Exhibit 99.1
Contact: Robert M. Gorman - (804) 523-7828
Executive Vice President / Chief Financial Officer
UNION BANKSHARES REPORTS SECOND QUARTER RESULTS AND DECLARES QUARTERLY DIVIDEND
Richmond, Va., July 22, 2016 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $19.3 million and earnings per share of $0.44 for its second quarter ended June 30, 2016. The quarterly results represent an increase of $2.4 million, or 14.0%, in net income and an increase of $0.06, or 15.8%, in earnings per share from the first quarter. For the six months ended June 30, 2016, net income was $36.3 million and earnings per share was $0.82, an increase of 16.9% and 18.8%, respectively, compared to the results from the six months ended June 30, 2015.
Union also declared a quarterly dividend of $0.19 per share payable on August 19, 2016 to shareholders of record as of August 5, 2016.
“Union’s second quarter results clearly demonstrate the steady progress we are making toward our strategic growth and profitability objectives,” said G. William Beale, president and chief executive officer of Union Bankshares Corporation. “During the quarter we achieved double digit annualized loan, deposit and net income growth, increased mortgage loan production levels and profitability, completed our acquisition of Old Dominion Capital Management and also opened a commercial loan production office in Charlotte, North Carolina.
I believe, now more than ever, that Union is well positioned to generate sustainable, profitable growth, achieve top tier financial performance and deliver the above average returns our shareholders expect on their investment.”
Select highlights for the second quarter include:
• | Return on Average Tangible Common Equity (“ROTCE”) was 11.60% for the quarter ended June 30, 2016 compared to ROTCE of 10.13% for the prior quarter and 9.20% for the second quarter of 2015. Return on Average Assets (“ROA”) was 0.98% for the quarter ended June 30, 2016 compared to ROA of 0.88% for the prior quarter and 0.83% for the second quarter of 2015. |
• | Net income for the community bank segment was $18.8 million, or $0.43 per share, for the second quarter, compared to $16.9 million, or $0.38 per share, for the first quarter. Net income for the community bank segment for the six months ended June 30, 2016 was $35.7 million, or $0.81 per share. |
• | The mortgage segment reported net income of $539,000 for the second quarter, compared to net income of $54,000 in the first quarter. Net income for the mortgage segment for the six months ended June 30, 2016 was $593,000, or $0.01 per share. |
• | On May 31, 2016, Union Bank & Trust (the “Bank”), the subsidiary bank of the Company, completed its acquisition of Old Dominion Capital Management, Inc. (“ODCM”), a Charlottesville, Virginia based registered investment advisor with nearly $300 million in assets under management. |
• | As previously announced, the Company closed five branches and opened a new stand-alone branch during the quarter as part of its continuing efforts to become more efficient. The Company plans to close an additional five in-store branches in the Richmond market on September 30, 2016. |
• | Loans held for investment grew $160.6 million, or 11.1% (annualized), from March 31, 2016 and increased $457.5 million, or 8.3%, from June 30, 2015, adjusting for the sale of the credit card portfolio in the third quarter of 2015. Average loans increased $153.0 million, or 10.7% (annualized), from the prior quarter and increased $441.4 |
million, or 8.1%, from the same quarter in the prior year, adjusting for the sale of the credit card portfolio in the third quarter of 2015.
• | Period-end deposits increased $149.8 million, or 10.1% (annualized), from March 31, 2016 and grew $311.4 million, or 5.4%, from June 30, 2015. Average deposits increased $126.1 million, or 8.6% (annualized), from the prior quarter and increased $315.6 million, or 5.5%, from the prior year. |
NET INTEREST INCOME
Tax-equivalent net interest income was $68.2 million, an increase of $2.0 million from the first quarter, primarily driven by higher earning asset balances. The second quarter tax-equivalent net interest margin increased 2 basis points to 3.84% from 3.82% in the previous quarter driven by higher levels of acquisition-related net accretion income. Core tax-equivalent net interest margin (which excludes the 8 and 6 basis point impact of acquisition accounting accretion in the current and prior quarter, respectively) remained constant at 3.76% compared to the previous quarter.
The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the second quarter, net accretion related to acquisition accounting increased $256,000, or 22.3%, from the prior quarter to $1.4 million for the quarter ended June 30, 2016. The first and second quarters of 2016 and remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
Loan Accretion | Borrowings Accretion (Amortization) | Total | |||||||||
For the quarter ended March 31, 2016 | $ | 1,084 | $ | 62 | $ | 1,146 | |||||
For the quarter ended June 30, 2016 | 1,259 | 143 | 1,402 | ||||||||
For the remaining six months of 2016 | 2,195 | 190 | 2,385 | ||||||||
For the years ending: | |||||||||||
2017 | 4,285 | 170 | 4,455 | ||||||||
2018 | 3,815 | (143) | 3,672 | ||||||||
2019 | 3,018 | (286) | 2,732 | ||||||||
2020 | 2,477 | (301) | 2,176 | ||||||||
2021 | 2,112 | (316) | 1,796 | ||||||||
Thereafter | 8,766 | (5,306) | 3,460 | ||||||||
ASSET QUALITY/LOAN LOSS PROVISION
Overview
During the second quarter, the Company experienced declines in past due and nonaccrual loan levels, other real estate owned (“OREO”) balances, and net charge-off levels from the prior quarter. Nonperforming assets and past due loans were also down from the prior year. The loan loss provision declined from the prior quarter due to lower charge-off levels and improving asset quality metrics. The allowance for loan loss increased from the prior quarter due to loan growth in the current quarter.
All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired loans (“PCI”) totaling $67.2 million (net of fair value mark of $15.9 million).
Nonperforming Assets (“NPAs”)
At June 30, 2016, NPAs totaled $24.2 million, a decrease of $7.5 million, or 23.6%, from June 30, 2015 and a decline of $3.1 million, or 11.3%, from March 31, 2016. In addition, NPAs as a percentage of total outstanding loans declined 17 basis points from 0.58% a year earlier and decreased 6 basis points from 0.47% last quarter to 0.41% in the current quarter. The following table shows a summary of asset quality balances at the quarter ended (dollars in thousands):
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||
Nonaccrual loans, excluding PCI loans | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | |||||||||
Foreclosed properties | 10,076 | 10,941 | 11,994 | 18,789 | 18,917 | ||||||||||||||
Former bank premises | 3,305 | 3,305 | 3,305 | 3,305 | 3,305 | ||||||||||||||
Total nonperforming assets | $ | 24,242 | $ | 27,338 | $ | 27,235 | $ | 35,060 | $ | 31,743 | |||||||||
The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||
Beginning Balance | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | |||||||||
Net customer payments | (2,859 | ) | (1,204 | ) | (1,493 | ) | (1,104 | ) | (4,647 | ) | |||||||||
Additions | 2,568 | 5,150 | 2,344 | 5,213 | 581 | ||||||||||||||
Charge-offs | (1,096 | ) | (1,446 | ) | (1,245 | ) | (541 | ) | (2,171 | ) | |||||||||
Loans returning to accruing status | (396 | ) | (932 | ) | (402 | ) | (123 | ) | (919 | ) | |||||||||
Transfers to OREO | (448 | ) | (412 | ) | (234 | ) | — | (708 | ) | ||||||||||
Ending Balance | $ | 10,861 | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | |||||||||
The following table shows the activity in OREO for the quarter ended (dollars in thousands):
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||
Beginning Balance | $ | 14,246 | $ | 15,299 | $ | 22,094 | $ | 22,222 | $ | 25,434 | |||||||||
Additions of foreclosed property | 501 | 456 | 234 | 1,082 | 904 | ||||||||||||||
Additions of former bank premises | — | — | 1,822 | — | — | ||||||||||||||
Capitalized improvements | — | — | — | 9 | 243 | ||||||||||||||
Valuation adjustments | (274 | ) | (126 | ) | (4,229 | ) | (473 | ) | (710 | ) | |||||||||
Proceeds from sales | (1,086 | ) | (1,390 | ) | (4,961 | ) | (767 | ) | (3,511 | ) | |||||||||
Gains (losses) from sales | (6 | ) | 7 | 339 | 21 | (138 | ) | ||||||||||||
Ending Balance | $ | 13,381 | $ | 14,246 | $ | 15,299 | $ | 22,094 | $ | 22,222 | |||||||||
During the second quarter, the majority of sales of OREO were related to residential real estate.
