United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K
________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 2016
UNION BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
________________________
Virginia | 0-20293 | 54-1598552 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
1051 East Cary Street
Suite 1200
Richmond, Virginia 23219
(Address of principal executive offices, including Zip Code)
________________________
Registrant’s telephone number, including area code: (804) 633-5031
________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) |
¨ | Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13c-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On January 20, 2016, Union Bankshares Corporation (the “Company”) issued a press release announcing its financial results for the three and twelve months ended December 31, 2015. A copy of the Company’s press release is attached as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit No. | Description | ||
99.1 | Union Bankshares Corporation press release dated January 20, 2016. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNION BANKSHARES CORPORATION | ||||
Date: January 20, 2016 | By: | /s/ Robert M. Gorman | ||
Robert M. Gorman | ||||
Executive Vice President and | ||||
Chief Financial Officer |
Exhibit 99.1
Contact: | Robert M. Gorman - (804) 523-7828 |
Executive Vice President / Chief Financial Officer
UNION BANKSHARES REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
Richmond, Va., January 20, 2016 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $17.8 million and earnings per share of $0.40 for its fourth quarter ended December 31, 2015. For the year ended December 31, 2015, net income was $67.1 million and earnings per share was $1.49.
“Union delivered solid earnings in the fourth quarter despite the impact of OREO valuation adjustments related to two long held properties recorded during the period,” said G. William Beale, president and chief executive officer for Union Bankshares Corporation. “During the fourth quarter and throughout 2015, we made measurable progress towards our strategic growth objectives that will enable Union to consistently generate profitable growth for our shareholders through the combination of net loan, core deposit and household growth and our efforts to improve efficiency. During the quarter, loans grew by 9.2% while deposits grew by 10% on an annualized basis as our commercial, retail, wealth management and mortgage teams continue to work together to attract new customers while deepening our relationships with existing customers.
Looking forward to 2016, we remain focused on leveraging Union’s unique franchise for sustainable growth and to deliver top-tier financial performance for our shareholders over the long-term. We are also working to enhance and upgrade our infrastructure to support initiatives that will result in an increased rate of organic growth while improving operating efficiency across the Company.”
Select highlights for the fourth quarter include:
· | Net income for the community bank segment was $17.9 million, or $0.40 per share, for the fourth quarter, compared to $18.2 million, or $0.40 per share, for the third quarter. Operating earnings(1) for the community bank segment for the year ended December 31, 2015 was $67.3 million, or $1.49 per share, compared to operating earnings(1) of $69.4 million, or $1.50 per share, for the year ended December 31, 2014. |
· | The mortgage segment reported a net loss of $90,000 for the fourth quarter, a decline from net income of $59,000 for the third quarter. The mortgage segment reported a net loss of $202,000 for the year ended December 31, 2015 compared to a net loss of $3.5 million for the year ended December 31, 2014. |
· | Fourth quarter net income includes after-tax valuation adjustments on other real estate owned (“OREO”) totaling $2.7 million, or $0.06 per share, related to updated appraisals on two large OREO properties. |
· | As previously announced, the Company sold its credit card portfolio in the fourth quarter, resulting in an after-tax benefit of $805,000. |
· | Period end loans held for investment grew $127.8 million, or 9.2% (annualized), from September 30, 2015, while average loans increased $87.2 million, or 6.3% (annualized), during the quarter. Adjusted for the sale of the credit card portfolio, loan balances increased $349.7 million, or 6.6%, from December 31, 2014. |
· | Period-end deposits increased $145.1 million, or 10.0% (annualized), from September 30, 2015 and increased $325.2 million, or 5.8%, from December 31, 2014. Average deposits increased $91.3 million, or 6.3% (annualized), during the quarter. |
(1) For a reconciliation of the non-GAAP measures operating earnings and earnings per share (“EPS”), see “Alternative Performance Measures (non-GAAP)” section of the Key Financial Results.
NET INTEREST INCOME
Tax-equivalent net interest income was $64.9 million, a decrease of $788,000 from the third quarter, primarily driven by lower earning asset yields and reduced levels of net accretion related to acquisition accounting. The fourth quarter tax-equivalent net interest margin decreased 10 basis points to 3.76% from 3.86% in the previous quarter. Core tax-equivalent net interest margin (which excludes the 7 basis point impact of acquisition accounting accretion) declined by 8 basis points to 3.69% from 3.77% in the previous quarter. The decrease in the core tax-equivalent net interest margin was principally due to the 9 basis point decline in interest-earning asset yields outpacing the 1 basis point reduction in cost of funds. Of the 9 basis point decline in interest-earning asset yields, 4 basis points related to the sale of the credit card portfolio in the fourth quarter. The remainder of the decline in interest-earning asset yields was primarily driven by lower loan yields on new and renewed loans and lower levels of loan fees recorded in the current quarter.
The Company continues to believe that core net interest margin will decline modestly over the next several quarters as decreases in interest-earning asset yields are projected to outpace any further declines in interest-bearing liabilities rates.
The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter, net accretion related to acquisition accounting declined by $243,000, or 2 basis points within tax-equivalent net interest margin, from the prior quarter to $1.4 million for the quarter ended December 31, 2015. The third and fourth quarters of 2015, the full year 2015, and remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
Accretion | Accretion (Amortization) | |||||||||||||||
Loan | Certificates of Deposit | Borrowings | Total | |||||||||||||
For the quarter ended September 30, 2015 | $ | 1,364 | $ | 154 | $ | 87 | $ | 1,605 | ||||||||
For the quarter ended December 31, 2015 | 1,300 | - | 62 | 1,362 | ||||||||||||
For the year ended December 31, 2015 | 4,355 | 1,843 | 424 | 6,622 | ||||||||||||
For the years ending: | ||||||||||||||||
2016 | 3,801 | - | 271 | 4,072 | ||||||||||||
2017 | 3,738 | - | 170 | 3,908 | ||||||||||||
2018 | 3,095 | - | (143 | ) | 2,952 | |||||||||||
2019 | 2,442 | - | (286 | ) | 2,156 | |||||||||||
2020 | 1,960 | - | (301 | ) | 1,659 | |||||||||||
Thereafter | 10,576 | - | (5,622 | ) | 4,954 |
ASSET QUALITY/LOAN LOSS PROVISION
Overview
During the fourth quarter, the Company experienced declines in nonaccrual loan levels and other real estate owned balances from the prior quarter and the prior year end. Excluding the $4.2 million in valuation adjustments recorded in the current quarter related to updated appraisals on two large OREO properties, the OREO balance declined $2.6 million, or 11.6%, from the prior quarter. The loan loss provision of $2.0 million was consistent with the prior quarter and decreased $2.5 million from the prior year’s fourth quarter due to lower levels of net charge-offs and continued improvements in asset quality. The allowance for loan losses increased $778,000 from the prior quarter due to loan growth.
All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired loans (“PCI”) totaling $73.7 million (net of fair value mark).
Nonperforming Assets (“NPAs”)
At December 31, 2015, nonperforming assets totaled $27.2 million, a decrease of $20.1 million, or 42.5%, from December 31, 2014 and a decline of $7.8 million, or 22.3%, from September 30, 2015. In addition, NPAs as a percentage of total outstanding loans declined 41 basis points from 0.89% a year earlier and decreased 15 basis points from 0.63% last quarter to 0.48% in the current quarter. The following table shows a summary of asset quality balances at the quarter ended (dollars in thousands):
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | ||||||||||||||||
Nonaccrual loans, excluding PCI loans | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | $ | 19,255 | ||||||||||
Foreclosed properties | 11,994 | 18,789 | 18,917 | 21,727 | 23,058 | |||||||||||||||
Former bank premises | 3,305 | 3,305 | 3,305 | 3,707 | 5,060 | |||||||||||||||
Total nonperforming assets | $ | 27,235 | $ | 35,060 | $ | 31,743 | $ | 42,819 | $ | 47,373 |
The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | ||||||||||||||||
Beginning Balance | $ | 12,966 | $ | 9,521 | $ | 17,385 | $ | 19,255 | $ | 20,279 | ||||||||||
Net customer payments | (1,493 | ) | (1,104 | ) | (4,647 | ) | (2,996 | ) | (4,352 | ) | ||||||||||
Additions | 2,344 | 5,213 | 581 | 4,379 | 7,413 | |||||||||||||||
Charge-offs | (1,245 | ) | (541 | ) | (2,171 | ) | (3,107 | ) | (1,839 | ) | ||||||||||
Loans returning to accruing status | (402 | ) | (123 | ) | (919 | ) | (53 | ) | (2,246 | ) | ||||||||||
Transfers to OREO | (234 | ) | - | (708 | ) | (93 | ) | - | ||||||||||||
Ending Balance | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | $ | 19,255 |
During the fourth quarter, the additions to nonaccrual loans were comprised of several smaller credit relationships.
