Exhibit 99.1

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Contact:    D. Anthony Peay - (804) 632-2112
   Executive Vice President/ Chief Financial Officer

UNION FIRST MARKET BANKSHARES REPORTS THIRD QUARTER RESULTS

Richmond, Va., October 24, 2011 - Union First Market Bankshares Corporation (the “Company”) (NASDAQ: UBSH) today reported net income of $9.1 million and earnings per share of $0.33 for its third quarter ended September 30, 2011. The quarterly results represent an increase of $2.3 million in net income or $0.09 in earnings per share from the second quarter and an increase of $1.0 million in net income or $0.04 in earnings per share from the quarter ended September 30, 2010. Net income available to common shareholders, which deducts dividends and discount accretion on preferred stock from net income, was $8.5 million compared to $7.5 million for the prior year’s third quarter.

“Union First Market Bankshares delivered strong third quarter results particularly in net income, new account openings and improved asset quality,” said G. William Beale, chief executive officer of Union First Market Bankshares. “In August, Union First Market Bank launched a totally free checking advertising campaign that helped generate thousands of new account openings. We also successfully introduced mobile banking services with more than 12,000 customers enrolling in two months. Asset quality continued to improve as the Company was able to profitably dispose of more than 6.5% of its owned real estate and saw a significant increase in customer pay downs of nonperforming loans. Our mortgage business stabilized after the disruptive regulatory changes were implemented earlier in the year. While it was a very successful quarter, we are continuing our work to separate ourselves from our competitors by leveraging the breadth of service offerings, highlighting our convenient branch footprint, as well as our financial strength.”

Select highlights:

 

   

Total nonperforming assets decreased $4.9 million or 5.37% during the third quarter of 2011. Noninterest income increased $1.6 million, or 15.9%, to $11.5 million from $9.9 million in the second quarter. Noninterest expense decreased $1.3 million, or 3.6%, to $34.6 million from $35.9 million when compared to the second quarter.

 

   

The Company’s results reflected a Return on Average Equity (ROE) of 8.02% and Return on Average Assets (ROA) of 0.93%.

Third quarter net income increased $2.3 million, or 33.0%, from the second quarter of this year and was largely attributable to a reduction in loan loss provision, a branch closure loss that occurred in the second quarter, gains on sales of loans in the mortgage segment, and lower costs associated with problem loans, FDIC insurance, and branch acquisitions. These improvements were partially offset by increased salary, benefits, and occupancy costs. During the quarter, the Company also sold securities to improve overall portfolio performance and credit quality and to take advantage of favorable price appreciation resulting in a gain of $499,000. Also during the Company’s ongoing securities portfolio evaluation, a single issuer Trust Preferred security was determined to be impaired. As a result, the Company incurred credit-related other-than-temporary impairment (“OTTI”) of $400,000, which was recognized in earnings.

Third quarter net income increased $1.0 million, or 12.4%, compared to the same quarter in the prior year. The increase in quarterly net income is largely a result of decreases in the provision for loan

 

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losses, a decline in interest expense, particularly on deposit accounts, outpacing lower income on interest earning assets, a decline in gains on sales of loans related to lower origination volume in the mortgage segment, and higher salary and benefits expense related to additional personnel.

Year to date net income for the nine months ended September 30, 2011 increased $3.6 million, or 19.4%, from the same period a year ago. The increase was principally a result of favorable net interest income and the absence of nonrecurring prior year acquisition costs. These improvements were partially offset by losses on sales of Company owned real estate and lower mortgage segment income. All comparative results to the prior year exclude First Market Bank, FSB (“FMB”) results for the month of January 2010.

NET INTEREST INCOME

On a linked quarter basis, tax-equivalent net interest income was $40.5 million, a decrease of $202,000, or 0.5%, from the second quarter of 2011. This decrease was principally due to a decline in income from interest-earning assets outpacing growth in interest-bearing liabilities. Third quarter tax-equivalent net interest margin declined 14 basis points to 4.54% compared to the most recent quarter. The change in net interest margin was principally attributable to lower investment security and loan yields due to cash flows from higher yielding investments and loans being reinvested at lower yields. A higher mix of earning assets in interest bearing deposits resulting from deposit growth outpacing loan growth also contributed to the change. Lower earning assets yields were offset by lower costs of interest-bearing deposits, mainly certificates of deposit. Additionally, the funding mix continued to shift from higher cost certificates of deposit to lower cost money market accounts.

The following table shows average interest-earning assets, interest-bearing liabilities, the related income/expense and change for the periods shown:

 

     Linked quarter results  
     Dollars in thousands  
     Three Months Ended  
     09/30/11     06/30/11     Change  

Average interest-earning assets

   $ 3,538,752      $ 3,486,949      $ 51,803   

Interest income

   $ 48,673      $ 48,849      $ (176

Yield on interest-earning assets

     5.46     5.62     (16 )bps 

Average interest-bearing liabilities

   $ 2,873,721      $ 2,861,567      $ 12,154   

Interest expense

   $ 8,159      $ 8,134      $ 25   

Cost of interest-bearing liabilities

     1.13     1.14     (1 )bps 

For the three months ended September 30, 2011, tax-equivalent net interest income increased $815,000, or 2.1%, when compared to the same period last year. The tax-equivalent net interest margin increased 7 basis points to 4.54% from 4.47% in the prior year. The change in net interest margin was principally attributable to the decline in costs of interest-bearing deposits, mainly certificates of deposit and money market which was greater than the decline in loan yields. Lower interest-earning asset income was principally due to lower yields on loans and loans held for sale. The following table shows average interest-earning assets, interest-bearing liabilities, the related income/expense and change for the periods shown:

 

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     Year-over-year results  
     Dollars in thousands  
     Three Months Ended  
     09/30/11     09/30/10     Change  

Average interest-earning assets

   $ 3,538,752      $ 3,523,678      $ 15,074   

Interest income

   $ 48,673      $ 49,490      $ (817

Yield on interest-earning assets

     5.46     5.57     (11 ) bps 

Average interest-bearing liabilities

   $ 2,873,721      $ 2,914,482      $ (40,761

Interest expense

   $ 8,159      $ 9,791      $ (1,632

Cost of interest-bearing liabilities

     1.13     1.33     (20 ) bps 

For the nine months ended September 30, 2011, tax-equivalent net interest income increased $5.7 million, or 5.0%, when compared to the same period last year. The tax-equivalent net interest margin increased 7 basis points to 4.63% from 4.56% in the prior year. The improvement in the net interest margin was a result of improvement in the cost of funds partially offset by lower loan yields and aided by the increase in interest-earning assets due to the acquisition of FMB in the first quarter of 2010.

