel for core customer deposits and broker deposits over the course of '26.

Phone call from the line.

Bill Cimino: Hi, Janet.

Advisor: Janet.

Rob Gorman: Janet.

Janet Lee: Good morning. I want to get some clarification. Much of your deposit decline in the quarter seems to be driven by a runoff of broker deposits. I assume that lowered broker deposits is partly attributable to your lower deposit guide for the full year. Would be great to hear the direction of travel for core customer deposits and broker deposits over the course of 2026 that's assumed in your updated deposit guide.

Your line is open. Please go ahead. Hi, Janet. Janet,

Good morning.

Um,

so, I want to

Speaker #6: That's assumed in your updated deposit guide.

Speaker #4: Yeah. So on the customer deposit side, we're looking for three to four percent growth on that front. In broker deposits, we pay down quite a bit I think quarter to quarter.

Get some clarification—much of your deposited client in the quarter seems to be driven by a runoff of brokered deposits.

Speaker #4: We were down about 500 million those are high-cost, obviously. And from a funding perspective, with a lowered loan growth quarter, we did not need to refinance those or fund those with new brokers.

Advisor: Yeah. On the customer deposit side, we're looking for 3% to 4% growth on that front. In broker deposits, we paid down quite a bit. I think quarter to quarter, we were down about $500 million. Those are high cost, obviously. From a funding perspective, with a lower loan growth quarter, we did not need to refinance those or fund those with new brokers. That was a positive. As I said, we got about $200 million this quarter in brokers that are maturing at high cost, and another $80 million or so in Q3. We'll see how that plays out in terms of broker, but that is part of the reason, maybe a lot of the reason why we've lowered our total deposit cost, including broker. Now we'll see what happens there, Janet.

Rob Gorman: Yeah. On the customer deposit side, we're looking for 3% to 4% growth on that front. In broker deposits, we paid down quite a bit. I think quarter to quarter, we were down about $500 million. Those are high cost, obviously. From a funding perspective, with a lower loan growth quarter, we did not need to refinance those or fund those with new brokers. That was a positive. As I said, we got about $200 million this quarter in brokers that are maturing at high cost, and another $80 million or so in Q3. We'll see how that plays out in terms of broker, but that is part of the reason, maybe a lot of the reason why we've lowered our total deposit cost, including broker. Now we'll see what happens there, Janet.

I see that lowered Burger deposits is partly attributing to your lower deposit guide for the full year but would be great to hear the direction of travel for core customer deposits and broker deposits over the course of 26. That's assumed in direct updated deposit guide.

Yeah, so on the customer deposit side, we're looking for, you know, 3 to 4% growth on that front. Um,

Speaker #4: So that was a positive. And as I said, we got about 200 this quarter in broker debt or maturing at high cost. And another 80 or so in the third quarter.

Speaker #4: We'll see how that plays out in terms of broker, but that is part of the reason maybe a lot of the reason why we've lowered our deposit total deposit costs, including broker.

And broken deposits. We paid down quite a bit. I think quarter to quarter we were down about 500 million. Um, those are high cost obviously, um, and from a funding perspective with a, a lower loan growth quarter. We did not need to, uh, uh, refinance, those or fund those with, uh, new brokerage. So that, that was a positive. And I said, as I said, we got about

Speaker #4: Now, we'll see what happens there, Janet. Really depends on seeing a pickup in loan growth over the next several quarters. And maybe if we're on the higher end, it may be outproducing the higher end.

200 this quarter and brokered that are maturing at high cost, and another 80 or so in the third quarter,

Um, we'll see how that plays out, um, in terms of broker, but that is part of—

Speaker #4: We may have to go back and bring in some broker deposits to fund the gap there.

Advisor: Really depends on seeing a pick-up in loan growth over the next several quarters. Maybe if we're on the higher end and maybe outproducing the higher end, we may have to go back and bring in some broker deposits to fund the gap there.

Rob Gorman: Really depends on seeing a pick-up in loan growth over the next several quarters. Maybe if we're on the higher end and maybe outproducing the higher end, we may have to go back and bring in some broker deposits to fund the gap there.

Speaker #6: Got it. Thank you. And the accretion income declined 13 million quarter over quarter and looks like it included some one-time measurement period adjustment. So it was 3.5 million.

Part of the reason, uh, maybe a lot of the reason why we've lowered, uh, our deposit, uh, total deposit costs, including broker now, we'll see what happens there. Uh, Janet, um, really depends on the team that pick up, uh, in loan growth, uh, over the next several quarters. Um, and maybe, you know, see if, if we're on a higher end and maybe, uh, uh,

Speaker #6: Is it fair to are you still maintaining your PAA guide of 150 to 160 million for the full year, or is that impacting your NII guide?

Our producing the higher end. You know, we may have to go back and bring in some broker broker deposits to to fund the Gap. There.

Janet Lee: Got it. Thank you. The accretion income declined $13 million quarter over quarter and looks like it included some one-time measurement period adjustments of $3.5 million. Are you still maintaining your PAA guide of $150 to 160 million for the full year, or is that impacting your NII guide? I know it's harder to-

Speaker #6: I know it's harder to forecast the accretion, but wanted to see where that should trend going forward.

Speaker #4: Yeah. We have lowered that, Janet, to call it 145 to 150 million accretion. Part of that was the 3.5 one-time, which wasn't anticipated in the earlier guide.

Advisor: Yeah

Rob Gorman: Yeah

Janet Lee: forecast the accretion, but

Advisor: Yeah

Rob Gorman: Yeah

Janet Lee: Wanted to see where that should trend going forward.

Speaker #4: And we do expect kind of more of a normalization of prepayments on that portfolio. It was pretty low quarter. Compared to the fourth quarter, in terms of prepayments and accelerated accretion, on a baseline perspective, excluding any early or prepayments, accelerated appreciation, it's about 10 to 11 million dollars on a loan accretion side on a from a baseline.

Advisor: Yeah, we have lowered that, Janet, to call it $145 to 150 million accretion. Part of that was the 3.5 one time, which wasn't anticipated within the earlier guide. We do expect more of a normalization of prepayments on that portfolio. It was pretty low quarter compared to the Q4 in terms of prepayments and accelerated accretion. On a baseline perspective, excluding any early prepayments or accelerated accretion, it's about $10 to $11 million on the loan accretion side from a baseline. You can expect that per quarter. Then the wild card is what's the accelerated prepayments look like and the accretion that comes through related to that. It's been running, probably normalized is more in the $3 million a month kind of thing. That's what is in our projection for that.

Rob Gorman: Yeah, we have lowered that, Janet, to call it $145 to 150 million accretion. Part of that was the 3.5 one time, which wasn't anticipated within the earlier guide. We do expect more of a normalization of prepayments on that portfolio. It was pretty low quarter compared to the Q4 in terms of prepayments and accelerated accretion. On a baseline perspective, excluding any early prepayments or accelerated accretion, it's about $10 to $11 million on the loan accretion side from a baseline. You can expect that per quarter. Then the wild card is what's the accelerated prepayments look like and the accretion that comes through related to that. It's been running, probably normalized is more in the $3 million a month kind of thing. That's what is in our projection for that.

Got it. Thank you and the accretion income declined 13 million quarter over quarter and looks like it included some 1-time measurement period adjustments so it's 3 and a half million. Is it fair to? Are you still maintaining your PA guide of 150 to 160 million for the full year? Or is that impacting your knee guide? I know it's harder to forecast the accretion, but wanted to see, uh, where that should be friend going forward.

yeah, we we have loaded that, um,

Uh, Janet to call the 145 to 150 million, um, accretion part of that was the 3 and a half 1 time which wasn't, uh, anticipated. When in the earlier guide, um, and we do do expect kind of more of a

Speaker #4: You can expect that per quarter. And then the wild card is what's the accelerated prepayments look like in the accretion that comes through related to that?

Speaker #4: And it's been running probably normalized. It's probably more in the 3 million dollars a month kind of thing. So that's kind of what is in our projection.

Normalization of uh prepayments on that portfolio is pretty low quarter compared to the fourth quarter. Uh in terms of uh uh pre- payments and accelerated accretion um on the Baseline perspective, excluding any early uh or prepayments accelerated appreciation accretion. Um it's about 10 11 million dollars on a loan accretion side on a you know from a baseline you can expect that.

Speaker #4: For that.

Speaker #6: Got it. Thank you so much. Congrats, Rob.

Uh, per quarter. And then the wild card is, what's the, what—what's the accelerated prepayments look like, and the accretion that comes through related to that?

Speaker #2: Thanks, Janet. Show we're ready for our next caller, please.

Speaker #6: One moment. Our next question comes from the line of David Chiaverini with Jefferies. Your line is open. Please go ahead.

That's kind of what, uh, is in our projection for that.

Janet Lee: Got it. Thank you so much. Congrats, Rob.

Speaker #7: Hi. Thanks for taking it. Hi. How's it going? Thanks for taking the question. So wanted to touch on loans. You mentioned about the loan pipelines being strong.

Got it. Thank you so much.

Bill Cimino: Thanks, Janet. Michelle, we're ready for our next caller, please.

No problem.

Operator: One moment. Our next question comes from the line of David Chiaverini with Jefferies. Your line is open. Please go ahead.

Speaker #7: Can you talk about customer sentiment and what you're seeing there in terms of drivers?

For our next caller, please hold 1 moment.

Speaker #5: Yes. Dave Ring, our head of all of our commercial-related businesses, which we call wholesalers here. Dave, do you want to speak to what you're seeing?

David Chiaverini: Hi.

Advisor: Hi, Dave.

