ATLANTIC UNION BANKSHARES CORPORATION (AUB): what the price requires
At today's price, ATLANTIC UNION BANKSHARES CORPORATION (AUB) is priced for 12.2% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/AUB
Headline
| Field | Value |
|---|---|
| Ticker | AUB |
| Company | ATLANTIC UNION BANKSHARES CORPORATION |
| Current price | $42.15/sh |
| Composition | Wholesale Banking 58% / Consumer Banking 42% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Return on equity needed | 12.2% |
| Return on equity now | 5.2% |
| ROE gap | +7.0pp |
| Price-to-book | 1.19x |
Solve inputs: computed at a 10.9% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.2pp.
Reconcile: at the x-ray's 9.3% required return this reads ~10.3%; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +4.67σ |
| cohort percentile (of 119 peers) | 27 |
| sustained it ~10 years at this level | 69% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.60x | 3 | expensive |
| Earnings | 1.34x | 2 | expensive |
| Relative | 1.49x | 3 | expensive |
| Growth | 1.33x | 3 | expensive |
Families that call it expensive: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $10.53 | 4.00x | yes | TBVPS $21.07 × 0.50x (ROE (TTM) 6.8% / CoE 9.3%, g=4.5% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption)) |
| Relative Valuation | Relative | $35.62 | 1.18x | yes | P/E 12.2x (blended: static sector reference 10x + trailing (TTM) 17x), scenarios: 9.8x / 12.2x / 14.6x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | $69.72 | 0.60x | yes | DPS $1.57, g=6.8% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $31.59 | 1.33x | yes | Stage 1: 6% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $26.29 | 1.60x | yes | BV/sh $35.51, ROE (TTM) 6.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $22.40 | 1.88x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $31.38 | 1.34x | yes | Rev $1.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 3.7x / 4.7x / 5.6x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $28.20 | 1.49x | yes | EPS $2.35, growth 6% (input: historical EPS growth), PEG=2.82 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $43.33 | 0.97x | yes | √(22.5 × EPS $2.35 × BVPS $35.51) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $40.92 | 1.03x | yes | EPS $2.35 × (8.5 + 2×6.1%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $21.63 | 1.95x | yes | EPS $2.35 × (PEG 1.5 × growth 6.1% (input: historical EPS growth)) → PE 9.2x |
| Earnings Yield | Earnings | $25.41 | 1.66x | yes | EPS $2.35 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (dilution) | 17.1% |
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
- Atlantic Union is now the largest regional bank headquartered in Virginia after absorbing Sandy Spring Bank, a deal that roughly grew its loan book from about $15.5 billion to $23.2 billion and its deposits from about $7.2 billion to $11.3 billion in the Wholesale Banking segment alone.
- The defining feature is that reported returns are depressed by merger accounting and integration costs, with the bank recently earning a return on equity in the mid-single digits while the price assumes it sustains close to 12%, the gap being the post-merger normalization the bull is buying.
- Watch the first clean quarter: management says the Sandy Spring integration is complete and merger-related charges end, with full-year 2026 net interest margin guided to roughly 3.90% to 4.00% and tangible book value per share growth of 12% to 15%.
Bull Case
The market is pricing Atlantic Union as if its true earning power is far above what the reported numbers show, and the question is whether that gap is justified. Today's price assumes the bank sustains a return on equity near 12%, while it has recently been earning roughly 5% to 7%. That looks like a stretch until you understand why the trailing return is depressed: the bank just completed a transformational acquisition of Sandy Spring, and the reported results are weighed down by merger expenses, purchase accounting, and the upfront loan-loss provisioning that a large deal forces. Management reported first-quarter adjusted operating earnings of $0.89 a share, well above the headline, and stated that the integration is complete with merger-related charges ending. Strip out the one-time noise and the underlying franchise earns far more than the trailing return on equity suggests.
The acquisition built genuine scale in attractive markets. The 10-K shows the Wholesale Banking segment's loans growing from about $15.5 billion to $23.2 billion and deposits from about $7.2 billion to $11.3 billion, "primarily related to the Sandy Spring acquisition," extending the bank's reach from its Virginia base into the Washington, D.C. and Maryland corridor. Scale matters for a regional bank because it spreads fixed compliance and technology costs over a larger balance sheet and gives the bank more lending capacity per relationship. The funding side is improving too: net interest margin expanded in the quarter as deposit costs fell and the fixed-rate loan book repriced upward, and management guides full-year margin to roughly 3.90% to 4.00%, helped by accretion income from the acquired loans.