Past Due Loans
Past due loans still accruing interest totaled $25.3 million, or 0.43% of total loans, at June 30, 2016 compared to $33.5 million, or 0.61%, a year ago and $35.1 million, or 0.61%, at March 31, 2016. At June 30, 2016, loans past due 90 days or more and accruing interest totaled $3.5 million, or 0.06% of total loans, compared to $10.9 million, or 0.20%, a year ago and $5.7 million, or 0.10%, at March 31, 2016.
Net Charge-offs
For the second quarter, net charge-offs were $1.6 million, or 0.11% on an annualized basis, compared to $2.2 million, or 0.16%, for the same quarter last year and $2.2 million, or 0.15%, for the prior quarter. For the six months ended
June 30, 2016, net charge-offs were $3.8 million, or 0.13% on an annualized basis, compared to $5.3 million, or 0.20%, for the same period last year.
Provision
The provision for loan losses for the current quarter was $2.3 million, a decline of $1.2 million compared to the same quarter a year ago and a decrease of $204,000 compared to the previous quarter. The decline in provision for loan losses in the current quarter compared to the prior periods was primarily driven by lower charge-off levels and improving asset quality metrics.
Allowance for Loan Losses
The allowance for loan losses (“ALL”) increased $675,000 from March 31, 2016 to $35.1 million at June 30, 2016 primarily due to loan growth during the quarter. The allowance for loan losses as a percentage of the total loan portfolio was 0.59% at June 30, 2016, 0.60% at March 31, 2016, and 0.59% at June 30, 2015. The ALL as a percentage of the total loan portfolio, adjusted for purchase accounting (non-GAAP), was 0.92% at June 30, 2016, a decrease from 0.95% from the prior quarter and a decrease from 1.02% from the quarter ended June 30, 2015. In acquisition accounting, there is no carryover of previously established allowance for loan losses, as acquired loans are recorded at fair value.
The nonaccrual loan coverage ratio was 322.9% at June 30, 2016, compared to 262.8% at March 31, 2016 and 339.7% at June 30, 2015. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.
NONINTEREST INCOME
Noninterest income increased $2.1 million, or 13.1%, to $18.0 million for the quarter ended June 30, 2016 from $15.9 million in the prior quarter, primarily driven by higher mortgage banking income of $826,000, higher customer-related fee income of $477,000, increases in loan-related interest rate swap fees of $428,000, and higher insurance-related income of $226,000. Increases in customer-related fee income were primarily driven by higher fiduciary and asset management fees, resulting from the acquisition of ODCM, as well as higher debit card interchange fees.
Mortgage banking income increased $826,000, or 38.5%, to $3.0 million in the second quarter compared to $2.1 million in the first quarter, related to increased mortgage loan originations. Mortgage loan originations increased by $41.9 million, or 42.6%, in the current quarter to $140.1 million from $98.2 million in the first quarter. Of the mortgage loan originations in the current quarter, 33.6% were refinances, which was a decline from 38.0% in the prior quarter.
NONINTEREST EXPENSE
Noninterest expense increased $979,000, or 1.8%, to $55.3 million for the quarter ended June 30, 2016 from $54.3 million in the prior quarter. Professional fees increased $559,000 due to higher project-related consulting expenses. Salary and benefit expenses increased $471,000 primarily related to the full-quarter impact of annual merit adjustments in the second quarter and increases related to the ODCM acquisition and the new Charlotte Loan Production Office. OREO and credit-related costs were $325,000 higher due to increases in valuation adjustments, OREO expenses, and seasonal real estate tax expenses on foreclosed properties in the second quarter. These increases were partially offset by the $300,000 in branch closure costs recorded in the first quarter.
BALANCE SHEET
At June 30, 2016, total assets were $8.1 billion, an increase of $268.0 million from March 31, 2016 and an increase of $602.9 million from June 30, 2015. The increase in assets was mostly related to loan growth.
At June 30, 2016, loans held for investment were $5.9 billion, an increase of $160.6 million, or 11.1% (annualized), from March 31, 2016, while average loans increased $153.0 million, or 10.7% (annualized), from the prior quarter. Adjusted for the sale of the credit card portfolio that occurred in the third quarter of 2015, loans held for investment
increased $457.5 million, or 8.3%, from June 30, 2015, while quarterly average loans increased $441.4 million, or 8.1%, from the prior year.
At June 30, 2016, total deposits were $6.1 billion, an increase of $149.8 million, or 10.1% (annualized), from March 31, 2016, while average deposits increased $126.1 million, or 8.6% (annualized), from the prior quarter. Total deposits grew $311.4 million, or 5.4%, from June 30, 2015, while average deposits increased $315.6 million, or 5.5%, from the prior year.
At June 30, 2016, March 31, 2016, and June 30, 2015, respectively, the Company had a common equity Tier 1 capital ratio of 9.92%, 10.25%, and 10.87%; a Tier 1 capital ratio of 11.25%, 11.63%, and 12.31%; a total capital ratio of 11.77%, 12.16%, and 12.83%; and a leverage ratio of 10.01%, 10.25%, and 10.82%.
The Company’s common equity to asset ratios at June 30, 2016, March 31, 2016, and June 30, 2015 were 12.21%, 12.52%, and 13.18%, respectively, while its tangible common equity to tangible assets ratio was 8.59%, 8.86%, and 9.30%, respectively. The decrease in capital ratios from prior periods is primarily due to share repurchases and asset growth.
During the second quarter, the Company declared and paid cash dividends of $0.19 per common share, consistent with the dividend paid in the prior quarter and an increase of $0.02, or 11.8%, compared to the same quarter in the prior year.
On February 25, 2016, the Company’s Board of Directors authorized a share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The Company repurchased approximately 272,000 shares during the quarter ended June 30, 2016 and had approximately $15.5 million available for repurchase under the current program.
* * * * * * *
ABOUT UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union Bank & Trust, which has 120 banking offices and 200 ATMs located throughout Virginia. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage products, Old Dominion Capital Management, Inc., which provides investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.
Additional information on the Company is available at http://investors.bankatunion.com.
