Exhibit 99.1

unionbankshares_image1a17.jpg

Contact:    Robert M. Gorman - (804) 523-7828
Executive Vice President / Chief Financial Officer

UNION BANKSHARES REPORTS SECOND QUARTER RESULTS

Richmond, Va., July 18, 2018 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $47.3 million and earnings per share of $0.72 for its second quarter ended June 30, 2018. Net operating earnings(1) were $53.9 million and operating earnings per share(1) was $0.82 for its second quarter ended June 30, 2018; these operating results exclude $6.5 million in after-tax merger-related costs.

Net income was $64.0 million and earnings per share was $0.97 for the six months ended June 30, 2018. Net operating earnings(1) were $92.7 million and operating earnings per share(1) were $1.41 for the six months ended June 30, 2018; these operating results exclude $28.8 million in after-tax merger-related costs.

“Union followed up on our strong first quarter with a number of accomplishments during the second quarter that align with our stated strategic priorities - positioning us for profitable growth and the delivery of top tier financial metrics, which we expect to achieve in the fourth quarter of 2018,” said John C. Asbury, President and CEO of Union Bankshares Corporation. “This quarter’s accomplishments included successfully converting the core data systems for Xenith Bank, exiting the mortgage origination business, divesting the national scope marine finance business acquired from Xenith Bank, divesting a non-strategic third party consumer lending portfolio and continuing to build out the commercial banking teams across the franchise.

Our second quarter actions demonstrate Union is executing on its strategic priorities with intensity and a sharp focus on our core business lines. We are especially pleased that our commercial banking build out is occurring at an accelerated pace and that we have achieved our long-term loan to deposit ratio target. Union has never been better positioned to achieve its profitability and growth objectives.”

Select highlights for the second quarter of 2018 include:
•
Performance metrics linked quarter
◦
Return on Average Assets (“ROA”) was 1.44% compared to 0.52% in the first quarter of 2018. Operating ROA(1) increased to 1.63% compared to 1.21% in the first quarter of 2018.
◦
Return on Average Equity (“ROE”) was 10.28% compared to 3.70% in the first quarter of 2018. Operating ROE(1) was 11.69% compared to 8.64% in the first quarter of 2018.
◦
Return on Average Tangible Common Equity (“ROTCE”) was 17.74% compared to 6.43% in the first quarter of 2018. Operating ROTCE(1) increased to 20.19% compared to 15.03% in the first quarter of 2018.
◦
Efficiency ratio declined to 57.2% compared to 82.2% in the first quarter of 2018 and the efficiency ratio (FTE) declined to 56.5% compared to 81.0% in the first quarter of 2018. Operating efficiency ratio(1) improved to 51.0% compared to 59.0% in the first quarter of 2018.
•
Notable activity during the second quarter
◦
On May 23, 2018, the Company's wholly-owned bank subsidiary, Union Bank & Trust, announced that it had entered into a definitive agreement with a third party mortgage company to team together to offer residential mortgages. As a result of this arrangement, Union Bank & Trust began winding-down the operations of Union Mortgage Group, its wholly-owned subsidiary. In connection with this transaction, the Company recorded exit costs totaling approximately $3.4 million, which includes goodwill impairment of approximately $864,000. These costs and the Company's mortgage segment results are reported within discontinued operations results.


◦
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 approximately $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 sale generated an after-tax gain of approximately $16.5 million, net of transaction and other related costs.
◦
On June 29, 2018, Union Bank & Trust sold approximately $206.3 million in consumer home improvement loans that had been originated through a third-party lending program. These loans were sold at par.
◦
The Company closed three branches during the second quarter of 2018 as part of conversion activities related to its acquisition of Xenith Bankshares, Inc. (“Xenith”). After further analyzing its branch footprint, the Company has decided to consolidate an additional seven branches, approximately 5% of the Company's branch network, during the third quarter of 2018. The upcoming branch closures resulted in after-tax branch closure costs of approximately $474,000 that were recorded in the second quarter of 2018.
◦
On April 1, 2018, Union Bank & Trust completed its acquisition of Dixon, Hubard, Feinour, & Brown, Inc. ("DHFB"), a Roanoke, Virginia based investment advisory firm with approximately $600 million in assets under management and advisement. DHFB operates as a subsidiary of Union Bank & Trust and from its offices in Roanoke, Virginia.
(1) For a reconciliation of the non-GAAP operating measures that exclude merger-related costs unrelated to the Company’s normal operations, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

NET INTEREST INCOME

For the second quarter of 2018, net interest income was $108.2 million, an increase of $4.7 million from the first quarter of 2018. Tax-equivalent net interest income was $110.2 million in the second quarter of 2018, an increase of $4.9 million from the first quarter of 2018. The increases in both net interest income and tax-equivalent net interest income were primarily driven by higher earning asset balances and higher yields on those balances. The second quarter net interest margin increased 6 basis points to 3.72% from 3.66% in the previous quarter, while the tax-equivalent net interest margin increased 7 basis points to 3.79% from 3.72% during the same periods. The increases in the net interest margin and tax-equivalent net interest margin were principally due to an approximate 16 basis point increase in the yield on earning assets, partially offset by an approximate 9 basis point increase in the cost of funds.

The Company’s tax-equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the second quarter of 2018, net accretion related to acquisition accounting increased $325,000 from the prior quarter to $5.9 million for the quarter ended June 30, 2018. The first and second quarters of 2018 and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
 
Loan Accretion
 
Deposit Accretion
 
Borrowings Amortization
 
Total
For the quarter ended March 31, 2018
$
4,846

 
$
832

 
$
(98
)
 
$
5,580

For the quarter ended June 30, 2018
5,324

 
685

 
(104)

 
5,905

For the remaining six months of 2018 (estimated)
5,650

 
1,036

 
(304)

 
6,382

For the years ending (estimated):
 
 
 
 
 
 
 
2019
9,626

 
1,170

 
(660)

 
10,136

2020
7,655

 
284

 
(734)

 
7,205

2021
6,023

 
108

 
(805)

 
5,326

2022
4,319

 
21

 
(827)

 
3,513

2023
2,739

 
—

 
(850)

 
1,889

Thereafter
9,670

 
—

 
(11,633)

 
(1,963)





ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the second quarter of 2018, the Company experienced declines in nonperforming asset (“NPA”) balances from the prior quarter, primarily related to sales of other real estate owned (“OREO”). Past due loan levels as a percentage of total loans held for investment at June 30, 2018 were consistent with past due loan levels at March 31, 2018 and June 30, 2017. Charge-off levels increased from the first quarter of 2018 and were primarily related to the consumer loan portfolio, while the provision for loan losses declined from the first quarter of 2018.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $101.5 million (net of fair value mark of $23.1 million).

