Atlantic Union Bankshares (AUB) risk factors, FY2024 10-K

Risks Related to Our Pending Merger with Sandy Spring

1. 01The dilution caused by the issuance of shares of our common stock in connection with the merger with Sandy Spring may adversely affect the market price of our common stock
2. 02Combining the Company and Sandy Spring may be more difficult, costly or time consuming than expected and the combined company may fail to realize the anticipated benefits and cost savings of the merger
3. 03We and Sandy Spring have, and the combined company following the merger will, incur significant transaction and merger-related costs in connection with the transactions contemplated by the merger agreement
4. 04The merger agreement with Sandy Spring may be terminated in accordance with its terms and the merger may not be completed. Such failure to complete the transactions contemplated by the merger agreement could have a material and adverse effect on our stock price and results of operations
5. 05The market price for our common stock following the closing of the transactions contemplated by the merger agreement with Sandy Spring may be affected by factors different from those that historically have affected or currently affect our common stock and Sandy Spring common stock
6. 06Upon completion of the transactions contemplated by the merger agreement with Sandy Spring, we will be subject to the risks related to Sandy Spring’s business, including its CRE loan portfolio
7. 07As a result of the transactions contemplated by the merger agreement and our acquisition of Sandy Spring, we will record goodwill in connection with such acquisition, and if it becomes impaired, our earnings could be significantly impacted
8. 08The future results of the combined company following the merger with Sandy Spring may suffer if the combined company does not effectively manage its expanded operations
9. 09We and Sandy Spring will be subject to business uncertainties and contractual restrictions while the merger is pending
10. 10Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact our business, financial condition and results of operations

Risks Related to Our Lending Activities

1. 11Our ACL may prove to be insufficient to absorb credit losses in our loan portfolio, which may adversely affect our business, financial condition, and results of operations
2. 12payment of these loans may be insufficient to fully compensate us for the outstanding balance of the loan plus the costs to dispose of the collateral
3. 13A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could hurt our business
4. 14We have significant credit exposure in CRE, which may expose us to additional credit risks, and may adversely affect our business, financial condition, and results of operations
5. 15Our loan portfolio contains construction and development loans, which may expose us to additional credit risks, and may adversely affect our results of operations and financial condition
6. 16Our commercial and industrial loans have contributed significantly to our loan growth, which may expose us to additional credit risks, and may adversely affect our results of operations and financial condition
7. 17The loans we make through federal programs are dependent on the federal government’s continuation and support of these programs and on our compliance with program requirements
8. 18We use independent appraisals and other valuation techniques in evaluating and monitoring loans secured by real estate and other real estate owned, which may not accurately describe the net value of the asset
9. 19If we fail to effectively manage credit risk, our business and financial condition will suffer
10. 20Our focus on lending to small to mid-sized community-based businesses may increase our credit risk
11. 21Nonperforming assets take significant time to resolve and may adversely affect our business, results of operations, and financial condition
12. 22Our mortgage revenue is cyclical and sensitive to interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits
13. 23We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm our liquidity, results of operations and financial condition
14. 24We are subject to environmental risks

Risks Related to Our Business, Industry, Markets, and Market Interest Rates

1. 25Our business and results of operations may be adversely affected by the financial markets, fiscal, monetary, and regulatory policies, developments impacting the financial services industry specifically and economic conditions generally
2. 26We may not be able to maintain a strong core deposit base or access other low-cost funding sources
3. 27We face substantial competition that could adversely affect our growth and/or operating results
4. 28Consumers may increasingly decide not to use banks to complete their financial transactions, which could materially adversely effect our business, financial condition, and results of operations
5. 29Changes in interest rates could adversely affect our income and cash flows
6. 30We may incur losses if asset values decline, including due to changes in interest rates and prepayment speeds

Risks Related to Our Operations

1. 31services, our customers and other third parties may use personal mobile devices or computing devices that are outside of our network environment and are subject to their own cybersecurity risks
2. 32Our business strategy includes continued growth, and our financial condition and results of operation could be negatively affected if we fail to grow or fail to manage our growth effectively
3. 33We may be adversely affected by risks associated with future mergers and acquisition, including execution risk which could disrupt our business and dilute shareholder value
4. 34The carrying value of goodwill and other intangible assets may be adversely affected
5. 35Our risk-management framework may not be effective in mitigating risks and/or losses
6. 36We use models in our business, and we could be adversely affected if our design, implementation, or use of models is flawed
7. 37Failure to keep pace with technological change could adversely affect our business and ability to remain competitive, and we may experience operational challenges when implementing new technologies
8. 38The implementation of new lines of business or new products and services may subject us to additional risk
9. 39Our business could be adversely affected by the operational functions of business counterparties over which we have limited or no control
10. 40We rely on other companies to provide key components of our business infrastructure
11. 41We depend on the accuracy and completeness of information about clients and counterparties, and our financial condition could be adversely affected if we rely on misleading information
12. 42We are subject to losses due to errors, omissions or fraud by our employees, clients, counterparties or other third parties
13. 43Competition for talent is substantial. If we are unable to attract, retain, develop and motivate our human capital, our business, results of operations, and prospects could be adversely affected
14. 44Our internal controls and procedures may fail or be circumvented, which could have a material adverse effect on our business, financial condition, and results of operation
15. 45Our business needs and future growth may require us to raise additional capital, but that capital may not be available or may be dilutive
16. 46We are or may become party from time to time to various claims and lawsuits incidental to our business. Litigation is subject to many uncertainties such that the expenses and ultimate exposure with respect to many of these matters cannot be ascertained
17. 47We are or may become involved from time to time in information-gathering requests, investigations, and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences
18. 48We may not be able to generate sufficient taxable income to fully realize our deferred tax assets

Risks Related to the Regulatory Environment

1. 49We are subject to extensive regulation that could limit or restrict our activities
2. 50Uncertainty surrounding potential legal, regulatory and policy changes by the new presidential administration may directly impact the financial services industry and the broader economy
3. 51Current and to-be-effective laws and regulations addressing consumer privacy and data use and security could increase our costs and failure to comply with such laws and regulation could impact our business, financial condition, and reputation
4. 52We are subject to the CFPB’s broad regulatory and enforcement authority and new regulations, and new approaches to regulation or enforcement by the CFPB could adversely impact us
5. 53We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties and other sanctions
6. 54The Federal Reserve may require us to commit capital resources to support the Bank

Risks Related to Our Securities

1. 55Our ability to pay dividends is limited, and we may be unable to pay dividends in the future
2. 56The trading volumes in our common stock may not provide adequate liquidity for investors
3. 57Future capital needs could result in shareholder dilution and may adversely affect the market price of our common stock and preferred stock (or depositary shares representing a fractional interest in our preferred stock)
4. 58Holders of our indebtedness and of depositary shares related to our Series A preferred stock have rights that are senior to those of our common shareholders
5. 59Our governing documents and the provisions of Virginia law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition of the Company that you may favor
6. 60Our stock price may be volatile, which could result in losses to our investors and litigation against us
7. 61Settlement provisions contained in the Forward Sale Agreements could result in substantial dilution to our earnings per share and return on equity or result in substantial cash payment obligations
8. 62In case of our bankruptcy or insolvency, the Forward Sale Agreements will automatically terminate, and we would not receive the proceeds from the forward sales of our common stock
9. 63Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance
10. 64Changes in accounting standards could impact reported earnings
11. 65We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts
12. 66We are subject to environmental, social and governance, or ESG, risks that could adversely affect our reputation, the trading price of our common stock and/or our business, operations, and earnings