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AUB earnings call for the time scale December that is ending 31 2019.

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

• Ready Remarks
• Concerns and responses
• Call Individuals

Ready Remarks:

Operator

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

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

William P. Cimino — Senior Vice President and Director of Investor Relations

Many thanks. Carl, and good early morning everybody. While i am hoping you enjoyed the brief little bit of news using this system, i wish to state that individuals’ll probably the next time go with music rather than the news regarding the hold. We have Atlantic Union Bankshares’ President and CEO, John Asbury beside me today; and Executive Vice President and CFO, Rob Gorman. We also provide other people of our Executive Management group with us when it comes to question-and-answer period.

Take note that today’s profits release is present to down load on our Investor website, investors. Atlanticunionbank.com. Throughout the call today, we are going to touch upon our performance that is financial using GAAP metrics and non-GAAP monetary measures. Important info about these non-GAAP monetary measures, including reconciliations to comparable GAAP measures is included within our earnings launch when it comes to quarter that is fourth 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 not vary materially from any future outcomes expressed or implied by these forward-looking statements.

We undertake no responsibility to publicly revise any statements that are forward-looking. Please make reference 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 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 opinions made during today’s call are at the mercy of that secure Harbor declaration. In the end regarding the call, we’re going to installment loans ms just just simply take concerns through the research analyst community.

And from now on I’ll turn the phone call up to John Asbury.

John C. Asbury — President and Ceo

Many thanks, Bill. Because of all for joining us today and pleased 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 when it comes to rough voice and occasional coughing.

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 last 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 nationwide Bank acquisition 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 completed the transformation regarding the Executive Leadership group, aided by the hiring of David Zimmerman into the fourth quarter to go our Wealth Management Group up Middleburg Financial; authorized and rolled down our brand brand new three-year strategic intend to our teammates; included a proven equipment funding group to shut the commercial banking item space; launched Zelle and included nCino to handle electronic item gaps; won lots of a person experience honors, such as the much coveted number 1 position when it comes to J.D. Energy Retail Banking Satisfaction Survey when it comes to Mid-Atlantic area in 2019, utilizing 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 will offer additional information on the economic performance in the section, but also for running metrics when it comes to 4th quarter, our running return on concrete equity ended up being 16.01%, which can be a 37 foundation point enhance through the 3rd quarter. For the full-year, our working ROTCE had been 16.14%.

Running return on assets had been 1.30percent, up 1 basis points through the prior quarter. For the operating that is full-year had been 1.31percent. Running effectiveness ratio had been 52.65%, that will be a 247 basis point decrease through the previous quarter. In belated 2018, we communicated that individuals had updated our top-tier economic 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 looking to run in a increasing price environment and stepped up our top-tier monetary metrics properly.

Whilst 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 your price environment had been below our expectations, and there clearly was a sustained inversion of this yield bend that adversely impacted our net interest margin and income development over summer and winter. Inspite of the changes that are adverse the price environment, we did succeed against our initial 2018 objectives.

Because of the challenging current and expected running environment for banking institutions Rob will touch upon our revised economic targets for 2020 and 2021 in their remarks to spotlight keeping top tier financial performance no matter what the running environment.

Loan development ended up being 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 we also saw significant growth materialize belated when you look at the quarter. Headwinds to development in Q4 had been a persistent trend of commercial real-estate 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 third quarter.