Union Bankshares Corporation (the “Company” or “Union”)
(NASDAQ:UBSH) today reported net income of $15.2 million and
earnings per share of $0.35 for its fourth quarter ended December
31, 2017. These results represent a decrease of $5.5 million,
or 26.5%, and $0.12 per share, or 25.5%, compared to net income and
earnings per share, respectively, from the third quarter of
2017. Net operating earnings(1) were $22.8 million and
operating earnings per share(1) were $0.52 for its fourth quarter
ended December 31, 2017; these operating results exclude $1.4
million in after-tax merger-related costs and $6.3 million in
nonrecurring tax expenses related to the Tax Cuts and Jobs Act (the
“Tax Act”). The Company's net operating earnings and
operating earnings per share for the fourth quarter of 2017
represent increases of $1.5 million, or 7.0%, and $0.03, or 6.1%,
respectively, in each case compared to the third quarter of 2017.
For the year ended December 31, 2017, net income was $72.9
million and earnings per share were $1.67. The Company's net
income and earnings per share for the year ended December 31, 2017
represent a decrease of 5.9% and 5.6%, respectively, compared to
the net income and earnings per share for the year ended December
31, 2016. Net operating earnings(1) were $83.6 million and
operating earnings per share(1) were $1.91 for the year ended
December 31, 2017; these operating results exclude $4.4 million in
after-tax merger-related costs and $6.3 million in nonrecurring tax
expenses related to the Tax Act. The Company's net operating
earnings and operating earnings per share for 2017 represent
increases of $6.1 million, or 7.9%, and $0.14, or 7.9%,
respectively, in each case compared to the year ended December 31,
2016.
These fourth quarter and full year results of the Company do not
include the financial results of Xenith Bankshares, Inc.
(“Xenith”), which the Company acquired on January 1, 2018, and are
prior to the effective date of the merger of Xenith into the
Company (“the Merger”).
Union also declared a quarterly dividend of $0.21 per share
payable on February 20, 2018 to shareholders of record as of
February 6, 2018.
“As I look back, 2017 was a year of significant progress and
change for Union. We started off 2017 with a well-planned and
well-executed CEO transition and added depth and talent to our
leadership team as the year progressed. We finished the year
with our transformation to Virginia’s regional bank upon the
closing of the Xenith acquisition on January 1, 2018,” said John C.
Asbury, president and chief executive officer of Union Bankshares
Corporation. “The combination of Union and Xenith was
perfectly aligned to our previously stated 2017 priorities and
gives the Company a growth platform in Virginia, Maryland and North
Carolina.
Both Union and Xenith also finished the year with a solid fourth
quarter performance headlined by strong loan growth, reinforcing
our belief that the merger is off to a great start and will unleash
the potential of this uniquely valuable franchise.
In 2018, the Company is focused on six priorities, three of
which continue from 2017. Our 2018 priorities are, 1)
integrating Xenith into Union, 2) diversifying our loan portfolio
and revenue streams, 3) growing core funding, 4) becoming more
efficient, 5) creating a more distinct and enduring brand and 6)
managing to higher levels of performance. We are intensely
focused on accelerating the achievement of these priorities and
generating top-tier financial performance for our
shareholders.”
Select highlights for the fourth quarter of 2017 include:
- Performance metrics linked quarter
- Return on Average Assets (“ROA”) was 0.66% compared to 0.91% in
the third quarter; operating ROA(1) was 1.00% compared to 0.94% in
the third quarter.
- Return on Average Equity (“ROE”) was 5.75% compared to 7.90% in
the third quarter; operating ROE(1) was 8.63% compared to 8.15% in
the third quarter.
- Return on Average Tangible Common Equity (“ROTCE”) was 8.20%
compared to 11.34% in the third quarter; operating ROTCE(1) was
12.32% compared to 11.70% in the third quarter.
- Efficiency ratio (FTE) was 64.2% compared to 62.9% in the third
quarter; operating efficiency ratio(1) was 62.1%, which was
consistent with the third quarter.
- Segment results linked quarter
- Net income for the community bank segment was $15.0 million, or
$0.34 per share, compared to $20.3 million, or $0.46 per share, in
the third quarter; operating earnings for the community bank
segment were $22.5 million, or $0.51 per share, compared to $21.0
million, or $0.48 per share, in the third quarter.
- Net income for the mortgage segment was $199,000 compared to
$347,000 in the third quarter; operating earnings for the mortgage
segment were $329,000 compared to $347,000 in the third
quarter.
- Balance sheet linked quarter and prior year
- Period-end loans held for investment grew $242.8 million, or
14.1% (annualized), from September 30, 2017 and increased $834.4
million, or 13.2%, from December 31, 2016. Average loans held
for investment increased $139.8 million, or 8.2% (annualized), from
the prior quarter.
- Period-end deposits increased $109.9 million, or 6.4%
(annualized), from September 30, 2017 and grew $612.2 million, or
9.6%, from December 31, 2016. Average deposits increased $158.1
million, or 9.3% (annualized), from the prior quarter.
(1) For a reconciliation of the non-GAAP operating measures that
exclude merger-related costs and nonrecurring tax expenses
unrelated to the Company’s normal operations, see Alternative
Performance Measures (non-GAAP) section of the Key Financial
Results. Such costs were only incurred during 2017; thus each of
these operating measures is equivalent to the corresponding GAAP
financial measure for the three months and year ended December 31,
2016.
NET INTEREST INCOME
For the fourth quarter of 2017, net interest income was $73.4
million, an increase of $2.2 million from the third quarter of
2017. Tax-equivalent net interest income was $76.2 million in
the fourth quarter of 2017, an increase of $2.3 million from the
third quarter of 2017. The increases in both net interest income
and tax-equivalent net interest income were primarily driven by
earning asset growth during the fourth quarter of 2017 as well as
higher earning asset yields. The fourth quarter net interest
margin increased 5 basis points to 3.51% from 3.46% in the previous
quarter, while the tax-equivalent net interest margin also
increased 5 basis points to 3.64% from 3.59% during the same
periods. The increase in the tax-equivalent net interest
margin was principally due to the 7 basis point increase in the
tax-equivalent yield on earning assets, partially offset by the 2
basis point increase in tax-equivalent cost of funds.
The Company’s tax-equivalent net interest margin includes the
impact of acquisition accounting fair value adjustments.
During the fourth quarter of 2017, net accretion related to
acquisition accounting increased $425,000, or 24.9%, from the prior
quarter to $2.1 million for the quarter ended December 31,
2017. The third and fourth quarters of 2017 as well as the
remaining estimated net accretion impact are reflected in the
following table (dollars in thousands):
|
Loan Accretion |
|
Borrowings Accretion (Amortization) |
|
Total |
For the quarter ended
September 30, 2017
|
$ |
1,662 |
|
$ |
47 |
|
|
$ |
1,709 |
|
For the quarter ended
December 31, 2017 |
2,107 |
|
27 |
|
|
2,134 |
|
For the years ending
(estimated) (1): |
|
|
|
|
|
2018 |
4,544 |
|
(143 |
) |
|
4,401 |
|
2019 |
3,371 |
|
(286 |
) |
|
3,085 |
|
2020 |
2,825 |
|
(301 |
) |
|
2,524 |
|
2021 |
2,259 |
|
(316 |
) |
|
1,943 |
|
2022 |
1,815 |
|
(332 |
) |
|
1,483 |
|
Thereafter |
6,493 |
|
(4,974 |
) |
|
1,519 |
|
(1) Estimated accretion includes accretion for previously
executed acquisitions, except for the Merger. The effects of
the Merger are not included in the information above.
ASSET QUALITY/LOAN LOSS PROVISION
OverviewDuring the fourth quarter of 2017, the Company
experienced declines in nonperforming asset balances from the prior
quarter, primarily related to sales and valuation adjustments of
other real estate owned (“OREO”). Past due loan levels at
December 31, 2017 improved compared to the past due loans levels at
September 30, 2017 and December 31, 2016. The loan loss provision
and the allowance for loan losses (“ALL”) increased from the prior
quarter due to loan growth in the fourth quarter of 2017.
All nonaccrual and past due loan metrics discussed below exclude
purchased credit impaired (“PCI”) loans totaling $39.0 million (net
of fair value mark of $8.9 million).
Nonperforming Assets (“NPAs”)At December 31, 2017, NPAs totaled
$28.4 million, a decline of $507,000, or 1.8%, from September 30,
2017 and an increase of $8.3 million, or 41.5%, from December 31,
2016. In addition, NPAs as a percentage of total outstanding
loans declined 2 basis points from 0.42% at September 30, 2017 and
increased 8 basis points from 0.32% at December 31, 2016 to 0.40%
at December 31, 2017. As the Company's NPAs have been at
historic lows over the last several quarters, certain changes from
quarter to quarter might stand out in comparison to one another but
have an insignificant impact on the Company's overall asset quality
position. 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, |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
|
2016 |
Nonaccrual loans
|
$ |
21,743 |
|
|
$ |
20,122 |
|
|
$ |
24,574 |
|
|
$ |
22,338 |
|
|
$ |
9,973 |
|
Foreclosed
properties |
5,253 |
|
|
6,449 |
|
|
6,828 |
|
|
6,951 |
|
|
7,430 |
|
Former bank
premises |
1,383 |
|
|
2,315 |
|
|
2,654 |
|
|
2,654 |
|
|
2,654 |
|
Total nonperforming
assets |
$ |
28,379 |
|
|
$ |
28,886 |
|
|
$ |
34,056 |
|
|
$ |
31,943 |
|
|
$ |
20,057 |
|
|
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, |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
|
2016 |
Beginning Balance |
$ |
20,122 |
|
|
$ |
24,574 |
|
|
$ |
22,338 |
|
|
$ |
9,973 |
|
|
$ |
12,677 |
|
Net
customer payments |
(768 |
) |
|
(4,642 |
) |
|
(1,498 |
) |
|
(1,068 |
) |
|
(1,451 |
) |
Additions |
4,335 |
|
|
4,114 |
|
|
5,979 |
|
|
13,557 |
|
|
1,094 |
|
Charge-offs |
(1,305 |
) |
|
(3,376 |
) |
|
(2,004 |
) |
|
(97 |
) |
|
(1,216 |
) |
Loans
returning to accruing status
|
(448 |
) |
|
— |
|
|
(134 |
) |
|
(27 |
) |
|
(1,039 |
) |
Transfers
to OREO |
(193 |
) |
|
(548 |
) |
|
(107 |
) |
|
— |
|
|
(92 |
) |
Ending Balance |
$ |
21,743 |
|
|
$ |
20,122 |
|
|
$ |
24,574 |
|
|
$ |
22,338 |
|
|
$ |
9,973 |
|
|
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, |
|
2017 |
|
2017 |
|
2017 |
|
2017 |
|
2016 |
Beginning Balance |
$ |
8,764 |
|
|
$ |
9,482 |
|
|
$ |
9,605 |
|
|
$ |
10,084 |
|
|
$ |
10,581 |
|
Additions
of foreclosed property
|
325 |
|
|
621 |
|
|
132 |
|
|
— |
|
|
859 |
|
Valuation
adjustments |
(1,046 |
) |
|
(588 |
) |
|
(19 |
) |
|
(238 |
) |
|
(138 |
) |
Proceeds
from sales |
(1,419 |
) |
|
(648 |
) |
|
(272 |
) |
|
(277 |
) |
|
(1,282 |
) |
Gains
(losses) from sales |
12 |
|
|
(103 |
) |
|
36 |
|
|
36 |
|
|
64 |
|
Ending Balance |
$ |
6,636 |
|
|
$ |
8,764 |
|
|
$ |
9,482 |
|
|
$ |
9,605 |
|
|
$ |
10,084 |
|
|
Past Due LoansPast due loans still accruing interest totaled
$27.8 million, or 0.39% of total loans, at December 31, 2017
compared to $34.3 million, or 0.50% of total loans, at September
30, 2017 and $27.9 million, or 0.44% of total loans, at December
31, 2016. Of the total past due loans still accruing
interest, $3.5 million, or 0.05% of total loans, were loans past
due 90 days or more at December 31, 2017, compared to $4.5 million,
or 0.07% of total loans, at September 30, 2017 and $3.0 million, or
0.05% of total loans, at December 31, 2016.