Rob Gorman: Hi, Dave.

David Chiaverini: Thanks for taking it. Hi, how's it going? Thanks for taking the question. Wanted to touch on loans. You mentioned about the loan pipelines being strong. Can you talk about customer sentiment and what you're seeing there in terms of drivers?

Our next question comes from the line of David Chiaverini with Jefferies. Your line is open. Please go ahead.

Speaker #5: I can give my perspective too, but.

Speaker #7: Sure. Like you said, pipelines are significantly higher than they were this time last year or even at the end of the quarter. First quarter, the sentiment is we are not seeing a lot of companies not doing transactions, but we're seeing companies sometimes pause them and it's largely driven by interest rates, not some of the other things going on in the economy.

Advisor: Yes. David Ring, our head of all of our commercial related businesses, which we call wholesale, is here. Dave, do you want to speak to what you're seeing? I can give my perspective too, but.

Rob Gorman: Yes. David Ring, our head of all of our commercial related businesses, which we call wholesale, is here. Dave, do you want to speak to what you're seeing? I can give my perspective too, but.

Hi, thanks for taking—hi. How's it going? Uh, thanks for taking the question. So, wanted to touch on, uh, loans. You mentioned the loan pipelines being strong. Can you talk about customer sentiment and what you're seeing there in terms of drivers?

David Ring: Sure. Like you said, pipelines are significantly higher than they were this time last year or even at the end of the quarter, Q1. The sentiment is we're not seeing a lot of companies not doing transactions, but we're seeing companies sometimes pause them, and it's largely driven by interest rates, not some of the other things going on in the economy. As interest rates kind of stabilize, we'll see I think our pipeline convert pretty quickly.

Dave Ring: Sure. Like you said, pipelines are significantly higher than they were this time last year or even at the end of the quarter, Q1. The sentiment is we're not seeing a lot of companies not doing transactions, but we're seeing companies sometimes pause them, and it's largely driven by interest rates, not some of the other things going on in the economy. As interest rates kind of stabilize, we'll see I think our pipeline convert pretty quickly.

Um, yes, they bring our head of all of our commercial-related businesses, which we call Wholesale, is here. Dave, do you want to speak to what you're saying? I can give my perspective too, but...

Sure, like you said, pipelines are significantly higher than they were this time last year, or even at the end of the quarter.

Speaker #7: So as interest rates kind of stabilize, we'll see I think our pipeline convert pretty quickly.

Uh, first quarter, but the sentiment is, you know,

Speaker #5: Yeah. I think, and Dave, when you say interest rates, you mean people are essentially we've heard some feedback that clients were sort of waiting on lower rates.

Speaker #5: And now we're in what appears to be a higher-for-longer environment. And as they see that rates are likely not about to come down, they move forward.

We are not seeing a lot of companies, um, not doing transactions, but we're seeing companies sometimes pause them, and it's largely driven by interest rates. Not, uh, some of the other things going on in the economy. So as interest rates, you know, kind of stabilize, we'll see.

Speaker #5: It is important to point out as I commented that we saw our record quarter best ever in Atlantic Union Equipment Finance fundings in Q1.

Advisor: Yeah, I think, and Dave, when you say interest rates, you mean people are essentially. We've heard some feedback that clients were sort of waiting-

Rob Gorman: Yeah, I think, and Dave, when you say interest rates, you mean people are essentially. We've heard some feedback that clients were sort of waiting-

David Ring: Right

Dave Ring: Right

Advisor: on lower rates, and now we're in what appears to be a higher for longer environment. As they see that rates are likely not about to come down, they move forward. It is important to point out, as I commented, that we saw a record quarter, best ever in Atlantic Union Equipment Finance fundings in Q1. We saw record production out of the North Carolina-based commercial real estate team that operates throughout the Carolinas. Pipelines look really good. Also I mentioned that the construction lending pipeline looks really good too. We are seeing activity out there, and despite all the uncertainty and concern about what's going on with this Iranian situation, doesn't really seem to have impacted sentiment. I agree with Dave. We've heard more comments on people that were kind of speculating on what rates might do.

Rob Gorman: on lower rates, and now we're in what appears to be a higher for longer environment. As they see that rates are likely not about to come down, they move forward. It is important to point out, as I commented, that we saw a record quarter, best ever in Atlantic Union Equipment Finance fundings in Q1. We saw record production out of the North Carolina-based commercial real estate team that operates throughout the Carolinas. Pipelines look really good. Also I mentioned that the construction lending pipeline looks really good too. We are seeing activity out there, and despite all the uncertainty and concern about what's going on with this Iranian situation, doesn't really seem to have impacted sentiment. I agree with Dave. We've heard more comments on people that were kind of speculating on what rates might do.

Speaker #5: We saw record production out of the North Carolina-based commercial real estate team that operates throughout the Carolinas. Pipelines look really good. And I also mentioned that the construction lending pipeline looks really good too.

Speaker #5: So we are seeing activity out there. And despite all the uncertainty and concern about what's going on with this Iranian situation, it doesn't really seem to have impacted sentiment.

Speaker #5: I agree with Dave. We've heard more comments on people that were kind of speculating on what rates might do. So we feel good about the outlook from here.

You know, I think our pipeline can work pretty quickly. Yeah, I think and Dave, when you say interest rates, you mean people are essential. We've we've heard some feedback that clients were sort of waiting right on lower rates and now we're in what appears to be a higher for longer environment and as they see that, uh, rates are are likely not about to come down. They move forward. Uh, it is important to point out as I commented that we saw our record quarter best ever in Atlantic Union equipment, Finance, funding and q1. We saw record production of the North Carolina, based commercial real estate team that operates throughout the Carolinas pipelines. Look really good. And uh also mentioned that um you know

Speaker #5: The fundamentals are pretty good across the footprint.

Speaker #7: Great. Thanks for that. And then shifting over to capital management, can you comment on to what extent, if any, the Basel III and game proposal could have on Atlantic Union?

A construction lending pipeline looks really good too. So we are seeing activity out there, and despite all the uncertainty and concern about what's going on with this Iranian situation.

Advisor: We feel good about the outlook from here. The fundamentals are pretty good across the footprint.

Rob Gorman: We feel good about the outlook from here. The fundamentals are pretty good across the footprint.

Speaker #7: And then also touch on your buyback appetite and timing is later this year still in the cards?

David Chiaverini: Great. Thanks for that. Shifting over to capital management, can you comment on to what extent, if any, the Basel III endgame proposal could have on Atlantic Union? Also touch on your buyback appetite and timing. Is later this year still in the cards?

Doesn't really seem to have impacted sentiment. Uh, I agree with Dave. We've heard more comments on people that were kind of speculating on what rates might do. So we feel good, uh, about the outlook from here. The fundamentals are pretty good across the footprint.

Speaker #4: Yeah. In terms of the first question on the Basel III impact, we've estimated that that impact based on what's out there today in the proposal is would reduce risk-weighted assets in the 6 to 6.5% range.

Speaker #4: Which translates into from a CET1 regulatory capital ratio of an increase of 65 to 70 basis points. So we'll see where that comes out in the final rules or what's approved.

Great, thanks for that and then shifting over to Capital Management. Uh, can you comment on to what extent if any of the Basel 3 and game proposal um could have on Atlantic Union and then also touch on your buyback? Appetite and timing um is later this year still in the cards.

Advisor: Yeah. In terms of the first question on the Basel III impact, we've estimated that that impact based on what's out there today, the proposal would reduce risk-weighted assets in the 6% to 6.5% range, which translates into, from a CET1 regulatory capital ratio, of an increase of 65 to 70, 75 basis points. We'll see where that comes out in the final rules or what's approved, but that's our current estimate of the impact there. Pretty positive from a regulatory capital ratio perspective. In terms of the potential buybacks, yeah. As we've said, we look at anything over 10.5% CET1 as excess capital available for us to buy back shares and kind of manage between 10% and 10.5% CET1. Well, I should say, we are projecting that we will hit that 10.5% mark coming out of Q2.

Rob Gorman: Yeah. In terms of the first question on the Basel III impact, we've estimated that that impact based on what's out there today, the proposal would reduce risk-weighted assets in the 6% to 6.5% range, which translates into, from a CET1 regulatory capital ratio, of an increase of 65 to 70, 75 basis points. We'll see where that comes out in the final rules or what's approved, but that's our current estimate of the impact there. Pretty positive from a regulatory capital ratio perspective. In terms of the potential buybacks, yeah. As we've said, we look at anything over 10.5% CET1 as excess capital available for us to buy back shares and kind of manage between 10% and 10.5% CET1. Well, I should say, we are projecting that we will hit that 10.5% mark coming out of Q2.

Yeah, in terms of the first question on the Basel 3 impact, um,

We've estimated that.

Speaker #4: But that's our current estimate of the impact there. So pretty positive from a regulatory capital ratio perspective. In terms of the potential buybacks, yes.

Speaker #4: So as we've said, we look at anything over 10.5% CET1 as excess capital available for us to buy back shares. And kind of manage between 10 and 10.5% CET1.

Speaker #4: We haven't come off our plans to well, I should say we are projecting that we will hit that 10.5% mark coming out of Q2.

That impact based on what out there today in The Proposal is uh, would reduce risk weighted Assets in the 6 to 6 and a half percent range, um, which translates into from a C1, uh, regulatory Capital ratio of a of an increase of 65 to 70, uh, 75 basis points. So, uh, we'll see where that that comes out in the final, uh, rules or what's approved, but that's, uh, our current estimate of the impact there. So pretty positive from a regulatory, um, Capital ratio perspective in terms of the, um, potential BuyBacks. Yeah. So as we've said, um, we're we look at um anything over 10 and a half percent C1 is excess Capital available for us to uh buy back shares.