Union Bankshares Corporation will hold a conference call on Friday, July 22nd, at 9:00 a.m. Eastern Time during which management will review earnings and performance trends. Callers wishing to participate may call toll-free by dialing (877) 668-4908. The conference ID number is 44271225.
NON-GAAP MEASURES
In reporting the results of the quarter ended June 30, 2016, the Company has provided supplemental performance measures on a tangible basis. Tangible common equity is used in the calculation of certain capital and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.
These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, information security, and consumer spending and saving habits. More information is available on the Company’s website, http://investors.bankatunion.com. The information on the Company’s website is not a part of this press release. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.
UNION BANKSHARES CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
KEY FINANCIAL RESULTS | |||||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||||
(FTE - "Fully Taxable Equivalent") | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
6/30/16 | 3/31/16 | 6/30/15 | 6/30/16 | 6/30/15 | |||||||||||||||
Results of Operations | |||||||||||||||||||
Interest and dividend income | $ | 72,781 | $ | 70,749 | $ | 69,854 | $ | 143,530 | $ | 137,455 | |||||||||
Interest expense | 7,005 | 7,018 | 6,038 | 14,023 | 11,670 | ||||||||||||||
Net interest income | 65,776 | 63,731 | 63,816 | 129,507 | 125,785 | ||||||||||||||
Provision for credit losses | 2,300 | 2,604 | 3,749 | 4,904 | 5,499 | ||||||||||||||
Net interest income after provision for credit losses | 63,476 | 61,127 | 60,067 | 124,603 | 120,286 | ||||||||||||||
Noninterest income | 17,993 | 15,914 | 16,212 | 33,907 | 31,266 | ||||||||||||||
Noninterest expenses | 55,251 | 54,272 | 55,241 | 109,523 | 109,081 | ||||||||||||||
Income before income taxes | 26,218 | 22,769 | 21,038 | 48,987 | 42,471 | ||||||||||||||
Income tax expense | 6,881 | 5,808 | 5,690 | 12,689 | 11,422 | ||||||||||||||
Net income | $ | 19,337 | $ | 16,961 | $ | 15,348 | $ | 36,298 | $ | 31,049 | |||||||||
Interest earned on earning assets (FTE) | $ | 75,232 | $ | 73,238 | $ | 72,145 | $ | 148,471 | $ | 141,907 | |||||||||
Net interest income (FTE) | 68,227 | 66,220 | 66,107 | 134,448 | 130,237 | ||||||||||||||
Core deposit intangible amortization | 1,745 | 1,880 | 2,138 | 3,625 | 4,361 | ||||||||||||||
Net income - community bank segment | $ | 18,798 | $ | 16,907 | $ | 15,253 | $ | 35,705 | $ | 31,221 | |||||||||
Net income (loss) - mortgage segment | 539 | 54 | 95 | 593 | (172 | ) | |||||||||||||
Key Ratios | |||||||||||||||||||
Earnings per common share, diluted | $ | 0.44 | $ | 0.38 | $ | 0.34 | $ | 0.82 | $ | 0.69 | |||||||||
Return on average assets (ROA) | 0.98 | % | 0.88 | % | 0.83 | % | 0.93 | % | 0.84 | % | |||||||||
Return on average equity (ROE) | 7.88 | % | 6.89 | % | 6.21 | % | 7.39 | % | 6.34 | % | |||||||||
Return on average tangible common equity (ROTCE) | 11.60 | % | 10.13 | % | 9.20 | % | 10.86 | % | 9.43 | % | |||||||||
Efficiency ratio (FTE) | 64.08 | % | 66.08 | % | 67.11 | % | 65.06 | % | 67.54 | % | |||||||||
Efficiency ratio - community bank segment (FTE) | 63.77 | % | 65.27 | % | 66.07 | % | 64.51 | % | 66.25 | % | |||||||||
Efficiency ratio - mortgage bank segment (FTE) | 75.31 | % | 93.36 | % | 94.21 | % | 83.30 | % | 103.90 | % | |||||||||
Net interest margin (FTE) | 3.84 | % | 3.82 | % | 3.97 | % | 3.83 | % | 3.96 | % | |||||||||
Yields on earning assets (FTE) | 4.23 | % | 4.23 | % | 4.33 | % | 4.23 | % | 4.32 | % | |||||||||
Cost of interest-bearing liabilities (FTE) | 0.51 | % | 0.52 | % | 0.47 | % | 0.52 | % | 0.46 | % | |||||||||
Cost of funds (FTE) | 0.39 | % | 0.41 | % | 0.36 | % | 0.40 | % | 0.36 | % | |||||||||
Net interest margin, core (FTE) (1) | 3.76 | % | 3.76 | % | 3.86 | % | 3.76 | % | 3.85 | % | |||||||||
Yields on earning assets (FTE), core (1) | 4.16 | % | 4.16 | % | 4.27 | % | 4.16 | % | 4.27 | % | |||||||||
Cost of interest-bearing liabilities (FTE), core (1) | 0.52 | % | 0.53 | % | 0.53 | % | 0.52 | % | 0.54 | % | |||||||||
Cost of funds (FTE), core (1) | 0.40 | % | 0.40 | % | 0.41 | % | 0.40 | % | 0.42 | % | |||||||||
Per Share Data | |||||||||||||||||||
Earnings per common share, basic | $ | 0.44 | $ | 0.38 | $ | 0.34 | $ | 0.82 | $ | 0.69 | |||||||||
Earnings per common share, diluted | 0.44 | 0.38 | 0.34 | 0.82 | 0.69 | ||||||||||||||
Cash dividends paid per common share | 0.19 | 0.19 | 0.17 | 0.38 | 0.32 | ||||||||||||||
Market value per share | 24.71 | 24.63 | 23.24 | 24.71 | 23.24 | ||||||||||||||
Book value per common share | 22.87 | 22.55 | 22.02 | 22.87 | 22.02 | ||||||||||||||
Tangible book value per common share | 15.44 | 15.31 | 14.87 | 15.44 | 14.87 | ||||||||||||||
Price to earnings ratio, diluted | 13.96 | 16.12 | 17.04 | 14.98 | 16.70 | ||||||||||||||
Price to book value per common share ratio | 1.08 | 1.09 | 1.06 | 1.08 | 1.06 | ||||||||||||||
Price to tangible common share ratio | 1.60 | 1.61 | 1.56 | 1.60 | 1.56 | ||||||||||||||
Weighted average common shares outstanding, basic | 43,746,583 | 44,251,276 | 45,128,698 | 43,998,929 | 45,117,396 | ||||||||||||||
Weighted average common shares outstanding, diluted | 43,824,183 | 44,327,229 | 45,209,814 | 44,075,706 | 45,198,727 | ||||||||||||||
Common shares outstanding at end of period | 43,619,867 | 43,854,381 | 45,112,893 | 43,619,867 | 45,112,893 | ||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
6/30/16 | 3/31/16 | 6/30/15 | 6/30/16 | 6/30/15 | |||||||||||||||
Capital Ratios | |||||||||||||||||||
