Union Bankshares Corporation (the “Company” or “Union”) (Nasdaq:
UBSH) today reported net income of $38.2 million and earnings per
share of $0.58 for its third quarter ended September 30,
2018. Net operating earnings(1) were $39.3 million and
operating earnings per share(1) was $0.60 for its third quarter
ended September 30, 2018; these operating results exclude $1.1
million in after-tax merger-related costs but include losses from
discontinued operations of $565,000.
Net income was $102.2 million and earnings per share was $1.55
for the nine months ended September 30, 2018. Net operating
earnings(1) were $132.1 million and operating earnings per share(1)
was $2.01 for the nine months ended September 30, 2018; these
operating results exclude $29.9 million in after-tax merger-related
costs but include losses from discontinued operations of $3.0
million.
“Union made further progress on our stated priorities during the
third quarter and we remain on track to deliver our top tier
financial performance metrics in the fourth quarter of 2018,” said
John C. Asbury, President and CEO of Union Bankshares
Corporation. “Loan growth increased in each month of the
quarter as we are beginning to see the impact of our commercial and
industrial banking efforts on the commercial loan portfolio.
Our commercial and industrial banking buildout is largely complete
and our team is starting to gain traction in the market. This
bodes well for the fourth quarter and more importantly, for 2019
and beyond.
“After the quarter closed, we announced our agreement to acquire
Access National Corporation, which is nearly a perfect fit with our
previously stated M&A strategic and financial objectives.
We’re pleased with the enthusiasm about Access becoming a part of
Union which substantially completes our Virginia franchise and
irrefutably positions Union as Virginia’s bank. While it has
been less than two weeks from the announcement, we have already
stood up our integration team and work has begun to ensure a smooth
transition. Having just completed the Xenith integration,
this is a process we know well. We will share more about the
implications of this powerful addition to our targeted financial
metrics and business strategy at our investor day scheduled in New
York on November 14.”
On October 5, 2018, the Company announced it has entered into a
definitive merger agreement to acquire Access National Corporation
(“Access”) in an all-stock transaction (the “Pending Merger”) that
is expected to close in the first quarter of 2019.
Select highlights for the third quarter of
2018
- Performance metrics - Changes in all metrics below were
primarily related to the net gain on the sale of the Shore Premier
Finance division in the second quarter of 2018.
- Return on Average Assets (“ROA”) was 1.17% compared to 1.44% in
the second quarter of 2018. Operating ROA(1) was 1.21% compared to
1.63% in the second quarter of 2018.
- Return on Average Equity (“ROE”) was 8.06% compared to 10.28%
in the second quarter of 2018. Operating ROE(1) was 8.30% compared
to 11.69% in the second quarter of 2018.
- Return on Average Tangible Common Equity (“ROTCE”)(1) was
13.73% compared to 17.74% in the second quarter of 2018. Operating
ROTCE(1) was 14.14% compared to 20.19% in the second quarter of
2018.
- Efficiency ratio increased to 60.7% compared to 57.2% in the
second quarter of 2018 and the efficiency ratio (fully taxable
equivalent (“FTE”))(1) increased to 59.7% compared to 56.5% in the
second quarter of 2018. Operating efficiency ratio (FTE)(1)
increased to 58.6% compared to 51.0% in the second quarter of
2018.
- Notable activity during the third quarter
- On July 1, 2018, Old Dominion Capital Management, Inc., a
subsidiary of Union Bank & Trust, completed its acquisition of
Outfitter Advisors, Inc., a McLean, Virginia based investment
advisory firm with approximately $400 million in assets under
management and advisement.
- The Company consolidated seven branches during the third
quarter of 2018, which resulted in additional after-tax branch
closure costs of approximately $375,000 that were recorded in the
third quarter of 2018.
- The Company incurred approximately $565,000 in after-tax costs
related to executive management changes during the quarter.
- On June 29, 2018, Union Bank & Trust entered into an
agreement to sell substantially all of the assets and certain
specific liabilities of its Shore Premier Finance division,
consisting primarily of marine loans totaling $383.9 million, for a
purchase price consisting of approximately $375.0 million in cash
and 1,250,000 shares of the purchasing company's common stock. The
initial estimated after-tax gain recorded in the second quarter of
2018 was $16.5 million, net of transaction and other related costs,
which was subsequently reduced by $737,000 in the third quarter
based on updated information obtained and wind-down costs
incurred.
(1) These are financial measures not calculated in accordance
with generally accepted accounting principles (“GAAP”). For a
reconciliation of these non-GAAP financial measures, see
Alternative Performance Measures (non-GAAP) section of the Key
Financial Results.
NET INTEREST INCOME
For the third quarter of 2018, net interest income was $106.0
million, a decrease of $2.2 million from the second quarter of
2018. Net interest income (FTE)(2) was $108.0 million in
the third quarter of 2018, a decrease of $2.2 million from the
second quarter of 2018. The decreases in both net interest income
and net interest income (FTE) were primarily driven by lower
acquisition accounting accretion during the three months ended
September 30, 2018 compared to the three months ended June 30,
2018. The third quarter net interest margin decreased 3 basis
points to 3.69% from 3.72% in the previous quarter, while the net
interest margin (FTE)(2) decreased 3 basis points to 3.76%
from 3.79% during the same periods. The decreases in the net
interest margin and net interest margin (FTE) were principally due
to a 6 basis point increase in the cost of funds, partially offset
by a 3 basis point increase in the yield on earnings assets, which
was lower by 6 basis points due to the reduced level of earning
asset accretion income recorded during the third quarter of 2018
compared to the prior quarter.
The Company’s net interest margin (FTE) includes the impact of
acquisition accounting fair value adjustments. During the
third quarter of 2018, net accretion related to acquisition
accounting decreased $2.0 million from the prior quarter to $3.9
million for the quarter ended September 30, 2018. The second
and third quarters of 2018 and the remaining estimated net
accretion impact are reflected in the following table (dollars in
thousands):
|
|
|
|
|
|
|
|
|
LoanAccretion |
|
DepositAccretion |
|
BorrowingsAmortization |
|
Total |
For the quarter ended June 30, 2018 |
$ |
5,324 |
|
$ |
685 |
|
$ |
(104 |
) |
|
$ |
5,905 |
|
For the quarter ended September 30, 2018 |
|
3,496 |
|
|
592 |
|
|
(143 |
) |
|
|
3,945 |
|
For the remaining three months of 2018 (estimated) |
|
2,401 |
|
|
445 |
|
|
(161 |
) |
|
|
2,685 |
|
For the years ending (estimated): |
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
8,481 |
|
|
1,170 |
|
|
(660 |
) |
|
|
8,991 |
|
2020 |
|
6,880 |
|
|
284 |
|
|
(734 |
) |
|
|
6,430 |
|
2021 |
|
5,520 |
|
|
108 |
|
|
(805 |
) |
|
|
4,823 |
|
2022 |
|
4,157 |
|
|
21 |
|
|
(827 |
) |
|
|
3,351 |
|
2023 |
|
2,710 |
|
|
— |
|
|
(850 |
) |
|
|
1,860 |
|
Thereafter |
|
9,751 |
|
|
— |
|
|
(11,633 |
) |
|
|
(1,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) For a reconciliation of these non-GAAP financial measures,
see Alternative Performance Measures (non-GAAP) section of the Key
Financial Results.
ASSET QUALITY/LOAN LOSS PROVISION
OverviewDuring the third quarter of 2018, the Company
experienced increases in nonperforming asset (“NPA”) balances from
the prior quarter, primarily due to nonaccrual additions related to
one credit relationship composed of construction loans. Past
due loan levels as a percentage of total loans held for investment
at September 30, 2018 were higher than past due loan levels at June
30, 2018 and were down slightly from September 30, 2017.
Charge-off levels increased from the second quarter of 2018 and
were primarily related to the consumer loan portfolio; as a result,
the provision for loan losses increased from the second quarter of
2018.
All nonaccrual and past due loan metrics discussed below exclude
purchased credit impaired (“PCI”) loans totaling $94.7 million (net
of fair value mark of $24.3 million) at September 30, 2018.
Nonperforming AssetsAt September 30, 2018, NPAs totaled $34.9
million, an increase of $2.0 million, or 6.1%, from June 30, 2018
and an increase of $8.3 million, or 31.4%, from September 30,
2017. NPAs as a percentage of total outstanding loans at
September 30, 2018 was 0.37%, an increase of 2 basis points from
0.35% at June 30, 2018 and a decline of 2 basis points from 0.39%
at September 30, 2017. As the Company's NPAs have been at or
near historic lows over the last several quarters, certain changes
from quarter to quarter might stand out in comparison to one
another but do not have a significant impact on the Company's
overall asset quality position.
