Good day, and thank you for standing by, and welcome to the Atlantic Union Bankshares Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host of today's call, Bill Cimino. Please go ahead.

Thank you, Justin, and good morning, everyone. I have Atlantic Union Bankshares' President and CEO, John Asbury; and Executive Vice President and CFO, Rob Gorman, with me today. We also have American National Chairman, President and CEO, Jeff Haley, on the call. Other members of our executive management team will be here for the question-and-answer period. Please note that today's releases and the accompanying slide presentation are available to download on our investor website, investors.atlanticunionbank.com. During today's call, we will comment on our financial performance using both GAAP metrics and non-GAAP financial measures. Important information about these non-GAAP financial measures, including reconciliations to comparable GAAP measures is included in the appendix to our slide presentation and in our earnings release for the second quarter of 2023. We'll make a number of forward-looking statements on today's call, which are not statements of historical fact and are subject to risks and uncertainties. There can be no assurance that actual performance will not differ materially from any future expectations or results expressed or implied by these forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statement. Please refer to our earnings release, the press release announcing the proposed merger and two slide presentations issued today as well as our other SEC filings for further discussion of the company's risk factors and other important information regarding our forward-looking statements including factors that could cause actual results to differ from those expressed or implied in any forward-looking statement. All comments made during today's call are subject to that safe harbor statement. At the end of the call, we'll take questions from the research analyst community. And now I'll turn the call over to John.

Thank you, Bill, and good morning, everyone. Today, we're excited to announce the planned merger of American National Bank headquartered in Danville, Virginia into Atlantic Union Bank. American National has $3.1 billion in assets and it's a high-quality community bank with an exceptional 114-year history, a strong core deposit base and outstanding asset quality. This is a company and leadership team we have long admired and know well and the relationship between our two banks spans decades. We're eager to share our thoughts on this and we will do so after Rob and I provide abbreviated comments on the strong Q2 results for Atlantic Union. Following that, American National Bank Chairman, President and CEO, Jeff Haley, will join us for a discussion of the merger. It was a solid quarter for AUB, making this a easier and hopefully shorter conversation. So let's begin. Last quarter, we spoke of the failures of non-traditional niche banks and how that shook confidence in the American banking system. Thankfully, we now see fewer so-called bank crisis headlines and our clients, our markets, our company and the economy as a whole are demonstrating resiliency. Broadly speaking, we saw our deposit base hold steady, better-than-expected loan growth and admittedly a seasonally strong second quarter, good expense management, modest net interest margin compression and impressive asset quality trends, all of this being a proof point that our franchise remains strong even in these uncertain times. We see the current environment as another confirmation of our long-term strategy of being a diversified, traditional, full-service bank that makes a positive difference in our markets with a strong brand and deep client relationships. We provide economically beneficial services and financing that help people and help businesses. It's a straightforward business model. It works and it's proven the test of time…

So thank you, John, and good morning, everyone. Thanks for joining us today. Please note that for the most part, my commentary will focus on Atlantic Union's second quarter financial results on a non-GAAP adjusted operating basis, which excludes the $3.9 million in pretax costs recorded in the second quarter for the strategic cost-saving initiatives as well as pretax loss on the sale of securities of $13.4 million and the pretax $5 million legal reserve, each of which was recorded in the first quarter. In the second quarter, reported net income available to common shareholders was $52.3 million, and earnings per share - per common share were $0.70. Adjusted operating earnings available to common shareholders was $55.4 million or $0.74 per common share for the second quarter, which was an increase of $8.2 million or 17.3% from the first quarter and up $4.1 million or 8% from the second quarter of 2022. The adjusted operating return on tangible common equity was 17% in the second quarter, which was up from $15.2 in the prior quarter. The adjusted operating return on assets was 1.16% in the second quarter, which was up 16 basis points from the first quarter. And on an adjusted operating basis, the efficiency ratio came in at 55% in the second quarter, down slightly from 56% in the prior quarter. Turning to credit loss reserves. As of the end of the second quarter, the total allowance for credit losses was $136 million, which was an increase of approximately $4.5 million from the first quarter, primarily due to loan growth in the second quarter and the impact of continued uncertainty in the economic outlook. The total allowance for credit losses as a percentage of total loans remained steady at 90 basis points at the end of June. The provision…