The following table shows the activity in OREO for the quarter ended (dollars in thousands):
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | ||||||||||||||||
Beginning Balance | $ | 22,094 | $ | 22,222 | $ | 25,434 | $ | 28,118 | $ | 37,754 | ||||||||||
Additions of foreclosed property | 234 | 1,082 | 904 | 158 | 367 | |||||||||||||||
Additions of former bank premises | 1,822 | - | - | 402 | 63 | |||||||||||||||
Capitalized improvements | - | 9 | 243 | 56 | 424 | |||||||||||||||
Valuation adjustments | (4,229 | ) | (473 | ) | (710 | ) | (590 | ) | (381 | ) | ||||||||||
Proceeds from sales | (4,894 | ) | (767 | ) | (3,511 | ) | (2,748 | ) | (11,362 | ) | ||||||||||
Gains (losses) from sales | 272 | 21 | (138 | ) | 38 | 1,253 | ||||||||||||||
Ending Balance | $ | 15,299 | $ | 22,094 | $ | 22,222 | $ | 25,434 | $ | 28,118 |
During the fourth quarter, the majority of additions to OREO were related to former bank premises, which were subsequently sold in the fourth quarter. Additional sales of OREO were primarily related to residential real estate.
Past Due Loans
Past due loans still accruing interest totaled $42.9 million, or 0.76% of total loans, at December 31, 2015 compared to $48.1 million, or 0.90%, a year ago and $27.5 million, or 0.50%, at September 30, 2015. At December 31, 2015, loans past due 90 days or more and accruing interest totaled $5.8 million, or 0.10% of total loans, compared to $10.0 million, or 0.19%, a year ago and $5.2 million, or 0.09%, at September 30, 2015.
Net Charge-offs
For the fourth quarter, net charge-offs were $1.2 million, or 0.09% on an annualized basis, compared to $4.2 million, or 0.31%, for the same quarter last year and $1.0 million, or 0.07%, for the third quarter of 2015. For the year ended December 31, 2015, net charge-offs were $7.6 million, or 0.13%, compared to $5.6 million, or 0.10%, in the prior year.
Provision
The provision for loan losses for the current quarter was $2.0 million, a decrease of $2.5 million compared to the same quarter a year ago and consistent with the previous quarter. The decrease in provision for loan losses in the current quarter compared to the prior year was driven by reduced levels of net charge-offs during the current quarter and continued improvements in asset quality.
Allowance for Loan Losses
The allowance for loan losses (“ALL”) increased $778,000 from September 30, 2015 to $34.0 million at December 31, 2015 primarily due to loan growth during the quarter. The allowance for loan losses as a percentage of the total loan portfolio was 0.60% at December 31, 2015, 0.60% at September 30, 2015, and 0.61% at December 31, 2014. The ALL as a percentage of the total loan portfolio, adjusted for purchase accounting (non-GAAP), was 0.98% at December 31, 2015, a decrease from 1.01% from the prior quarter and a decrease from 1.08% from the quarter ended December 31, 2014. 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 285.3% at December 31, 2015, compared to 256.6% at September 30, 2015 and 168.2% at December 31, 2014. 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 $291,000, or 1.7%, to $17.0 million for the quarter ended December 31, 2015 from $16.7 million in the prior quarter. Customer-related fee income increased $113,000, primarily driven by higher overdraft fees. Other improvements in the current quarter included increased gains on sales of securities of $738,000 from the prior quarter as well as a $300,000 other-than-temporary impairment charge recognized in the prior quarter on a municipal security in the available-for-sale portfolio. Mortgage banking income declined $445,000, or 16.9%, from the prior quarter, related to decreased mortgage loan originations. Mortgage loan originations decreased by $35.1 million, or 23.7%, in the current quarter to $113.0 million from $148.1 million in the third quarter. Of the loan originations in the current quarter, 36.2% were refinances, which was an increase from 32.3% in the prior quarter.
NONINTEREST EXPENSE
Noninterest expense increased $1.2 million, or 2.2%, to $54.5 million for the quarter ended December 31, 2015 from $53.3 million in the prior quarter. OREO and credit-related costs increased $3.2 million due to $4.2 million in valuation adjustments recorded in the current quarter related to updated appraisals on two large OREO properties. Excluding the $4.2 million in OREO valuation adjustments, noninterest expense decreased $3.1 million, or 5.8%, compared to the prior quarter. This net decrease in noninterest expense is primarily attributable to reduced professional fees of $689,000; declines in salary and benefit expenses of $566,000 primarily related to lower group insurance costs; lower OREO and credit-related expenses of $523,000 due to reductions in OREO, foreclosure, and credit-related legal expenses as well as higher gains on sales of OREO property; declines in other loan-related expenses of $422,000; and reductions in marketing expenses of $406,000 related to the timing of advertising campaigns.
BALANCE SHEET
At December 31, 2015, total assets were $7.7 billion, an increase of $99.0 million from September 30, 2015 and an increase of $334.6 million from December 31, 2014. The increase in assets was mostly related to loan growth.
At December 31, 2015, loans held for investment were $5.7 billion, an increase of $127.8 million, or 9.2% (annualized), from September 30, 2015, while average loans increased $87.2 million, or 6.3% (annualized), from the prior quarter. Adjusted for the sale of the credit card portfolio, loans held for investment increased $349.7 million, or 6.6%, from December 31, 2014, while average loans increased $254.2 million, or 4.9%, from the prior year.
At December 31, 2015, total deposits were $6.0 billion, an increase of $145.1 million, or 10.0% (annualized), from September 30, 2015, while average deposits increased $91.3 million, or 6.3% (annualized), from the prior quarter. Total deposits increased $325.2 million, or 5.8%, from December 31, 2014, while average deposits increased $92.7 million, or 1.6%, from the prior year.
At December 31 and September 30, 2015, respectively, the Company had a common equity Tier 1 capital ratio of 10.55% and 10.75%, a Tier 1 capital ratio of 11.94% and 12.16%, a total capital ratio of 12.46% and 12.69%, and a leverage ratio of 10.68% and 10.80%.
The Company’s common equity to asset ratio at December 31, 2015, September 30, 2015, and December 31, 2014 was 12.94%, 13.10%, and 13.28%, respectively, while its tangible common equity to tangible assets ratio was 9.20%, 9.29%, and 9.27% at December 31, 2015, September 30, 2015, and December 31, 2014, respectively.
During the fourth quarter, the Company declared and paid cash dividends of $0.19 per common share, an increase of $0.02, or 11.8%, over the prior quarter’s dividend per common share.
On January 30, 2014, the Company’s Board of Directors authorized a share repurchase program to purchase up to $65.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program was authorized through December 31, 2015. On October 29, 2015, the Company’s Board of Directors authorized a new 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 repurchase program is authorized through December 31, 2016. The new stock repurchase authorization was in addition to the existing stock repurchase program approved by the Board of Directors on January 30, 2014, which had approximately $2.5 million remaining for repurchase and continued to be utilized until such authorization was completed prior to the December 31, 2015 expiration date. During the fourth quarter of 2015, the Company repurchased approximately 321,500 shares, totaling approximately $8.3 million. All shares were repurchased under the program authorized on January 30, 2014 prior to repurchasing shares under the program authorized on October 29, 2015. At December 31, 2015, approximately $21.1 million remained available under the current repurchase program.