The following table shows a summary of nonperforming asset
balances at the quarter ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
Nonaccrual loans |
$ |
28,110 |
|
|
$ |
25,662 |
|
|
$ |
25,138 |
|
|
$ |
21,743 |
|
|
$ |
20,122 |
|
Foreclosed properties |
6,800 |
|
|
7,241 |
|
|
8,079 |
|
|
5,253 |
|
|
6,449 |
|
Total nonperforming assets |
$ |
34,910 |
|
|
$ |
32,903 |
|
|
$ |
33,217 |
|
|
$ |
26,996 |
|
|
$ |
26,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows the activity in nonaccrual loans for
the quarter ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
Beginning Balance |
$ |
25,662 |
|
|
$ |
25,138 |
|
|
$ |
21,743 |
|
|
$ |
20,122 |
|
|
$ |
24,574 |
|
Net customer payments |
(2,459 |
) |
|
(2,651 |
) |
|
(1,455 |
) |
|
(768 |
) |
|
(4,642 |
) |
Additions |
6,268 |
|
|
5,063 |
|
|
5,451 |
|
|
4,335 |
|
|
4,114 |
|
Charge-offs |
(1,137 |
) |
|
(539 |
) |
|
(403 |
) |
|
(1,305 |
) |
|
(3,376 |
) |
Loans returning to accruing status |
(70 |
) |
|
(1,349 |
) |
|
(182 |
) |
|
(448 |
) |
|
— |
|
Transfers to foreclosed property |
(154 |
) |
|
— |
|
|
(16 |
) |
|
(193 |
) |
|
(548 |
) |
Ending Balance |
$ |
28,110 |
|
|
$ |
25,662 |
|
|
$ |
25,138 |
|
|
$ |
21,743 |
|
|
$ |
20,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Of the nonaccrual additions in the third quarter of 2018, the
majority related to one credit relationship, which consisted of
construction loans.
The following table shows the activity in foreclosed properties
for the quarter ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
Beginning Balance |
$ |
7,241 |
|
|
$ |
8,079 |
|
|
$ |
5,253 |
|
|
$ |
6,449 |
|
|
$ |
6,828 |
|
Additions of foreclosed property |
165 |
|
|
283 |
|
|
44 |
|
|
325 |
|
|
621 |
|
Acquisitions of foreclosed property (1) |
— |
|
|
(162 |
) |
|
4,204 |
|
|
— |
|
|
— |
|
Valuation adjustments |
(42 |
) |
|
(383 |
) |
|
(759 |
) |
|
(1,046 |
) |
|
(249 |
) |
Proceeds from sales |
(889 |
) |
|
(580 |
) |
|
(684 |
) |
|
(479 |
) |
|
(648 |
) |
Gains (losses) from sales |
325 |
|
|
4 |
|
|
21 |
|
|
4 |
|
|
(103 |
) |
Ending Balance |
$ |
6,800 |
|
|
$ |
7,241 |
|
|
$ |
8,079 |
|
|
$ |
5,253 |
|
|
$ |
6,449 |
|
(1) Includes subsequent measurement period
adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Past Due LoansPast due loans still accruing interest totaled
$46.6 million, or 0.49% of total loans, at September 30, 2018
compared to $38.2 million, or 0.41% of total loans, at June 30,
2018 and $34.4 million, or 0.50% of total loans, at September 30,
2017. Of the total past due loans still accruing interest,
$9.5 million, or 0.10% of total loans, were loans past due 90 days
or more at September 30, 2018, compared to $6.9 million, or 0.07%
of total loans, at June 30, 2018 and $4.5 million, or 0.07% of
total loans, at September 30, 2017.
Net Charge-offsFor the third quarter of 2018, net charge-offs
were $3.2 million, or 0.13% of total average loans on an annualized
basis, compared to $1.8 million, or 0.07%, for the prior quarter
and $4.1 million, or 0.24%, for the same quarter last year.
The majority of net charge-offs in the third quarter of 2018 were
related to consumer loans.
Provision for Loan LossesThe provision for loan losses for the
third quarter of 2018 was $3.1 million, an increase of $440,000
compared to the previous quarter and an increase of $44,000
compared to the same quarter in 2017. The increase in
provision for loan losses from the second quarter of 2018 was
primarily driven by higher levels of net charge-offs in the third
quarter of 2018.
Allowance for Loan Losses (“ALL”)The ALL at September 30, 2018
was consistent with the prior quarter at $41.3 million. The
ALL as a percentage of the total loan portfolio was 0.44% at both
September 30, 2018 and June 30, 2018 and was 0.54% at September 30,
2017. The year-over-year decline in the allowance ratio was
primarily attributable to the acquisition of Xenith. In
acquisition accounting, there is no carryover of previously
established allowance for loan losses.
The ratio of the ALL to nonaccrual loans was 146.9% at September
30, 2018, compared to 160.8% at June 30, 2018 and 184.7% at
September 30, 2017. 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 $20.7 million to $19.9 million for
the quarter ended September 30, 2018 from $40.6 million in the
prior quarter, primarily driven by the net gain on sale of the
Shore Premier Finance division recognized during the second quarter
of 2018. The initial estimated gain recorded in the second
quarter of 2018 was $20.9 million, which was subsequently reduced
by $933,000 in the third quarter based on updated information
obtained and wind-down costs incurred. Excluding this gain
and its subsequent adjustment from their respective quarters,
noninterest income increased $1.1 million, or 5.7%, for the quarter
ended September 30, 2018 when compared to the prior quarter.
Customer-related fee income increased $1.1 million, primarily due
to the acquisition of Outfitter Advisors, Inc. as well as higher
overdraft, letter of credit, and debit card interchange fees.
NONINTEREST EXPENSE
Noninterest expense decreased $8.8 million to $76.3 million for
the quarter ended September 30, 2018 from $85.1 million in the
prior quarter. Excluding merger-related costs of $1.4 million
and $8.3 million in the third and second quarters of 2018,
respectively, operating noninterest expense(3) decreased $1.9
million, or 2.5%, to $74.9 million when compared to the second
quarter of 2018. The decrease in operating noninterest
expense included a decline in salaries and benefits of $1.5
million, primarily due to planned synergies arising from the core
system conversion from the Xenith acquisition that occurred in the
second quarter, partially offset by increased incentive plan
expenses of $408,000 recorded in the third quarter of 2018.
Other real estate owned (“OREO”) and credit-related expenses
declined $670,000 related to higher gains on sales of property and
lower valuation adjustments in the third quarter compared to the
second quarter of 2018. Additionally, FDIC premiums and other
insurance costs declined $519,000 compared to the second quarter of
2018. Included in operating noninterest expense were branch
closure costs of approximately $475,000 related to the
consolidation of seven branches in the third quarter of 2018,
$714,000 in costs related to executive management changes during
the quarter, as well as operating losses of $463,000 related to a
community development investment fund.
(3) For a reconciliation of this non-GAAP financial
measure, see Alternative Performance Measures (non-GAAP) section of
the Key Financial Results.
INCOME TAXES
The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed
into law in December 2017. 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 made on a preliminary
basis. The Company's evaluation of the impact of the
Tax Act is subject to refinement for up to one year after
enactment. No additional adjustments related to the Tax Act
were recorded in the third quarter of 2018.
The effective tax rate for the three months ended September 30,
2018 was 15.9% compared to 19.0% for the three months ended June
30, 2018. The decrease in the effective tax rate was primarily due
to tax-exempt income being a higher component of pre-tax income in
the third quarter of 2018 compared to the second quarter of
2018.
BALANCE SHEET
At September 30, 2018, total assets were $13.4 billion, an
increase of $305.6 million from June 30, 2018, primarily a result
of increases in the investment securities portfolio and loan growth
during the third quarter of 2018, partially offset by lower cash
and cash equivalent balances.
At September 30, 2018, total investments were $2.3 billion, an
increase of $519.6 million from June 30, 2018, primarily the result
of reinvesting the proceeds received at the end of the second
quarter from the sale of Shore Premier Finance loans and certain
third party lending loans into the investment securities portfolio
during the third quarter of 2018.
At September 30, 2018, loans held for investment (net of
deferred fees and costs) were $9.4 billion, an increase of $121.3
million, or 5.2% (annualized), from June 30, 2018, while average
loans decreased $511.9 million from the prior quarter.
Adjusted for the sale of the Shore Premier Finance loans and
certain third party lending programs loans in the second quarter of
2018, average loans increased $66.8 million, or 2.9% (annualized),
during the third quarter of 2018 compared to the prior quarter.
At September 30, 2018, total deposits were $9.8 billion, an
increase of $37.4 million, or 1.5% (annualized), from June 30,
2018, while average deposits increased $158.3 million, or 6.6%
(annualized), from the prior quarter.
