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Jun 01

In conclusion, Atlantic Union had another solid quarter and a good 2019.

In conclusion, Atlantic Union had another solid quarter and a good 2019.

We continue steadily to make steady progress against our strategic priorities and delivered good financial performance despite headwinds through the interest rate environment that is adverse. I stay highly confident exactly exactly what the near future holds we have to deliver long-term sustainable financial performance for our customers, communities, teammates and shareholders for us, and the potential.

I could think about no better means to complete my reviews when you look at the brand brand New 12 months, than by reiterating Atlantic Union Bankshares is just an uniquely valuable franchise. It really is thick and compact in great areas by having story unlike any kind of in our area. We now have put together the right scale, the best areas while the right group to provide high end in a franchise that may not any longer be replicated in Virginia. We now have development possibilities inside our new york and Maryland operations with what we think is going to be a multi-year interruption, with certainly one of our biggest rivals.

We’ll now turn the decision up to Rob to pay for the results that are financial the quarter as well as 2019. Rob?

Robert Michael GormanExecutive Vice President and Chief Financial Officer

Thank you, John and morning that is good every person. Today thanks for joining us. We’d now want to simply just take a couple of minutes to offer some information on Atlantic Union’s economic outcomes for the quarter that is fourth for 2019.

Take note that for the part that is most, my commentary will consider Atlantic Union’s 4th quarter and full-year economic outcomes on a non-GAAP working foundation, which exclude $709,000 in after-tax merger-related costs, and $713,000 in after-tax rebranding associated expenses into the 4th quarter. Moreover it excludes $22.3 million in after-tax merger-related expenses and $5.1 million in after-tax rebranding charges for the full-year of 2019.

For quality, i shall specify which monetary metrics take a reported versus operating basis that is non-GAAP. Within the 4th quarter, reported net gain had been $55.8 million and profits per share had been $0.69. That is up more or less $2.6 million or $0.04 through the quarter that is third. For the year finished 2019, reported income that is net $193.5 million and profits per share were $2.41, up $47 million or $0.19 per share from 2018 amounts.

Reported return on equity for the 4th quarter had been 8.81% and 7.89% when it comes to full-year. Reported return on assets had been 1.27percent for the 4th quarter, and ended up being 1.15percent for 2019. Reported efficiency ratio ended up being 57.4% when it comes to quarter and 62.37% when it comes to full-year.

On an operating that is non-gaap, which because noted, excludes $1.4 million in after-tax merger-related expenses and rebranding-related prices for the quarter and $27.4 million for the year. Consolidated web profits for the 4th quarter had been $57.3 million or $0.71 per share, which will be up from $56 link.1 million or $0.69 per share within the quarter that is third. When it comes to complete year 2019 running internet profits had been $221 million or $2.75 per share, which can be up $43 million or $0.04 per share from 2018 amounts.

The operating that is non-GAAP on concrete typical equity ended up being 16.01% into the 4th quarter and had been 16.14% when it comes to full-year. The non-GAAP working return on assets had been 1.3percent into the 4th quarter and had been 1.31% for 2019. Non-GAAP running effectiveness ratio ended up being 52.65% into the 4th quarter, and had been 53.6% for the full-year of 2019.

Being a reminder, we remain dedicated to attaining tier that is top performance in accordance with our peers. Considering that the autumn of 2018, we’ve been focusing on the operating that is following metrics. A running return on concrete typical equity within a variety of 16% to 18per cent and running return on assets when you look at the variety of 1.4per cent to 1.6per cent as well as a running effectiveness ratio of 50% or reduced. Whenever we set these goals at the conclusion of 2018, we anticipated to run in a increasing rate environment, that may end in web interest margin expansion and solid revenue development. Nonetheless this failed to materialize as market interest levels declined materially because the start of 2019.

With all this challenging current and expected environment that is operating banking institutions as well as its effect on income development due to the intractable reduced for longer rate of interest environment, which we have now anticipate will persist in 2021, our company is revising our running monetary metric objectives correctly into the after. Return on tangible equity that is common a range of 15% to 17per cent; return on assets into the variety of 1.2per cent to 1.4percent and an effectiveness ratio of 53% or reduced.

Our economic performance goals are set regularly within the top quartile among our peer group, whatever the running environment therefore we think these brand brand new objectives are reflective associated with financial metrics necessary to achieve top tier financial performance in the present financial environment.

Now looking at the most important the different parts of the earnings declaration for the 4th quarter, tax equivalent net interest income ended up being $137.8 million, down $1.6 million through the third quarter, mainly due to reduce receiving asset yields, through the quarter, driven by lower typical market prices and alterations in the typical receiving asset mix through the 3rd quarter.

Web accretion of buy accounting adjustments for loans, time deposits and debt that is long-term included 18 foundation points into the web interest margin into the 4th quarter, which will be up through the 3rd quarter 13 foundation point impact mainly because of increased degrees of loan related-accretion income.

The quarter that is fourth tax equivalent net interest margin was 3.55%. That is a decrease of 9 foundation points through the past quarter. For the full-year taxation interest margin ended up being 3.69%, which can be down 5 basis points from 2018’s web interest margin of 3.74%. The 9 foundation point decrease when you look at the tax equivalent interest that is net when it comes to 4th quarter had been principally because of an 18 foundation point decline in the yield on making assets, partially offset with a 9 foundation point decrease into the price of funds. The 18 foundation point reduction in the quarter-to-quarter making asset yield ended up being mainly driven by 17 foundation point decrease into the loan profile yield and a 3 foundation point negative effect pertaining to alterations in making asset mix within the quarter.

Decline when you look at the loan profile yield of 17 basis points ended up being driven by reduced typical loan yields of 22 foundation points, partially offset by the 5 foundation point take advantage of higher loan accretion earnings. Typical loan yields were reduced, mainly as a result of effect of decreases in market interest levels through the quarter. Particularly the significant decreases within the 30 days LIBOR and prime prices.

The 3 foundation point asset that is earning decrease caused by alterations in the receiving asset mix through the previous quarter had been as a result of the accumulation of liquidity through the quarter caused by the timing of deposit inflows early in the quarter additionally the capital of loan development later when you look at the quarter, which willn’t carry over into future quarters. The quarterly 9 foundation point decrease within the price of funds to at least one% ended up being mainly driven by way of a 28 foundation point decrease in wholesale borrowing price, favorable alterations in the funding that is overall between quarters and also by reduced interest-bearing deposit expenses, which declined 6 foundation points through the 3rd quarter’s 125 foundation points.

The supply for loan losings when it comes to 4th quarter ended up being $3.1 million or 10 foundation points on an annualized foundation, that will be a loss of $6 million or 19 foundation points through the 3rd quarter. The decline in the mortgage loss provision through the past quarter had been mainly driven by reduced quantities of web charge-offs. For the quarter of 2019, web charge-offs had been $4.6 million or 15 foundation points for an annualized foundation, when compared with $7.7 million or 25 foundation points when it comes to quarter that is prior.

A significant amount of the net charge-offs came from non-relationship third-party consumer loans, which are in run-off mode as in previous quarters. When it comes to 12 months, web charge-offs were $20.9 million or 17 foundation points. Non-interest income declined to $29.2 million when it comes to 4th quarter from $48.1 million within the previous quarter. The decline in non-interest income ended up being mainly driven by life insurance coverage profits of around $9.3 million pertaining to the purchase of Xenith and an increase of around $7.1 million as a result of the purchase of investment securities recorded within the third quarter.

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