Net Charge-offsFor the fourth quarter of 2017, net charge-offs
were $2.7 million, or 0.15% of total average loans on an annualized
basis, compared to $4.1 million, or 0.24%, for the prior quarter
and $824,000, or 0.05%, for the same quarter last year. Of
the net charge-offs in the fourth quarter of 2017, the majority
were previously considered impaired. For the year ended December
31, 2017, net charge-offs were $10.1 million, or 0.15% of total
average loans, compared to $5.5 million, or 0.09%, for the year
ended December 31, 2016.
Provision for Loan LossesThe provision for loan losses for the
fourth quarter of 2017 was $3.7 million, an increase of $661,000
compared to the previous quarter and an increase of $2.2 million
compared to the same quarter in 2016. The increase in
provision for loan losses was primarily driven by higher loan
balances in the fourth quarter of 2017.
Allowance for Loan LossesThe ALL increased $1.0 million from
September 30, 2017 to $38.2 million at December 31, 2017 primarily
due to loan growth during the quarter. The ALL as a
percentage of the total loan portfolio was 0.54% at December 31,
2017, 0.54% at September 30, 2017, and 0.59% at December 31,
2016.
The ratio of the ALL to nonaccrual loans was 175.7% at December
31, 2017, compared to 184.7% at September 30, 2017 and 372.9% at
December 31, 2016. 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 decreased $293,000, or 1.7%, to $17.2 million
for the quarter ended December 31, 2017 from $17.5 million in the
prior quarter, primarily driven by lower mortgage banking income of
$187,000, lower insurance-related income of $127,000, and reduced
levels of gains on sales of securities of $166,000, partially
offset by increases in customer-related fee income of $214,000.
Mortgage banking income decreased $187,000, or 8.1%, to $2.1
million in the fourth quarter of 2017 compared to $2.3 million in
the third quarter of 2017, related to declines in mortgage loan
originations and higher unrealized losses on mortgage banking
derivatives in the fourth quarter of 2017 compared to the third
quarter. Mortgage loan originations declined by $5.4 million,
or 4.3%, in the fourth quarter to $121.9 million from $127.3
million in the third quarter of 2017. The majority of the
decrease was related to purchase-money mortgage loans, which
declined by $11.9 million from the prior quarter. Of
the mortgage loan originations in the fourth quarter of 2017, 34.4%
were refinances compared with 28.0% in the prior quarter.
NONINTEREST EXPENSE
Noninterest expense increased $2.4 million, or 4.3%, to $59.9
million for the quarter ended December 31, 2017 from $57.5 million
in the prior quarter. Excluding merger-related costs of $1.9
million and $732,000 in the fourth and third quarters of 2017,
respectively, operating noninterest expense increased $1.3 million
when compared to the third quarter of 2017. Incentive
compensation and profit sharing expenses increased by $420,000 for
the fourth quarter of 2017 compared to the prior quarter.
OREO and credit-related expenses increased $602,000 primarily due
to higher valuation adjustments of $458,000 as well as higher
foreclosed property legal costs. During the fourth quarter of
2017, the Company entered into a contract to sell a long-held
property that includes developed residential lots, a golf course,
and undeveloped land and as a result recorded a valuation
adjustment of $980,000. In addition, professional fees
increased $205,000 related to higher consulting and legal fees,
while technology costs increased $194,000 due to higher data
processing fees.
INCOME TAXES
On December 22, 2017, the Tax Act was signed into law. Among
other things, the Tax Act permanently reduced the corporate tax
rate to 21% from the prior maximum rate of 35%, effective for tax
years including or commencing January 1, 2018. As a result of the
reduction of the corporate tax rate to 21%, companies are required
to revalue their deferred tax assets and liabilities as of the date
of enactment, with resulting tax effects accounted for in the
fourth quarter of 2017. The Company continues to evaluate the
impact on its 2017 tax expense of the revaluation required by the
lower corporate tax rate implemented by the Tax Act, which
management has estimated to fall between $5.0 million and $8.0
million. During the fourth quarter of 2017, the Company
recorded $6.3 million in additional tax expense based on the
Company's preliminary analysis of the impact of the Tax Act.
The Company's preliminary estimate of the impact of the Tax Act is
based on currently available information and interpretation of its
provisions. The actual results may differ from the current
estimate due to, among other things, further guidance that may be
issued by U.S. tax authorities or regulatory bodies and/or changes
in interpretations and assumptions that the Company has
preliminarily made. The Company's evaluation of the
impact of the Tax Act is subject to refinement for up to one year
after enactment.
During the fourth quarter of 2017, the Company recorded other
net tax adjustments of $2.5 million as a reduction to tax expense,
primarily related to state net operating losses for which it had
previously reserved in prior years. In assessing the ability
to realize deferred tax assets, management considered the scheduled
reversal of temporary differences, projected future taxable income,
and tax planning strategies. Based on its latest analysis, at
December 31, 2017, management concluded that it is more likely than
not that the Company would be able to fully realize its deferred
tax asset related to net operating losses generated at the state
level.
The effective tax rate for the three months ended December 31,
2017 was 44.3% compared to 26.7% for the three months ended
September 30, 2017. The increase in the effective tax rate
was related to the impact of the Tax Act, tax-exempt interest
income being a smaller percentage of pre-tax income in the fourth
quarter of 2017 compared to the prior quarter, the impact of
additional nondeductible merger-related costs recognized in the
fourth quarter of 2017.
BALANCE SHEET
At December 31, 2017, total assets were $9.3 billion, an
increase of $285.7 million from September 30, 2017 and an increase
of $888.4 million from December 31, 2016. The increase in
assets was mostly related to loan growth.
At December 31, 2017, loans held for investment (net of deferred
fees and costs) were $7.1 billion, an increase of $242.8 million,
or 14.1% (annualized), from September 30, 2017, while average loans
increased $139.8 million, or 8.2% (annualized), from the prior
quarter. Loans held for investment increased $834.4 million,
or 13.2%, from December 31, 2016, while year-to-date average loans
increased $745.0 million, or 12.5%, from the prior year.
At December 31, 2017, total deposits were $7.0 billion, an
increase of $109.9 million, or 6.4% (annualized), from September
30, 2017, while average deposits increased $158.1 million, or 9.3%
(annualized), from the prior quarter. Total deposits grew $612.2
million, or 9.6%, from December 31, 2016, while year-to-date
average deposits increased $590.7 million, or 9.7%, from the prior
year.
At December 31, 2017, September 30, 2017, and December 31, 2016,
respectively, the Company had a common equity Tier 1 capital ratio
of 9.04%, 9.40%, and 9.72%; a Tier 1 capital ratio of 10.14%,
10.56%, and 10.97%; a total capital ratio of 12.43%, 12.94%, and
13.56%; and a leverage ratio of 9.42%, 9.52%, and 9.87%.
The Company’s common equity to total assets ratios at December
31, 2017, September 30, 2017, and December 31, 2016 were 11.23%,
11.53%, and 11.88%, respectively, while its tangible common equity
to tangible assets ratio was 8.14%, 8.34%, and 8.41%,
respectively.
During the fourth quarter of 2017, the Company declared and paid
cash dividends of $0.21 per common share, an increase of $0.01, or
5.0%, compared to both the prior quarter of 2017 and the fourth
quarter of 2016.
XENITH INFORMATION
Xenith’s fourth quarter net loss was $55.8 million, compared to
net income of $7.2 million in the third quarter of 2017. Excluding
after-tax merger-related costs of $5.5 million and nonrecurring tax
expenses related to the preliminary estimated impact of the Tax Act
of $57.2 million, Xenith's net operating earnings(2) were $6.9
million for the fourth quarter of 2017, a decrease of $1.2 million
compared to $8.1 million, which excludes the $896,000 in after-tax
merger-related costs, in the third quarter of 2017. The decline in
the net operating earnings, excluding these nonrecurring items,
from the prior quarter was primarily driven by higher provision for
credit losses and lower gains on sales of securities in the fourth
quarter of 2017 compared to the third quarter of 2017. The Company
continues to evaluate the impact on its 2017 tax expense of the
revaluation required by the lower corporate tax rate implemented by
the Tax Act, which management has estimated to fall between $55.0
million and $60.0 million. For more information on the Tax
Act and the related accounting considerations, please refer to the
"Income Taxes" section above.
Xenith reported a net loss of $36.7 million in 2017, compared to
net income of $57.0 million in 2016. Excluding after-tax
merger-related costs of $8.3 million and nonrecurring tax expenses
related to the Tax Act of $57.2 million, Xenith’s 2017 operating
earnings(2) were $28.7 million. Excluding after-tax
merger-related costs of $12.0 million and a tax benefit of $60.0
million, Xenith's 2016 operating earnings were $9.1 million.
The increase in operating earnings, excluding these nonrecurring
items, of $19.7 million was driven by the full year impact of the
merger between Xenith and Hampton Roads Bankshares, Inc., which was
effective July 29, 2016, higher average balances of earnings assets
in 2017, and lower provision for credit losses in 2017 compared to
2016.
At December 31, 2017, Xenith's loans held for investment were
$2.5 billion, an increase of $82.4 million, or 13.5% (annualized),
from September 30, 2017, while average loans increased $40.2
million, or 6.6% (annualized), from the prior quarter. Loans
held for investment increased $42.5 million, or 1.7%, from December
31, 2016.
At December 31, 2017, total deposits were $2.5 billion, a
decline of $59.8 million, or 9.1% (annualized), from September 30,
2017, while average deposits declined $15.0 million, or 2.3%
(annualized), from the prior quarter. Total deposits declined $26.4
million, or 1.0%, from December 31, 2016.
(2) For a reconciliation of the non-GAAP operating measures that
exclude merger-related costs and nonrecurring and unusual tax
expenses unrelated to the Company’s normal operations, see
Alternative Performance Measures (non-GAAP) section of the Key
Financial Results.
ABOUT UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Union Bankshares
Corporation (NASDAQ: UBSH) is the holding company for Union Bank
& Trust, which has 150 banking offices, 39 of which are
operated as Xenith Bank, a division of Union Bank & Trust of
Richmond, Virginia, and approximately 220 ATMs located throughout
Virginia and in portions of Maryland and North Carolina.
Union Bank & Trust also operates Shore Premier Finance, a
specialty marine lender. Non-bank affiliates of the holding
company include: Union Mortgage Group, Inc., which provides a full
line of mortgage products, Old Dominion Capital Management, Inc.,
which provides investment advisory services, and Union Insurance
Group, LLC, which offers various lines of insurance products.
Additional information on the Company is available at
http://investors.bankatunion.com.
