RICHMOND, Va. - Atlantic Union Bankshares Corporation (NYSE: NYSE:AUB) has announced the pricing of its underwritten public offering of common stock, which is expected to close tomorrow, subject to customary conditions. The bank holding company has priced 9,859,155 shares at $35.50 each, aiming for aggregate proceeds of $350 million before underwriting discounts and commissions.
The underwriters have an option to purchase up to an additional 1,478,873 shares, which could lead to a further forward sale agreement with the purchaser. Morgan Stanley (NYSE:MS) & Co. LLC is leading the offering, with BofA Securities, Piper Sandler & Co., and Stephens Inc. also involved as book-runners and co-managers.
Atlantic Union has entered a forward sale agreement with Morgan Stanley, under which it will sell shares to the bank at the offering price, adjusted over the term of the agreement. The forward purchaser is expected to borrow and deliver the shares for sale in the offering. Atlantic Union may settle the forward sale agreement within approximately 18 months with either physical settlement, cash settlement, or net share settlement.
While Atlantic Union will not immediately receive proceeds from the sale of shares, it retains the right to proceeds upon settlement. The anticipated net proceeds of $336 million are intended for general corporate purposes, including potentially contributing Tier 1 capital to Atlantic Union Bank.
The offering is made pursuant to an effective registration statement on Form S-3 and a prospectus supplement filed with the Securities and Exchange Commission. The final prospectus supplement and accompanying prospectus will be available on the SEC's website.
Atlantic Union Bankshares Corporation, based in Richmond, Virginia, operates Atlantic Union Bank with branches across Virginia, Maryland, and North Carolina. It also has non-bank financial services affiliates.
This news is based on a press release statement and includes forward-looking statements subject to risks, uncertainties, and assumptions. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
In other recent news, Atlantic Union Bankshares (AUB) revealed optimistic Q2 results for 2024, boosted by its merger with American National Bankshares (NASDAQ:AMNB). The merger has led to a significant increase in product offerings and a stronger market presence, especially in North Carolina. The bank reported a net income available to common shareholders of $22.2 million and adjusted operating earnings of $56.4 million for the quarter. A common stock dividend of $0.32 per share was paid, marking a 6.7% increase from the previous year.
The bank anticipates year-end loan balances to be between $18.5 billion and $19 billion, with deposit balances expected to be between $20 billion and $20.5 billion. Full-year fully tax equivalent net interest income is projected to be between $730 million and $740 million, with a net interest margin between 3.4% and 3.5%.
Despite an anticipated increase in expenses by 4% to 4.5%, primarily due to investments in the North Carolina market, Atlantic Union Bankshares remains confident in achieving the financial benefits of the merger and delivering top-tier financial performance in 2024 and beyond. Recent developments indicate success in winning new business, particularly with former American National customers engaging with new product offerings. The bank's fixed rate portfolio, with a three-year duration, is set to reprice approximately $2.5 billion over the next year, underpinning its cautiously optimistic economic outlook and expected mid-single-digit annualized loan growth.
InvestingPro Insights
Atlantic Union Bankshares Corporation's (AUB) recent public offering of common stock comes against a backdrop of solid financial performance and a history of shareholder returns. According to InvestingPro data, the company has demonstrated a revenue growth of 4.03% over the last twelve months, with quarterly revenue growth accelerating to 9.63% in Q2 2024. This growth trajectory aligns with the company's decision to raise capital, potentially positioning it for further expansion or strengthening its capital base.
InvestingPro Tips highlight AUB's commitment to shareholder value, noting that the company "has raised its dividend for 13 consecutive years" and "has maintained dividend payments for 31 consecutive years." This track record of consistent dividend growth may appeal to income-focused investors, especially considering the current dividend yield of 3.3%.
The company's profitability is also noteworthy, with an operating income margin of 42.02% for the last twelve months. This strong profitability supports another InvestingPro Tip, which indicates that "analysts predict the company will be profitable this year."
However, investors should be aware that "2 analysts have revised their earnings downwards for the upcoming period," which could signal some near-term challenges. Additionally, the company "suffers from weak gross profit margins," which may be a factor to watch in light of the recent capital raise.
For those interested in a deeper analysis, InvestingPro offers 5 additional tips on AUB, providing a more comprehensive view of the company's financial health and prospects.
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