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

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

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

  • Ready Remarks
  • Concerns and responses
  • Call 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 Guidelines

I might now choose to control the meeting up to your presenter today, Mr. Bill Cimino. You might begin.

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. 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 in our Executive Management group with us for the question-and-answer period.

Take note that today’s profits release is present to down load on our Investor site, investors. Throughout the call today, we’ll discuss our performance that is financial using GAAP metrics and non-GAAP economic measures. Information about these non-GAAP economic measures, including reconciliations to comparable GAAP measures is roofed inside our earnings launch when it comes to quarter that is fourth full-year 2019.

Before we turn the phone call up to John, I would like to remind everyone else that on today’s call we’ll make forward-looking statements, that aren’t statements of historic reality and are usually at the mercy of dangers and uncertainties. There could be no assurance that real performance will not differ materially from any future outcomes expressed or suggested by these statements that are forward-looking.

We undertake no responsibility to publicly revise any forward-looking statements. Please make reference to our earnings launch for the quarter that is fourth complete 12 months 2019 and our other SEC filings for further conversation of this 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 susceptible to that secure Harbor declaration. During the end of this call, we’re going to simply simply take concerns through the research analyst community.

And today we’ll turn the decision up to John Asbury.

John C. AsburyPresident and Chief Executive Officer

Many thanks, Bill. As a result of all for joining us today and delighted brand new year from Atlantic Union Bankshares Corporation. I wish to mention i am fighting a cold, and so I apologize ahead of time for the rough sound and periodic coughing.

We shut out an eventful 2018 with a great 4th quarter by continuing to perform on our strategic plan and hitting the mortgage and deposit growth targets we revised quarter that is last. 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 start out, we shut the Access nationwide Bank purchase on February 1st and converted their core systems in might; effectively and uneventful rebranded the business to Atlantic Union and changed the trading expression to AUB; delivered 8% deposit development while loan development ended up being 6% when it comes to year.

The year-end loan to deposit ratio was in line 95% target right where it must be; we finished the change for the Executive Leadership group, because of the hiring of David Zimmerman into the 4th quarter to head up our riches Management Group Middleburg Financial; approved and rolled down our brand new three-year strategic want to our teammates; included a proven 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 honors, like 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, with all the Mid-Atlantic region defined by J.D. Energy as Virginia to New York State, there is none better; last a concentrated initiative to use the coming market interruption through the Truist merger.

Rob will give you additional information in the economic performance inside the part, but also for running metrics for the 4th quarter, our operating return on concrete equity ended up being 16.01%, that is a 37 foundation point enhance through the quarter that is third. For the full-year, our running ROTCE ended up being 16.14%.

Running return on assets ended up being 1.30percent, up 1 basis points through the quarter that is prior. For the operating that is full-year was 1.31percent. Running effectiveness ratio had been 52.65%, which can be a 247 foundation point decrease through the previous quarter. In late 2018, we communicated that people had updated our top-tier monetary objectives towards the after; operating ROTCE between 16% and 18%; operating ROA between 1.4% and 1.6%; plus a running efficiency 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 properly.

Because 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 an inversion that is sustained of yield bend that adversely impacted our web interest margin and income development throughout every season. Inspite of the changes that are adverse 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 in the remarks to pay attention to maintaining top tier financial performance no matter what the running environment.

Loan growth had been 10% annualized for the quarter point-to-point, while typical loans expanded 3%. Q4 is predictably a stronger seasonally in loan development, so we saw significant growth materialize belated in the quarter. Headwinds to development in Q4 were 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.

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