Speaker #4: Nothing's changed really there into Q3. So we're in a position to request an authorization from our board of directors subject to their approval. And we would expect to be in the market assuming approval there.

Um, and kind of manage, you know, between 10 and 10.5 percent CT1. Um, we haven't come off our plans to, uh, uh,

Speaker #4: And the near future.

Advisor: Nothing's changed really there into Q3. We're in a position to request an authorization from our board of directors subject to their approval. We would expect to be in the market, assuming approval there, in the near future.

Rob Gorman: Nothing's changed really there into Q3. We're in a position to request an authorization from our board of directors subject to their approval. We would expect to be in the market, assuming approval there, in the near future.

Speaker #7: Very helpful. Thank you.

Speaker #4: Yep.

Speaker #2: Thanks, Dave. And Michelle, we're ready for our next caller, please.

Speaker #6: Our next question is going to come from the line of David Bishop with Hovde Group. Your line is open. Please go ahead.

Speaker #2: Hi, David. Hey, John and congratulations, Rob, on the retirement. Enjoyed working with you.

David Chiaverini: Very helpful. Thank you.

Well, well, I should say we are projecting that that we will um, hit that 10 and a half percent Mark coming coming out of Q2, nothing's changed really there into Q3. Um, so we're in a position to request, um, an authorization from our board of directors subject, to their approval. Um, and uh, we would expect to be in the market, um, assuming approval there, uh, in the, you know, near future.

Advisor: Yep. Thanks, Dave. Michelle, we're ready for our next caller, please.

Bill Cimino: Yep. Thanks, Dave. Michelle, we're ready for our next caller, please.

Very helpful. Thank you.

Speaker #4: Thank you.

Speaker #8: Thank you, John.

Speaker #2: John, Dave, just curious from the net charge-off guidance I see in the slide deck, you're still sticking with the 10 to 15 basis points guidance.

Operator: Our next question is going to come from the line of David Bishop with Hovde Group. Your line is open. Please go ahead.

Thanks, Dave and Michelle. We're ready for our next caller, please.

John Asbury: Hi, David.

Our next question is going to come from the line of David Bishop with Hovde Group. Your line is open. Please go ahead.

David Bishop: Hey, John, and congratulations, Rob, on the retirement. Enjoyed working with you.

Speaker #2: Just curious. Is there any line of sight into reaching even that lower end, just giving what's happening on a high-level basis? And maybe what could get you there on sort of a worst-case scenario, maybe what portfolios can drive it higher?

Advisor: Thank you, sir.

Rob Gorman: Thank you, sir.

David Bishop: John, Dave. Just curious from the net charge-off guidance that we see in the slide deck, you're still sticking with the 10 to 15 basis points guidance. Just curious. Is there any line of sight into reaching even that lower end, just given what's happening on a high-level basis? Maybe what could get you there on sort of a worst-case scenario? Maybe what portfolios could drive that higher?

Hi David, hi David. Hey John, and uh, congratulations Rob on the retirement. It's been enjoyed working with you.

Speaker #5: We don't see anything. We have no line of sight to meeting even the lower end of the guide at this moment. Meaning we don't see anything coming having said that.

Speaker #5: We know from experience it's usually the infamous one-off, which can happen from time to time. Doug Woolley's here as well. So Doug, you may want to our chief credit officer, do you see anything that would be sort of a systemic or kind of secular concern?

John Asbury: We don't see anything. We have no line of sight to meeting even the lower end of the guide at this moment, meaning we don't see anything coming. Having said that, we know from experience it's usually the infamous one-off, which can happen from time to time. Doug Woolley's here as well. Doug, our chief credit officer, do you see anything that would be sort of a systemic or kind of secular concern?

John Dave, uh, just curious from the the net charge off guidance. I see in the slide deck, you're still sticking with the the 10 to 15 basis points. Um, Guidance, just curious, is there any line of sight into, you know, reaching even that that lower end just giving what's happening on a, on a high level basis and maybe what could get you there on sort of a worst case scenario? Maybe what? Uh, portfolio is to drive a higher.

Speaker #9: No, no portfolio's at risk. Like John said, they inevitably end up being one-offs. Sometimes larger than we expect. But always resolved quickly once identified.

Speaker #5: As a $38 billion bank, we're not going to run the bank with two bips of annualized net charge-offs. Having said that, I've made similar comments for nine and a half years.

Douglas Woolley: No. No portfolios at risk. Like John said, they inevitably end up being one-offs, sometimes larger than we expect. Always resolved quickly once identified.

Doug Woolley: No. No portfolios at risk. Like John said, they inevitably end up being one-offs, sometimes larger than we expect. Always resolved quickly once identified.

Speaker #5: So I mean, it would be great. We would love to do that very thing. But we'll see. We think it's a reasonable assumption based on what we know right now, Dave.

Uh, we don't see anything. We we have no line of sight to meeting even the lower end of the guide at this moment. Meaning, we don't see anything coming. Um, having said that, we know from experience, it's usually the Infamous 1 off, uh, which can happen from time to time. Uh, Doug Willie's here as well. So Doug, you may want to our chief credit officer. Uh, do you see anything that would be sort of a systemic or kind of secular concern? No. No, uh, portfolio is at risk, like John said, um, the inevitably uh, end up being 1 offs. Um, sometimes larger than we expect.

John Asbury: As a $38 billion bank, we're not going to run the bank with two dips of annualized net charge-offs. Having said that, I've made similar comments for 9 and a half years. It would be great. We would love to do that very thing, but we'll see. We think it's a reasonable assumption based on what we know right now, Dave.

Speaker #2: Got it. One follow-up. I know you mentioned the seasonal impact on swap fees were down this quarter. We do see maybe stability in the term structure of rates.

Speaker #2: Do you think that impacts the overall level of swap fees this year from a go-forward basis? Thanks.

Um, but, uh, you know, always, uh, resolved quickly, uh, once identified. You know, as a $38 billion bank, you know, we're not going to run the bank with $2 billion of annualized net charge-offs. Having said that, I've made similar comments for nine and a half years. So, um, I mean, it would be great, we would love to do that very thing, but we'll see. We think it's a reasonable assumption, based on what we know right now, that—

David Bishop: Got it. One follow-up. I know you mentioned the seasonal impact on swap fees were down this quarter. If we do see maybe stability in the term structure of rates, do you think that impacts the overall level of swap fees this year from a go-forward basis? Thanks.

Speaker #4: Say that again, Dave. The term rates I didn't catch the.

Speaker #2: The rates are stable to be expected.

Speaker #4: Yeah. I think you're saying that we expect sort of relative stability in the outlook for interest rates. Does that have a depressive impact if rates aren't volatile on the outlook for swap fees moving forward?

Speaker #2: Thanks.

Advisor: Say that again, Dave. The term rates, I didn't catch that.

Rob Gorman: Say that again, Dave. The term rates, I didn't catch that.

Got it. 1 follow up. I know you mentioned the seasonal impact. Uh, on uh, swap fees were down in this quarter. If we do see maybe stability, uh, in the term structure of race, do you think that impacts the overall level of Southeast this year from a, a go forward basis? Thanks.

Speaker #4: Yeah. I think, yeah, so on swaps, yeah, we have a pretty good quarter. We'll continue to see how that plays out. But I think you're right.

John Asbury: Rates are stable, that we expect.

David Bishop: Yeah, I think you're saying that you expect sort of relative stability in the outlook for interest rates. Does that have a depressive impact if rates aren't volatile on the outlook for swap fees moving forward? Thanks.

Speaker #4: There's a volatility we'll play into that. And I don't know if Dave has anything Dave Ring has anything to add to that. But.

Speaker #8: Yeah. I mean, for swaps, we're actually not seeing volatility doesn't normally play a role in our swap sales. It's really a function of new transactions getting booked.

Advisor: Yeah, on swaps we had a pretty good quarter. We'll continue to see how that plays out, but I think you're right. The volatility will play into that. I don't know if David Ring has anything to add to that, but.

Rob Gorman: Yeah, on swaps we had a pretty good quarter. We'll continue to see how that plays out, but I think you're right. The volatility will play into that. I don't know if David Ring has anything to add to that, but.

Say that again, Dave—the term rates. I didn't catch the stable that we expect. Yeah, I think you're saying the exact sort of relative stability and the outlook for interest rates. Does that have a depressive impact, if rates aren't volatile, on the outlook for swap fees moving forward? Thanks.

Speaker #8: So we have a pretty strong very strong methodology around making sure we're eyeballing all transactions that are coming in the bank. And we're trying to help clients decide whether to manage the interest rates or not.

David Ring: Yeah, for swaps, volatility doesn't normally play a role in our swap sales. It's really a function of new transactions getting booked. We have a very strong methodology around making sure we're eyeballing all transactions that are coming in the bank, and we're trying to help clients decide whether to manage the interest rates or not. I think the reason we're so successful in swap production is our methodology and the fact that we close a lot of new transactions every quarter. I would say that if there's no expectation that rates are about to drop, that's generally helpful based on my experience, meaning there's not much to wait for. People aren't sort of betting on lower rates.

Dave Ring: Yeah, for swaps, volatility doesn't normally play a role in our swap sales. It's really a function of new transactions getting booked. We have a very strong methodology around making sure we're eyeballing all transactions that are coming in the bank, and we're trying to help clients decide whether to manage the interest rates or not. I think the reason we're so successful in swap production is our methodology and the fact that we close a lot of new transactions every quarter. I would say that if there's no expectation that rates are about to drop, that's generally helpful based on my experience, meaning there's not much to wait for. People aren't sort of betting on lower rates.

