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 December that is ending 31 2019.

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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

Ready Remarks:


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

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

William P. CiminoSenior Vice President and Director of Investor Relations

Thank you. Carl, and morning everyone that is good. While i am hoping you enjoyed the brief little bit of news with this particular program, i wish to state that individuals’ll probably the next occasion go with music as opposed to the news in the hold. We have Atlantic Union Bankshares’ President and CEO, John Asbury beside me today; and Executive Vice President and CFO, Rob Gorman. We have other people in us for the question-and-answer period to our Executive Management team.

Please be aware that today’s earnings launch can be acquired to down load on our Investor web site, investors. Throughout the call today, we are going to touch upon our monetary performance utilizing both GAAP metrics and non-GAAP monetary measures. Important information about these non-GAAP economic measures, including reconciliations to comparable GAAP measures is roofed inside our earnings launch when it comes to 4th 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 could be no assurance that real performance will likely 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 launch when it comes to quarter that is fourth complete 12 months 2019 and our other SEC filings for further conversation associated with business’s danger facets as well as other important info regarding our forward-looking statements, including facets that may cause real leads to vary. All commentary made during today’s call are susceptible to that secure Harbor declaration. During the end associated with call, we’re going to simply simply take concerns through the research analyst community.

And from now on we’ll turn the decision up to John Asbury.

John C. AsburyPresident and Ceo

Many thanks, Bill. By way of all for joining us today and delighted brand new 12 months from Atlantic Union Bankshares Corporation. I want to explain i am fighting a cold, and so I apologize ahead of time for the rough sound and cough that is occasional.

We shut out an eventful 2018 with a good 4th quarter by continuing to perform on our strategic plan and striking the mortgage and deposit growth targets we revised final quarter. Even as we start 2020, we continue steadily to think we now have a fantastic opportunity before us generate one thing uniquely valuable for the investors while the communities we provide and stay keenly dedicated to attaining the complete potential for this powerful franchise.

Atlantic Union accomplished much in 2019. To begin, we shut the Access nationwide Bank purchase on 1st and converted their core systems in May; successfully and uneventful rebranded the Company to Atlantic Union and changed the stock trading symbol to AUB; delivered 8% deposit growth while loan growth was 6% for the year february.

The year-end loan to deposit ratio was at line 95% target right where it must be; we finished the change of this Executive Leadership group, because of the hiring of David Zimmerman into the 4th quarter to head our Wealth Management Group up Middleburg Financial; authorized and rolled away our new three-year strategic intend to our teammates; included a well established equipment funding group to shut the commercial banking item space; launched Zelle and included nCino to address electronic item gaps; won an amount of a person experience prizes, such as the much coveted number 1 position for the J.D. Energy Retail Banking Satisfaction Survey for the Mid-Atlantic area in 2019, using the Mid-Atlantic area 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 provides additional information from the economic performance in the part, but also for running metrics when it comes to fourth quarter, our running return on concrete equity had been 16.01%, which can be a 37 foundation point increase through the quarter that is third. When it comes to full-year, our running ROTCE ended up being 16.14%.

Running return on assets had been 1.30percent, up 1 basis points through the quarter that is prior. When it comes to operating that is full-year ended up being 1.31percent. Operating effectiveness ratio ended up being 52.65%, that is a 247 foundation point decrease through the previous quarter. In belated 2018, we communicated that individuals had updated our top-tier economic goals into the 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 rate that is rising and stepped up our top-tier economic metrics appropriately.

Since the financial and geopolitical environment materially changed during the period of 2019, we shifted objectives for the Federal Reserve to cut prices. Also then your price environment ended up being 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 changes that are adverse the price environment, we did work against our initial 2018 objectives.

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

Loan growth was 10% annualized for the quarter point-to-point, while typical loans expanded 3%. Q4 is predictably a stronger seasonally in loan development, therefore we saw growth that is significant 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 roughly 40% and total commitments both found through the 3rd quarter.