Atlantic Union Bankshares (AUB): Buy, Sell, or Hold Post Q1 Earnings?

Over the past six months, Atlantic Union Bankshares’s stock price fell to $32.44. Shareholders have lost 14.3% of their capital, which is disappointing considering the S&P 500 has climbed by 4.5%. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Is there a buying opportunity in Atlantic Union Bankshares, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.

Why Is Atlantic Union Bankshares Not Exciting?

Even with the cheaper entry price, we're cautious about Atlantic Union Bankshares. Here are three reasons why there are better opportunities than AUB and a stock we'd rather own.

1. Net Interest Income Points to Soft Demand

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

Atlantic Union Bankshares’s net interest income has grown at a 7.3% annualized rate over the last four years, slightly worse than the broader bank industry.

2. Substandard TBVPS Growth Indicates Limited Asset Expansion

In the banking industry, tangible book value per share (TBVPS) provides the clearest picture of shareholder value, as it focuses on concrete assets while excluding intangible items that may not hold value during challenging times.

Disappointingly for investors, Atlantic Union Bankshares’s TBVPS grew at a sluggish 3.2% annual clip over the last two years.

3. TBVPS Projections Show Stormy Skies Ahead

A bank’s tangible book value per share (TBVPS) increases when it generates higher net interest margins and keeps credit losses low, allowing it to compound shareholder value over time.

Over the next 12 months, Consensus estimates call for Atlantic Union Bankshares’s TBVPS to shrink by 7.5% to $19.59, a sour projection.

Final Judgment

Atlantic Union Bankshares isn’t a terrible business, but it doesn’t pass our quality test. After the recent drawdown, the stock trades at 1× forward P/B (or $32.44 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now. We’d suggest looking at a top digital advertising platform riding the creator economy.

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