Atlantic Union Bankshares’ third quarter results were met with a negative market response, as the company’s revenue fell short of Wall Street expectations despite robust year-over-year growth. Management attributed the quarter’s performance to the ongoing integration of the Sandy Spring acquisition and continued efforts to streamline costs and unify operations. CEO John Asbury noted that merger-related expenses created a noisy quarter, but highlighted successful system conversions and branch consolidations. The company also experienced modest loan growth, tempered by lower revolving credit utilization and increased loan paydowns late in the quarter. CFO Rob Gorman acknowledged the impact of merger-related costs and commercial loan charge-offs, but emphasized improvements in core net interest margin and fee income, particularly from wealth management and interest rate swap activity.
Is now the time to buy AUB? Find out in our full research report (it’s free for active Edge members).
Atlantic Union Bankshares (AUB) Q3 CY2025 Highlights:
- Revenue: $371 million vs analyst estimates of $374.3 million (70.8% year-on-year growth, 0.9% miss)
- Adjusted EPS: $0.84 vs analyst estimates of $0.84 (in line)
- Adjusted Operating Income: $160.3 million vs analyst estimates of $174.8 million (43.2% margin, 8.3% miss)
- Market Capitalization: $4.65 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Atlantic Union Bankshares’s Q3 Earnings Call
- Russell Elliott Gunther (Stephens): Asked if mid-single-digit loan growth is sustainable for 2026. CEO John Asbury replied that while uncertainty remains, high single-digit growth is possible in a normalized environment if specialty lines continue to perform.
- Stephen Scouten (Piper Sandler): Inquired about expense run rates post-integration. CFO Rob Gorman noted the $190 million quarterly run rate should be stable heading into 2026, with cost savings from Sandy Spring fully realized by early next year.
- Catherine Mealor (KBW): Questioned margin outlook as rates decline. Gorman explained that deposit cost reductions should offset lower loan yields, with management expecting modest core margin expansion if term rates hold.
- Sun Young Lee (TD Cowen): Sought clarity on loan growth drivers. Asbury and David Ring, Head of Commercial Banking, attributed growth to new client acquisitions and robust pipelines, not merely a reversal in line utilization.
- Brian Wilczynski (Morgan Stanley): Asked about competition and Sandy Spring revenue synergies. Asbury and Ring emphasized increased competition from traditional banks and highlighted new revenue opportunities in interest rate swaps, asset-based lending, and cross-selling deposit products.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be monitoring (1) the pace at which Sandy Spring integration achieves targeted cost synergies and operational efficiencies, (2) the sustainability of loan growth and specialty lending as economic conditions evolve, and (3) the company’s ability to manage net interest margin through strategic deposit pricing and new lending initiatives. Progress in North Carolina and the scalability of fee income streams will also be key markers.
Atlantic Union Bankshares currently trades at $32.82, down from $34.04 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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