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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 December that is ending 31 2019.

Image supply: The Motley Fool.

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

  • Ready Remarks
  • Concerns and responses
  • Phone Individuals

Prepared Remarks:

Operator

Women and men, many thanks for standing by and welcome to your Atlantic Union Bankshares Fourth Quarter and complete 2019 Earnings Call year. Operator Directions

I might now choose to control the seminar up to your presenter today, Mr. Bill Cimino. You may start.

William P. CiminoSenior Vice President and Director of Investor Relations

Many thanks. Carl, and good early morning everybody else. While i really hope you enjoyed the brief little bit of news using this program, i wish to state that individuals’ll probably the next time go with music as opposed to the news in the hold. 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 users 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 web site, investors. Atlanticunionbank.com. Through the call today, we’re going to touch upon our performance that is financial using GAAP metrics and non-GAAP economic measures. Information about these non-GAAP monetary measures, including reconciliations to comparable GAAP measures is roofed inside our earnings release when it comes to fourth quarter and full-year 2019.

I would like to remind everyone that on today’s call we will make forward-looking statements, which are not statements of historical fact and are subject to risks and uncertainties before I turn the call over to John. There might be no assurance that real performance will likely not vary materially from any future outcomes expressed or suggested by these forward-looking statements.

We undertake no responsibility to publicly revise any statements that are forward-looking. Please make reference to our earnings launch when it comes to 4th quarter and full 12 months 2019 and our other SEC filings for further conversation associated with the organization’s danger facets along with other important info regarding our forward-looking statements, including facets which could cause actual leads to vary. All opinions made during today’s call are at the mercy of that secure Harbor declaration. In the final end associated with call, we are going to just just take questions through the research analyst community.

And today we’ll turn the phone call over to John Asbury.

John C. AsburyPresident and Ceo

Many thanks, Bill. As a result of all for joining us today and pleased brand new 12 months from Atlantic Union Bankshares Corporation. I wish to explain i am fighting a cold, and so I apologize ahead of time for the rough vocals and cough that is occasional.

We shut out an eventful 2018 with an excellent 4th quarter by continuing to perform on our strategic plan and hitting the mortgage and deposit growth targets we revised final quarter. Before us to create something uniquely valuable for our shareholders and the communities we serve and remain keenly focused on reaching the full potential of this powerful franchise as we begin 2020, we continue to believe we have look at this now a great opportunity.

Atlantic Union accomplished much in 2019. To start out, we shut the Access nationwide Bank acquisition on February first and converted their core systems in might; effectively and uneventful rebranded the organization to Atlantic Union and changed the trading and investing expression to AUB; delivered 8% deposit development while loan development had been 6% when it comes to 12 months.

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

Rob will give you more information in the monetary performance inside the part, but also for running metrics for the 4th quarter, our running return on concrete equity ended up being 16.01%, that will be a 37 foundation point enhance through the 3rd quarter. When it comes to full-year, our running ROTCE ended up being 16.14%.

Operating return on assets ended up being 1.30percent, up 1 basis points through the previous quarter. For the operating that is full-year ended up being 1.31%. Running effectiveness ratio ended up being 52.65%, which can be a 247 foundation point decrease through the quarter that is prior. In belated 2018, we communicated that individuals had updated our top-tier monetary goals to your after; operating ROTCE between 16% and 18%; operating ROA between 1.4% and 1.6%; as well as a running effectiveness ratio of 50% or below. We made those updates then looking to run in a increasing rate environment and stepped up our top-tier monetary metrics appropriately.

Because the financial and environment that is geopolitical changed during the period of 2019, we shifted expectations when it comes to Federal Reserve to cut prices. Also then your rate environment had been below our expectations, and there clearly was a sustained inversion of this yield bend that adversely impacted our web interest margin and income development over summer and winter. Regardless of the negative alterations in the price environment, we did succeed against our initial 2018 goals.

Offered the challenging current and expected environment that is operating banks Rob will touch upon our revised monetary targets for 2020 and 2021 in the remarks to pay attention to keeping top tier financial performance whatever the working environment.

Loan development had been 10% annualized when it comes to quarter point-to-point, while typical loans expanded 3%. Q4 is predictably a stronger seasonally in loan development, and now 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 amounts, and our decision to run-off the third-party customer loan portfolio, C&I line utilization at more or less 40% and total commitments both acquired through the 3rd quarter.