Common equity Tier 1 capital ratio (2) | 9.92 | % | 10.25 | % | 10.87 | % | 9.92 | % | 10.87 | % | |||||||||
Tier 1 capital ratio (2) | 11.25 | % | 11.63 | % | 12.31 | % | 11.25 | % | 12.31 | % | |||||||||
Total capital ratio (2) | 11.77 | % | 12.16 | % | 12.83 | % | 11.77 | % | 12.83 | % | |||||||||
Leverage ratio (Tier 1 capital to average assets) (2) | 10.01 | % | 10.25 | % | 10.82 | % | 10.01 | % | 10.82 | % | |||||||||
Common equity to total assets | 12.21 | % | 12.52 | % | 13.18 | % | 12.21 | % | 13.18 | % | |||||||||
Tangible common equity to tangible assets | 8.59 | % | 8.86 | % | 9.30 | % | 8.59 | % | 9.30 | % | |||||||||
Financial Condition | |||||||||||||||||||
Assets | $ | 8,100,561 | $ | 7,832,611 | $ | 7,497,706 | $ | 8,100,561 | $ | 7,497,706 | |||||||||
Loans held for investment | 5,941,098 | 5,780,502 | 5,510,385 | 5,941,098 | 5,510,385 | ||||||||||||||
Earning Assets | 7,282,137 | 7,045,552 | 6,717,137 | 7,282,137 | 6,717,137 | ||||||||||||||
Goodwill | 297,659 | 293,522 | 293,522 | 297,659 | 293,522 | ||||||||||||||
Core deposit intangibles, net | 19,685 | 21,430 | 27,394 | 19,685 | 27,394 | ||||||||||||||
Deposits | 6,095,826 | 5,945,982 | 5,784,474 | 6,095,826 | 5,784,474 | ||||||||||||||
Stockholders' equity | 989,201 | 980,978 | 988,134 | 989,201 | 988,134 | ||||||||||||||
Tangible common equity (3) | 668,093 | 666,026 | 667,218 | 668,093 | 667,218 | ||||||||||||||
Loans held for investment, net of deferred fees and costs | |||||||||||||||||||
Construction and land development | $ | 765,997 | $ | 776,698 | $ | 671,234 | $ | 765,997 | $ | 671,234 | |||||||||
Commercial real estate - owner occupied | 831,880 | 849,202 | 874,582 | 831,880 | 874,582 | ||||||||||||||
Commercial real estate - non-owner occupied | 1,370,745 | 1,296,251 | 1,217,646 | 1,370,745 | 1,217,646 | ||||||||||||||
Multifamily real estate | 337,723 | 323,270 | 316,474 | 337,723 | 316,474 | ||||||||||||||
Commercial & Industrial | 469,054 | 453,208 | 426,193 | 469,054 | 426,193 | ||||||||||||||
Residential 1-4 Family | 992,457 | 978,478 | 991,592 | 992,457 | 991,592 | ||||||||||||||
Auto | 244,575 | 241,737 | 216,420 | 244,575 | 216,420 | ||||||||||||||
HELOC | 519,196 | 517,122 | 512,123 | 519,196 | 512,123 | ||||||||||||||
Consumer and all other | 409,471 | 344,536 | 284,121 | 409,471 | 284,121 | ||||||||||||||
Total loans held for investment | $ | 5,941,098 | $ | 5,780,502 | $ | 5,510,385 | $ | 5,941,098 | $ | 5,510,385 | |||||||||
Deposits | |||||||||||||||||||
NOW accounts | $ | 1,563,297 | $ | 1,504,227 | $ | 1,378,129 | $ | 1,563,297 | $ | 1,378,129 | |||||||||
Money market accounts | 1,366,451 | 1,323,192 | 1,303,792 | 1,366,451 | 1,303,792 | ||||||||||||||
Savings accounts | 598,622 | 589,542 | 565,584 | 598,622 | 565,584 | ||||||||||||||
Time deposits of $100,000 and over | 521,138 | 508,153 | 547,492 | 521,138 | 547,492 | ||||||||||||||
Other time deposits | 653,584 | 657,625 | 699,801 | 653,584 | 699,801 | ||||||||||||||
Total interest-bearing deposits | $ | 4,703,092 | $ | 4,582,739 | $ | 4,494,798 | $ | 4,703,092 | $ | 4,494,798 | |||||||||
Demand deposits | 1,392,734 | 1,363,243 | 1,289,676 | 1,392,734 | 1,289,676 | ||||||||||||||
Total deposits | $ | 6,095,826 | $ | 5,945,982 | $ | 5,784,474 | $ | 6,095,826 | $ | 5,784,474 | |||||||||
Averages | |||||||||||||||||||
Assets | $ | 7,949,576 | $ | 7,764,830 | $ | 7,459,446 | $ | 7,857,203 | $ | 7,411,332 | |||||||||
Loans held for investment | 5,863,007 | 5,709,998 | 5,448,126 | 5,786,502 | 5,404,643 | ||||||||||||||
Loans held for sale | 30,698 | 27,304 | 43,307 | 29,001 | 40,901 | ||||||||||||||
Securities | 1,202,772 | 1,187,150 | 1,143,343 | 1,194,961 | 1,143,487 | ||||||||||||||
Earning assets | 7,153,627 | 6,968,988 | 6,676,440 | 7,061,307 | 6,626,704 | ||||||||||||||
Deposits | 6,025,545 | 5,899,404 | 5,709,963 | 5,962,475 | 5,675,134 | ||||||||||||||
Certificates of deposit | 1,164,561 | 1,171,972 | 1,233,904 | 1,168,267 | 1,251,531 | ||||||||||||||
Interest-bearing deposits | 4,642,899 | 4,562,856 | 4,431,087 | 4,602,878 | 4,423,933 | ||||||||||||||
Borrowings | 881,027 | 816,943 | 703,223 | 848,984 | 691,348 | ||||||||||||||
Interest-bearing liabilities | 5,523,926 | 5,379,799 | 5,134,310 | 5,451,862 | 5,115,281 | ||||||||||||||
Stockholders' equity | 987,147 | 989,414 | 991,093 | 988,281 | 986,844 | ||||||||||||||
Tangible common equity (3) | 670,503 | 673,562 | 669,139 | 672,033 | 663,814 | ||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
6/30/16 | 3/31/16 | 6/30/15 | 6/30/16 | 6/30/15 | |||||||||||||||
Asset Quality | |||||||||||||||||||
Allowance for Loan Losses (ALL) | |||||||||||||||||||
Beginning balance | $ | 34,399 | $ | 34,047 | $ | 30,977 | $ | 34,047 | $ | 32,384 | |||||||||
Add: Recoveries | 660 | 828 | 1,023 | 1,488 | 1,695 | ||||||||||||||
Less: Charge-offs | 2,285 | 2,980 | 3,205 | 5,265 | 7,034 | ||||||||||||||
Add: Provision for loan losses | 2,300 | 2,504 | 3,549 | 4,804 | 5,299 | ||||||||||||||
Ending balance | $ | 35,074 | $ | 34,399 | $ | 32,344 | $ | 35,074 | $ | 32,344 | |||||||||
ALL / total outstanding loans | 0.59 | % | 0.60 | % | 0.59 | % | 0.59 | % | 0.59 | % | |||||||||
ALL / total outstanding loans, adjusted for acquisition accounting (4) | 0.92 | % | 0.95 | % | 1.02 | % | 0.92 | % | 1.02 | % | |||||||||
Net charge-offs / total outstanding loans | 0.11 | % | 0.15 | % | 0.16 | % | 0.13 | % | 0.20 | % | |||||||||
Provision / total outstanding loans | 0.16 | % | 0.18 | % | 0.26 | % | 0.16 | % | 0.19 | % | |||||||||
Total PCI Loans | $ | 67,170 | $ | 70,105 | $ | 87,841 | $ | 67,170 | $ | 87,841 | |||||||||
Nonperforming Assets | |||||||||||||||||||
Construction and land development | $ | 1,604 | $ | 2,156 | $ | 2,402 | $ | 1,604 | $ | 2,402 | |||||||||