The following table shows average interest-earning assets, interest-bearing liabilities, the related income/expense and change for the periods shown:

 

     Year-over-year results  
     Dollars in thousands  
     Nine Months Ended  
     09/30/11     09/30/10     Change  

Average interest-earning assets

   $ 3,494,013      $ 3,378,128      $ 115,885   

Interest income

   $ 146,012      $ 144,096      $ 1,916   

Yield on interest-earning assets

     5.59     5.69     (10 )bps 

Average interest-bearing liabilities

   $ 2,864,620      $ 2,818,950      $ 45,670   

Interest expense

   $ 24,884      $ 28,704      $ (3,820

Cost of interest-bearing liabilities

     1.16     1.36     (20 )bps 

Acquisition Activity – Net Interest Margin

The favorable impact of acquisition accounting fair value adjustments on net interest income was $1.8 million ($1.5 million – FMB; $333,000 – Harrisonburg branch) for the three months ended September 30, 2011. If not for this favorable impact, the net interest margin for the third quarter would have been 4.34%, compared to 4.47% from the second quarter of 2011.

The Harrisonburg branch

The acquired loan portfolio of the Harrisonburg branch was marked-to-market with a fair value discount to market rates. Performing loan discount accretion is recognized as interest income over the estimated remaining life of the loans. The Company also assumed certificates of deposit at a premium to market. These were marked-to-market with estimates of fair value on acquisition date. The resulting premium to market is amortized as a decrease to interest expense over the estimated lives of the certificates of deposit.

FMB

The acquired loan and investment security portfolios of FMB were marked-to-market with a fair value discount to market rates. Performing loan and investment security discount accretion is recognized as interest income over the estimated remaining life of the loans and investment securities. The Company also assumed borrowings (Federal Home Loan Bank (“FHLB”)) and subordinated debt) and certificates

 

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of deposit. These liabilities were marked-to-market with estimates of fair value on acquisition date. The resulting discount/premium to market is accreted/amortized as an increase/decrease to net interest income over the estimated lives of the liabilities. Additional credit quality deterioration above the original credit mark is recorded as additional provisions for loan losses.

The third quarter and remaining estimated discount/premium is reflected in the following table (dollars in thousands):

 

     Harrisonburg Branch      First Market Bank  
     Loan
Accretion
     Certificates
of Deposit
     Loan
Accretion
     Investment
Securities
     Borrowings     Certificates
of Deposit
 

For the quarter ended September 30, 2011

   $ 267       $ 66       $ 1,339       $ 93       $ (122   $ 171   

For the remaining three months of 2011

     239         35         1,146         93         (122     140   

For the years ending:

                

2012

     589         11         3,624         201         (489     222   

2013

     148         7         2,377         15         (489     —     

2014

     37         4         1,478         —           (489     —     

2015

     26         —           570         —           (489     —     

2016

     27         —           28         —           (163     —     

Thereafter

     143         —           —           —           —          —     

Acquisition Activity – Other Operating Expenses

Acquisition-related expenses associated with the acquisition of the Harrisonburg branch were $426,000 for the nine month period ended September 30, 2011 and are recorded in “Other operating expenses” in the Company’s condensed consolidated statements of income. Such costs principally included system conversion and integrating operations integration charges which have been expensed as incurred. There were no acquisition-related expenses related to the Harrisonburg branch in 2010 or the third quarter of 2011. The Company expects no further expenses from the Harrisonburg branch acquisition.

ASSET QUALITY/LOAN LOSS PROVISION

Overview

During the third quarter, the Company continued to experience modest improvement in asset quality. The reduced levels of nonperforming loans and other real estate owned (“OREO”) were favorable even though current economic conditions did not improve materially. While future economic conditions remain unknown, the Company’s continued lower levels of provisions for loan losses and increasing coverage ratios demonstrate that its dedicated efforts to improve asset quality are having a positive impact. The magnitude of any continued softening in the real estate market and its impact on the Company are largely dependent upon any lagging impact on commercial real estate, the recovery of residential housing, and the pace at which the local economies in the Company’s operating markets recover.

Nonperforming Assets (“NPAs”)

At September 30, 2011, nonperforming assets totaled $86.4 million, a decrease of $4.9 million from the second quarter, and an increase of $8.4 million compared to a year ago. The current quarter decrease in NPAs from the second quarter related to net decreases in both nonaccrual loans of $2.3 million and OREO of $2.4 million. The decrease in nonperforming loans was a result of customer net pay downs of approximately $3.4 million and charge-offs of $2.3 million, partially offset by additions of $2.5 million. The nonperforming loans added during the quarter were principally related to residential real estate as borrowers continued to experience financial difficulties with the protracted economic recovery’s depleting their cash reserves and other repayment sources.

Nonperforming Loans

Nonperforming assets at September 30, 2011 included $52.0 million in nonaccrual loans (excluding purchased impaired loans). This total includes residential real estate loans of $24.3 million, land loans of $14.9 million, commercial real estate loans of $7.4 million, commercial and industrial loans of $1.6

 

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million, land development loans of $1.5 million, and other loans of $2.3 million. At September 30, 2011, the coverage ratio of the allowance for loan losses to nonperforming loans was 79.5%, an increase from 72.4% a year earlier and from 72.9% at June 30, 2011. Impairment analyses provided appropriate reserves on these nonperforming loans while appropriate reserves on homogenous pools continue to be maintained. The increase in the coverage ratio is primarily related to a decline in nonperforming loans.

Other Real Estate Owned (“OREO”)

Nonperforming assets at September 30, 2011 also included $34.5 million in other real estate owned, a decrease of $2.4 million, or 6.69%, from the prior quarter. This total includes residential real estate of $11.9 million, land development of $11.8 million, land of $8.6 million, commercial real estate of $1.2 million and land previously held for development of bank branch sites of $1.0 million. Included in land development is $8.7 million related to a residential community in the Northern Neck region of Virginia, which includes developed residential lots, a golf course and undeveloped land. Foreclosed properties were adjusted to their fair values at the time of each foreclosure and any losses were taken as loan charge-offs against the allowance for loan losses at that time. OREO asset valuations are also evaluated at least quarterly and any necessary write down to fair value is recorded as impairment.

During the third quarter ended September 30, 2011, the Company’s OREO showed a net decrease of approximately $2.4 million compared to the second quarter of 2011, with sales of $3.2 million at a net gain of $124,000, or 3.9%, and additions of $690,000. The additions were principally related to single-family homes; sales from OREO were principally related to residential real estate and commercial office space. The Company expects this type of activity to continue until the market for these properties and the economy as a whole show marked improvement.