Thank you, Rob. And we are excited. Now that we've hit the high points for the quarter. Let's talk about the partnership with the venerable American National Bank. As noted on Slides 2 and 3 of the presentation for those watching, the merger will be addressed in a proxy statement of American National and a prospectus of Atlantic Union to be filed with the SEC, we urge you to read it when it becomes available because it will contain important information. Information regarding the persons who may under the rules of the SEC, be considered participants in the solicitation of American National shareholders in connection with the proposed merger and will be set forth in the proxy statement prospectus when it is filed with the SEC. Now let me begin by saying how excited we are to join with American National Bank. We have long admired this team and company and it is one of Virginia's premier community banks with a rich 114-year history and a deep commitment to its communities. We share a common legacy with our own 121-year-old history, and we have a highly compatible culture. We'll ask Jeff Haley to speak about this and the strategic rationale from his perspective in just a moment. This merger is between two institutions with a decades-long relationship and a deep friendship between our banks and our respective management teams that began years ago, long before my time. When it comes to strategy, I think of AUB as less opportunistic and more intentional. We'll now make the case for why that is so with this combination. If you recall our shareholder value proposition, you can see why we believe this transaction delivers on every one of our points. We have worked hard in our company to build a leading regional presence…

So John, I've been called, American National has been called a lot of things. I've never been called venerable. I think that was a compliment.

That is a compliment.

So look, this is an exciting day, I think, for both companies. And those that don't know me or the company, so we were founded in Danville, Virginia in 1909. 25 years ago, we were doing business in just Danville, Virginia. We're about a $200 million community bank. My colleague, my predecessor, Charlie Majors, and I take this company from a little Danville Bank to $3 billion, two states, 11 markets. And one of the things I'm most proud of is that over that period of time, we've gone through all types of economies. And there's not a dent, there's not scrape, there's not a scratch on this company. I think we've done a phenomenal job. As it relates to this transaction, I do need to highlight, we have an incredible Board of Directors that have been by our side for many years, and they've always been shareholder-focused. To supplement that I've got a great management team and then another group of teammates that help us run this company every day The way I look at my job is I tell everybody, I manage a three-legged stool, the shareholders, the customers and the employees. And along with our Board, we've gotten to the point where even with our incredible performance, our incredible reputation, we felt as though we were losing relevance not to just our shareholder but our customers in the way this industry is changing rapidly. My concern was that we needed to do something and there were really no other better options than partnering with what I believe taking two of the best banks in Virginia over 200 years of experience, both high-performing companies, putting them together to solidify Virginia, but then to also set the springboard for continued expansion in North Carolina. This is, in some ways, a sad day, but it's because of 114 years of a company being based in Danville, Virginia. But that is more personal from the three-legged stool perspective, this is an incredible transaction. I am so excited to be doing it. These are not new people to us. These are dear, dear friends of ours that we've known, as John said, goes back four decades. But I mean, I know John, I know Maria, I know Rob, I know Shawn, I know Dave Ring, I mean these are friends of mine and I am a little bit today like a proud father, letting my child go to college. I'm a little sad, but I'm so excited about the opportunities for everyone involved in this transaction. So John, I hope that helped and gave everybody a little bit of insight to where our head was.