Speaker #8: But I think the way the reason we're so successful in swap production is our methodology and the fact that we are we close a lot of new transactions.

Speaker #8: Every quarter.

Speaker #5: I would say that if there's no expectation that rates are about to drop, that's generally helpful based on my experience. Meaning there's not much to wait for.

Speaker #5: People aren't sort of betting on lower rates.

Speaker #2: Right. Great. Appreciate the color. Thanks, Dave. And Michelle, we're ready for our next caller, please.

Yeah I think. Uh yeah so on swaps yeah. We look we have a pretty good quarter. We'll continue to see how that plays out but I think you're you're right. The supply volatility will play into that I can, I don't know if Dave has anything Dave ring, has anything to add to that but um yeah, I mean for swaps we're actually not seeing um volatility doesn't normally play a role in our swap sales. It it's really a function of um new transactions getting booked. So yeah. You know we have a pretty strong, very strong methodology around. Making sure we're eyeballing all transactions that are coming in the bank and, you know, we're trying to help clients, you know, decide whether to manage to fix, you know, manage the interest rates or not. But, you know, we I I think the way, the reason we're so successful in in swap production is our

Speaker #6: One moment. Our next question comes from the line of Brian Wilczynski with Morgan Stanley. Your line is open. Please go ahead.

David Bishop: Right. Great. Appreciate the color.

Methodology and the fact that we, you know, we closed a lot of new transactions every quarter. I would say that if there's no expectation that rates are about to drop, that's generally helpful based on my experience. Meaning, there's not much to wait for—people aren't, you know, sort of betting on lower rates.

Speaker #5: Hi, Brian.

Speaker #10: Hi. Hi. Good morning. Wanted to just quickly go back to the net interest income outlook for the year. For 2026, it looks like you brought that down by about 18 million.

Advisor: Thanks, Dave.

Rob Gorman: Thanks, Dave.

Great. Appreciate the caller.

John Asbury: Thanks, Dave.

Bill Cimino: Thanks, Dave.

Bill Cimino: Michelle, we're ready for our next caller, please.

Operator: One moment. Our next question comes from the line of Brian Wilczynski with Morgan Stanley. Your line is open. Please go ahead.

Thanks, Dave. Thanks. Dave and Michelle, we're ready for our next caller, please?

1 moment.

Speaker #10: At the midpoint, it sounds like the lower purchase accounting accretion explains a portion of that. But was just wondering if you could speak to any change in the core net interest income outlook and anything new that you're seeing on that front specifically.

John Asbury: Hi, Brian.

Our next question comes from the line of Brian Wilchinsky with Morgan Stanley. Your line is open. Please go ahead.

Brian Wilczynski: Hi, good morning. Wanted to just quickly go back to the net interest income outlook for the year. For 2026, it looks like you brought that down by about $18 million at the midpoint. It sounds like the lower purchase accounting accretion explains a portion of that. Was just wondering if you could speak to any change in the core net interest income outlook and anything new that you're seeing on that front specifically.

Speaker #4: Yeah. So Brian, yeah, the bulk of the adjustment there is accretion income. That you saw on the first quarter. That we brought that down a bit.

Speaker #4: The other driver there is we've increased our deposit rate outlook from original guidance earlier in the year. We're seeing some competition in some of our markets.

Advisor: Yeah. Brian, the bulk of the adjustment there is accretion income that you saw in Q1. We brought that down a bit. The other driver there is we've increased our deposit rate outlook from our original guidance earlier in the year. We're seeing some competition in some of our markets. We do regional pricing. In terms of the regions where we're seeing some increases and we've raised rates in those regions is the Metro DC area, former Sandy Spring footprint, and then some impact, even though it's not as large for us, is North Carolina. We've also seen heavy competition from the bigger players in those markets and some of our peers. We did increase those rates a bit. For instance, we now have CD specials in the 4% range or for CD offerings in the 4% range for 3 and 6 months.

Rob Gorman: Yeah. Brian, the bulk of the adjustment there is accretion income that you saw in Q1. We brought that down a bit. The other driver there is we've increased our deposit rate outlook from our original guidance earlier in the year. We're seeing some competition in some of our markets. We do regional pricing. In terms of the regions where we're seeing some increases and we've raised rates in those regions is the Metro DC area, former Sandy Spring footprint, and then some impact, even though it's not as large for us, is North Carolina. We've also seen heavy competition from the bigger players in those markets and some of our peers. We did increase those rates a bit. For instance, we now have CD specials in the 4% range or for CD offerings in the 4% range for 3 and 6 months.

Hi Brian, hi, hi. Good morning. I wanted to just quickly go back to the net interest income outlook for the year, um, for 2026. It looks like you brought that down by about $18 million at the midpoint. It sounds like the lower purchase accounting accretion explains a portion of that, but I was just wondering if you could speak to any change in the core net interest income outlook and anything new that you're seeing on that front, specifically.

Yeah, so Brian, you know the bulk of the

Adjustment. There is accretion income, um,

Uh, that you saw in the first quarter, um, that we brought that down.

A bit.

Speaker #4: We do reasonable pricing. But in terms of the regions where we're seeing some increases and we've raised rates, in those regions is the metro DC area, former Sandy Spring footprint.

Uh, the, the other, the other, um, driver there is, you know, we've increased our deposit rate outlook.

Speaker #4: And then some impact even though it's not as large for us, is North Carolina. We've also seen heavy competition from our some from the bigger players in those markets in some of our peers.

Speaker #4: So we did increase those rates a bit. For instance, we now have CD specials in the 4% range or CDs. Offerings in the 4% range for three and six months.

Speaker #4: And we also now have an advantage money market rate, which is in the 380 range. That requires new money to come in. But those are increasing the deposit rate outlook as we go through this year.

Players in those markets and in some of our peers. So, we did increase those rates a bit. Um,

Speaker #5: Rob, on the accretion income expectations, it's fair to say that's more of a timing issue?

Advisor: We also now have an advantage money market rate, which is in the 380 range. That requires new money to come in. Those are increasing the deposit rate outlook as we go through this year.

Rob Gorman: We also now have an advantage money market rate, which is in the 380 range. That requires new money to come in. Those are increasing the deposit rate outlook as we go through this year.

Speaker #10: Well, it's a timing issue in terms of, yeah, we'll be acceleration of accretion income come through prepayments from the Sandy Spring acquired portfolio. Those activities.

John Asbury: Rob, on the accretion income expectations, is it fair to say that's more of a timing issue?

Speaker #10: And it could be plus or it could be higher. It could be lower. Actually, we were high in the fourth quarter as we talked about last quarter.

You know, for instance, uh, we now have cd specials in the 4% range or for CDs, offerings in the 4% range for 3 and 6 months. And we also now have uh, an advantage money market rate, which is, uh, in the 380 ranks. That that need that requires new money to come in. But, um, those those are, uh, increasing the positive rate Outlook, um, as we go through this year, Rob on the accretion income expectations. So, try to say that's more of a timing issue.

Advisor: Well, it's a timing issue in terms of will the acceleration of accretion income come through prepayments from the Sandy Spring acquired portfolio, those activities. It could be plus or-

Rob Gorman: Well, it's a timing issue in terms of will the acceleration of accretion income come through prepayments from the Sandy Spring acquired portfolio, those activities. It could be plus or-

Speaker #10: And we were lower this quarter. Excluding that three and a half million dollar adjustment that was not recurring. So it kind of does fluctuate quarter to quarter depending on what prepayments we get.

John Asbury: It could be more?

Speaker #5: Yeah. You still have that, as you pointed out, you still have this base level that's a pretty good accounting tailwind. And then the volatility comes in with prepayment activity, which is very difficult to predict.

Advisor: It could be higher, it could be lower. I'd say we were high in the Q4 as we talked about last quarter, and we were lower this quarter, excluding that $3.5 million adjustment that was non-recurring. It kind of does fluctuate quarter to quarter depending on what prepayments we get.

Rob Gorman: It could be higher, it could be lower. I'd say we were high in the Q4 as we talked about last quarter, and we were lower this quarter, excluding that $3.5 million adjustment that was non-recurring. It kind of does fluctuate quarter to quarter depending on what prepayments we get.

Speaker #10: Yeah. That's right.

Speaker #11: And maybe just to clarify on the PAA, the updated expectation, is it 145 to 150? I may have misheard, but I think earlier in the call, you might have said 140 to 145.

John Asbury: Yeah. As you pointed out, you still have this base level that's a pretty good accounting tailwind, and then the volatility comes in with prepayment activity, which is very difficult to predict.

Speaker #11: So just wanted to clarify what the new expectation is.

Advisor: Yeah. That's right.

Rob Gorman: Yeah. That's right.

Speaker #4: Yeah. It's really 140 to 150, Brian. I kind of misstated that. So midpoint about 145 is what we're thinking.

Well, it's a timing issue in terms of of uh yeah, we'll be accelerate acceleration of accretion income, come through prepayments correct, free from understanding spring acquired portfolio, those activities and it could be plus, you know, it could be more, be higher. It could be lower. Actually, you know, we were high in the fourth quarter as as we talked about last last quarter and we were lower this quarter, excluding that 3 and a half million dollar adjustment, that was not recurring. So it kind of does fluctuate quarter to quarter, depending on what prepayments we get. Yeah, you still have that. As you pointed out, you still have this base level. That's a, a pretty good accounting tailwind. And then, the volatility comes in with prepayment activity, which is very difficult to predict

Yeah.