Nonperforming Assets
At June 30, 2018, NPAs totaled $33.7 million, a decrease of $1.6 million, or 4.5%, from March 31, 2018 and a decline of $399,000, or 1.2%, from June 30, 2017. In addition, NPAs as a percentage of total outstanding loans at June 30, 2018 was 0.36%, consistent with March 31, 2018 and a decline of 14 basis points from 0.50% at June 30, 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 no 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):
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
2018
 
2018
 
2017
 
2017
 
2017
Nonaccrual loans
$
25,662

 
$
25,138

 
$
21,743

 
$
20,122

 
$
24,574

Foreclosed properties
7,241

 
8,079

 
5,253

 
6,449

 
6,828

Former bank premises
754

 
2,020

 
1,383

 
2,315

 
2,654

Total nonperforming assets
$
33,657

 
$
35,237

 
$
28,379

 
$
28,886

 
$
34,056


The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
2018
 
2018
 
2017
 
2017
 
2017
Beginning Balance
$
25,138

 
$
21,743

 
$
20,122

 
$
24,574

 
$
22,338

Net customer payments
(2,651
)
 
(1,455
)
 
(768
)
 
(4,642
)
 
(1,498
)
Additions
5,063

 
5,451

 
4,335

 
4,114

 
5,979

Charge-offs
(539
)
 
(403
)
 
(1,305
)
 
(3,376
)
 
(2,004
)
Loans returning to accruing status
(1,349
)
 
(182
)
 
(448
)
 
—

 
(134
)
Transfers to OREO
—

 
(16
)
 
(193
)
 
(548
)
 
(107
)
Ending Balance
$
25,662

 
$
25,138

 
$
21,743

 
$
20,122

 
$
24,574


The following table shows the activity in OREO for the quarter ended (dollars in thousands):
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
2018
 
2018
 
2017
 
2017
 
2017
Beginning Balance
$
10,099

 
$
6,636

 
$
8,764

 
$
9,482

 
$
9,605

Additions of foreclosed property
283

 
44

 
325

 
621

 
132

Acquisitions of foreclosed property (1)
(162
)
 
4,204

 
—

 
—

 
—

Acquisitions of former bank premises
—

 
1,208

 
—

 
—

 
—

Valuation adjustments
(383
)
 
(759
)
 
(1,046
)
 
(588
)
 
(19
)
Proceeds from sales
(1,858
)
 
(1,255
)
 
(1,419
)
 
(648
)
 
(272
)
Gains (losses) from sales
16

 
21

 
12

 
(103
)
 
36

Ending Balance
$
7,995

 
$
10,099

 
$
6,636

 
$
8,764

 
$
9,482

(1) Includes subsequent measurement period adjustments.



Past Due Loans
Past due loans still accruing interest totaled $38.2 million, or 0.41% of total loans, at June 30, 2018 compared to $41.6 million, or 0.42% of total loans, at March 31, 2018 and $27.4 million, or 0.40% of total loans, at June 30, 2017. Of the total past due loans still accruing interest, $6.9 million, or 0.07% of total loans, were loans past due 90 days or more at June 30, 2018, compared to $2.6 million, or 0.03% of total loans, at March 31, 2018 and $3.6 million, or 0.05% of total loans, at June 30, 2017.

Net Charge-offs
For the second quarter of 2018, net charge-offs were $1.8 million, or 0.07% of total average loans on an annualized basis, compared to $1.1 million, or 0.05%, for the prior quarter and $2.5 million, or 0.15%, for the same quarter last year. Of the net charge-offs in the second quarter of 2018, the majority were related to consumer loans.

Provision for Loan Losses
The provision for loan losses for the second quarter of 2018 was $2.7 million, a decrease of $864,000 compared to the previous quarter and an increase of $349,000 compared to the same quarter in 2017. The decrease in provision from the first quarter of 2018 was primarily driven by lower levels of loan growth in the current quarter.

Allowance for Loan Losses (“ALL”)
The ALL increased $641,000 from March 31, 2018 to $41.3 million at June 30, 2018 primarily due to organic loan growth during the quarter. The ALL as a percentage of the total loan portfolio was 0.44% at June 30, 2018, 0.41% at March 31, 2018, and 0.56% at June 30, 2017. The quarter-over-quarter increase in the allowance ratio was primarily due to the sale of loans during the second quarter of 2018, while 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 160.8% at June 30, 2018, compared to 161.6% at March 31, 2018 and 155.5% at June 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 increased $20.3 million to $40.6 million for the quarter ended June 30, 2018 from $20.3 million in the prior quarter, primarily driven by the net gain on sale of the Shore Premier Finance division of $20.9 million. During the first quarter of 2018, noninterest income included a gain of $1.4 million related to the sale of the Company's ownership interest in a payments-related company. Excluding these gains from their respective quarters, noninterest income increased $847,000, or 4.5%, for the quarter ended June 30, 2018 when compared to the prior quarter. The increase in customer-related fee income of $1.6 million was primarily due to the acquisition of DHFB as well as higher overdraft fees and debit card interchange fees. Partially offsetting this increase, the Company experienced losses on the sales of securities in the second quarter of 2018 compared to gains in the first quarter of 2018.