Union Bankshares Corporation will hold a conference call on
Tuesday, January 23rd, 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; international callers wishing to participate may do so by
dialing (973) 453-3058. The conference ID number is
4764909.
NON-GAAP MEASURES
In reporting the results of the quarter ended December 31, 2017,
the Company has provided supplemental performance measures on a
tax-equivalent, tangible, or operating basis. These measures
are a supplement to GAAP used to prepare the Company’s financial
statements and should not be considered in isolation or as a
substitute for comparable measures calculated in accordance with
GAAP. 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, are based on
certain assumptions as of the time they are made, and are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified. Such statements are often
characterized by the use of qualified words (and their derivatives)
such as “expect,” “believe,” “estimate,” “plan,” “project,”
“anticipate,” “intend,” “will,” “may,” “view,” “opportunity,”
“potential,” 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 or changes in:
- the possibility that any of the anticipated benefits of the
Merger with Xenith will not be realized or will not be realized
within the expected time period, the businesses of the Company and
Xenith may not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected, the
expected revenue synergies and cost savings from the Merger may not
be fully realized or realized within the expected time frame,
revenues following the Merger may be lower than expected, or
customer and employee relationships and business operations may be
disrupted by the Merger,
- changes in interest rates,
- general economic and financial market conditions,
- the Company’s ability to manage its growth or implement its
growth strategy,
- the incremental cost and/or decreased revenues associated with
exceeding $10 billion in assets,
- levels of unemployment in the Bank’s lending area,
- real estate values in the Bank’s lending area,
- an insufficient allowance for loan losses,
- the quality or composition of the loan or investment
portfolios,
- concentrations of loans secured by real estate, particularly
commercial real estate,
- the effectiveness of the Company’s credit processes and
management of the Company’s credit risk,
- demand for loan products and financial services in the
Company’s market area,
- the Company’s ability to compete in the market for financial
services,
- technological risks and developments, and cyber attacks or
events,
- performance by the Company’s counterparties or vendors,
- deposit flows,
- the availability of financing and the terms thereof,
- the level of prepayments on loans and mortgage-backed
securities,
- legislative or regulatory changes and requirements,
- the impact of the Tax Act, including, but not limited to, the
effect of the lower corporate tax rate, including on the valuation
of the Company's tax assets and liabilities,
- any future refinements to the Company's preliminary analysis of
the impact of the Tax Act on the Company,
- changes in the effect of the Tax Act due to issuance of
interpretive regulatory guidance or enactment of corrective or
supplement legislation,
- monetary and fiscal policies of the U.S. government including
policies of the U.S. Department of the Treasury and the Board of
Governors of the Federal Reserve System, and
- accounting principles and guidelines.
More information on risk factors that could affect the Company’s
forward-looking statements is available on the Company’s website,
http://investors.bankatunion.com or the Company’s Annual Report on
Form 10-K for the year ended December 31, 2016, the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2017, and other reports filed with the Securities and Exchange
Commission. The information on the Company’s website is not a part
of this press release. All risk factors and uncertainties described
in those documents should be considered in evaluating
forward-looking statements and undue reliance should not be placed
on such statements. 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 |
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Results of
Operations |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
(unaudited) |
|
Interest
and dividend income |
$ |
87,482 |
|
|
$ |
84,850 |
|
|
$ |
76,957 |
|
|
$ |
330,194 |
|
|
$ |
294,920 |
|
Interest
expense |
14,090 |
|
|
13,652 |
|
|
8,342 |
|
|
50,037 |
|
|
29,770 |
|
Net
interest income |
73,392 |
|
|
71,198 |
|
|
68,615 |
|
|
280,157 |
|
|
265,150 |
|
Provision
for credit losses |
3,411 |
|
|
3,050 |
|
|
1,723 |
|
|
10,756 |
|
|
9,100 |
|
Net
interest income after provision for credit losses |
69,981 |
|
|
68,148 |
|
|
66,892 |
|
|
269,401 |
|
|
256,050 |
|
Noninterest income |
17,243 |
|
|
17,536 |
|
|
18,050 |
|
|
71,674 |
|
|
70,907 |
|
Noninterest expenses |
59,944 |
|
|
57,496 |
|
|
56,267 |
|
|
234,765 |
|
|
222,703 |
|
Income
before income taxes |
27,280 |
|
|
28,188 |
|
|
28,675 |
|
|
106,310 |
|
|
104,254 |
|
Income
tax expense |
12,095 |
|
|
7,530 |
|
|
7,899 |
|
|
33,387 |
|
|
26,778 |
|
Net
income |
$ |
15,185 |
|
|
$ |
20,658 |
|
|
$ |
20,776 |
|
|
$ |
72,923 |
|
|
$ |
77,476 |
|
|
|
|
|
|
|
|
|
|
|
Interest
earned on earning assets (FTE) (1) |
$ |
90,263 |
|
|
$ |
87,498 |
|
|
$ |
79,833 |
|
|
$ |
340,810 |
|
|
$ |
305,164 |
|
Net
interest income (FTE) (1) |
76,173 |
|
|
73,846 |
|
|
71,491 |
|
|
290,774 |
|
|
275,394 |
|
|
|
|
|
|
|
|
|
|
|
Net
income - community bank segment |
$ |
14,986 |
|
|
$ |
20,311 |
|
|
$ |
20,394 |
|
|
$ |
71,822 |
|
|
$ |
75,716 |
|
Net
income - mortgage segment |
199 |
|
|
347 |
|
|
382 |
|
|
1,101 |
|
|
1,760 |
|
|
|
|
|
|
|
|
|
|
|
Key
Ratios |
|
|
|
|
|
|
|
|
|
Earnings
per common share, diluted |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.48 |
|
|
$ |
1.67 |
|
|
$ |
1.77 |
|
Return on
average assets (ROA) |
0.66 |
% |
|
0.91 |
% |
|
0.99 |
% |
|
0.83 |
% |
|
0.96 |
% |
Return on
average equity (ROE) |
5.75 |
% |
|
7.90 |
% |
|
8.22 |
% |
|
7.07 |
% |
|
7.79 |
% |
Return on
average tangible common equity (ROTCE) (2) |
8.20 |
% |
|
11.34 |
% |
|
12.05 |
% |
|
10.20 |
% |
|
11.45 |
% |
Efficiency ratio |
66.14 |
% |
|
64.80 |
% |
|
64.92 |
% |
|
66.73 |
% |
|
66.27 |
% |
Efficiency ratio (FTE) (1) |
64.17 |
% |
|
62.92 |
% |
|
62.84 |
% |
|
64.77 |
% |
|
64.31 |
% |
Net
interest margin |
3.51 |
% |
|
3.46 |
% |
|
3.63 |
% |
|
3.49 |
% |
|
3.66 |
% |
Net
interest margin (FTE) (1) |
3.64 |
% |
|
3.59 |
% |
|
3.78 |
% |
|
3.63 |
% |
|
3.80 |
% |
Yields on
earning assets (FTE) (1) |
4.32 |
% |
|
4.25 |
% |
|
4.23 |
% |
|
4.25 |
% |
|
4.21 |
% |
Cost of
interest-bearing liabilities (FTE) (1) |
0.87 |
% |
|
0.85 |
% |
|
0.57 |
% |
|
0.80 |
% |
|
0.53 |
% |
Cost of
funds (FTE) (1) |
0.68 |
% |
|
0.66 |
% |
|
0.45 |
% |
|
0.62 |
% |
|
0.41 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
Measures (3) |
|
|
|
|
|
|
|
|
|
Net
operating earnings |
$ |
22,821 |
|
|
$ |
21,319 |
|
|
$ |
20,776 |
|
|
$ |
83,578 |
|
|
$ |
77,476 |
|
Operating
earnings per share, diluted |
$ |
0.52 |
|
|
$ |
0.49 |
|
|
$ |
0.48 |
|
|
$ |
1.91 |
|
|
$ |
1.77 |
|
Operating
ROA |
1.00 |
% |
|
0.94 |
% |
|
0.99 |
% |
|
0.95 |
% |
|
0.96 |
% |
Operating
ROE |
8.63 |
% |
|
8.15 |
% |
|
8.22 |
% |
|
8.11 |
% |
|
7.79 |
% |
Operating
ROTCE |
12.32 |
% |
|
11.70 |
% |
|
12.05 |
% |
|
11.69 |
% |
|
11.45 |
% |
Operating
efficiency ratio (FTE) |
62.12 |
% |
|
62.12 |
% |
|
62.84 |
% |
|
63.28 |
% |
|
64.31 |
% |
Community
bank segment net operating earnings |
$ |
22,492 |
|
|
$ |
20,972 |
|
|
$ |
20,394 |
|
|
$ |
82,347 |
|
|
$ |
75,716 |
|
Community
bank segment operating earnings per share, diluted |
$ |
0.51 |
|
|
$ |
0.48 |
|
|
$ |
0.47 |
|
|
$ |
1.88 |
|
|
$ |
1.73 |
|
Mortgage
segment net operating earnings |
$ |
329 |
|
|
$ |
347 |
|
|
$ |
382 |
|
|
$ |
1,231 |
|
|
$ |
1,760 |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data |
|
|
|
|
|
|
|
|
|
Earnings
per common share, basic |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.48 |
|
|
$ |
1.67 |
|
|
$ |
1.77 |
|
Earnings
per common share, diluted |
0.35 |
|
|
0.47 |
|
|
0.48 |
|
|
1.67 |
|
|
1.77 |
|
Cash
dividends paid per common share |
0.21 |
|
|
0.20 |
|
|
0.20 |
|
|
0.81 |
|
|
0.77 |
|
Market
value per share |
36.17 |
|
|
35.30 |
|
|
35.74 |
|
|
36.17 |
|
|
35.74 |
|
Book
value per common share |
24.10 |
|
|
24.00 |
|
|
23.15 |
|
|
24.10 |
|
|
23.15 |
|
Tangible
book value per common share (2) |
16.88 |
|
|
16.76 |
|
|
15.78 |
|
|
16.88 |
|
|
15.78 |
|
Price to
earnings ratio, diluted |
26.05 |
|
|
18.93 |
|
|
18.72 |
|
|
21.66 |
|
|
20.19 |
|
Price to
book value per common share ratio |
1.50 |
|
|
1.47 |
|
|
1.54 |
|
|
1.50 |
|
|
1.54 |
|
Price to