Brian Wilczynski: Maybe just to clarify on the PAA, the updated expectation, is it 145 to 150? I may have misheard, but I think earlier in the call you might have said 140 to 145. Just wanted to clarify what the new expectation is.

Speaker #11: Got it. Got it. And then you mentioned the strong production during the quarter on the loan side. Sounds like loan pipelines are quite strong.

Advisor: It's really 140 to 150. Brian, I kind of misstated that. Midpoint of about 145 is what we're thinking.

Rob Gorman: It's really 140 to 150. Brian, I kind of misstated that. Midpoint of about 145 is what we're thinking.

Speaker #11: Albeit with some paydowns towards the end of the quarter. I'm wondering to the extent that loan growth surprises negatively over the course of the year, say in a scenario where paydowns remain elevated, do you think that the NII guidance is still achievable?

Brian Wilczynski: Got it. You mentioned the strong production during the quarter on the loan side. Sounds like loan pipelines are quite strong, albeit with some pay downs towards the end of the quarter. I'm wondering, to the extent that loan growth surprises negatively over the course of the year, say in a scenario where pay downs remain elevated, do you think that the NII guidance is still achievable? Would there be more offsets maybe on the deposit side? Or would the NII guidance become more challenging in that scenario? Thanks.

That's right. And and maybe just to clarify in the paa the the updated expectation is it 1:45 to 1:50. Um, I I may have misheard, but I think earlier in the call, you might have said 140 to 145. So just just wanted to clarify what the, what the new expectation is. It's really 140 to 150. Um, Brian, I got a misstated that so midpoint about 145 is what we're we're thinking.

Speaker #11: Would there be more offsets, maybe on the deposit side? Or would the NII guidance become more challenging in that scenario? Thanks.

Speaker #4: Yeah. I think the range that we put out there assumes that there's much lower growth than what we were projecting internally. So the range is what 3 to 7 percent if you look at the loan guidance.

Got it, got it. Um and then you know you you mentioned the strong production during the quarter on the loan side, sounds like 1 pipeline or quite strong. Um I'll be it with some pay Downs. Towards the end of the quarter. I'm wondering to the extent that loan growth surprises. Negatively over the course of the Year, say in a scenario where pay Downs remain elevated, do you think that the knee guidance is still achievable? Would there be more offsets maybe on the deposit side um, or would the knee guidance become more challenging in that scenario? Thanks.

Advisor: Yeah, I think the range that we put out there assumes that there's much lower growth than what we're projecting internally. The range is what? 3% to 7%, if you look at the loan guidance and then the net interest income related to that is kind of on a low end. Surely, if it comes in lower or it's flat, that will have some impact on that guidance and likely bring it lower. We're not projecting that flat growth rate. Certainly, as I said earlier, we may then take other actions, maybe from an expense point of view, maybe on the deposit cost perspective, to maintain that net interest margin. We do have some other levers on the expense side we could pull if the revenue growth doesn't come through.

Rob Gorman: Yeah, I think the range that we put out there assumes that there's much lower growth than what we're projecting internally. The range is what? 3% to 7%, if you look at the loan guidance and then the net interest income related to that is kind of on a low end. Surely, if it comes in lower or it's flat, that will have some impact on that guidance and likely bring it lower. We're not projecting that flat growth rate. Certainly, as I said earlier, we may then take other actions, maybe from an expense point of view, maybe on the deposit cost perspective, to maintain that net interest margin. We do have some other levers on the expense side we could pull if the revenue growth doesn't come through.

Speaker #4: And then the net interest income related to that is kind of on a low end. But certainly, if it comes in lower or it's flat, that will help some impact on that guidance and likely bring it lower.

Yeah, I think we—you know, the range that we put out there assumes that.

Uh, you know, there's much lower growth than what—

What we're projecting internally—so, the range is what, you know.

Speaker #4: But we're not projecting that flat growth rate. But certainly, as I said earlier, we may then take other actions, maybe from an expense point of view, maybe on the deposit cost perspective, to maintain that net interest margin.

Speaker #4: But we do have some other levels levers on the expense side we could pull if the revenue growth doesn't come through.

Speaker #11: Got it. Really appreciate all the detail. As always, and Rob, congratulations on your retirement.

Speaker #4: Yeah. Thank you, Brian.

Speaker #10: Just for market clarity, Rob's not retired yet. So we're going to get our money's worth out of him until September. But Alex is CFO as of now.

3, 3 to 7%. If you look at the, um, the the loan guidance and then the, uh, net interest income related to that is kind of on a low low end. But certainly there, you know, if it comes in lower or it's flat, uh, that will help some impact on that guidance. And and likely, uh, bring it, bring it lower, but we're not projecting, you know, that flat group growth rate. Um, but certainly, um, as I said earlier, you know, we we may then take other actions, maybe from an expense point of view. Maybe on the deposit cost per P perspective to, to

Brian Wilczynski: Got it. Really appreciate all the detail as always. Rob, congratulations on your retirement.

Speaker #10: And they'll go through a very planful transition, as you know.

Maintain that net interest margin. Um, but we do have some other levers on the expense side we could pull if the revenue growth doesn't come through.

Speaker #12: And Michelle, we're ready for our next caller, please.

Speaker #13: One moment. Our next question will come from the line of Catherine Miller with KBW. Your line is open. Please go ahead. Hi. Good morning.

Advisor: Yeah. Thank you, Brian.

Rob Gorman: Yeah. Thank you, Brian.

John Asbury: Just for market clarity, Rob's not retired yet. We're going to get our money's worth out of him until September, but Alex is CFO as of now, and we'll go through a very planful transition, as you know.

Got it. We really appreciate all the detail, as always, and Rob, congratulations on your retirement.

Yeah, thank you. Just for market clarity, Rob's not retired yet. So, uh, yeah.

Speaker #13: One more on the loan side or on the NIM side. Could you repeat what loan maturities you have maturing per quarter? And then on average, where new loan yields are coming on the books today?

Advisor: Michelle, we're ready for our next caller, please.

Bill Cimino: Michelle, we're ready for our next caller, please.

We're gonna get our money's worth out of him until September, but Alex is CFO as of now, and they'll go through a very planful transition, as you know.

Operator: One moment. Our next question will come from the line of Catherine Mealor with KBW. Your line is open. Please go ahead.

And Michelle, ready for our next caller, please?

1 moment.

Speaker #4: Yeah. It's about to speak to the fixed rate portfolio. It's about 850 to 900 million maturing on a quarterly basis. And those new loans are being or those loans revised or new loans coming on are in the 6% to 610 range.

Advisor: Hi, Catherine. Good morning.

John Asbury: Hi, Catherine. Good morning.

Catherine Mealor: Hi, good morning. One more on the loan side or on the NIM side. Could you repeat what loan maturities you have maturing per quarter, and then on average, where new loan yields are coming on the books today?

Our next question will come from the line of Katherine Mueller with KBW. Your line is open. Please go ahead. Hi, Katherine, good morning. Hi. Good morning.

Advisor: Yeah. To speak to the fixed rate portfolio, it's about $850 to 900 million maturing on a quarterly basis. Those new loans or those loans refis or new loans coming on are in the 6% to 6.10% range, versus a portfolio at about 5% to 5.10%.

Rob Gorman: Yeah. To speak to the fixed rate portfolio, it's about $850 to 900 million maturing on a quarterly basis. Those new loans or those loans refis or new loans coming on are in the 6% to 6.10% range, versus a portfolio at about 5% to 5.10%.

One more on the loan side, or on the NIM side—could you repeat what loan maturities you have per quarter, and then, on average, where new loan yields are coming on the books today?

Speaker #4: Versus a portfolio at about 5 to 510.

Speaker #13: Okay. And are those just legacy?

Yeah, it’s about, I think, to speak to the fixed rate portfolio, it’s about $850 to $900 million maturing on a quarterly basis.

Speaker #4: Yeah. That's legacy, yeah.

Speaker #13: Okay. So that doesn't include.

Speaker #4: No. That's yes. Yeah. So if we bring in Sandy Spring, it's about that 900 goes up to about 1.2 to 1.3 billion quarterly.

Um, and those new loans are being—or those loans, refis or new loans coming on—are in the 6, uh, 6.

Catherine Mealor: Okay. Are those just legacy?

6% to 610 range, uh, versus a portfolio at about, uh, you know, um, about 5 to 510.

Speaker #13: Okay. Great. But you're saying that's going from about 5 to 610?

Advisor: Yeah, that's legacy.

Rob Gorman: Yeah, that's legacy.

Catherine Mealor: Okay. That doesn't include Sandy Spring Bank and Marshall & Ilsley.

Speaker #4: Yeah. Yeah. Right.

Advisor: Yeah. If we bring in Sandy Spring, that $900 goes up to about $1.2 to 1.3 billion quarterly.

Rob Gorman: Yeah. If we bring in Sandy Spring, that $900 goes up to about $1.2 to 1.3 billion quarterly.

Speaker #13: Got it. Okay. Great. And then we talked a lot about deposit cost competition on this call. What about loan competition? Are you still seeing kind of can you talk about the competitive dynamic in lending both on how that impacts volumes and then how that impacts rate today?

Catherine Mealor: Okay, great. You're saying that's going from about 5 to 6.10.

Yeah, okay, so that is an include. Yeah, so if we bring in Sandy Spring, it's—it's about, um, that $900 million goes up to about $1.2 to $1.3 billion quarterly.

Okay, great.

But you're saying that's going from about five.

Advisor: Yeah. Right.

Rob Gorman: Yeah. Right.

To 6.