Yes, it certainly did give insights. Need I say any more about why we respect this company and this leadership team. That's as clear as pictures could be painted. From our perspective, if you're going to do a bank merger in this environment, this is exactly what you would want to do. All right. I have a few more comments and Rob will get into the financial aspects of it, and then we'll - Jeff, Rob and I and others will be available for questions. So as should be evident, we have a great respect and admiration for Jeff and his team and are deeply appreciative that American National's Board of Directors chose to partner with us. Through the years, we've often conferred and learned much from each other and will now do so like never before. We're grateful that post-closing, Jeff has agreed to stay on with us for two years as a consultant on our regional community banking strategy in the American National legacy markets, which will be led by American National executives. His intimate knowledge and experience there will be invaluable. Further, aside from his consulting role, we are pleased and grateful that he will serve as our representative to Danville, Virginia Charitable Trust currently administered by American National that over the years, have provided significant contributions to not-for-profit organizations in that community. No one knows that community better than Jeff. Stepping back and looking at the map on this slide, it should be evident while we are interested in adding this company to the Atlantic Union Bank family, it's a hand-in-glove fit to our franchise that should be evident. Slide 8 shows combined depository market share, starting with Virginia. Data is on the left, this further solidifies our clear positioning as the number fourth player in…

Yes. Thanks, John. Let me switch gears to outline the expected financial impact of the merger from the strategic aspects of the transaction, which, as John just noted, we believe, are very compelling. I'll start by outlining the transaction structure and some of the key financial terms over the next few pages. On Slide 11, we recap the transaction structure and key terms of the transaction. In terms of the transaction itself, it's a 100% stock deal with a fixed exchange ratio of 1.35 common shares of AUB from each share of American National's common stock. This works out to approximately 16% pro forma ownership of the combined company by American National's shareholders. That translates into an aggregate transaction value of about $417 million to be paid or $39.23 for Americans National share based on a 10-day weighted average closing share price of Atlantic Union stock ending last night. This represents a per share market premium for American National shareholders of 24% over yesterday's closing stock price. The applied transaction metrics represents a price to tangible book value multiple of 174%, a price to 2024 forward consensus earnings plus cost saves multiple of 8.4 times and a core deposit premium of 7.2%. We believe this is a fair price to pay to acquire such an outstanding banking franchise. Upon closing the transaction, two members of American National's Board of Directors, Nancy Agee and Joel Shepherd will join Atlantic Union's Board. And as John noted, Jeff Haley will serve as a consultant to our leadership team. In addition, we will operate the former American National markets under a regional community banking model which will be led by two key American National Bank executives who know these markets very well. The transaction is expected to close in the first quarter of 2024,…

Thank you, Rob. We've given you much to consider this morning. So I have no further comments. At this point, we are ready to take your questions.

[Operator Instructions] And our first question comes from Catherine Mealor from KBW. Your line is now open.

Good morning, Catherine.

Good morning, and congrats on the deal.

Thank you.

Wanted to start just with first AUB-specific question. Just on - can you help us walk through the cadence of how we'll see the $17 million of cost savings flow in through the back half of this year and then into next, kind of maybe the run rate of expenses that we'll be hitting as we exit '23 and then going to '24?

Yes, Catherine. In terms of the - how that's coming into the expense base or coming out of the expense base, I should say. We saw about $500,000 or call it, $2 million on an annualized basis come out of Q2. As John noted, the majority of the cost savings will kick in post-August 1, because that's when after a 60-day notice period that we're reducing our teammate count. That will kick in August 1. So the next - in this third quarter, we should see about $3.5 million of that annualized $17 million come out. And going to the fourth quarter, you'll see the full effect of that, which is about $4.25 million. So it's kind of coming in, but Q3 will start to see a really shift in and Q4, you see the full annualized base - annualized or quarterly run rate of the annualized savings.

And it's really done at this point. There's essentially nothing material left to do. Everything has been executed.

Okay. Great. And then just as you think about - I guess my second question just on the deal. Is there any way to help us think about the timing of how the pace at which we'll see the $120 million loan mark on American National flow-through earnings?

Yes. So we are projecting that, that earnings will come in over four years on Sum-of-the-years' digit basis. The contractual if you look at the loan portfolio, it's about five-year maturity on a contractual basis, but the duration of that portfolio is more like three years. So we are using four years for that assumption.