Charge-offs

For the quarter ended September 30, 2011, net charge-offs were $1.9 million, or 0.27%, of loans on an annualized basis, compared to $5.3 million, or 0.74%, for the second quarter of 2011 and $2.5 million, or 0.35%, for the same quarter last year. Net charge-offs in the current quarter included commercial loans of $714,000, commercial construction loans of $310,000, other consumer loans of $693,000, and home equity lines of credits of $206,000. At September 30, 2011, total accruing past due loans were $45.4 million, or 1.61%, of total loans, an increase from 1.33% at June 30, 2011, but a decrease from 1.99% for the same quarter a year ago.

Provision

The provision for loan losses for the current quarter was $3.6 million, a decrease of $900,000 from the second quarter of this year and $2.3 million decrease from the same quarter a year ago. The lower provision for loan losses compared to the most recent quarter reflects improvements in asset quality, tempered by higher reserves on remaining impaired loans, as other impaired loans were charged off. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, changes in risk ratings on loans, net charge-off activity, loan growth, delinquency trends and other credit risk factors that the Company considers in assessing the adequacy of the allowance for loan losses.

The allowance for loan losses as a percentage of the total loan portfolio, including net loans acquired in the FMB and the Harrisonburg branch acquisitions, was 1.47% at September 30, 2011, 1.35% at December 31, 2010, and 1.32% at September, 2010. The allowance for loan losses as a percentage of the total loan portfolio, adjusted for acquired loans, was 1.89% at September 30, 2011, an increase from 1.88% at June 30, 2011, and an increase from 1.86% in the same quarter a year ago. The lower allowance for loan losses as a percentage of loans compared to the loan portfolio, adjusted for acquired loans, is related to the elimination of FMB’s allowance for loan losses at acquisition. In acquisition accounting, there is no carryover of previously established allowance for loan losses.

 

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NONINTEREST INCOME

On a linked quarter basis, noninterest income increased $1.6 million, or 15.9%, to $11.5 million from $9.9 million in the second quarter. Gains on sales of Company owned real estate increased $909,000. During the second quarter, the Company reached an agreement to sell a previously closed branch building and a loss of $626,000 was accrued in the second quarter. Gains on the sales of loans in the mortgage segment increased $558,000, or 13.0%, and were driven by higher volume in loan originations. Increases in mortgage loan refinancing volume accounted for most of the volume increase as refinanced loans as a percentage of originations in the Mortgage segment increased from 20.2% in the second quarter to 35.7%. Gains on sales of securities increased $499,000. Also during the Company’s ongoing securities portfolio evaluation, a single issuer Trust Preferred security was determined to be impaired. As a result, the Company incurred credit-related, OTTI loss of $400,000, which was recognized in earnings. Excluding mortgage segment operations, the current quarter net gain on securities transactions, and current and prior period real estate transactions, noninterest income increased $14,000 or 0.2%, essentially flat from the second quarter.

For the quarter ended September 30, 2011, noninterest income decreased $809,000, or 6.5%, to $11.5 million from $12.4 million in the prior year’s same quarter. Gains on sales of loans in the mortgage segment decreased $1.1 million, or 18.5%, due to lower origination volume than the record levels a year earlier. During the current quarter, the Company sold securities for a gain of $499,000 compared to a gain of $38,000 in the prior year’s same quarter. Also during the quarter, the Company incurred a credit-related OTTI loss of $400,000 as mentioned above. Other service charges and fees increased $394,000, which included higher debit card income, ATM fees, and brokerage commissions. During the current quarter, the Company recorded gains on sales of other real estate owned of $118,000, compared to $332,000 in the prior year’s same quarter. Excluding the mortgage segment operations, current quarter net gain on securities transactions, and current and prior period real estate transactions, noninterest income increased $442,000, or 7.2%, from the same period a year ago, primarily as a result of higher account service charge fees.

For the nine months ending September 30, 2011, noninterest income decreased $2.1 million, to $32.1 million, from $34.2 million a year ago. Gains on sales of loans in the mortgage segment decreased $1.6 million due to lower origination volume. The Company sold a branch building as mentioned above and accrued a loss on the sale of $626,000 as well as incurring other current year real estate gains and losses and fair value adjustments. In 2010, the Company recorded a gain on sale as a result of a reversal of a property improvement liability. As a result, gains on sales of Company owned real estate declined $1.3 million. Service charges on deposit accounts decreased $227,000 primarily related to lower overdraft and account service charges. Other service charges and fees increased $1.2 million, generally related to higher debit card fee income, brokerage commissions, and higher ATM fee income, while other operating income decreased $234,000 largely related to a reversal of a property improvement liability that occurred in the prior year, partially offset by bank owned life insurance investment income. Excluding the mortgage segment operations, current quarter net gain on securities transactions, and current and prior period real estate transactions, noninterest income increased $691,000 or 3.7%, from the same period a year ago, and was primarily a result of higher account service charge fees.

NONINTEREST EXPENSE

On a linked quarter basis, noninterest expense decreased $1.3 million, or 3.6%, to $34.6 million from $35.9 million when compared to the second quarter. Other operating expenses decreased $2.0 million, or 14.5%. Of the other operating expenses decrease, $822,000 consisted of lower property tax payments of $390,000, a valuation adjustment of $165,000, and other costs to maintain the Company’s portfolio of other real estate owned. In addition, other operating decreases were lower costs for FDIC insurance of $488,000 due to a change in the assessment base and rate, lower conversion expenses of $279,000, lower costs for legal and professional fees for problem loan workouts and foreclosure activity, and lower costs in communication expenses. Salaries and benefits expense increased $496,000

 

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due to the origination volume related commission expense in the mortgage segment and branch personnel, and occupancy expenses increased $217,000. Excluding the mortgage segment operations and acquisition costs, noninterest expense decreased $997,000 million, or 3.2%, compared to the second quarter of this year.

For the quarter ended September 30, 2011, noninterest expense increased $653,000, or 1.9%, to $34.6 million from $34.0 million for the third quarter of 2010. Salaries and benefits increased $625,000 related to additional personnel in branch additions, partially offset by the lower origination volume related commission expense in the mortgage segment. Other operating expenses included higher marketing and advertising costs of $628,000 related to multi-media brand awareness campaigns for in-store branches, home equity line of credit and free checking promotions, and customer loyalty rewards programs, higher franchise taxes, which were levied to include all of former FMB branches, of $307,000, ,and higher costs related to appraisal and maintenance of the Company’s portfolio in other real estate owned. Partially offsetting these increases in other operating expense were decreases in other expenses of $960,000, which included conversion expenses related to the FMB acquisition occurring in the prior year, lower amortization of the acquired deposit portfolio, and lower overdraft losses. Additionally, FDIC insurance decreased $304,000 due to a change in assessment base and lower rate. Excluding mortgage segment operations and acquisition costs, noninterest expense increased $1.8 million, or 6.5% from the third quarter of 2010.