The following table shows the Company's capital ratios at the
quarters ended:
|
|
|
|
|
|
|
September
30, |
|
June 30, |
|
September
30, |
|
2018 |
|
2018 |
|
|
2017 |
Common equity Tier 1 capital ratio (1) |
9.92 |
% |
|
9.80 |
% |
|
9.40 |
% |
Tier 1 capital ratio (1) |
11.12 |
% |
|
11.02 |
% |
|
10.56 |
% |
Total capital ratio (1) |
12.97 |
% |
|
12.89 |
% |
|
12.94 |
% |
Leverage ratio (Tier 1 capital to average assets) (1) |
9.89 |
% |
|
9.46 |
% |
|
9.52 |
% |
Common equity to total assets |
14.06 |
% |
|
14.27 |
% |
|
11.53 |
% |
Tangible common equity to tangible assets (2) |
8.74 |
% |
|
8.86 |
% |
|
8.34 |
% |
|
|
|
|
|
|
(1) All ratios at September 30, 2018 are estimates
and subject to change pending the Company’s filing of its FR Y9-C.
All other periods are presented as filed. |
(2) For a reconciliation of this non-GAAP financial
measure, see Alternative Performance Measures (non-GAAP) section of
the Key Financial Results. |
|
During the third quarter of 2018, the Company declared and paid
cash dividends of $0.23 per common share, an increase of $0.02, or
9.5%, compared to the second quarter of 2018 and an increase of
$0.03, or 15.0%, compared to the third quarter of 2017.
ABOUT UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Union Bankshares
Corporation (Nasdaq: UBSH) is the holding company for Union Bank
& Trust, which has 140 branches, seven of which are operated as
Xenith Bank, a division of Union Bank & Trust of Richmond,
Virginia, and approximately 190 ATMs located throughout Virginia
and in portions of Maryland and North Carolina. Non-bank
affiliates of the holding company include: Old Dominion Capital
Management, Inc. and Dixon, Hubard, Feinour, & Brown, Inc.,
which both provide investment advisory services, and Union
Insurance Group, LLC, which offers various lines of insurance
products.
THIRD QUARTER 2018 EARNINGS RELEASE CONFERENCE
CALL
Union will hold a conference call on Wednesday, October 17th,
2018 at 9:00 a.m. Eastern Time during which management will review
the third quarter 2018 financial results. Interested parties
may participate in the 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 8775497.
NON-GAAP FINANCIAL MEASURES
In reporting the results of the quarter and nine months ended
September 30, 2018, the Company has provided supplemental
performance measures on a tax-equivalent, tangible, or operating
basis. These non-GAAP financial measures are a supplement to
GAAP, which is 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 financial measures may not be
comparable to non-GAAP financial measures of other companies.
The Company uses the non-GAAP financial measures discussed herein
in its analysis of the Company’s performance. The Company’s
management believes that these non-GAAP financial measures provide
additional understanding of ongoing operations, enhance
comparability of results of operations with prior periods and show
the effects of significant gains and charges in the periods
presented without the impact of items or events that may obscure
trends in the Company’s underlying performance. For a
reconciliation of these measures to their most directly comparable
GAAP measures and additional information about these non-GAAP
financial measures, see Alternative Performance Measures (non-GAAP)
section of the Key Financial Results.
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 include, without limitation, projections, predictions,
expectations, or beliefs about future events or results that are
not statements of historical fact. Such forward-looking statements
are based on various assumptions as of the time they are made, and
are inherently subject to known and unknown risks, uncertainties
and other factors that may cause actual results, performance or
achievements to be materially different from those expressed or
implied by such forward-looking statements. Forward-looking
statements are often accompanied by words that convey projected
future events or outcomes 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 Union and its
management about future events. Although Union 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 Union will not
differ materially from any projected future results, performance,
or achievements expressed or implied by such forward-looking
statements. Actual future results, performance or
achievements may differ materially from historical results or those
anticipated depending on a variety of factors, including, but not
limited to:
- changes in interest rates;
- general economic and financial market conditions in the United
States generally and particularly in the markets in which Union
operates and which its loans are concentrated, including the
effects of declines in real estate values, an increase in
unemployment levels and slowdowns in economic growth;
- Union’s ability to manage its growth or implement its growth
strategy;
- the ability to obtain regulatory, shareholder or other
approvals or other conditions to closing the Pending Merger on a
timely basis or at all, the ability to close the Pending Merger on
the expected timeframe, or at all, that closing may be more
difficult, time-consuming or costly than expected, and that if the
Pending Merger is consummated, the businesses of Union and Access
may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected;
- Union’s ability to recruit and retain key employees;
- 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 Union’s credit processes and management of
Union’s credit risk;
- demand for loan products and financial services in Union’s
market area;
- Union’s ability to compete in the market for financial
services;
- technological risks and developments, and cyber threats,
attacks, or events;
- performance by Union’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 Union's tax assets and liabilities;
- any future refinements to Union's preliminary analysis of the
impact of the Tax Act on Union;
- 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;
- changes to applicable accounting principles and guidelines;
and
- other factors, many of which are beyond the control of
Union.
Please refer to the “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”
sections of Union’s Annual Report on Form 10-K for the year ended
December 31, 2017 and comparable “Risk Factors” sections of Union’s
Quarterly Reports on Form 10-Q and related disclosures in other
filings, which have been filed with the SEC and are available on
the SEC’s website at www.sec.gov. All of the forward-looking
statements made in this press release are expressly qualified by
the cautionary statements contained or referred to herein. The
actual results or developments anticipated may not be realized or,
even if substantially realized, they may not have the expected
consequences to or effects on Union or its businesses or
