Updated 3/6/25
Atlantic Union Bankshares Corporation (NASDAQ: AUB) is a regional bank based in Virginia, offering a full range of financial services to individuals and businesses. With a strong presence in the Mid-Atlantic region, the company has expanded steadily through organic growth and acquisitions. As a well-established player in the banking industry, AUB has successfully navigated various economic cycles with a conservative approach, ensuring financial stability.
For dividend investors, AUB presents an attractive opportunity. It consistently rewards shareholders with regular payouts and maintains a balanced approach between dividend distributions and business growth. The bank’s financial strength and focus on shareholder returns make it a compelling option for those looking for steady income from the financial sector.
📊 Key Dividend Metrics
💰 Dividend Yield: 3.99% (Forward)
📅 Dividend Growth: 5-year average yield of 3.49%
📈 Payout Ratio: 58.04% (Moderate and sustainable)
💵 Annual Dividend: $1.36 per share
📆 Latest Dividend Date: February 28, 2025
🔄 Ex-Dividend Date: February 14, 2025
Dividend Overview
AUB has built a solid track record of paying dividends, making it an appealing choice for income investors. Its forward dividend yield of 3.99% sits above its five-year average, which means the bank has maintained a strong and steady payout history. While the yield is not the highest among regional banks, it offers a healthy balance of income and long-term stability.
The most recent quarterly dividend payment of $0.34 per share demonstrates AUB’s commitment to returning capital to shareholders. The payout ratio of 58.04% suggests the company is distributing a reasonable portion of its earnings while keeping enough retained earnings to reinvest in operations and future growth.
Dividend Growth and Safety
AUB’s dividend has remained stable, with a modest level of growth over time. With a payout ratio below 60%, there is room for continued increases as long as earnings remain steady. The bank’s ability to maintain its dividend through various economic conditions is a positive sign for investors who prioritize income reliability.
Looking at profitability, AUB has a return on equity (ROE) of 7.34% and a return on assets (ROA) of 0.91%. While not overly aggressive, these numbers reflect a steady and disciplined approach to capital management. The company isn’t taking excessive risks to boost profits, which helps ensure dividend sustainability in different market conditions.
Chart Analysis
AUB’s stock price has been in a noticeable downtrend over the past few months after peaking above $42.50. The price action suggests a shift from a strong uptrend into a more bearish phase, as seen in the breakdown below both the 50-day moving average (orange line) and the 200-day moving average (blue line). The most recent close at $34.06 reflects continued weakness, with the stock trading near the lower range of its past six months.
The 50-day moving average has been rolling over since early January, indicating growing downward momentum. This short-term trend has crossed below the 200-day moving average, forming a bearish crossover, commonly known as a death cross, which typically signals a longer-term trend shift to the downside.
Volume spikes are notable, especially during the sharp decline in October, when selling pressure surged. Since then, volume has normalized, but the recent selloff has occurred on relatively steady volume, suggesting that selling is not exhausted yet. There has not been a strong reversal signal or high-volume buying that would suggest a capitulation bottom.
The Relative Strength Index (RSI) is trending lower but has not yet reached deeply oversold levels. The RSI suggests that bearish momentum is still in play, though the stock could be approaching an area where buyers might start looking for value.
In the most recent five trading sessions, price action has remained weak. The candles have long upper wicks, which means sellers continue to step in on any brief rallies. The stock has consistently closed near its intraday lows, a sign that downward pressure remains dominant.
A key level to watch is $33.75, which was the intraday low on March 5. If the stock breaks below this support, it could trigger another leg down. However, if buyers defend this area, a short-term bounce could be possible.
Analyst Ratings
📊 Over the past year, Atlantic Union Bankshares (AUB) has seen a mix of analyst upgrades and downgrades, reflecting different views on its financial performance and future outlook.
Upgrades
🟢 January 13, 2025: Piper Sandler initiated coverage on AUB with an Overweight rating and set a price target of $51.00. The firm pointed to the bank’s strong financial health and growth potential as key reasons for the positive outlook.
🟢 November 22, 2024: Keefe, Bruyette & Woods maintained their Market Perform rating but raised the price target from $42.00 to $46.00. This adjustment came after the company posted improved earnings and showed greater operational efficiency, which suggested better-than-expected performance.
Downgrades
🔴 April 6, 2023: Keefe, Bruyette & Woods downgraded AUB from Buy to Hold and lowered the price target from $42.00 to $36.00. The downgrade stemmed from concerns about the bank’s exposure to potential economic slowdowns, which could impact loan growth and profitability.
🔴 April 27, 2023: Raymond James adjusted its price target from $43.00 to $34.00 while keeping an Outperform rating. The revision was influenced by broader challenges in the banking sector, including interest rate uncertainty and potential credit risk pressures.
Consensus Price Target
📌 The average price target among analysts currently stands at $44.40, suggesting a potential upside of approximately 24.53% from the current stock price. Analysts remain cautiously optimistic, with expectations of steady performance despite economic headwinds in the banking sector.
Earnings Report Summary
Atlantic Union Bankshares wrapped up the fourth quarter of 2024 on a solid note, reporting net income of $54.8 million for common shareholders. That translated to earnings per share of $0.61 on a basic level and $0.60 on a diluted basis. Adjusted for certain items, the company posted $61.4 million in operating earnings, which worked out to $0.67 per share.
For the full year, total net income came in at $197.3 million, with earnings per share at $2.29 basic and $2.24 diluted. Adjusted earnings, which strip out one-time impacts, were $241.3 million, or $2.74 per share.
Interest income held steady, with net interest income for the quarter landing at $183.2 million, slightly up from the previous quarter’s $182.9 million. This stability suggests the bank is doing a good job managing its loan portfolio and deposit costs despite the challenging rate environment.
On the expense side, the efficiency ratio came in at 60.3%, which is a key measure of how well a bank manages its overhead relative to revenue. Noninterest expenses declined to $130.6 million from $137.4 million, reflecting ongoing cost controls.
Loan growth remained healthy, with total loans at $14.9 billion by the end of the year, up from $14.7 billion the quarter before. Deposits dipped slightly to $16.2 billion from $16.4 billion, likely due to competition in the deposit market.
Credit quality remained strong, with nonperforming assets sitting at $39.5 million, or just 0.21% of total assets—essentially unchanged from the previous quarter. Net charge-offs edged up slightly to $4.2 million from $3.8 million, but overall, the credit picture still looks stable.
The bank’s capital position remains solid, with a common equity tier 1 capital ratio of 10.2% and a total capital ratio of 12.5%, keeping it well above regulatory requirements. This strong capital base gives the company flexibility for future growth and expansion.
A major highlight from the quarter was Atlantic Union’s planned acquisition of Sandy Spring Bancorp, Inc., a move that expands its footprint in the Mid-Atlantic region. The Federal Reserve Bank of Richmond approved the deal just seven weeks after it was filed, signaling confidence in the transaction. Once completed, this acquisition should boost AUB’s scale and competitiveness in key markets.
All in all, the bank delivered a solid quarter, balancing stable earnings, loan growth, and strong asset quality while positioning itself for future expansion.
Financial Health and Stability
AUB maintains a strong financial position, supported by solid profitability metrics. The bank operates with a profit margin of 27.25% and an operating margin of 44.33%, showing that it manages expenses well while maintaining a healthy bottom line.
Liquidity and Balance Sheet Strength
- Total Cash: $451.47 million
- Total Debt: $819.54 million
- Book Value Per Share: $35.01
The bank’s cash reserves provide flexibility, while its debt remains at a manageable level. With a price-to-book ratio of 0.97, AUB’s stock is trading close to its intrinsic value, which could suggest a reasonable entry point for long-term investors.
Earnings Performance
- Revenue (TTM): $767.33 million
- Net Income (TTM): $197.26 million
- Diluted EPS (TTM): $2.24
- Quarterly Revenue Growth (YoY): 15.00%
Revenue has grown by 15% year-over-year, indicating that the company is expanding its business effectively. However, earnings growth has been modest at 1.50%, meaning that while the company is generating more revenue, profitability has remained relatively stable rather than accelerating.
Valuation and Stock Performance
AUB’s stock has seen some short-term declines, down 0.84% in the last session and another 1.20% in pre-market trading. Over the past year, it has traded within a range of $30.43 to $44.54, reflecting some volatility but remaining above its 52-week low.
Valuation Metrics
- Trailing P/E Ratio: 15.21
- Price-to-Sales: 3.66
- Price-to-Book: 0.97
The stock’s P/E ratio of 15.21 suggests it is trading at a reasonable valuation relative to earnings. With a price-to-book ratio just under 1.0, the stock appears fairly valued, potentially offering an opportunity for investors looking for stability in the financial sector.
AUB’s beta of 0.90 indicates it has lower volatility compared to the broader market, making it a more defensive stock for investors who want income without excessive risk.
Risks and Considerations
Like any bank, AUB faces risks that investors should be aware of before committing capital.
- Interest Rate Sensitivity – Since banks rely on net interest income, AUB’s profitability is influenced by Federal Reserve policies. If interest rates decline, it could compress margins.
- Credit Risk – The bank’s ability to manage its loan portfolio is critical. Any rise in non-performing loans could impact earnings and put pressure on dividend payments.
- Economic Slowdowns – A weakening economy could reduce loan demand and overall revenue growth, potentially affecting profitability.
- Stock Performance Volatility – Institutional investors hold 94.86% of AUB’s shares, meaning that shifts in large fund positions could lead to price swings.
Final Thoughts
For income investors looking at regional banks, AUB stands out as a steady dividend payer with a strong financial foundation. With a nearly 4% dividend yield, a manageable payout ratio, and a reasonable valuation, it offers a solid combination of income and stability.
While AUB isn’t a high-growth stock, it provides consistent dividends and has a well-managed risk profile. Investors should keep an eye on earnings trends, interest rate movements, and credit quality to ensure continued dividend reliability.
With shares trading close to book value and a dividend that remains well-supported by earnings, AUB could be an interesting option for long-term income-focused investors looking to add exposure to the financial sector.
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