tangible book value per common share ratio (2) |
2.14 |
|
|
2.11 |
|
|
2.26 |
|
|
2.14 |
|
|
2.26 |
|
Weighted
average common shares outstanding, basic |
43,740,001 |
|
|
43,706,635 |
|
|
43,577,634 |
|
|
43,698,897 |
|
|
43,784,193 |
|
Weighted
average common shares outstanding, diluted |
43,816,018 |
|
|
43,792,058 |
|
|
43,659,416 |
|
|
43,779,744 |
|
|
43,890,271 |
|
Common
shares outstanding at end of period |
43,743,318 |
|
|
43,729,229 |
|
|
43,609,317 |
|
|
43,743,318 |
|
|
43,609,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three Months
Ended |
|
As of & For Year Ended |
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Capital
Ratios |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Common
equity Tier 1 capital ratio (4) |
9.04 |
% |
|
9.40 |
% |
|
9.72 |
% |
|
9.04 |
% |
|
9.72 |
% |
Tier 1
capital ratio (4) |
10.14 |
% |
|
10.56 |
% |
|
10.97 |
% |
|
10.14 |
% |
|
10.97 |
% |
Total
capital ratio (4) |
12.43 |
% |
|
12.94 |
% |
|
13.56 |
% |
|
12.43 |
% |
|
13.56 |
% |
Leverage
ratio (Tier 1 capital to average assets) (4)
|
9.42 |
% |
|
9.52 |
% |
|
9.87 |
% |
|
9.42 |
% |
|
9.87 |
% |
Common
equity to total assets |
11.23 |
% |
|
11.53 |
% |
|
11.88 |
% |
|
11.23 |
% |
|
11.88 |
% |
Tangible
common equity to tangible assets (2) |
8.14 |
% |
|
8.34 |
% |
|
8.41 |
% |
|
8.14 |
% |
|
8.41 |
% |
|
|
|
|
|
|
|
|
|
|
Financial
Condition |
|
|
|
|
|
|
|
|
|
Assets |
$ |
9,315,179 |
|
|
$ |
9,029,436 |
|
|
$ |
8,426,793 |
|
|
$ |
9,315,179 |
|
|
$ |
8,426,793 |
|
Loans
held for investment |
7,141,552 |
|
|
6,898,729 |
|
|
6,307,060 |
|
|
7,141,552 |
|
|
6,307,060 |
|
Earning
Assets |
8,513,145 |
|
|
8,232,413 |
|
|
7,611,098 |
|
|
8,513,145 |
|
|
7,611,098 |
|
Goodwill |
298,528 |
|
|
298,191 |
|
|
298,191 |
|
|
298,528 |
|
|
298,191 |
|
Amortizable intangibles, net |
14,803 |
|
|
16,017 |
|
|
20,602 |
|
|
14,803 |
|
|
20,602 |
|
Deposits |
6,991,718 |
|
|
6,881,826 |
|
|
6,379,489 |
|
|
6,991,718 |
|
|
6,379,489 |
|
Stockholders' equity |
1,046,329 |
|
|
1,041,371 |
|
|
1,001,032 |
|
|
1,046,329 |
|
|
1,001,032 |
|
Tangible
common equity (2) |
732,998 |
|
|
727,163 |
|
|
682,239 |
|
|
732,998 |
|
|
682,239 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for
investment, net of deferred fees and costs |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
948,791 |
|
|
$ |
841,738 |
|
|
$ |
751,131 |
|
|
$ |
948,791 |
|
|
$ |
751,131 |
|
Commercial real estate - owner occupied |
943,933 |
|
|
903,523 |
|
|
857,805 |
|
|
943,933 |
|
|
857,805 |
|
Commercial real estate - non-owner occupied |
1,713,659 |
|
|
1,748,039 |
|
|
1,564,295 |
|
|
1,713,659 |
|
|
1,564,295 |
|
Multifamily real estate |
357,079 |
|
|
368,686 |
|
|
334,276 |
|
|
357,079 |
|
|
334,276 |
|
Commercial & Industrial |
612,023 |
|
|
554,522 |
|
|
551,526 |
|
|
612,023 |
|
|
551,526 |
|
Residential 1-4 Family |
1,098,085 |
|
|
1,083,112 |
|
|
1,029,547 |
|
|
1,098,085 |
|
|
1,029,547 |
|
Auto |
282,474 |
|
|
276,572 |
|
|
262,071 |
|
|
282,474 |
|
|
262,071 |
|
HELOC |
537,521 |
|
|
535,446 |
|
|
526,884 |
|
|
537,521 |
|
|
526,884 |
|
Consumer
and all other |
647,987 |
|
|
587,091 |
|
|
429,525 |
|
|
647,987 |
|
|
429,525 |
|
Total
loans held for investment |
$ |
7,141,552 |
|
|
$ |
6,898,729 |
|
|
$ |
6,307,060 |
|
|
$ |
7,141,552 |
|
|
$ |
6,307,060 |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
NOW
accounts |
$ |
1,929,416 |
|
|
$ |
1,851,327 |
|
|
$ |
1,765,956 |
|
|
$ |
1,929,416 |
|
|
$ |
1,765,956 |
|
Money
market accounts |
1,685,174 |
|
|
1,621,443 |
|
|
1,435,591 |
|
|
1,685,174 |
|
|
1,435,591 |
|
Savings
accounts |
546,274 |
|
|
553,082 |
|
|
591,742 |
|
|
546,274 |
|
|
591,742 |
|
Time
deposits of $100,000 and over |
624,112 |
|
|
621,070 |
|
|
530,275 |
|
|
624,112 |
|
|
530,275 |
|
Other
time deposits |
704,534 |
|
|
699,755 |
|
|
662,300 |
|
|
704,534 |
|
|
662,300 |
|
Total
interest-bearing deposits |
$ |
5,489,510 |
|
|
$ |
5,346,677 |
|
|
$ |
4,985,864 |
|
|
$ |
5,489,510 |
|
|
$ |
4,985,864 |
|
Demand
deposits |
1,502,208 |
|
|
1,535,149 |
|
|
1,393,625 |
|
|
1,502,208 |
|
|
1,393,625 |
|
Total
deposits |
$ |
6,991,718 |
|
|
$ |
6,881,826 |
|
|
$ |
6,379,489 |
|
|
$ |
6,991,718 |
|
|
$ |
6,379,489 |
|
|
|
|
|
|
|
|
|
|
|
Averages |
|
|
|
|
|
|
|
|
|
Assets |
$ |
9,085,211 |
|
|
$ |
8,973,964 |
|
|
$ |
8,312,750 |
|
|
$ |
8,820,142 |
|
|
$ |
8,046,305 |
|
Loans
held for investment |
6,962,299 |
|
|
6,822,498 |
|
|
6,214,084 |
|
|
6,701,101 |
|
|
5,956,125 |
|
Loans
held for sale |
31,448 |
|
|
38,569 |
|
|
43,594 |
|
|
31,458 |
|
|
36,126 |
|
Securities |
1,238,663 |
|
|
1,243,904 |
|
|
1,202,125 |
|
|
1,230,105 |
|
|
1,202,692 |
|
Earning
assets |
8,293,366 |
|
|
8,167,919 |
|
|
7,514,979 |
|
|
8,016,311 |
|
|
7,249,090 |
|
Deposits |
6,955,949 |
|
|
6,797,840 |
|
|
6,310,025 |
|
|
6,701,475 |
|
|
6,110,788 |
|
Certificates of deposit |
1,335,357 |
|
|
1,289,794 |
|
|
1,192,253 |
|
|
1,271,649 |
|
|
1,177,732 |
|
Interest-bearing deposits |
5,435,705 |
|
|
5,302,226 |
|
|
4,885,428 |
|
|
5,234,102 |
|
|
4,722,572 |
|
Borrowings |
1,022,307 |
|
|
1,080,226 |
|
|
927,218 |
|
|
1,028,434 |
|
|
877,602 |
|
Interest-bearing liabilities |
6,458,012 |
|
|
6,382,452 |
|
|
5,812,646 |
|
|
6,262,536 |
|
|
5,600,174 |
|
Stockholders' equity |
1,048,632 |
|
|
1,037,792 |
|
|
1,005,769 |
|
|
1,030,847 |
|
|
994,785 |
|
Tangible
common equity (2) |
734,847 |
|
|
722,920 |
|
|
686,143 |
|
|
715,125 |
|
|
676,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Year Ended
|
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Asset
Quality |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
(unaudited) |
Allowance for Loan Losses (ALL) |
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance |
$ |
37,162 |
|
|
$ |
38,214 |
|
|
$ |
36,542 |
|
|
$ |
37,192 |
|
|
$ |
34,047 |
|
Add:
Recoveries |
696 |
|
|
887 |
|
|
1,003 |
|
|
3,255 |
|
|
3,025 |
|
Less:
Charge-offs |
3,361 |
|
|
4,989 |
|
|
1,827 |
|
|
13,310 |
|
|
8,555 |
|
Add:
Provision for loan losses |
3,711 |
|
|
3,050 |
|
|
1,474 |
|
|
11,071 |
|
|
8,675 |
|
Ending
balance |
$ |
38,208 |
|
|
$ |
37,162 |
|
|
$ |
37,192 |
|
|
$ |
38,208 |
|
|
$ |
37,192 |
|
|
|
|
|
|
|
|
|
|
|
ALL /
total outstanding loans |
0.54 |
% |
|
0.54 |
% |
|
0.59 |
% |
|
0.54 |
% |
|
0.59 |
% |
Net
charge-offs / total average loans |
0.15 |
% |
|
0.24 |
% |
|
0.05 |
% |
|
0.15 |
% |
|
0.09 |
% |
Provision
/ total average loans |
0.21 |
% |
|
0.18 |
% |
|
0.09 |
% |
|
0.17 |
% |
|
0.15 |
% |
|
|
|
|
|
|
|
|
|
|
Total PCI
Loans |
$ |
39,021 |
|
|
$ |
51,041 |
|
|
$ |
59,292 |
|
|
$ |
39,021 |
|
|
$ |
59,292 |
|
Remaining
fair value mark on purchased performing loans |
13,726 |
|
|
14,602 |
|
|
16,939 |
|
|
13,726 |
|
|
16,939 |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Assets |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
5,610 |
|
|
$ |
5,671 |
|
|
$ |
2,037 |
|
|
$ |
5,610 |
|
|
$ |
2,037 |
|
Commercial real estate - owner occupied |
2,708 |
|
|
2,205 |
|
|
794 |
|
|
2,708 |
|
|
794 |
|
Commercial real estate - non-owner occupied |
2,992 |
|
|
2,701 |
|
|
— |
|
|
2,992 |
|
|
— |
|
Commercial & Industrial |
316 |
|
|
1,252 |
|
|
124 |
|
|
316 |
|
|
124 |
|
Residential 1-4 Family |
7,354 |
|
|
6,163 |
|
|
5,279 |
|
|
7,354 |
|
|
5,279 |
|
Auto |
413 |
|
|
174 |
|
|
169 |
|
|
413 |
|
|
169 |
|
HELOC |
2,075 |
|
|
1,791 |
|
|
1,279 |
|
|
2,075 |
|
|
1,279 |
|
Consumer
and all other |
275 |
|
|
165 |
|
|
291 |
|
|
275 |
|
|
291 |
|
Nonaccrual loans |
$ |
21,743 |
|
|
$ |
20,122 |
|
|
$ |
9,973 |
|
|
$ |
21,743 |
|
|
$ |
9,973 |
|
Other
real estate owned |
6,636 |
|
|
8,764 |
|
|
10,084 |
|
|
6,636 |
|
|
10,084 |
|
Total
nonperforming assets (NPAs) |
$ |
28,379 |
|
|
$ |
28,886 |
|
|
$ |
20,057 |
|
|
$ |
28,379 |
|
|
$ |
20,057 |
|
Construction and land development |
$ |
1,340 |
|
|
$ |
54 |
|
|
$ |
76 |
|
|
$ |
1,340 |
|
|
$ |
76 |
|
Commercial real estate - owner occupied |
— |
|
|
679 |
|
|
35 |
|
|
— |
|
|
35 |
|
Commercial real estate - non-owner occupied |
194 |
|
|
298 |
|
|
— |
|
|
194 |
|
|
— |
|
Commercial & Industrial |
214 |
|
|
101 |
|
|
9 |
|
|
214 |
|
|
9 |
|
Residential 1-4 Family |
1,125 |
|
|
2,360 |
|
|
2,048 |
|
|
1,125 |
|
|
2,048 |
|
Auto |
40 |
|
|
143 |
|
|
111 |
|
|
40 |
|
|
111 |
|
HELOC |
217 |
|
|
709 |
|
|
635 |
|
|
217 |
|
|
635 |
|
Consumer
and all other |
402 |
|
|
188 |
|
|
91 |
|
|
402 |
|
|
91 |
|
Loans ≥
90 days and still accruing |
$ |
3,532 |
|
|
$ |
4,532 |
|
|
$ |
3,005 |
|
|
$ |
3,532 |
|
|
$ |
3,005 |
|
Total
NPAs and loans ≥ 90 days |
$ |
31,911 |
|
|
$ |
33,418 |
|
|
$ |
23,062 |
|
|
$ |
31,911 |
|
|
$ |
23,062 |
|
NPAs /
total outstanding loans |
0.40 |
% |
|
0.42 |
% |
|
0.32 |
% |
|
0.40 |
% |
|
0.32 |
% |
NPAs /
total assets |
0.30 |
% |
|
0.32 |
% |
|
0.24 |
% |
|
0.30 |
% |
|
0.24 |
% |
ALL /
nonaccrual loans |
175.73 |
% |
|
184.68 |