operations. Readers are cautioned not to rely too heavily on the
forward-looking statements contained in this press release.
Forward-looking statements speak only as of the date they are made
and Union does not undertake any obligation to update, revise or
clarify these forward-looking statements, whether as a result of
new information, future events or otherwise.
|
|
|
|
|
UNION BANKSHARES CORPORATION AND
SUBSIDIARIES |
|
|
|
|
KEY FINANCIAL RESULTS |
|
|
|
|
(Dollars in thousands, except share data) |
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Nine Months
Ended |
|
9/30/18 |
|
6/30/18 |
|
9/30/17 |
|
9/30/18 |
|
9/30/17 |
Results of Operations |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Interest and dividend income |
$ |
131,363 |
|
|
$ |
132,409 |
|
|
$ |
84,499 |
|
|
$ |
388,151 |
|
|
$ |
241,865 |
|
Interest expense |
25,400 |
|
|
24,241 |
|
|
13,652 |
|
|
70,549 |
|
|
35,947 |
|
Net interest income |
105,963 |
|
|
108,168 |
|
|
70,847 |
|
|
317,602 |
|
|
205,918 |
|
Provision for credit losses |
3,340 |
|
|
2,147 |
|
|
3,056 |
|
|
9,011 |
|
|
7,344 |
|
Net interest income after provision for credit
losses |
102,623 |
|
|
106,021 |
|
|
67,791 |
|
|
308,591 |
|
|
198,574 |
|
Noninterest income |
19,887 |
|
|
40,597 |
|
|
15,230 |
|
|
80,752 |
|
|
47,305 |
|
Noninterest expenses |
76,349 |
|
|
85,140 |
|
|
55,204 |
|
|
263,234 |
|
|
167,871 |
|
Income before income taxes |
46,161 |
|
|
61,478 |
|
|
27,817 |
|
|
126,109 |
|
|
78,008 |
|
Income tax expense |
7,399 |
|
|
11,678 |
|
|
7,397 |
|
|
20,973 |
|
|
20,924 |
|
Income from continuing operations |
38,762 |
|
|
49,800 |
|
|
20,420 |
|
|
105,136 |
|
|
57,084 |
|
Discontinued operations, net of tax |
(565 |
) |
|
(2,473 |
) |
|
238 |
|
|
(2,973 |
) |
|
653 |
|
Net income |
$ |
38,197 |
|
|
$ |
47,327 |
|
|
$ |
20,658 |
|
|
$ |
102,163 |
|
|
$ |
57,737 |
|
|
|
|
|
|
|
|
|
|
|
Interest earned on earning assets (FTE) (1) |
$ |
133,377 |
|
|
$ |
134,417 |
|
|
$ |
87,498 |
|
|
$ |
394,011 |
|
|
$ |
250,548 |
|
Net interest income (FTE) (1) |
107,977 |
|
|
110,176 |
|
|
73,846 |
|
|
323,462 |
|
|
214,601 |
|
|
|
|
|
|
|
|
|
|
|
Key Ratios |
|
|
|
|
|
|
|
|
|
Earnings per common share, diluted |
$ |
0.58 |
|
|
$ |
0.72 |
|
|
$ |
0.47 |
|
|
$ |
1.55 |
|
|
$ |
1.32 |
|
Return on average assets (ROA) |
1.17 |
% |
|
1.44 |
% |
|
0.91 |
% |
|
1.05 |
% |
|
0.88 |
% |
Return on average equity (ROE) |
8.06 |
% |
|
10.28 |
% |
|
7.90 |
% |
|
7.38 |
% |
|
7.53 |
% |
Return on average tangible common equity (ROTCE)
(2) |
13.73 |
% |
|
17.74 |
% |
|
11.34 |
% |
|
12.71 |
% |
|
10.90 |
% |
Efficiency ratio |
60.67 |
% |
|
57.23 |
% |
|
64.13 |
% |
|
66.08 |
% |
|
66.29 |
% |
Efficiency ratio (FTE) (1) |
59.71 |
% |
|
56.47 |
% |
|
61.97 |
% |
|
65.12 |
% |
|
64.10 |
% |
Net interest margin |
3.69 |
% |
|
3.72 |
% |
|
3.44 |
% |
|
3.69 |
% |
|
3.47 |
% |
Net interest margin (FTE) (1) |
3.76 |
% |
|
3.79 |
% |
|
3.59 |
% |
|
3.76 |
% |
|
3.62 |
% |
Yields on earning assets (FTE) (1) |
4.65 |
% |
|
4.62 |
% |
|
4.25 |
% |
|
4.58 |
% |
|
4.23 |
% |
Cost of interest-bearing liabilities (FTE) (1) |
1.15 |
% |
|
1.06 |
% |
|
0.85 |
% |
|
1.05 |
% |
|
0.78 |
% |
Cost of funds (FTE) (1) |
0.89 |
% |
|
0.83 |
% |
|
0.66 |
% |
|
0.82 |
% |
|
0.61 |
% |
|
|
|
|
|
|
|
|
|
|
Operating Measures (3) |
|
|
|
|
|
|
|
|
|
Net operating earnings |
$ |
39,326 |
|
|
$ |
53,864 |
|
|
$ |
21,319 |
|
|
$ |
132,065 |
|
|
$ |
60,757 |
|
Operating earnings per share, diluted |
$ |
0.60 |
|
|
$ |
0.82 |
|
|
$ |
0.49 |
|
|
$ |
2.01 |
|
|
$ |
1.39 |
|
Operating ROA |
1.21 |
% |
|
1.63 |
% |
|
0.94 |
% |
|
1.35 |
% |
|
0.93 |
% |
Operating ROE |
8.30 |
% |
|
11.69 |
% |
|
8.15 |
% |
|
9.54 |
% |
|
7.93 |
% |
Operating ROTCE |
14.14 |
% |
|
20.19 |
% |
|
11.70 |
% |
|
16.44 |
% |
|
11.47 |
% |
Operating efficiency ratio (FTE) (1) |
58.59 |
% |
|
50.98 |
% |
|
61.15 |
% |
|
55.87 |
% |
|
62.77 |
% |
|
|
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
|
|
Earnings per common share, basic |
$ |
0.58 |
|
|
$ |
0.72 |
|
|
$ |
0.47 |
|
|
$ |
1.55 |
|
|
$ |
1.32 |
|
Earnings per common share, diluted |
0.58 |
|
|
0.72 |
|
|
0.47 |
|
|
1.55 |
|
|
1.32 |
|
Cash dividends paid per common share |
0.23 |
|
|
0.21 |
|
|
0.20 |
|
|
0.65 |
|
|
0.60 |
|
Market value per share |
38.53 |
|
|
38.88 |
|
|
35.30 |
|
|
38.53 |
|
|
35.30 |
|
Book value per common share |
28.68 |
|
|
28.47 |
|
|
24.00 |
|
|
28.68 |
|
|
24.00 |
|
Tangible book value per common share (2) |
16.79 |
|
|
16.62 |
|
|
16.76 |
|
|
16.79 |
|
|
16.76 |
|
Price to earnings ratio, diluted |
16.74 |
|
|
13.46 |
|
|
18.93 |
|
|
18.59 |
|
|
20.00 |
|
Price to book value per common share ratio |
1.34 |
|
|
1.37 |
|
|
1.47 |
|
|
1.34 |
|
|
1.47 |
|
Price to tangible book value per common share ratio
(2) |
2.29 |
|
|
2.34 |
|
|
2.11 |
|
|
2.29 |
|
|
2.11 |
|
Weighted average common shares outstanding,
basic |
65,974,702 |
|
|
65,919,055 |
|
|
43,706,635 |
|
|
65,817,668 |
|
|
43,685,045 |
|
Weighted average common shares outstanding,
diluted |
66,013,152 |
|
|
65,965,577 |
|
|
43,792,058 |
|
|
65,873,202 |
|
|
43,767,502 |
|
Common shares outstanding at end of period |
65,982,669 |
|
|
65,939,375 |
|
|
43,729,229 |
|
|
65,982,669 |
|
|
43,729,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Nine Months
Ended |
|
9/30/18 |
|
6/30/18 |
|
9/30/17 |
|
9/30/18 |
|
9/30/17 |
Capital Ratios |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Common equity Tier 1 capital ratio (4) |
9.92 |
% |
|
9.80 |
% |
|
9.40 |
% |
|
9.92 |
% |
|
9.40 |
% |
Tier 1 capital ratio (4) |
11.12 |
% |
|
11.02 |
% |
|
10.56 |
% |
|
11.12 |
% |
|
10.56 |
% |
Total capital ratio (4) |
12.97 |
% |
|
12.89 |
% |
|
12.94 |
% |
|
12.97 |
% |
|
12.94 |
% |
Leverage ratio (Tier 1 capital to average assets)
(4) |
9.89 |
% |
|
9.46 |
% |
|
9.52 |
% |
|
9.89 |
% |
|
9.52 |
% |
Common equity to total assets |
14.06 |
% |
|
14.27 |
% |
|
11.53 |
% |
|
14.06 |
% |
|
11.53 |
% |
Tangible common equity to tangible assets (2) |
8.74 |
% |
|
8.86 |
% |
|
8.34 |
% |
|
8.74 |
% |
|
8.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Condition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
13,371,742 |
|
|
$ |
13,066,106 |
|
|
$ |
9,029,436 |
|
|
$ |
13,371,742 |
|
|
$ |
9,029,436 |
|
Loans held for investment |
9,411,598 |
|
|
9,290,259 |
|
|
6,898,729 |
|
|
9,411,598 |
|
|
6,898,729 |
|
Earning Assets |
11,808,717 |
|
|
11,494,113 |
|
|
8,232,413 |
|
|
11,808,717 |
|
|
8,232,413 |
|
Goodwill |
727,699 |
|
|
725,195 |
|
|
298,191 |
|
|
727,699 |
|
|
298,191 |
|
Amortizable intangibles, net |
51,563 |
|
|
51,211 |
|
|
16,017 |
|
|
51,563 |
|
|
16,017 |
|
Deposits |
9,834,695 |
|
|
9,797,272 |
|
|
6,881,826 |
|
|
9,834,695 |
|
|
6,881,826 |
|
Stockholders' equity |
1,880,029 |
|
|
1,864,870 |
|
|
1,041,371 |
|
|
1,880,029 |
|
|
1,041,371 |
|
Tangible common equity (2) |
1,100,767 |
|
|
1,088,464 |
|
|
727,163 |
|
|
1,100,767 |
|
|
