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

Atlantic Union Bankshares Corporation (AUB) Q4 2019 Earnings Call Transcript | Продукты и еда

AUB earnings call for the time 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 Answers
  • Phone Individuals

Ready Remarks:


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 meeting up to your speaker today, Mr. Bill Cimino. You may 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. We have Atlantic Union Bankshares’ President and CEO, John Asbury beside me today; and Executive Vice President and CFO, Rob Gorman. We likewise have other people in our Executive Management group with us when it comes to question-and-answer period.

Take note that today’s earnings launch can be acquired to down load on our Investor site, investors. Through the call today, we are going to touch upon our monetary performance making use of both GAAP metrics and non-GAAP economic measures. Important info about these non-GAAP economic measures, including reconciliations to comparable GAAP measures is roofed within our earnings launch for the 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 not vary materially from any future outcomes expressed or suggested by these statements that are forward-looking.

We undertake no obligation to publicly revise any forward-looking statements. Please relate to our earnings launch for the quarter that is fourth complete 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 real leads to vary. All commentary made during today’s call are at the mercy of that secure Harbor statement. In the final end of this call, we’re going to just 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. As a result of all for joining us today and pleased new year from Atlantic Union Bankshares Corporation. I want to explain i am fighting a cold, and so I apologize ahead of time for the rough voice and periodic coughing.

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 a great opportunity.

Atlantic Union accomplished much in 2019. To begin, we shut the Access National 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 team, because of the hiring of David Zimmerman within the 4th quarter to go our Wealth Management Group up Middleburg Financial; authorized and rolled out our brand brand new three-year strategic want to our teammates; included an existing equipment financing group to shut the commercial banking item space; launched Zelle and included nCino to handle electronic item gaps; won lots of an individual experience prizes, like the much coveted number 1 position for the J.D. Energy Retail Banking Satisfaction Survey for the Mid-Atlantic area in 2019, because of the Mid-Atlantic area defined by J.D. Energy as Virginia to New York State, there was none better; last a concentrated effort to make use of the coming market interruption through the Truist merger.

Rob provides more information in the monetary performance in the part, however for running metrics for the 4th quarter, our operating return on concrete equity had been 16.01%, which will be a 37 foundation point enhance through the third quarter. When it comes to full-year, our working ROTCE had been 16.14%.

Running return on assets ended up being 1.30percent, up 1 basis points through the prior quarter. When it comes to full-year running ROA ended up being 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 we had updated our top-tier monetary objectives to your following; 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 hoping to run in a rate that is rising and stepped up our top-tier economic metrics appropriately.

While the financial and environment that is geopolitical changed during the period of 2019, we shifted objectives for the Federal Reserve to cut rates. Also then a price environment had been below our expectations, and there was clearly a sustained inversion of this yield curve that adversely impacted our web interest margin and income development throughout every season. Regardless of the changes that are adverse the price environment, we did work against our initial 2018 objectives.

Provided the challenging current and expected environment that is operating banking institutions Rob will comment on our revised economic targets for 2020 and 2021 in the remarks to spotlight keeping top tier financial performance no matter what the working environment.

Loan development ended up being 10% annualized when it comes to quarter point-to-point, while normal loans expanded 3%. Q4 is predictably a stronger seasonally in loan growth, and then we saw growth that is significant belated when you look at the quarter. Headwinds to development in Q4 were a persistent trend of commercial property pay downs remaining at elevated amounts, and our decision to run-off the third-party customer loan portfolio, C&I line utilization at around 40% and total commitments both found through the 3rd quarter.