NONINTEREST EXPENSE

Noninterest expense decreased $16.6 million to $85.1 million for the quarter ended June 30, 2018 from $101.7 million in the prior quarter. Excluding merger-related costs of $8.3 million and $27.7 million in the second and first quarters of 2018, respectively, operating noninterest expense increased $2.8 million, or 3.8%, to $76.9 million when compared to the first quarter of 2018. The increase in operating noninterest expense was primarily related to increased marketing expenses of $1.9 million associated with the launch of the Union Bank & Trust brand in Xenith's footprint as well as higher levels of debit card rewards expenses. In addition, operating noninterest expense in the second quarter of 2018 included approximately $770,000 in expenses for DHFB and branch closure costs of approximately $600,000 related to the decision to consolidate seven branches in the third quarter of 2018.

INCOME TAXES

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. Among other things, the Tax Act 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. No additional adjustments related to the Tax Act were recorded in the second quarter of 2018.

The effective tax rate for the three months ended June 30, 2018 was 19.0% compared to 10.3% for the three months ended March 31, 2018. The increase in the effective tax rate was primarily due to tax benefits related to stock compensation of approximately $1.2 million recorded during the first quarter of 2018 in accordance with ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” as well as tax-exempt income being a lower component of pre-tax income in the second quarter of 2018 compared to the first quarter of 2018.

BALANCE SHEET

At June 30, 2018, total assets were $13.1 billion, a decrease of $83.2 million from March 31, 2018, a result of the sale of the Shore Premier loans and certain third party lending loans at the end of the quarter.

At June 30, 2018, loans held for investment (net of deferred fees and costs) were $9.3 billion, a decrease of $515.5 million from March 31, 2018, while average loans increased $128.9 million, or 5.3% (annualized), from the prior quarter. Adjusted for the sale of the Shore Premier loans and certain third party lending program loans, loans held for investment grew $66.7 million, or 2.9% (annualized), from March 31, 2018.

At June 30, 2018, total deposits were $9.8 billion, an increase of $119.3 million, or 4.9% (annualized), from March 31, 2018, while average deposits increased $181.5 million, or 7.7% (annualized), from the prior quarter.

The following table shows the Company's regulatory capital ratios at the quarters ended:
 
June 30,
 
March 31,
 
June 30,
 
2018
 
2018
 
2017
Common equity Tier 1 capital ratio (1)
9.74%

 
9.03%

 
9.39
%
Tier 1 capital ratio (1)
10.95%

 
10.19%

 
10.57
%
Total capital ratio (1)
12.81%

 
11.97%

 
13.00
%
Leverage ratio (Tier 1 capital to average assets) (1)
9.46%

 
9.32%

 
9.61
%
Common equity to total assets
14.27
%
 
13.93
%
 
11.56
%
Tangible common equity to tangible assets (2)
8.86
%
 
8.54
%
 
8.32
%
 
 
 
 
 
 
(1) All ratios at June 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 second quarter of 2018, the Company declared and paid cash dividends of $0.21 per common share, consistent with the first quarter of 2018 and an increase of $0.01, or 5.0%, compared to the second 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 147 branches, 7 of which are operated as Xenith Bank, a division of Union Bank &


Trust of Richmond, Virginia, and approximately 200 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.

Union Bankshares Corporation will hold a conference call on Wednesday, July 18th, 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 7389206.

NON-GAAP MEASURES
In reporting the results of the quarter and six months ended June 30, 2018, 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 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 Union Bank & Trust’s lending area,
•
real estate values in Union Bank & Trust’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 threats, 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, 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")
 
 
 
 
 
As of & For Three Months Ended
 
Six Months Ended
 
6/30/18
 
3/31/18
 
6/30/17
 
6/30/18
 
6/30/17
Results of Operations
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and dividend income
$
132,409

 
$
124,379

 
$
80,926

 
$
256,789

 
$
157,365

Interest expense
24,241

 
20,907

 
12,222

 
45,149

 
22,294

Net interest income
108,168

 
103,472

 
68,704

 
211,640

 
135,071

Provision for credit losses
2,147

 
3,524

 
2,184

 
5,671

 
4,288

Net interest income after provision for credit losses
106,021

 
99,948

 
66,520

 
205,969

 
130,783

Noninterest income
40,597

 
20,267

 
15,262

 
60,865

 
32,075

Noninterest expenses
85,140

 
101,743

 
57,575

 
186,885

 
112,668

Income before income taxes
61,478

 
18,472

 
24,207

 
79,949

 
50,190

Income tax expense
11,678

 
1,897

 
6,725

 
13,575

 
13,507

Income from continuing operations
49,800

 
16,575

 
17,482

 
66,374

 
36,683

Discontinued operations, net of tax
(2,473
)
 
64

 
474

 
(2,408
)
 
397

Net income
$
47,327

 
$
16,639

 
$
17,956

 
$
63,966

 
$
37,080

 
 
 
 
 
 
 
 
 
 
Interest earned on earning assets (FTE) (1)
$
134,417

 
$
126,217

 
$
83,869

 
$
260,634

 
$
163,049

Net interest income (FTE) (1)
110,176

 
105,310

 
71,647

 
215,485

 
140,755

 
 
 
 
 
 
 
 
 
 
Key Ratios
 
 
 
 
 
 
 
 
 
Earnings per common share, diluted
$
0.72

 
$
0.25

 
$
0.41

 
$
0.97

 
$
0.85

Return on average assets (ROA)
1.44
%
 
0.52
%
 
0.82
%
 
0.98
%
 
0.87
%
Return on average equity (ROE)
10.28
%
 
3.70
%
 
7.02
%
 
7.03
%
 
7.34
%
Return on average tangible common equity (ROTCE) (2)
17.74
%
 
6.43
%
 
10.15
%
 
12.18
%
 
10.66
%
Efficiency ratio
57.23
%
 
82.22
%
 
68.57
%
 
68.58
%
 
67.41
%
Efficiency ratio (FTE) (1)
56.47
%
 
81.02
%
 
66.25
%
 
67.63
%
 
65.19
%
Net interest margin
3.72
%
 
3.66
%
 
3.47
%
 
3.69
%
 
3.49
%
Net interest margin (FTE) (1)
3.79
%
 
3.72
%
 
3.62
%
 
3.76
%
 
3.64
%
Yields on earning assets (FTE) (1)
4.62
%
 
4.46
%
 
4.24
%
 
4.54
%
 
4.22
%
Cost of interest-bearing liabilities (FTE) (1)
1.06
%
 
0.93
%
 
0.79
%
 
1.00
%
 
0.74
%
Cost of funds (FTE) (1)
0.83
%
 
0.74
%
 
0.62
%
 
0.78
%
 
0.58
%
 
 
 