Commercial real estate - owner occupied | 1,661 | 2,816 | 3,624 | 1,661 | 3,624 | ||||||||||||||
Commercial real estate - non-owner occupied | — | — | 200 | — | 200 | ||||||||||||||
Commercial & Industrial | 263 | 810 | 564 | 263 | 564 | ||||||||||||||
Residential 1-4 Family | 5,448 | 5,696 | 2,128 | 5,448 | 2,128 | ||||||||||||||
Auto | 140 | 162 | — | 140 | — | ||||||||||||||
HELOC | 1,495 | 973 | 493 | 1,495 | 493 | ||||||||||||||
Consumer and all other | 250 | 479 | 110 | 250 | 110 | ||||||||||||||
Nonaccrual loans | $ | 10,861 | $ | 13,092 | $ | 9,521 | $ | 10,861 | $ | 9,521 | |||||||||
Other real estate owned | 13,381 | 14,246 | 22,222 | 13,381 | 22,222 | ||||||||||||||
Total nonperforming assets (NPAs) | $ | 24,242 | $ | 27,338 | $ | 31,743 | $ | 24,242 | $ | 31,743 | |||||||||
Construction and land development | $ | 116 | $ | 544 | $ | 1,447 | $ | 116 | $ | 1,447 | |||||||||
Commercial real estate - owner occupied | 439 | 196 | 705 | 439 | 705 | ||||||||||||||
Commercial real estate - non-owner occupied | 723 | 723 | 142 | 723 | 142 | ||||||||||||||
Multifamily real estate | — | — | 656 | — | 656 | ||||||||||||||
Commercial & Industrial | 117 | 422 | 494 | 117 | 494 | ||||||||||||||
Residential 1-4 Family | 1,302 | 2,247 | 5,530 | 1,302 | 5,530 | ||||||||||||||
Auto | 144 | 53 | 222 | 144 | 222 | ||||||||||||||
HELOC | 642 | 1,315 | 1,289 | 642 | 1,289 | ||||||||||||||
Consumer and all other | 50 | 223 | 418 | 50 | 418 | ||||||||||||||
Loans ≥ 90 days and still accruing | $ | 3,533 | $ | 5,723 | $ | 10,903 | $ | 3,533 | $ | 10,903 | |||||||||
Total NPAs and loans ≥ 90 days | $ | 27,775 | $ | 33,061 | $ | 42,646 | $ | 27,775 | $ | 42,646 | |||||||||
NPAs / total outstanding loans | 0.41 | % | 0.47 | % | 0.58 | % | 0.41 | % | 0.58 | % | |||||||||
NPAs / total assets | 0.30 | % | 0.35 | % | 0.42 | % | 0.30 | % | 0.42 | % | |||||||||
ALL / nonperforming loans | 322.94 | % | 262.75 | % | 339.71 | % | 322.94 | % | 339.71 | % | |||||||||
ALL / nonperforming assets | 144.68 | % | 125.83 | % | 101.89 | % | 144.68 | % | 101.89 | % | |||||||||
Troubled Debt Restructurings | |||||||||||||||||||
Performing | $ | 11,885 | $ | 11,486 | $ | 19,880 | $ | 11,885 | $ | 19,880 | |||||||||
Nonperforming | 1,658 | 1,470 | 2,244 | 1,658 | 2,244 | ||||||||||||||
Total troubled debt restructurings | $ | 13,543 | $ | 12,956 | $ | 22,124 | $ | 13,543 | $ | 22,124 | |||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
6/30/16 | 3/31/16 | 6/30/15 | 6/30/16 | 6/30/15 | |||||||||||||||
Past Due Detail | |||||||||||||||||||
Construction and land development | $ | 402 | $ | 2,676 | $ | 248 | $ | 402 | $ | 248 | |||||||||
Commercial real estate - owner occupied | 912 | 1,787 | 169 | 912 | 169 | ||||||||||||||
Commercial real estate - non-owner occupied | 267 | 24 | 1,427 | 267 | 1,427 | ||||||||||||||
Multifamily real estate | — | 155 | 1,909 | — | 1,909 | ||||||||||||||
Commercial & Industrial | 2,464 | 985 | 1,256 | 2,464 | 1,256 | ||||||||||||||
Residential 1-4 Family | 5,476 | 13,711 | 3,854 | 5,476 | 3,854 | ||||||||||||||
Auto | 1,282 | 1,519 | 1,663 | 1,282 | 1,663 | ||||||||||||||
HELOC | 1,347 | 1,870 | 2,515 | 1,347 | 2,515 | ||||||||||||||
Consumer and all other | 1,364 | 736 | 2,106 | 1,364 | 2,106 | ||||||||||||||
Loans 30-59 days past due | $ | 13,514 | $ | 23,463 | $ | 15,147 | $ | 13,514 | $ | 15,147 | |||||||||
Construction and land development | $ | 1,177 | $ | 724 | $ | 326 | $ | 1,177 | $ | 326 | |||||||||
Commercial real estate - owner occupied | — | 963 | 341 | — | 341 | ||||||||||||||
Commercial real estate - non-owner occupied | — | 276 | 1,199 | — | 1,199 | ||||||||||||||
Commercial & Industrial | 62 | 284 | 284 | 62 | 284 | ||||||||||||||
Residential 1-4 Family | 5,033 | 1,111 | 4,410 | 5,033 | 4,410 | ||||||||||||||
Auto | 377 | 126 | 234 | 377 | 234 | ||||||||||||||
HELOC | 1,228 | 388 | 387 | 1,228 | 387 | ||||||||||||||
Consumer and all other | 412 | 1,996 | 263 | 412 | 263 | ||||||||||||||
Loans 60-89 days past due | $ | 8,289 | $ | 5,868 | $ | 7,444 | $ | 8,289 | $ | 7,444 | |||||||||
Alternative Performance Measures (non-GAAP) | |||||||||||||||||||
Tangible Common Equity (3) | |||||||||||||||||||
Ending equity | $ | 989,201 | $ | 980,978 | $ | 988,134 | $ | 989,201 | $ | 988,134 | |||||||||
Less: Ending goodwill | 297,659 | 293,522 | 293,522 | 297,659 | 293,522 | ||||||||||||||
Less: Ending core deposit intangibles | 19,685 | 21,430 | 27,394 | 19,685 | 27,394 | ||||||||||||||
Less: Ending other amortizable intangibles | 3,764 | — | — | 3,764 | — | ||||||||||||||
Ending tangible common equity (non-GAAP) | $ | 668,093 | $ | 666,026 | $ | 667,218 | $ | 668,093 | $ | 667,218 | |||||||||
Average equity | $ | 987,147 | $ | 989,414 | $ | 991,093 | $ | 988,281 | $ | 986,844 | |||||||||
Less: Average goodwill | 294,886 | 293,522 | 293,522 | 294,204 | 293,522 | ||||||||||||||
Less: Average core deposit intangibles | 20,517 | 22,330 | 28,432 | 21,424 | 29,508 | ||||||||||||||
Less: Average other amortizable intangibles | 1,241 | — | — | 620 | — | ||||||||||||||
Average tangible common equity (non-GAAP) | $ | 670,503 | $ | 673,562 | $ | 669,139 | $ | 672,033 | $ | 663,814 | |||||||||
ALL to loans, adjusted for acquisition accounting (non-GAAP)(4) | |||||||||||||||||||
Allowance for loan losses | $ | 35,074 | $ | 34,399 | $ | 32,344 | $ | 35,074 | $ | 32,344 | |||||||||
Remaining fair value mark on purchased performing loans | 19,092 | 19,994 | 23,010 | 19,092 | 23,010 | ||||||||||||||
Adjusted allowance for loan losses | $ | 54,166 | $ | 54,393 | $ | 55,354 | $ | 54,166 | $ | 55,354 | |||||||||
Loans, net of deferred fees | $ | 5,941,098 | $ | 5,780,502 | $ | 5,510,385 | $ | 5,941,098 | $ | 5,510,385 | |||||||||
