Exhibit 99.1

unionbankshares_image1a19.jpg

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

UNION BANKSHARES REPORTS FOURTH QUARTER AND FULL YEAR RESULTS

Richmond, Va., January 22, 2019 - Union Bankshares Corporation (the “Company” or “Union”) (Nasdaq: UBSH) today reported net income of $44.1 million and earnings per share of $0.67 for its fourth quarter ended December 31, 2018. Net operating earnings(1) were $46.2 million and operating earnings per share(1) was $0.70 for its fourth quarter ended December 31, 2018; these operating results exclude $2.2 million in after-tax merger-related costs but include losses from discontinued operations of $192,000.

For the year ended December 31, 2018, net income was $146.2 million and earnings per share was $2.22. Net operating earnings(1) were $178.3 million and operating earnings per share(1) was $2.71 for the year ended December 31, 2018; these operating results exclude $32.1 million in after-tax merger-related costs but include losses from discontinued operations of $3.2 million.

“Union closed out our transformative 2018 year with a strong fourth quarter,” said John C. Asbury, President and CEO of Union Bankshares Corporation. “We accomplished what we said we would do by hitting each one of our top tier financial targets showing the underlying strength and earnings potential of this uniquely valuable franchise.

“We had stronger than expected loan growth for the quarter which brought our full year loan growth back in line with our initial expectations for 2018. With the Access National Corporation acquisition about to close, 2019 looks to be another year of positive change and financial improvement as Union evolves into a mid-Atlantic regional bank.”
On January 11, 2019, the Company and Access National Corporation ("Access") jointly announced the receipt of regulatory approval from the Federal Reserve Bank of Richmond and from the Virginia State Corporation Commission to move forward with the proposed merger of Access into the Company (the "Pending Access Merger"). Further, on January 15, 2019, the Company and Access jointly announced that, at separate special meetings, the shareholders of both the Company and Access approved the Pending Access Merger. The Pending Access Merger is expected to close February 1, 2019.

Select highlights for the fourth quarter of 2018

◦
Return on Average Assets (“ROA”) was 1.29% compared to 1.17% in the third quarter of 2018. Operating ROA(1) was 1.36% compared to 1.21% in the third quarter of 2018.
◦
Return on Average Equity (“ROE”) was 9.21% compared to 8.06% in the third quarter of 2018. Operating ROE(1) was 9.66% compared to 8.30% in the third quarter of 2018.
◦
Return on Average Tangible Common Equity (“ROTCE”)(1) was 16.42% compared to 14.72% in the third quarter of 2018. Operating ROTCE(1) was 17.18% compared to 15.13% in the third quarter of 2018.
◦
Efficiency ratio decreased to 56.2% compared to 60.7% in the third quarter of 2018. Operating efficiency ratio (FTE)(1) decreased to 53.5% compared to 58.6% in the third quarter of 2018.

Select highlights for the full year 2018

◦
ROA was 1.11% compared to 0.83% for the year ended 2017. Operating ROA(1) was 1.35% compared to 0.95% for the year ended 2017.


◦
ROE was 7.85% compared to 7.07% for the year ended 2017. Operating ROE(1) was 9.57% compared to 8.11% for the year ended 2017.
◦
ROTCE(1) was 14.40% compared to 10.75% for the year ended 2017. Operating ROTCE(1) was 17.35% compared to 12.24% for the year ended 2017.
◦
Efficiency ratio decreased to 63.6% compared to 66.1% for the year ended 2017. Operating efficiency ratio (FTE)(1) decreased to 55.3% compared to 62.4% for the year ended 2017.
(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 fourth quarter of 2018, net interest income was $109.1 million, an increase of $3.1 million from the third quarter of 2018. Net interest income (FTE)(1) was $111.4 million in the fourth quarter of 2018, an increase of $3.4 million from the third quarter of 2018. The increases in both net interest income and net interest income (FTE) were primarily driven by loan growth during the quarter ended December 31, 2018. The fourth quarter net interest margin decreased 7 basis points to 3.62% from 3.69% in the previous quarter, while the net interest margin (FTE)(1) decreased 6 basis points to 3.70% from 3.76% during the same periods. The decreases in the net interest margin and net interest margin (FTE) were principally due to an approximately 15 basis point increase in the cost of funds, partially offset by an approximately 9 basis point increase in the yield on earnings assets..

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2018, net accretion related to acquisition accounting decreased $182,000 from the prior quarter to $3.8 million for the quarter ended December 31, 2018. The third and fourth 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 September 30, 2018
3,496
 
592

 
(143)
 
$
3,945

For the quarter ended December 31, 2018
3,479
 
445

 
(161)
 
3,763

For the year ended December 31, 2018
17,145
 
2,553

 
(506)
 
19,192

For the years ending (estimated):(2)
 
 
 
 
 
 
 
2019
10,538
 
1,170

 
(660)
 
11,048

2020
8,130
 
284

 
(734)
 
7,680

2021
6,614
 
108

 
(805)
 
5,917

2022
4,984
 
21

 
(827)
 
4,178

2023
2,996
 
—

 
(850)
 
2,146

Thereafter
10,550
 
—

 
(11,633)
 
(1,083)


(1) For the reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of Key Financial Results.

(2) Estimated net accretion only includes accretion for the previously completed acquisitions. The accretion effects of the Pending Access Merger are not included in the information above.

ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the fourth quarter of 2018, the Company experienced decreases in nonperforming asset (“NPA”) balances from the prior quarter, primarily due to an increase in charge-offs related to two credit relationships composed of construction and land development loans. Past due loan levels as a percentage of total loans held for investment at December 31, 2018 were higher than past due loan levels at September 30, 2018 and December 31, 2017. Charge-off levels increased from the third quarter of 2018 and were primarily related to the consumer loan portfolio; as a result, the provision for loan losses increased from the third quarter of 2018.



All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $90.2 million (net of fair value mark of $23.3 million) at December 31, 2018.