For the nine months ended September 30, 2011, noninterest expense decreased $656,000, or 0.5%, to $105.3 million, from $105.9 million a year ago. Other operating expenses decreased $3.8 million, or 8.9%. Included in the reduction of other operating expenses were prior year costs associated with the acquisitions and mergers of $8.1 million during the first nine months of 2010. Increases in current year other operating expenses included higher costs to maintain the Company’s portfolio of other real estate owned of $1.2 million, communication expenses related to increased online customer activity and additional branch locations of $958,000, and higher professional fees related to continuing collection activity and problem loan workouts of $646,000. Other costs included higher franchise tax assessments, which included the acquired FMB branches of $897,000 due to adjustments starting in 2011. Salary and benefits expense increased $3.0 million, primarily related to additional personnel. Excluding mortgage segment operations and acquisition costs, noninterest expense increased $7.0 million, or 8.3% from the same period a year ago.

BALANCE SHEET

At September 30, 2011, total cash and cash equivalents were $149.8 million, an increase of $88.6 million from December 31, 2010, and an increase of $69.6 million from September 30, 2010. At September 30, 2011, net loans were $2.8 billion, a decrease of $42.9 million, or 1.5% from the prior quarter. Net loans decreased $27.8 million, or 1.0%, from September 30, 2010. Loans held for sale of $61.8 million in the Company’s mortgage segment increased by $11.4 million from the prior quarter, related to an increase in refinance originations, but declined $22.6 million from $84.4 million on lower originations compared to the prior year. At September 30, 2011, total assets were $3.9 billion, an increase of $62.9 million compared to the second quarter, and an increase of $55.1 million from $3.9 billion at September 30, 2010.

Total deposits increased $51.8 million compared to the second quarter driven by higher volumes in money market, time deposits, and demand deposit accounts. Total deposits increased $60.7 million from September 30, 2010 with net volume inflows into demand deposit and money market accounts and out of certificates of deposits. Total borrowings, including repurchase agreements, decreased $9.7 million on a linked quarter basis and decreased $40.0 million from September 30, 2010. The Company’s equity to assets ratio was 11.54% and 11.16% at September 30, 2011 and 2010, respectively. The Company’s tangible common equity to tangible assets ratio was 8.74% and 8.19% at September 30, 2011 and 2010, respectively.

 

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MORTGAGE SEGMENT INFORMATION

On a linked quarter basis, the mortgage segment net income for the third quarter increased $296,000, or 177.2%, to $463,000 from $167,000 in the second quarter. Originations increased by $28.3 million from $147.7 million to $176.0 million, or 19.2%, from the second quarter as a result of an increase in refinance originations. Refinanced loans represented 35.7% of the originations during the third quarter compared to 20.2% during the second quarter. Gains on the sale of loans increased $558,000, or 13.0%, while commission expense increased $172,000, or 9.2%. Salary and benefit expenses increased $123,000 largely on loan volume driven commission expense. Estimated loan related losses attributable to early payment defaults, repurchase requests and indemnifications were $205,000, increasing $21,000, or 11.5% from the prior quarter.

For the three months ended September 30, 2011, the mortgage segment net income decreased $436,000 from $899,000 to $463,000, or 48.5%, during the same period last year as residential mortgage activity and average loan size declined. Refinanced loans represented 35.7% of originations during the third quarter of 2011 compared to 50.4% during the same period a year ago. As a result, gains on the sale of loans decreased $1.1 million, or 18.5 %. Noninterest expenses decreased $739,000. Of this amount, salaries and benefits decreased $758,000 primarily as a result of loan volume driven commission expense.

For the nine months ended September 30, 2011, the mortgage segment net income decreased $1.3 million, or 57.9%, to $958,000 from $2.3 million during the same period last year. Originations declined by $99.1 million from $572.0 million to $472.9 million, or 17.3%, during the same period last year due to declines in residential mortgage activity and particularly refinance volume. Net interest income decreased $526,000, or 34.3%, due to decreased originations and higher borrowing rates. Gains on the sale of loans decreased $1.6 million, or 10.0%, driven largely by declines in originations and a slight increase in estimated loan related losses attributable to early payment defaults, repurchase requests and indemnifications. Refinanced loans represented 31.6% of originations during the first nine months of the year compared to 37.7% during the same period a year ago. Salary and benefit expenses decreased $348,000 primarily due to lower commission expense on decreased origination volume, partially offset by higher salaries expense required to meet evolving regulatory, compliance and production demands. Other operating expenses increased $183,000, or 9.8%, primarily related to increased costs associated with the processing, underwriting and compliance components of origination.

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ABOUT UNION FIRST MARKET BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union First Market Bankshares Corporation is the holding company for Union First Market Bank, which has 99 branches and more than 160 ATMs throughout Virginia. Non-bank affiliates of the holding company include: Union Investment Services, Inc., which provides full brokerage services; Union Mortgage Group, Inc., which provides a full line of mortgage products; and Union Insurance Group, LLC, which offers various lines of insurance products. Union First Market Bank also owns a non-controlling interest in Johnson Mortgage Company, LLC.

Additional information is available on the Company’s website at http://investors.bankatunion.com. Shares of the Company’s common stock are traded on the NASDAQ Global Select Market under the symbol UBSH.

FORWARD-LOOKING STATEMENTS

Certain statements in this report 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

 

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not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, changes in the stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, and consumer spending and savings habits. More information is available on the Company’s website, http://investors.bankatunion.com and on the Securities and Exchange Commission’s website, www.sec.gov. The information on the Company’s website is not a part of this press release. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.