727,163 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for investment, net of deferred fees and
costs |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
1,178,054 |
|
|
$ |
1,250,448 |
|
|
$ |
841,738 |
|
|
$ |
1,178,054 |
|
|
$ |
841,738 |
|
Commercial real estate - owner occupied |
1,283,125 |
|
|
1,293,791 |
|
|
903,523 |
|
|
1,283,125 |
|
|
903,523 |
|
Commercial real estate - non-owner occupied |
2,427,251 |
|
|
2,318,589 |
|
|
1,748,039 |
|
|
2,427,251 |
|
|
1,748,039 |
|
Multifamily real estate |
542,662 |
|
|
541,730 |
|
|
368,686 |
|
|
542,662 |
|
|
368,686 |
|
Commercial & Industrial |
1,154,583 |
|
|
1,093,771 |
|
|
554,522 |
|
|
1,154,583 |
|
|
554,522 |
|
Residential 1-4 Family - commercial |
719,798 |
|
|
723,945 |
|
|
602,937 |
|
|
719,798 |
|
|
602,937 |
|
Residential 1-4 Family - mortgage |
611,728 |
|
|
607,155 |
|
|
480,175 |
|
|
611,728 |
|
|
480,175 |
|
Auto |
306,196 |
|
|
296,706 |
|
|
276,572 |
|
|
306,196 |
|
|
276,572 |
|
HELOC |
612,116 |
|
|
626,916 |
|
|
535,446 |
|
|
612,116 |
|
|
535,446 |
|
Consumer |
345,320 |
|
|
298,021 |
|
|
396,971 |
|
|
345,320 |
|
|
396,971 |
|
Other Commercial |
230,765 |
|
|
239,187 |
|
|
190,120 |
|
|
230,765 |
|
|
190,120 |
|
Total loans held for investment |
$ |
9,411,598 |
|
|
$ |
9,290,259 |
|
|
$ |
6,898,729 |
|
|
$ |
9,411,598 |
|
|
$ |
6,898,729 |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
2,205,262 |
|
|
$ |
2,147,999 |
|
|
$ |
1,851,327 |
|
|
$ |
2,205,262 |
|
|
$ |
1,851,327 |
|
Money market accounts |
2,704,480 |
|
|
2,758,704 |
|
|
1,621,443 |
|
|
2,704,480 |
|
|
1,621,443 |
|
Savings accounts |
635,788 |
|
|
643,894 |
|
|
553,082 |
|
|
635,788 |
|
|
553,082 |
|
Time deposits of $100,000 and over |
1,078,448 |
|
|
1,019,577 |
|
|
621,070 |
|
|
1,078,448 |
|
|
621,070 |
|
Other time deposits |
1,020,830 |
|
|
1,034,171 |
|
|
699,755 |
|
|
1,020,830 |
|
|
699,755 |
|
Total interest-bearing deposits |
$ |
7,644,808 |
|
|
$ |
7,604,345 |
|
|
$ |
5,346,677 |
|
|
$ |
7,644,808 |
|
|
$ |
5,346,677 |
|
Demand deposits |
2,189,887 |
|
|
2,192,927 |
|
|
1,535,149 |
|
|
2,189,887 |
|
|
1,535,149 |
|
Total deposits |
$ |
9,834,695 |
|
|
$ |
9,797,272 |
|
|
$ |
6,881,826 |
|
|
$ |
9,834,695 |
|
|
$ |
6,881,826 |
|
|
|
|
|
|
|
|
|
|
|
Averages |
|
|
|
|
|
|
|
|
|
Assets |
$ |
12,947,352 |
|
|
$ |
13,218,227 |
|
|
$ |
8,973,964 |
|
|
$ |
13,061,453 |
|
|
$ |
8,730,815 |
|
Loans held for investment |
9,297,213 |
|
|
9,809,083 |
|
|
6,822,498 |
|
|
9,594,094 |
|
|
6,613,078 |
|
Securities |
1,966,010 |
|
|
1,625,273 |
|
|
1,243,904 |
|
|
1,720,978 |
|
|
1,227,220 |
|
Earning assets |
11,383,320 |
|
|
11,661,189 |
|
|
8,167,919 |
|
|
11,506,200 |
|
|
7,922,944 |
|
Deposits |
9,803,475 |
|
|
9,645,186 |
|
|
6,797,840 |
|
|
9,638,698 |
|
|
6,615,718 |
|
Time deposits |
2,079,686 |
|
|
2,063,414 |
|
|
1,289,794 |
|
|
2,076,320 |
|
|
1,250,180 |
|
Interest-bearing deposits |
7,635,710 |
|
|
7,549,953 |
|
|
5,302,226 |
|
|
7,559,053 |
|
|
5,166,163 |
|
Borrowings |
1,155,093 |
|
|
1,617,322 |
|
|
1,080,226 |
|
|
1,460,685 |
|
|
1,030,500 |
|
Interest-bearing liabilities |
8,790,803 |
|
|
9,167,275 |
|
|
6,382,452 |
|
|
9,019,738 |
|
|
6,196,663 |
|
Stockholders' equity |
1,880,582 |
|
|
1,847,366 |
|
|
1,037,792 |
|
|
1,851,072 |
|
|
1,024,853 |
|
Tangible common equity (2) |
1,103,530 |
|
|
1,069,886 |
|
|
722,920 |
|
|
1,074,303 |
|
|
708,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Nine Months
Ended |
|
9/30/18 |
|
6/30/18 |
|
9/30/17 |
|
9/30/18 |
|
9/30/17 |
Asset Quality |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Allowance for Loan Losses
(ALL) |
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
41,270 |
|
|
$ |
40,629 |
|
|
$ |
38,214 |
|
|
$ |
38,208 |
|
|
$ |
37,192 |
|
Add: Recoveries |
1,401 |
|
|
1,201 |
|
|
887 |
|
|
4,082 |
|
|
2,559 |
|
Less: Charge-offs |
4,560 |
|
|
2,980 |
|
|
4,989 |
|
|
10,099 |
|
|
9,949 |
|
Add: Provision for loan losses |
3,100 |
|
|
2,660 |
|
|
3,056 |
|
|
9,284 |
|
|
7,359 |
|
Add: Provision for loan losses included in
discontinued operations |
83 |
|
|
(240 |
) |
|
(6 |
) |
|
(181 |
) |
|
1 |
|
Ending balance |
$ |
41,294 |
|
|
$ |
41,270 |
|
|
$ |
37,162 |
|
|
$ |
41,294 |
|
|
$ |
37,162 |
|
|
|
|
|
|
|
|
|
|
|
ALL / total outstanding loans |
0.44 |
% |
|
0.44 |
% |
|
0.54 |
% |
|
0.44 |
% |
|
0.54 |
% |
Net charge-offs / total average loans |
0.13 |
% |
|
0.07 |
% |
|
0.24 |
% |
|
0.08 |
% |
|
0.15 |
% |
Provision / total average loans |
0.13 |
% |
|
0.11 |
% |
|
0.18 |
% |
|
0.13 |
% |
|
0.15 |
% |
|
|
|
|
|
|
|
|
|
|
Total PCI loans, net of fair value mark |
$ |
94,746 |
|
|
$ |
101,524 |
|
|
$ |
51,041 |
|
|
$ |
94,746 |
|
|
$ |
51,041 |
|
Remaining fair value mark on purchased performing
loans |
33,428 |
|
|
36,207 |
|
|
14,602 |
|
|
33,428 |
|
|
14,602 |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Assets |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
9,221 |
|
|
$ |
6,485 |
|
|
$ |
5,671 |
|
|
$ |
9,221 |
|
|
$ |
5,671 |
|
Commercial real estate - owner occupied |
3,202 |
|
|
2,845 |
|
|
2,205 |
|
|
3,202 |
|
|
2,205 |
|
Commercial real estate - non-owner occupied |
1,812 |
|
|
3,068 |
|
|
2,701 |
|
|
1,812 |
|
|
2,701 |
|
Commercial & Industrial |
1,404 |
|
|
1,387 |
|
|
1,252 |
|
|
1,404 |
|
|
1,252 |
|
Residential 1-4 Family |
10,491 |
|
|
9,550 |
|
|
6,163 |
|
|
10,491 |
|
|
6,163 |
|
Auto |
525 |
|
|
463 |
|
|
174 |
|
|
525 |
|
|
174 |
|
HELOC |
1,273 |
|
|
1,669 |
|
|
1,791 |
|
|
1,273 |
|
|
1,791 |
|
Consumer and all other |
182 |
|
|
195 |
|
|
165 |
|
|
182 |
|
|
165 |
|
Nonaccrual loans |
$ |
28,110 |
|
|
$ |
25,662 |
|
|
$ |
20,122 |
|
|
$ |
28,110 |
|
|
$ |
20,122 |
|
Foreclosed property |
6,800 |
|
|
7,241 |
|
|
6,449 |
|
|
6,800 |
|
|
6,449 |
|
Total nonperforming assets (NPAs) |
$ |
34,910 |
|
|
$ |
32,903 |
|
|
$ |
26,571 |
|
|
$ |
34,910 |
|
|
$ |
26,571 |
|
Construction and land development |
$ |
442 |
|
|
$ |
144 |
|
|
$ |
54 |
|
|
$ |
442 |
|
|
$ |
54 |
|
Commercial real estate - owner occupied |
3,586 |
|
|
2,512 |
|
|
679 |
|
|
3,586 |
|
|
679 |
|
Commercial real estate - non-owner occupied |
— |
|
|
— |
|
|
298 |
|
|
— |
|
|
298 |
|
Commercial & Industrial |
256 |
|
|
100 |
|
|
101 |
|
|
256 |
|
|
101 |
|
Residential 1-4 Family |
2,921 |
|
|
2,801 |
|
|
2,360 |
|
|
2,921 |
|
|
2,360 |
|
Auto |
211 |
|
|
121 |
|
|
143 |
|
|
211 |
|
|
143 |
|
HELOC |
1,291 |
|
|
570 |
|
|
709 |
|
|
1,291 |
|
|
709 |
|
Consumer and all other |
825 |
|
|
673 |
|
|
188 |
|
|
825 |
|
|
188 |
|
Loans ≥ 90 days and still accruing |
$ |
9,532 |
|
|
$ |
6,921 |
|
|
$ |
4,532 |
|
|
$ |
9,532 |
|
|
$ |
4,532 |
|
Total NPAs and loans ≥ 90 days |
$ |
44,442 |
|
|
$ |
39,824 |
|
|
$ |
31,103 |
|
|
$ |
44,442 |
|
|
$ |
31,103 |
|
NPAs / total outstanding loans |
0.37 |
% |
|
0.35 |
% |
|
0.39 |
% |
|
0.37 |
% |
|
0.39 |
% |
NPAs / total assets |
0.26 |
% |
|
0.25 |
% |
|
0.29 |
% |
|
0.26 |
% |
|
0.29 |
% |
ALL / nonaccrual loans |