Remaining fair value mark on purchased performing loans | 19,092 | 19,994 | 23,010 | 19,092 | 23,010 | ||||||||||||||
Less: Purchased credit impaired loans, net of fair value mark | 67,170 | 70,105 | 87,841 | 67,170 | 87,841 | ||||||||||||||
Adjusted loans, net of deferred fees | $ | 5,893,020 | $ | 5,730,391 | $ | 5,445,554 | $ | 5,893,020 | $ | 5,445,554 | |||||||||
ALL / gross loans, adjusted for acquisition accounting | 0.92 | % | 0.95 | % | 1.02 | % | 0.92 | % | 1.02 | % | |||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
6/30/16 | 3/31/16 | 6/30/15 | 6/30/16 | 6/30/15 | |||||||||||||||
Mortgage Origination Volume | |||||||||||||||||||
Refinance Volume | $ | 47,033 | $ | 37,304 | $ | 43,385 | $ | 84,337 | $ | 108,934 | |||||||||
Construction Volume | 21,751 | 14,894 | 20,946 | 36,645 | 40,498 | ||||||||||||||
Purchase Volume | 71,297 | 46,013 | 75,971 | 117,310 | 129,584 | ||||||||||||||
Total Mortgage loan originations | $ | 140,081 | $ | 98,211 | $ | 140,302 | $ | 238,292 | $ | 279,016 | |||||||||
% of originations that are refinances | 33.6 | % | 38.0 | % | 30.9 | % | 35.4 | % | 39.0 | % | |||||||||
Other Data | |||||||||||||||||||
End of period full-time employees | 1,423 | 1,400 | 1,443 | 1,423 | 1,443 | ||||||||||||||
Number of full-service branches | 120 | 124 | 131 | 120 | 131 | ||||||||||||||
Number of full automatic transaction machines (ATMs) | 200 | 201 | 199 | 200 | 199 | ||||||||||||||
(1) The core metrics, FTE, exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.
(2) All ratios at June 30, 2016 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(3) Tangible common equity is used in the calculation of certain capital and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.
(4) The allowance for loan losses ratio, adjusted for acquisition accounting (non-GAAP), includes an adjustment for the fair value mark on purchased performing loans. The purchased performing loans are reported net of the related fair value mark in loans, net of deferred fees, on the Company’s Consolidated Balance Sheet; therefore, the fair value mark is added back to the balance to represent the total loan portfolio. The adjusted allowance for loan losses, including the fair value mark, represents the total reserve on the Company’s loan portfolio. The PCI loans, net of the respective fair value mark, are removed from the loans, net of deferred fees, as these PCI loans are not covered by the allowance established by the Company unless changes in expected cash flows indicate that one of the PCI loan pools are impaired, at which time an allowance for PCI loans will be established. GAAP requires the acquired allowance for loan losses not be carried over in an acquisition or merger. The Company believes the presentation of the allowance for loan losses ratio, adjusted for acquisition accounting, is useful to investors because the acquired loans were purchased at a market discount with no allowance for loan losses carried over to the Company, and the fair value mark on the purchased performing loans represents the allowance associated with those purchased loans. The Company believes that this measure is a better reflection of the reserves on the Company’s loan portfolio.
UNION BANKSHARES CORPORATION AND SUBSIDIARIES | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
(Dollars in thousands, except share data) | |||||||||||
June 30, | December 31, | June 30, | |||||||||
2016 | 2015 | 2015 | |||||||||
ASSETS | |||||||||||
Cash and cash equivalents: | |||||||||||
Cash and due from banks | $ | 128,896 | $ | 111,323 | $ | 109,480 | |||||
Interest-bearing deposits in other banks | 87,887 | 29,670 | 26,334 | ||||||||
Federal funds sold | 251 | 1,667 | 1,019 | ||||||||
Total cash and cash equivalents | 217,034 | 142,660 | 136,833 | ||||||||
Securities available for sale, at fair value | 949,663 | 903,292 | 888,362 | ||||||||
Securities held to maturity, at carrying value | 202,917 | 205,374 | 201,072 | ||||||||
Restricted stock, at cost | 62,206 | 51,828 | 50,171 | ||||||||
Loans held for sale | 38,114 | 36,030 | 39,450 | ||||||||
Loans held for investment, net of deferred fees and costs | 5,941,098 | 5,671,462 | 5,510,385 | ||||||||
Less allowance for loan losses | 35,074 | 34,047 | 32,344 | ||||||||
Net loans held for investment | 5,906,024 | 5,637,415 | 5,478,041 | ||||||||
Premises and equipment, net | 124,032 | 126,028 | 132,681 | ||||||||
Other real estate owned, net of valuation allowance | 13,381 | 15,299 | 22,222 | ||||||||
Core deposit intangibles, net | 19,685 | 23,310 | 27,394 | ||||||||
Goodwill | 297,659 | 293,522 | 293,522 | ||||||||
Bank owned life insurance | 176,413 | 173,687 | 141,284 | ||||||||
Other assets | 93,433 | 84,846 | 86,674 | ||||||||
Total assets | $ | 8,100,561 | $ | 7,693,291 | $ | 7,497,706 | |||||
LIABILITIES | |||||||||||
Noninterest-bearing demand deposits | $ | 1,392,734 | $ | 1,372,937 | $ | 1,289,676 | |||||
Interest-bearing deposits | 4,703,092 | 4,590,999 | 4,494,798 | ||||||||
Total deposits | 6,095,826 | 5,963,936 | 5,784,474 | ||||||||
Securities sold under agreements to repurchase | 121,262 | 84,977 | 119,680 | ||||||||
Other short-term borrowings | 557,000 | 304,000 | 261,000 | ||||||||
Long-term borrowings | 274,547 | 291,198 | 300,294 | ||||||||
Other liabilities | 62,725 | 53,813 | 44,124 | ||||||||
Total liabilities | 7,111,360 | 6,697,924 | 6,509,572 | ||||||||
Commitments and contingencies | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,619,867 shares, 44,785,674 shares, and 45,112,893 shares, respectively. | 57,537 | 59,159 | 59,672 | ||||||||
Additional paid-in capital | 605,018 | 631,822 | 640,936 | ||||||||