 

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UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS

(in thousands, except share data)

 

     Three Months Ended     Nine Months Ended  
     09/30/11     06/30/11     09/30/10     09/30/11     09/30/10  

Results of Operations

          

Interest and dividend income

   $ 47,606      $ 47,756      $ 48,440      $ 142,754      $ 141,080   

Interest expense

     8,160        8,133        9,791        24,885        28,704   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     39,446        39,623        38,649        117,869        112,376   

Provision for loan losses

     3,600        4,500        5,912        14,400        14,868   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     35,846        35,123        32,737        103,469        97,508   

Noninterest income

     11,544        9,963        12,353        32,054        34,193   

Noninterest expenses

     34,637        35,872        33,984        105,276        105,932   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     12,753        9,214        11,106        30,247        25,769   

Income tax expense

     3,682        2,394        3,033        8,162        7,271   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 9,071      $ 6,820      $ 8,073      $ 22,085      $ 18,498   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest earned on loans (FTE)

   $ 42,777      $ 42,473      $ 43,737      $ 127,406      $ 126,807   

Interest earned on securities (FTE)

     5,874        6,349        5,703        18,550        17,201   

Interest earned on earning assets (FTE)

     48,673        48,849        49,490        146,012        144,096   

Net interest income (FTE)

     40,514        40,715        39,699        121,128        115,392   

Interest expense on certificates of deposit

     4,205        4,353        5,983        13,475        17,185   

Interest expense on interest-bearing deposits

     5,923        6,167        7,955        18,774        23,056   

Core deposit intangible amortization

     1,496        1,553        1,935        4,674        5,327   

Net income - community bank segment

   $ 8,607      $ 6,654      $ 7,175      $ 21,126      $ 16,224   

Net income - mortgage segment

     463        167        899        958        2,274   

Key Ratios

          

Return on average assets (ROA)

     0.93     0.71     0.83     0.77     0.67

Return on average equity (ROE)

     8.02     6.21     7.46     6.70     6.01

Efficiency ratio

     67.93     72.34     66.63     70.22     72.27

Efficiency ratio - community bank segment

     66.06     70.18     65.00     68.09     71.46

Net interest margin (FTE)

     4.54     4.68     4.47     4.63     4.56

Net interest margin, core (FTE)1

     4.34     4.47     4.16     4.43     4.23

Yields on earning assets (FTE)

     5.46     5.62     5.57     5.59     5.69

Cost of interest-bearing liabilities (FTE)

     1.13     1.14     1.33     1.16     1.36

Noninterest expense less noninterest income / average assets

     2.36     2.71     2.22     2.55     2.58

Per Share Data

          

Earnings per common share, basic

   $ 0.33      $ 0.24      $ 0.29      $ 0.79      $ 0.68   

Earnings per common share, diluted

     0.33        0.24        0.29        0.79        0.68   

Cash dividends paid per common share

     0.07        0.07        0.06        0.21        0.18   

Market value per share

     10.72        12.18        13.06        10.72        13.06   

Book value per common share

     16.04        15.72        15.29        16.04        15.29   

Tangible book value per common share

     12.88        12.50        11.93        12.88        11.93   

Price to earnings ratio, diluted

     8.19        12.65        11.35        10.15        14.36   

Price to book value per common share ratio

     0.67        0.77        0.85        0.67        0.85   

Price to tangible common share ratio

     0.83        0.97        1.10        0.83        1.10   

Weighted average common shares outstanding, basic

     25,986,677        25,969,806        25,881,694        25,971,639        24,993,316   

Weighted average common shares outstanding, diluted

     26,001,900        25,992,190        25,920,287        25,993,611        25,035,926   

Common shares outstanding at end of period

     26,057,501        26,043,633        25,955,213        26,057,501        25,955,213   

 

Page 10 of 16


     Three Months Ended     Nine Months Ended  
     09/30/11     06/30/11     09/30/10     09/30/11     09/30/10  

Financial Condition

          

Assets

   $ 3,914,457      $ 3,851,524      $ 3,859,323      $ 3,914,457      $ 3,859,323   

Loans, net of unearned income

     2,818,342        2,859,569        2,842,267        2,818,342        2,842,267   

Earning Assets

     3,573,844        3,502,818        3,505,845        3,573,844        3,505,845   

Goodwill

     59,400        59,400        57,567        59,400        57,567   

Core deposit intangibles, net

     22,162        23,658        28,762        22,162        28,762   

Deposits

     3,134,876        3,083,053        3,074,195        3,134,876        3,074,195   

Stockholders’ equity

     451,581        443,116        430,596        451,581        430,596   

Tangible common equity

     334,874        324,878        308,979        334,874        308,979   

Averages

          

Assets

   $ 3,876,740      $ 3,830,786      $ 3,865,249      $ 3,838,748      $ 3,718,107   

Loans, net of unearned income

     2,831,924        2,823,186        2,827,451        2,822,579        2,723,904   

Loans held for sale

     48,664        42,341        75,261        48,366        60,020   

Securities

     597,489        586,407        572,016        587,186        539,790   

Earning assets

     3,538,752        3,486,949        3,523,678        3,494,013        3,378,128   

Deposits

     3,105,792        3,077,823        3,080,908        3,079,347        2,937,491   

Certificates of deposit

     1,160,662        1,170,341        1,330,228        1,183,813        1,280,906   

Interest-bearing deposits

     2,583,864        2,573,013        2,591,275        2,574,685        2,478,476   

Borrowings

     289,857        288,554        323,207        289,935        340,474   

Interest-bearing liabilities

     2,873,721        2,861,567        2,914,482        2,864,620        2,818,950   

Stockholders’ equity

     448,618        440,359        429,126        440,521        411,801   

Tangible common equity

     331,170        323,195        306,564        322,726        294,203   

Asset Quality

          

Allowance for Loan Losses (ALLL)

          

Beginning balance

   $ 39,631      $ 40,399      $ 33,956      $ 38,406      $ 30,484   

Add: Recoveries

     674        514        320        1,561        1,736   

Less: Charge-offs

     2,615        5,782        2,793        13,077        9,693   

Add: Provision for loan losses

     3,600        4,500        5,912        14,400        14,868   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

   $ 41,290      $ 39,631      $ 37,395      $ 41,290      $ 37,395   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ALLL / total outstanding loans

     1.47     1.39     1.32     1.47     1.32

ALLL / total outstanding loans, adjusted for acquired2

     1.89     1.88     1.86     1.89     1.86

Net charge-offs / total outstanding loans

     0.27     0.74     0.35     0.55     0.37

Nonperforming Assets

          

Nonaccrual loans

   $ 51,965      $ 54,322      $ 51,630      $ 51,965      $ 51,630   

Other real estate owned

     34,464        36,935        26,382        34,464        26,382   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets (NPAs)

     86,429        91,257        78,012        86,429        78,012   

Loans > 90 days and still accruing

     12,159        9,087        18,554        12,159        18,554   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets and loans > 90 days and still accruing

   $ 98,588      $ 100,344      $ 96,566      $ 98,588      $ 96,566   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NPAs / total outstanding loans

     3.07     3.19     2.74     3.07     2.74

NPAs / total assets

     2.21     2.37     2.02     2.21     2.02

ALLL / nonperforming loans

     79.46     72.96     72.43     79.46     72.43

ALLL / nonperforming assets

     47.77     43.43     47.93     47.77     47.93

Other Data

          

