Atlantic Union Bankshares Launches $250 Million Subordinated Notes Offering With 6.25% Fixed Rate

Capital Structure and Subordination Terms of the New Notes

The subordinated notes being issued by Atlantic Union Bankshares will carry a subordinated status within the company's capital structure. The disclosure states that the notes will rank junior to all existing and future senior indebtedness, including claims from general creditors. This subordination hierarchy is a defining characteristic of subordinated debt instruments and reflects the notes' position in the creditor chain relative to senior obligations.

Beyond senior debt, the notes are effectively subordinated to all secured indebtedness to the extent of collateral value, and they are structurally subordinated to all liabilities and obligations of Atlantic Union Bank, the company's wholly-owned bank subsidiary. The notes represent obligations of the parent holding company only and will not be guaranteed by any subsidiaries, including Atlantic Union Bank. The filing indicates that there is no sinking fund associated with the notes, meaning there are no scheduled principal repayment obligations prior to maturity.

Interest Rate Structure and the Transition to Floating Rate

The notes feature a two-stage interest rate structure that shifts from fixed to floating after five years. During the initial fixed-rate period from issuance through July 31, 2031, the notes will accrue interest at a fixed annual rate of 6.25%, payable semi-annually on February 1 and August 1 each year, with the first payment scheduled for February 1, 2027. This fixed-rate phase provides investors with predictable income during the initial years of the notes' life.

Beginning August 1, 2031, and continuing through maturity on August 1, 2036, the interest rate will convert to a floating mechanism indexed to the Three-Month Term SOFR, or an applicable successor benchmark rate, plus a spread of 213 basis points. Under this floating arrangement, interest will be payable quarterly on February 1, May 1, August 1, and November 1. The disclosure clarifies that if the Three-Month Term SOFR or applicable benchmark rate falls below zero, it will be treated as zero for calculation purposes, protecting note holders from negative rate scenarios.

Redemption Rights and Federal Reserve Approval Requirements

Atlantic Union Bankshares retains the right to redeem the notes under specified conditions. Beginning with the August 1, 2031 interest payment date, the company may redeem all or a portion of the notes at any time thereafter at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest through the redemption date. This right to redeem on or after August 1, 2031 aligns with the date of the interest rate conversion from fixed to floating.

The company also possesses redemption rights triggered by certain regulatory or tax events. The notes may be redeemed in their entirety, but not partially, if a change or prospective change in law occurs that would prevent the company from deducting interest payments for U.S. federal income tax purposes, if a subsequent event would preclude the notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the company is required to register as an investment company under the Investment Company Act of 1940. All redemptions are subject to prior approval by the Federal Reserve Board or any successor bank regulatory agency as required under applicable law and capital regulations.

Offering Size, Pricing, and Underwriting Compensation

The aggregate principal amount of the offering is $250 million, priced at 100% of par value. The public offering price represents par, plus any accrued interest from the original issuance date if applicable. Underwriting discounts and commissions total 1.00% of the offering amount, equating to $2.5 million in total underwriting compensation, resulting in net proceeds to the company before expenses of $247.5 million.

Keefe, Bruyette & Woods, A Stifel Company, and Piper Sandler are serving as joint book-running managers for the offering. The prospectus supplement was dated July 27, 2026, and the underwriters expected to deliver the notes in book-entry form only through The Depository Trust Company on or about July 30, 2026, representing a T+3 settlement timeline, which is the standard three business days following the pricing date.

Book-Entry Settlement and Trading Market Limitations

The notes will be issued exclusively in book-entry form and will be held through the facilities of The Depository Trust Company. This means that physical note certificates will not be issued, and all trading and transfers will occur through electronic book-entry systems maintained by the DTC. Settlement is anticipated to occur on or about July 30, 2026, the third business day following the pricing date of the offering.

The disclosure states that currently there is no public trading market for the notes, and the company does not intend for the notes to be listed on any securities exchange or quoted on any quotation system. This absence of a designated secondary market is typical for many subordinated bank notes and means investors seeking liquidity would need to transact directly or through private channels outside formal exchange trading.

Use of Proceeds and Capital Adequacy Implications

The filing does not disclose specific intended uses for the $247.5 million in net proceeds from the offering. However, subordinated notes of this nature are commonly used by bank holding companies to strengthen capital ratios and support regulatory capital requirements. The disclosure confirms that the notes will be recognized as Tier 2 capital for regulatory capital purposes, subject to applicable regulatory requirements and limitations.

The timing of the offering and the structure of the notes suggest that capital management and maintenance of adequate capital levels are driving considerations for Atlantic Union Bankshares. The floating-rate conversion and call option structure, along with the Federal Reserve's required approval for any early redemption, reflect the regulatory framework governing bank holding company capital instruments.

Risk Factors and Investment Considerations

The prospectus supplement directs investors to consider risk factors beginning on page S-8 of the supplement and page 5 of the accompanying prospectus dated August 6, 2024. Additionally, investors are directed to Atlantic Union Bankshares' Annual Report on Form 10-K for the year ended December 31, 2025, for comprehensive information about company risks and financial condition. The filing emphasizes that potential purchasers should carefully review all available information before investing.

Importantly, the notes are not deposits or savings accounts, and they are neither insured nor guaranteed by the Federal Deposit Insurance Corporation, any other governmental agency, or any public or private insurer. The notes represent direct unsecured subordinated obligations of the holding company and carry credit risk associated with the issuer's ability to meet its obligations.

Regulatory Approvals and Compliance Status

The prospectus supplement contains standard regulatory disclaimers stating that the SEC, the FDIC, the Federal Reserve Board, and state and federal securities regulatory agencies have not approved or disapproved the notes or passed upon the adequacy or accuracy of the offering documents. The filing notes that any representation to the contrary would constitute a criminal offense. This language is standard for debt securities offerings and reflects the regulatory landscape governing securities issuances by financial institutions.

While the SEC does not pre-approve securities offerings, the regulatory framework does require review and compliance by the Federal Reserve for redemptions and capital treatment of the notes. The filing confirms that any redemption will be subject to Federal Reserve approval to the extent required under applicable laws and capital regulations, underscoring the ongoing regulatory oversight of the notes throughout their life.

Non-Convertible Status and Investor Protection Measures

The disclosure explicitly states that the notes will not be convertible or exchangeable into any other securities of Atlantic Union Bankshares or any other entity. This feature clarifies that investors will not have any rights to convert the notes into equity or other instruments, ensuring that the debt remains a fixed-income obligation. The absence of conversion features simplifies the legal and economic structure of the notes and provides certainty regarding their status as debt instruments.

The notes carry no sinking fund provision, meaning there are no mandatory scheduled principal payments prior to the August 1, 2036 maturity date. The sole maturity date obligation is the payment of the full $250 million principal amount at or before maturity, along with accrued interest. This structure allows Atlantic Union Bankshares to manage its repayment obligations flexibly, subject to the redemption rights and regulatory constraints disclosed in the offering documents.