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

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

Image source: The Motley Fool.

Atlantic Union Bankshares Corporation https://www.speedyloan.net/reviews/advance-financial-24-7/ (NASDAQ: AUB)
Q4 2019 profits Call
Jan 21, 2020, 9:00 a.m. ET

  • Ready Remarks
  • Concerns and responses
  • Phone Participants

Ready Remarks:


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’d now want to control the seminar up to your presenter today, Mr. Bill Cimino. You may begin.

William P. CiminoSenior Vice President and Director of Investor Relations

Many thanks. Carl, and morning everyone that is good. While i am hoping you enjoyed the brief little bit of news with this specific system, i want to state that people’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 also provide other people of us for the question-and-answer period to our Executive Management team.

Take note that today’s profits launch can be obtained to down load on our Investor site, investors. Atlanticunionbank.com. Through the call today, we’re going to touch upon our economic performance utilizing both GAAP metrics and non-GAAP monetary measures. Important info 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.

Before we turn the phone call up to John, i would really like to remind every person that on today’s call we shall make forward-looking statements, that are not statements of historic reality and generally are susceptible to dangers and uncertainties. There may be no assurance that real performance will likely not vary materially from any future outcomes expressed or implied by these statements that are forward-looking.

We undertake no responsibility to publicly revise any statements that are forward-looking. Please make reference to our earnings launch for the 4th quarter and complete 12 months 2019 and our other SEC filings for further conversation associated with business’s danger facets along with 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 susceptible to that Safe Harbor declaration. During the final end associated with the call, we are going to simply simply simply take concerns through the research analyst community.

Now we’ll turn the phone call 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, therefore I apologize in advance for the rough sound and periodic coughing.

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 quarter that is last. Once we start 2020, we continue steadily to think we now have an excellent possibility before us to generate one thing uniquely valuable for the investors additionally the communities we provide and stay keenly centered on achieving the complete potential with this effective 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 completed the change associated with the Executive Leadership team, with all the hiring of David Zimmerman into the 4th quarter to go our Wealth Management Group up Middleburg Financial; authorized and rolled away our brand new three-year strategic intend to our teammates; included a recognised equipment funding group to shut the commercial banking product gap; launched Zelle and included nCino to handle electronic product gaps; won an amount of an individual experience honors, such as the much coveted number 1 position for the 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 provides more information in the economic performance in the area, but also for running metrics for the 4th quarter, our running return on concrete equity had been 16.01%, which can be a 37 foundation point enhance from the third quarter. For the full-year, our working ROTCE ended up being 16.14%.

Operating return on assets had been 1.30percent, up 1 basis points through the previous quarter. For the operating that is full-year had been 1.31percent. Running efficiency ratio ended up being 52.65%, that is a 247 foundation point decrease through the previous quarter. In late 2018, we communicated we had updated our top-tier economic objectives into the after; operating ROTCE between 16% and 18%; operating ROA between 1.4% and 1.6%; plus a running effectiveness ratio of 50% or below. We made those updates then looking to run in a rate that is rising and stepped up our top-tier economic metrics appropriately.

Once the financial and environment that is geopolitical changed during the period of 2019, we shifted objectives when it comes to Federal Reserve to cut prices. Also then 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 revenue development throughout every season. Inspite of the unfavorable alterations in the price environment, we did work against our initial 2018 goals.

Provided the challenging current and expected running environment for banking institutions Rob will touch upon our revised economic targets for 2020 and 2021 inside the remarks to pay attention to keeping top tier financial performance no matter what the operating 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 development, so we saw growth that is significant 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 found through the quarter that is third.