Mortgage loan originations

   $ 176,040      $ 147,718      $ 220,352      $ 472,882      $ 572,010   

% of originations that are refinances

     35.70     20.20     50.40     31.60     37.70

End of period full-time employees

     1,047        1,055        982        1,047        982   

Number of full-service branches

     99        99        91        99        91   

Number of full automatic transaction machines (ATMs)

     167        168        159        167        159   

 

Page 11 of 16


     Three Months Ended     Nine Months Ended  
     09/30/11     06/30/11     09/30/10     09/30/11     09/30/10  

Alternative Performance Measures

          

Cash basis earnings3

          

Net income

   $ 9,071      $ 6,820      $ 8,073      $ 22,085      $ 18,498   

Plus: Core deposit intangible amortization, net of tax

     972        1,009        1,258        3,038        3,463   

Plus: Trademark intangible amortization, net of tax

     65        65        65        195        174   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash basis operating earnings

   $ 10,108      $ 7,894      $ 9,396      $ 25,318      $ 22,135   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets

   $ 3,876,740      $ 3,830,786      $ 3,865,249      $ 3,838,748      $ 3,718,107   

Less: Average trademark intangible

     582        681        982        681        950   

Less: Average goodwill

     59,400        57,581        57,566        58,189        57,566   

Less: Average core deposit intangibles

     22,890        24,384        29,696        24,411        28,707   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible assets

   $ 3,793,868      $ 3,748,140      $ 3,777,005      $ 3,755,467      $ 3,630,884   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average equity

   $ 448,618      $ 440,359      $ 429,126      $ 440,521      $ 411,801   

Less: Average trademark intangible

     582        681        982        681        950   

Less: Average goodwill

     59,400        57,581        57,566        58,189        57,566   

Less: Average core deposit intangibles

     22,890        24,384        29,696        24,411        28,707   

Less: Average preferred equity

     34,576        34,518        34,318        34,514        30,375   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible common equity

   $ 331,170      $ 323,195      $ 306,564      $ 322,726      $ 294,203   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash basis operating earnings per share, diluted

   $ 0.39      $ 0.30      $ 0.36      $ 0.97      $ 0.88   

Cash basis operating return on average tangible assets

     1.06     0.84     0.99     0.90     0.82

Cash basis operating return on average tangible common equity

     12.11     9.80     12.16     10.49     10.06

 

(1) The net interest margin, core (FTE) excludes the impact of acquisition accounting accretion and amortization adjustments in net interest income.
(2) The allowance for loan losses, adjusted for acquired loans (non-GAAP) ratio includes the allowance for loan losses to the total loan portfolio less acquired loans without additional credit deterioration above the original credit mark (which have been provided for in the ALLL subsequent to acquisition). GAAP requires the acquired allowance for loan losses not be carried over in an acquisition or merger. We believe the presentation of the allowance for loan losses, adjusted for acquired loans ratio is useful to investors because the acquired loans were purchased at a market discount with no allowance for loan losses carried over to the Company. Therefore, acquired loans without additional credit deterioration above the original credit mark are adjusted out of the loan balance denominator.

 

Gross Loans

   $  2,818,342      $  2,859,569      $  2,842,267      $  2,818,342      $  2,842,267   

less acquired loans without additional credit deterioration

     (635,072     (755,358     (836,093     (635,072     (836,093
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Loans, adjusted for acquired

     2,183,270        2,104,211        2,006,174        2,183,270        2,006,174   

Allowance for loan losses

     41,290        39,631        37,395        41,290        37,395   

ALLL / gross loans, adjusted for acquired

     1.89     1.88     1.86     1.89     1.86

 

(3) As a supplement to GAAP, management also reviews operating performance based on its “cash basis earnings” to fully analyze its core business. Cash basis earnings exclude amortization expense attributable to intangibles (goodwill and core deposit intangibles) that do not qualify as regulatory capital. Financial ratios based on cash basis earnings exclude the amortization of nonqualifying intangible assets from earnings and the unamortized balance of nonqualifying intangibles from assets and equity.

In management’s opinion, cash basis earnings are useful to investors because by excluding non-operating adjustments they allow investors to see clearly the economic impact on the results of Company. These non-GAAP disclosures should not, however, be viewed in direct comparison with non-GAAP measures of other companies.

 

Page 12 of 16


UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share and per share amounts)

 

     September  30,
2011
    December  31,
2010
    September  30,
2010
 
      

ASSETS

      

Cash and cash equivalents:

      

Cash and due from banks

   $ 62,546      $ 58,951      $ 76,981   

Interest-bearing deposits in other banks

     86,872        1,449        2,329   

Money market investments

     199        158        143   

Federal funds sold

     160        595        685   
  

 

 

   

 

 

   

 

 

 

Total cash and cash equivalents

     149,777        61,153        80,138   
  

 

 

   

 

 

   

 

 

 

Securities available for sale, at fair value

     606,485        572,441        576,040   
  

 

 

   

 

 

   

 

 

 

Loans held for sale

     61,786        73,974        84,381   
  

 

 

   

 

 

   

 

 

 

Loans, net of unearned income

     2,818,342        2,837,253        2,842,267   

Less allowance for loan losses

     41,290        38,406        37,395   
  

 

 

   

 

 

   

 

 

 

Net loans

     2,777,052        2,798,847        2,804,872   
  

 

 

   

 

 

   

 

 

 

Bank premises and equipment, net

     90,936        90,680        91,054   

Other real estate owned

     34,464        36,122        26,382   

Core deposit intangibles, net

     22,162        26,827        28,762   

Goodwill

     59,400        57,567        57,567   

Other assets

     112,395        119,636        110,127   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 3,914,457      $ 3,837,247      $ 3,859,323   
  

 

 

   

 

 

   

 

 

 

LIABILITIES

      

Noninterest-bearing demand deposits

   $ 542,692      $ 484,867      $ 495,779   

Interest-bearing deposits:

      

NOW accounts

     395,822        381,512        359,986   

Money market accounts

     858,426        783,431        756,938   

Savings accounts

     176,531        153,724        153,928   

Time deposits of $100,000 and over

     511,579        563,375        577,239   

Other time deposits

     649,826        703,150        730,325   
  

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     2,592,184        2,585,192        2,578,416   
  

 

 

   

 

 

   

 

 

 

Total deposits

     3,134,876        3,070,059        3,074,195   
  

 

 

   

 

 

   

 

 

 

Securities sold under agreements to repurchase

     70,450        69,467        69,693   

Other short-term borrowings

     —          23,500        41,200   

Trust preferred capital notes

     60,310        60,310        60,310   

Long-term borrowings

     155,258        154,892        154,864   

Other liabilities

     41,982        30,934        28,465   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     3,462,876        3,409,162        3,428,727   
  

 

 

   

 

 

   

 

 

 

Commitments and contingencies

      

STOCKHOLDERS’ EQUITY

      

Preferred stock, $10.00 par value, $1,000 liquidation value, shares authorized 500,000; issued and outstanding, 35,595 shares for all periods.

