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 responses
- Phone Individuals
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 love to control the meeting up to your presenter today, Mr. Bill Cimino. You might start.
William P. Cimino — Senior Vice President and Director of Investor Relations
Many thanks. Carl, and good early morning everybody else. 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 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 us for the question-and-answer period to our Executive Management team.
Take note that today’s profits launch can be obtained to download on our Investor web site, investors. Atlanticunionbank.com. Through the call today, we’re going to touch upon our monetary performance utilizing both GAAP metrics and non-GAAP economic measures. Information about these non-GAAP economic measures, including reconciliations to comparable GAAP measures is roofed within our earnings launch for the quarter that is fourth full-year 2019.
Before we turn the phone call over to John, i’d like to remind everybody else that on today’s call we are going to make forward-looking statements, that aren’t statements of historic reality and are also subject to dangers and uncertainties. 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 launch for the quarter that is fourth complete 12 months 2019 and our other SEC filings for further discussion of this organization’s danger facets along with other important info regarding our forward-looking statements, including facets which could cause real leads to differ. All opinions made during today’s call are susceptible to that Safe Harbor declaration. In the final end associated with the call, we are going to simply simply simply take concerns through the research analyst community.
And today we’ll turn the decision up to John Asbury.
John C. Asbury — President and Ceo
Many thanks, Bill. As a result of all for joining us today and pleased brand new year from Atlantic Union Bankshares Corporation. I wish to explain i am fighting a cold, therefore I apologize ahead of time when it comes to rough vocals and periodic coughing.
We shut out an eventful 2018 with a good 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 start out, we shut the Access nationwide Bank purchase on February first 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 growth while loan development ended up being 6% for the 12 months.
The year-end loan to deposit ratio was at line 95% target right where it ought to be; we finished the change regarding the Executive Leadership group, using the hiring of David Zimmerman within the 4th quarter to go up our riches Management Group Middleburg Financial; authorized and rolled away our brand new three-year strategic want to our teammates; included an existing equipment financing group to shut the commercial banking product space; launched Zelle and included nCino to handle electronic item gaps; won lots of a person experience prizes, like the much coveted number 1 position when it comes to J.D. Energy Retail Banking Satisfaction Survey for the Mid-Atlantic area in 2019, utilizing the Mid-Atlantic area defined by J.D. Power 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 regarding the economic performance in the area, however for operating metrics when it comes to 4th quarter, our operating return on concrete equity ended up being 16.01%, that will be a 37 foundation point enhance from the 3rd quarter. For the full-year, our working 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. When it comes to operating that is full-year had been 1.31percent. Running effectiveness ratio had been 52.65%, that is a 247 foundation point decrease through the quarter that is prior. In belated 2018, we communicated that people had updated our top-tier economic objectives to your following; 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 hoping to run in a rate that is rising and stepped up our top-tier economic metrics appropriately.
Given that financial and environment that is geopolitical changed during the period of 2019, we shifted expectations when it comes to Federal Reserve to cut prices. Also then your rate environment ended up being below our expectations, and there was clearly a sustained inversion of this yield bend that adversely impacted our web 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.
Offered 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 had been 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 then 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 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.