Catherine, one thing I'll point out that may not be evident or perhaps is a surprise to those who don't know, American National. The duration of this loan portfolio is comparable to our own. Unlike what we often see in the market, American National does not do long-term fixed-rate loans. Typically five years or less is what they do. And that's part of why the math is working here and the rate marks are manageable. That, of course, plus the fact that they're 15% of the asset size. So this will come back quickly in terms of the rate marks. If they were doing what we sometimes see 10, 15, 20-year fixed-rate commercial real estate plans this would be a very different conversation. This probably wouldn't be a conversation that's happening today, but that's not done. One of the many things we admire about them.

Yes. That's helpful. And that's why the earn-back is manageable at three years. So that's great. I mean, as you think about just big picture, the two companies together, how does this - you don't need to put specific targets, but how does this alter your kind of - your outlook for ROA, ROE efficiently, I'm assuming it's going to be enhancing all those metrics, but how do you kind of think - how the two companies come together where that may trend as we move through '24?

Yes. So as we look at that, Catherine, it's a material improvement to what we've used consensus estimates for this - for the discussion today. And you'll see that which we kind of outlay on Page 7 of the presentation, that ROA is - should be going up from a consensus perspective of AUB about 20 basis points or call about a 1.25%. ROTCE is looking at about a 19.5%, 20% return on tangible common equity and we think the efficiency ratio will hover back towards the 50% mark once we get the full cost savings in. So fairly material improvements in the returns and the financial metrics that we always are looking at to be in a top-tier financial performer.

And when do your conversion is slated? Is it too early for that?

Well, we're looking at likely in second quarter. It really depends on if we can close the deal early in '24, which we're expecting.

Okay, great. I'll step back, congrats on the deal. Thank you.

Thank you, Catherine. And Justin, we're ready for our next caller, please.

And thank you. And one moment for our next caller. And our next caller is Casey Whitman from Piper Sandler. Your line is now open.

Hi, Casey.

Hi, good morning.

Good morning.

Good morning. Maybe just starting with your earnings this quarter. Can you sort of walk us through the progression of the margin throughout the quarter and sort of how it was faring in June or even at the end of the quarter? Just to sort of give us an idea of where we're headed in the third quarter.

Yes. So as you seen what we reported was a 5 basis point decline in the margin quarter-to-quarter, the [indiscernible]. If you look at it from where June, the month of June is coming out, it's still hovering in that 3.45% range. But we are expecting that over the next two quarters, we report Q3 and Q4 that we're going to get down to the, call it, the 3.35% range, give or take, a couple of bps due to continued deposit cost increases. The good news there is we also, as John mentioned, have some mitigating factors due to the variable rate loan book that we have. We are anticipating the Fed will move tomorrow another 25 basis points. So that will bode well from that point of view. But you should see probably bottoming out in the fourth quarter, about 3.35%, give or take, a couple of bps.

Okay. And you might - may have this, but do you have like an expected range you can give us for the pro forma margin? Just to sort of help us out with all the markets and we're not - I know there's a lot of moving parts there, but just any sort of range you can give us to go off of will be helpful.

I mean in terms of the deal impact. Yes, we think - sorry, go ahead.

In terms of where the margin - the pro forma margin, the combined margin might be running just given what we know today.

Yes. So including the accretion that we noted is that comes back through interest income. We think we're going to be around 3.60% to 3.65% reported margin once we close the deal.

Okay. Helpful. And then also remind us, you still have more of the expense stuff coming through in the third quarter just on the cost saves. Is it about $7.5 million left?

Yes. So again, we should have - we should be close to $3.5 million coming out if you go back to the last year, $3.5 million run rate coming out in the third quarter and then because it's a partial quarter with FTEs not dropping until August 1. We'll see about $4.25 million expense on a quarterly basis coming out in the fourth quarter. And then that would be the $17 million if you annualize that --

Yes, sorry, the onetime costs.