 
 
 
 
 
 
 
Operating Measures (3)
 
 
 
 
 
 
 
 
 
Net operating earnings
$
53,864

 
$
38,875

 
$
20,314

 
$
92,739

 
$
39,438

Operating earnings per share, diluted
$
0.82

 
$
0.59

 
$
0.46

 
$
1.41

 
$
0.90

Operating ROA
1.63
%
 
1.21
%
 
0.93
%
 
1.43
%
 
0.92
%
Operating ROE
11.69
%
 
8.64
%
 
7.94
%
 
10.19
%
 
7.81
%
Operating ROTCE
20.19
%
 
15.03
%
 
11.48
%
 
17.65
%
 
11.35
%
Operating efficiency ratio (FTE) (1)
50.98
%
 
58.95
%
 
63.09
%
 
54.60
%
 
63.60
%
 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
Earnings per common share, basic
$
0.72

 
$
0.25

 
$
0.41

 
$
0.97

 
$
0.85

Earnings per common share, diluted
0.72

 
0.25

 
0.41

 
0.97

 
0.85

Cash dividends paid per common share
0.21

 
0.21

 
0.20

 
0.42

 
0.40

Market value per share
38.88

 
36.71

 
33.90

 
38.88

 
33.90

Book value per common share
28.47

 
27.87

 
23.79

 
28.47

 
23.79

Tangible book value per common share (2)
16.62

 
16.14

 
16.50

 
16.62

 
16.50

Price to earnings ratio, diluted
13.46

 
36.21

 
20.61

 
19.88

 
19.78

Price to book value per common share ratio
1.37

 
1.32

 
1.42

 
1.37

 
1.42

Price to tangible book value per common share ratio (2)
2.34

 
2.27

 
2.05

 
2.34

 
2.05

Weighted average common shares outstanding, basic
65,919,055

 
65,554,630

 
43,693,427

 
65,737,849

 
43,674,070

Weighted average common shares outstanding, diluted
65,965,577

 
65,636,262

 
43,783,952

 
65,801,926

 
43,755,045

Common shares outstanding at end of period
65,939,375

 
65,895,421

 
43,706,000

 
65,939,375

 
43,706,000





 
As of & For Three Months Ended
 
As of & For Six Months Ended
 
6/30/18
 
3/31/18
 
6/30/17
 
6/30/18
 
6/30/17
Capital Ratios
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Common equity Tier 1 capital ratio (4)
9.74
%
 
9.03
%
 
9.39
%
 
9.74
%
 
9.39
%
Tier 1 capital ratio (4)
10.95
%
 
10.19
%
 
10.57
%
 
10.95
%
 
10.57
%
Total capital ratio (4)
12.81
%
 
11.97
%
 
13.00
%
 
12.81
%
 
13.00
%
Leverage ratio (Tier 1 capital to average assets) (4)
9.46
%
 
9.32
%
 
9.61
%
 
9.46
%
 
9.61
%
Common equity to total assets
14.27
%
 
13.93
%
 
11.56
%
 
14.27
%
 
11.56
%
Tangible common equity to tangible assets (2)
8.86
%
 
8.54
%
 
8.32
%
 
8.86
%
 
8.32
%
 
 
 
 
 
 
 
 
 
 
Financial Condition
 
 
 
 
 
 
 
 
 
Assets
$
13,066,106

 
$
13,149,292

 
$
8,915,187

 
$
13,066,106

 
$
8,915,187

Loans held for investment
9,290,259

 
9,805,723

 
6,771,490

 
9,290,259

 
6,771,490

Earning Assets
11,494,113

 
11,595,325

 
8,094,574

 
11,494,113

 
8,094,574

Goodwill
725,195

 
724,106

 
298,191

 
725,195

 
298,191

Amortizable intangibles, net
51,211

 
50,092

 
17,422

 
51,211

 
17,422

Deposits
9,797,272

 
9,677,955

 
6,764,434

 
9,797,272

 
6,764,434

Stockholders' equity
1,864,870

 
1,831,077

 
1,030,869

 
1,864,870

 
1,030,869

Tangible common equity (2)
1,088,464

 
1,056,879

 
715,256

 
1,088,464

 
715,256

 
 
 
 
 
 
 
 
 
 
Loans held for investment, net of deferred fees and costs
 
 
 
 
 
 
 
 
 
Construction and land development
$
1,250,448

 
$
1,249,196

 
$
799,938

 
$
1,250,448

 
$
799,938

Commercial real estate - owner occupied
1,293,791

 
1,279,155

 
888,285

 
1,293,791

 
888,285

Commercial real estate - non-owner occupied
2,318,589

 
2,230,463

 
1,698,329

 
2,318,589

 
1,698,329

Multifamily real estate
541,730

 
547,520

 
367,257

 
541,730

 
367,257

Commercial & Industrial
1,093,771

 
1,125,733

 
568,602

 
1,093,771

 
568,602

Residential 1-4 Family - commercial
723,945

 
714,660

 
589,398

 
723,945

 
589,398

Residential 1-4 Family - mortgage
607,155

 
604,354

 
477,121

 
607,155

 
477,121

Auto
296,706

 
288,089

 
274,162

 
296,706

 
274,162

HELOC
626,916

 
642,084

 
535,088

 
626,916

 
535,088

Consumer
298,021

 
839,699

 
387,782

 
298,021

 
387,782

Other Commercial
239,187

 
284,770

 
185,528

 
239,187

 
185,528

Total loans held for investment
$
9,290,259

 
$
9,805,723

 
$
6,771,490

 
$
9,290,259

 
$
6,771,490

 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
NOW accounts
$
2,147,999

 
$
2,185,562

 
$
1,882,287

 
$
2,147,999

 
$
1,882,287

Money market accounts
2,758,704

 
2,692,662

 
1,559,895

 
2,758,704

 
1,559,895

Savings accounts
643,894

 
654,931

 
558,472

 
643,894

 
558,472

Time deposits of $100,000 and over
1,019,577

 
819,056

 
580,962

 
1,019,577

 
580,962

Other time deposits
1,034,171

 
1,268,319

 
681,248

 
1,034,171

 
681,248

Total interest-bearing deposits
$
7,604,345

 
$
7,620,530

 
$
5,262,864

 
$
7,604,345

 
$
5,262,864

Demand deposits
2,192,927

 
2,057,425

 
1,501,570

 
2,192,927

 
1,501,570

Total deposits
$
9,797,272

 
$
9,677,955

 
$
6,764,434

 
$
9,797,272

 
$
6,764,434

 
 
