 RICHMOND, Va., July 23, 2020 GLOBE NEWSWIRE -- Atlantic Union Bankshares Corporation the Company or Atlantic Union Nasdaq: AUB today reported net income of 30.7 million and diluted earnings per share of 0.39 for its second quarter ended June 30, 2020. Pre-tax pre-provision earnings1 were 70.4 million, or 0.89 per share1, in the second quarter ended June 30, 2020. Net income was 37.8 million and earnings per share were 0.48 for the six months ended June 30, 2020. Pre-tax pre-provision earnings1 were 138.7 million, or 1.76 per share1, in the six months ended June 30, 2020.During the second quarter Atlantic Union demonstrated resilience, agility and innovation along with its willingness to make the tough decisions required to successfully navigate through the challenges of COVID-19, said John C. Asbury, President and Chief Executive Officer of Atlantic Union. We have remained focused on helping our customers and our communities weather the storm as exemplified by our teams ability to process more than 11,000 loans which provided approximately 1.7 billion to businesses through the Small Business Administrations Paycheck Protection Program during the second quarter. Operating under the mantra of soundness, profitability and growth in that order of priority we believe that Atlantic Union continues to be in a strong financial position with ample liquidity and a well-fortified capital base further enhanced by the issuance of preferred stock during the quarter. We also took action to better align our expense run rate to the revenue reality of the much lower for longer than expected interest rate environment. This includes the consolidation of 14 branches, or nearly 10 of our branch network, that is expected to close in September.Small Business Administration SBA Paycheck Protection Program PPPDuring the second quarter of 2020, the Company continued to participate in the SBA PPP under the Coronavirus Aid, Relief, and Economic Security CARES Act, which was intended to provide economic relief to small businesses that have been adversely impacted by the COVID-19 global pandemic COVID-19. The Company processed over 11,000 loans, which totaled 1.7 billion with a recorded investment of 1.6 billion as of June 30, 2020. The loans carry a 1 interest rate and the Company recorded net PPP loan origination fees of approximately 50.2 million which are being amortized over a 24-month period.Expense Reduction Measures and Balance Sheet RepositioningDuring the second quarter of 2020, the Company undertook several actions, including a planned consolidation of 14 branches expected to occur in September, to reduce expenses in light of the current and expected operating environment. These actions resulted in expenses during the second quarter of 1.8 million of severance costs and also 1.6 million related to the real estate write-downs. In response to the current rate environment, the Company prepaid a Federal Home Loan Bank FHLB advance, which resulted in a prepayment penalty of approximately 10.3 million, and sold several securities, which resulted in a gain of approximately 10.3 million.On June 9, 2020, the Company issued and sold 6,900,000 depositary shares, each representing a 1400th ownership interest in a share of the Companys 6.875 Perpetual Non-Cumulative Preferred Stock, Series A Series A Preferred Stock, par value 10.00 per share of Series A Preferred Stock, with a liquidation preference of 10,000 per share of Series A Preferred Stock. The net proceeds received from the issuance of the Series A Preferred Stock were approximately 166.4 million, after deducting the underwriting discount and other offering expenses payable by the Company. 1 These are financial measures not calculated in accordance with generally accepted accounting principles GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures non-GAAP section of the Key Financial Results.NET INTEREST INCOMEFor the second quarter of 2020, net interest income was 137.3 million, an increase from 135.0 million reported in the first quarter of 2020. Net interest income FTE1 was 140.1 million in the second quarter of 2020, an increase of 2.3 million from the first quarter of 2020. The second quarter net interest margin decreased 26 basis points to 3.23 from 3.49 in the previous quarter, while the net interest margin FTE1 decreased 27 basis points to 3.29 from 3.56 during the same period. The decreases in the net interest margin and net interest margin FTE were principally due to a 60 basis point decrease in the yield on earning assets FTE1 offset by a 33 basis point decrease in cost of funds. The decline in the Companys earning asset yields was driven by the impact of the lower yielding PPP loans originated during the second quarter and the full quarter impact of the lower interest rate environment. The cost of funds decline was driven by lower deposit costs and wholesale borrowing costs driven by lower market interest rates and a favorable funding mix.The Companys net interest margin FTE includes the impact of acquisition accounting fair value adjustments. During the second quarter of 2020, net accretion related to acquisition accounting decreased 3.1 million from the prior quarter to 6.3 million for the quarter ended June 30, 2020. The first and second quarters of 2020, and the remaining estimated net accretion impact are reflected in the following table dollars in thousands: Deposit Loan Accretion Borrowings Accretion Amortization Amortization Total For the quarter ended March 31, 2020 9,528 50 138 9,440 For the quarter ended June 30, 2020 6,443 34 140 6,337 For the remaining six months of 2020 estimated 5,400 49 355 5,094 For the years ending estimated: 2021 9,405 14 807 8,612 2022 7,569 43 829 6,697 2023 5,415 32 852 4,531 2024 4,406 4 877 3,525 2025 3,322 1 900 2,421 Thereafter 14,931 9,873 5,058 1 These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures non-GAAP section of the Key Financial Results.ASSET QUALITYOverview During the second quarter of 2020, the Company experienced decreases in nonperforming assets NPAs primarily due to nonaccrual loan customer payments. Past due loan levels as a percentage of total loans held for investment at June 30, 2020 were down from past due loan levels at March 31, 2020 and June 30, 2019. Net charge-off levels and the provision for loan losses decreased from the first quarter of 2020.Loan Modifications for Borrowers Affected by COVID-19 On March 22, 2020, the five federal bank regulatory agencies and the Conference of State Bank Supervisors issued joint guidance subsequently revised on April 7, 2020 with respect to loan modifications for borrowers affected by COVID-19 the March 22 Joint Guidance. The March 22 Joint Guidance encourages banks, savings associations, and credit unions to make loan modifications for borrowers affected by COVID-19 and, importantly, assures those financial institutions that they will not i receive supervisory criticism for such prudent loan modifications and ii be required by examiners to automatically categorize COVID-19-related loan modifications as TDRs. The federal banking regulators have confirmed with the Financial Accounting Standards Board or FASB that short-term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current i.e., less than 30 days past due on contractual payments prior to any loan modification are not TDRs.In addition, Section 4013 of the CARES Act provides banks, savings associations, and credit unions with the ability to make loan modifications related to COVID-19 without categorizing the loan as a TDR or conducting the analysis to make the determination, which is intended to streamline the loan modification process. Any such suspension is effective for the term of the loan modification; however, the suspension is only permitted for loan modifications made during the effective period of Section 4013 and only for those loans that were not more than thirty days past due as of December 31, 2019.The Company has made certain loan modifications pursuant to the March 22 Joint Guidance or Section 4013 of the CARES Act and as of June 30, 2020 approximately 1.6 billion remain under their modified terms.Nonperforming Assets At June 30, 2020, NPAs totaled 44.0 million, a decrease of 4.4 million from March 31, 2020. NPAs as a percentage of total outstanding loans at June 30, 2020 were 0.31, a decrease of 7 basis points from 0.38 at March 31, 2020. Excluding the impact of the PPP loans1, NPAs as a percentage of total outstanding loans were 0.35, a decrease of 3 basis points from March 31, 2020. The Companys adoption of current expected credit loss CECL on January 1, 2020 resulted in a change in the accounting and reporting related to purchased credit impaired PCI loans, which are now defined as purchased credit deteriorated PCD and evaluated at the loan level instead of being evaluated in pools under PCI accounting. All prior period nonaccrual and past due loan metrics discussed herein have not been restated for CECL accounting and exclude PCI-related loan balances. 1 These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures non-GAAP section of the Key Financial Results. 