* * * * * * *
ABOUT UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union Bank & Trust, which has 124 banking offices and 201 ATMs located throughout Virginia. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage products; and Union Insurance Group, LLC, which offers various lines of insurance products. Effective January 1, 2016, Union Investment Services, Inc., formerly a non-bank affiliate of the holding company, became a department under the Wealth Management Division of Union Bank & Trust.
Additional information on the Company is available at http://investors.bankatunion.com.
Union Bankshares Corporation will hold a conference call on Wednesday, January 20th 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 20849711.
ADOPTION OF NEW ACCOUNTING STANDARDS
The Company adopted ASU 2014-01, “Accounting for Investments in Qualified Affordable Housing Projects” as of January 1, 2015. As permitted by the guidance, the Company adopted the proportional amortization method of accounting for Qualified Affordable Housing Projects. The proportional amortization method amortizes the cost of the investment over the period in which the Company will receive tax credits and other tax benefits, and the resulting amortization is recognized as a component of income taxes attributable to continuing operations. Historically, these investments were accounted for under the equity method of accounting and the passive losses related to the investments were recognized within noninterest expense. The Company adopted this guidance in the first quarter of 2015 with retrospective application as required by the ASU. Prior period 2014 results and related metrics have been restated to conform to this presentation.
NON-GAAP MEASURES
In reporting the results of the quarter ended December 31, 2015, the Company has provided supplemental performance measures on an operating or tangible basis. Operating measures exclude acquisition costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude non-operating adjustments resulting from acquisition activity and allow investors to see the combined economic results of the organization. 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, 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 | Year Ended | |||||||||||||||||||
12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Interest and dividend income | $ | 69,317 | $ | 70,000 | $ | 68,511 | $ | 276,771 | $ | 274,945 | ||||||||||
Interest expense | 6,712 | 6,556 | 5,446 | 24,937 | 19,927 | |||||||||||||||
Net interest income | 62,605 | 63,444 | 63,065 | 251,834 | 255,018 | |||||||||||||||
Provision for credit losses | 2,010 | 2,062 | 4,500 | 9,571 | 7,800 | |||||||||||||||
Net interest income after provision for credit losses | 60,595 | 61,382 | 58,565 | 242,263 | 247,218 | |||||||||||||||
Noninterest income | 17,016 | 16,725 | 14,901 | 65,007 | 61,287 | |||||||||||||||
Noninterest expenses | 54,476 | 53,325 | 52,550 | 216,882 | 238,216 | |||||||||||||||
Income before income taxes | 23,135 | 24,782 | 20,916 | 90,388 | 70,289 | |||||||||||||||
Income tax expense | 5,321 | 6,566 | 5,951 | 23,309 | 18,125 | |||||||||||||||
Net income | $ | 17,814 | $ | 18,216 | $ | 14,965 | $ | 67,079 | $ | 52,164 | ||||||||||
Interest earned on earning assets (FTE) | $ | 71,655 | $ | 72,287 | $ | 70,516 | $ | 285,850 | $ | 283,072 | ||||||||||
Net interest income (FTE) | 64,943 | 65,731 | 65,070 | 260,913 | 263,145 | |||||||||||||||
Core deposit intangible amortization | 2,010 | 2,074 | 2,334 | 8,445 | 9,795 | |||||||||||||||
Net income - community bank segment | $ | 17,904 | $ | 18,157 | $ | 15,854 | $ | 67,281 | $ | 55,662 | ||||||||||
Net income (loss) - mortgage segment | (90 | ) | 59 | (889 | ) | (202 | ) | (3,498 | ) | |||||||||||
Key Ratios | ||||||||||||||||||||
Earnings per common share, diluted | $ | 0.40 | $ | 0.40 | $ | 0.33 | $ | 1.49 | $ | 1.13 | ||||||||||
Return on average assets (ROA) | 0.93 | % | 0.96 | % | 0.82 | % | 0.90 | % | 0.72 | % | ||||||||||
Return on average equity (ROE) | 7.08 | % | 7.26 | % | 6.05 | % | 6.76 | % | 5.30 | % | ||||||||||
Return on average tangible common equity (ROTCE) | 10.38 | % | 10.70 | % | 9.11 | % | 10.00 | % | 8.02 | % | ||||||||||
Efficiency ratio (FTE) | 66.47 | % | 64.67 | % | 65.71 | % | 66.54 | % | 73.43 | % | ||||||||||
Efficiency ratio - community bank segment (FTE) | 65.38 | % | 63.65 | % | 63.05 | % | 65.37 | % | 70.81 | % | ||||||||||
Efficiency ratio - mortgage bank segment (FTE) | 105.16 | % | 94.77 | % | 155.98 | % | 101.79 | % | 148.71 | % | ||||||||||
Net interest margin (FTE) | 3.76 | % | 3.86 | % | 4.01 | % | 3.89 | % | 4.09 | % | ||||||||||
Yields on earning assets (FTE) | 4.15 | % | 4.25 | % | 4.35 | % | 4.26 | % | 4.40 | % | ||||||||||
Cost of interest-bearing liabilities (FTE) | 0.51 | % | 0.50 | % | 0.43 | % | 0.48 | % | 0.39 | % | ||||||||||
Cost of funds (FTE) | 0.39 | % | 0.39 | % | 0.34 | % | 0.37 | % | 0.31 | % | ||||||||||
Net interest margin, core (FTE) (1) | 3.69 | % | 3.77 | % | 3.88 | % | 3.79 | % | 3.93 | % | ||||||||||
Yields on earning assets (FTE), core (1) | 4.08 | % | 4.17 | % | 4.32 | % | 4.19 | % | 4.39 | % | ||||||||||
Cost of interest-bearing liabilities (FTE), core (1) | 0.52 | % | 0.52 | % | 0.57 | % | 0.53 | % | 0.58 | % | ||||||||||
Cost of funds (FTE), core (1) | 0.39 | % | 0.40 | % | 0.44 | % | 0.40 | % | 0.46 | % | ||||||||||
Key Operating Ratios - excluding merger costs (non-GAAP) (2) | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Operating net income | $ | 17,814 | $ | 18,216 | $ | 15,528 | $ | 67,079 | $ | 65,888 | ||||||||||
Operating diluted earnings per share | $ | 0.40 | $ | 0.40 | $ | 0.34 | $ | 1.49 | $ | 1.43 | ||||||||||
