What the changes say
- Merger-related integration and stock dilution risks from Sandy Spring were dropped after completion.
- New tax position review risks were added.
- Interest rate exposure was updated to reflect 2024 and 2025 FOMC rate cuts totaling 175 bps.
- Management disclosed an ongoing Chief Financial Officer transition.
What changed since the prior 10-K
New
- NewRisks Related to Our Operations
Challenges to our tax positions could result in tax liability
Tax authorities may challenge our tax positions and allocations, potentially resulting in additional taxes, interest, and penalties.
Dropped
- DroppedRisks Related to Our Pending Merger with Sandy Spring
The 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
Dilution from issuing common stock for the Sandy Spring merger.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
Combining 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
Difficulties and cost of integrating Sandy Spring operations.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
We 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
Incurring significant transaction and merger-related costs.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
The 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
Risk of the Sandy Spring merger agreement being terminated.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
The 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
Stock price fluctuations from differing combined company factors.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
Upon 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
Taking on Sandy Spring business risks, including its CRE loan portfolio.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
As 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
Goodwill impairment risks resulting from the Sandy Spring acquisition.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
The 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
Challenges in managing expanded operations post-merger.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
We and Sandy Spring will be subject to business uncertainties and contractual restrictions while the merger is pending
Business uncertainties and contractual restrictions while the merger was pending.
- DroppedRisks Related to Our Pending Merger with Sandy Spring
Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact our business, financial condition and results of operations
Shareholder litigation regarding the Sandy Spring merger.
- DroppedRisks Related to Our Lending Activities
payment 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
- DroppedRisks Related to Our Operations
services, 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
Potential insufficiency of loan loss reserves and collateral.
- DroppedRisks Related to the Regulatory Environment
Uncertainty surrounding potential legal, regulatory and policy changes by the new presidential administration may directly impact the financial services industry and the broader economy
- DroppedRisks Related to Our Securities
Settlement 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
- DroppedRisks Related to Our Securities
In 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
Reworded
- 90% rewrittenRisks Related to Our Lending Activities
Our 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
Added specific language about collateral potentially being insufficient to cover loan balances and disposal costs.
- 65% rewrittenRisks Related to Our Business, Industry, Markets, and Market Interest Rates
Consumers may increasingly decide not to use banks to complete their financial transactions, which could materially adversely affect our business, financial condition, and results of operations
Added references to global digital asset adoption trends impacting bank disintermediation.
Was: Consumers 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
- 57% rewrittenRisks Related to Our Securities
We 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
Updated to specifically reference momentum in anti-ESG and corporate diversity, equity, and inclusion efforts.
- 47% rewrittenRisks Related to Our Operations
Failure 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
Added digital assets and payment systems as new technology-driven products and services.
- 46% rewrittenRisks Related to Our Business, Industry, Markets, and Market Interest Rates
Changes in interest rates could adversely affect our income and cash flows
Updated interest rate figures to show Federal Funds rate reductions totaling 100 bps from late 2024 and 75 bps from 2025.
- 46% rewrittenRisks Related to Our Operations
We use models in our business, and we could be adversely affected if our design, implementation, or use of models is flawed
Added minor phrasing consistency updates regarding quantitative model usage.
- 38% rewrittenRisks Related to Our Operations
Competition 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
Added disclosure regarding an ongoing chief financial officer transition.
- 36% rewrittenRisks Related to the Regulatory Environment
We 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
Maintained regulatory risk disclosures regarding the CFPB's broad enforcement authority.
- 31% rewrittenRisks Related to Our Securities
We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts
- 27% rewrittenRisks Related to Our Operations
We may not be able to generate sufficient taxable income to fully realize our deferred tax assets
- 23% rewrittenRisks Related to Our Operations
Our 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
- 21% rewrittenRisks Related to Our Operations
The carrying value of goodwill and other intangible assets may be adversely affected
All 52 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Lending Activities
- 01Our 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 operations90% rewritten
- 02A significant portion of our loan portfolio is secured by real estate and events that negatively impact the real estate market could hurt our business
- 03We 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
- 04Our 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
- 05Our commercial and industrial loans are a significant component of our loan portfolio, which may expose us to additional credit risks, and may adversely affect our results of operations and financial condition
- 06The 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
- 07We 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
- 08If we fail to effectively manage credit risk, our business and financial condition will suffer
- 09Our lending to small to mid-sized community-based businesses may increase our credit risk
- 10Nonperforming assets take significant time to resolve and may adversely affect our business, results of operations, and financial condition
- 11Our 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
- 12We 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
- 13We are subject to environmental risks
Risks Related to Our Business, Industry, Markets, and Market Interest Rates
- 14Our 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
- 15We may not be able to maintain a strong core deposit base or access other low-cost funding sources
- 16We face substantial competition that could adversely affect our growth and/or operating results
- 17Consumers may increasingly decide not to use banks to complete their financial transactions, which could materially adversely affect our business, financial condition, and results of operations65% rewritten
- 18Changes in interest rates could adversely affect our income and cash flows46% rewritten
- 19We may incur losses if asset values decline, including due to changes in interest rates and prepayment speeds
Risks Related to Our Operations
- 20Our 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 effectively23% rewritten
- 21We may be adversely affected by risks associated with future mergers and acquisition, including execution risk which could disrupt our business and dilute shareholder value
- 22The carrying value of goodwill and other intangible assets may be adversely affected21% rewritten
- 23Our risk-management framework may not be effective in mitigating risks and/or losses
- 24We use models in our business, and we could be adversely affected if our design, implementation, or use of models is flawed46% rewritten
- 25Failure 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 technologies47% rewritten
- 26The implementation of new lines of business or new products and services may subject us to additional risk
- 27Our business could be adversely affected by the operational functions of business counterparties over which we have limited or no control
- 28We rely on other companies to provide key components of our business infrastructure
- 29We 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
- 30We are subject to losses due to errors, omissions or fraud by our employees, clients, counterparties or other third parties
- 31Competition 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 affected38% rewritten
- 32Our 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
- 33Our business needs and future growth may require us to raise additional capital, but that capital may not be available or may be dilutive
- 34We 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
- 35We 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
- 36We may not be able to generate sufficient taxable income to fully realize our deferred tax assets27% rewritten
- 37Challenges to our tax positions could result in tax liabilityNew
Risks Related to the Regulatory Environment
- 38We are subject to extensive regulation that could limit or restrict our activities
- 39Laws 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
- 40We 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 us36% rewritten
- 41We 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
- 42The Federal Reserve may require us to commit capital resources to support the Bank
Risks Related to Our Securities
- 43Our ability to pay dividends is limited, and we may be unable to pay dividends in the future
- 44The trading volumes in our common stock may not provide adequate liquidity for investors
- 45Future 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)
- 46Holders 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
- 47Our 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
- 48Our stock price may be volatile, which could result in losses to our investors and litigation against us
- 49Our 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
- 50Changes in accounting standards could impact reported earnings
- 51We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts31% rewritten
- 52We 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 earnings57% rewritten
Other Atlantic Union Bankshares 10-Ks
- FY2024 10-K risk factors66 risks
Atlantic Union Bankshares faces material concentration risks in commercial real estate lending and commercial and industrial loans. The company’s near-term profitability and stock performance are heavily tied to the successful closing and integration of the Sandy Spring merger. Rapid technological change and cyber-attacks on third-party vendors threaten customer data and core banking operations.
Filed Feb 27, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.