% |
|
372.93 |
% |
|
175.73 |
% |
|
372.93 |
% |
ALL /
nonperforming assets |
134.63 |
% |
|
128.65 |
% |
|
185.43 |
% |
|
134.63 |
% |
|
185.43 |
% |
|
|
|
|
|
|
|
|
|
|
Past Due Detail |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
1,248 |
|
|
$ |
7,221 |
|
|
$ |
1,162 |
|
|
$ |
1,248 |
|
|
$ |
1,162 |
|
Commercial real estate - owner occupied |
444 |
|
|
1,707 |
|
|
1,842 |
|
|
444 |
|
|
1,842 |
|
Commercial real estate - non-owner occupied |
187 |
|
|
909 |
|
|
2,369 |
|
|
187 |
|
|
2,369 |
|
Multifamily real estate |
— |
|
|
— |
|
|
147 |
|
|
— |
|
|
147 |
|
Commercial & Industrial |
1,147 |
|
|
1,558 |
|
|
759 |
|
|
1,147 |
|
|
759 |
|
Residential 1-4 Family |
5,520 |
|
|
5,633 |
|
|
7,038 |
|
|
5,520 |
|
|
7,038 |
|
Auto |
3,541 |
|
|
2,415 |
|
|
2,570 |
|
|
3,541 |
|
|
2,570 |
|
HELOC |
2,382 |
|
|
1,400 |
|
|
1,836 |
|
|
2,382 |
|
|
1,836 |
|
Consumer
and all other |
2,404 |
|
|
3,469 |
|
|
2,522 |
|
|
2,404 |
|
|
2,522 |
|
Loans
30-59 days past due |
$ |
16,873 |
|
|
$ |
24,312 |
|
|
$ |
20,245 |
|
|
$ |
16,873 |
|
|
$ |
20,245 |
|
|
|
|
|
|
As of & For Three Months
Ended |
|
As of & For Year Ended |
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Past Due Detail cont'd |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
(unaudited) |
|
Construction and land development |
$ |
898 |
|
|
$ |
100 |
|
|
$ |
232 |
|
|
$ |
898 |
|
|
$ |
232 |
|
Commercial real estate - owner occupied |
81 |
|
|
689 |
|
|
109 |
|
|
81 |
|
|
109 |
|
Commercial real estate - non-owner occupied
|
84 |
|
|
571 |
|
|
— |
|
|
84 |
|
|
— |
|
Commercial & Industrial |
109 |
|
|
255 |
|
|
858 |
|
|
109 |
|
|
858 |
|
Residential 1-4 Family |
3,241 |
|
|
1,439 |
|
|
534 |
|
|
3,241 |
|
|
534 |
|
Auto |
185 |
|
|
293 |
|
|
317 |
|
|
185 |
|
|
317 |
|
HELOC |
717 |
|
|
628 |
|
|
1,140 |
|
|
717 |
|
|
1,140 |
|
Consumer
and all other |
2,052 |
|
|
1,445 |
|
|
1,431 |
|
|
2,052 |
|
|
1,431 |
|
Loans
60-89 days past due |
$ |
7,367 |
|
|
$ |
5,420 |
|
|
$ |
4,621 |
|
|
$ |
7,367 |
|
|
$ |
4,621 |
|
|
|
|
|
|
|
|
|
|
|
Troubled Debt Restructurings |
|
|
|
|
|
|
|
|
|
Performing |
$ |
14,553 |
|
|
$ |
16,519 |
|
|
$ |
13,967 |
|
|
$ |
14,553 |
|
|
$ |
13,967 |
|
Nonperforming |
2,849 |
|
|
2,725 |
|
|
1,435 |
|
|
2,849 |
|
|
1,435 |
|
Total
troubled debt restructurings |
$ |
17,402 |
|
|
$ |
19,244 |
|
|
$ |
15,402 |
|
|
$ |
17,402 |
|
|
$ |
15,402 |
|
|
|
|
|
|
|
|
|
|
|
Alternative
Performance Measures (non-GAAP) |
|
|
|
|
|
|
|
|
|
Net interest income (FTE) |
|
|
|
|
|
|
|
|
|
Net
interest income (GAAP) |
$ |
73,392 |
|
|
$ |
71,198 |
|
|
$ |
68,615 |
|
|
$ |
280,157 |
|
|
$ |
265,150 |
|
FTE
adjustment |
2,781 |
|
|
2,648 |
|
|
2,876 |
|
|
10,617 |
|
|
10,244 |
|
Net
interest income (FTE) (non-GAAP) (1) |
$ |
76,173 |
|
|
$ |
73,846 |
|
|
$ |
71,491 |
|
|
$ |
290,774 |
|
|
$ |
275,394 |
|
Average
earning assets |
8,293,366 |
|
|
8,167,919 |
|
|
7,514,979 |
|
|
8,016,311 |
|
|
7,249,090 |
|
Net
interest margin |
3.51 |
% |
|
3.46 |
% |
|
3.63 |
% |
|
3.49 |
% |
|
3.66 |
% |
Net
interest margin (FTE) (1) |
3.64 |
% |
|
3.59 |
% |
|
3.78 |
% |
|
3.63 |
% |
|
3.80 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible Assets |
|
|
|
|
|
|
|
|
|
Ending
assets (GAAP) |
$ |
9,315,179 |
|
|
$ |
9,029,436 |
|
|
$ |
8,426,793 |
|
|
$ |
9,315,179 |
|
|
$ |
8,426,793 |
|
Less:
Ending goodwill |
298,528 |
|
|
298,191 |
|
|
298,191 |
|
|
298,528 |
|
|
298,191 |
|
Less:
Ending amortizable intangibles |
14,803 |
|
|
16,017 |
|
|
20,602 |
|
|
14,803 |
|
|
20,602 |
|
Ending
tangible assets (non-GAAP) |
$ |
9,001,848 |
|
|
$ |
8,715,228 |
|
|
$ |
8,108,000 |
|
|
$ |
9,001,848 |
|
|
$ |
8,108,000 |
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity (2) |
|
|
|
|
|
|
|
|
|
Ending
equity (GAAP) |
$ |
1,046,329 |
|
|
$ |
1,041,371 |
|
|
$ |
1,001,032 |
|
|
$ |
1,046,329 |
|
|
$ |
1,001,032 |
|
Less:
Ending goodwill |
298,528 |
|
|
298,191 |
|
|
298,191 |
|
|
298,528 |
|
|
298,191 |
|
Less:
Ending amortizable intangibles |
14,803 |
|
|
16,017 |
|
|
20,602 |
|
|
14,803 |
|
|
20,602 |
|
Ending
tangible common equity (non-GAAP) |
$ |
732,998 |
|
|
$ |
727,163 |
|
|
$ |
682,239 |
|
|
$ |
732,998 |
|
|
$ |
682,239 |
|
|
|
|
|
|
|
|
|
|
|
Average
equity (GAAP) |
$ |
1,048,632 |
|
|
$ |
1,037,792 |
|
|
$ |
1,005,769 |
|
|
$ |
1,030,847 |
|
|
$ |
994,785 |
|
Less:
Average goodwill |
298,385 |
|
|
298,191 |
|
|
298,191 |
|
|
298,240 |
|
|
296,087 |
|
Less:
Average amortizable intangibles |
15,400 |
|
|
16,681 |
|
|
21,435 |
|
|
17,482 |
|
|
22,044 |
|
Average
tangible common equity (non-GAAP) |
$ |
734,847 |
|
|
$ |
722,920 |
|
|
$ |
686,143 |
|
|
$ |
715,125 |
|
|
$ |
676,654 |
|
|
|
|
|
|
|
|
|
|
|
Operating Measures (3) |
|
|
|
|
|
|
|
|
|
Net
income (GAAP) |
$ |
15,185 |
|
|
$ |
20,658 |
|
|
$ |
20,776 |
|
|
$ |
72,923 |
|
|
$ |
77,476 |
|
Plus:
Merger-related costs, net of tax |
1,386 |
|
|
661 |
|
|
— |
|
|
4,405 |
|
|
— |
|
Plus:
Nonrecurring tax expenses |
6,250 |
|
|
— |
|
|
— |
|
|
6,250 |
|
|
— |
|
Net
operating earnings (non-GAAP) |
$ |
22,821 |
|
|
$ |
21,319 |
|
|
$ |
20,776 |
|
|
$ |
83,578 |
|
|
$ |
77,476 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense (GAAP) |
$ |
59,944 |
|
|
$ |
57,496 |
|
|
$ |
56,267 |
|
|
$ |
234,765 |
|
|
$ |
222,703 |
|
Less:
Merger-related costs |
1,917 |
|
|
732 |
|
|
— |
|
|
5,393 |
|
|
— |
|
Operating
noninterest expense (non-GAAP) |
$ |
58,027 |
|
|
$ |
56,764 |
|
|
$ |
56,267 |
|
|
$ |
229,372 |
|
|
$ |
222,703 |
|
|
|
|
|
|
|
|
|
|
|
Net
interest income (FTE) (non-GAAP) (1) |
$ |
76,173 |
|
|
$ |
73,846 |
|
|
$ |
71,491 |
|
|
$ |
290,774 |
|
|
$ |
275,394 |
|
Noninterest income (GAAP) |
17,243 |
|
|
17,536 |
|
|
18,050 |
|
|
71,674 |
|
|
70,907 |
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
66.14 |
% |
|
64.80 |
% |
|
64.92 |
% |
|
66.73 |
% |
|
66.27 |
% |
Efficiency ratio (FTE) (1) |
64.17 |
% |
|
62.92 |
% |
|
62.84 |
% |
|
64.77 |
% |
|
64.31 |
% |
Operating
efficiency ratio (FTE) |
62.12 |
% |
|
62.12 |
% |
|
62.84 |
% |
|
63.28 |
% |
|
64.31 |
% |
|
|
|
|
|
As of & For Three Months Ended
|
|
As of &
For Year Ended |
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Alternative
Performance Measures (non-GAAP) cont'd |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Operating Measures cont'd
(3) |
|
|
|
|
|
|
|
|
|
Community
bank segment net income (GAAP) |
$ |
14,986 |
|
|
$ |
20,311 |
|
|
$ |
20,394 |
|
|
$ |
71,822 |
|
|
$ |
75,716 |
|
Plus:
Merger-related costs, net of tax |
1,386 |
|
|
661 |
|
|
— |
|
|
4,405 |
|
|
— |
|
Plus:
Nonrecurring tax expenses |
6,120 |
|
|
— |
|
|
— |
|
|
6,120 |
|
|
— |
|
Community
bank segment net operating earnings (non-GAAP) |
$ |
22,492 |
|
|
$ |
20,972 |
|
|
$ |
20,394 |
|
|
$ |
82,347 |
|
|
$ |
75,716 |
|
|
|
|
|
|
|
|
|
|
|
Community
bank segment earnings per share, diluted (GAAP) |
$ |
0.34 |
|
|
$ |
0.46 |
|
|
$ |
0.47 |
|
|
$ |
1.64 |
|
|
$ |
1.73 |
|
Community
bank segment operating earnings per share, diluted (non-GAAP) |
0.51 |
|
|
0.48 |
|
|
0.47 |
|
|
1.88 |
|
|
1.73 |
|
|
|
|
|
|
|
|
|
|
|
Mortgage
segment net income (GAAP) |
$ |
199 |
|
|
$ |
347 |
|
|
$ |
382 |
|
|
$ |
1,101 |
|
|
$ |
1,760 |
|
Plus:
Nonrecurring tax expenses |
130 |
|
|
— |
|
|
— |
|
|
130 |
|
|
— |
|
Mortgage
segment net operating earnings (non-GAAP) |
$ |
329 |
|
|
$ |
347 |
|
|
$ |
382 |
|
|
$ |
1,231 |
|
|
$ |
1,760 |
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Origination Volume |
|
|
|
|
|
|
|
|
|
Refinance
Volume |
$ |
41,889 |
|
|
$ |
35,678 |
|
|
$ |
71,454 |
|
|
$ |
143,857 |
|
|
$ |
208,674 |
|
Construction Volume |
20,186 |
|
|
19,966 |
|
|
10,621 |
|
|
82,731 |
|
|
68,026 |
|
Purchase
Volume |
59,840 |
|
|
71,694 |
|
|
63,249 |
|
|
259,461 |
|
|
263,571 |
|
Total
Mortgage loan originations |
$ |
121,915 |
|
|
$ |
127,338 |
|
|
$ |
145,324 |
|
|
$ |
486,049 |
|
|
$ |
540,271 |
|
% of
originations that are refinances |
34.4 |
% |
|
28.0 |
% |
|
49.2 |
% |
|
29.6 |
% |
|
38.6 |
% |
|
|
|
|
|
|
|
|
|
|
Other
Data |
|
|
|
|
|
|
|
|
|
End of
period full-time employees |
1,419 |
|
|
1,427 |
|
|
1,416 |
|
|
1,419 |
|
|
1,416 |
|
Number of
full-service branches |
111 |
|
|
111 |
|
|
114 |
|
|
111 |
|
|
114 |
|
Number of
full automatic transaction machines ("ATMs") |
176 |
|
|
173 |
|
|
185 |
|
|
176 |
|
|
185 |
|
(1) Net interest income (FTE), which is used in computing net
interest margin (FTE) and efficiency ratio (FTE), provides valuable
additional insight into the net interest margin and the efficiency
ratio by adjusting for differences in tax treatment of interest
income sources. The entire FTE adjustment is attributable to
interest income on earning assets, which is used in computing yield
on earning assets. Interest expense and the related cost of
interest-bearing liabilities and cost of funds ratios are not
affected by the FTE components.
(2) Tangible common equity is used in the calculation of
certain profitability, 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.
(3) Operating measures exclude merger-related costs and
nonrecurring tax expenses unrelated to the Company’s normal
operations. Such costs were only incurred during 2017; thus each of
these operating measures is equivalent to the corresponding GAAP
financial measure for the three months and year ended December 31,
2016. The Company believes these measures are useful to investors
as they exclude certain costs resulting from acquisition activity
and allow investors to more clearly see the combined economic
results of the organization's operations.
(4) All ratios at December 31, 2017 are estimates and subject to
change pending the Company’s filing of its FR Y9-C. All other
periods are presented as filed.
|
|
UNION BANKSHARES CORPORATION AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Dollars in thousands,
except share data) |
|
|
|
|
December 31,
|
|
December 31,
|
|
2017 |
|
2016 |
ASSETS |
(unaudited) |
|
(audited) |
Cash and cash equivalents: |
|
|
|
Cash and
due from banks |
$ |
117,586 |
|
|
$ |
120,758 |
|
Interest-bearing deposits in other banks |
81,291 |
|
|
58,030 |
|
Federal
funds sold |
496 |
|
|
449 |
|
Total cash and cash equivalents |
199,373 |
|
|
179,237 |
|
Securities available for sale, at fair value |
974,222 |
|
|
946,764 |
|
Securities held to maturity, at carrying
value |
199,639 |
|
|
201,526 |
|
Restricted stock, at cost |
75,283 |
|
|
60,782 |
|
Loans held for sale, at fair value |
40,662 |
|
|
36,487 |
|
Loans held for investment, net of deferred fees and
costs |
7,141,552 |
|
|
6,307,060 |
|
Less allowance for loan losses |
38,208 |
|
|
37,192 |
|
Net loans held for investment |
7,103,344 |
|
|
6,269,868 |
|
Premises and equipment, net |
119,981 |
|
|
122,027 |
|
Other real estate owned, net of valuation
allowance |
6,636 |
|
|
10,084 |
|
Goodwill |
298,528 |
|
|
298,191 |
|
Amortizable intangibles, net |
14,803 |
|
|
20,602 |
|
Bank owned life insurance |
182,854 |
|
|
179,318 |
|
Other assets |
99,854 |
|
|
101,907 |
|
Total assets |
$ |
9,315,179 |
|
|
$ |
8,426,793 |
|
LIABILITIES |
|
|
|
Noninterest-bearing demand deposits |
$ |
1,502,208 |
|
|
$ |
1,393,625 |
|
Interest-bearing deposits |
5,489,510 |
|
|
4,985,864 |
|
Total deposits |
6,991,718 |
|
|
6,379,489 |
|
Securities sold under agreements to
repurchase |
49,152 |
|
|
59,281 |
|
Other short-term borrowings |
745,000 |
|
|
517,500 |
|
Long-term borrowings |
425,262 |
|
|
413,308 |
|
Other liabilities |
57,718 |
|
|
56,183 |
|
Total liabilities |
8,268,850 |
|
|
7,425,761 |
|
Commitments and contingencies |
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
Common stock,
$1.33 par value, shares authorized 100,000,000; issued and
outstanding, 43,743,318 shares and 43,609,317 shares,
respectively |
57,744 |
|
|
57,506 |
|
Additional paid-in capital |
610,001 |
|
|
605,397 |
|
Retained earnings |
379,468 |
|
|
341,938 |
|
Accumulated other comprehensive income |
(884 |
) |
|
(3,809 |
) |
Total stockholders' equity |
1,046,329 |
|
|
1,001,032 |
|
Total liabilities and stockholders' equity |
$ |
9,315,179 |
|
|
$ |
8,426,793 |
|
|
|
|
|
|
UNION BANKSHARES CORPORATION AND SUBSIDIARIES |
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
(Dollars in thousands,
except share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Interest and
dividend income: |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
Interest
and fees on loans |
$ |
78,501 |
|
|
$ |
75,948 |
|
|
$ |
68,683 |
|
|
$ |
295,146 |
|
|
$ |
262,567 |
|
Interest
on deposits in other banks |
172 |
|
|
181 |
|
|
67 |
|
|
539 |
|
|
244 |
|
Interest
and dividends on securities: |
|
|
|
|
|
|
|
|
|
Taxable |
5,225 |
|
|
5,175 |
|
|
4,761 |
|
|
20,305 |
|
|
18,319 |
|
Nontaxable |
3,584 |
|
|
3,546 |
|
|
3,446 |
|
|
14,204 |
|
|
13,790 |
|
Total interest and dividend income |
87,482 |
|
|
84,850 |
|
|
76,957 |
|
|
330,194 |
|
|
294,920 |
|
Interest
expense: |
|
|
|
|
|
|
|
|
|
Interest
on deposits |
7,696 |
|
|
7,234 |
|
|
4,786 |
|
|
26,106 |
|
|
17,731 |
|
Interest
on short-term borrowings |
1,814 |
|
|
1,871 |
|
|
797 |
|
|
6,035 |
|
|
2,894 |
|
Interest
on long-term borrowings |
4,580 |
|
|
4,547 |
|
|
2,759 |
|
|
17,896 |
|
|
9,145 |
|
Total interest expense |
14,090 |
|
|
13,652 |
|
|
8,342 |
|
|
50,037 |
|
|
29,770 |
|
Net interest income |
73,392 |
|
|
71,198 |
|
|
68,615 |
|
|
280,157 |
|
|
265,150 |
|
Provision for
credit losses |
3,411 |
|
|
3,050 |
|
|
1,723 |
|
|
10,756 |
|
|
9,100 |
|
Net interest income after provision for credit
losses |
69,981 |
|
|
68,148 |
|
|
66,892 |
|
|
269,401 |
|
|
256,050 |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts |
5,266 |
|
|
5,153 |
|
|
5,042 |
|
|
20,212 |
|
|
19,496 |
|
Other
service charges and fees |
4,630 |
|
|
4,529 |
|
|
4,204 |
|
|
18,205 |
|
|
17,175 |
|
Fiduciary
and asset management fees |
2,933 |
|
|
2,794 |
|
|
2,884 |
|
|
11,245 |
|
|
10,199 |
|
Mortgage
banking income, net |
2,118 |
|
|
2,305 |
|
|
2,629 |
|
|
9,241 |
|
|
10,953 |
|
Gains on
securities transactions, net |
18 |
|
|
184 |
|
|
60 |
|
|
800 |
|
|
205 |
|
Bank
owned life insurance income |
1,306 |
|
|
1,377 |
|
|
1,391 |
|
|
6,144 |
|
|
5,513 |
|
Loan-related interest rate swap fees |
424 |
|
|
416 |
|
|
1,198 |
|
|
3,051 |
|
|
4,254 |
|
Other
operating income |
548 |
|
|
778 |
|
|
642 |
|
|
2,776 |
|
|
3,112 |
|
Total noninterest income |
17,243 |
|
|
17,536 |
|
|
18,050 |
|
|
71,674 |
|
|
70,907 |
|
Noninterest
expenses: |
|
|
|
|
|
|
|
|
|
Salaries
and benefits |
29,723 |
|
|
29,769 |
|
|
30,042 |
|
|
122,222 |
|
|
117,103 |
|
Occupancy
expenses |
5,034 |
|
|
4,939 |
|
|
4,901 |
|
|
19,594 |
|
|
19,528 |
|
Furniture
and equipment expenses |
2,621 |
|
|
2,559 |
|
|
2,608 |
|
|
10,503 |
|
|
10,475 |
|
Printing,
postage, and supplies |
1,252 |
|
|
1,154 |
|
|
1,126 |
|
|
4,962 |
|
|
4,692 |
|
Communications expense |
740 |
|
|
798 |
|
|
887 |
|
|
3,319 |
|
|
3,850 |
|
Technology and data processing |
4,426 |
|
|
4,232 |
|
|
4,028 |
|
|
16,485 |
|
|
15,368 |
|
Professional services |
2,190 |
|
|
1,985 |
|
|
1,653 |
|
|
7,925 |
|
|
8,085 |
|
Marketing
and advertising expense |
1,876 |
|
|
1,944 |
|
|
1,946 |
|
|
7,838 |
|
|
7,784 |
|
FDIC
assessment premiums and other insurance |
1,255 |
|
|
1,141 |
|
|
1,403 |
|
|
4,048 |
|
|
5,406 |
|
Other
taxes |
2,022 |
|
|
2,022 |
|
|
1,592 |
|
|
8,087 |
|
|
5,456 |
|
Loan-related expenses |
1,369 |
|
|
1,349 |
|
|
1,152 |
|
|
5,328 |
|
|
4,790 |
|
OREO and
credit-related expenses |
1,741 |
|
|
1,139 |
|
|
637 |
|
|
3,764 |
|
|
2,602 |
|
Amortization of intangible assets |
1,427 |
|
|
1,480 |
|
|
1,742 |
|
|
6,088 |
|
|
7,210 |
|
Training
and other personnel costs |
1,034 |
|
|
887 |
|
|
923 |
|
|
3,934 |
|
|
3,435 |
|
Merger-related costs |
1,917 |
|
|
732 |
|
|
— |
|
|
5,393 |
|
|
— |
|
Other
expenses |
1,317 |
|
|
1,366 |
|
|
1,627 |
|
|
5,275 |
|
|
6,919 |
|
Total noninterest expenses |
59,944 |
|
|
57,496 |
|
|
56,267 |
|
|
234,765 |
|
|
222,703 |
|
Income before income
taxes |
27,280 |
|
|
28,188 |
|
|
28,675 |
|
|
106,310 |
|
|
104,254 |
|
Income tax expense |
12,095 |
|
|
7,530 |
|
|
7,899 |
|
|
33,387 |
|
|
26,778 |
|