The forward math is what makes the bull case concrete. Management has guided to tangible book value per share growth of 12% to 15% for 2026 and stated an objective of peer top-quartile returns now that the merger is behind it. For a bank, growing tangible book value while paying a dividend is the engine of total return, and a mid-teens tangible-book growth rate is strong. The stock trades at only about 1.1 times book, in the lower half of its peer group on price-to-book, which means an investor is not paying a premium multiple for that normalization. The bull case is straightforward: a newly enlarged, well-positioned regional bank whose reported returns are temporarily masked by deal accounting, trading at a modest multiple, with management guiding to the return level the price requires.
Bear Case
The bear case starts with the bet itself: the price requires the bank to earn close to a 12% return on equity, and it has actually been earning roughly half that. That gap is the whole risk. Management attributes the shortfall to merger noise and promises normalization, but acquisitions of this size are exactly where banks disappoint. Integrating Sandy Spring means merging two loan books, two deposit bases, two systems, and two credit cultures, and the cost savings and revenue synergies that justify the deal are projections, not facts. If the normalization to a top-quartile return is slower or shallower than guided, the price has assumed a level of profitability the combined bank has not yet demonstrated, and the stock would re-rate toward what it actually earns rather than what it promises.
The credit risk is concentrated in the part of the balance sheet that grew the most. The Sandy Spring deal loaded the bank with commercial real estate, and the 10-K is direct that "CRE loans are generally viewed as having more risk of default than residential real estate loans and depend on cash flows from the owner's business or the property's tenants to service the deb"t. Commercial real estate, particularly office, has been under pressure, and a regional bank that just expanded its CRE book through an acquisition is taking on exactly the exposure the market is most wary of. The upfront provisioning helps, but if credit deteriorates beyond what was reserved, the normalization story slips and capital is consumed. The bank also acknowledges deposit-volatility risk, noting it "may not be able to manage the risk of deposit volatility effectively," which for any regional bank is the tail risk that the last few years made vivid.
The valuation, read honestly, is not deeply cheap, it is conditionally cheap. At about 1.1 times book the stock looks reasonable only if the implied return materializes. The implied-assumption framework flags the priced-in return as elevated, above what fundamentals comfortably support, because the assumed roughly 12% runs well above the bank's own recent record. The conservative book-value-based methods, which anchor on the tangible book and the actual trailing return, land well below the price, while only the earnings-power and growth methods that credit the recovery reach it. If the trailing low-single-digit-to-mid-single-digit return on equity is closer to the truth than the guided top-quartile target, the price-to-book the stock can support compresses, and a 1.1 times multiple on a bank earning a 6% return on equity is not cheap at all. The bear case is that the market is paying for a post-merger earnings recovery that integration risk, CRE exposure, and the rate environment could all delay or dilute.
Valuation
A bank is worth the return it earns on its capital, so Atlantic Union is valued off price-to-book rather than an operating multiple, and at $39.15 (June 27, 2026) it trades at roughly 1.1 times book. That looks modest, but the multiple embeds a specific and demanding assumption: that the bank sustains a return on equity near 12%, well above the roughly 5% to 7% it has recently earned. The entire valuation hinges on whether that gap closes. If the post-merger normalization delivers the guided top-quartile returns, 1.1 times book is cheap; if the bank settles at its depressed trailing return, the same multiple is full. The framework reads the priced-in return as elevated precisely because it runs above the bank's own record, and history says only a fraction of firms sustain a return that far above their recent level.
The methods split along the line you would expect for a recovery story. The conservative book-value methods, which anchor on the tangible book value near $21 a share and the actual trailing return on equity, land well below the price, because a bank earning below its cost of equity does not deserve a premium to book. The earnings-power and growth methods, which credit the normalization and the dividend, reach the price. That pattern, value-and-asset methods saying expensive while earnings-power and growth methods support the price, is the signature of a bank the market is valuing on its forward earning power rather than its trailing one. The reassuring counterpoint is that the price sits in the lower half of the peer group on price-to-book, so relative to other regional banks the market is not paying up; it is paying a peer-typical-to-slightly-low multiple for a normalization story.
The balance-sheet frame for a bank is capital and credit, not leverage in the industrial sense. Atlantic Union carries a dividend it funds from earnings, guides to tangible book value per share growth of 12% to 15%, and runs the capital ratios a bank its size needs; the relevant question is not solvency but whether credit costs stay contained as the acquired CRE book seasons and whether deposit costs keep falling to support the margin. The buyer at today's price is underwriting the post-merger return recovery: pay roughly book value for a newly enlarged Virginia-centered franchise and get a top-quartile-return bank if integration delivers, or a mid-single-digit-return bank trading at a full multiple if it does not. Published analyst targets cluster modestly above the current price, in the low-to-mid $40s, with one firm at $46, crediting the normalization more than the trailing numbers do.