Operating ROA | 0.93 | % | 0.96 | % | 0.85 | % | 0.90 | % | 0.91 | % | ||||||||||
Operating ROE | 7.08 | % | 7.26 | % | 6.28 | % | 6.76 | % | 6.70 | % | ||||||||||
Operating ROTCE | 10.38 | % | 10.70 | % | 9.46 | % | 10.00 | % | 10.13 | % | ||||||||||
Operating efficiency ratio (FTE) | 66.47 | % | 64.67 | % | 64.68 | % | 66.54 | % | 67.15 | % | ||||||||||
Community Bank Segment | ||||||||||||||||||||
Operating net income | $ | 17,904 | $ | 18,157 | $ | 16,417 | $ | 67,281 | $ | 69,386 | ||||||||||
Operating diluted earnings per share | $ | 0.40 | $ | 0.40 | $ | 0.36 | $ | 1.49 | $ | 1.50 | ||||||||||
Operating ROA | 0.93 | % | 0.96 | % | 0.90 | % | 0.90 | % | 0.96 | % | ||||||||||
Operating ROE | 7.13 | % | 7.26 | % | 6.66 | % | 6.80 | % | 7.11 | % | ||||||||||
Operating ROTCE | 10.48 | % | 10.71 | % | 10.05 | % | 10.07 | % | 10.79 | % | ||||||||||
Operating efficiency ratio (FTE) | 65.38 | % | 63.65 | % | 61.99 | % | 65.37 | % | 64.33 | % |
Three Months Ended | Year Ended | |||||||||||||||||||
12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||||||
Capital Ratios | ||||||||||||||||||||
Common equity Tier 1 capital ratio (3) | 10.55 | % | 10.75 | % | N/A | 10.55 | % | N/A | ||||||||||||
Tier 1 capital ratio (3) | 11.94 | % | 12.16 | % | 12.76 | % | 11.94 | % | 12.76 | % | ||||||||||
Total capital ratio (3) | 12.46 | % | 12.69 | % | 13.38 | % | 12.46 | % | 13.38 | % | ||||||||||
Leverage ratio (Tier 1 capital to average assets) (3) | 10.68 | % | 10.80 | % | 10.62 | % | 10.68 | % | 10.62 | % | ||||||||||
Common equity to total assets | 12.94 | % | 13.10 | % | 13.28 | % | 12.94 | % | 13.28 | % | ||||||||||
Tangible common equity to tangible assets | 9.20 | % | 9.29 | % | 9.27 | % | 9.20 | % | 9.27 | % | ||||||||||
Financial Condition | ||||||||||||||||||||
Assets | $ | 7,693,291 | $ | 7,594,313 | $ | 7,358,643 | $ | 7,693,291 | $ | 7,358,643 | ||||||||||
Loans, net of deferred fees | 5,671,462 | 5,543,621 | 5,345,996 | 5,671,462 | 5,345,996 | |||||||||||||||
Earning Assets | 6,900,023 | 6,827,669 | 6,566,504 | 6,900,023 | 6,566,504 | |||||||||||||||
Goodwill | 293,522 | 293,522 | 293,522 | 293,522 | 293,522 | |||||||||||||||
Core deposit intangibles, net | 23,310 | 25,320 | 31,755 | 23,310 | 31,755 | |||||||||||||||
Deposits | 5,963,936 | 5,818,853 | 5,638,770 | 5,963,936 | 5,638,770 | |||||||||||||||
Stockholders' equity | 995,367 | 995,012 | 977,169 | 995,367 | 977,169 | |||||||||||||||
Tangible common equity (5) | 678,535 | 676,170 | 651,892 | 678,535 | 651,892 | |||||||||||||||
Loans, net of deferred fees | ||||||||||||||||||||
Raw land and lots | $ | 195,665 | $ | 187,182 | $ | 211,225 | $ | 195,665 | $ | 211,225 | ||||||||||
Commercial construction | 484,768 | 429,645 | 341,280 | 484,768 | 341,280 | |||||||||||||||
Commercial real estate | 2,478,691 | 2,449,885 | 2,384,602 | 2,478,691 | 2,384,602 | |||||||||||||||
Single family investment real estate | 428,495 | 436,340 | 412,494 | 428,495 | 412,494 | |||||||||||||||
Commercial and industrial | 468,607 | 444,199 | 393,776 | 468,607 | 393,776 | |||||||||||||||
Other commercial | 91,892 | 89,344 | 81,106 | 91,892 | 81,106 | |||||||||||||||
Consumer | 1,523,344 | 1,507,026 | 1,521,513 | 1,523,344 | 1,521,513 | |||||||||||||||
Total loans, net of deferred fees | $ | 5,671,462 | $ | 5,543,621 | $ | 5,345,996 | $ | 5,671,462 | $ | 5,345,996 | ||||||||||
Interest-Bearing Deposits | ||||||||||||||||||||
NOW accounts | $ | 1,521,906 | $ | 1,382,891 | $ | 1,332,029 | $ | 1,521,906 | $ | 1,332,029 | ||||||||||
Money market accounts | 1,312,612 | 1,318,229 | 1,261,520 | 1,312,612 | 1,261,520 | |||||||||||||||
Savings accounts | 572,800 | 569,667 | 548,526 | 572,800 | 548,526 | |||||||||||||||
Time deposits of $100,000 and over | 514,286 | 527,642 | 550,842 | 514,286 | 550,842 | |||||||||||||||
Other time deposits | 669,395 | 682,379 | 746,475 | 669,395 | 746,475 | |||||||||||||||
Total interest-bearing deposits | $ | 4,590,999 | $ | 4,480,808 | $ | 4,439,392 | $ | 4,590,999 | $ | 4,439,392 | ||||||||||
Demand deposits | 1,372,937 | 1,338,045 | 1,199,378 | 1,372,937 | 1,199,378 | |||||||||||||||
Total deposits | $ | 5,963,936 | $ | 5,818,853 | $ | 5,638,770 | $ | 5,963,936 | $ | 5,638,770 | ||||||||||
Averages | ||||||||||||||||||||
Assets | $ | 7,624,416 | $ | 7,521,841 | $ | 7,237,492 | $ | 7,492,895 | $ | 7,250,494 | ||||||||||
Loans, net of deferred fees | 5,612,366 | 5,525,119 | 5,220,223 | 5,487,367 | 5,235,471 | |||||||||||||||
Loans held for sale | 35,402 | 44,904 | 34,740 | 40,524 | 46,917 | |||||||||||||||
Securities | 1,149,817 | 1,138,462 | 1,145,458 | 1,143,816 | 1,125,002 | |||||||||||||||
Earning assets | 6,845,071 | 6,751,654 | 6,433,992 | 6,713,239 | 6,437,681 | |||||||||||||||
Deposits | 5,905,406 | 5,814,146 | 5,660,824 | 5,768,213 | 5,675,521 | |||||||||||||||
Certificates of deposit | 1,196,127 | 1,227,835 | 1,318,005 | 1,231,593 | 1,390,308 | |||||||||||||||
Interest-bearing deposits | 4,536,643 | 4,501,411 | 4,437,178 | 4,471,870 | 4,511,489 | |||||||||||||||
Borrowings | 659,567 | 661,517 | 536,639 | 675,819 | 536,061 | |||||||||||||||
Interest-bearing liabilities | 5,196,210 | 5,162,928 | 4,973,817 | 5,147,689 | 5,047,550 | |||||||||||||||
Stockholders' equity | 998,590 | 995,463 | 981,291 | 991,977 | 983,727 | |||||||||||||||
Tangible common equity (5) | 680,801 | 675,618 | 651,561 | 671,071 | 650,232 |
Three Months Ended | Year Ended | |||||||||||||||||||
12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||||||
Asset Quality | ||||||||||||||||||||
Allowance for Loan Losses (ALL) | ||||||||||||||||||||
Beginning balance | $ | 33,269 | $ | 32,344 | $ | 32,109 | $ | 32,384 | $ | 30,135 | ||||||||||
Add: Recoveries | 933 | 1,299 | 603 | 3,927 | 3,469 | |||||||||||||||