Nonperforming Assets
At December 31, 2018, NPAs totaled $33.7 million, a decline of $1.2 million, or 3.5%, from September 30, 2018 and an increase of $6.7 million, or 24.7%, from December 31, 2017. NPAs as a percentage of total outstanding loans at December 31, 2018 were 0.35%, a decrease of 2 basis points from 0.37% at September 30, 2018 and a decline of 3 basis points from 0.38% at December 31, 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):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2018
 
2018
 
2018
 
2018
 
2017
Nonaccrual loans
$
26,953

 
$
28,110

 
$
25,662

 
$
25,138

 
$
21,743

Foreclosed properties
6,722

 
6,800

 
7,241

 
8,079

 
5,253

Total nonperforming assets
$
33,675

 
$
34,910

 
$
32,903

 
$
33,217

 
$
26,996


The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2018
 
2018
 
2018
 
2018
 
2017
Beginning Balance
$
28,110

 
$
25,662

 
$
25,138

 
$
21,743

 
$
20,122

Net customer payments
(3,077
)
 
(2,459
)
 
(2,651
)
 
(1,455
)
 
(768
)
Additions
4,659

 
6,268

 
5,063

 
5,451

 
4,335

Charge-offs
(2,069
)
 
(1,137
)
 
(539
)
 
(403
)
 
(1,305
)
Loans returning to accruing status
(420
)
 
(70
)
 
(1,349
)
 
(182
)
 
(448
)
Transfers to foreclosed property
(250
)
 
(154
)
 
—

 
(16
)
 
(193
)
Ending Balance
$
26,953

 
$
28,110

 
$
25,662

 
$
25,138

 
$
21,743



The following table shows the activity in foreclosed properties for the quarter ended (dollars in thousands):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2018
 
2018
 
2018
 
2018
 
2017
Beginning Balance
$
6,800

 
$
7,241

 
$
8,079

 
$
5,253

 
$
6,449

Additions of foreclosed property
432

 
165

 
283

 
44

 
325

Acquisitions of foreclosed property (1)
—

 
—

 
(162
)
 
4,204

 
—

Valuation adjustments
(140
)
 
(42
)
 
(383
)
 
(759
)
 
(1,046
)
Proceeds from sales
(286
)
 
(889
)
 
(580
)
 
(684
)
 
(479
)
Gains (losses) from sales
(84
)
 
325

 
4

 
21

 
4

Ending Balance
$
6,722

 
$
6,800

 
$
7,241

 
$
8,079

 
$
5,253

(1) Includes subsequent measurement period adjustments.

Past Due Loans
Past due loans still accruing interest totaled $61.9 million, or 0.64% of total loans, at December 31, 2018 compared to $46.6 million, or 0.49% of total loans, at September 30, 2018 and $27.8 million, or 0.39% of total loans, at December 31, 2017. Of the total past due loans still accruing interest, $8.9 million, or 0.09% of total loans, were loans past due 90 days or more at December 31, 2018, compared to $9.5 million, or 0.10% of total loans, at September 30, 2018 and $3.5 million, or 0.05% of total loans, at December 31, 2017. The increase in past due loans was primarily driven by a seasonal increase related to residential 1-4 family loans that were 30 days past due as of year-end of which the majority subsequently became current.



Net Charge-offs
For the fourth quarter of 2018, net charge-offs were $5.0 million, or 0.21% of total average loans on an annualized basis, compared to $3.2 million, or 0.13%, for the prior quarter and $2.7 million, or 0.15%, for the same quarter last year. The majority of net charge-offs in the fourth quarter of 2018 were related to consumer loans. For the year ended December 31, 2018, net charge-offs were $11.1 million, or 0.12% of total average loans, compared to $10.1 million, or 0.15%, for the year ended 2017.

Provision for Loan Losses
The provision for loan losses for the fourth quarter of 2018 was $4.8 million, an increase of $1.7 million compared to the previous quarter and an increase of $1.0 million compared to the same quarter in 2017. The increase in provision for loan losses from the third quarter of 2018 was primarily driven by loan growth and higher levels of net charge-offs in the fourth quarter of 2018.

Allowance for Loan Losses (“ALL”)
The ALL decreased $249,000 from September 30, 2018 to $41.0 million at December 31, 2018 primarily due to a decrease in historical loss rates. The ALL as a percentage of the total loan portfolio was 0.42% at December 31, 2018, 0.44% at September 30, 2018, and 0.54% at December 31, 2017. The year-over-year decline in the allowance ratio was primarily attributable to the acquisition of Xenith Bankshares, Inc. ("Xenith") on January 1, 2018. In acquisition accounting, there is no carryover of previously established allowance for loan losses.

The ratio of the ALL to nonaccrual loans was 152.3% at December 31, 2018, compared to 146.9% at September 30, 2018 and 175.7% at December 31, 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 $3.6 million to $23.5 million for the quarter ended December 31, 2018 from $19.9 million in the prior quarter. The increase in noninterest income was primarily driven by life insurance proceeds of approximately $976,000, an increase in customer-related fee income of $222,000 due to higher overdraft fees and fiduciary and asset management fees, an increase in interest rate swap fees of $814,000 due to an increase in transaction volume, and $933,000 adjustment made in the third quarter to reduce the previously recorded gain from the sale of Shore Premier.

NONINTEREST EXPENSE

Noninterest expense decreased $1.8 million to $74.5 million for the quarter ended December 31, 2018 from $76.3 million in the prior quarter. Excluding merger-related costs of $2.3 million and $1.4 million in the fourth and third quarters of 2018, respectively, operating noninterest expense(1) decreased $2.7 million, or 3.6%, to $72.2 million when compared to the third quarter of 2018. The decrease in operating noninterest expense included a decline in marketing and advertising expense of $898,000 due to the timing of marketing campaigns and digital marketing related expenses. Salaries and benefits expenses declined $698,000, primarily due to decreases in incentive compensation and benefit costs. Professional services declined $692,000 primarily due to a decrease in consulting fees. Additionally, operating noninterest expense declined due to lower amortization of intangibles of $536,000 and a decline in branch closure costs of approximately $475,000 compared to the third quarter of 2018.

Partially offsetting these declines, other real estate owned (“OREO”) and credit-related expenses increased $574,000 primarily due to losses on sales of property in the fourth quarter of 2018 compared to gains recognized in the third quarter of 2018.

(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.





INCOME TAXES

The effective tax rate for the three months ended December 31, 2018 was 16.5% compared to 15.9% for the three months ended September 30, 2018. The increase in the effective tax rate was primarily due to an increase in non-deductible merger expenses related to the Pending Access Merger.

BALANCE SHEET

At December 31, 2018, total assets were $13.8 billion, an increase of $394.0 million from September 30, 2018, and an increase of $4.5 billion from December 31, 2017. The increase in assets from the previous quarter was primarily a result of loan growth and increases in the investment securities portfolio during the fourth quarter of 2018. The increase from the prior year was primarily a result of the Xenith acquisition and loan growth.