 
 
 
 
 
 
 
 
Averages
 
 
 
 
 
 
 
 
 
Assets
$
13,218,227

 
$
13,019,572

 
$
8,747,377

 
$
13,119,448

 
$
8,607,225

Loans held for investment
9,809,083

 
9,680,195

 
6,628,011

 
9,744,995

 
6,506,632

Securities
1,625,273

 
1,567,269

 
1,229,593

 
1,596,431

 
1,218,741

Earning assets
11,661,189

 
11,475,099

 
7,934,405

 
11,568,658

 
7,798,427

Deposits
9,645,186

 
9,463,697

 
6,637,742

 
9,554,943

 
6,523,148

Time deposits
2,063,414

 
2,085,930

 
1,248,818

 
2,074,610

 
1,230,045

Interest-bearing deposits
7,549,953

 
7,489,893

 
5,179,774

 
7,520,089

 
5,097,004

Borrowings
1,617,322

 
1,614,691

 
1,023,599

 
1,616,013

 
1,005,224

Interest-bearing liabilities
9,167,275

 
9,104,584

 
6,203,373

 
9,136,102

 
6,102,228

Stockholders' equity
1,847,366

 
1,824,588

 
1,026,148

 
1,836,072

 
1,018,277

Tangible common equity (2)
1,069,886

 
1,048,824

 
709,793

 
1,059,446

 
701,138






 
As of & For Three Months Ended
 
As of & For Six Months Ended
 
6/30/18
 
3/31/18
 
6/30/17
 
6/30/18
 
6/30/17
Asset Quality
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Allowance for Loan Losses (ALL)
 
 
 
 
 
 
 
 
 
Beginning balance
$
40,629

 
$
38,208

 
$
38,414

 
$
38,208

 
$
37,192

Add: Recoveries
1,201

 
1,480

 
827

 
2,681

 
1,672

Less: Charge-offs
2,980

 
2,559

 
3,327

 
5,539

 
4,960

Add: Provision for loan losses
2,660

 
3,524

 
2,311

 
6,184

 
4,303

Add: Provision for loan losses included in discontinued operations
(240
)
 
(24
)
 
(11
)
 
(264
)
 
7

Ending balance
$
41,270

 
$
40,629

 
$
38,214

 
$
41,270

 
$
38,214

 
 
 
 
 
 
 
 
 
 
ALL / total outstanding loans
0.44
%
 
0.41
%
 
0.56
%
 
0.44
%
 
0.56
%
Net charge-offs / total average loans
0.07
%
 
0.05
%
 
0.15
%
 
0.06
%
 
0.10
%
Provision / total average loans
0.11
%
 
0.15
%
 
0.14
%
 
0.13
%
 
0.13
%
 
 
 
 
 
 
 
 
 
 
Total PCI loans, net of fair value mark
$
101,524

 
$
102,861

 
$
56,167

 
$
101,524

 
$
56,167

Remaining fair value mark on purchased performing loans
36,207

 
44,766

 
15,382

 
36,207

 
15,382

 
 
 
 
 
 
 
 
 
 
Nonperforming Assets
 
 
 
 
 
 
 
 
 
Construction and land development
$
6,485

 
$
6,391

 
$
5,659

 
$
6,485

 
$
5,659

Commercial real estate - owner occupied
2,845

 
2,539

 
1,279

 
2,845

 
1,279

Commercial real estate - non-owner occupied
3,068

 
2,089

 
4,765

 
3,068

 
4,765

Commercial & Industrial
1,387

 
1,969

 
4,281

 
1,387

 
4,281

Residential 1-4 Family
9,550

 
9,441

 
6,128

 
9,550

 
6,128

Auto
463

 
394

 
270

 
463

 
270

HELOC
1,669

 
2,072

 
2,059

 
1,669

 
2,059

Consumer and all other
195

 
243

 
133

 
195

 
133

Nonaccrual loans
$
25,662

 
$
25,138

 
$
24,574

 
$
25,662

 
$
24,574

Other real estate owned
7,995

 
10,099

 
9,482

 
7,995

 
9,482

Total nonperforming assets (NPAs)
$
33,657

 
$
35,237

 
$
34,056

 
$
33,657

 
$
34,056

Construction and land development
$
144

 
$
322

 
$
83

 
$
144

 
$
83

Commercial real estate - owner occupied
2,512

 
—

 
56

 
2,512

 
56

Commercial real estate - non-owner occupied
—

 
—

 
298

 
—

 
298

Commercial & Industrial
100

 
200

 
55

 
100

 
55

Residential 1-4 Family
2,801

 
1,261

 
2,369

 
2,801

 
2,369

Auto
121

 
170

 
35

 
121

 
35

HELOC
570

 
306

 
544

 
570

 
544

Consumer and all other
673

 
371

 
185

 
673

 
185

Loans ≥ 90 days and still accruing
$
6,921

 
$
2,630

 
$
3,625

 
$
6,921

 
$
3,625

Total NPAs and loans ≥ 90 days
$
40,578

 
$
37,867

 
$
37,681

 
$
40,578

 
$
37,681

NPAs / total outstanding loans
0.36
%
 
0.36
%
 
0.50
%
 
0.36
%
 
0.50
%
NPAs / total assets
0.26
%
 
0.27
%
 
0.38
%
 
0.26
%
 
0.38
%
ALL / nonaccrual loans
160.82
%
 
161.62
%
 
155.51
%
 
160.82
%
 
155.51
%
ALL / nonperforming assets
122.62
%
 
115.30
%
 
112.21
%
 
122.62
%
 
112.21
%
 
 
 