Less: Charge-offs | 2,165 | 2,336 | 4,828 | 11,535 | 9,020 | |||||||||||||||
Add: Provision for loan losses | 2,010 | 1,962 | 4,500 | 9,271 | 7,800 | |||||||||||||||
Ending balance | $ | 34,047 | $ | 33,269 | $ | 32,384 | $ | 34,047 | $ | 32,384 | ||||||||||
ALL / total outstanding loans | 0.60 | % | 0.60 | % | 0.61 | % | 0.60 | % | 0.61 | % | ||||||||||
ALL / total outstanding loans, adjusted for acquisition accounting (4) | 0.98 | % | 1.01 | % | 1.08 | % | 0.98 | % | 1.08 | % | ||||||||||
Net charge-offs / total outstanding loans | 0.09 | % | 0.07 | % | 0.31 | % | 0.13 | % | 0.10 | % | ||||||||||
Provision / total outstanding loans | 0.14 | % | 0.14 | % | 0.33 | % | 0.16 | % | 0.15 | % | ||||||||||
Nonperforming Assets | ||||||||||||||||||||
Commercial | $ | 7,042 | $ | 8,589 | $ | 15,719 | $ | 7,042 | $ | 15,719 | ||||||||||
Consumer | 4,894 | 4,377 | 3,536 | 4,894 | 3,536 | |||||||||||||||
Nonaccrual loans | 11,936 | 12,966 | 19,255 | 11,936 | 19,255 | |||||||||||||||
Other real estate owned | 15,299 | 22,094 | 28,118 | 15,299 | 28,118 | |||||||||||||||
Total nonperforming assets (NPAs) | 27,235 | 35,060 | 47,373 | 27,235 | 47,373 | |||||||||||||||
Commercial | 1,813 | 3,349 | 3,251 | 1,813 | 3,251 | |||||||||||||||
Consumer | 4,016 | 1,815 | 6,796 | 4,016 | 6,796 | |||||||||||||||
Loans ≥ 90 days and still accruing | 5,829 | 5,164 | 10,047 | 5,829 | 10,047 | |||||||||||||||
Total NPAs and loans ≥ 90 days | $ | 33,064 | $ | 40,224 | $ | 57,420 | $ | 33,064 | $ | 57,420 | ||||||||||
NPAs / total outstanding loans | 0.48 | % | 0.63 | % | 0.89 | % | 0.48 | % | 0.89 | % | ||||||||||
NPAs / total assets | 0.35 | % | 0.46 | % | 0.64 | % | 0.35 | % | 0.64 | % | ||||||||||
ALL / nonperforming loans | 285.25 | % | 256.59 | % | 168.19 | % | 285.25 | % | 168.19 | % | ||||||||||
ALL / nonperforming assets | 125.01 | % | 94.89 | % | 68.36 | % | 125.01 | % | 68.36 | % | ||||||||||
Past Due Detail | ||||||||||||||||||||
Commercial | $ | 2,176 | $ | 1,870 | $ | 2,692 | $ | 2,176 | $ | 2,692 | ||||||||||
Consumer | 7,157 | 7,400 | 6,038 | 7,157 | 6,038 | |||||||||||||||
Loans 60-89 days past due | $ | 9,333 | $ | 9,270 | $ | 8,730 | $ | 9,333 | $ | 8,730 | ||||||||||
Commercial | $ | 8,992 | $ | 4,189 | $ | 9,682 | $ | 8,992 | $ | 9,682 | ||||||||||
Consumer | 18,795 | 8,917 | 19,615 | 18,795 | 19,615 | |||||||||||||||
Loans 30-59 days past due | $ | 27,787 | $ | 13,106 | $ | 29,297 | $ | 27,787 | $ | 29,297 | ||||||||||
Commercial | $ | 65,410 | $ | 69,676 | $ | 94,235 | $ | 65,410 | $ | 94,235 | ||||||||||
Consumer | 8,327 | 8,930 | 11,553 | 8,327 | 11,553 | |||||||||||||||
Purchased impaired | $ | 73,737 | $ | 78,606 | $ | 105,788 | $ | 73,737 | $ | 105,788 | ||||||||||
Troubled Debt Restructurings | ||||||||||||||||||||
Performing | $ | 10,780 | $ | 9,468 | $ | 22,829 | $ | 10,780 | $ | 22,829 | ||||||||||
Nonperforming | 1,921 | 2,087 | 3,948 | 1,921 | 3,948 | |||||||||||||||
Total troubled debt restructurings | $ | 12,701 | $ | 11,555 | $ | 26,777 | $ | 12,701 | $ | 26,777 | ||||||||||
Per Share Data | ||||||||||||||||||||
Earnings per common share, basic | $ | 0.40 | $ | 0.40 | $ | 0.33 | $ | 1.49 | $ | 1.13 | ||||||||||
Earnings per common share, diluted | 0.40 | 0.40 | 0.33 | 1.49 | 1.13 | |||||||||||||||
Cash dividends paid per common share | 0.19 | 0.17 | 0.15 | 0.68 | 0.58 | |||||||||||||||
Market value per share | 25.24 | 24.00 | 24.08 | 25.24 | 24.08 | |||||||||||||||
Book value per common share | 22.38 | 22.24 | 21.73 | 22.38 | 21.73 | |||||||||||||||
Tangible book value per common share | 15.25 | 15.11 | 14.50 | 15.25 | 14.50 | |||||||||||||||
Price to earnings ratio, diluted | 15.90 | 15.12 | 18.39 | 16.94 | 21.31 | |||||||||||||||
Price to book value per common share ratio | 1.13 | 1.08 | 1.11 | 1.13 | 1.11 | |||||||||||||||
Price to tangible common share ratio | 1.66 | 1.59 | 1.66 | 1.66 | 1.66 | |||||||||||||||
Weighted average common shares outstanding, basic | 44,899,629 | 45,087,409 | 45,341,854 | 45,054,938 | 46,036,023 | |||||||||||||||
Weighted average common shares outstanding, diluted | 44,988,577 | 45,171,610 | 45,426,861 | 45,138,891 | 46,130,895 | |||||||||||||||
Common shares outstanding at end of period | 44,785,674 | 44,990,569 | 45,162,853 | 44,785,674 | 45,162,853 |
Three Months Ended | Year Ended | |||||||||||||||||||
12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||||||
Alternative Performance Measures (non-GAAP) | ||||||||||||||||||||
Operating Earnings (2) | ||||||||||||||||||||
Net Income (GAAP) | $ | 17,814 | $ | 18,216 | $ | 14,965 | $ | 67,079 | $ | 52,164 | ||||||||||
Plus: Merger and conversion related expense, after tax | - | - | 563 | - | 13,724 | |||||||||||||||
Net operating earnings (non-GAAP) | $ | 17,814 | $ | 18,216 | $ | 15,528 | $ | 67,079 | $ | 65,888 | ||||||||||
Operating earnings per share - Basic | $ | 0.40 | $ | 0.40 | $ | 0.34 | $ | 1.49 | $ | 1.43 | ||||||||||
Operating earnings per share - Diluted | 0.40 | 0.40 | 0.34 | 1.49 | 1.43 | |||||||||||||||
Operating ROA | 0.93 | % | 0.96 | % | 0.85 | % | 0.90 | % | 0.91 | % | ||||||||||
Operating ROE | 7.08 | % | 7.26 | % | 6.28 | % | 6.76 | % | 6.70 | % | ||||||||||
Operating ROTCE | 10.38 | % | 10.70 | % | 9.46 | % | 10.00 | % | 10.13 | % | ||||||||||
Community Bank Segment Operating Earnings (2) | ||||||||||||||||||||
Net Income (GAAP) | $ | 17,904 | $ | 18,157 | $ | 15,854 | $ | 67,281 | $ | 55,662 | ||||||||||
Plus: Merger and conversion related expense, after tax | - | - | 563 | - | 13,724 | |||||||||||||||
Net operating earnings (non-GAAP) | $ | 17,904 | $ | 18,157 | $ | 16,417 | $ | 67,281 | $ | 69,386 | ||||||||||
Operating earnings per share - Basic | $ | 0.40 | $ | 0.40 | $ | 0.36 | $ | 1.49 | $ | 1.50 | ||||||||||
Operating earnings per share - Diluted | 0.40 | 0.40 | 0.36 | 1.49 | 1.50 | |||||||||||||||
Operating ROA | 0.93 | % | 0.96 | % | 0.90 | % | 0.90 | % | 0.96 | % | ||||||||||
Operating ROE | 7.13 | % | 7.26 | % | 6.66 | % | 6.80 | % | 7.11 | % | ||||||||||
Operating ROTCE | 10.48 | % | 10.71 | % | 10.05 | % | 10.07 | % | 10.79 | % | ||||||||||
Operating Efficiency Ratio FTE (2) | ||||||||||||||||||||
Net Interest Income (GAAP) | $ | 62,605 | $ | 63,444 | $ | 63,065 | $ | 251,834 | $ | 255,018 | ||||||||||
FTE adjustment | 2,338 | 2,287 | 2,005 | 9,079 | 8,127 | |||||||||||||||
Net Interest Income (FTE) | $ | 64,943 | $ | 65,731 | $ | 65,070 | $ | 260,913 | $ | 263,145 | ||||||||||
Noninterest Income (GAAP) | 17,016 | 16,725 | 14,901 | 65,007 | 61,287 | |||||||||||||||
Noninterest Expense (GAAP) | $ | 54,476 | $ | 53,325 | $ | 52,550 | $ | 216,882 | $ | 238,216 | ||||||||||
Merger and conversion related expense | - | - | 821 | - | 20,345 | |||||||||||||||
Noninterest Expense (Non-GAAP) | $ | 54,476 | $ | 53,325 | $ | 51,729 | $ | 216,882 | $ | 217,871 | ||||||||||
Operating Efficiency Ratio FTE (non-GAAP) | 66.47 | % | 64.67 | % | 64.68 | % | 66.54 | % | 67.15 | % | ||||||||||
Community Bank Segment Operating Efficiency Ratio FTE (2) | ||||||||||||||||||||
Net Interest Income (GAAP) | $ | 62,271 | $ | 63,075 | $ | 62,866 | $ | 250,510 | $ | 253,956 | ||||||||||
FTE adjustment | 2,247 | 2,256 | 2,005 | 8,955 | 8,126 | |||||||||||||||
Net Interest Income (FTE) | $ | 64,518 | $ | 65,331 | $ | 64,871 | $ | 259,465 | $ | 262,082 | ||||||||||
Noninterest Income (GAAP) | 14,987 | 14,287 | 12,912 | 55,645 | 51,878 | |||||||||||||||
Noninterest Expense (GAAP) | $ | 51,982 | $ | 50,674 | $ | 49,042 | $ | 205,993 | $ | 222,311 | ||||||||||
Merger and conversion related expense | - | - | 821 | - | 20,345 | |||||||||||||||
Noninterest Expense (Non-GAAP) | $ | 51,982 | $ | 50,674 | $ | 48,221 | $ | 205,993 | $ | 201,966 | ||||||||||
Operating Efficiency Ratio FTE (non-GAAP) | 65.38 | % | 63.65 | % | 61.99 | % | 65.37 | % | 64.33 | % | ||||||||||
Tangible Common Equity (5) | ||||||||||||||||||||
Ending equity | $ | 995,367 | $ | 995,012 | $ | 977,169 | $ | 995,367 | $ | 977,169 | ||||||||||
Less: Ending goodwill | 293,522 | 293,522 | 293,522 | 293,522 | 293,522 | |||||||||||||||
Less: Ending core deposit intangibles | 23,310 | 25,320 | 31,755 | 23,310 | 31,755 | |||||||||||||||
Ending tangible common equity | $ | 678,535 | $ | 676,170 | $ | 651,892 | $ | 678,535 | $ | 651,892 | ||||||||||
Average equity | $ | 998,590 | $ | 995,463 | $ | 981,291 | $ | 991,977 | $ | 983,727 | ||||||||||
Less: Average goodwill | 293,522 | 293,522 | 296,855 | 293,522 | 296,870 | |||||||||||||||
Less: Average core deposit intangibles | 24,267 | 26,323 | 32,875 | 27,384 | 36,625 | |||||||||||||||
Average tangible common equity | $ | 680,801 | $ | 675,618 | $ | 651,561 | $ | 671,071 | $ | 650,232 |
Three Months Ended | Year Ended | |||||||||||||||||||
12/31/15 | 09/30/15 | 12/31/14 | 12/31/15 | 12/31/14 | ||||||||||||||||
ALL to loans, adjusted for acquisition accounting (non-GAAP)(4) | ||||||||||||||||||||
Allowance for loan losses | $ | 34,047 | $ | 33,269 | $ | 32,384 | $ | 34,047 | $ | 32,384 | ||||||||||
Remaining fair value mark on purchased performing loans | 20,819 | 21,884 | 24,340 | 20,819 | 24,340 | |||||||||||||||
Adjusted allowance for loan losses | 54,866 | 55,153 | 56,724 | 54,866 | 56,724 | |||||||||||||||
Loans, net of deferred fees | 5,671,462 | 5,543,621 | 5,345,996 | 5,671,462 | 5,345,996 | |||||||||||||||
Remaining fair value mark on purchased performing loans | 20,819 | 21,884 | 24,340 | 20,819 | 24,340 | |||||||||||||||
Less: Purchased credit impaired loans, net of fair value mark | 73,737 | 78,606 | 105,788 | 73,737 | 105,788 | |||||||||||||||
Adjusted loans, net of deferred fees | $ | 5,618,544 | $ | 5,486,899 | $ | 5,264,548 | $ | 5,618,544 | $ | 5,264,548 | ||||||||||
ALL / gross loans, adjusted for acquisition accounting | 0.98 | % | 1.01 | % | 1.08 | % | 0.98 | % | 1.08 | % | ||||||||||
Mortgage Origination Volume | ||||||||||||||||||||
Refinance Volume | $ | 40,943 | $ | 47,788 | $ | 58,662 | $ | 197,665 | $ | 202,584 | ||||||||||
Construction Volume | 12,394 | 21,994 | 25,764 | 74,885 | 133,952 | |||||||||||||||
Purchase Volume | 59,702 | 78,286 | 70,775 | 267,572 | 340,838 | |||||||||||||||
Total Mortgage loan originations | $ | 113,039 | $ | 148,068 | $ | 155,201 | $ | 540,122 | $ | 677,374 | ||||||||||
% of originations that are refinances | 36.22 | % | 32.27 | % | 37.80 | % | 36.60 | % | 29.91 | % | ||||||||||
Other Data | ||||||||||||||||||||
End of period full-time employees | 1,422 | 1,418 | 1,471 | 1,422 | 1,471 | |||||||||||||||
Number of full-service branches | 124 | 124 | 131 | 124 | 131 | |||||||||||||||
Number of full automatic transaction machines (ATMs) | 201 | 202 | 201 | 201 | 201 |
(1) The core metrics, FTE, exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.
(2) The Company has provided supplemental performance measures which it believes may be useful to investors as they exclude non-operating adjustments resulting from acquisition activity and allow investors to see the combined economic results of the organization. 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.
(3) Beginning January 1, 2015, the Company calculates its regulatory capital under the Basel III Standardized Approach. The Company calculated regulatory capital measures for periods prior to 2015 under previous regulatory requirements. All ratios at December 31, 2015 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(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.
(5) 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.
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash and cash equivalents: | ||||||||
Cash and due from banks | $ | 111,323 | $ | 112,752 | ||||
Interest-bearing deposits in other banks | 29,670 | 19,345 | ||||||
Federal funds sold | 1,667 | 1,163 | ||||||
Total cash and cash equivalents | 142,660 | 133,260 | ||||||
Securities available for sale, at fair value | 903,292 | 1,102,114 | ||||||
Securities held to maturity, at carrying value | 205,374 | - | ||||||
Restricted stock, at cost | 51,828 | 54,854 | ||||||
Loans held for sale | 36,030 | 42,519 | ||||||
Loans held for investment, net of deferred fees and costs | 5,671,462 | 5,345,996 | ||||||
Less allowance for loan losses | 34,047 | 32,384 | ||||||
Net loans held for investment | 5,637,415 | 5,313,612 | ||||||
Premises and equipment, net | 126,028 | 135,247 | ||||||
Other real estate owned, net of valuation allowance | 15,299 | 28,118 | ||||||
Core deposit intangibles, net | 23,310 | 31,755 | ||||||
Goodwill | 293,522 | 293,522 | ||||||
Bank owned life insurance | 173,687 | 139,005 | ||||||
Other assets | 84,846 | 84,637 | ||||||
Total assets | $ | 7,693,291 | $ | 7,358,643 | ||||
LIABILITIES | ||||||||
Noninterest-bearing demand deposits | $ | 1,372,937 | $ | 1,199,378 | ||||
Interest-bearing deposits | 4,590,999 | 4,439,392 | ||||||
Total deposits | 5,963,936 | 5,638,770 | ||||||
Securities sold under agreements to repurchase | 84,977 | 44,393 | ||||||
Other short-term borrowings | 304,000 | 343,000 | ||||||
Long-term borrowings | 291,198 | 299,542 | ||||||
Other liabilities | 53,813 | 55,769 | ||||||
Total liabilities | 6,697,924 | 6,381,474 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 44,785,674 shares and 45,162,853 shares, respectively. | 59,159 | 59,795 | ||||||
Additional paid-in capital | 631,822 | 643,443 | ||||||
Retained earnings | 298,134 | 261,676 | ||||||
Accumulated other comprehensive income | 6,252 | 12,255 | ||||||
Total stockholders' equity | 995,367 | 977,169 | ||||||
Total liabilities and stockholders' equity | $ | 7,693,291 | $ | 7,358,643 |
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except share data)
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||
Interest and fees on loans | $ | 61,880 | $ | 62,651 | $ | 61,370 | $ | 247,587 | $ | 246,366 | ||||||||||
Interest on deposits in other banks | 30 | 23 | 19 | 94 | 60 | |||||||||||||||
Interest and dividends on securities: | ||||||||||||||||||||
Taxable | 3,985 | 3,954 | 3,834 | 15,606 | 15,226 | |||||||||||||||
Nontaxable | 3,422 | 3,372 | 3,288 | 13,484 | 13,293 | |||||||||||||||
Total interest and dividend income | 69,317 | 70,000 | 68,511 | 276,771 | 274,945 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Interest on deposits | 4,348 | 4,204 | 3,201 | 15,553 | 11,034 | |||||||||||||||
Interest on federal funds purchased | - | 1 | 1 | 6 | 50 | |||||||||||||||
Interest on short-term borrowings | 211 | 223 | 143 | 938 | 516 | |||||||||||||||
Interest on long-term borrowings | 2,153 | 2,128 | 2,101 | 8,440 | 8,327 | |||||||||||||||
Total interest expense | 6,712 | 6,556 | 5,446 | 24,937 | 19,927 | |||||||||||||||
Net interest income | 62,605 | 63,444 | 63,065 | 251,834 | 255,018 | |||||||||||||||
Provision for credit losses | 2,010 | 2,062 | 4,500 | 9,571 | 7,800 | |||||||||||||||
Net interest income after provision for credit losses | 60,595 | 61,382 | 58,565 | 242,263 | 247,218 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts | 5,104 | 4,965 | 4,440 | 18,904 | 17,721 | |||||||||||||||
Other service charges and fees | 3,957 | 3,983 | 3,701 | 15,575 | 14,983 | |||||||||||||||
Fiduciary and asset management fees | 2,306 | 2,304 | 2,282 | 9,141 | 9,036 | |||||||||||||||
Mortgage banking income, net | 2,185 | 2,630 | 1,782 | 9,767 | 9,707 | |||||||||||||||
Gains on securities transactions, net | 813 | 75 | 246 | 1,486 | 1,695 | |||||||||||||||
Other-than-temporary impairment losses | - | (300 | ) | - | (300 | ) | - | |||||||||||||
Bank owned life insurance income | 1,163 | 1,161 | 1,181 | 4,593 | 4,648 | |||||||||||||||
Other operating income | 1,488 | 1,907 | 1,269 | 5,841 | 3,497 | |||||||||||||||
Total noninterest income | 17,016 | 16,725 | 14,901 | 65,007 | 61,287 | |||||||||||||||
Noninterest expenses: | ||||||||||||||||||||
Salaries and benefits | 25,287 | 25,853 | 25,338 | 104,192 | 107,804 | |||||||||||||||
Occupancy expenses | 4,832 | 4,915 | 4,952 | 20,053 | 20,136 | |||||||||||||||
Furniture and equipment expenses | 2,856 | 3,015 | 3,317 | 11,674 | 11,872 | |||||||||||||||
Printing, postage, and supplies | 1,154 | 1,191 | 1,242 | 5,124 | 4,924 | |||||||||||||||
Communications expense | 1,153 | 1,159 | 1,161 | 4,634 | 4,902 | |||||||||||||||
Technology and data processing | 3,647 | 3,549 | 3,319 | 13,667 | 12,465 | |||||||||||||||
Professional services | 1,302 | 1,991 | 1,697 | 6,309 | 5,594 | |||||||||||||||
Marketing and advertising expense | 1,375 | 1,781 | 1,585 | 7,215 | 6,406 | |||||||||||||||
FDIC assessment premiums and other insurance | 1,346 | 1,351 | 1,562 | 5,376 | 6,125 | |||||||||||||||
Other taxes | 1,553 | 1,569 | 1,432 | 6,227 | 5,784 | |||||||||||||||
Loan-related expenses | 513 | 935 | 685 | 2,819 | 2,672 | |||||||||||||||
OREO and credit-related expenses | 4,496 | 1,263 | (89 | ) | 8,911 | 10,164 | ||||||||||||||
Amortization of intangible assets | 2,010 | 2,074 | 2,334 | 8,445 | 9,795 | |||||||||||||||
Acquisition and conversion costs | - | - | 821 | - | 20,345 | |||||||||||||||
Other expenses | 2,952 | 2,679 | 3,194 | 12,236 | 9,228 | |||||||||||||||
Total noninterest expenses | 54,476 | 53,325 | 52,550 | 216,882 | 238,216 | |||||||||||||||
Income before income taxes | 23,135 | 24,782 | 20,916 | 90,388 | 70,289 | |||||||||||||||
Income tax expense | 5,321 | 6,566 | 5,951 | 23,309 | 18,125 | |||||||||||||||
Net income | $ | 17,814 | $ | 18,216 | $ | 14,965 | $ | 67,079 | $ | 52,164 | ||||||||||
Basic earnings per common share | $ | 0.40 | $ | 0.40 | $ | 0.33 | $ | 1.49 | $ | 1.13 | ||||||||||
Diluted earnings per common share | $ | 0.40 | $ | 0.40 | $ | 0.33 | $ | 1.49 | $ | 1.13 |
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Dollars in thousands)
Community Bank | Mortgage | Eliminations | Consolidated | |||||||||||||
Three Months Ended December 31, 2015 | ||||||||||||||||
Net interest income | $ | 62,271 | $ | 334 | $ | - | $ | 62,605 | ||||||||
Provision for credit losses | 2,000 | 10 | - | 2,010 | ||||||||||||
Net interest income after provision for credit losses | 60,271 | 324 | - | 60,595 | ||||||||||||
Noninterest income | 14,987 | 2,200 | (171 | ) | 17,016 | |||||||||||
Noninterest expenses | 51,982 | 2,665 | (171 | ) | 54,476 | |||||||||||
Income (loss) before income taxes | 23,276 | (141 | ) | - | 23,135 | |||||||||||
Income tax expense (benefit) | 5,372 | (51 | ) | - | 5,321 | |||||||||||
Net income (loss) | $ | 17,904 | $ | (90 | ) | $ | - | $ | 17,814 | |||||||
Plus: Merger and conversion related expense, after tax | - | - | - | - | ||||||||||||
Net operating earnings (loss) (non-GAAP) | $ | 17,904 | $ | (90 | ) | $ | - | $ | 17,814 | |||||||
Total assets | $ | 7,690,132 | $ | 57,900 | $ | (54,741 | ) | $ | 7,693,291 | |||||||
Three Months Ended September 30, 2015 | ||||||||||||||||
Net interest income | $ | 63,075 | $ | 369 | $ | - | $ | 63,444 | ||||||||
Provision for credit losses | 2,000 | 62 | - | 2,062 | ||||||||||||
Net interest income after provision for credit losses | 61,075 | 307 | - | 61,382 | ||||||||||||
Noninterest income | 14,287 | 2,608 | (170 | ) | 16,725 | |||||||||||
Noninterest expenses | 50,674 | 2,821 | (170 | ) | 53,325 | |||||||||||
Income before income taxes | 24,688 | 94 | - | 24,782 | ||||||||||||
Income tax expense | 6,531 | 35 | - | 6,566 | ||||||||||||
Net income | $ | 18,157 | $ | 59 | $ | - | $ | 18,216 | ||||||||
Plus: Merger and conversion related expense, after tax | - | - | - | - | ||||||||||||
Net operating earnings (non-GAAP) | $ | 18,157 | $ | 59 | $ | - | $ | 18,216 | ||||||||
Total assets | $ | 7,588,606 | $ | 62,127 | $ | (56,420 | ) | $ | 7,594,313 | |||||||
Three Months Ended December 31, 2014 | ||||||||||||||||
Net interest income | $ | 62,866 | $ | 199 | $ | - | $ | 63,065 | ||||||||
Provision for credit losses | 4,500 | - | - | 4,500 | ||||||||||||
Net interest income after provision for credit losses | 58,366 | 199 | - | 58,565 | ||||||||||||
Noninterest income | 12,912 | 2,160 | (171 | ) | 14,901 | |||||||||||
Noninterest expenses | 49,042 | 3,679 | (171 | ) | 52,550 | |||||||||||
Income (loss) before income taxes | 22,236 | (1,320 | ) | - | 20,916 | |||||||||||
Income tax expense (benefit) | 6,382 | (431 | ) | - | 5,951 | |||||||||||
Net income (loss) | $ | 15,854 | $ | (889 | ) | $ | - | $ | 14,965 | |||||||
Plus: Merger and conversion related expense, after tax | 563 | - | - | 563 | ||||||||||||
Net operating earnings (loss) (non-GAAP) | $ | 16,417 | $ | (889 | ) | $ | - | $ | 15,528 | |||||||
Total assets | $ | 7,354,058 | $ | 51,485 | $ | (46,900 | ) | $ | 7,358,643 |
Community Bank | Mortgage | Eliminations | Consolidated | |||||||||||||
Year Ended December 31, 2015 | ||||||||||||||||
Net interest income | $ | 250,510 | $ | 1,324 | $ | - | $ | 251,834 | ||||||||
Provision for credit losses | 9,450 | 121 | - | 9,571 | ||||||||||||
Net interest income after provision for credit losses | 241,060 | 1,203 | - | 242,263 | ||||||||||||
Noninterest income | 55,645 | 10,044 | (682 | ) | 65,007 | |||||||||||
Noninterest expenses | 205,993 | 11,571 | (682 | ) | 216,882 | |||||||||||
Income (loss) before income taxes | 90,712 | (324 | ) | - | 90,388 | |||||||||||
Income tax expense (benefit) | 23,431 | (122 | ) | - | 23,309 | |||||||||||
Net income (loss) | $ | 67,281 | $ | (202 | ) | $ | - | $ | 67,079 | |||||||
Plus: Merger and conversion related expense, after tax | - | - | - | - | ||||||||||||
Net operating earnings (loss) (non-GAAP) | $ | 67,281 | $ | (202 | ) | $ | - | $ | 67,079 | |||||||
Total assets | $ | 7,690,132 | $ | 57,900 | $ | (54,741 | ) | $ | 7,693,291 | |||||||
Year Ended December 31, 2014 | ||||||||||||||||
Net interest income | $ | 253,956 | $ | 1,062 | $ | - | $ | 255,018 | ||||||||
Provision for credit losses | 7,800 | - | - | 7,800 | ||||||||||||
Net interest income after provision for credit losses | 246,156 | 1,062 | - | 247,218 | ||||||||||||
Noninterest income | 51,878 | 10,091 | (682 | ) | 61,287 | |||||||||||
Noninterest expenses | 222,311 | 16,587 | (682 | ) | 238,216 | |||||||||||
Income (loss) before income taxes | 75,723 | (5,434 | ) | - | 70,289 | |||||||||||
Income tax expense (benefit) | 20,061 | (1,936 | ) | - | 18,125 | |||||||||||
Net income (loss) | $ | 55,662 | $ | (3,498 | ) | $ | - | $ | 52,164 | |||||||
Plus: Merger and conversion related expense, after tax | 13,724 | - | - | 13,724 | ||||||||||||
Net operating earnings (loss) (non-GAAP) | $ | 69,386 | $ | (3,498 | ) | $ | - | $ | 65,888 | |||||||
Total assets | $ | 7,354,058 | $ | 51,485 | $ | (46,900 | ) | $ | 7,358,643 |
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
For the Quarter Ended | ||||||||||||||||||||||||
December 31, 2015 | September 30, 2015 | |||||||||||||||||||||||
Average Balance | Interest Income / Expense | Yield / Rate (1) | Average Balance | Interest Income / Expense | Yield / Rate (1) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | $ | 709,645 | $ | 3,985 | 2.23 | % | $ | 710,583 | $ | 3,954 | 2.21 | % | ||||||||||||
Tax-exempt | 440,172 | 5,264 | 4.74 | % | 427,879 | 5,187 | 4.81 | % | ||||||||||||||||
Total securities | 1,149,817 | 9,249 | 3.19 | % | 1,138,462 | 9,141 | 3.19 | % | ||||||||||||||||
Loans, net (2) (3) | 5,612,366 | 62,062 | 4.39 | % | 5,525,119 | 62,745 | 4.51 | % | ||||||||||||||||
Loans held for sale | 35,402 | 313 | 3.51 | % | 44,904 | 378 | 3.34 | % | ||||||||||||||||
Federal funds sold | 784 | 1 | 0.28 | % | 807 | - | 0.20 | % | ||||||||||||||||
Money market investments | 1 | - | 0.00 | % | 1 | - | 0.00 | % | ||||||||||||||||
Interest-bearing deposits in other banks | 46,701 | 30 | 0.25 | % | 42,361 | 23 | 0.22 | % | ||||||||||||||||
Total earning assets | 6,845,071 | $ | 71,655 | 4.15 | % | 6,751,654 | $ | 72,287 | 4.25 | % | ||||||||||||||
Allowance for loan losses | (33,583 | ) | (32,857 | ) | ||||||||||||||||||||
Total non-earning assets | 812,928 | 803,044 | ||||||||||||||||||||||
Total assets | $ | 7,624,416 | $ | 7,521,841 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Transaction and money market accounts | $ | 2,770,386 | $ | 1,382 | 0.20 | % | $ | 2,706,542 | $ | 1,289 | 0.19 | % | ||||||||||||
Regular savings | 570,130 | 244 | 0.17 | % | 567,034 | 248 | 0.17 | % | ||||||||||||||||
Time deposits (4) | 1,196,127 | 2,722 | 0.90 | % | 1,227,835 | 2,667 | 0.86 | % | ||||||||||||||||
Total interest-bearing deposits | 4,536,643 | 4,348 | 0.38 | % | 4,501,411 | 4,204 | 0.37 | % | ||||||||||||||||
Other borrowings (5) | 659,567 | 2,364 | 1.42 | % | 661,517 | 2,352 | 1.41 | % | ||||||||||||||||
Total interest-bearing liabilities | 5,196,210 | $ | 6,712 | 0.51 | % | 5,162,928 | $ | 6,556 | 0.50 | % | ||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||
Demand deposits | 1,368,763 | 1,312,735 | ||||||||||||||||||||||
Other liabilities | 60,853 | 50,715 | ||||||||||||||||||||||
Total liabilities | 6,625,826 | 6,526,378 | ||||||||||||||||||||||
Stockholders' equity | 998,590 | 995,463 | ||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,624,416 | $ | 7,521,841 | ||||||||||||||||||||
Net interest income | $ | 64,943 | $ | 65,731 | ||||||||||||||||||||
Interest rate spread (6) | 3.64 | % | 3.75 | % | ||||||||||||||||||||
Cost of funds | 0.39 | % | 0.39 | % | ||||||||||||||||||||
Net interest margin (7) | 3.76 | % | 3.86 | % |
(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 $1.4 million for the three months ended December 31, 2015 and September 30, 2015, respectively, in accretion of the fair market value adjustments related to acquisitions. | |||||||||||||||
(4) Interest expense on certificates of deposits includes $0 and $154,000 for the three months ended December 31, 2015 and September 30, 2015, respectively, in accretion of the fair market value adjustments related to acquisitions. | |||||||||||||||
(5) Interest expense on borrowings includes $62,000 and $87,000 for the three months ended December 31, 2015 and September 30, 2015, respectively, in accretion of the fair market value adjustments related to acquisitions. | |||||||||||||||
(6) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%. | |||||||||||||||
(7) Core net interest margin excludes purchase accounting adjustments and was 3.69% and 3.77% for the three months ended December 31, 2015 and September 30, 2015, respectively. |