Virginia Banker Atlantic Union Bankshares to Sell Preferred Issue

Atlantic Union Bankshares (AUB) has announced an offering of non-cumulative preferred shares. They currently have no other exchange listed preferreds outstanding.

The shares will trade under ticker AUBAP on NASDAQ after a short stint on the OTC grey market (temporary ticker not yet announced).

An optional early redemption period will become available to the bank starting in 2025–on any dividend payment date.

I am not finding any rating on this new issue from the 3 major rating agencies at this time.

The preliminary prospectus can be read here.

Thanks to mcg for being on top of this new issue.

17 thoughts on “Virginia Banker Atlantic Union Bankshares to Sell Preferred Issue”

    1. Yes. Thanks Tim and George, M. The SYMBOL is AUKBL. When search for AUK and then looking for the child via QOL.com. Sold LMHB SWAN baby bond and replaced it with AUKBL @ $25.14. I have another order in Fidelity after selling some TDE @ 25.13, waiting to be filled. That Kroll rating certainly deserves attention. All in IRA account. Needs cash to do some deferred maintenance and some upgrade to aging houses.

      1. About 1.932 million shares sold according to Fidelity Active Trader at 1:56 pm EDT. 6 Mllion shares offered per QOL. It is possible that I bought and buying too early as I have made such mistakes many times. Who knows?

  1. OT here but thanks to this community for all the insight on the preferreds and baby bonds…a HELLUVA lot better than SA and the other preferred websites. Comments here especially answer the mail for me!

    Like others, I took some major equity hits in the pandemic flush but hung on and even added to positions with the exception of dumping some energy and regional bank preferreds. Took decent sized losses on those positions but rolled those funds elsewhere and have recovered all of said losses. Plus, I was at 40% cash going into the melee’ which gave me added flexibility to pick up preferreds and some blue chip and tech commons. Remarkably, my account equity stands at about +5% YTD

    On the common front I got spectacular values on JNJ, MMM, LOW, SYY, SBUX, MAIN, CSCO, EXC, QCOM and others…started entering a bit early but kept at it till early April. Some positions I entered by shorting the puts and some by buying shares outright.

    For preferreds and BBs, I took the opportunity to doubled my position in AATRL (was basis $47.50, now at $43 and change as I picked up more in the upper 30s), added a sizable position in KBTA which I had been waiting on for months – basis there is $26.

    My only action these days has been to sell covered calls on the commons during the rips to enhance income and provide a small hedge against any market downturn. Being 3 years out from retirement, I am now ideally positioned for income when that occurs. But, nonetheless, I am a bit apprehensive regarding the V market recovery at this point – where do we go from here? That is indeed the $64,000 question. Thx again to Tim and this community.

  2. Jerome Powell increases money flow by 23% driving down short term interest rates for depositors. Bankers see an opportunity to buy shakier small banks with low cost deposits (See Pacific Premier Bank buy out of Opus Bank with 2 Billion dollars of deposits with average rate of .10 percent). If the loan portfolio is not a mess, it is a great opportunity for a bank to increase market share, increase deposit and customer base, cut expenses through layoffs, and provide an alternative to the poor service at BofA, Wells, etc. Five to Seven percent preferred stocks or baby bonds (like upcoming 6.25% Hancock Whitney note) are great for the banks and good for investors like me when banks are paying a half percent to one percent as their best rate. I suspect very few smart people will be investing in the near future in starting a new business, expanding business locations, or buying commercial property, etc after watching the mass looting going on around the USA.

    1. ” I suspect very few smart people will be investing in the near future in starting a new business, expanding business locations, or buying commercial property, etc after watching the mass looting going on around the USA”

      Do you think investors will see this as a recurring event? If so, the implications will be a disaster for the whole US economy, not just for banks.

      1. I believe that statement is an exaggeration. That said, I could see that being true in some big cities where this wanton destruction occurred and where some people just choose to relocate (which has been happening in NYC due to covid prior to these riots). If I was a company, I would think twice about investing in a new facility in the same area if my business or location was burnt down or looted.

  3. Has anyone besides me noticed that many many of the new issues coming to market lately have all been either banks, financial institutions, or something related to finance??? Hmmm.

    1. ChuckP – I have noticed that as well. My guess is that some of these banks are going to be sitting on some bad loans in the next couple of months and they are trying to raise capital now before earnings are out. My local bank reported earnings last quarter and I believe they were about 1/2 of the prior year – but at least they had earnings!

    2. This slide from AUB’s last earnings report indicates they are ‘well capitalized’ going into the second quarter 2020.

      https://seekingalpha.com/article/4340653-atlantic-union-bankshares-corporation-2020-q1-results-earnings-call-presentation

      I’d be interested to see how their current loan portfolio breaks down by state, with an eye on lending exposure in states outside the mid-Atlantic region…especially California where legislation is being proposed to make commercial loans retroactively non-recourse.

      1. That certainly won’t help them rebuild after the riots.

        California is determined to salt its own earth.

      2. That’s a fair point about rebuilding Scott…I also wonder how the courts would view retroactive changes to commercial contracts, etc. Easier (imo) to just avoid anyone with exposure to California commercial real estate until this proposed legislation is sorted out.

  4. Here is another one from RF as well –

    NEW DEAL: Regions Financial $Bmark PerpNC5 Snr Pref 6.125%a
    NEW DEAL: Regions Financial $Bmark PerpNC5 Snr Pref 6.125%a

    (Bloomberg) — Expected to price today.
    $Benchmark PerpNC5 Snr Pref Fixed 6.125% Area
    Issuer: Regions Financial Corp (RF)
    Exp. Ratings: Ba1/BB+/BB
    Format: SEC registered, senior preferred
    UOP: GCP
    Settlement: June 5, 2020 (T+3)
    Bookrunners: Citi, GS (B&D), JPM, MS, REGFIN, RBCCM
    Optional redemption: Redeemable in whole or in part, during the three-month period prior to, and including, each reset date, or in whole, but not in part, at any time following a Regulatory Capital Treatment Event
    Information from person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it

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