Catalysts
The defining recent event is the completion of the Sandy Spring integration. Atlantic Union reported first-quarter 2026 net income available to common shareholders of $119.2 million, or $0.84 per share, with adjusted operating earnings of $0.89, and confirmed that the integration is complete, final goodwill is set, and the $9 million of merger-related expenses in the quarter were the last tied to the deal. That matters because the next quarter should be the first clean read on the combined bank's true earning power, free of merger noise. Net interest margin expanded in the quarter on lower deposit costs and loan repricing, and management guides full-year margin to roughly 3.90% to 4.00%, supported by an estimated $150 million to $160 million of accretion income from the acquired loans.
The forward guidance is the catalyst set to watch. Management set full-year 2026 tangible book value per share growth guidance at 12% to 15% and reiterated an objective of peer top-quartile financial returns now that the deal is behind it, so each quarter is a test of whether the post-merger return normalizes toward the level the price assumes. Credit quality, particularly in the acquired commercial real estate book, is the risk to monitor alongside it. Analyst sentiment is constructive, with a consensus that skews to buy and price targets clustered modestly above the current level, including a Piper Sandler target of $46, reflecting confidence that the integration delivers the earnings recovery. The next earnings report, the first without merger charges, is the event that confirms or challenges the normalization the price depends on.
Peer Cohorts (Per Segment, With Filing Citations)
Wholesale Banking (reported)
- UMBF (UMB FINANCIAL CORP)
- FY2025 10-K: …banking, installment loans, home equity lines of credit, and residential mortgages. The range of client services extends from a basic checking account to estate planning and trust services and includes private banking, brokerage services, and insurance services in addition to a full spectrum of investment advisory,…
- FY2025 10-K: …include commercial loans, commercial real estate financing, commercial credit cards, letters of credit, loan syndication services, and consultative services. In addition, the Company's specialty lending group offers a variety of business solutions including asset-based lending, mezzanine debt and minority equity…
- WSBC (WESBANCO, INC.)
- FY2025 10-K: Notes to Consolidated Financial Statements. 72 NO TE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations- Wesbanco, Inc. ("Wesbanco" or the "Company") is a bank holding company offering a full range of financial services, including trust and investment services, mortgage banking, insurance and brokerage…
- FY2025 10-K: …Relationships and Related Transactions, and Director Independence 142 14 Principal Accountant Fees and Services 142 Part IV 15 Exhibits and Financial Statement Schedules 143 16 Form 10-K Summary 143 Signatures 147 2 PART I ITEM 1. BUSINESS GENERAL Wesbanco, Inc. ("Wesbanco" or the "Company"), a bank holding company…
- RNST (RENASANT CORP)
- FY2025 10-K: …and revenues are derived from, the operations of our community banks, which offer a complete range of banking and financial services to individuals and to businesses of all sizes. As described in more detail below, these services include business and personal loans, interim construction loans, specialty commercial…
- FY2025 10-K: …quality and pricing. Many of our competitors are larger and have substantially greater resources than we do, including higher total assets and capitalization, larger technology and marketing budgets and a broader offering of financial services, while other competitors are not subject to regulation by federal and…
- INDB (Independent Bank Corp.)
- FY2025 10-K: …is inherent in any lending function. Loans are approved based upon a hierarchy of authority, predicated upon the size of the loan, quality of collateral and perceived level of risk. Levels within the hierarchy of lending authorities range from individual lenders to the Company's Loan Approval Committees. In…
- FY2025 10-K: …co-operative banks, credit unions, internet banks, as well as other non-bank institutions that offer financial alternatives such as brokerage firms and insurance companies. Competitive factors considered in attracting and retaining deposits include deposit and investment products and their respective rates of return,…
- UBSI (UNITED BANKSHARES INC/WV)
- FY2025 10-K: …and commercial customers. Digital Banking is available on a multitude of devices to include a browser-based experience, mobile (Apple, Android) and tablet applications. Digital Banking allows customers to manage their financial lives from any place they can access the internet (cellular or Wi-Fi). Customers can…
- FY2025 10-K: …new team members to the culture and enabling an environment that helps them be engaged in their roles. We have rigorous interdepartmental training and development programs that provide employees with capabilities to perform their job functions, deliver results, and advance their careers. We partnered with West…
- FULT (FULTON FINANCIAL CORP)
- FY2025 10-K: …services regulatory framework, banks, insurance companies and securities firms may affiliate under a financial holding company structure, allowing their expansion into non-banking financial services activities that had previously been restricted. These activities include a full range of banking, securities and…
- FY2025 10-K: …financial and managerial issues, the capital position of the combined organization, convenience and needs factors, including the applicant's CRA record, the effectiveness of the subject organizations in combating money laundering activities, and the transaction's effect on the stability of the U.S. banking or…
- CBSH (COMMERCE BANCSHARES, INC.)