Retained earnings | 317,747 | 298,134 | 278,297 | ||||||||
Accumulated other comprehensive income | 8,899 | 6,252 | 9,229 | ||||||||
Total stockholders' equity | 989,201 | 995,367 | 988,134 | ||||||||
Total liabilities and stockholders' equity | $ | 8,100,561 | $ | 7,693,291 | $ | 7,497,706 | |||||
UNION BANKSHARES CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Interest and dividend income: | |||||||||||||||||||
Interest and fees on loans | $ | 64,747 | $ | 62,947 | $ | 62,604 | $ | 127,694 | $ | 123,057 | |||||||||
Interest on deposits in other banks | 65 | 47 | 24 | 112 | 41 | ||||||||||||||
Interest and dividends on securities: | |||||||||||||||||||
Taxable | 4,510 | 4,316 | 3,860 | 8,826 | 7,667 | ||||||||||||||
Nontaxable | 3,459 | 3,439 | 3,366 | 6,898 | 6,690 | ||||||||||||||
Total interest and dividend income | 72,781 | 70,749 | 69,854 | 143,530 | 137,455 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Interest on deposits | 4,197 | 4,195 | 3,680 | 8,393 | 7,000 | ||||||||||||||
Interest on federal funds purchased | 2 | 2 | 4 | 3 | 5 | ||||||||||||||
Interest on short-term borrowings | 708 | 621 | 255 | 1,329 | 505 | ||||||||||||||
Interest on long-term borrowings | 2,098 | 2,200 | 2,099 | 4,298 | 4,160 | ||||||||||||||
Total interest expense | 7,005 | 7,018 | 6,038 | 14,023 | 11,670 | ||||||||||||||
Net interest income | 65,776 | 63,731 | 63,816 | 129,507 | 125,785 | ||||||||||||||
Provision for credit losses | 2,300 | 2,604 | 3,749 | 4,904 | 5,499 | ||||||||||||||
Net interest income after provision for credit losses | 63,476 | 61,127 | 60,067 | 124,603 | 120,286 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges on deposit accounts | 4,754 | 4,734 | 4,622 | 9,488 | 8,835 | ||||||||||||||
Other service charges and fees | 4,418 | 4,156 | 4,051 | 8,574 | 7,634 | ||||||||||||||
Fiduciary and asset management fees | 2,333 | 2,138 | 2,312 | 4,471 | 4,531 | ||||||||||||||
Mortgage banking income, net | 2,972 | 2,146 | 2,574 | 5,117 | 4,952 | ||||||||||||||
Gains on securities transactions, net | 3 | 143 | 404 | 146 | 597 | ||||||||||||||
Bank owned life insurance income | 1,361 | 1,372 | 1,134 | 2,734 | 2,269 | ||||||||||||||
Other operating income | 2,152 | 1,225 | 1,115 | 3,377 | 2,448 | ||||||||||||||
Total noninterest income | 17,993 | 15,914 | 16,212 | 33,907 | 31,266 | ||||||||||||||
Noninterest expenses: | |||||||||||||||||||
Salaries and benefits | 28,519 | 28,048 | 25,561 | 56,567 | 53,052 | ||||||||||||||
Occupancy expenses | 4,809 | 4,976 | 5,173 | 9,785 | 10,305 | ||||||||||||||
Furniture and equipment expenses | 2,595 | 2,636 | 2,989 | 5,232 | 5,803 | ||||||||||||||
Printing, postage, and supplies | 1,280 | 1,139 | 1,408 | 2,419 | 2,779 | ||||||||||||||
Communications expense | 927 | 1,089 | 1,143 | 2,016 | 2,322 | ||||||||||||||
Technology and data processing | 3,608 | 3,814 | 3,216 | 7,422 | 6,471 | ||||||||||||||
Professional services | 2,548 | 1,989 | 1,669 | 4,537 | 3,017 | ||||||||||||||
Marketing and advertising expense | 1,924 | 1,938 | 2,372 | 3,863 | 4,060 | ||||||||||||||
FDIC assessment premiums and other insurance | 1,379 | 1,362 | 1,280 | 2,741 | 2,679 | ||||||||||||||
Other taxes | 1,607 | 1,618 | 1,554 | 3,225 | 3,105 | ||||||||||||||
Loan-related expenses | 855 | 599 | 687 | 1,454 | 1,371 | ||||||||||||||
OREO and credit-related expenses | 894 | 569 | 1,965 | 1,463 | 3,152 | ||||||||||||||
Amortization of intangible assets | 1,745 | 1,880 | 2,138 | 3,625 | 4,361 | ||||||||||||||
Training and other personnel costs | 905 | 744 | 912 | 1,649 | 1,633 | ||||||||||||||
Other expenses | 1,656 | 1,871 | 3,174 | 3,525 | 4,971 | ||||||||||||||
Total noninterest expenses | 55,251 | 54,272 | 55,241 | 109,523 | 109,081 | ||||||||||||||
Income before income taxes | 26,218 | 22,769 | 21,038 | 48,987 | 42,471 | ||||||||||||||
Income tax expense | 6,881 | 5,808 | 5,690 | 12,689 | 11,422 | ||||||||||||||
Net income | $ | 19,337 | $ | 16,961 | $ | 15,348 | $ | 36,298 | $ | 31,049 | |||||||||
Basic earnings per common share | $ | 0.44 | $ | 0.38 | $ | 0.34 | $ | 0.82 | $ | 0.69 | |||||||||
Diluted earnings per common share | $ | 0.44 | $ | 0.38 | $ | 0.34 | $ | 0.82 | $ | 0.69 | |||||||||
UNION BANKSHARES CORPORATION AND SUBSIDIARIES | |||||||||||||||
SEGMENT FINANCIAL INFORMATION | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Community Bank | Mortgage | Eliminations | Consolidated | ||||||||||||
Three Months Ended June 30, 2016 | |||||||||||||||
Net interest income | $ | 65,478 | $ | 298 | $ | — | $ | 65,776 | |||||||
Provision for credit losses | 2,260 | 40 | — | 2,300 | |||||||||||
Net interest income after provision for credit losses | 63,218 | 258 | — | 63,476 | |||||||||||
Noninterest income | 14,940 | 3,207 | (154 | ) | 17,993 | ||||||||||
Noninterest expenses | 52,766 | 2,639 | (154 | ) | 55,251 | ||||||||||
Income before income taxes | 25,392 | 826 | — | 26,218 | |||||||||||
Income tax expense | 6,594 | 287 | — | 6,881 | |||||||||||
Net income | $ | 18,798 | $ | 539 | $ | — | $ | 19,337 | |||||||
Total assets | $ | 8,094,176 | $ | 75,802 | $ | (69,417 | ) | $ | 8,100,561 | ||||||
Three Months Ended March 31, 2016 | |||||||||||||||
Net interest income | $ | 63,425 | $ | 306 | $ | — | $ | 63,731 | |||||||
Provision for credit losses | 2,500 | 104 | — | 2,604 | |||||||||||
Net interest income after provision for credit losses | 60,925 | 202 | — | 61,127 | |||||||||||
Noninterest income | 13,608 | 2,477 | (171 | ) | 15,914 | ||||||||||
Noninterest expenses | 51,844 | 2,599 | (171 | ) | 54,272 | ||||||||||
Income before income taxes | 22,689 | 80 | — | 22,769 | |||||||||||
Income tax expense | 5,782 | 26 | — | 5,808 | |||||||||||
