Although Atlantic Union Bankshares (currently trading at $32.36 per share) has gained 12.9% over the last six months, it has trailed the S&P 500’s 19.5% return during that period. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Is now the time to buy Atlantic Union Bankshares, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free for active Edge members.
Why Is Atlantic Union Bankshares Not Exciting?
We're swiping left on Atlantic Union Bankshares for now. Here are three reasons there are better opportunities than AUB and a stock we'd rather own.
1. 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.
To the detriment of investors, Atlantic Union Bankshares’s TBVPS grew at a sluggish 2.4% annual clip over the last two years.
2. Projected TBVPS Growth Is Slim
The key to tangible book value per share (TBVPS) growth is a bank’s ability to earn consistent returns on its assets that exceed its funding costs and credit losses.
Over the next 12 months, Consensus estimates call for Atlantic Union Bankshares’s TBVPS to grow by 7.3% to $21.63, mediocre growth rate.
Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.
Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.
This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.
New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.
Over the last two years, Atlantic Union Bankshares has averaged a Tier 1 capital ratio of 9.8%, which is considered unsafe in the event of a black swan or if macro or market conditions suddenly deteriorate. For this reason alone, we will be crossing it off our shopping list.
Final Judgment
Atlantic Union Bankshares’s business quality ultimately falls short of our standards. With its shares underperforming the market lately, the stock trades at 0.9× forward P/B (or $32.36 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better investments elsewhere. Let us point you toward the most entrenched endpoint security platform on the market.
Stocks We Like More Than Atlantic Union Bankshares
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.