Thank you, Michelle, and good morning, everyone. I have Atlantic Union Bankshares President and CEO John Asbury and Executive Vice President and CFO Alex Dodd with me today.

Since Alex is only eight days into his job, former CFO Rob Gorman will cover the first quarter financial results in his transition capacity as a senior financial advisor to the company through his September 30th retirement. We also have other members of our executive management team with us for the question-and-answer period.

Please note that today's earnings release and the accompanying slide presentation we are going through on this webcast are available to download on our investor website, investors.atlanticunionbank.com. During today's call, we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures.

Important information about these non-GAAP financial measures, including reconciliations to comparable GAAP measures, is included in the appendix to our slide presentation and in our earnings release for the first quarter of 2026. We'll also make forward-looking statements, which are not statements of historical fact and are subject to risks and uncertainties.

There can be no assurance that actual performance will not differ materially from any future expectations or results expressed or implied by these forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statement, except as required by law.

Please refer to our earnings release and slide presentation issued today and our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements, including factors that could cause actual results to differ from those expressed or implied in our forward-looking statements. All comments made during today's call are subject to that safe harbor statement.

At the end of the call, we will take questions from the research analyst community. Now I'll turn the call over to John.

Thank you, Bill. Good morning, everyone, and thank you for joining us today.

I am pleased to introduce Alex Dodd as our new Chief Financial Officer. Alex brings a wealth of experience, having successfully helped guide a smaller institution through its transformation into a larger, more complex financial organization.

His background aligns well with our executive leadership team, and I am confident he will add tremendous value as we continue to drive growth and innovation. Over the next few months, we look forward to having Alex meet many of you during our active investor relations calendar.

While Rob Gorman will remain with us full-time until his retirement at the end of September, I do want to extend my sincere gratitude to Rob for his invaluable contributions and his dedication to ensuring a seamless CFO transition. Atlantic Union Bankshares reported solid first quarter financial results, reflecting disciplined execution and a successful conclusion of the integration of Sandy Spring Bank.

We believe the adjusted operating financial results for the quarter showcased the organization's earnings capacity. While we had a final set of merger-related charges impact this quarter's results, the underlying operating performance supports our continued confidence in achieving the financial outlook for adjusted operating return on assets, return on tangible common equity, and efficiency ratio that we have set for 2026.

We do look forward to reporting results without the merger noise starting next quarter, which we believe should more clearly demonstrate the financial strength and operational efficiency we are committed to delivering for our shareholders. Our commitment to creating shareholder value remains unwavering.

We believe Atlantic Union is well-positioned to deliver sustainable growth, top-tier financial performance, and long-term value for our shareholders. We believe the strategic advantages gained from the Sandy Spring acquisition, combined with continued organic growth opportunities due to our robust presence in attractive markets, reinforce our status as the premier regional bank headquartered in the lower Mid-Atlantic.

I'll briefly cover the Q1 2026 highlights and share market insights before Rob presents the financial review. Here are the highlights from the first quarter.

Quarterly loan growth was approximately 2.2% annualized during the typically slow first quarter, with total loans ending at $27.9 billion. For additional context, quarterly loan growth averaged roughly 5.9% annualized over this year's first quarter.

Loan production remained strong and, when compared to the previous four quarters, was second only to the fourth quarter of last year. We were pleased to see record level fundings from Atlantic Union Equipment Finance and record level production from our North Carolina-based commercial real estate team.

However, we also experienced elevated payoffs late in the quarter, particularly within our commercial real estate portfolio due to a number of property sales. This activity highlights the strength of our CRE markets, robust investor demand, and the availability of ample liquidity.

The first quarter saw a slight increase in line of credit utilization for the fourth quarter and was relatively flat year-over-year. At the end of the first quarter, our loan pipelines were noticeably higher than at the beginning, giving us confidence that we are pacing to meet our loan growth targets for 2026.

A deeper look at the pipeline report reveals that our construction and development pipeline has achieved a record high. For those familiar with my construction lending bathtub analogy, this means our pipeline is filling up at a faster rate than it's draining, which positions us well for continued growth in construction lending balances throughout the year.

While forecasting loan growth remains challenging in this uncertain macroeconomic environment, particularly with the recent energy price shocks, we continue to expect 2026 year-end loan balances to range between $29 billion and $30 billion. Our deposit base demonstrated strong customer deposit growth this quarter, nearly offsetting the planned reduction in high-cost brokered deposits.

Brokered deposits currently represent just 2% of total deposits and play a purposeful role in our liquidity strategy. We believe this approach provides us flexibility to add brokered deposits in the future, if needed.

Depending on cost and market conditions, we anticipate any new additions, if any, would be at lower rates than those currently rolling off. Above all, our core customer deposit base remains the crown jewel of the franchise, and our primary focus is on growing customer deposits and expanding our share of wallet.