     35,595        35,595        35,595   

Common stock, $1.33 par value, shares authorized 36,000,000; issued and outstanding, 26,057,501 shares, 26,004,197 shares, and 25,955,213 shares, respectively.

     34,581        34,532        34,460   

Surplus

     186,505        185,763        184,964   

Retained earnings

     184,845        169,801        167,718   

Discount on preferred stock

     (983     (1,177     (1,240

Accumulated other comprehensive income

     11,038        3,571        9,099   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     451,581        428,085        430,596   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,914,457      $ 3,837,247      $ 3,859,323   
  

 

 

   

 

 

   

 

 

 

 

Page 13 of 16


UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

 

     Three Months Ended      Nine Months Ended  
     September 30      September 30  
     2011     2010      2011     2010  

Interest and dividend income:

         

Interest and fees on loans

   $ 42,664      $ 43,571       $ 126,999      $ 126,234   

Interest on Federal funds sold

     1        2         1        17   

Interest on deposits in other banks

     22        49         55        72   

Interest and dividends on securities:

         

Taxable

     3,148        3,176         10,405        10,218   

Nontaxable

     1,771        1,642         5,294        4,539   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest and dividend income

     47,606        48,440         142,754        141,080   
  

 

 

   

 

 

    

 

 

   

 

 

 

Interest expense:

         

Interest on deposits

     5,924        7,956         18,774        23,056   

Interest on Federal funds purchased

     —          5         7        19   

Interest on short-term borrowings

     466        367         838        1,628   

Interest on long-term borrowings

     1,770        1,463         5,266        4,001   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest expense

     8,160        9,791         24,885        28,704   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income

     39,446        38,649         117,869        112,376   

Provision for loan losses

     3,600        5,912         14,400        14,868   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income after provision for loan losses

     35,846        32,737         103,469        97,508   
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest income:

         

Service charges on deposit accounts

     2,294        2,243         6,568        6,795   

Other service charges, commissions and fees

     3,254        2,860         9,529        8,311   

Gains (losses) on securities transactions, net

     499        38         483        62   

Other-than-temporary impairment losses

     (400     —           (400     —     

Gains on sales of loans

     4,861        5,962         14,132        15,701   

Gains (losses) on sales of other real estate and bank premises, net

     118        332         (972     376   

Other operating income

     918        918         2,714        2,948   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest income

     11,544        12,353         32,054        34,193   
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest expenses:

         

Salaries and benefits

     18,076        17,451         53,310        50,269   

Occupancy expenses

     2,885        2,947         8,307        8,453   

Furniture and equipment expenses

     1,756        1,691         5,097        4,874   

Other operating expenses

     11,920        11,895         38,562        42,336   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest expenses

     34,637        33,984         105,276        105,932   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

     12,753        11,106         30,247        25,769   

Income tax expense

     3,682        3,033         8,162        7,271   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 9,071      $ 8,073       $ 22,085      $ 18,498   

Dividends paid and accumulated on preferred stock

     462        462         1,386        1,227   

Accretion of discount on preferred stock

     66        62         195        163   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to common shareholders

   $ 8,543      $ 7,549       $ 20,504      $ 17,108   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per common share, basic

   $ 0.33      $ 0.29       $ 0.79      $ 0.68   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per common share, diluted

   $ 0.33      $ 0.29       $ 0.79      $ 0.68   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

Page 14 of 16


AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

 

     For the Three Months Ended September 30,  
     2011     2010     2009  
     Average
Balance
    Interest
Income /
Expense
     Yield/
Rate (1)
    Average
Balance
    Interest
Income /
Expense
     Yield/
Rate (1)
    Average
Balance
    Interest
Income /
Expense
     Yield/
Rate (1)
 
     (Dollars in thousands)  

Assets:

                     

Securities:

                     

Taxable

   $ 429,780      $ 3,148         2.91   $ 420,394      $ 3,176         3.00   $ 279,394      $ 2,794         3.97

Tax-exempt

     167,709        2,726         6.45     151,622        2,527         6.61     119,597        2,140         7.10
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total securities (2)

     597,489        5,874         3.90     572,016        5,703         3.96     398,991        4,934         4.91

Loans, net (3) (4)

     2,831,924        42,323         5.93     2,827,451        43,062         6.04     1,872,906        28,054         5.94

Loans held for sale

     48,664        454         3.70     75,261        675         3.56     48,126        430         3.54

Federal funds sold

     519        —           0.24     12,960        2         0.04     304        —           0.18

Money market investments

     48        —           0.00     160        —           0.00     151        —           0.00

Interest-bearing deposits in other banks

     60,108        22         0.15     35,830        48         0.53     10,572        9         0.33

Other interest-bearing deposits

     —          —           0.00     —          —           0.00     2,598        —           0.00
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total earning assets

     3,538,752        48,673         5.46     3,523,678        49,490         5.57     2,333,648        33,427         5.68
    

 

 

        

 

 

        

 

 

    

Allowance for loan losses

     (40,320          (34,486          (30,321     

Total non-earning assets

     378,308             376,057             263,511        
  

 

 

        

 

 

        

 

 

      

Total assets

   $ 3,876,740           $ 3,865,249           $ 2,566,838        
  

 

 

        

 

 

        

 

 

      

Liabilities and Stockholders’ Equity:

                     

Interest-bearing deposits:

                     

Checking

   $ 383,452        173         0.18   $ 354,590        196         0.22   $ 199,063        83         0.17

Money market savings

     863,022        1,373         0.63     754,238        1,652         0.87     441,106        1,504         1.35

Regular savings

     176,728        172         0.39     152,219        124         0.32     101,923        97         0.38

Certificates of deposit: (5)

                     

$100,000 and over

     561,755        2,168         1.53     665,980        3,110         1.85     451,249        3,717         3.27

Under $100,000

     598,907        2,037         1.35     664,248        2,873         1.72     489,091        3,930         3.19
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing deposits

     2,583,864        5,923         0.91     2,591,275        7,955         1.22     1,682,432        9,331         2.20

Other borrowings (6)

     289,857        2,236         3.06     323,207        1,836         2.25     275,542        2,354         3.38
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

     2,873,721        8,159         1.13     2,914,482        9,791         1.33     1,957,974        11,685         2.37
    