At December 31, 2018, loans held for investment (net of deferred fees and costs) were $9.7 billion, an increase of $304.6 million, or 12.9% (annualized), from September 30, 2018, while average loans increased $259.9 million, or 11.2% (annualized), from the prior quarter. The increase was primarily driven by a combined growth of $256.9 million in commercial and industrial and commercial real estate portfolios. Loans held for investment increased $2.6 billion, or 36.1%, from December 31, 2017, while quarterly average loans increased $2.6 billion or 37.3%, from the prior year. The increase from the prior year was primarily a result of the Xenith acquisition.

At December 31, 2018, total deposits were $10.0 billion, an increase of $136.3 million, or 5.5% (annualized), from September 30, 2018, while average deposits increased $148.5 million, or 6.1    % (annualized), from the prior quarter. Deposits increased $3.0 billion, or 42.6%, from December 31, 2017, while quarterly average deposits increased $3.0 billion, or 43.1%, from the prior year. The increase from the prior year was primarily a result of the Xenith acquisition.

The following table shows the Company's capital ratios at the quarters ended:
 
December 31,
 
September 30,
 
December 31,
 
2018
 
2018
 
2017
Common equity Tier 1 capital ratio (1)
9.93
%
 
9.92
%
 
9.04
%
Tier 1 capital ratio (1)
11.10
%
 
11.12
%
 
10.14
%
Total capital ratio (1)
12.88
%
 
12.97
%
 
12.43
%
Leverage ratio (Tier 1 capital to average assets) (1)
9.71
%
 
9.89
%
 
9.42
%
Common equity to total assets
13.98
%
 
14.06
%
 
11.23
%
Tangible common equity to tangible assets (2)
8.84
%
 
8.74
%
 
8.14
%
 
 
 
 
 
 
(1) All ratios at December 31, 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 fourth quarter of 2018, the Company declared and paid cash dividends of $0.23 per common share consistent with the third quarter of 2018 and an increase of $0.02, or 9.5%, compared to the fourth quarter of 2017.

ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union Bankshares Corporation (Nasdaq: UBSH) is the holding company for Union Bank & Trust. Union Bank & Trust has 140 branches, 7 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., as well as its subsidiary Outfitter Advisors, Ltd., and Dixon, Hubard, Feinour, & Brown, Inc., all of which provide investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.




FOURTH QUARTER AND FULL YEAR 2018 EARNINGS RELEASE CONFERENCE CALL
Union will hold a conference call on Tuesday, January 22nd, 2019 at 9:00 a.m. Eastern Time during which management will review the fourth quarter and full year 2018 financial results and provide an update on recent activities. 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 4563297.

NON-GAAP FINANCIAL MEASURES
In reporting the results of the quarter and full year ended December 31, 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, slowdowns in economic growth, and prolonged government shutdown;
•
Union’s ability to manage its growth or implement its growth strategy;
•
the ability to close the Pending Access 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 Access 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 Cuts and Jobs Act of 2017 (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.



Exhibit 99.1

UNION BANKSHARES CORPORATION AND SUBSIDIARIES
 
 
 
 
KEY FINANCIAL RESULTS
 
 
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
As of & For Three Months Ended
 
As of & For Year Ended
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
Results of Operations
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and dividend income
$
140,636

 
$
131,363

 
$
87,179

 
$
528,788

 
$
329,044

Interest expense
31,547

 
25,400

 
14,089

 
102,097

 
50,037

Net interest income
109,089

 
105,963

 
73,090

 
426,691

 
279,007

Provision for credit losses
4,725

 
3,340

 
3,458

 
13,736

 
10,802

Net interest income after provision for credit losses
104,364

 
102,623

 
69,632

 
412,955

 
268,205

Noninterest income
23,487

 
19,887

 
15,124

 
104,241

 
62,429

Noninterest expenses
74,533

 
76,349

 
57,796

 
337,767

 
225,668

Income before income taxes
53,318

 
46,161

 
26,960

 
179,429

 
104,966

Income tax expense
9,041

 
7,399

 
11,867

 
30,016

 
32,790

Income from continuing operations
44,277

 
38,762

 
15,093

 
149,413

 
72,176

Discontinued operations, net of tax
(192
)
 
(565
)
 
92

 
(3,165
)
 
747

Net income
$
44,085

 
$
38,197

 
$
15,185

 
$
146,248

 
$
72,923

 
 
 
 
 
 
 
 
 
 
Interest earned on earning assets (FTE) (1)
$
142,970

 
$
133,377

 
$
90,263

 
$
536,981

 
$
340,810

Net interest income (FTE) (1)
111,424

 
107,977

 
76,173

 
434,884

 
290,774

 
 
 
 
 
 
 
 
 
 
Key Ratios
 
 
 
 
 
 
 
 
 
Earnings per common share, diluted
$
0.67

 
$
0.58

 
$
0.35

 
$
2.22

 
$
1.67

Return on average assets (ROA)
1.29
%
 
1.17
%
 
0.66
%
 
1.11
%
 
0.83
%
Return on average equity (ROE)
9.21
%
 
8.06
%
 
5.75
%
 
7.85
%
 
7.07
%
Return on average tangible common equity (ROTCE) (2)
16.42
%
 
14.72
%
 
8.70
%
 
14.40
%
 
10.75
%
Efficiency ratio
56.22
%
 
60.67
%
 
65.52
%
 
63.62
%
 
66.09
%
Net interest margin
3.62
%
 
3.69
%
 
3.51
%
 
3.67
%
 
3.48
%
Net interest margin (FTE) (1)
3.70
%
 
3.76
%
 
3.64
%
 
3.74
%
 
3.63
%
Yields on earning assets (FTE) (1)
4.74
%
 
4.65
%
 
4.32
%
 
4.62
%
 
4.25
%
Cost of interest-bearing liabilities
1.34
%
 
1.15
%
 
0.87
%
 
1.12
%
 
0.80
%
Cost of deposits

0.76
%
 
0.65
%
 
0.44
%
 
0.61
%
 
0.39
%
Cost of funds
1.04
%
 
0.89
%
 
0.68
%
 
0.88
%
 
0.62
%
 
 
 
 
 
 
 
 
 
 
Operating Measures (4)
 
 
 
 
 