 
 
 
 
 
 
 
Past Due Detail
 
 
 
 
 
 
 
 
 
Construction and land development
$
648

 
$
403

 
$
602

 
$
648

 
$
602

Commercial real estate - owner occupied
3,775

 
4,985

 
3,148

 
3,775

 
3,148

Commercial real estate - non-owner occupied
44

 
1,867

 
1,530

 
44

 
1,530

Multifamily real estate
86

 
—

 
500

 
86

 
500

Commercial & Industrial
1,921

 
2,608

 
1,652

 
1,921

 
1,652

Residential 1-4 Family
7,142

 
9,917

 
2,477

 
7,142

 
2,477

Auto
2,187

 
2,167

 
1,562

 
2,187

 
1,562

HELOC
2,505

 
3,564

 
1,405

 
2,505

 
1,405

Consumer and all other
2,722

 
4,179

 
1,891

 
2,722

 
1,891

Loans 30-59 days past due
$
21,030

 
$
29,690

 
$
14,767

 
$
21,030

 
$
14,767





 
As of & For Three Months Ended
 
As of & For Six Months Ended
 
6/30/18
 
3/31/18
 
6/30/17
 
6/30/18
 
6/30/17
Past Due Detail cont'd
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Construction and land development
$
292

 
$
1,291

 
$
26

 
$
292

 
$
26

Commercial real estate - owner occupied
1,819

 
777

 
194

 
1,819

 
194

Commercial real estate - non-owner occupied
—

 
—

 
571

 
—

 
571

Commercial & Industrial
1,567

 
1,254

 
113

 
1,567

 
113

Residential 1-4 Family
3,742

 
2,357

 
5,663

 
3,742

 
5,663

Auto
419

 
193

 
240

 
419

 
240

HELOC
1,622

 
1,346

 
964

 
1,622

 
964

Consumer and all other
761

 
2,074

 
1,242

 
761

 
1,242

Loans 60-89 days past due
$
10,222

 
$
9,292

 
$
9,013

 
$
10,222

 
$
9,013

 
 
 
 
 
 
 
 
 
 
Troubled Debt Restructurings
 
 
 
 
 
 
 
 
 
Performing
$
15,696

 
$
13,292

 
$
14,947

 
$
15,696

 
$
14,947

Nonperforming
4,001

 
4,284

 
4,454

 
4,001

 
4,454

Total troubled debt restructurings
$
19,697

 
$
17,576

 
$
19,401

 
$
19,697

 
$
19,401

 
 
 
 
 
 
 
 
 
 
Alternative Performance Measures (non-GAAP)
 
 
 
 
 
 
 
 
 
Net interest income (FTE)
 
 
 
 
 
 
 
 
 
Net interest income (GAAP)
$
108,168

 
$
103,472

 
$
68,704

 
$
211,640

 
$
135,071

FTE adjustment
2,008

 
1,838

 
2,943

 
3,845

 
5,684

Net interest income (FTE) (non-GAAP) (1)
$
110,176

 
$
105,310

 
$
71,647

 
$
215,485

 
$
140,755

Average earning assets
11,661,189

 
11,475,099

 
7,934,405

 
11,568,658

 
7,798,427

Net interest margin
3.72
%
 
3.66
%
 
3.47
%
 
3.69
%
 
3.49
%
Net interest margin (FTE) (1)
3.79
%
 
3.72
%
 
3.62
%
 
3.76
%
 
3.64
%
 
 
 
 
 
 
 
 
 
 
Tangible Assets
 
 
 
 
 
 
 
 
 
Ending assets (GAAP)
$
13,066,106

 
$
13,149,292

 
$
8,915,187

 
$
13,066,106

 
$
8,915,187

Less: Ending goodwill
725,195

 
724,106

 
298,191

 
725,195

 
298,191

Less: Ending amortizable intangibles
51,211

 
50,092

 
17,422

 
51,211

 
17,422

Ending tangible assets (non-GAAP)
$
12,289,700

 
$
12,375,094

 
$
8,599,574

 
$
12,289,700

 
$
8,599,574

 
 
 
 
 
 
 
 
 
 
Tangible Common Equity (2)
 
 
 
 
 
 
 
 
 
Ending equity (GAAP)
$
1,864,870

 
$
1,831,077

 
$
1,030,869

 
$
1,864,870

 
$
1,030,869

Less: Ending goodwill
725,195

 
724,106

 
298,191

 
725,195

 
298,191

Less: Ending amortizable intangibles
51,211

 
50,092

 
17,422

 
51,211

 
17,422

Ending tangible common equity (non-GAAP)
$
1,088,464

 
$
1,056,879

 
$
715,256

 
$
1,088,464

 
$
715,256

 
 
 
 
 
 
 
 
 
 
Average equity (GAAP)
$
1,847,366

 
$
1,824,588

 
$
1,026,148

 
$
1,836,072

 
$
1,018,277

Less: Average goodwill
726,934

 
724,106

 
298,191

 
725,527

 
298,191

Less: Average amortizable intangibles
50,546

 
51,658

 
18,164

 
51,099

 
18,948

Average tangible common equity (non-GAAP)
$
1,069,886

 
$
1,048,824

 
$
709,793

 
$
1,059,446

 
$
701,138

 
 
 
 
 
 
 
 
 
 
Operating Measures (3)
 
 
 
 
 
 
 
 
 
Net income (GAAP)
$
47,327

 
$
16,639

 
$
17,956

 
$
63,966

 
$
37,080

Plus: Merger-related costs, net of tax
6,537

 
22,236

 
2,358

 
28,773

 
2,358

Net operating earnings (non-GAAP)
$
53,864

 
$
38,875

 
$
20,314

 
$
92,739

 
$
39,438

 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
$
85,140

 
$
101,743

 
$
57,575

 
$
186,885

 
$
112,668

Less: Merger-related costs
8,273

 
27,712

 
2,744

 
35,985

 
2,744

Operating noninterest expense (non-GAAP)
$
76,867

 
$
74,031

 
$
54,831

 
$
150,900

 
$
109,924

 
 
 
 
 
 
 
 
 
 