146.90 |
% |
|
160.82 |
% |
|
184.68 |
% |
|
146.90 |
% |
|
184.68 |
% |
ALL / nonperforming assets |
118.29 |
% |
|
125.43 |
% |
|
139.86 |
% |
|
118.29 |
% |
|
139.86 |
% |
|
|
|
|
|
|
|
|
|
|
Past Due Detail |
|
|
|
|
|
|
|
|
|
Construction and land development |
$ |
1,351 |
|
|
$ |
648 |
|
|
$ |
7,221 |
|
|
$ |
1,351 |
|
|
$ |
7,221 |
|
Commercial real estate - owner occupied |
4,218 |
|
|
3,775 |
|
|
1,707 |
|
|
4,218 |
|
|
1,707 |
|
Commercial real estate - non-owner occupied |
492 |
|
|
44 |
|
|
909 |
|
|
492 |
|
|
909 |
|
Multifamily real estate |
553 |
|
|
86 |
|
|
— |
|
|
553 |
|
|
— |
|
Commercial & Industrial |
2,239 |
|
|
1,921 |
|
|
1,558 |
|
|
2,239 |
|
|
1,558 |
|
Residential 1-4 Family |
7,041 |
|
|
7,142 |
|
|
5,633 |
|
|
7,041 |
|
|
5,633 |
|
Auto |
2,414 |
|
|
2,187 |
|
|
2,415 |
|
|
2,414 |
|
|
2,415 |
|
HELOC |
4,783 |
|
|
2,505 |
|
|
1,400 |
|
|
4,783 |
|
|
1,400 |
|
Consumer and all other |
2,640 |
|
|
2,722 |
|
|
3,469 |
|
|
2,640 |
|
|
3,469 |
|
Loans 30-59 days past due |
$ |
25,731 |
|
|
$ |
21,030 |
|
|
$ |
24,312 |
|
|
$ |
25,731 |
|
|
$ |
24,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Nine Months
Ended |
|
9/30/18 |
|
6/30/18 |
|
9/30/17 |
|
9/30/18 |
|
9/30/17 |
Past Due Detail cont'd |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Construction and land development |
$ |
1,826 |
|
|
$ |
292 |
|
|
$ |
54 |
|
|
$ |
1,826 |
|
|
$ |
54 |
|
Commercial real estate - owner occupied |
539 |
|
|
1,819 |
|
|
679 |
|
|
539 |
|
|
679 |
|
Commercial real estate - non-owner occupied |
— |
|
|
— |
|
|
298 |
|
|
— |
|
|
298 |
|
Commercial & Industrial |
428 |
|
|
1,567 |
|
|
101 |
|
|
428 |
|
|
101 |
|
Residential 1-4 Family |
5,685 |
|
|
3,742 |
|
|
2,360 |
|
|
5,685 |
|
|
2,360 |
|
Auto |
299 |
|
|
419 |
|
|
143 |
|
|
299 |
|
|
143 |
|
HELOC |
1,392 |
|
|
1,622 |
|
|
709 |
|
|
1,392 |
|
|
709 |
|
Consumer and all other |
1,140 |
|
|
761 |
|
|
188 |
|
|
1,140 |
|
|
188 |
|
Loans 60-89 days past due |
$ |
11,309 |
|
|
$ |
10,222 |
|
|
$ |
4,532 |
|
|
$ |
11,309 |
|
|
$ |
4,532 |
|
|
|
|
|
|
|
|
|
|
|
Troubled Debt Restructurings |
|
|
|
|
|
|
|
|
|
Performing |
$ |
19,854 |
|
|
$ |
15,696 |
|
|
$ |
16,519 |
|
|
$ |
19,854 |
|
|
$ |
16,519 |
|
Nonperforming |
8,425 |
|
|
4,001 |
|
|
2,725 |
|
|
8,425 |
|
|
2,725 |
|
Total troubled debt restructurings |
$ |
28,279 |
|
|
$ |
19,697 |
|
|
$ |
19,244 |
|
|
$ |
28,279 |
|
|
$ |
19,244 |
|
|
|
|
|
|
|
|
|
|
|
Alternative Performance Measures (non-GAAP) |
|
|
|
|
|
|
|
|
|
Net interest income (FTE) |
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
$ |
105,963 |
|
|
$ |
108,168 |
|
|
$ |
70,847 |
|
|
$ |
317,602 |
|
|
$ |
205,918 |
|
FTE adjustment |
2,014 |
|
|
2,008 |
|
|
2,999 |
|
|
5,860 |
|
|
8,683 |
|
Net interest income (FTE) (non-GAAP) (1) |
$ |
107,977 |
|
|
$ |
110,176 |
|
|
$ |
73,846 |
|
|
$ |
323,462 |
|
|
$ |
214,601 |
|
Average earning assets |
11,383,320 |
|
|
11,661,189 |
|
|
8,167,919 |
|
|
11,506,200 |
|
|
7,922,944 |
|
Net interest margin |
3.69 |
% |
|
3.72 |
% |
|
3.44 |
% |
|
3.69 |
% |
|
3.47 |
% |
Net interest margin (FTE) (1) |
3.76 |
% |
|
3.79 |
% |
|
3.59 |
% |
|
3.76 |
% |
|
3.62 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible Assets |
|
|
|
|
|
|
|
|
|
Ending assets (GAAP) |
$ |
13,371,742 |
|
|
$ |
13,066,106 |
|
|
$ |
9,029,436 |
|
|
$ |
13,371,742 |
|
|
$ |
9,029,436 |
|
Less: Ending goodwill |
727,699 |
|
|
725,195 |
|
|
298,191 |
|
|
727,699 |
|
|
298,191 |
|
Less: Ending amortizable intangibles |
51,563 |
|
|
51,211 |
|
|
16,017 |
|
|
51,563 |
|
|
16,017 |
|
Ending tangible assets (non-GAAP) |
$ |
12,592,480 |
|
|
$ |
12,289,700 |
|
|
$ |
8,715,228 |
|
|
$ |
12,592,480 |
|
|
$ |
8,715,228 |
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity
(2) |
|
|
|
|
|
|
|
|
|
Ending equity (GAAP) |
$ |
1,880,029 |
|
|
$ |
1,864,870 |
|
|
$ |
1,041,371 |
|
|
$ |
1,880,029 |
|
|
$ |
1,041,371 |
|
Less: Ending goodwill |
727,699 |
|
|
725,195 |
|
|
298,191 |
|
|
727,699 |
|
|
298,191 |
|
Less: Ending amortizable intangibles |
51,563 |
|
|
51,211 |
|
|
16,017 |
|
|
51,563 |
|
|
16,017 |
|
Ending tangible common equity (non-GAAP) |
$ |
1,100,767 |
|
|
$ |
1,088,464 |
|
|
$ |
727,163 |
|
|
$ |
1,100,767 |
|
|
$ |
727,163 |
|
|
|
|
|
|
|
|
|
|
|
Average equity (GAAP) |
$ |
1,880,582 |
|
|
$ |
1,847,366 |
|
|
$ |
1,037,792 |
|
|
$ |
1,851,072 |
|
|
$ |
1,024,853 |
|
Less: Average goodwill |
723,785 |
|
|
726,934 |
|
|
298,191 |
|
|
724,940 |
|
|
298,191 |
|
Less: Average amortizable intangibles |
53,267 |
|
|
50,546 |
|
|
16,681 |
|
|
51,829 |
|
|
18,184 |
|
Average tangible common equity (non-GAAP) |
$ |
1,103,530 |
|
|
$ |
1,069,886 |
|
|
$ |
722,920 |
|
|
$ |
1,074,303 |
|
|
$ |
708,478 |
|
|
|
|
|
|
|
|
|
|
|
Operating Measures
(3) |
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
38,197 |
|
|
$ |
47,327 |
|
|
$ |
20,658 |
|
|
$ |
102,163 |
|
|
$ |
57,737 |
|
Plus: Merger-related costs, net of tax |
1,129 |
|
|
6,537 |
|
|
661 |
|
|
29,902 |
|
|
3,020 |
|
Net operating earnings (non-GAAP) |
$ |
39,326 |
|
|
$ |
53,864 |
|
|
$ |
21,319 |
|
|
$ |
132,065 |
|
|
$ |
60,757 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense (GAAP) |
$ |
76,349 |
|
|
$ |
85,140 |
|
|
$ |
55,204 |
|
|
$ |
263,234 |
|
|
$ |
167,871 |
|
Less: Merger-related costs |
1,429 |
|
|
8,273 |
|
|
732 |
|
|
37,414 |
|
|
3,476 |
|
Operating noninterest expense (non-GAAP) |
$ |
74,920 |
|
|
$ |
76,867 |
|
|
$ |
54,472 |
|
|
$ |
225,820 |
|
|
$ |
164,395 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income (FTE) (non-GAAP) (1) |
$ |
107,977 |
|
|
$ |
110,176 |
|
|
$ |
73,846 |
|
|
$ |
323,462 |
|
|
$ |
214,601 |
|
Noninterest income (GAAP) |
19,887 |
|
|
40,597 |
|
|
15,230 |
|
|
80,752 |
|
|
47,305 |
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio |
60.67 |
% |
|
57.23 |
% |
|
64.13 |
% |
|
66.08 |
% |
|
66.29 |
% |
Efficiency ratio (FTE) (1) |
59.71 |
% |
|
56.47 |
% |
|
61.97 |
% |
|
65.12 |
% |
|
64.10 |
% |
Operating efficiency ratio (FTE) |
58.59 |
% |
|
50.98 |
% |
|
61.15 |
% |
|
55.87 |
% |
|
62.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of & For Three
Months Ended |
|
As of & For Nine
Months Ended |
|
9/30/18 |
|
6/30/18 |
|
9/30/17 |
|
9/30/18 |
|
9/30/17 |
Other Data |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
End of period full-time employees |
1,621 |
|
|
1,702 |
|
|
1,427 |
|
|
1,621 |
|
|
1,427 |
|
Number of full-service branches |
140 |
|
|
147 |
|
|
111 |
|
|
140 |
|
|
111 |
|
Number of full automatic transaction machines
("ATMs") |
190 |
|
|
199 |
|
|
173 |
|
|
190 |
|
|
173 |
|
(1) These are non-GAAP financial measures. 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) These are non-GAAP financial measures. 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) These are non-GAAP financial measures. Operating measures
exclude merger-related costs 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.
