Atlantic Union Bankshares: Navigating Uncertainty Amidst Rising Share Prices

Atlantic Union Bankshares Corporation's shares have risen 50% after previously halving due to concerns over the new administration's policies. The bank's performance has improved despite potential headwinds.

Atlantic Union Bankshares Corporation (NYSE:AUB) has seen its shares rise by 50% in recent months, rebounding from a significant drop that occurred earlier in the year. This recovery comes despite potential headwinds, including concerns over the new administration's policies, tariffs, and risk arbitrage pressure from an all-stock acquisition of Sandy Spring Bancorp. The bank's strong performance in its core markets and robust earnings forecasts have contributed to its resurgence.

Atlantic Union Bankshares Corporation is the largest regional bank holding company in the lower Mid-Atlantic region of the U.S. With 183 branches across Virginia, Maryland, and North Carolina, the bank has expanded its presence through acquisitions such as Sandy Spring Bancorp and American National Bankshares. The recent acquisition of Sandy Spring has been particularly notable, adding 53 branches to the bank's portfolio and increasing its deposit base and loan portfolio, primarily in Maryland.

The bank's stock has shown resilience, reaching an all-time high of $44.54 per share in November 2024 before falling to a 54-month low of $22.85 in April 2025. The stock has since rebounded by 39% and is currently trading just under $36.00 per share, with a market capitalization of approximately $5.1 billion. The bank's strong earnings reports and solid financial forecasts have been key drivers of this recovery. In the second quarter of 2025, Atlantic Union reported earnings of $0.95 per share, with a net interest margin of 3.83%.

Despite the recent rebound, Atlantic Union faces challenges, including potential exposure to the DC Metro area and the broader economic impact of tariffs. However, the bank's focus on organic growth and its strong capital allocation strategy have positioned it well to weather these challenges. The bank's loan portfolio is heavily weighted towards commercial real estate, with a concentration on non-owner-occupied properties and owner-occupied properties. This focus has allowed the bank to maintain a strong capital position, with a CET1 capital ratio of 9.8%.

Atlantic Union's management is optimistic about the bank's future, with plans to expand into North Carolina and maintain its dividend payout ratio between 35% and 45%. The bank's recent insider buying, including purchases by President & CEO John Asbury and other insiders, suggests confidence in the bank's prospects. However, analysts remain mixed on the bank's prospects, with some expecting the stock to pull back to the low $30s before becoming more aggressive below $30 as yields increase.

In conclusion, Atlantic Union Bankshares Corporation has shown resilience in the face of potential headwinds. Its strong earnings reports, solid financial forecasts, and strategic focus on organic growth have contributed to its recent rebound. However, the bank's exposure to the DC Metro area and the broader economic impact of tariffs remain concerns. For income investors, the bank's current yield of 3.8% and PE of 9.4 on FY26E EPS make it an attractive option, especially if the stock pulls back to the low $30s.

References:
https://seekingalpha.com/article/4820873-atlantic-union-bankshares-moving-forward-despite-potential-headwinds