Net income | $ | 16,907 | $ | 54 | $ | — | $ | 16,961 | |||||||
Total assets | $ | 7,825,652 | $ | 55,069 | $ | (48,110 | ) | $ | 7,832,611 | ||||||
Three Months Ended June 30, 2015 | |||||||||||||||
Net interest income | $ | 63,441 | $ | 375 | $ | — | $ | 63,816 | |||||||
Provision for credit losses | 3,700 | 49 | — | 3,749 | |||||||||||
Net interest income after provision for credit losses | 59,741 | 326 | — | 60,067 | |||||||||||
Noninterest income | 13,523 | 2,860 | (171 | ) | 16,212 | ||||||||||
Noninterest expenses | 52,365 | 3,047 | (171 | ) | 55,241 | ||||||||||
Income before income taxes | 20,899 | 139 | — | 21,038 | |||||||||||
Income tax expense | 5,646 | 44 | — | 5,690 | |||||||||||
Net income | $ | 15,253 | $ | 95 | $ | — | $ | 15,348 | |||||||
Total assets | $ | 7,495,564 | $ | 55,563 | $ | (53,421 | ) | $ | 7,497,706 | ||||||
Six Months Ended June 30, 2016 | |||||||||||||||
Net interest income | $ | 128,903 | $ | 604 | $ | — | $ | 129,507 | |||||||
Provision for credit losses | 4,760 | 144 | — | 4,904 | |||||||||||
Net interest income after provision for credit losses | 124,143 | 460 | — | 124,603 | |||||||||||
Noninterest income | 28,548 | 5,684 | (325 | ) | 33,907 | ||||||||||
Noninterest expenses | 104,610 | 5,238 | (325 | ) | 109,523 | ||||||||||
Income before income taxes | 48,081 | 906 | — | 48,987 | |||||||||||
Income tax expense | 12,376 | 313 | — | 12,689 | |||||||||||
Net income | $ | 35,705 | $ | 593 | $ | — | $ | 36,298 | |||||||
Total assets | $ | 8,094,176 | $ | 75,802 | $ | (69,417 | ) | $ | 8,100,561 | ||||||
Six Months Ended June 30, 2015 | |||||||||||||||
Net interest income | $ | 125,164 | $ | 621 | $ | — | $ | 125,785 | |||||||
Provision for credit losses | 5,450 | 49 | — | 5,499 | |||||||||||
Net interest income after provision for credit losses | 119,714 | 572 | — | 120,286 | |||||||||||
Noninterest income | 26,371 | 5,236 | (341 | ) | 31,266 | ||||||||||
Noninterest expenses | 103,337 | 6,085 | (341 | ) | 109,081 | ||||||||||
Income (loss) before income taxes | 42,748 | (277 | ) | — | 42,471 | ||||||||||
Income tax expense (benefit) | 11,527 | (105 | ) | — | 11,422 | ||||||||||
Net income (loss) | $ | 31,221 | $ | (172 | ) | $ | — | $ | 31,049 | ||||||
Total assets | $ | 7,495,564 | $ | 55,563 | $ | (53,421 | ) | $ | 7,497,706 | ||||||
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) | |||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
June 30, 2016 | March 31, 2016 | ||||||||||||||||||||
Average Balance | Interest Income / Expense | Yield / Rate (1) | Average Balance | Interest Income / Expense | Yield / Rate (1) | ||||||||||||||||
Assets: | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 755,655 | $ | 4,510 | 2.40 | % | $ | 743,724 | $ | 4,316 | 2.33 | % | |||||||||
Tax-exempt | 447,117 | 5,321 | 4.79 | % | 443,426 | 5,291 | 4.80 | % | |||||||||||||
Total securities | 1,202,772 | 9,831 | 3.29 | % | 1,187,150 | 9,607 | 3.25 | % | |||||||||||||
Loans, net (2) (3) | 5,863,007 | 65,115 | 4.47 | % | 5,709,998 | 63,326 | 4.46 | % | |||||||||||||
Other earning assets | 87,848 | 286 | 1.31 | % | 71,840 | 305 | 1.71 | % | |||||||||||||
Total earning assets | 7,153,627 | $ | 75,232 | 4.23 | % | 6,968,988 | $ | 73,238 | 4.23 | % | |||||||||||
Allowance for loan losses | (35,282 | ) | (35,034 | ) | |||||||||||||||||
Total non-earning assets | 831,231 | 830,876 | |||||||||||||||||||
Total assets | $ | 7,949,576 | $ | 7,764,830 | |||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Transaction and money market accounts | $ | 2,882,468 | $ | 1,448 | 0.20 | % | $ | 2,809,961 | $ | 1,393 | 0.20 | % | |||||||||
Regular savings | 595,870 | 224 | 0.15 | % | 580,923 | 217 | 0.15 | % | |||||||||||||
Time deposits | 1,164,561 | 2,525 | 0.87 | % | 1,171,972 | 2,585 | 0.89 | % | |||||||||||||
Total interest-bearing deposits | 4,642,899 | 4,197 | 0.36 | % | 4,562,856 | 4,195 | 0.37 | % | |||||||||||||
Other borrowings (4) | 881,027 | 2,808 | 1.28 | % | 816,943 | 2,823 | 1.39 | % | |||||||||||||
Total interest-bearing liabilities | 5,523,926 | $ | 7,005 | 0.51 | % | 5,379,799 | $ | 7,018 | 0.52 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | 1,382,646 | 1,336,548 | |||||||||||||||||||
Other liabilities | 55,857 | 59,069 | |||||||||||||||||||
Total liabilities | 6,962,429 | 6,775,416 | |||||||||||||||||||
Stockholders' equity | 987,147 | 989,414 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,949,576 | $ | 7,764,830 | |||||||||||||||||
Net interest income | $ | 68,227 | $ | 66,220 | |||||||||||||||||
Interest rate spread (5) | 3.72 | % | 3.71 | % | |||||||||||||||||
Cost of funds | 0.39 | % | 0.41 | % | |||||||||||||||||
Net interest margin (6) | 3.84 | % | 3.82 | % | |||||||||||||||||
(1) Rates and yields are annualized and calculated from actual, not rounded, amounts in thousands, which appear above. | |||||||||||||||||||||
(2) Nonaccrual loans are included in average loans outstanding. | |||||||||||||||||||||
(3) Interest income on loans includes $1.3 million and $1.1 million for the three months ended June 30, 2016 and March 31, 2016, respectively, in accretion of the fair market value adjustments related to acquisitions. | |||||||||||||||||||||
(4) Interest expense on borrowings includes $143,000 and $62,000 for the three months ended June 30, 2016 and March 31, 2016, respectively, in accretion of the fair market value adjustments related to acquisitions. | |||||||||||||||||||||
(5) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%. | |||||||||||||||||||||
(6) Core net interest margin excludes purchase accounting adjustments and was 3.76% for both the three months ended June 30, 2016 and March 31, 2016. | |||||||||||||||||||||