 
 
 
 
Net operating earnings
$
46,248

 
$
39,326

 
$
22,821

 
$
178,313

 
$
83,578

Operating earnings per share, diluted
$
0.70

 
$
0.60

 
$
0.52

 
$
2.71

 
$
1.91

Operating ROA
1.36
%
 
1.21
%
 
1.00
%
 
1.35
%
 
0.95
%
Operating ROE
9.66
%
 
8.30
%
 
8.63
%
 
9.57
%
 
8.11
%
Operating ROTCE
17.18
%
 
15.13
%
 
12.82
%
 
17.35
%
 
12.24
%
Operating efficiency ratio (FTE) (1)
53.53
%
 
58.59
%
 
61.21
%
 
55.28
%
 
62.36
%
 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
Earnings per common share, basic
$
0.67

 
$
0.58

 
$
0.35

 
$
2.22

 
$
1.67

Earnings per common share, diluted
0.67

 
0.58

 
0.35

 
2.22

 
1.67

Cash dividends paid per common share
0.23

 
0.23

 
0.21

 
0.88

 
0.81

Market value per share
28.23

 
38.53

 
36.17

 
28.23

 
36.17

Book value per common share
29.34

 
28.68

 
24.10

 
29.34

 
24.10

Tangible book value per common share (2)
17.51

 
16.79

 
16.88

 
17.51

 
16.88

Price to earnings ratio, diluted
12.72

 
16.74

 
26.05

 
10.62

 
21.66

Price to book value per common share ratio
0.96

 
1.34

 
1.50

 
0.96

 
1.50

Price to tangible book value per common share ratio (2)
1.61

 
2.29

 
2.14

 
1.61

 
2.14

Weighted average common shares outstanding, basic
65,982,304

 
65,974,702

 
43,740,001

 
65,859,165

 
43,698,897

Weighted average common shares outstanding, diluted
66,013,326

 
66,013,152

 
43,816,018

 
65,908,571

 
43,779,744

Common shares outstanding at end of period
65,977,149

 
65,982,669

 
43,743,318

 
65,977,149

 
43,743,318





 
As of & For Three Months Ended
 
As of & For Year End
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
Capital Ratios
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Common equity Tier 1 capital ratio (5)
9.93
%
 
9.92
%
 
9.04
%
 
9.93
%
 
9.04
%
Tier 1 capital ratio (5)
11.10
%
 
11.12
%
 
10.14
%
 
11.10
%
 
10.14
%
Total capital ratio (5)
12.88
%
 
12.97
%
 
12.43
%
 
12.88
%
 
12.43
%
Leverage ratio (Tier 1 capital to average assets) (5)
9.71
%
 
9.89
%
 
9.42
%
 
9.71
%
 
9.42
%
Common equity to total assets
13.98
%
 
14.06
%
 
11.23
%
 
13.98
%
 
11.23
%
Tangible common equity to tangible assets (2)
8.84
%
 
8.74
%
 
8.14
%
 
8.84
%
 
8.14
%
 
 
 
 
 
 
 
 
 
 
Financial Condition
 
 
 
 
 
 
 
 
 
Assets
$
13,765,599

 
$
13,371,742

 
$
9,315,179

 
$
13,765,599

 
$
9,315,179

Loans held for investment
9,716,207

 
9,411,598

 
7,141,552

 
9,716,207

 
7,141,552

Securities
2,391,695

 
2,258,239

 
1,249,144

 
2,391,695

 
1,249,144

Earning Assets
12,202,023

 
11,808,717

 
8,513,145

 
12,202,023

 
8,513,145

Goodwill
727,168

 
727,699

 
298,528

 
727,168

 
298,528

Amortizable intangibles, net
48,685

 
51,563

 
14,803

 
48,685

 
14,803

Deposits
9,970,960

 
9,834,695

 
6,991,718

 
9,970,960

 
6,991,718

Borrowings
1,756,278

 
1,554,642

 
1,219,414

 
1,756,278

 
1,219,414

Stockholders' equity
1,924,581

 
1,880,029

 
1,046,329

 
1,924,581

 
1,046,329

Tangible common equity (2)
1,148,728

 
1,100,767

 
732,998

 
1,148,728

 
732,998

 
 
 
 
 
 
 
 
 
 
Loans held for investment, net of deferred fees and costs
 
 
 
 
 
 
 
 
 
Construction and land development
$
1,194,821

 
$
1,178,054

 
$
948,791

 
$
1,194,821

 
$
948,791

Commercial real estate - owner occupied
1,337,345

 
1,283,125

 
943,933

 
1,337,345

 
943,933

Commercial real estate - non-owner occupied
2,467,410

 
2,427,251

 
1,713,659

 
2,467,410

 
1,713,659

Multifamily real estate
548,231

 
542,662

 
357,079

 
548,231

 
357,079

Commercial & Industrial
1,317,135

 
1,154,583

 
612,023

 
1,317,135

 
612,023

Residential 1-4 Family - commercial
713,750

 
719,798

 
612,395

 
713,750

 
612,395

Residential 1-4 Family - mortgage

600,578

 
611,728

 
485,690

 
600,578

 
485,690

Auto
301,943

 
306,196

 
282,474

 
301,943

 
282,474

HELOC
613,383

 
612,116

 
537,521

 
613,383

 
537,521

Consumer
379,694

 
345,320

 
408,667

 
379,694

 
408,667

Other Commercial
241,917

 
230,765

 
239,320

 
241,917

 
239,320

Total loans held for investment
$
9,716,207

 
$
9,411,598

 
$
7,141,552

 
$
9,716,207

 
$
7,141,552

 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
NOW accounts
$
2,288,523

 
$
2,205,262

 
$
1,929,416

 
$
2,288,523

 
$
1,929,416

Money market accounts
2,875,301

 
2,704,480

 
1,685,174

 
2,875,301

 
1,685,174

Savings accounts
622,823

 
635,788

 
546,274

 
622,823

 
546,274

Time deposits of $100,000 and over
1,067,181

 
1,078,448

 
624,112

 
1,067,181

 
624,112

Other time deposits
1,022,525

 
1,020,830

 
704,534

 
1,022,525

 
704,534

Total interest-bearing deposits
$
7,876,353

 
$
7,644,808

 
$
5,489,510

 
$
7,876,353

 
$
5,489,510

Demand deposits
2,094,607

 
2,189,887

 
1,502,208

 
2,094,607

 
1,502,208

Total deposits
$
9,970,960

 
$
9,834,695

 
$
6,991,718

 
$
9,970,960

 
$
6,991,718

 
 
 
 
 
 
 
 
 
 
Averages
 
 
 
 
 
 
 
 
 
Assets
$
13,538,160

 
$
12,947,352

 
$
9,085,211

 
$
13,181,609

 
$
8,820,142

Loans held for investment
9,557,160

 
9,297,213

 
6,962,299

 
9,584,785

 
6,701,101

Securities
2,340,051

 
1,966,010

 
1,238,663

 
1,877,018

 
1,230,105

Earning assets
11,961,234

 
11,383,320

 
8,293,366

 
11,620,893

 
8,016,311

Deposits
9,951,983

 
9,803,475

 
6,955,949

 
9,717,663

 
6,701,475

Time deposits
2,083,270

 
2,079,686

 
1,335,357

 
2,078,073

 
1,271,649

Interest-bearing deposits
7,789,642

 
7,635,710

 
5,435,705

 
7,617,174

 
5,234,102

Borrowings
1,575,173

 
1,155,093

 
1,022,307

 
1,489,542

 
1,028,434

Interest-bearing liabilities
9,364,815

 
8,790,803

 
6,458,012

 
9,106,716

 
6,262,536

Stockholders' equity
1,899,249

 
1,880,582

 
1,048,632

 
1,863,215

 
1,030,847

Tangible common equity (2)
1,121,788

 
1,103,530

 
734,847

 
1,086,272

 
715,125






 
As of & For Three Months Ended
 
As of & For Year Ended
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
Asset Quality
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Allowance for Loan Losses (ALL)
 
 
 
 
 
 
 
 
 
Beginning balance
$
41,294

 
$
41,270

 
$
37,162

 
$
38,208

 
$
37,192

Add: Recoveries
830

 
1,401

 
696

 
4,912

 
3,255

Less: Charge-offs
5,875

 
4,560

 
3,361

 
15,974

 
13,310

Add: Provision for loan losses
4,800

 
3,100

 
3,758

 
14,084

 
11,117

Add: Provision for loan losses included in discontinued operations
(4
)
 
83

 
(47
)
 
(185
)
 
(46
)
Ending balance
$
41,045

 
$
41,294

 
$
38,208

 
$
41,045

 
$
38,208

 
 
 
 
 
 
 
 
 
 
ALL / total outstanding loans
0.42
%
 
0.44
%
 
0.54
%
 
0.42
%
 
0.54
%
Net charge-offs / total average loans
0.21
%
 
0.13
%
 
0.15
%
 
0.12
%
 
0.15
%
Provision / total average loans
0.20
%
 
0.13
%
 
0.21
%
 
0.15
%
 
0.17
%
 
 
 
 
 
 
 
 
 
 
Total PCI loans, net of fair value mark
$
90,221

 
$
94,746

 
$
39,021

 
$
90,221

 
$
39,021

Remaining fair value mark on purchased performing loans
30,281

 
33,428

 
13,726

 
30,281

 
13,726

 
 
 
 
 
 
 
 
 
 
Nonperforming Assets
 
 
 
 
 
 
 
 
 
Construction and land development
$
8,018

 
$
9,221

 
$
5,610

 
$
8,018

 
$
5,610

Commercial real estate - owner occupied
3,636

 
3,202

 
2,708

 
3,636

 
2,708

Commercial real estate - non-owner occupied
1,789

 
1,812

 
2,992

 
1,789

 
2,992

Commercial & Industrial
1,524

 
1,404

 
316

 
1,524

 
316

Residential 1-4 Family - commercial
2,481

 
1,956

 
1,085

 
2,481

 
1,085

Residential 1-4 Family - mortgage
7,276

 
8,535

 
6,269

 
7,276

 
6,269

Auto
576

 
525

 
413

 
576

 
413

HELOC
1,518

 
1,273

 
2,075

 
1,518

 
2,075

Consumer and all other
135

 
182

 
275

 
135

 
275

Nonaccrual loans
$
26,953

 
$
28,110

 
$
21,743

 
$
26,953

 
$
21,743

Foreclosed property
6,722

 
6,800

 
5,253

 
6,722

 
5,253

Total nonperforming assets (NPAs)
$
33,675

 
$
34,910

 
$
26,996

 
$
33,675

 
$
26,996

Construction and land development
$
180

 
$
442

 
$
1,340

 
$
180

 
$
1,340

Commercial real estate - owner occupied
3,193

 
3,586

 
—

 
3,193

 
—

Commercial real estate - non-owner occupied
—

 
—

 
194

 
—

 
194

Commercial & Industrial
132

 
256

 
214

 
132

 
214

Residential 1-4 Family - commercial
1,409

 
378

 
579

 
1,409

 
579

Residential 1-4 Family - mortgage

2,437

 
2,543

 
546

 
2,437

 
546

Auto
195

 
211

 
40

 
195

 
40

HELOC
440

 
1,291

 
217

 
440

 
217

Consumer and all other
870

 
825

 
402

 
870

 
402

Loans ≥ 90 days and still accruing
$
8,856

 
$
9,532

 
$
3,532

 
$
8,856

 
$
3,532

Total NPAs and loans ≥ 90 days
$
42,531

 
$
44,442

 
$
30,528

 
$
42,531

 
$
30,528

NPAs / total outstanding loans
0.35
%
 
0.37
%
 
0.38
%
 
0.35
%
 
0.38
%
NPAs / total assets
0.24
%
 
0.26
%
 
0.29
%
 
0.24
%
 
0.29
%
ALL / nonaccrual loans
152.28
%
 
146.90
%
 
175.73
%
 
152.28
%
 
175.73
%
ALL / nonperforming assets
121.89
%
 
118.29
%
 
141.53
%
 
121.89
%
 
141.53
%
Past Due Detail
 
 
 
 
 
 
 
 
 
Construction and land development
$
759

 
$
1,351

 
$
1,248

 
$
759

 
$
1,248

Commercial real estate - owner occupied
8,755

 
4,218

 
444

 
8,755

 
444

Commercial real estate - non-owner occupied
338

 
492

 
187

 
338

 
187

Multifamily real estate
—

 
553

 
—

 
—

 
—

Commercial & Industrial
3,353

 
2,239

 
1,147

 
3,353

 
1,147

Residential 1-4 Family - commercial
6,619

 
2,535

 
1,682

 
6,619

 
1,682

Residential 1-4 Family - mortgage

12,049

 
4,506

 
3,838

 
12,049

 
3,838

Auto
3,320

 
2,414

 
3,541

 
3,320

 
3,541

HELOC
4,611

 
4,783

 
2,382

 
4,611

 
2,382

Consumer and all other
1,630

 
2,640

 
2,404

 
1,630

 
2,404

Loans 30-59 days past due
$
41,434

 
$
25,731

 
$
16,873

 
$
41,434

 
$
16,873





 
As of & For Three Months Ended
 
As of & For Year Ended
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
Past Due Detail cont'd
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Construction and land development
$
6

 
$
1,826

 
$
898

 
$
6

 
$
898

Commercial real estate - owner occupied
1,142

 
539

 
81

 
1,142

 
81

Commercial real estate - non-owner occupied
41

 
—

 
84

 
41

 
84

Multifamily Real Estate
146

 
—

 
—

 
146

 
—

Commercial & Industrial
389

 
428

 
109

 
389

 
109

Residential 1-4 Family - commercial
1,577

 
1,892

 
700

 
1,577

 
700

Residential 1-4 Family - mortgage
5,143

 
3,793

 
2,541

 
5,143

 
2,541

Auto
403

 
299

 
185

 
403

 
185

HELOC
1,644

 
1,392

 
717

 
1,644

 
717

Consumer and all other
1,096

 
1,140

 
2,052

 
1,096

 
2,052

Loans 60-89 days past due
$
11,587

 
$
11,309

 
$
7,367

 
$
11,587

 
$
7,367

 
 
 
 
 
 
 
 
 
 
Troubled Debt Restructurings
 
 
 
 
 
 
 
 
 
Performing
$
19,201

 
$
19,854

 
$
14,553

 
$
19,201

 
$
14,553

Nonperforming
7,397

 
8,425

 
2,849

 
7,397

 
2,849

Total troubled debt restructurings
$
26,598

 
$
28,279

 
$
17,402

 
$
26,598

 
$
17,402

 
 
 
 
 
 
 
 
 
 
Alternative Performance Measures (non-GAAP)
 
 
 
 
 
 
 
 
 
Net interest income (FTE)
 
 
 
 
 
 
 
 
 
Net interest income (GAAP)
$
109,089

 
$
105,963

 
$
73,090

 
$
426,691

 
$
279,007

FTE adjustment
2,335

 
2,014

 
3,083

 
8,193

 
11,767

Net interest income (FTE) (non-GAAP) (1)
$
111,424

 
$
107,977

 
$
76,173

 
$
434,884

 
$
290,774

Average earning assets
11,961,234

 
11,383,320

 
8,293,366

 
11,620,893

 
8,016,311

Net interest margin
3.62
%
 
3.69
%
 
3.51
%
 
3.67
%
 
3.48
%
Net interest margin (FTE) (1)
3.70
%
 
3.76
%
 
3.64
%
 
3.74
%
 
3.63
%
 
 
 
 
 
 
 
 
 
 
Tangible Assets
 
 
 
 
 
 
 
 
 
Ending assets (GAAP)
$
13,765,599

 
$
13,371,742

 
$
9,315,179

 
$
13,765,599

 
$
9,315,179

Less: Ending goodwill
727,168

 
727,699

 
298,528

 
727,168

 
298,528

Less: Ending amortizable intangibles
48,685

 
51,563

 
14,803

 
48,685

 
14,803

Ending tangible assets (non-GAAP)
$
12,989,746

 
$
12,592,480

 
$
9,001,848

 
$
12,989,746

 
$
9,001,848

 
 
 
 
 
 
 
 
 
 
Tangible Common Equity (2)
 
 
 
 
 
 
 
 
 
Ending equity (GAAP)
$
1,924,581

 
$
1,880,029

 
$
1,046,329

 
$
1,924,581

 
$
1,046,329

Less: Ending goodwill
727,168

 
727,699

 
298,528

 
727,168

 
298,528

Less: Ending amortizable intangibles
48,685

 
51,563

 
14,803

 
48,685

 
14,803

Ending tangible common equity (non-GAAP)
$
1,148,728

 
$
1,100,767

 
$
732,998

 
$
1,148,728

 
$
732,998

 
 
 
 
 
 
 
 
 
 
Average equity (GAAP)
$
1,899,249

 
$
1,880,582

 
$
1,048,632

 
$
1,863,216

 
$
1,030,847

Less: Average goodwill
727,544

 
723,785

 
298,385

 
725,597

 
298,240

Less: Average amortizable intangibles
49,917

 
53,267

 
15,400

 
51,347

 
17,482

Average tangible common equity (non-GAAP)
$
1,121,788

 
$
1,103,530

 
$
734,847

 
$
1,086,272

 
$
715,125

 
 
 
 
 
 
 
 
 
 
Operating Measures (4)
 
 
 
 
 
 
 
 
 
Net income (GAAP)
$
44,085

 
$
38,197

 
$
15,185

 
$
146,248

 
$
72,923

Plus: Merger-related costs, net of tax
2,163

 
1,129

 
1,386

 
32,065

 
4,405

Plus: Nonrecurring tax expenses
—

 
—

 
6,250

 
—

 
6,250

Net operating earnings (non-GAAP)
$
46,248

 
$
39,326

 
$
22,821

 
$
178,313

 
$
83,578

 
 
 
 
 
 
 
 
 
 
Noninterest expense (GAAP)
$
74,533

 
$
76,349

 
$
57,796

 
$
337,767

 
$
225,668

Less: Merger-related costs
2,314

 
1,429

 
1,917

 
39,728

 
5,393

Operating noninterest expense (non-GAAP)
$
72,219

 
$
74,920

 
$
55,879

 
$
298,039

 
$
220,275

 
 
 
 
 
 
 
 
 
 
Net interest income (FTE) (non-GAAP) (1)
$
111,424

 
$
107,977

 
$
76,173

 
$
434,886

 
$
290,774

Noninterest income (GAAP)
23,487

 
19,887

 
15,124

 
104,241

 
62,429

 
 
 
 
 
 
 
 
 
 
Efficiency ratio
56.22
%
 
60.67
%
 
65.52
%
 
63.62
%
 
66.09
%
Operating efficiency ratio (FTE)
53.53
%
 
58.59
%
 
61.21
%
 
55.28
%
 
62.36
%
 
 
 
 
 
 
 
 
 
 


 
As of & For Three Months Ended
 
As of & For Year Ended
 
12/31/18
 
9/30/18
 
12/31/17
 
12/31/18
 
12/31/17
ROTCE (2)(3)
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Net Income (GAAP)
$
44,085

 
$
38,197

 
$
15,185

 
$
146,248

 
$
72,923

Plus: Amortization of intangibles, tax effected
2,334

 
2,757

 
928

 
10,143

 
3,957

Net Income before amortization of intangibles (non-GAAP)
$
46,419

 
$
40,954

 
$
16,113

 
$
156,391

 
$
76,880

 
 
 
 
 
 
 
 
 
 
Average tangible common equity (non-GAAP)
$
1,121,788

 
$
1,103,530

 
$
734,847

 
$
1,086,272

 
$
715,125

Return on average tangible common equity (non-GAAP)
16.42
%
 
14.72
%
 
8.70
%
 
14.40
%
 
10.75
%
 
 
 
 
 
 
 
 
 
 
Operating ROTCE (2)(3)
 
 
 
 
 
 
 
 
 
Operating Net Income (non-GAAP)
$
46,248

 
$
39,326

 
$
22,821

 
$
178,313

 
$
83,578

Plus: Amortization of intangibles, tax effected
2,334

 
2,757

 
928

 
10,143

 
3,957

Net Income before amortization of intangibles (non-GAAP)
$
48,582

 
$
42,083

 
$
23,749

 
$
188,456

 
$
87,535

 
 
 
 
 
 
 
 
 
 
Average tangible common equity (non-GAAP)
$
1,121,788

 
$
1,103,530

 
$
734,847

 
$
1,086,272

 
$
715,125

Operating return on average tangible common equity (non-GAAP)
17.18
%
 
15.13
%
 
12.82
%
 
17.35
%
 
12.24
%
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
 
 
 
End of period full-time employees
1,609

 
1,621

 
1,419

 
1,609

 
1,419

Number of full-service branches
140

 
140

 
111

 
140

 
111

Number of full automatic transaction machines ("ATMs")
188

 
190

 
176

 
188

 
176




(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. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.

In prior periods, the Company has not added amortization of intangibles, tax effected to net income (GAAP) and operating net income (non-GAAP) when calculating ROTCE and operating ROTCE, respectively. The Company has adjusted its presentation for all periods in this release.

(4) 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.

(5) All ratios at December 31, 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)
 
 
 
 
 
December 31,
 
December 31,
 
 
2018
 
2017
 
ASSETS
(unaudited)
 
(unaudited)
 
Cash and cash equivalents:
 
 
 
 
Cash and due from banks
$
166,927

 
$
117,586

 
Interest-bearing deposits in other banks
94,056

 
81,291

 
Federal funds sold
216

 
496

 
Total cash and cash equivalents
261,199

 
199,373

 
Securities available for sale, at fair value
1,774,821

 
974,222

 
Securities held to maturity, at carrying value
492,272

 
199,639

 
Restricted stock, at cost
124,602

 
75,283

 
Loans held for investment, net of deferred fees and costs
9,716,207

 
7,141,552

 
Less allowance for loan losses
41,045

 
38,208

 
Net loans held for investment
9,675,162

 
7,103,344

 
Premises and equipment, net
146,967

 
119,604

 
Goodwill
727,168

 
298,528

 
Amortizable intangibles, net
48,685

 
14,803

 
Bank owned life insurance
263,034

 
182,854

 
Other assets
250,210

 
102,871

 
Assets of discontinued operations
1,479

 
44,658

 
Total assets
$
13,765,599

 
$
9,315,179

 
LIABILITIES
 
 

 
Noninterest-bearing demand deposits
$
2,094,607

 
$
1,502,208

 
Interest-bearing deposits
7,876,353

 
5,489,510

 
Total deposits
9,970,960

 
6,991,718

 
Securities sold under agreements to repurchase
39,197

 
49,152

 
Other short-term borrowings
1,048,600

 
745,000

 
Long-term borrowings
668,481

 
425,262

 
Other liabilities
112,093

 
54,008

 
Liabilities of discontinued operations
1,687

 
3,710

 
Total liabilities
11,841,018

 
8,268,850

 
Commitments and contingencies
 
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
 
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 65,977,149 shares, and 43,743,318 shares, respectively.
87,250

 
57,744

 
Additional paid-in capital
1,380,259

 
610,001

 
Retained earnings
467,345

 
379,468

 
Accumulated other comprehensive income (loss)
(10,273
)
 
(884
)
 
Total stockholders' equity
1,924,581

 
1,046,329

 
Total liabilities and stockholders' equity
$
13,765,599

 
$
9,315,179

 



UNION BANKSHARES CORPORATION AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
2018
 
2018
 
2017
 
2018
 
2017
Interest and dividend income:
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and fees on loans
$
121,846

 
$
115,817

 
$
78,198

 
$
469,856

 
$
293,996

Interest on deposits in other banks
309

 
492

 
172

 
2,125

 
539

Interest and dividends on securities:
 
 
 
 
 
 
 
 
 
Taxable
11,623

 
10,145

 
5,225

 
36,851

 
20,305

Nontaxable
6,858

 
4,909

 
3,584

 
19,956

 
14,204

Total interest and dividend income
140,636

 
131,363

 
87,179

 
528,788

 
329,044

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
19,149

 
15,928

 
7,696

 
59,336

 
26,106

Interest on short-term borrowings
5,663

 
3,379

 
1,813

 
18,458

 
6,035

Interest on long-term borrowings
6,735

 
6,093

 
4,580

 
24,303

 
17,896

Total interest expense
31,547

 
25,400

 
14,089

 
102,097

 
50,037

Net interest income
109,089

 
105,963

 
73,090

 
426,691

 
279,007

Provision for credit losses
4,725

 
3,340

 
3,458

 
13,736

 
10,802

Net interest income after provision for credit losses
104,364

 
102,623

 
69,632

 
412,955

 
268,205

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
6,873

 
6,483

 
4,925

 
25,439

 
18,850

Other service charges and fees
1,467

 
1,625

 
1,202

 
5,603

 
4,593

Interchange fees, net
4,640

 
4,882

 
3,769

 
18,803

 
14,974

Fiduciary and asset management fees
4,643

 
4,411

 
2,933

 
16,150

 
11,245

Gains (losses) on securities transactions, net
161

 
97

 
18

 
383

 
800

Bank owned life insurance income
2,072

 
1,732

 
1,306

 
7,198

 
6,144

Loan-related interest rate swap fees
1,376

 
562

 
424

 
3,554

 
3,051

Gain on Shore Premier Finance sale
—

 
(933
)
 