Catherine Mealor: Got it. Okay, great. Then, we've talked a lot about deposit cost competition on this call. What about loan competition? Can you talk about the competitive dynamic in lending, both on how that impacts volumes and how that impacts rate today?

Right, got it.

Speaker #10: It's competitive. It's always competitive, particularly for a bank like us that deals with what I would call the higher quality set of credit. Dave, do you want to comment on what you're seeing?

That's a great.

And then, are you—we talked a lot about deposit cost competition on this call. What about loan competition? Are you still seeing

Speaker #12: Yeah. It's competitive in structure and price. So it really depends on the asset the better the organization or better the company or better the prospect the more competitive it gets for sure.

John Asbury: It's competitive. It's always competitive, particularly for a bank like us that deals with what I would call the higher quality set of credit. Dave, do you want to comment on what you're seeing?

Rob Gorman: It's competitive. It's always competitive, particularly for a bank like us that deals with what I would call the higher quality set of credit. Dave, do you want to comment on what you're seeing?

Can you talk about the competitive dynamic in lending, and how that impacts volumes? And then, how does that impact rates today?

Speaker #12: What we're seeing now is the larger banks are very active in the markets we're in now. And so we feel like we compete best against them, actually.

David Ring: Yeah. It's competitive in structure and price. It really depends on the asset. The better the organization or better the company or better the prospect, the more competitive it gets, for sure. What we're seeing now is the larger banks are very active in the markets we're in now, and so we feel like we compete best against them, actually. We feel like strong competition, but we're teed up to compete against them.

Dave Ring: Yeah. It's competitive in structure and price. It really depends on the asset. The better the organization or better the company or better the prospect, the more competitive it gets, for sure. What we're seeing now is the larger banks are very active in the markets we're in now, and so we feel like we compete best against them, actually. We feel like strong competition, but we're teed up to compete against them.

It's competitive. It's always competitive, particularly for a bank like us that deals with, um, you know, what I would call the higher quality set of credit. Dave, do you want to comment on what you're seeing?

Speaker #12: So we feel like strong competition, but we're teed up to compete against them.

Speaker #4: Yeah. We'll get our fair share, Catherine.

Speaker #13: Great. And then maybe one more question on just the growth. You've left your end-of-period growth guide unchanged. Is there and this is a hard question, but it matters for the full-year NII guide, relative to the growth?

John Asbury: Yeah. We'll get our fair share, Catherine.

Speaker #13: I mean, do you feel like that growth is back and loaded? Or do you feel like we're I know paydowns are kind of heavy in the back part of this quarter.

Catherine Mealor: Great. Maybe one more question on just the growth. You've left your end of period growth guide unchanged. I know this is a hard question, but it matters for the full year NII guide relative to the growth. I mean, do you feel like that growth is back-end loaded, or do you feel like we're, I know pay downs are kind of heavy in the back part of this quarter, going to get, as you see it today, a big improvement in growth even starting in Q2? Do we see that kind of ramp to growth starting sooner rather than later?

Yeah, it’s competitive in structure and price, so it really depends on the asset—the better the organization, or the better the company, or the better the prospect, the more competitive it gets for sure. What we’re seeing now is the larger banks are very active in the markets we’re in now, and so we feel like we compete best against them, actually. So, you know, we feel like there’s strong competition, but we’re teeing up to compete against them. Yeah, we’ll get our fair share, Katherine.

Speaker #13: Or do you feel like we're going to get as you see it today, a big improvement in growth even starting in the second quarter?

Speaker #13: So we see that kind of ramp to growth starting. Sooner rather than later.

Speaker #4: Yeah. Truthfully, Q1 was better than I would have expected. Based on production and we were looking we were approaching 4% point-to-point annualized loan growth until literally the last week of Q1.

Great. And then maybe 1 more question on. Just the growth, you you've left your end of period. Gross guide unchanged is there and this is a hard question, but it it matters for the full year and II guide, you know, relative to the growth. I mean, do you feel like that growth is back-end loaded or do you feel like we're I know pay Downs are kind of heavy in the back part of this quarter? Or do you feel like we're going to get

Speaker #4: Notice that the average loan growth for Q1 versus Q4 was 5.8%, which would be a very strong number for Q1, which is seasonally slow coming off a very strong Q4.

John Asbury: Yeah. Truthfully, Q1 was better than I would have expected based on production, and we were approaching 4% point-to-point annualized loan growth until literally the last week of Q1. Notice that the average loan growth for Q1 versus Q4 was 5.8%, which would be a very strong number for Q1, which is seasonally slow coming off a very strong Q4. So the productivity is there. We're off to a very good start in Q2, and I would say we're on pace to where we'll continue to see it ramp. We're not effectively saying we don't see much happening until we get into H2, for example. Do you have anything to add on that, Dave? I mean, we can see it in the pipeline.

Speaker #4: So the productivity is there. We're off to a very good start in Q2. And I would say we're on pace to where we'll continue to see it ramp.

Speaker #4: We're not effectively saying we don't see much happening until we get into the second half of the year, for example. Do you have anything to add on that, Dave?

Speaker #4: I mean, we can see it in the pipeline.

Speaker #12: Yeah. Pipeline's good. Yeah. The pipeline, if you were to just look at quarter over quarter, the pipeline's up 26%, even though we had a really strong fourth quarter.

Speaker #12: And so I think it's just a matter of conversion and we're doing that, like John said. We already had a good start to the second quarter.

David Ring: Yeah, the pipeline, if you were to just look at quarter-over-quarter, the pipeline's up 26%, even though we had a really strong Q4. I think it's just a matter of conversion-

Dave Ring: Yeah, the pipeline, if you were to just look at quarter-over-quarter, the pipeline's up 26%, even though we had a really strong Q4. I think it's just a matter of conversion-

Speaker #12: So we're confident that our conversion rates will be good.

As you see it today, and a big Improvement in growth, even starting in the second quarter. So we see that kind of ramp to growth starting soon sooner rather than later. Yeah. Truthfully q1, uh, was better than I would have expected, uh, based on production, and we were looking, we were approaching 4% point-to-point annualized, loan growth until literally, the last week of q1. Notice that the, uh, average loan growth for q1 versus Q4 was 5.8% which would be a very strong number uh, for q1. Which is seasonally slow coming off a very strong Q4. So the the productivity is there, we're off to a very good start uh in Q2. And I would say we're on Pace to where we'll continue to see it wrap. We're not effectively saying, we don't see much happening until we get into the second half of the year, for example. Um, do you have anything to add on that date? I mean, we can see it in the pipelines. Yeah, and the pipeline, you know, if you were to just look at

Speaker #4: So Catherine, right now, we feel pretty good in terms of being on pace to meet our expectations. It's not all back and loaded. Having said that, Q4 is traditionally, in my 37-year career, Q4 is always the best quarter of the year.

David Ring: Mm-hmm

John Asbury: Mm-hmm

Advisor: We're doing that. Like John said, we already had a good start to Q2, so we're confident that

Dave Ring: We're doing that. Like John said, we already had a good start to Q2, so we're confident that

Speaker #4: But it's not like we're waiting on that.

David Ring: Good

John Asbury: Good

David Ring: Our conversion rates will be good.

Dave Ring: Our conversion rates will be good.

Speaker #13: Great. Very helpful caller. Thank you. Congrats, Rob, on your new role, not retirement.

John Asbury: Catherine, right now we feel pretty good, in terms of being on pace to meet our expectations. It's not all back-end loaded. Having said that, Q4 is traditionally, in my 37-year career, Q4 is always the best quarter of the year. But it's not like we're waiting on that.

Speaker #4: Well said, Catherine. Thank you.

Speaker #12: Yeah. Thanks, Catherine. And Michelle, we're ready for our last caller, please.

Speaker #13: One moment. And our last question will come from the line of Steve Moss with Raymond James. Your line is open. Please go ahead.

Catherine Mealor: Great. Very helpful caller. Thank you.

You know, quarter over quarter of the pipeline's up, you know, 26% even though we had a really strong fourth quarter. And so, you know, I think it's just a matter of conversion. And and and we're doing that, like John said, we already had a good start to the second quarter so we're confident that, you know, our conversion rates will be good, so Katherine right now we feel pretty good uh, in terms of being on Pace to meet our expectations. It's not all back and loaded. Having said that Q4 is traditionally in my 37 year career Q4 is always the best quarter of the year, but it's not like we're waiting on that.

John Asbury: Mm-hmm.

Catherine Mealor: Congrats, Rob, on your new role, not retirement.

Very helpful caller. Thank you.

Speaker #4: Hi, Steve. Good morning.

congrats, Rob on your

Speaker #12: Good morning. Hey, John, Rob, good morning. Appreciate you guys taking my questions here. Just maybe not to be a dead horse, but just following up on deposit cost.

On your new role.

John Asbury: Well said, Catherine. Thank you.

Advisor: Thanks, Catherine.

Rob Gorman: Thanks, Catherine.

Bill Cimino: Thanks, Catherine. Michelle, we're ready for our last caller, please.

Operator: One moment. Our last question will come from the line of Steve Moss with Raymond James. Your line is open. Please go ahead.

Speaker #12: Just kind of curious, how are you thinking about the marginal cost of deposits for you guys? I hear you on the 4% CD rates, but just thinking about the blended holistic dynamic, what you're bringing in.

And Michelle, we're ready for our last caller. Please hold 1 moment.

and our last question,

Advisor: Hi, Steve. Good morning.

Rob Gorman: Hi, Steve. Good morning.

John Asbury: Morning.

