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 constant progress against our strategic priorities and delivered good monetary performance despite headwinds through the interest rate environment that is adverse. We stay highly confident exactly just what the future holds for people, while the potential we must deliver long-lasting sustainable economic performance for the clients, communities, teammates and shareholders.

I will think about no better method in order to complete my commentary within the brand brand New 12 months, than by reiterating Atlantic Union Bankshares is a franchise that is uniquely valuable. It is thick and compact in great areas with tale unlike every other inside our area. We now have put together the right scale, the proper areas plus the right team to produce powerful in a franchise that may not any longer be replicated in Virginia. We now have development possibilities within our new york and Maryland operations with what we think are going to be a disruption that is multi-year 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 for 2019. Rob?

Robert Michael GormanExecutive Vice President and Chief Financial Officer

Many thanks, John and morning that is good everybody. Today thanks for joining us. We’d now prefer to just simply just take a few momemts to offer some information on Atlantic Union’s economic outcomes for the quarter that is fourth for 2019.

Please be aware that for the money key part that is most, my commentary will consider Atlantic Union’s fourth quarter and full-year economic outcomes for a non-GAAP running foundation, which exclude $709,000 in after-tax merger-related expenses, and $713,000 in after-tax rebranding related expenses within the 4th quarter. Moreover it excludes $22.3 million in after-tax costs that are merger-related $5.1 million in after-tax rebranding charges for the full-year of 2019.

For quality, i shall specify which monetary metrics are on a reported versus non-GAAP running basis. Into the quarter that is fourth reported net gain had been $55.8 million and profits per share had been $0.69. That is up about $2.6 million or $0.04 from the 3rd quarter. For the year finished 2019, reported income that is net $193.5 million and profits per share had been $2.41, up $47 million or $0.19 per share from 2018 amounts.

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

For a non-gaap working foundation, which because noted, excludes $1.4 million in after-tax merger-related costs and rebranding-related prices for the quarter and $27.4 million for the 12 months. Consolidated web profits for the 4th quarter were $57.3 million or $0.71 per share, that is up from $56.1 million or $0.69 per share into the quarter that is third. For the complete year 2019 working internet profits were $221 million or $2.75 per share, which can be up $43 million or $0.04 per share from 2018 amounts.

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

As being a reminder, we remain invested in attaining tier that is top performance in accordance with our peers. Considering that the fall of 2018, we’ve been focusing on the operating that is following metrics. A return that is operating concrete typical equity within a selection of 16% to 18% and running return on assets into the number of 1.4per cent to 1.6per cent plus a running effectiveness ratio of 50% or reduced. We expected to operate in a rising rate environment, which will result in net interest margin expansion and solid revenue growth when we set these targets at the end of 2018. Nevertheless this failed to materialize as market rates of interest declined materially because the start of 2019.

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

Our economic performance goals are set regularly within the top quartile among our peer group, whatever the working environment therefore we think these brand brand new goals are reflective regarding the financial metrics necessary to achieve top tier monetary performance in today’s financial environment.

Now looking at the main aspects of the earnings declaration for the 4th quarter, tax equivalent net interest earnings had been $137.8 million, down $1.6 million through the 3rd quarter, mainly due to reduce receiving asset yields, through the quarter, driven by reduced typical market prices and alterations in the typical receiving asset mix from the 3rd quarter.

Net accretion of buy accounting adjustments for loans, time deposits and debt that is long-term added 18 foundation points towards the web interest margin when you look at the 4th quarter, which will be up through the 3rd quarter 13 foundation point effect mainly as a result of increased degrees of loan related-accretion earnings.

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

Decline within the loan profile yield of 17 foundation points had been driven by reduced normal loan yields of 22 basis points, partially offset by the 5 foundation point reap the benefits of higher loan accretion earnings. Normal loan yields had been reduced, mainly as a result of the effect of decreases in market rates of interest through the quarter. Particularly the significant decreases within the a month LIBOR and rates that are prime.

The 3 foundation point asset that is earning decrease caused by alterations in the receiving asset mix through the previous quarter ended up being because of the accumulation of liquidity through the quarter caused by the timing of deposit inflows at the beginning of the quarter therefore the capital of loan growth later within the quarter, which willn’t carry over into future quarters. The quarterly 9 foundation point decrease when you look at the price of funds to 1% had been mainly driven with a 28 foundation point decrease in wholesale borrowing expense, favorable alterations in the general money mix between quarters and also by reduced interest-bearing deposit costs, which declined 6 foundation points through the 3rd quarter’s 125 foundation points.

The supply for loan losings when it comes to 4th quarter had been $3.1 million or 10 foundation points for an annualized foundation, which can be a decrease of $6 million or 19 basis points from the quarter that is third. The decline in the mortgage loss supply through the quarter that is previous mainly driven by reduced quantities of web charge-offs. When it comes to quarter of 2019, web charge-offs were $4.6 million or 15 foundation points on an annualized foundation, when compared with $7.7 million or 25 basis points for the previous quarter.

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 had been $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 reduction in non-interest earnings ended up being mainly driven by life insurance coverage profits of roughly $9.3 million pertaining to the purchase of Xenith and an increase of around $7.1 million as a result of purchase of investment securities recorded within the quarter that is third.

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