—

 
19,966

 
—

Other operating income
2,255

 
1,028

 
547

 
7,145

 
2,772

Total noninterest income
23,487

 
19,887

 
15,124

 
104,241

 
62,429

Noninterest expenses:
 
 
 
 
 
 
 
 
 
Salaries and benefits
38,581

 
39,279

 
28,228

 
159,378

 
115,968

Occupancy expenses
6,590

 
6,551

 
4,775

 
25,368

 
18,558

Furniture and equipment expenses
2,967

 
2,983

 
2,529

 
11,991

 
10,047

Printing, postage, and supplies
1,125

 
1,183

 
1,237

 
4,650

 
4,901

Communications expense
923

 
872

 
738

 
3,898

 
3,304

Technology and data processing
4,675

 
4,841

 
4,339

 
18,397

 
16,132

Professional services
2,183

 
2,875

 
2,155

 
10,283

 
7,767

Marketing and advertising expense
2,211

 
3,109

 
1,863

 
10,043

 
7,795

FDIC assessment premiums and other
1,214

 
1,363

 
1,255

 
6,644

 
4,048

Other taxes
2,882

 
2,878

 
2,022

 
11,542

 
8,087

Loan-related expenses
2,109

 
1,939

 
1,249

 
7,206

 
4,733

OREO and credit-related expenses
1,026

 
452

 
1,741

 
4,131

 
3,764

Amortization of intangible assets
2,954

 
3,490

 
1,427

 
12,839

 
6,088

Training and other personnel costs
1,104

 
1,024

 
1,014

 
4,259

 
3,843

Merger-related costs
2,314

 
1,429

 
1,917

 
39,728

 
5,393

Other expenses
1,675

 
2,081

 
1,307

 
7,410

 
5,240

Total noninterest expenses
74,533

 
76,349

 
57,796

 
337,767

 
225,668

Income from continuing operations before income taxes
53,318

 
46,161

 
26,960

 
179,429

 
104,966

Income tax expense
9,041

 
7,399

 
11,867

 
30,016

 
32,790

Income from continuing operations
44,277

 
38,762

 
$
15,093

 
149,413

 
$
72,176



UNION BANKSHARES CORPORATION AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED STATEMENTS OF INCOME (continued)
 
 
 
 
(Dollars in thousands, except share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
2018
 
2018
 
2017
 
2018
 
2017
Discontinued operations:
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
Income (loss) from operations of discontinued mortgage segment
$
(509
)
 
$
(761
)
 
$
320

 
$
(4,280
)
 
$
1,344

Income tax expense (benefit)
(317
)
 
(196
)
 
228

 
(1,115
)
 
597

Income (loss) on discontinued operations
(192
)
 
(565
)
 
92

 
(3,165
)
 
747

Net income
$
44,085

 
$
38,197

 
$
15,185

 
$
146,248

 
$
72,923

Basic earnings per common share
$
0.67

 
$
0.58

 
$
0.35

 
$
2.22

 
$
1.67

Diluted earnings per common share
$
0.67

 
$
0.58

 
$
0.35

 
$
2.22

 
$
1.67





AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
 
For the Quarter Ended
 
December 31, 2018
 
September 30, 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
$
1,477,670

11,623,000

$
11,623

 
3.12
%
 
$
1,333,960

 
$
10,145

 
3.02
%
Tax-exempt
862,381

 
8,681

 
3.99
%
 
632,050

 
6,214

 
3.90
%
Total securities
2,340,051

 
20,304

 
3.44
%
 
1,966,010

 
16,359

 
3.30
%
Loans, net (3) (4)
9,557,160

 
122,330

 
5.08
%
 
9,297,213

 
116,266

 
4.96
%
Other earning assets
64,023

 
336

 
2.09
%
 
120,097

 
752

 
2.49
%
Total earning assets
11,961,234

 
$
142,970

 
4.74
%
 
11,383,320

 
$
133,377

 
4.65
%
Allowance for loan losses
(41,556
)
 
 
 
 
 
(41,799
)
 
 
 

Total non-earning assets
1,618,482

 
 
 
 
 
1,605,831

 
 
 
 
Total assets
$
13,538,160

 
 
 
 
 
$
12,947,352

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Transaction and money market accounts
$
5,080,120

 
$
11,086

 
0.87
%
 
$
4,915,070

 
$
8,789

 
0.71
%
Regular savings
626,252

 
211

 
0.13
%
 
640,954

 
209

 
0.13
%
Time deposits (5)
2,083,270

 
7,851

 
1.50
%
 
2,079,686

 
6,930

 
1.32
%
Total interest-bearing deposits
7,789,642

 
19,148

 
0.98
%
 
7,635,710

 
15,928

 
0.83
%
Other borrowings (6)
1,575,173

 
12,398

 
3.12
%
 
1,155,093

 
9,472

 
3.25
%
Total interest-bearing liabilities
9,364,815

 
31,546

 
1.34
%
 
8,790,803

 
25,400

 
1.15
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
2,162,341

 
 
 
 
 
2,167,765

 
 
 
 
Other liabilities
111,755

 
 
 
 
 
108,202

 
 
 
 
Total liabilities
11,638,911

 
 
 
 
 
11,066,770

 
 
 
 
Stockholders' equity
1,899,249

 
 
 
 
 
1,880,582

 
 
 
 
Total liabilities and stockholders' equity
$
13,538,160

 
 
 
 
 
$
12,947,352

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
111,424

 
 
 
 
 
$
107,977

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 
 
 
3.40
%
 
 
 
 
 
3.50
%
Cost of funds
 
 
 
 
1.04
%
 
 
 
 
 
0.89
%
Net interest margin
 
 
 
 
3.70
%
 
 
 
 
 
3.76
%
 
 
 
 
 
 
 
 
 
 
 
 
(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21% for both the three months ended December 31, 2018 and December 31, 2017.
(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 for both the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $445,000 and $592,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $161,000 and $143,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in amortization of the fair market value adjustments related to acquisitions.