The onetime costs -

Yes. So the onetime cost, we're going to have another $6 million or so in the third quarter, and then there won't be any beyond that. That primarily relates to some lease termination costs as well as some costs associated with renegotiating our core contract or core systems contract, which we used a third-party firm to help us with that.

Okay. All right, great. Thank you.

Thank you, Casey.

Justin, we're ready for our next caller, please.

Thank you. And one moment for our next question. And our next question comes from Stephen Moss from Raymond James. Your line is now open.

Good morning.

Good morning.

Congratulations, Jeff and John on the transaction here. Thank you. Judging by the presentation, it sounds like the deal was negotiated here. Just curious, when you put these balance sheets together, are you - do you think you'll be restructuring the securities portfolio?

Well, we're going to take a look at that, Steve. We haven't assumed anything there. As you know, upon closing, we have mark-to-market the securities portfolio. We are evaluating alternatives to restructure portfolio more in line with how AUB has managed over time. But a lot of that's going to depend on where rates are at that point in time. But it's certainly possible and we're evaluating options there.

Okay. That's helpful. And in terms of the - in terms of - I'll following up on the margin here and just deposit pricing, just curious what the tone is that you're seeing these days? It seems like Truist is more aggressive here. And just curious on your thoughts as to what you're seeing in the last month or so?

Yes. I think to your point, we've seen more aggressive pricing on deposits from bigger players, including BofA and Truist, as you mentioned. So we usually look to the big players to follow them from a deposit pricing perspective. So we've increased our deposit levels on both on CDs and money markets during the quarter to basically match the Truist of the world. Interestingly enough, I think we're seeing less - as the quarter has gone on and through today, I'm seeing less and less pressure on deposits, I should say. But we'll see how that plays out, but there was a lot of adjustments coming through earlier in the second quarter. It's kind of stabilized a bit at this point in time.

I would agree with Rob, on that point. It's still highly competitive, but we seem to be out of the frenzy for whatever reason. We'll see what happens with the next rate increase. It seems better. I would not quite say we're at an equilibrium on it.

But we will adjust according to the larger players in the market. That's kind of our way we handle that.

Okay. Just instructive. As you know, Steven, the fact that half of our loan book is variable rate is what allows us to somewhat offset at least mitigate this rising rate environment, and that's part how we were able to manage the compression issue. That and quite candidly, not positioning ourselves as the highest rate in the market in order to drive deposits. Like every other bank in America, we maintained a very delicate balancing act in terms of managing the value proposition and the rate with the funding requirements. We do not want to offer the highest rates out there simply to try to drive deposit growth. That strategy will not work over time.

Right. And so in terms of - and I guess on the other side of the equation here in terms of the balance sheet with loans. You guys had really good loan growth this quarter, north of 4% year-to-date. Your guidance implies only modest loan growth, though the pipeline sounds like it's still pretty strong. Just - I think John has said a little bit about seasonality here for the current quarter. And I know you've talked about pull-through in the past. Just kind of curious, it feels a little bit maybe conservative on loan growth just given the pipeline.

Well, potentially. It's hard to predict in this environment. I have to admit Q2 was better than we expected. We expected to see more things slowdown in the pipeline. As I clearly stated, the second quarter is traditionally seasonally strong, second only to Q4. Q3 is typically one of the slowest quarters and that's for an obvious reason, people go on vacation and things get deferred. So what's happening in Q3, just to set expectations, clearly, one, we - actually three things. One, it is traditionally one of our slower quarters, business slows down and so many of our clients go on vacation and that's part of what happens in Q4, traditionally, things kind of get pushed into Q4, and then they're motivated to get things done before year-end. But we're looking at a seasonally slow Q3. Two, we'll now have a full quarter of runoff and this indirect auto loan portfolio that we discontinued at the end of May. We still had some things that were closing, so to speak, as June began. But it seems like we've got - yes, let's call it, $18 million a month, Rob, maybe closer to $20 million.