Net interest income (FTE) (non-GAAP) (1)
$
110,176

 
$
105,310

 
$
71,647

 
$
215,485

 
$
140,755

Noninterest income (GAAP)
40,597

 
20,267

 
15,262

 
60,865

 
32,075

 
 
 
 
 
 
 
 
 
 
Efficiency ratio
57.23
%
 
82.22
%
 
68.57
%
 
68.58
%
 
67.41
%
Efficiency ratio (FTE) (1)
56.47
%
 
81.02
%
 
66.25
%
 
67.63
%
 
65.19
%
Operating efficiency ratio (FTE)
50.98
%
 
58.95
%
 
63.09
%
 
54.60
%
 
63.60
%





 
As of & For Three Months Ended
 
As of & For Six Months Ended
 
6/30/18
 
3/31/18
 
6/30/17
 
6/30/18
 
6/30/17
Other Data
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
End of period full-time employees
1,702

 
1,824

 
1,432

 
1,702

 
1,432

Number of full-service branches
147

 
150

 
112

 
147

 
112

Number of full automatic transaction machines ("ATMs")
199

 
216

 
174

 
199

 
174


(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 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 June 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
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
 
June 30,
 
December 31,
 
June 30,
 
2018
 
2017
 
2017
ASSETS
(unaudited)
 
(audited)
 
(unaudited)
Cash and cash equivalents:
 
 
 
 
 
Cash and due from banks
$
153,078

 
$
117,586

 
$
135,759

Interest-bearing deposits in other banks
417,423

 
81,291

 
45,473

Federal funds sold
7,552

 
496

 
678

Total cash and cash equivalents
578,053

 
199,373

 
181,910

Securities available for sale, at fair value
1,586,248

 
974,222

 
960,537

Securities held to maturity, at carrying value
47,604

 
199,639

 
205,630

Restricted stock, at cost
104,837

 
75,283

 
69,631

Loans held for investment, net of deferred fees and costs
9,290,259

 
7,141,552

 
6,771,490

Less allowance for loan losses
41,270

 
38,208

 
38,214

Net loans held for investment
9,248,989

 
7,103,344

 
6,733,276

Premises and equipment, net
160,508

 
119,604

 
121,367

Other real estate owned, net of valuation allowance
7,995

 
6,636

 
9,482

Goodwill
725,195

 
298,528

 
298,191

Amortizable intangibles, net
51,211

 
14,803

 
17,422

Bank owned life insurance
260,124

 
182,854

 
180,110

Other assets
251,878

 
96,235

 
90,297

Assets of discontinued operations
43,464

 
44,658

 
47,334

Total assets
$
13,066,106

 
$
9,315,179

 
$
8,915,187

LIABILITIES
 
 

 
 
Noninterest-bearing demand deposits
$
2,192,927

 
$
1,502,208

 
$
1,501,570

Interest-bearing deposits
7,604,345

 
5,489,510

 
5,262,864

Total deposits
9,797,272

 
6,991,718

 
6,764,434

Securities sold under agreements to repurchase
50,299

 
49,152

 
34,543

Other short-term borrowings
742,900

 
745,000

 
602,000

Long-term borrowings
507,077

 
425,262

 
434,260

Other liabilities
99,327

 
54,008

 
45,026

Liabilities of discontinued operations
4,361

 
3,710

 
4,055

Total liabilities
11,201,236

 
8,268,850

 
7,884,318

Commitments and contingencies
 
 
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
 
 
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 65,939,375 shares, 43,743,318 shares, and 43,706,000 shares, respectively.
87,129

 
57,744

 
57,643

Additional paid-in capital
1,376,294

 
610,001

 
607,666

Retained earnings
415,492

 
379,468

 
361,552

Accumulated other comprehensive income (loss)
(14,045
)
 
(884
)
 
4,008

Total stockholders' equity
1,864,870

 
1,046,329

 
1,030,869

Total liabilities and stockholders' equity
$
13,066,106

 
$
9,315,179

 
$
8,915,187




UNION BANKSHARES CORPORATION AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
June 30,
 
2018
 
2018
 
2017
 
2018
 
2017
Interest and dividend income:
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and fees on loans
$
119,540

 
$
112,652

 
$
72,317

 
$
232,193

 
$
140,200

Interest on deposits in other banks
676

 
647

 
115

 
1,323

 
186

Interest and dividends on securities:
 
 
 
 
 
 
 
 
 
Taxable
8,012

 
7,072

 
4,982

 
15,084

 
9,905

Nontaxable
4,181

 
4,008

 
3,512

 
8,189

 
7,074

Total interest and dividend income
132,409

 
124,379

 
80,926

 
256,789

 
157,365

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
13,047

 
11,212

 
6,100

 
24,259

 
11,176

Interest on short-term borrowings
5,166

 
4,249

 
1,400

 
9,415

 
2,350

Interest on long-term borrowings
6,028

 
5,446

 
4,722

 
11,475

 
8,768

Total interest expense
24,241

 
20,907

 
12,222

 
45,149

 
22,294

Net interest income
108,168

 
103,472

 
68,704

 
211,640

 
135,071

Provision for credit losses
2,147

 
3,524

 
2,184

 
5,671

 
4,288

Net interest income after provision for credit losses
106,021

 
99,948

 
66,520

 
205,969

 
130,783

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
6,189

 
5,894

 
4,613

 
12,083

 
9,129

Other service charges and fees
1,278

 
1,233

 
1,120

 
2,512

 
2,259

Interchange fees, net
4,792

 
4,489

 
3,867

 
9,280

 
7,449

Fiduciary and asset management fees
4,040

 
3,056

 
2,725

 
7,096

 
5,519

Gains on securities transactions, net
(88
)
 
213

 
117

 
125

 
598

Bank owned life insurance income
1,728

 
1,667

 
1,335

 
3,395

 
3,460

Loan-related interest rate swap fees
898

 
718

 
1,031

 
1,617

 
2,211

Gain on Shore Premier sale
20,899

 
—

 
—

 
20,899

 
—

Other operating income
861

 
2,997

 
454

 
3,858

 
1,450

Total noninterest income
40,597

 
20,267

 
15,262

 
60,865

 
32,075

Noninterest expenses:
 