Steve Moss: Hey, John, Rob. Good morning. Appreciate you guys taking my questions here. Just maybe, not to beat a dead horse, but just following up on deposit costs. Just kind of curious, how are you thinking about the marginal cost deposits for you guys? I hear you on the 4% CD rates, but just thinking about the blended holistic dynamic, what you're bringing in, where does that roughly shake out these days?

Please, go ahead. I speak—good morning. Good morning.

Speaker #12: Where does that roughly shake out these days?

Speaker #4: Yeah. So if you look at the mix of deposit growth, it's going to be in the money market and the CD book. And as I said, those are probably kind of marginal cost basis.

Speaker #4: Those would be in the ranges that I just mentioned. So they'll start to kick up the average cost of deposits will tick up a bit.

Hey, John, Rob, good morning. Uh, you appreciate you guys taking my questions here, just maybe not to be a dead horse, but just following up on deposit costs. Just kind of curious. You know, how are you thinking about the marginal cost of the deposits for you guys? I hear you on the 4%, CD rates. But just, you know, a thing about the Blended holistic, uh, Dynamic of what you're bringing in. You know, where is that roughly shake out these days?

Advisor: Yeah. If you look at the mix of deposit growth, it's going to be in the money market and the CD book. As I said, those are probably on a marginal cost basis. Those would be in the ranges that I just mentioned. They'll start to kick up the average cost of deposits, will tick up a bit. On the money market side, that's not repricing the back book, so that's not as big an impact, but it will grind higher over a period of time. CDs, as they mature, you'll see that coming in again over time. I think that's the way to think about it. Those are the growth engines at this point from a deposit. Other than we are bringing on some operating accounts and things of that nature.

Rob Gorman: Yeah. If you look at the mix of deposit growth, it's going to be in the money market and the CD book. As I said, those are probably on a marginal cost basis. Those would be in the ranges that I just mentioned. They'll start to kick up the average cost of deposits, will tick up a bit. On the money market side, that's not repricing the back book, so that's not as big an impact, but it will grind higher over a period of time. CDs, as they mature, you'll see that coming in again over time. I think that's the way to think about it. Those are the growth engines at this point from a deposit. Other than we are bringing on some operating accounts and things of that nature.

Speaker #4: On the money market side, that's not repricing the backbook. So that's not as big an impact. But it will grind higher over a period of time.

Yeah, so if you look at the mix of deposit growth, it's going to be in the money market and the CD book, and you know, as I said, those are probably—

Speaker #4: And then CDs, as they mature, you'll see that coming in again over time. So I think that's kind of the way to think about it.

Um on a marginal cost basis, those would be, you know, in the ranges that I that I just mentioned so you know they'll start to kick pick up the average uh cost deposits will tick up a bit. Um,

Speaker #4: Those are the growth engines at this point from a deposit. Other than we are bringing on some operating accounts and things of that nature.

Speaker #4: Of course, we always look for that from a growth point of view. But in terms of the drivers of the growth, it's going to be in those categories.

You know, again, over time. So, um, I think that's kind of the way to think about it. Those are the

Speaker #12: Okay. And then maybe just kind of to take it along the lines, just given how high the cost is, just curious if you guys are thinking about maybe running off more securities here as the year goes on, just a fun growth.

Advisor: Of course, we always look for that from a growth point of view, but in terms of the drivers of the growth, it's going to be in those categories.

Rob Gorman: Of course, we always look for that from a growth point of view, but in terms of the drivers of the growth, it's going to be in those categories.

Speaker #12: If we see a remix that way. Maybe how low are you guys willing to take securities and cash here?

Steve Moss: Okay. Maybe just kind of thinking along the lines, just given how high the cost is, just curious if you guys are thinking about maybe running off more securities here as the year goes on, just to fund growth, if we see a remix that way?

Those are the growth engines, uh, at this point from a deposit—you know, other than, you know, we are bringing on some operating accounts and things of that nature. Of course, we always look for that from a growth point of view. But, um, in terms of the drivers of growth, it's going to be in those categories.

Speaker #4: Yeah. Yeah. That's a good question. Steve, yes, we are. Bringing down the securities portfolios and percentage total assets. That's part of the equation to help fund any gaps between deposit growth and loan growth.

Okay. And then maybe just kind of, you know, dig in along those lines. Just given how high the cost is, just curious if you guys are thinking about maybe running off,

Advisor: Yeah.

Rob Gorman: Yeah.

Steve Moss: Maybe how low are you guys wanting to take securities and cash here?

Speaker #4: Right now, we're about 13 and a half percent of the securities portfolios percentage of total assets. And we're expected to see that come down to about 12 and a half, 12 to 12 and a half, which historically is where we've been.

Advisor: Yeah. That's a good question. Steve, yes, we are bringing down the securities portfolio as a percentage of total assets. That's part of the equation to help fund any gaps between deposit growth and loan growth. Right now, we're about 13.5% of the securities portfolio as a percentage of total assets, and we're expecting to see that come down to about 12% to 12.5%, which historically is where we've been. So there is that funding from maturities coming out of the securities portfolio. Cash flows are about $75 million a month out of the securities portfolio. So that gives us some good funding opportunities for the loan growth, moving that to the loan book.

Rob Gorman: Yeah. That's a good question. Steve, yes, we are bringing down the securities portfolio as a percentage of total assets. That's part of the equation to help fund any gaps between deposit growth and loan growth. Right now, we're about 13.5% of the securities portfolio as a percentage of total assets, and we're expecting to see that come down to about 12% to 12.5%, which historically is where we've been. So there is that funding from maturities coming out of the securities portfolio. Cash flows are about $75 million a month out of the securities portfolio. So that gives us some good funding opportunities for the loan growth, moving that to the loan book.

Um, more securities here as the year goes on—just a fun growth if we see a remix that way, you know. Maybe, how long are you guys willing to take, you know, securities and cash here?

Yeah, that's—yeah, that's a good question. Um, Steve, yes, we are. Um,

Speaker #4: So there is that funding from maturities coming out of the securities portfolio. Cash flows are about 75 million a month out of the securities portfolio.

Bringing you down to the securities portfolio as a percentage of total assets. Uh, that's part of the equation to help fund any gaps between deposit growth and loan growth. Uh, right now we're about 13.5%.

Speaker #4: So that gives us some good funding opportunity for loan growth, moving that to the loan book.

Speaker #12: Okay. And then just on the reserve methodology change here, kind of curious, maybe just explain kind of underneath what the dynamic is that how this could impact the way you're reserve behaves in future periods or and I know you guys said it wasn't a material benefit.

Uh, the securities portfolio is a percent of, uh, total assets. And we're expected to see that come down to about 12 and a half, 12 to 12 and a half, which historically is where we've been. Um, so there is that, uh, that funding, um, from, you know, maturities coming out of the securities portfolio. Cash flows are about $75 million a month.

Uh, out of the security portfolio. So that gives us some, uh,

some good funding, uh,

Steve Moss: Okay. Just on the reserve methodology change here, kind of curious, maybe just explain kind of what the dynamic is and how this could impact the way your reserve behaves in future periods. I know you guys said that it wasn't a material benefit. Is it just like $1 million, $2 million to the provision? Just kind of curious how we think about the dynamics for this quarter and just like the way sensitivity changes going forward.

Opportunity for for the loan growth, moving that to the loan to the loan.

Speaker #12: Is it just like a million, two million to the provision? Just kind of curious how we think about the dynamics for this quarter and just the way sensitivity changes.

Speaker #12: Going forward.

Speaker #4: Yeah. The big change there is, as we said, is we now have modeling on three segments. We split commercial real estate and the commercial industrial portfolios.

Speaker #4: And the real benefit there is that we now have loan-level credit modeling available to us on the commercial real estate side. And that can get very granular in terms of where collateral is and things like of that nature.

Okay. And and then just on the uh Reserve methodology change here, kind of curious, you know, maybe just explain kind of underneath what the dynamic is that um you know, how this could impact the way your reserve behaves in future periods or you know and and I know you guys said it wasn't a material benefit you know was it just like a million 2 million to the provision just kind of curious how we think about the Dynamics for this quarter and just like

Advisor: Yeah, the big change there is, as we said, is we now have modeling on three segments. We split commercial real estate and the commercial and industrial portfolios. The real benefit there is that we now have loan-level credit modeling available to us on the commercial real estate side. That can get very granular in terms of where collateral is and things of that nature. The other component here is if you looked at our allowance for credit losses under the previous modeling, we had about 50% of our reserve was what we considered qualitative factors versus quantitative modeling. Now under the new modeling, we still have qualitative factors, but they're more in the 20% to 25% range. The quantitative model, the more granular model, is producing 75%, give or take, of the total allowance.

Rob Gorman: Yeah, the big change there is, as we said, is we now have modeling on three segments. We split commercial real estate and the commercial and industrial portfolios. The real benefit there is that we now have loan-level credit modeling available to us on the commercial real estate side. That can get very granular in terms of where collateral is and things of that nature. The other component here is if you looked at our allowance for credit losses under the previous modeling, we had about 50% of our reserve was what we considered qualitative factors versus quantitative modeling. Now under the new modeling, we still have qualitative factors, but they're more in the 20% to 25% range. The quantitative model, the more granular model, is producing 75%, give or take, of the total allowance.

The way things seem to be changing going forward.

Speaker #4: The other component here is if you looked at our allowance for credit losses under the previous modeling, we had about 50% of our reserve was what we considered qualitative factors versus quantitative modeling.

Speaker #4: And now, under the new modeling, we still have qualitative factors, but they're more in the 20 to 25 percent range. And the quantitative model, the more granular model is producing 75% of the give or take of the total allowance.