Yes. I would say it's $200 million annually.

So $200 million a year, so a quarter of that is going to come down. So that will offset growth in Q3. And that's a good move because it's lower yielding, it's not strategic and we can recycle that capital and that liquidity. And third thing is we do have known payoffs, clients who've informed us. We've got a couple of things going on, mostly in the C&I space, this is interesting. We have a couple of larger clients we deal with one has a pretty major asset sale. Another company is being sold. And so we have advanced knowledge of some fairly material paydowns, and it's more than a couple so these are all things that we think will somewhat offset. But we are, in fact, sitting on a good loan pipeline better than I would have expected right now. We'll see how it plays out, Steve. But I do not see us having a double-digit loan growth year. Is it possible we could do better than high single digits, which is 4% to 6%? That is possible, it could tip a little higher. We're just a little leery of forecasting that, frankly, because it's hard to do. So moderate growth mode, whether it's 6% or 7% or - but I don't think we're talking about teams. I actually don't want to see that right now.

Got it. And then on credit here, I saw there was one past due non-owner occupied commercial real estate loan, that's 90 days plus. Just kind of curious on any color and just set any expectations around that credit.

Past dues looks good. Past dues are as low as they've been in a long time.

Curious, we talked about the memory care that's restructured as a reengagement. Is that what you're referring to?

Could be we had held for sale last quarter, and we moved it back to held for investment.

Yes. Past dues are down. I'm looking by line item, that's a good story on past dues. You could be looking at the increase in nonperformers, and that was that credit note was not in a nonperforming loan at [indiscernible]. Yes, so we moved it back to held for investment, it looks like a new nonperformer, but it's not.

Is that what it was?

Yes, that's - credit is very clean right now.

Right. Okay. That's helpful. And then in terms of just maybe going back to the deal here with the North Carolina franchise that you acquired for American National kind of curious if you could give us an outline for how you're thinking about the North Carolina expansion in the future here a little further. Will we primarily be focused in the Greensboro or Raleigh area, obviously, you have an LPO down in Charlotte, just kind of --

Well, I think this was - broadly speaking, I would say this is going to be a to-be-determined and the leader of the North Carolina market for American National Bank, who will lead it for us. She and we will work together, David Ring, who leads what we refer to as wholesale banking, which will be all commercial banks will work out the plan exactly. But here's my perspective, my perspective is they have a good footing in the Piedmont Triad. And for those who don't know it, that means Winston-Salem and Greensboro and it's a little broader Burlington, is an important market for them. So they're sitting there on the I-40 corridor, they do have a Raleigh office, which we are thrilled about. We have a Charlotte LPO, it's not quite the same thing, that's a commercial real estate play. We have four branches in Eastern North Carolina. And so in general terms, we see this as an infill. And it would be great. I think it will also give us opportunity in Charlotte because when you have an LPO and no other meaningful presence in event bankers, with some of the bankers on the ground, you execute what we've done and we've done it well in Charlotte, which is sort of a specialty play, and this is going to be a little broader. So think of this as an infill strategy over time. And I think this is going to create opportunity for us. Bear in mind, for those who don't know this area, Greensboro, North Carolina is closer to Danville, Virginia than is Roanoke. Greensboro is only an hour away. So if you're in Martinsville, Danville, et cetera, kind of your closest metro area is, in fact, is Piedmont Triad it's contiguous. It's right across the line. So Dave, anything they bring us here, anything you wish to say about North Carolina expansion plans?

I think we'll work together with the management team in North Carolina to develop the strategy. We'll take our time and we'll plot it out so we can be successful.