Net income |
$ |
15,185 |
|
|
$ |
20,658 |
|
|
$ |
20,776 |
|
|
$ |
72,923 |
|
|
$ |
77,476 |
|
Basic earnings per
common share |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.48 |
|
|
$ |
1.67 |
|
|
$ |
1.77 |
|
Diluted earnings per
common share |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.48 |
|
|
$ |
1.67 |
|
|
$ |
1.77 |
|
|
UNION BANKSHARES CORPORATION AND SUBSIDIARIES |
SEGMENT FINANCIAL INFORMATION |
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
Community Bank |
|
Mortgage |
|
Eliminations |
|
Consolidated |
Three Months
Ended December 31, 2017 (unaudited) |
|
|
|
|
|
|
|
Net interest income |
$ |
72,936 |
|
|
$ |
456 |
|
|
$ |
— |
|
|
$ |
73,392 |
|
Provision for credit losses |
3,458 |
|
|
(47 |
) |
|
— |
|
|
3,411 |
|
Net interest income after provision for credit
losses |
69,478 |
|
|
503 |
|
|
— |
|
|
69,981 |
|
Noninterest income |
15,040 |
|
|
2,329 |
|
|
(126 |
) |
|
17,243 |
|
Noninterest expenses |
57,722 |
|
|
2,348 |
|
|
(126 |
) |
|
59,944 |
|
Income before income taxes |
26,796 |
|
|
484 |
|
|
— |
|
|
27,280 |
|
Income tax expense |
11,810 |
|
|
285 |
|
|
— |
|
|
12,095 |
|
Net income |
14,986 |
|
|
199 |
|
|
— |
|
|
15,185 |
|
Plus: Merger-related costs, net of tax |
1,386 |
|
|
— |
|
|
— |
|
|
1,386 |
|
Plus: Nonrecurring tax expenses |
6,120 |
|
|
130 |
|
|
— |
|
|
6,250 |
|
Net operating earnings (non-GAAP) |
$ |
22,492 |
|
|
$ |
329 |
|
|
$ |
— |
|
|
$ |
22,821 |
|
Total assets |
$ |
9,305,660 |
|
|
$ |
111,845 |
|
|
$ |
(102,326 |
) |
|
$ |
9,315,179 |
|
Three Months
Ended September 30, 2017 (unaudited) |
|
|
|
|
|
|
|
Net interest income |
$ |
70,718 |
|
|
$ |
480 |
|
|
$ |
— |
|
|
$ |
71,198 |
|
Provision for credit losses |
3,056 |
|
|
(6 |
) |
|
— |
|
|
3,050 |
|
Net interest income after provision for credit
losses |
67,662 |
|
|
486 |
|
|
— |
|
|
68,148 |
|
Noninterest income |
15,121 |
|
|
2,527 |
|
|
(112 |
) |
|
17,536 |
|
Noninterest expenses |
55,133 |
|
|
2,475 |
|
|
(112 |
) |
|
57,496 |
|
Income before income taxes |
27,650 |
|
|
538 |
|
|
— |
|
|
28,188 |
|
Income tax expense |
7,339 |
|
|
191 |
|
|
— |
|
|
7,530 |
|
Net income |
20,311 |
|
|
347 |
|
|
— |
|
|
20,658 |
|
Plus: Merger-related costs, net of tax |
661 |
|
|
— |
|
|
— |
|
|
661 |
|
Net operating earnings (non-GAAP) |
$ |
20,972 |
|
|
$ |
347 |
|
|
$ |
— |
|
|
$ |
21,319 |
|
Total assets |
$ |
9,020,486 |
|
|
$ |
97,154 |
|
|
$ |
(88,204 |
) |
|
$ |
9,029,436 |
|
Three Months
Ended December 31, 2016 (unaudited) |
|
|
|
|
|
|
|
Net interest income |
$ |
68,205 |
|
|
$ |
410 |
|
|
$ |
— |
|
|
$ |
68,615 |
|
Provision for credit losses |
1,668 |
|
|
55 |
|
|
— |
|
|
1,723 |
|
Net interest income after provision for credit
losses |
66,537 |
|
|
355 |
|
|
— |
|
|
66,892 |
|
Noninterest income |
15,368 |
|
|
2,823 |
|
|
(141 |
) |
|
18,050 |
|
Noninterest expenses |
53,810 |
|
|
2,598 |
|
|
(141 |
) |
|
56,267 |
|
Income before income taxes |
28,095 |
|
|
580 |
|
|
— |
|
|
28,675 |
|
Income tax expense |
7,701 |
|
|
198 |
|
|
— |
|
|
7,899 |
|
Net income |
$ |
20,394 |
|
|
$ |
382 |
|
|
$ |
— |
|
|
$ |
20,776 |
|
Total assets |
$ |
8,419,625 |
|
|
$ |
93,581 |
|
|
$ |
(86,413 |
) |
|
$ |
8,426,793 |
|
Year Ended
December 31, 2017 (unaudited) |
|
|
|
|
|
|
|
Net interest income |
$ |
278,470 |
|
|
$ |
1,687 |
|
|
$ |
— |
|
|
$ |
280,157 |
|
Provision for credit losses |
10,802 |
|
|
(46 |
) |
|
— |
|
|
10,756 |
|
Net interest income after provision for credit
losses |
267,668 |
|
|
1,733 |
|
|
— |
|
|
269,401 |
|
Noninterest income |
62,120 |
|
|
10,073 |
|
|
(519 |
) |
|
71,674 |
|
Noninterest expenses |
225,366 |
|
|
9,918 |
|
|
(519 |
) |
|
234,765 |
|
Income before income taxes |
104,422 |
|
|
1,888 |
|
|
— |
|
|
106,310 |
|
Income tax expense |
32,600 |
|
|
787 |
|
|
— |
|
|
33,387 |
|
Net income |
71,822 |
|
|
1,101 |
|
|
— |
|
|
72,923 |
|
Plus: Merger-related costs, net of tax |
4,405 |
|
|
— |
|
|
— |
|
|
4,405 |
|
Plus: Nonrecurring tax expenses |
6,120 |
|
|
130 |
|
|
— |
|
|
6,250 |
|
Net operating earnings (non-GAAP) |
$ |
82,347 |
|
|
$ |
1,231 |
|
|
$ |
— |
|
|
$ |
83,578 |
|
Total assets |
$ |
9,305,660 |
|
|
$ |
111,845 |
|
|
$ |
(102,326 |
) |
|
$ |
9,315,179 |
|
Year Ended
December 31, 2016 (audited) |
|
|
|
|
|
|
|
Net interest income |
$ |
263,714 |
|
|
$ |
1,436 |
|
|
$ |
— |
|
|
$ |
265,150 |
|
Provision for credit losses |
8,883 |
|
|
217 |
|
|
— |
|
|
9,100 |
|
Net interest income after provision for credit
losses |
254,831 |
|
|
1,219 |
|
|
— |
|
|
256,050 |
|
Noninterest income |
59,505 |
|
|
12,008 |
|
|
(606 |
) |
|
70,907 |
|
Noninterest expenses |
212,774 |
|
|
10,535 |
|
|
(606 |
) |
|
222,703 |
|
Income before income taxes |
101,562 |
|
|
2,692 |
|
|
— |
|
|
104,254 |
|
Income tax expense |
25,846 |
|
|
932 |
|
|
— |
|
|
26,778 |
|
Net income |
$ |
75,716 |
|
|
$ |
1,760 |
|
|
$ |
— |
|
|
$ |
77,476 |
|
Total assets |
$ |
8,419,625 |
|
|
$ |
93,581 |
|
|
$ |
(86,413 |
) |
|
$ |
8,426,793 |
|
|
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES
(TAXABLE EQUIVALENT BASIS) |
|
For the Quarter Ended |
|
December 31, 2017 |
|
September 30, 2017 |
|
AverageBalance |
|
Interest Income / Expense (1) |
|
Yield / Rate (1)(2) |
|
AverageBalance |
|
Interest Income / Expense (1) |
|
Yield / Rate (1)(2) |
Assets: |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
Taxable |
$ |
758,189 |
|
|
$ |
5,225 |
|
|
2.73 |
% |
|
$ |
774,513 |
|
|
$ |
5,175 |
|
|
2.65 |
% |
Tax-exempt |
480,474 |
|
|
5,513 |
|
|
4.55 |
% |
|
469,391 |
|
|
5,455 |
|
|
4.61 |
% |
Total
securities |
1,238,663 |
|
|
10,738 |
|
|
3.44 |
% |
|
1,243,904 |
|
|
10,630 |
|
|
3.39 |
% |
Loans, net (3) (4) |
6,962,299 |
|
|
79,048 |
|
|
4.50 |
% |
|
6,822,498 |
|
|
76,333 |
|
|
4.44 |
% |
Other earning
assets |
92,404 |
|
|
477 |
|
|
2.05 |
% |
|
101,517 |
|
|
535 |
|
|
2.09 |
% |
Total earning assets |
8,293,366 |
|
|
$ |
90,263 |
|
|
4.32 |
% |
|
8,167,919 |
|
|
$ |
87,498 |
|
|
4.25 |
% |
Allowance for loan
losses |
(37,449 |
) |
|
|
|
|
|
(38,138 |
) |
|
|
|
|
Total
non-earning assets |
829,294 |
|
|
|
|
|
|
844,183 |
|
|
|
|
|
Total
assets |
$ |
9,085,211 |
|
|
|
|
|
|
$ |
8,973,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
Transaction and money market accounts
|
$ |
3,551,759 |
|
|
$ |
3,703 |
|
|
0.41 |
% |
|
$ |
3,457,279 |
|
|
$ |
3,491 |
|
|
0.40 |
% |
Regular
savings |
548,589 |
|
|
150 |
|
|
0.11 |
% |
|
555,153 |
|
|
151 |
|
|
0.11 |
% |
Time
deposits |
1,335,357 |
|
|
3,843 |
|
|
1.14 |
% |
|
1,289,794 |
|
|
3,592 |
|
|
1.10 |
% |
Total interest-bearing deposits |
5,435,705 |
|
|
7,696 |
|
|
0.56 |
% |
|
5,302,226 |
|
|
7,234 |
|
|
0.54 |
% |
Other borrowings
(5) |
1,022,307 |
|
|
6,394 |
|
|
2.48 |
% |
|
1,080,226 |
|
|
6,418 |
|
|
2.36 |
% |
Total interest-bearing liabilities |
6,458,012 |
|
|
14,090 |
|
|
0.87 |
% |
|
6,382,452 |
|
|
13,652 |
|
|
0.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits |
1,520,244 |
|
|
|
|
|
|
1,495,614 |
|
|
|
|
|
Other
liabilities |
58,323 |
|
|
|
|
|
|
58,106 |
|
|
|
|
|
Total liabilities |
8,036,579 |
|
|
|
|
|
|
7,936,172 |
|
|
|
|
|
Stockholders'
equity |
1,048,632 |
|
|
|
|
|
|
1,037,792 |
|
|
|
|
|
Total
liabilities and stockholders' equity |
$ |
9,085,211 |
|
|
|
|
|
|
$ |
8,973,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
|
$ |
76,173 |
|
|
|
|
|
|
$ |
73,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
spread |
|
|
|
|
3.45 |
% |
|
|
|
|
|
3.40 |
% |
Cost of
funds |
|
|
|
|
0.68 |
% |
|
|
|
|
|
0.66 |
% |
Net interest
margin |
|
|
|
|
3.64 |
% |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income
and yields are reported on a taxable equivalent basis using the
statutory federal corporate tax rate of 35%. |
(2) Rates
and yields are annualized and calculated from actual, not rounded,
amounts in thousands, which appear above. |
(3)
Nonaccrual loans are included in average loans outstanding. |
(4)
Interest income on loans includes $2.1 million and $1.7 million for
the three months ended December 31, 2017 and September 30, 2017,
respectively, in accretion of the fair market value adjustments
related to acquisitions. |
(5)
Interest expense on borrowings includes $27,000 and $47,000 for the
both three months ended December 31, 2017 and September 30, 2017,
respectively, in accretion of the fair market value adjustments
related to acquisitions. |
|
|
|
|
|
XENITH BANKSHARES, INC. |
|
|
|
|
KEY FINANCIAL RESULTS |
|
|
|
|
(Dollars
in thousands, except share data) |
|
|
|
|
(FTE -
"Fully Taxable Equivalent") |
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
12/31/17 |
|
9/30/17 |
|
12/31/16 |
|
12/31/17 |
|
12/31/16 |
Results of
Operations |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Interest
and dividend income |
$ |
30,987 |
|
|
$ |
30,412 |
|
|
$ |
28,965 |
|
|
$ |
120,648 |
|
|
$ |
92,417 |
|
Interest
expense |
5,399 |
|
|
5,187 |
|
|
4,831 |
|
|
20,274 |
|
|
15,548 |
|
Net
interest income |
25,588 |
|
|
25,225 |
|
|
24,134 |
|
|
100,374 |
|
|
76,869 |
|
Provision
for credit losses |
865 |
|
|
— |
|
|
625 |
|
|
874 |
|
|
11,329 |
|
Net
interest income after provision for credit losses
|
24,723 |
|
|
25,225 |
|
|
23,509 |
|
|
99,500 |
|
|
65,540 |
|
Noninterest income |
3,563 |
|
|
4,172 |
|
|
3,130 |
|
|
14,688 |
|
|
11,124 |
|
Noninterest expenses |
25,557 |
|
|
18,779 |
|
|
18,461 |
|
|
83,305 |
|
|
80,878 |
|
Income
before income taxes |
2,729 |
|
|
10,618 |
|
|
8,178 |
|
|
30,883 |
|
|
(4,214 |
) |
Income
tax expense |
58,634 |
|
|
3,453 |
|
|
3,066 |
|
|
67,632 |
|
|
(59,728 |
) |
Net
income (loss) |
(55,905 |
) |
|
7,165 |
|
|
5,112 |
|
|
(36,749 |
) |
|
55,514 |
|
Net
income (loss) from discontinued operations |
83 |
|
|
(7 |
) |
|
61 |
|
|
15 |
|
|
1,528 |
|
Net
income (loss) attributable to Company |
(55,822 |
) |
|
7,158 |
|
|
5,173 |
|
|
(36,734 |
) |
|
57,042 |
|
Plus:
Merger-related costs, net of tax |
5,511 |
|
|
896 |
|
|
755 |
|
|
8,275 |
|
|
11,975 |
|
Plus:
Nonrecurring tax expenses |
57,200 |
|
|
— |
|
|
— |
|
|
57,200 |
|
|
— |
|
Plus: Tax
benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(59,950 |
) |
Net
operating earnings (non-GAAP) (1) |
$ |
6,889 |
|
|
$ |
8,054 |
|
|
$ |
5,928 |
|
|
$ |
28,741 |
|
|
$ |
9,067 |
|
|
|
|
|
|
|
|
|
|
|
Net
interest margin |
3.51 |
% |
|
3.50 |
% |
|
3.25 |
% |
|
3.49 |
% |
|
3.35 |
% |
Net
interest margin (FTE) (2) |
3.53 |
% |
|
3.51 |
% |
|
3.27 |
% |
|
3.51 |
% |
|
3.38 |
% |
|
|
|
|
|
|
|
|
|
|
Financial
Condition |
|
|
|
|
|
|
|
|
|
Assets |
$ |
3,270,726 |
|
|
$ |
3,255,771 |
|
|
$ |
3,267,192 |
|
|
$ |
3,270,726 |
|
|
$ |
3,267,192 |
|
Loans
held for investment |
2,506,589 |
|
|
2,424,140 |
|
|
2,464,056 |
|
|
2,506,589 |
|
|
2,464,056 |
|
Earning
Assets |
2,987,115 |
|
|
2,921,542 |
|
|
2,924,263 |
|
|
2,987,115 |
|
|
2,924,263 |
|
Goodwill |
26,931 |
|
|
26,931 |
|
|
26,931 |
|
|
26,931 |
|
|
26,931 |
|
Amortizable intangibles, net |
3,261 |
|
|
3,393 |
|
|
3,787 |
|
|
3,261 |
|
|
3,787 |
|
Deposits |
2,545,547 |
|
|
2,605,390 |
|
|
2,571,970 |
|
|
2,545,547 |
|
|
2,571,970 |
|
Stockholders' equity |
429,740 |
|
|
484,261 |
|
|
463,638 |
|
|
429,740 |
|
|
463,638 |
|
Tangible
common equity (3) |
399,548 |
|
|
453,937 |
|
|
432,920 |
|
|
399,548 |
|
|
432,920 |
|
|
|
|
|
|
|
|
|
|
|
Averages |
|
|
|
|
|
|
|
|
|
Assets |
$ |
3,223,346 |
|
|
$ |
3,199,595 |
|
|
$ |
3,320,516 |
|
|
$ |
3,210,633 |
|
|
$ |
2,568,744 |
|
Loans
held for investment |
2,453,025 |
|
|
2,412,871 |
|
|
2,452,449 |
|
|
2,415,868 |
|
|
1,965,504 |
|
Earning
assets |
2,891,879 |
|
|
2,861,996 |
|
|
2,956,592 |
|
|
2,871,979 |
|
|
2,296,457 |
|
Deposits |
2,541,618 |
|
|
2,556,577 |
|
|
2,604,622 |
|
|
2,573,685 |
|
|
2,065,933 |
|
Stockholders' equity |
488,269 |
|
|
484,282 |
|
|
466,254 |
|
|
479,637 |
|
|
357,552 |
|
Tangible
common equity (3) |
458,002 |
|
|
453,878 |
|
|
435,977 |
|
|
449,170 |
|
|
346,014 |
|
|
|
|
|
|
|
|
|
|
|
Alternative
Performance Measures (non-GAAP) |
|
|
|
|
|
|
|
|
|
Net interest income (FTE) |
|
|
|
|
|
|
|
|
|
Net
interest income (GAAP) |
$ |
25,588 |
|
|
$ |
25,225 |
|
|
$ |
24,134 |
|
|
$ |
100,374 |
|
|
$ |
76,869 |
|
FTE
adjustment |
166 |
|
|
126 |
|
|
197 |
|
|
477 |
|
|
719 |
|
Net
interest income (FTE) (non-GAAP) (2) |
$ |
25,754 |
|
|
$ |
25,351 |
|
|
$ |
24,331 |
|
|
$ |
100,851 |
|
|
$ |
77,588 |
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity (3) |
|
|
|
|
|
|
|
|
|
Ending
equity (GAAP) |
$ |
429,740 |
|
|
$ |
484,261 |
|
|
$ |
463,638 |
|
|
$ |
429,740 |
|
|
$ |
463,638 |
|
Less:
Ending goodwill |
26,931 |
|
|
26,931 |
|
|
26,931 |
|
|
26,931 |
|
|
26,931 |
|
Less:
Ending amortizable intangibles |
3,261 |
|
|
3,393 |
|
|
3,787 |
|
|
3,261 |
|
|
3,787 |
|
Ending
tangible common equity (non-GAAP) |
$ |
399,548 |
|
|
$ |
453,937 |
|
|
$ |
432,920 |
|
|
$ |
399,548 |
|
|
$ |
432,920 |
|
|
|
|
|
|
|
|
|
|
|
Average
equity (GAAP) |
$ |
488,269 |
|
|
$ |
484,282 |
|
|
$ |
466,254 |
|
|
$ |
479,637 |
|
|
$ |
357,552 |
|
Less:
Average goodwill |
26,931 |
|
|
26,931 |
|
|
26,404 |
|
|
26,931 |
|
|
9,969 |
|
Less:
Average amortizable intangibles |
3,336 |
|
|
3,473 |
|
|
3,873 |
|
|
3,536 |
|
|
1,569 |
|
Average
tangible common equity (non-GAAP) |
$ |
458,002 |
|
|
$ |
453,878 |
|
|
$ |
435,977 |
|
|
$ |
449,170 |
|
|
$ |
346,014 |
|
(1) Operating earnings excludes after-tax merger-related costs
and nonrecurring and unusual tax expenses unrelated to the
Company’s normal operations. The Company believes these
measures are useful to investors as they exclude certain costs
resulting from acquisition activity and allow investors to more
clearly see the combined economic results of the organization's
operations.
(2) Net interest income (FTE), which is used in computing net
interest margin (FTE), provides valuable additional insight into
the net interest margin by adjusting for differences in tax
treatment of interest income sources. The entire FTE
adjustment is attributable to interest income on earning assets,
which is used in computing yield on earning assets. Interest
expense and the related cost of interest-bearing liabilities and
cost of funds ratios are not affected by the FTE components.
(3) Tangible common equity is used in the calculation of
certain profitability, 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.
Contact:
Robert M. Gorman - (804) 523-7828 Executive Vice President / Chief
Financial Officer
Union Bankshares Corp (NASDAQ:UBSH)
Historical Stock Chart
From May 2024 to Jun 2024
Union Bankshares Corp (NASDAQ:UBSH)
Historical Stock Chart
From Jun 2023 to Jun 2024