(4) All ratios at September 30, 2018 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
(UNAUDITED) |
|
|
(Dollars in thousands, except share data) |
|
|
|
|
|
|
September 30, |
|
December 31, |
|
September 30, |
|
2018 |
|
2017 |
|
2017 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents: |
|
|
|
|
|
Cash and due from banks |
$ |
143,693 |
|
|
$ |
117,586 |
|
|
$ |
115,776 |
|
Interest-bearing deposits in other banks |
130,098 |
|
|
81,291 |
|
|
60,294 |
|
Federal funds sold |
8,421 |
|
|
496 |
|
|
891 |
|
Total cash and cash
equivalents |
282,212 |
|
|
199,373 |
|
|
176,961 |
|
Securities available for sale, at fair
value |
1,883,141 |
|
|
974,222 |
|
|
968,361 |
|
Securities held to maturity, at carrying
value |
235,333 |
|
|
199,639 |
|
|
204,801 |
|
Marketable equity securities, at fair
value |
27,375 |
|
|
— |
|
|
— |
|
Restricted stock, at cost |
112,390 |
|
|
75,283 |
|
|
68,441 |
|
Loans held for investment, net of deferred
fees and costs |
9,411,598 |
|
|
7,141,552 |
|
|
6,898,729 |
|
Less allowance for loan losses |
41,294 |
|
|
38,208 |
|
|
37,162 |
|
Net loans held for investment |
9,370,304 |
|
|
7,103,344 |
|
|
6,861,567 |
|
Premises and equipment, net |
155,001 |
|
|
119,604 |
|
|
120,380 |
|
Goodwill |
727,699 |
|
|
298,528 |
|
|
298,191 |
|
Amortizable intangibles, net |
51,563 |
|
|
14,803 |
|
|
16,017 |
|
Bank owned life insurance |
261,874 |
|
|
182,854 |
|
|
181,451 |
|
Other assets |
262,716 |
|
|
102,871 |
|
|
97,990 |
|
Assets of discontinued
operations |
2,134 |
|
|
44,658 |
|
|
35,276 |
|
Total assets |
$ |
13,371,742 |
|
|
$ |
9,315,179 |
|
|
$ |
9,029,436 |
|
LIABILITIES |
|
|
|
|
|
Noninterest-bearing demand
deposits |
$ |
2,189,887 |
|
|
$ |
1,502,208 |
|
|
$ |
1,535,149 |
|
Interest-bearing deposits |
7,644,808 |
|
|
5,489,510 |
|
|
5,346,677 |
|
Total deposits |
9,834,695 |
|
|
6,991,718 |
|
|
6,881,826 |
|
Securities sold under agreements to
repurchase |
40,624 |
|
|
49,152 |
|
|
43,337 |
|
Other short-term borrowings |
1,016,250 |
|
|
745,000 |
|
|
574,000 |
|
Long-term borrowings |
497,768 |
|
|
425,262 |
|
|
434,750 |
|
Other liabilities |
99,757 |
|
|
54,008 |
|
|
51,385 |
|
Liabilities of discontinued
operations |
2,619 |
|
|
3,710 |
|
|
2,767 |
|
Total liabilities |
11,491,713 |
|
|
8,268,850 |
|
|
7,988,065 |
|
Commitments and contingencies |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
Common stock, $1.33 par value, shares authorized
100,000,000; issued and outstanding, 65,982,669 shares, 43,743,318
shares, and 43,729,229 shares, respectively. |
87,192 |
|
|
57,744 |
|
|
57,708 |
|
Additional paid-in capital |
1,378,940 |
|
|
610,001 |
|
|
608,884 |
|
Retained earnings |
438,513 |
|
|
379,468 |
|
|
373,468 |
|
Accumulated other comprehensive income
(loss) |
(24,616 |
) |
|
(884 |
) |
|
1,311 |
|
Total stockholders' equity |
1,880,029 |
|
|
1,046,329 |
|
|
1,041,371 |
|
Total liabilities and stockholders'
equity |
$ |
13,371,742 |
|
|
$ |
9,315,179 |
|
|
$ |
9,029,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNION BANKSHARES CORPORATION AND
SUBSIDIARIES |
|
|
|
|
CONSOLIDATED STATEMENTS OF
INCOME |
|
|
|
|
(Dollars in thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Interest and dividend income: |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Interest and fees on loans |
$ |
115,817 |
|
|
$ |
119,540 |
|
|
$ |
75,597 |
|
|
$ |
348,009 |
|
|
$ |
215,797 |
|
Interest on deposits in other banks |
492 |
|
|
676 |
|
|
181 |
|
|
1,815 |
|
|
367 |
|
Interest and dividends on securities: |
|
|
|
|
|
|
|
|
|
Taxable |
10,145 |
|
|
8,012 |
|
|
5,175 |
|
|
25,229 |
|
|
15,081 |
|
Nontaxable |
4,909 |
|
|
4,181 |
|
|
3,546 |
|
|
13,098 |
|
|
10,620 |
|
Total interest and dividend
income |
131,363 |
|
|
132,409 |
|
|
84,499 |
|
|
388,151 |
|
|
241,865 |
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Interest on deposits |
15,928 |
|
|
13,047 |
|
|
7,234 |
|
|
40,187 |
|
|
18,410 |
|
Interest on short-term borrowings |
3,379 |
|
|
5,166 |
|
|
1,871 |
|
|
12,794 |
|
|
4,221 |
|
Interest on long-term borrowings |
6,093 |
|
|
6,028 |
|
|
4,547 |
|
|
17,568 |
|
|
13,316 |
|
Total interest expense |
25,400 |
|
|
24,241 |
|
|
13,652 |
|
|
70,549 |
|
|
35,947 |
|
Net interest income |
105,963 |
|
|
108,168 |
|
|
70,847 |
|
|
317,602 |
|
|
205,918 |
|
Provision for credit losses |
3,340 |
|
|
2,147 |
|
|
3,056 |
|
|
9,011 |
|
|
7,344 |
|
Net interest income after provision for
credit losses |
102,623 |
|
|
106,021 |
|
|
67,791 |
|
|
308,591 |
|
|
198,574 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
6,483 |
|
|
6,189 |
|
|
4,795 |
|
|
18,566 |
|
|
13,924 |
|
Other service charges and fees |
1,625 |
|
|
1,278 |
|
|
1,131 |
|
|
4,137 |
|
|
3,391 |
|
Interchange fees, net |
4,882 |
|
|
4,792 |
|
|
3,756 |
|
|
14,163 |
|
|
11,205 |
|
Fiduciary and asset management fees |
4,411 |
|
|
4,040 |
|
|
2,794 |
|
|
11,507 |
|
|
8,313 |
|
Gains (losses) on securities transactions, net |
97 |
|
|
(88 |
) |
|
184 |
|
|
222 |
|
|
782 |
|
Bank owned life insurance income |
1,732 |
|
|
1,728 |
|
|
1,377 |
|
|
5,126 |
|
|
4,837 |
|
Loan-related interest rate swap fees |
562 |
|
|
898 |
|
|
416 |
|
|
2,178 |
|
|
2,627 |
|
Gain on Shore Premier sale |
(933 |
) |
|
20,899 |
|
|
— |
|
|
19,966 |
|
|
— |
|
Other operating income |
1,028 |
|
|
861 |
|
|
777 |
|
|
4,887 |
|
|
2,226 |
|
Total noninterest income |
19,887 |
|
|
40,597 |
|
|
15,230 |
|
|
80,752 |
|
|
47,305 |
|
Noninterest expenses: |
|
|
|
|
|
|
|
|
|
Salaries and benefits |
39,279 |
|
|
40,777 |
|
|
28,187 |
|
|
120,797 |
|
|
87,740 |
|
Occupancy expenses |
6,551 |
|
|
6,159 |
|
|
4,678 |
|
|
18,778 |
|
|
13,783 |
|
Furniture and equipment expenses |
2,983 |
|
|
3,103 |
|
|
2,454 |
|
|
9,024 |
|
|
7,518 |
|
Printing, postage, and supplies |
1,183 |
|
|
1,282 |
|
|
1,139 |
|
|
3,525 |
|
|
3,664 |
|
Communications expense |
872 |
|
|
1,009 |
|
|
796 |
|
|
2,976 |
|
|
2,567 |
|
Technology and data processing |