 
 
 
 
 
 
 
 
Salaries and benefits
40,777

 
40,741

 
28,930

 
81,518

 
59,553

Occupancy expenses
6,159

 
6,067

 
4,453

 
12,226

 
9,106

Furniture and equipment expenses
3,103

 
2,937

 
2,598

 
6,041

 
5,064

Printing, postage, and supplies
1,282

 
1,060

 
1,393

 
2,342

 
2,525

Communications expense
1,009

 
1,095

 
870

 
2,104

 
1,771

Technology and data processing
4,322

 
4,560

 
3,842

 
8,881

 
7,646

Professional services
2,671

 
2,554

 
2,054

 
5,225

 
3,664

Marketing and advertising expense
3,288

 
1,436

 
2,270

 
4,725

 
4,002

FDIC assessment premiums and other insurance
1,882

 
2,185

 
947

 
4,067

 
1,652

Other taxes
2,895

 
2,886

 
2,022

 
5,782

 
4,043

Loan-related expenses
1,843

 
1,315

 
1,128

 
3,158

 
2,292

OREO and credit-related expenses
1,122

 
1,532

 
342

 
2,654

 
884

Amortization of intangible assets
3,215

 
3,181

 
1,544

 
6,396

 
3,180

Training and other personnel costs
1,125

 
1,006

 
1,018

 
2,132

 
1,967

Merger-related costs
8,273

 
27,712

 
2,744

 
35,985

 
2,744

Other expenses
2,174

 
1,476

 
1,420

 
3,649

 
2,575

Total noninterest expenses
85,140

 
101,743

 
57,575

 
186,885

 
112,668

Income from continuing operations before income taxes
61,478

 
18,472

 
24,207

 
79,949

 
50,190

Income tax expense
11,678

 
1,897

 
6,725

 
13,575

 
13,507

Income from continuing operations
$
49,800

 
$
16,575

 
$
17,482

 
$
66,374

 
$
36,683



UNION BANKSHARES CORPORATION AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME (continued)
 
 
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
June 30,
 
2018
 
2018
 
2017
 
2018
 
2017
Discontinued operations:
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Income (loss) from operations of discontinued mortgage segment
$
(3,085
)
 
$
76

 
$
745

 
$
(3,008
)
 
651

Income tax expense (benefit)
(612
)
 
12

 
271

 
(600
)
 
254

Income (loss) on discontinued operations
(2,473
)
 
64

 
474

 
(2,408
)
 
397

Net income
$
47,327

 
$
16,639

 
$
17,956

 
$
63,966

 
$
37,080

Basic earnings per common share
$
0.72

 
$
0.25

 
$
0.41

 
$
0.97

 
$
0.85

Diluted earnings per common share
$
0.72

 
$
0.25

 
$
0.41

 
$
0.97

 
$
0.85





AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
 
For the Quarter Ended
 
June 30, 2018
 
March 31, 2018
 
Average Balance
 
Interest Income / Expense (1)
 
Yield / Rate (1)(2)
 
Average Balance
 
Interest Income / Expense (1)
 
Yield / Rate (1)(2)
Assets:
(unaudited)
 
(unaudited)
Securities:
 
 
 
 
 
 
 
 
 
 
 
Taxable
$
1,077,656

 
$
8,012

 
2.98
%
 
$
1,020,691

 
$
7,072

 
2.81
%
Tax-exempt
547,617

 
5,293

 
3.88
%
 
546,578

 
5,073

 
3.76
%
Total securities
1,625,273

 
13,305

 
3.28
%
 
1,567,269

 
12,145

 
3.14
%
Loans, net (3) (4)
9,809,083

 
120,039

 
4.91
%
 
9,680,195

 
113,135

 
4.74
%
Other earning assets
226,833

 
1,073

 
1.90
%
 
227,635

 
937

 
1.67
%
Total earning assets
11,661,189

 
$
134,417

 
4.62
%
 
11,475,099

 
$
126,217

 
4.46
%
Allowance for loan losses
(41,645
)
 
 
 
 
 
(39,847
)
 
 
 

Total non-earning assets
1,598,683

 
 
 
 
 
1,584,320

 
 
 
 
Total assets
$
13,218,227

 
 
 
 
 
$
13,019,572

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Transaction and money market accounts
$
4,836,642

 
$
6,790

 
0.56
%
 
$
4,759,523

 
$
5,555

 
0.47
%
Regular savings
649,897

 
217

 
0.13
%
 
644,440

 
212

 
0.13
%
Time deposits (5)
2,063,414

 
6,040

 
1.17
%
 
2,085,930

 
5,445

 
1.06
%
Total interest-bearing deposits
7,549,953

 
13,047

 
0.69
%
 
7,489,893

 
11,212

 
0.61
%
Other borrowings (6)
1,617,322

 
11,194

 
2.78
%
 
1,614,691

 
9,695

 
2.44
%
Total interest-bearing liabilities
9,167,275

 
24,241

 
1.06
%
 
9,104,584

 
20,907

 
0.93
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
2,095,233

 
 
 
 
 
1,973,804

 
 
 
 
Other liabilities
108,353

 
 
 
 
 
116,596

 
 
 
 
Total liabilities
11,370,861

 
 
 
 
 
11,194,984

 
 
 
 
Stockholders' equity
1,847,366

 
 
 
 
 
1,824,588

 
 
 
 
Total liabilities and stockholders' equity
$
13,218,227

 
 
 
 
 
$
13,019,572

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
110,176

 
 
 
 
 
$
105,310

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 
 
 
3.56
%
 
 
 
 
 
3.53
%
Cost of funds
 
 
 
 
0.83
%
 
 
 
 
 
0.74
%
Net interest margin
 
 
 
 
3.79
%
 
 
 
 
 
3.72
%
 
 
 
 
 
 
 
 
 
 
 
 
(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 $5.3 million and $4.8 million for the three months ended June 30, 2018 and March 31, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $685,000 and $832,000 for the three months ended June 30, 2018 and March 31, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $104,000 and $98,000 for the three months ended June 30, 2018 and March 31, 2018, respectively, in amortization of the fair market value adjustments related to acquisitions.