Atlantic Union Bankshares Corporation (AUB) Q4 2019 Profits Call Transcript

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Atlantic Union Bankshares Corporation (AUB) Q4 2019 Profits Call Transcript

Atlantic Union Bankshares Corporation (AUB) Q4 2019 Profits Call Transcript

AUB earnings call for the time scale closing December 31, 2019.

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Atlantic Union Bankshares Corporation (NASDAQ: AUB)
Q4 2019 profits Call
Jan 21, 2020, 9:00 a.m advance financial. ET

  • Ready Remarks
  • Concerns and Answers
  • Phone Individuals

Prepared Remarks:

Operator

Women and men, many thanks for standing by and welcome to your Atlantic Union Bankshares Fourth Quarter and Full 12 months 2019 profits Call. Operator Directions

I might now want to control the meeting up to your presenter today, Mr. Bill Cimino. You might start.

William P. CiminoSenior Vice President and Director of Investor Relations

Many thanks. Carl, and morning everyone that is good. You enjoyed the brief bit of news with this program, I do want to say that we’ll probably next time go with music instead of the news on the hold while I hope. I’ve Atlantic Union Bankshares’ President and CEO, John Asbury beside me today; and Executive Vice President and CFO, Rob Gorman. We likewise have other people of us for the question-and-answer period to our Executive Management team.

Please be aware that today’s profits launch can be acquired to down load on our Investor internet site, investors. Atlanticunionbank.com. Throughout the call today, we’re going to discuss our monetary performance making use of both GAAP metrics and non-GAAP economic measures. Information about these non-GAAP monetary measures, including reconciliations to comparable GAAP measures is roofed within our earnings launch for the quarter that is fourth full-year 2019.

Before I turn the phone call up to John, i’d like to remind every person that on today’s call we shall make forward-looking statements, that are not statements of historic reality and they are at the mercy of dangers and uncertainties. There could be no assurance that real performance will not vary materially from any future outcomes expressed or suggested by these statements that are forward-looking.

We undertake no responsibility to publicly revise any statements that are forward-looking. Please relate to our earnings release when it comes to quarter that is fourth complete 12 months 2019 and our other SEC filings for further conversation associated with organization’s danger facets along with other information regarding our forward-looking statements, including facets that may cause real leads to vary. All opinions made during today’s call are susceptible to that secure Harbor declaration. During the final end associated with call, we are going to simply take concerns through the research analyst community.

Now we’ll turn the decision up to John Asbury.

John C. AsburyPresident and Chief Executive Officer

Many thanks, Bill. By way of all for joining us today and delighted brand new 12 months from Atlantic Union Bankshares Corporation. I wish to mention I’m fighting a cold, therefore I apologize ahead of time when it comes to rough vocals and periodic cough.

We shut out an eventful 2018 with a great 4th quarter by continuing to perform on our strategic plan and striking the mortgage and deposit growth targets we revised final quarter. Once we start 2020, we continue steadily to think we now have an excellent possibility before us to produce one thing uniquely valuable for the shareholders in addition to communities we provide and remain keenly dedicated to attaining the complete potential of the effective franchise.

Atlantic Union accomplished much in 2019. To begin, we shut the Access National Bank purchase on February first and converted their core systems in might; effectively and uneventful rebranded the business to Atlantic Union and changed the trading and investing expression to AUB; delivered 8% deposit development while loan development had been 6% for the 12 months.

The year-end loan to deposit ratio was at line 95% target right where it ought to be; we finished the change of this Executive Leadership group, aided by the hiring of David Zimmerman within the 4th quarter to head up our riches Management Group Middleburg Financial; authorized and rolled away our brand brand brand new three-year strategic intend to our teammates; included a proven equipment funding group to close the commercial banking item space; launched Zelle and included nCino to handle electronic item gaps; won an amount of a client experience honors, such as the much coveted number 1 position when it comes to J.D. Energy Retail Banking Satisfaction Survey for the Mid-Atlantic area in 2019, utilizing the Mid-Atlantic area defined by J.D. Energy as Virginia to New York State, there clearly was none better; last a concentrated effort to make use of the coming market interruption through the Truist merger.

Rob will give you additional information from the monetary performance inside the area, but also for running metrics when it comes to 4th quarter, our running return on concrete equity had been 16.01%, that will be a 37 foundation point enhance through the 3rd quarter. For the full-year, our running ROTCE was 16.14%.

Running return on assets was 1.30percent, up 1 basis points through the quarter that is prior. When it comes to operating that is full-year had been 1.31percent. Running effectiveness ratio ended up being 52.65%, that is a 247 foundation point decrease through the quarter that is prior. In belated 2018, we communicated that people had updated our top-tier monetary goals to your after; operating ROTCE between 16% and 18%; operating ROA between 1.4% and 1.6%; and a running effectiveness ratio of 50% or below. We made those updates then hoping to operate in a increasing price environment and stepped up our top-tier monetary metrics appropriately.

Because the financial and geopolitical environment materially changed during the period of 2019, we shifted objectives when it comes to Federal Reserve to cut prices. Also then price environment had been below our expectations, and there is an inversion that is sustained of yield bend that negatively impacted our web interest margin and income development over summer and winter. Regardless of the undesirable alterations in the price environment, we did work against our original 2018 objectives.

Because of the challenging current and expected running environment for banking institutions Rob will comment on our revised monetary targets for 2020 and 2021 in the remarks to spotlight keeping top tier financial performance whatever the working environment.

Loan development had been 10% annualized for the quarter point-to-point, while typical loans expanded 3%. Q4 is predictably a stronger seasonally in loan development, so we saw significant growth materialize belated in the quarter. Headwinds to development in Q4 had been a persistent trend of commercial property pay downs staying at elevated levels, and our decision to run-off the third-party consumer loan portfolio, C&I line utilization at roughly 40% and total commitments both acquired through the quarter that is third.