Net interest margin, excluding the impact of accretion income, which can be volatile, improved by 4 basis points quarter-over-quarter, matching our expectations. Our reported FTE net interest margin declined 11 basis points to 3.85%, mainly because accretion income was lower compared to the elevated level seen in Q4 '25.

Rob will provide more detail about the factors influencing NIM performance in his section. Credit quality continues to show strength and improvement.

Our first quarter annualized net charge-off ratio was just 2 basis points. For the year, we are still projecting a range of 10 to 15 basis points, although we do not yet have full visibility into reaching that range.

Key asset quality indicators remain robust and are improving. Nonperforming assets as a percentage of loans held for investment declined by 6 basis points to 0.36% from 0.42% in the prior quarter, bringing us closer to our historical operating levels.

Criticized and classified assets also improved, decreasing to 4.5% of total loans from 4.7% last quarter. Looking at the most current unemployment data, the Bureau of Labor Statistics reported Virginia's January unemployment rate remained stable at 3.7%, Maryland's unemployment rate was 4.3%, and North Carolina's was 3.8%, all of which are at or below January's national average of 4.3%.

We continue to expect unemployment levels in Virginia, Maryland, and North Carolina to stay manageable and comparable to or below the national average, consistent with Moody's current state-level forecast. We remain confident in our markets and consider them among the most attractive in the country.

I do want to acknowledge the ongoing conflict in Iran and its potential impact on our bank and the markets we serve. We are closely monitoring the geopolitical developments and their effects on the broader economy.

The most immediate consequence has been the sharp increase in petroleum prices. Should this trend persist over an extended period, our primary concern is not a direct credit event, given our portfolio's limited sensitivity to energy prices, but rather a possible decline in consumer and business confidence.

At present, our loan pipelines remain strong, business sentiment across our markets is positive, and the underlying economy in our footprint continues to be favorable. Additionally, it appears likely that defense spending will rise as a result of the geopolitical situation, which should provide a stimulative effect for certain areas of our markets.

We remain vigilant and believe we are well-positioned to navigate these challenges while supporting our clients and our communities. We have deliberately and thoughtfully built the distinctive, valuable franchise outlined in our strategic plan, delivering on our commitments and establishing the banking platform we set out to create.

With a strong foundation, we believe we are well-positioned to capitalize on our expanded markets, drive continued growth in Virginia, and pursue new organic opportunities in North Carolina and in our specialty lines. With disciplined execution of our prior acquisitions and no additional acquisitions currently planned during this phase of our strategic plan, our focus has shifted to demonstrating the franchise's earnings power and capital generation ability.

After dedicating capital to strategic investments over the past two years to complete the company we envisioned and worked diligently to build and consistently communicated our plans to do so, we believe we are well-positioned to demonstrate clear and tangible benefits from these efforts. In summary, we had a good start to 2026, and we believe that our full-year results will demonstrate the differentiated financial performance compared to our peers, which, in turn, will help build long-term shareholder value.

With that, I'll turn the call over to Rob for a detailed review of our quarterly financial results. Rob?

Thank you, John, and good morning, everyone. I'll now take a few minutes to provide you with some details of Atlantic Union's financial results for the first quarter of 2026.

My commentary today will primarily address Atlantic Union's first quarter financial results presented on a non-GAAP adjusted operating basis, which, for the first quarter, excludes $9 million in pre-tax merger-related costs. As John noted, we don't expect to incur any additional Sandy Spring merger-related costs going forward.

In addition, in the first quarter, we finalized the fair value assets acquired and liabilities assumed related to the Sandy Spring acquisition, inclusive of measurement period adjustments primarily related to loans, other assets, and other liabilities. The one-year measurement period related to the Sandy Spring acquisition concluded, and related goodwill was finalized as of March 31st at $541 million.

In the fourth quarter, reported net income available to common shareholders was $119.2 million, and earnings per common share were 84 cents. Adjusted operating earnings available to common shareholders were $126.2 million, or 89 cents per common share, for the first quarter, which resulted in an adjusted operating return on tangible common equity of 19.6%, an adjusted operating return on assets of 1.41%, and an adjusted operating efficiency ratio of 49.9% in the quarter.

Turning to credit loss reserves, at the end of the first quarter, the total allowance for credit losses was $321.9 million. Please note that effective January 1st, 2026, the company made certain changes to its allowance for credit losses methodology as part of the continued enhancement of its credit modeling practices, resulting in the company moving from two loan portfolio segments, commercial and consumer, to three loan portfolio segments: commercial real estate, commercial and industrial, and consumer.

These model enhancements enable more dynamic and precise modeling and allow for more granularity in monitoring our estimated credit losses. As a result, and paired with portfolio mix changes, the total allowance for credit losses as a percentage of total loans held for investment decreased 1 basis point to 115 basis points at the end of the first quarter.

The allowance for loan losses as a percentage of total loans held for investment decreased by 2 basis points from the prior quarter to 104 basis points, while the reserve for unfunded commitments coverage ratio increased 1 basis point to 11 basis points on March 31st, which was primarily driven by higher construction and land development unfunded commitments. As John mentioned, net charge-offs were $1.6 million, or only 2 basis points annualized, in the first quarter.

Now turning to the pre-tax pre-provision components of the income statement for the first quarter, tax-equivalent net interest income was $316.9 million, which was a decrease of $17.9 million from the fourth quarter, primarily driven by a decrease in loan accretion income, the lower day count in the first quarter, lower average earning assets, and the full quarter impact on variable rate loan yields following the cumulative 75 basis point reduction in the Fed funds rate between September and December 2025. The decreases in tax-equivalent net interest income were partially offset by a decrease in interest expense, primarily from lower deposit costs.

As John noted, the first quarter's tax-equivalent net interest margin declined by 11 basis points from the prior quarter to 3.85% due to lower earning asset yields, which were partially offset by lower cost of funds. Earning asset yields decreased 20 basis points from the prior quarter to 5.79%, primarily due to lower loan accretion income of $13 million, which was inclusive of the impact of a $3.5 million nonrecurring loan fair value measurement period adjustment related to the Sandy Spring acquisition, and lower yields on variable rate loans, as previously noted.

Cost of funds decreased 9 basis points from the prior quarter to 1.94% for the first quarter, due primarily to lower deposit costs of 13 basis points, which reflected the impact of Fed funds rate reductions on customer deposit rates and the decline in higher-costing average brokered deposit balances. Of note, excluding the impact of net accretion income, our core net interest margin increased by 4 basis points to 3.45% from 3.41% in the prior quarter, which was primarily driven by lower deposit costs partially offset by lower core loan yields.

Non-interest income declined by $2.2 million to $54.8 million for the first quarter, primarily driven by lower loan-related interest rate swap fees due to seasonally lower transaction volumes, which was partially offset by higher capital markets income. Reported non-interest expenses decreased by $33.4 million to $209.8 million for the first quarter, primarily driven by a $29.6 million decline in merger-related costs and a $2.3 million decrease in amortization of intangible assets.

Adjusted operating non-interest expense, which excludes merger-related costs in the fourth quarter of '25 and the first quarter of '26 and the amortization of intangible assets in both quarters, decreased by $1.6 million to $185.3 million for the first quarter. This decrease was primarily due to a $3.1 million reduction in other expenses, primarily due to lower non-credit-related losses on customer transactions; a $2.3 million decrease in professional services expenses related to strategic projects that occurred in the prior quarter; and a $1.9 million decrease in technology and data processing expenses.

These decreases were partially offset by a $5 million increase in salaries and benefits expense, primarily due to seasonally increases in payroll taxes and 401(k) contribution expenses. On March 31st, loans held for investment net of unearned income were $27.9 billion, which was an increase of $150.3 million, or 2.2% annualized, from the prior quarter.

On March 31st, total deposits were $30.4 billion, which was a decrease of $80.4 million, or approximately 1% annualized, from the prior quarter, primarily due to decreases of $517.9 million in brokered deposits, partially offset by an increase of $438.5 million in interest-bearing customer deposits. At the end of the first quarter, Atlantic Union Bankshares and Atlantic Union Bank's regulatory capital ratios were comfortably above well-capitalized levels.

In addition, on an adjusted basis, we remain well-capitalized as of the end of the first quarter if you include the negative impact of AOCI and held-to-maturity securities unrealized losses in the calculation of the regulatory capital ratios. AOCI increased $22.4 million during the first quarter as term interest rates increased from the prior quarter.

The company paid a common stock dividend of 37 cents per share in the first quarter, in line with the fourth quarter's dividend amount and an increase of 8.8% from the previous year's first quarter dividend amount of 34 cents per common share. On a quarterly basis, tangible book value per common share increased 24 cents, or 1%, to $19.93 per share in the first quarter despite the headwinds caused by the increase in the AOCI unrealized losses.

We estimate that the increase in AOCI had a negative impact to our tangible book value of 16 cents per share in the first quarter. As noted on slide 17, we are updating our full-year 2026 financial outlook for AUB to the following: we expect loan balances to end the year between $29 billion and $30 billion, while year-end deposits balances are projected to be between $31 billion and $32 billion.

On the credit front, the allowance for credit losses to loan balances is projected to remain at current levels in the 115 to 120 basis points range, and the net charge-off ratio is expected to fall between 10 and 15 basis points in 2026, although we don't currently have a line of sight to reaching that range this year. Fully taxable equivalent net interest income for the full year is projected to come in between $1.34 billion and $1.35 billion, inclusive of accretion income of between $140 million and $145 million.

As a result, we are projecting that full-year tax-equivalent net interest margin will fall in a range between 3.90% and 4% for the full year, driven by our baseline assumption that the Federal Reserve Bank will not cut the Fed funds rate in 2026 and that term rates will remain stable at current levels. On a full-year basis, non-interest income is expected to be between $220 million and $230 million, while adjusted operating non-interest expense is estimated to fall in the range of $742 million to $752 million, including the expense impact of our North Carolina investment and other 2026 strategic initiatives.

Based on these projections, we expect to generate annual growth in tangible book value per share of 12% to 15%, produce financial returns that will place us within the top quartile of our proxy peer group, and meet our objective of delivering top-tier financial performance for our shareholders. In summary, Atlantic Union delivered solid operating results in the first quarter, and 2026 is off to a good start.

We remain firmly focused on leveraging this valuable Atlantic Union Bank franchise to generate sustainable, profitable growth and to build long-term value for our shareholders in 2026 and beyond. Before I transition the call back to Bill, I would like to briefly reflect on my tenure at AUB.

When I joined the organization in 2012, AUB had approximately $4 billion in total assets with a market capitalization of around $360 million. Currently, our assets have grown to nearly $40 billion, and our market capitalization exceeds $5 billion, establishing us as the largest regional bank headquartered in the lower Mid-Atlantic.

It's been a great privilege to have played a part in the company's growth and financial success over the past 14 years. Looking ahead, I am pleased to have Alex step into the role of CFO as my successor, and I'm confident that his extensive financial leadership experience will contribute significantly to Atlantic Union's future success.

I'll now turn the call over to Bill to see if there are any questions from our research analyst community.

Thanks, Rob. Michelle, we're ready for our first caller, please.

Good morning, Russell.

Hey, good morning, guys. Hey, John, good morning.

Wanted to start on the core margin, please. Nice to see that up a little bit this quarter.

Would be helpful to get a sense for how you expect that to trend over the course of the year and particularly touching on the direction of deposit costs from here with the Fed on pause. Just wondering if you have the ability to lower further or if there's an upward bias to the deposit costs.

Yeah. In terms of the core margin, Russell, we do expect it can grind higher from here.

As I mentioned in my comments, we don't expect the Fed to cut this year, there shouldn't be an impact on our variable-rate loan yields from a negative perspective. However, it also means higher for longer rates will impact our ability to reduce the deposit costs meaningfully lower from here.

Basically, saying that it's probably going to be stable. We may see that tick up a bit on the customer deposit side.

The good news there is we do have some brokered deposits that are still outstanding that are maturing this quarter and next quarter, and those brokered deposits are paying about 5.15% currently. We will get a pickup on that if you look at what current brokered rates are or even customer deposit CD rates and money market rates are.

We will get some positive out of that in the near term. The real impact of the grind higher in core net interest income or net interest margin is basically the continuing fixed-rate loan back book repricing, and that will continue throughout the year.

As we mentioned, we were projecting that term rates, five-year term rates will stay pretty stable going forward here. We've got about nine 850 to 900 million of maturing fixed-rate loans on the legacy AUB side per quarter through the rest of this year.

You're seeing about a pickup of, call it 90 to 100 basis points from portfolio yields on that portfolio of, sort of, 5.10%, 5.15% level repricing into the 6% to 6.10% range. That's really the underlying context of our thoughts that core margin will grind a bit higher.

Got it. Rob.

That's helpful detail. Thank you.

Then last one for me would be on the expense front. Solid result this quarter.

You lowered that guide. At the Investor Day in December, that deck had mentioned considering some additional branch rationalization in '26.

Wondering if that is at all contemplated in the lower guide, and if not, given the lower NII outlook, is that on the cards at all as a potential offset?

It's certainly not in the guidance that we just provided and in those numbers on the non-interest expense side. There's always some thoughts around that where we could be looking at that if we really thought the revenue growth was not going to materialize.

We do think we've got a pretty good handle on the expense. Discipline around expenses, that's why we did lower that.

Part of that was the first quarter we came in better than we expected. That should continue as we go forward.

As we've said that the first quarter's the seasonally high expense quarter for the year. Should see savings coming down, especially on payroll taxes and 401(k).

We had an increase of over $5 million quarter-to-quarter. That's going to come down over time.

It's just elevated due to incentive paying and etc., which drive those higher in the first quarter. You should see those costs come down.

Now, we did mention that we do have investments being made, primarily in the North Carolina franchise, opening 10 new branches. Not all this year.

Probably three branches will be open by year-end, another five or six next year, and then the remainder early in 2028. That expense will start coming on board later this year, call it second, third, and fourth quarter will start to increase.

Those are somewhat of offsets to this reduced level of payroll taxes and 401(k) that we'll see going into next three quarters.

Excellent. Thanks, Rob, and congrats on your retirement.

Hey,

thank you.

Thanks, Russell. Michelle, we're ready for our next caller, please.

Hi, Janet.

Good morning. I want to get some clarification.

Much of your deposit decline in the quarter seems to be driven by a runoff of broker deposits. I assume that lower broker deposits is partly attributing to your lower deposit guide for the full year, but would be great to hear the direction of travel for core customer deposits and broker deposits over the course of '26 that's assumed in your updated deposit guide.

On on the customer deposit side, we're looking for, 3% to 4% percent growth on that front. Broker deposits, we paid down quite a bit.

I think quarter-to-quarter, we were down about $500 million. Those are high cost, obviously.

From a funding perspective, with a lower loan growth quarter, we did not need to refinance those or fund those with new brokers. That that was a positive.

I said as I said, we got about 200 this quarter in broker that are maturing at high cost and another 80 or so in the third quarter. We'll see how that plays out, in terms of broker, but that is part of part of the reason, maybe a lot of the reason why we've lowered our deposit total deposit costs, including broker.

Now, we'll see what happens there, Janet. Really depends on seeing a pickup in loan growth over the next several quarters, and maybe, see if we're on the higher end and maybe are producing the higher end.

We may have the go back and bring in some broker broker deposits to to fund the gap there.

Got it. Thank you.

The accretion income declined 13 million quarter-over-quarter, and looks like it included some one-time measurement period adjustments of 3.5 million. Are you still maintaining your PAA guide of 150 to 160 million for the full year, or is that impacting your NII guide?

I know it's harder to forecast the accretion, but wanted to see where that should trend going forward.

We have lowered that, Janet, to call it 145 to 150 million accretion. Part of that was the 3.5 one-time, which wasn't anticipated in the earlier guide.

We do expect kind of more of a normalization of prepayments on that portfolio. It was pretty low quarter compared to the fourth quarter in terms of prepayments and accelerated accretion.

On a baseline perspective, excluding any prepayments accelerated accretion, it's about $10 million to $11 million on a loan accretion side from a baseline. You can expect that per quarter.

Then the wild card is what's the accelerated prepayments look like and the accretion that comes through related to that? Normalized is probably more in the $3 million a month kind of thing.

That's kind of what is in our projection for that.

Got it. Thank you so much.

Congrats, Rob.

Thanks, Janet. Michelle, we're ready for our next caller, please.

Hi, how's it going? Thanks for taking the question.

Wanted to touch on loans. You mentioned about the loan pipelines being strong.

Can you talk about customer sentiment and what you're seeing there in terms of drivers?

Yes. Dave Ring, our head of all of our commercial-related businesses, which we call wholesale, is here.

Dave, do you want to speak to what you're seeing? I can give my perspective too, but.

Sure. As like you said, pipelines are significantly higher than they were this time last year or even at the end of the quarter, first quarter.

The sentiment is, we're not seeing a lot of companies not doing transactions, but we're seeing companies sometimes pause them, and it's largely driven by interest rates, not some of the other things going on in the economy. As interest rates, kind of stabilize, we'll see, I think our pipeline convert pretty quickly.

I think, and Dave, when you say interest rates, you mean we've heard some feedback that clients were sort of waiting, right, on lower rates. Now we're in what appears to be a higher-for-longer environment, and as they see that rates are likely not about to come down, they move forward.

It is important to point out, as I commented, that we saw a record quarter, best ever in Atlantic Union Equipment Finance fundings in Q1. We saw record production out of the North Carolina-based commercial real estate team that operates throughout the Carolinas.

Pipelines look really good. Also mentioned that the construction lending pipeline looks really good, too.

We are seeing activity out there, and despite all the uncertainty and concern about what's going on with this Iranian situation, doesn't really seem to have impacted sentiment. I agree with Dave.

We've heard more comments on people that were kind of speculating on what rates might do. We feel good about the outlook from here.

The fundamentals are pretty good across the footprint.

Great. Thanks for that.

Then shifting over to capital management, can you comment on to what extent, if any, the Basel III endgame proposal could have on Atlantic Union? Then also touch on your buyback appetite and timing.

Is later this year still in the cards?

In terms of the first question on the Basel III impact, we've estimated that that impact, based on what's out there today in the proposal, would reduce risk-weighted assets in the 6% to 6.5% range, which translates into, from a CET1 regulatory capital ratio, of an increase of 65 to 70 75 basis points. We'll see where that comes out in the final rules, what's approved.

That's our current estimate of the impact there. Pretty positive from a regulatory capital ratio perspective.

In terms of the potential buybacks, yeah, so as we've said, where we look at anything over 10.5% CET1 is excess capital available for us to buy back shares and kind of manage between 10% and 10.5% CET1. We are projecting that we will hit that 10.5% mark coming out of Q2.

Nothing's changed really there into Q3. We're in a position to request an authorization from our Board of Directors, subject to their approval, and we would expect to be in the market, assuming approval there, in the near future.

Very helpful. Thank you.

Yep. Thanks, Dave.

Michelle, we're ready for our next caller, please.

Hi, David.

Hey, John and congratulations, Rob, on the retirement. Enjoyed working with you.

Thank you, sir.

John, Dave, just curious from the net charge-off guidance. I see in the slide deck you're still sticking with the 10 to 15 basis points guidance.

Just curious, is there any line of sight into reaching even that lower end? Just given what's happening on a high-level basis, and maybe what could get you there on sort of a worst-case scenario, maybe what portfolios could draw that higher?

We don't see anything. We have no line of sight to meeting even the lower end of the guide at this moment, meaning we don't see anything coming.

Having said that, we know from experience it's usually the infamous one-off, which can happen from time to time. Doug Woolley here as well.

Doug, you may want to—our Chief Credit Officer, do you see anything that would be sort of a systemic or kind of secular concern?

No portfolios at risk. Like John said, they inevitably end up being one-offs, sometimes larger than we expect.

Always resolved quickly once identified.

As a $38 billion bank, we're not going to run the bank with 2 bips of annualized net charge-offs. Having said that, I've made similar comments for nine and a half years.

It would be great. We would love to do that very thing, but we'll see.

We think it's a reasonable assumption based on what we know right now, Dave.

Got it. A quick follow-up.

I know you mentioned the seasonal impact on swap fees were down this quarter. If we do see maybe stability in the term structure of rates, do you think that impacts the overall level of swap fees this year from a go-forward basis?

Thanks.

Did I hear, Dave, the term rates I didn't catch that.

Rates are stable, did you say? I think you're saying that you expect sort of relative stability in the outlook for interest rates.

Does that have a depressive impact if rates aren't volatile on the outlook for swap fees moving forward? Thanks.

On swaps, yeah, we had a pretty good quarter. We'll continue to see how that plays out, but I think you're right.

This volatility will play into that, and I don't know if Dave Ring has anything to add to that, but.

For swaps, volatility doesn't normally play a role in our swap sales. It's really a function of new transactions getting booked.

We have a very strong methodology around making sure we're eyeballing all transactions that are coming in the bank, and we're trying to help clients decide whether to manage the interest rates or not. I think the reason we're so successful in swap production is our methodology and the fact that we close a lot of new transactions every quarter.

I would say that if there's no expectation that rates are about to drop, that's generally helpful based on my experience, meaning there's not much to wait for. People aren't sort of betting on lower rates.

Right. Great.

Appreciate the color.

Thanks, Dave.

Thanks, Dave. Michelle, we're ready for our next caller, please.

Hi, Brian.

Hi. Hi, good morning.

Wanted to just quickly go back to the net interest income outlook for the year. For 2026, it looks like you brought that down by about 18 million.

At the midpoint, it sounds like the lower purchase accounting accretion explains a portion of that, but was just wondering if you could speak to any change in the core net interest income outlook, and anything new that you're seeing on that front specifically.

Brian, yeah, the bulk of the adjustment there is accretion income that you saw in the first quarter. We brought that down a bit.

The other driver there is we've increased our deposit rate outlook from our original guidance earlier in the year. We're seeing some competition in some of our markets.

We do reasonable pricing, but in terms of the regions where we're seeing some increases, and we've raised rates in those regions, is the Metro DC area, former Sandy Spring footprint. Then some impact, even though it's not as large for us, is North Carolina.

We've also seen heavy competition from some from the bigger players in those markets and some of our peers. We did increase those rates a bit.

For instance, we now have CD specials in the 4% range or for CDs offerings in the 4% range for 3 and 6 months. We also now have Advantage money market rate, which is in the 3.80s range.

That requires new money to come in, but those are increasing the deposit rate outlook as we go through this year.

Rob, on the accretion income expectations, it's fair to say that that's more of a timing issue?

It's a timing issue in terms of will the acceleration of accretion income come through prepayments?

Right.

From the Sandy Spring acquired portfolio, those activities. It could be

more,

could be higher, could be lower. Actually, we were high in the fourth quarter as we talked about last quarter, and we were lower this quarter, excluding that $3.5 million adjustment that was non-recurring.

It kind of does fluctuate quarter-to-quarter depending on what prepayments we get.

You still have that, as you pointed out, you still have this base level that's pretty good accounting tailwind, and then the volatility comes in with prepayment activity, which is very difficult to predict.

Yeah. That's right.

Maybe just to clarify on the PAA, the updated expectation, is it 145 to 150? I may have misheard, but I think earlier in the call, you might have said 140 to 145.

Just wanted to clarify what the new expectation is.

It's really 140 to 150. Brian, I kind of misstated that.

Midpoint of about 145 is what we're thinking.

Got it. Then, you mentioned the strong production during the quarter on the loan side.

Sounds like loan pipelines are quite strong, albeit with some paydowns towards the end of the quarter. I'm wondering to the extent that loan growth surprises negatively over the course of the year, say in a scenario where paydowns remain elevated, do you think that the NII guidance is still achievable?

Would there be more offsets maybe on the deposit side? Or would the NII guidance become more challenging in that scenario?

Thanks.

I think the range that we put out there assumes that there's much lower growth than what we're projecting internally. The range is what, 3 3% to 7%, if you look at the loan guidance.

Then the net interest income related to that is kind of on a low end. Certainly, if it comes in lower or it's flat, that will help some impact on that guidance, and it likely bring it lower, but we're not projecting that flat growth rate.

Certainly, as I said earlier, we may then take other actions, maybe from the expense point of view, maybe on the deposit cost perspective to maintain that net interest margin. We do have some other levers on the expense side we could pull if the revenue growth doesn't come through.

Got it. Really appreciate all the detail, as always, and Rob, congratulations on your retirement.

Thank you, Brian.

Just for market clarity, Rob's not retired yet. We're going to get our money's worth out of him until September.

Alex is CFO as of now, and we'll go through a very planned full transition, as you know.

Michelle, we're ready for our next caller, please.

Hi, Catherine. Good morning.

Hi, good morning. One more on the NIM side.

Could you repeat what the loan maturities you have maturing per quarter and then on average where new loan yields are coming on the books today?

I'll just speak to the fixed-rate portfolio. It's about $850 to $900 million maturing on a quarterly basis.

Those loans revised or new loans coming on are in the 6% 6% 6% to 6.10% range versus a portfolio of about 5% to 5.10%.

Okay. Are those just legacy?

That's legacy. Yeah.

That doesn't include Sandy Spring. That doesn't include Sandy Spring.

No, that's, yeah, AUB.

Yeah. If we bring in Sandy Spring, that 900 goes up to about $1.2 to $1.3 billion quarterly.

Great. You're saying that's going from about 5% to 6.10%?

Yeah. Right.

Got it. Great.

Then, we've talked a lot about deposit cost competition on this call. What about loan competition?

Can you talk about the competitive dynamic in lending both how that impacts volumes and then how that impacts rate today?

It's competitive. It's always competitive, particularly for a bank like us that deals with what I'd call a higher quality set of credit.

Dave, do you want to comment on what you're seeing?

It's competitive in structure and price, it really depends on the asset. The better the organization or better the company or better the prospect, the more competitive it gets, for sure.

What we're seeing now is the larger banks are very active in the markets we're in now. We feel like we compete best against them, actually.

We feel like strong competition, but we're teed up to compete against them.

We'll get our fair share, Catherine.

Great. Then, maybe one more question on just the growth.

You've left your end-of-period growth guide unchanged. This is a hard question, but it matters for the full-year NII guide relative to the growth.

Do you feel like that growth is back-end loaded, or do you feel like I know paydowns are kind of heavy in the back part of this quarter, or do you feel like we're going to get as you see it today, a big improvement in growth even starting in the second quarter? We see that kind of ramp to growth starting sooner rather than later.

Truthfully, Q1 was better than I would have expected based on production. We were approaching 4% point-to-point annualized loan growth until literally the last week of Q1.

Notice that the average loan growth for Q1 versus Q4 was 5.8%, which would be a very strong number for Q1, which is seasonally slow coming off a very strong Q4. The productivity is there.

We're off to a very good start in Q2, and I would say we're on pace to where we'll continue to see it ramp. We're not effectively saying we don't see much happening until we get into the second half of the year, for example.

Do you have anything to add on that, Dave? We can see it in the pipeline.

That's what I was going to say. The pipeline, if you were to just look at quarter-over-quarter, the pipeline's up 26% even though we had a really strong fourth quarter.

I think it's just a matter of conversion, and we're doing that. Like John said, we already had a good start to the second quarter, we're confident that our conversion rates will be good.

Catherine, right now, we feel pretty good in terms of being on pace to meet our expectations. It's not all back-end loaded.

Having said that, Q4 is traditionally, in my 37-year career, Q4 is always the best quarter of the year, but it's not like we're waiting on that.

Great. Very helpful color.

Thank you. Congrats, Rob, on your new role, not retirement.

Said, Catherine. Thank you.

Thanks, Catherine. Michelle, we're ready for our last caller, please.

Hi, Steve. Good morning.

Morning. Hey, John.

Rob, good morning. Appreciate you guys taking my questions here.

Just maybe not to beat a dead horse, but just following up on deposit costs. Just kind of curious, how are you thinking about the marginal cost of deposits for you guys?

I hear you on the 4% CD rate, but just thinking about the blended, holistic dynamic what you're bringing in, where does that roughly shake out these days?

If you look at the mix of the deposit growth, it's going to be in the money market and the CD book. As I said, those are probably on a marginal cost basis, those would be in the ranges that I just mentioned.

The average cost of deposits will tick up a bit. On the money market side, that's not repricing the back book, so that's not as big an impact, but it'll grind higher over a period of time.

Then CDs, as they mature, you'll see that coming in again over time. I think that's kind of the way to think about it.

Those are the growth engines at this point from a deposit, other than we are bringing on some operating accounts and things of that nature. Of course, we always look for that from a growth point of view.

In terms of the drivers of the growth, it's going to be in those categories.

Okay. Then, maybe just kind of thinking along the lines just given how high the cost is, just curious if you guys are thinking about maybe running off more securities here as the year goes on just to fund growth, if we see a remix that way.

Maybe how low are you guys willing to take securities and cash here?

That's a good question, Steve. Yes, we are bringing down the securities portfolio as a percentage of total assets.

That's part of the equation to help fund any gaps between deposit growth and loan growth. Right now, we're about 13.5% of the securities portfolio as a percentage of total assets, and we're expecting to see that come down to about 12.5%, 12% to 12.5%, which historically is where we've been.

There is that funding from maturities coming out of the securities portfolio. Cash flows are about $75 million a month out of the securities portfolio.

That gives us some good funding opportunity for loan growth, moving that to the loan book.

Okay. Then just on the reserve methodology change here, kind of curious, maybe just explain kind of underneath what the dynamic is that how this could impact the way your reserve behaves in future periods or And I know you guys said that it wasn't a material benefit.

Is it just like a million, 2 million to the provision? Just kind of curious how we think about the dynamics for this quarter and just like the way sensitivity changes going forward.

The big change there is, as we said, we now have modeling three segments. We split commercial real estate and the commercial and industrial portfolios.

The real benefit there is that we now have loan-level credit modeling available to us on the commercial real estate side, and that can get very granular in terms of where collateral is and things of that nature. The other component here is if you looked at our allowance for credit losses under the previous modeling, we had about 50% of our reserve was what we considered qualitative factors versus quantitative modeling.

Now, under the new modeling, we still have qualitative factors, but they're more in the 20% to 25% range, and the quantitative model, the more granular model, is producing 75% of the give or take, of the total allowance. It's really a much better, more detailed model for us, and I don't think you'll see very much volatility in it going forward depending on the economic forecast.

That can change it a bit going forward, but that would be under the old model as well. We feel good about the changes that we made.

We've continually evolved. We had three models.

This is the fourth model, and this is obviously the best model we've had. Interestingly enough, it kind of underpinned what we were putting in as qualitative because the new model really wasn't that really much different from the ACL levels that we have on the balance sheet.

Okay. That's helpful.

I'll take a little more offline there, but appreciate all that color. Then maybe just in terms of, John, I heard you on the loan pipeline and talking about good dynamics in North Carolina, I believe you said.

Just kind of curious, what does that looking like these days, and just kind of what percentage of the loan pipeline? Maybe sizing it up a little more would be helpful.

You mean coming out of the Carolinas?

Correct.

When I say North Carolina, I should say broadly, Carolinas because the commercial real estate team covers both of the Carolinas. Dave, do you want to speak to how do you think about that in terms of how much of a broadly North Carolina or Carolinas are as a part of the overall equation in terms of pipeline?

They certainly helped this quarter. That Carolinas was our second largest growth engine for the company, for commercial.

That kind of speaks for itself, I think. The pipelines are strong enough to replicate this performance in the Carolinas.

We feel really good about it.

We're expanding. It used to be, and, a few years ago when we talked about Carolinas, what we really meant was the commercial real estate team based in Charlotte.

Thanks to the acquisition of American National Bank, that gave us a base principally in the Piedmont Triad. We have our Wilmington LPO, which is doing well, which we did post-American National acquisition.

We've been expanding in Raleigh. We've got the branch investment going on in the Greater Raleigh area and Wilmington, and we're continuing to expand the team at a reasonable pace.

Steve, I think it'll become more important over time. It is arguably one of the best growth markets in the country.

They're gaining employment faster than most places, as well. It's right next door.

We feel really good. It's very important to understand how diversified Atlantic Union Bank is.

I don't think we get credit for that. We need to do a better job of explaining we are a diversified bank over three very good states, and we have specialty lines as well that can go beyond, like Equipment Finance.

We feel good about our opportunity.

No, definitely hear you on that, John. That's everything for me at the moment.

I really appreciate all the call here. Thank you very much, guys.

Great. Thank you all so much.

Take care. Thanks, everyone, for joining us, and we look forward to talking with you next quarter.