It's right. I think they've done a good job. We bring additional capabilities to the table. We looked very much like American National not that long ago. We've worked very, very hard over the last 6.5, 7 years to transform this company. We have very good commercial and industrial banking capabilities, treasury management services, capital market services, specialty lending capabilities such as asset-based lending, equipment finance, government contractor finance, things that you wouldn't typically see a bank of our size doing that are actually playing vanilla in our minds. So we bring all this to the table. This will be a big acceleration play, we believe. So we're excited having spent time with the leadership of these markets they are the ones who will really drive this, they will be at the table and we work with them. So that's more to follow on this with passage of time. I don't want to get the cart before the horse.

Thanks, Steve. And Justin, we're running a little bit long. So we have time for one more caller, please.

Thank you, sir. And one moment for our next question. And our next question comes from David Bishop from Hovde Group. Your line is now open.

David, good morning.

Hi, good morning, gentlemen. I'll keep it quick. John, maybe on a long-term basis, do you think this accelerates or improves the long-term loan growth prospects for Atlantic Union as you expand into these markets and obviously, you have experience consider yourself sort of a legacy North Carolina banker.

David, I'm so sorry, may I ask you to repeat that? We're having difficulty hearing you.

I'm sorry. Yes. Just curious if you think this accelerates the prospects for long term. Loan growth as a combined company and especially --

Absolutely, it does. So what's happening is that it absolutely accelerates prospects, not just for loan growth over time, but I just think growth for the company because now we'll have a physical presence in some very attractive growth markets in North Carolina. As I called out - if you look at the south side of Virginia, in particular, this is one of the better industrial markets of the state. We have clients there, even though we don't have a physical presence. So I think when we couple the historic presence and relationships and knowledge of these markets that the American National team has with additional capabilities and a bigger balance sheet to be clear. I think that - and our treasury management services, this is going to be a formal combination. So in summary, presence for us in these very attractive North Carolina markets, Piedmont Triad, in particular, the Raleigh office coupled with Charlotte, then the additional capabilities that we bring to the table that allows the American National Bank team to do new things that they're not currently doing. This is going to be a really good combination. And so we're excited. We think this is great. And of course, the Roanoke Valley is - we are there. And I think that we're a bit undersized that when you couple American National with us and you combine our strength in the New River Valley, just to the west, where we're essentially tied for number one the way I think about it, this is a formidable Western Virginia franchise and we are excited about it.

Got it. And then, John, maybe - I'm just curious, obviously, strong growth in pure C&I this quarter. Just curious any color in terms of what drove the strong quarter just in sort of the pure C&I category this quarter?

In terms of where growth came from in terms of C&I during the quarter? Dave, do you have any perspective on that? So pretty good strength across the board.

Every market grew, except for the Western Virginia market, which we're, I think, now adding firepower to --

Isn't that interesting?

So all the specialty groups grew quarter-over-quarter, all the markets grew quarter-over-quarter, except for that one.

So pretty well distributed. And again, we just - we need more resources in Southwest Virginia, and now we have them. This is a hand-in-glove fit. I can't emphasize that enough. This is - if you were to go back and listen to our comments through the years, I've been describing this for years, it should be plainly evident if you understood what we were talking about, this is a good fit for us.

Got it. And then maybe just a housekeeping item. For Rob, the 40% cost saves off American National, that - should we assume a second quarter annualized or 2022? Just curious what's the best base to use in terms of forecasting those expense saves?

Yes. We're talking about $27 million of cost saves which we're modeling 75% in '24, depending on the close date and then 100% thereafter.

Got it. Appreciate the time.

And thank you.

Thanks, David, and thanks, Justin, and thanks, everyone, for joining us today. John, do you have anything --

Yes. I realize this has been a long call, but obviously, we had a lot to go over. I think that Jeff Haley's commentary, where he described the strategic rationale for the combination from his perspective is a master class of how a publicly held bank CEO and Board should think about their responsibilities. We absolutely agree with them out the Virginia Bankers Association, banker school take this transcript and teach that as a case study. So Jeff, to you and to the team at American National Bank, we couldn't be more excited. We look forward to consummating this and this is going to be great. So thank you all very much for your time today.

Thank you, and have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect.