Union Bankshares Reports Fourth Quarter And Full Year Results

Jan 20, 2016, 07:30 ET from Union Bankshares Corporation

RICHMOND, Va., Jan. 20, 2016 /PRNewswire/ -- 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.

 

 

SOURCE Union Bankshares Corporation



RELATED LINKS

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