Yeah, the big the big change there is as we said, is we now have modeling on 3, segur portfolios, um, and the real benefit there is that we now have loan level, um credit modeling available to us on a commercial real estate side. Um and that can get very granular um, in terms of where collateral is and things like of that nature. Um, the other, uh,

The component here is, if you looked at our allowance for credit losses under the previous modeling,

We had about 50% of our reserve that was, what we considered, qualitative factors versus quantitative modeling.

Speaker #4: So it's really a much better more detailed model for us. And we feel like it's I don't think you'll see very much volatility in it going forward.

Speaker #4: Depending on the economic forecast, I mean, that can change it a bit going forward. But that would be under the old model as well.

Advisor: It's really a much better, more detailed model for us, and we feel like it's. I don't think you'll see very much volatility in it, going forward, depending on the economic forecast. I mean, that can change it a bit going forward, but that would be under the old model as well. We feel good about the changes that we made. We've continually evolved.

Rob Gorman: It's really a much better, more detailed model for us, and we feel like it's. I don't think you'll see very much volatility in it, going forward, depending on the economic forecast. I mean, that can change it a bit going forward, but that would be under the old model as well. We feel good about the changes that we made. We've continually evolved.

Speaker #4: So we feel good about the changes that we made. And we've continually evolved. This is we are three models. This is the fourth model.

Um, and now under the new modeling, we still have qualitative factors, but they're more in the 20 to 25% range and the, the quantitative model, the more, uh, uh, granular model is producing, 75% of of the, uh, give or take of the of the total allowance. So it's really, uh, a much better more detailed model for us. And we feel feel like, uh, it's, uh,

I don't think you'll see.

Speaker #4: And this is probably this is obviously the best model we've had. And interestingly enough, it kind of underpinned ed what we were putting as a qualitative because the new model didn't really wasn't that really much different from the ACL levels that we've that we have on the balance sheet.

Very much volatility in it, um, going forward, uh, depending on the economic forecast. I mean, that can change it, change it a bit going forward, but that would be under the old model as well. So, um, we feel good about the, uh, the changes that we made. Um, and we've continually evolved. Uh, this is, um,

We?

John Asbury: Three models. This is the fourth model, and this is obviously the best model we've had. Interestingly enough, it kind of underpinned what we were putting as qualitative because the new model wasn't that really much different from the ACL levels that we have on the balance sheet.

Rob Gorman: Three models. This is the fourth model, and this is obviously the best model we've had. Interestingly enough, it kind of underpinned what we were putting as qualitative because the new model wasn't that really much different from the ACL levels that we have on the balance sheet.

had um,

Speaker #12: Okay. And okay. That's helpful. I'll take a little more offline there. But I appreciate all that color. And then maybe just in terms of John, I heard you on the loan pipeline or talking about good dynamics in North Carolina.

Three models. This is the fourth model, and this is probably—this is obviously—the best model we've had, and interestingly enough, um, it kind of

Steve Moss: Okay. I'll take a little more offline there, but I appreciate all that color. Maybe just in terms of, John, I heard you on the loan pipeline or talk about good dynamics in North Carolina, I believe you said. Just kind of curious, what is that looking like these days? Just what percentage of the loan pipeline? Or maybe sizing up a little more would be helpful.

Um, underpin. You know, what we were putting is qualitative because the, the new model didn't really—wasn't that really much different from, um, you know, the ACL levels that we've, uh, that we have on the balance sheet.

Speaker #12: I believe you said. Just kind of curious, what is that looking like these days and just kind of what percentage of the loan pipeline or maybe sizing up a little more would be helpful?

Okay. And

Speaker #4: You mean coming out of the Carolinas?

Speaker #12: Correct.

Speaker #4: Yeah. And when I say North Carolina, I should say broadly Carolinas because the commercial real estate team covers both of the Carolinas. Dave, do you want to speak to how do you think about that in terms of how much of a broadly North Carolina or Carolinas are as a part of the overall equation in terms of pipeline?

Okay, that's—that's how I'll take a little more offline there, but I appreciate all that color. Um, and then maybe just in terms of, um, you know, John, I heard you on the loan pipeline or talk about—good.

John Asbury: You mean coming out of the Carolinas?

Good dynamics in North Carolina. I believe you said—just kind of curious, what is that looking like these days? And just, kind of, what percentage of the loan pipeline, or maybe size it up a little more, would be helpful.

Steve Moss: Correct.

Uh, you mean coming out of the Carolinas?

John Asbury: Yeah. When I say North Carolina, I should say broadly Carolinas because the commercial real estate team covers both of the Carolinas. Dave, do you want to speak to how you think about that in terms of how much of a broadly North Carolina, where Carolinas are as a part of the overall equation in terms of pipeline?

Speaker #12: Yeah. I mean, it certainly helped this quarter that Carolinas was our second largest growth engine for the company for our commercial. So that kind of speaks for itself, I think.

Speaker #12: The pipelines, our strong enough to replicate this performance. In the Carolinas. So we feel really good about it.

David Ring: Yeah. It certainly helped this quarter that Carolinas was our second largest growth engine for the company, for commercial. That kind of speaks for itself, I think. The pipelines are strong enough to replicate this performance in the Carolinas. We feel really good about it.

Dave Ring: Yeah. It certainly helped this quarter that Carolinas was our second largest growth engine for the company, for commercial. That kind of speaks for itself, I think. The pipelines are strong enough to replicate this performance in the Carolinas. We feel really good about it.

Speaker #4: And we're expanding. It used to be and a few years ago when we talked about Carolinas, what we really meant was the commercial real estate team based in Charlotte.

The commercial real estate team covers, you know, both of the Carolinas. Um, Dave, do you want to speak to—like, how do you think about that in terms of how much of, broadly, um, North Carolina, you know, where Carolinas are as a part of the overall equation in terms of pipeline? Yeah, I mean, they certainly helped this quarter. That Airlines was our second largest—

Speaker #4: And so thanks to the acquisition of American National Bank, that gave us a base principally in the Piedmont Triad. We have our Wellington LPO, which is doing well.

John Asbury: We're expanding. It used to be, and a few years ago, when we talked about Carolinas, what we really meant was the commercial real estate team based in Charlotte. Thanks to the acquisition of American National Bank, that gave us a base principally in the Piedmont Triad. We have our Wilmington LPO, which is doing well, which we did post American National acquisition. We've been expanding in Raleigh. We've got the branch investment going on in the greater Raleigh area and Wilmington, and we're continuing to expand the team at a reasonable pace. Steve, I think it'll become more important over time. It is arguably one of the best growth markets in the country, and they're gaining employment faster than most places as well. It's right next door. We feel really good. It's very important to understand how diversified Atlantic Union Bank is.

Speaker #4: Which we did post American National acquisition. We've been expanding in Raleigh. We've got the branch investment going on in the greater Raleigh area and Wellington.

Speaker #4: And we're continuing to expand the team. At a reasonable pace. So Steve, I think it'll become more important over time. It is arguably one of the best growth markets in the country.

Speaker #4: And they're gaining employment faster than most places as well. And it's right next door. So we feel really good. It's very important to understand how diversified Atlantic Union Bank is.

Speaker #4: I don't think we get credit for that. We need to do a better job of explaining we are a diversified bank over three very good states.

Growth engine, uh, for the company, for our, our commercial. So that kind of speaks for itself. I think the pipelines are strong enough to replicate this performance, um, in the Carolinas. So, we're, we feel really good about it. And we're expanding, it used to be— and, and you a few years ago, when we talked about Carolina, what we really meant was the commercial real estate team based in Charlotte. And so, uh, thanks to the acquisition of American National Bank, that gave us a base principally in the Piedmont Triad. We have our wellness and LPO, which is doing well, which we did post-American National acquisition. Uh, we've been expanding, you know, in Raleigh, we've got the branch investment going on in the greater Raleigh area, and Wilmington, and we're continuing to expand the team, you know, at a reasonable pace. So, I think it'll become more important over time, it is arguably, you know, one of the, um, the best growth markets in the country.

Speaker #4: And we have specialty lines as well that can go beyond equipment finance. So we feel good about our opportunity.

Speaker #12: Okay. No, definitely hear you on that, John. Okay. That's everything for me at the moment. I really appreciate all the call here. Thank you very much, guys.

John Asbury: I don't think we get credit for that. We need to do a better job of explaining we are a diversified bank over three very good states. We have specialty lines as well that can go beyond, like equipment finance. We feel good about our opportunity.

Speaker #4: Great. Thank you all so much. Take care.

Speaker #12: Thanks, everyone, for joining us. And we look forward to talking with you next quarter.

And they're, you know, they're gaining employment faster than most places as well. Um, and it's right next door, so we feel really good. It's very important to understand how diversified Atlantic Union Bank is. I don't think we get credit for that. We need to do a better job of explaining. We are a diversified bank, you know, over three very good states and we have specialty lines as well that can go beyond, like equipment finance. So we feel good about our opportunity.

Steve Moss: Okay. No, definitely hear you on that, John. Okay, that's everything for me at the moment. I really appreciate all the color here. Thank you very much, guys.

Okay, no, definitely hear you on that, John. Um,

John Asbury: Great. Thank you all so much.

Bill Cimino: Take care. Thanks, everyone, for joining us, and we look forward to talking with you next quarter.

Rob Gorman: Take care.

Bill Cimino: Thanks, everyone, for joining us, and we look forward to talking with you next quarter.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Okay, that's everything for me at the moment. I really appreciate all the call here. Thank you very much, guys. Great, thank you all so much. Thanks, everyone, for joining us, and we look forward to talking with you next quarter.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.

Q1 2026 Atlantic Union Bankshares Corp Earnings Call

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