4,841 |
|
|
4,322 |
|
|
4,148 |
|
|
13,722 |
|
|
11,793 |
|
Professional services |
2,875 |
|
|
2,671 |
|
|
1,948 |
|
|
8,101 |
|
|
5,611 |
|
Marketing and advertising expense |
3,109 |
|
|
3,288 |
|
|
1,931 |
|
|
7,834 |
|
|
5,933 |
|
FDIC assessment premiums and other insurance |
1,363 |
|
|
1,882 |
|
|
1,141 |
|
|
5,430 |
|
|
2,793 |
|
Other taxes |
2,878 |
|
|
2,895 |
|
|
2,022 |
|
|
8,660 |
|
|
6,065 |
|
Loan-related expenses |
1,939 |
|
|
1,843 |
|
|
1,193 |
|
|
5,097 |
|
|
3,484 |
|
OREO and credit-related expenses |
452 |
|
|
1,122 |
|
|
1,139 |
|
|
3,106 |
|
|
2,023 |
|
Amortization of intangible assets |
3,490 |
|
|
3,215 |
|
|
1,480 |
|
|
9,885 |
|
|
4,661 |
|
Training and other personnel costs |
1,024 |
|
|
1,125 |
|
|
861 |
|
|
3,155 |
|
|
2,829 |
|
Merger-related costs |
1,429 |
|
|
8,273 |
|
|
732 |
|
|
37,414 |
|
|
3,476 |
|
Other expenses |
2,081 |
|
|
2,174 |
|
|
1,355 |
|
|
5,730 |
|
|
3,931 |
|
Total noninterest expenses |
76,349 |
|
|
85,140 |
|
|
55,204 |
|
|
263,234 |
|
|
167,871 |
|
Income from continuing operations before income taxes |
46,161 |
|
|
61,478 |
|
|
27,817 |
|
|
126,109 |
|
|
78,008 |
|
Income tax expense |
7,399 |
|
|
11,678 |
|
|
7,397 |
|
|
20,973 |
|
|
20,924 |
|
Income from continuing
operations |
$ |
38,762 |
|
|
$ |
49,800 |
|
|
$ |
20,420 |
|
|
$ |
105,136 |
|
|
$ |
57,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNION BANKSHARES CORPORATION AND
SUBSIDIARIES |
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
(continued) |
|
|
|
|
(Dollars in thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Discontinued operations: |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Income (loss) from operations of discontinued
mortgage segment |
$ |
(761 |
) |
|
$ |
(3,085 |
) |
|
$ |
371 |
|
|
$ |
(3,768 |
) |
|
1,021 |
|
Income tax expense (benefit) |
(196 |
) |
|
(612 |
) |
|
133 |
|
|
(795 |
) |
|
368 |
|
Income (loss) on discontinued
operations |
(565 |
) |
|
(2,473 |
) |
|
238 |
|
|
(2,973 |
) |
|
653 |
|
Net income |
$ |
38,197 |
|
|
$ |
47,327 |
|
|
$ |
20,658 |
|
|
$ |
102,163 |
|
|
$ |
57,737 |
|
Basic earnings per common share |
$ |
0.58 |
|
|
$ |
0.72 |
|
|
$ |
0.47 |
|
|
$ |
1.55 |
|
|
$ |
1.32 |
|
Diluted earnings per common share |
$ |
0.58 |
|
|
$ |
0.72 |
|
|
$ |
0.47 |
|
|
$ |
1.55 |
|
|
$ |
1.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES, INCOME AND EXPENSES,
YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) |
|
For the Quarter
Ended |
|
September 30,
2018 |
|
June 30, 2018 |
|
AverageBalance |
|
InterestIncome /Expense
(1) |
|
Yield /Rate
(1)(2) |
|
AverageBalance |
|
InterestIncome /Expense
(1) |
|
Yield /Rate
(1)(2) |
|
|
|
|
Assets: |
(unaudited) |
|
(unaudited) |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
Taxable |
$ |
1,333,960 |
|
|
$ |
10,145 |
|
3.02 |
% |
|
$ |
1,077,656 |
|
|
$ |
8,012 |
|
2.98 |
% |
Tax-exempt |
632,050 |
|
|
6,214 |
|
3.90 |
% |
|
547,617 |
|
|
5,293 |
|
3.88 |
% |
Total securities |
1,966,010 |
|
|
16,359 |
|
3.30 |
% |
|
1,625,273 |
|
|
13,305 |
|
3.28 |
% |
Loans, net (3) (4) |
9,297,213 |
|
|
116,266 |
|
4.96 |
% |
|
9,809,083 |
|
|
120,039 |
|
4.91 |
% |
Other earning assets |
120,097 |
|
|
752 |
|
2.49 |
% |
|
226,833 |
|
|
1,073 |
|
1.90 |
% |
Total earning assets |
11,383,320 |
|
|
$ |
133,377 |
|
4.65 |
% |
|
11,661,189 |
|
|
$ |
134,417 |
|
4.62 |
% |
Allowance for loan losses |
(41,799 |
) |
|
|
|
|
|
(41,645 |
) |
|
|
|
|
Total non-earning assets |
1,605,831 |
|
|
|
|
|
|
1,598,683 |
|
|
|
|
|
Total assets |
$ |
12,947,352 |
|
|
|
|
|
|
$ |
13,218,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
Transaction and money market accounts |
$ |
4,915,070 |
|
|
$ |
8,789 |
|
0.71 |
% |
|
$ |
4,836,642 |
|
|
$ |
6,790 |
|
0.56 |
% |
Regular savings |
640,954 |
|
|
209 |
|
0.13 |
% |
|
649,897 |
|
|
217 |
|
0.13 |
% |
Time deposits (5) |
2,079,686 |
|
|
6,930 |
|
1.32 |
% |
|
2,063,414 |
|
|
6,040 |
|
1.17 |
% |
Total interest-bearing
deposits |
7,635,710 |
|
|
15,928 |
|
0.83 |
% |
|
7,549,953 |
|
|
13,047 |
|
0.69 |
% |
Other borrowings (6) |
1,155,093 |
|
|
9,472 |
|
3.25 |
% |
|
1,617,322 |
|
|
11,194 |
|
2.78 |
% |
Total interest-bearing
liabilities |
8,790,803 |
|
|
25,400 |
|
1.15 |
% |
|
9,167,275 |
|
|
24,241 |
|
1.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
2,167,765 |
|
|
|
|
|
|
2,095,233 |
|
|
|
|
|
Other liabilities |
108,202 |
|
|
|
|
|
|
108,353 |
|
|
|
|
|
Total liabilities |
11,066,770 |
|
|
|
|
|
|
11,370,861 |
|
|
|
|
|
Stockholders' equity |
1,880,582 |
|
|
|
|
|
|
1,847,366 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
12,947,352 |
|
|
|
|
|
|
$ |
13,218,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
107,977 |
|
|
|
|
|
$ |
110,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
3.50 |
% |
|
|
|
|
|
3.56 |
% |
Cost of funds |
|
|
|
|
0.89 |
% |
|
|
|
|
|
0.83 |
% |
Net interest margin |
|
|
|
|
3.76 |
% |
|
|
|
|
|
3.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Income and yields are reported on a taxable
equivalent basis using the statutory federal corporate tax rate of
21%. |
(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 $3.5 million
and $5.3 million for the three months ended September 30, 2018 and
June 30, 2018, respectively, in accretion of the fair market value
adjustments related to acquisitions. |
(5) Interest expense on time deposits includes
$592,000 and $685,000 for the three months ended September 30, 2018
and June 30, 2018, respectively, in accretion of the fair market
value adjustments related to acquisitions. |
(6) Interest expense on borrowings includes $143,000
and $104,000 for the three months ended September 30, 2018 and June
30, 2018, respectively, in amortization of the fair market value
adjustments related to acquisitions. |
|
Contact:Robert M. Gorman - (804)
523-7828Executive Vice President / Chief Financial Officer
Union Bankshares Corp (NASDAQ:UBSH)
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