Atlantic Union Bankshares (AUB)

Regional banking company Atlantic Union Bankshares (NYSE:AUB) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 72.8% year on year to $375.4 million. Its GAAP profit of $0.63 per share was 19.4% below analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE:AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Atlantic Union Bankshares competes with other regional banks operating in the Mid-Atlantic region, including Truist Financial (NYSE:TFC), M&T Bank (NYSE:MTB), and F.N.B. Corporation (NYSE:FNB), as well as national banks with significant regional presence like Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC).

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Thankfully, Atlantic Union Bankshares’s 12.5% annualized revenue growth over the last five years was excellent. Its growth beat the average banking company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Atlantic Union Bankshares’s annualized revenue growth of 30.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Atlantic Union Bankshares’s year-on-year revenue growth of 72.8% was magnificent, and its $375.4 million of revenue was in line with Wall Street’s estimates.

Net interest income made up 83.7% of the company’s total revenue during the last five years, meaning Atlantic Union Bankshares barely relies on non-interest income to drive its overall growth.

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Atlantic Union Bankshares’s flat EPS over the last five years was below its 12.5% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Atlantic Union Bankshares, its two-year annual EPS declines of 17.1% show its recent history was to blame for its underperformance over the last five years. These results were bad no matter how you slice the data.

In Q3, Atlantic Union Bankshares reported EPS of $0.63, down from $0.82 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Atlantic Union Bankshares’s full-year EPS of $1.87 to grow 94.9%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

Atlantic Union Bankshares’s TBVPS declined at a 2.1% annual clip over the last five years. TBVPS has stabilized recently as it was flat over the last two years at about $18.99 per share.

Over the next 12 months, Consensus estimates call for Atlantic Union Bankshares’s TBVPS to grow by 14.2% to $21.68, top-notch growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Atlantic Union Bankshares has averaged a Tier 1 capital ratio of 9.8%, which is considered unsafe in the event of a black swan or if macro or market conditions suddenly deteriorate. For this reason alone, we will be crossing it off our shopping list.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, Atlantic Union Bankshares has averaged an ROE of 8.2%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.

We struggled to find many positives in these results. Its net interest income missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.5% to $33.52 immediately after reporting.

Updated: December 4, 2025 at 11:24 PM EST

Before making an investment decision, investors should account for Atlantic Union Bankshares’s business fundamentals and valuation in addition to what happened in the latest quarter.

Atlantic Union Bankshares’s business quality ultimately falls short of our standards. Although its revenue growth was solid over the last five years and is expected to accelerate over the next 12 months, its TBVPS growth was weak over the last five years. And while the company’s estimated net interest income growth for the next 12 months is great, the downside is its estimated sales for the next 12 months are weak.

Atlantic Union Bankshares’s P/B ratio based on the next 12 months is 1x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $40.39 on the company (compared to the current share price of $34.98).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.