- FY2025 10-K: …are also subject to collateralization requirements and must be conducted on arm's length terms. Covered transactions include (a) a loan or extension of credit by the banking subsidiary, including derivative contracts, (b) a purchase of securities issued to a banking subsidiary, (c) a purchase of assets by the banking…
- FY2025 10-K: …cbsh:InterestFeesForgivenMember 2025-01-01 2025-12-31 0000022356 us-gaap:CommercialPortfolioSegmentMember cbsh:BusinessLoanMember cbsh:OtherLoanRestructuringMember 2025-01-01 2025-12-31 0000022356 us-gaap:CommercialPortfolioSegmentMember cbsh:ConstructionAndLandLoansMember us-gaap:ExtendedMaturityMember 2025-01-01…
Consumer Banking (reported)
- UBSI (UNITED BANKSHARES INC/WV)
- FY2025 10-K: …and commercial customers. Digital Banking is available on a multitude of devices to include a browser-based experience, mobile (Apple, Android) and tablet applications. Digital Banking allows customers to manage their financial lives from any place they can access the internet (cellular or Wi-Fi). Customers can…
- FY2025 10-K: …banks. Among the more prominent of such laws and regulations are the Truth in Lending Act, the Home Mortgage Disclosure Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection…
- RNST (RENASANT CORP)
- FY2025 10-K: …of ADC and non-owner occupied CRE loans as defined in regulatory guidance, represent 300% or more the institution's total capital, where the balance of the institution's CRE loan portfolio has increased by 50% or more during the prior 36 months. The foregoing criteria are commonly referred to as the 100/300 Test. As…
- FY2025 10-K: …on the Consolidated Statements of Income. Factoring : The Company provides short-term financing to certain clients by operating as a factor. The Company purchases accounts receivable from its client and then generally collects the receivables directly from the client's account customers. Cash is advanced to the…
- INDB (Independent Bank Corp.)
- FY2025 10-K: …Company's designated chief operating decision makers ("CODMs"), based upon information about the Company's products and services offered to customers as part of its community banking operations. The CODMs assess performance for the community banking segment and decide how to allocate resources based on the Company's…
- FY2025 10-K: …loans comprised of residential mortgages and home equity loans and lines, all secured by one-to-four family residential properties, as well as other consumer loans. Residential mortgages are offered in amounts based on up to 97% of the lesser of the appraised value of the residential property securing the loan or the…
- WSBC (WESBANCO, INC.)
- FY2025 10-K: …does not maintain current information about the industry in which retail borrowers are employed. While such information is obtained when each loan is underwritten, it often becomes inaccurate with the passage of time as borrowers change employment. Instead, Wesbanco estimates potential exposure based on consumer…
- FY2025 10-K: …transactions and management of investments. The commission income from customers' transactions is recognized when the transaction is complete and approved. Annuity commissions are earned based upon the carrier's commission rate for the annuity product chosen by the investing customer. The commission income from the…
- FULT (FULTON FINANCIAL CORP)
- FY2025 10-K: …losses of $23.4 million for non-PCD Loans, partially offset by an elevated level of provision for credit losses in the same period in 2023 due to a $13.3 million charge-off for a commercial office loan. 50 Non-Interest Income The following table presents the components of non-interest income: Increase (Decrease) 2024…
- FY2025 10-K: …from imposing higher capital requirements for high volatility commercial real estate exposures unless such exposures meet the statutory definition for high volatility acquisition, development or construction loans in the Economic Growth Act; • Exempting from appraisal requirements certain transactions involving real…
- SSB (SOUTHSTATE BANK CORP)
- FY2025 10-K: …ssb:ConsumerLoansMember 2025-01-01 2025-12-31 0000764038 us-gaap:CommercialPortfolioSegmentMember us-gaap:ConstructionLoansMember 2025-01-01 2025-12-31 0000764038 us-gaap:CommercialPortfolioSegmentMember ssb:OtherCommercialNonOwnerOccupiedRealEstateMember 2025-01-01 2025-12-31 0000764038…
- FY2025 10-K: Consumer owner-occupied Risk rating: Pass $ 15,587 $ 3,687 $ 20,410 $ 10,949 $ 11,145 $ 25,248 $ 31,042 $ 118,068 Special mention 118 745 131 - - - - 994 Substandard 1,376…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
FY2025 10-K · Q1 FY2026 results, April 2026 · analyst consensus, TipRanks / Benzinga, 2026 · analyst actions, TipRanks / Benzinga, June 2026