 

 

        

 

 

        

 

 

    

Noninterest-bearing liabilities:

                     

Demand deposits

     521,928             489,633             302,207        

Other liabilities

     32,473             32,008             19,787        
  

 

 

        

 

 

        

 

 

      

Total liabilities

     3,428,122             3,436,123             2,279,968        

Stockholders’ equity

     448,618             429,126             286,870        
  

 

 

        

 

 

        

 

 

      

Total liabilities and stockholders’ equity

   $ 3,876,740           $ 3,865,249           $ 2,566,838        
  

 

 

        

 

 

        

 

 

      

Net interest income

     $ 40,514           $ 39,699           $ 21,742      
    

 

 

        

 

 

        

 

 

    

Interest rate spread (7)

          4.33          4.24          3.31

Interest expense as a percent of average earning assets

          0.91          1.10          1.99

Net interest margin (8)

          4.54          4.47          3.69

 

(1) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(2) Interest income on securities includes $93 thousand in accretion of the fair market value adjustments related to the acquisition of FMB. Remaining estimated accretion for 2011 is $93 thousand.
(3) Nonaccrual loans are included in average loans outstanding.
(4) Interest income on loans includes $1.3 million in accretion of the fair market value adjustments related to the acquisition of FMB. Remaining estimated FMB accretion for 2011 is $1.2 million for FMB. The Harrisonburg branch accretion was $267 thousand with $239 thousand estimated to remain in 2011.
(5) Interest expense on certificates of deposits includes $171 thousand in accretion of the fair market value adjustments related to the acquisition of FMB. Remaining estimated FMB accretion for 2011 is $140 thousand. The Harrisonburg branch accretion was $66 thousand with $35 thousand estimated to remain in 2011.
(6) Interest expense on borrowings includes $122 thousand in amortization of the fair market value adjustments related to the acquisition of FMB. Remaining estimated amortization for 2011 is $123 thousand.
(7) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.
(8) Core net interest margin excludes purchase accounting adjustments and was 4.34% for the quarter ending 9/30/11.

 

Page 15 of 16


AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

 

     For the Nine Months Ended September 30,  
     2011     2010     2009  
     Average
Balance
    Interest
Income /
Expense
     Yield /
Rate (1)
    Average
Balance
    Interest
Income /
Expense
     Yield /
Rate (1)
    Average
Balance
    Interest
Income /
Expense
     Yield /
Rate (1)
 
     (Dollars in thousands)  

Assets:

                     

Securities:

                     

Taxable

   $ 420,743      $ 10,405         3.31   $ 402,771      $ 10,218         3.39   $ 252,991      $ 7,860         4.15

Tax-exempt

     166,443        8,145         6.54     137,019        6,983         6.81     119,256        6,431         7.21
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total securities (2)

     587,186        18,550         4.22     539,790        17,201         4.26     372,247        14,291         5.13

Loans, net (3) (4)

     2,822,579        125,920         5.96     2,723,904        124,969         6.13     1,871,281        82,774         5.91

Loans held for sale

     48,366        1,486         4.11     60,020        1,838         4.09     46,150        1,441         4.17

Federal funds sold

     318        1         0.24     16,132        17         0.14     305        —           0.19

Money market investments

     120        —           0.00     160        —           0.00     116        —           0.00

Interest-bearing deposits in other banks

     35,444        55         0.21     37,151        71         0.26     62,765        123         0.26

Other interest-bearing deposits

     —          —           0.00     971        —           0.00     2,598        —           0.00
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total earning assets

     3,494,013        146,012         5.59     3,378,128        144,096         5.69     2,355,462        98,629         5.60
    

 

 

        

 

 

        

 

 

    

Allowance for loan losses

     (39,701          (33,419          (28,253     

Total non-earning assets

     384,436             373,398             254,991        
  

 

 

        

 

 

        

 

 

      

Total assets

   $ 3,838,748           $ 3,718,107           $ 2,582,200        
  

 

 

        

 

 

        

 

 

      

Liabilities and Stockholders’ Equity:

                     

Interest-bearing deposits:

                     

Checking

   $ 381,470        489         0.17   $ 339,910      $ 579         0.23   $ 200,156        250         0.17

Money market savings

     838,289        4,343         0.69     707,334        4,852         0.92     428,050        6,630         2.07

Regular savings

     171,113        467         0.36     150,326        440         0.39     99,291        295         0.40

Certificates of deposit: (5)

                     

$100,000 and over

     577,281        6,868         1.59     638,249        8,997         1.88     465,304        11,730         3.37

Under $100,000

     606,532        6,607         1.46     642,657        8,188         1.70     498,448        12,317         3.30
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing deposits

     2,574,685        18,774         0.97     2,478,476        23,056         1.24     1,691,249        31,222         2.47

Other borrowings (6)

     289,935        6,110         2.82     340,474        5,648         2.22     303,353        7,386         3.26
  

 

 

   

 

 

      

 

 

   

 

 

      

 

 

   

 

 

    

Total interest-bearing liabilities

     2,864,620        24,884         1.16     2,818,950        28,704         1.36     1,994,602        38,608         2.59
    

 

 

        

 

 

        

 

 

    

Noninterest-bearing liabilities:

                     

Demand deposits

     504,662             459,015             287,246        

Other liabilities

     28,945             28,341             20,576        
  

 

 

        

 

 

        

 

 

      

Total liabilities

     3,398,227             3,306,306             2,302,424        

Stockholders’ equity

     440,521             411,801             279,776        
  

 

 

        

 

 

        

 

 

      

Total liabilities and stockholders’ equity

   $ 3,838,748           $ 3,718,107           $ 2,582,200        
  

 

 

        

 

 

        

 

 

      

Net interest income

     $ 121,128           $ 115,392           $ 60,021      
    

 

 

        

 

 

        

 

 

    

Interest rate spread (7)

          4.43          4.33          3.01

Interest expense as a percent of average earning assets

          0.95          1.13          2.19

Net interest margin

          4.63          4.56          3.41

 

(1) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(2) Interest income on securities includes $294 thousand in accretion of the fair market value adjustments related to the acquisition of FMB.
(3) Nonaccrual loans are included in average loans outstanding.
(4) Interest income on loans includes $4.4 million in accretion of the fair market value adjustments related to the acquisition of FMB and $385 thousand related to the Harrisonburg branch.
(5) Interest expense on certificates of deposits includes $623 thousand in accretion of the fair market value adjustments related to the acquisition of FMB and $88 thousand related to the Harrisonburg branch.
(6) Interest expense on borrowings includes $367 thousand in amortization of the fair market value adjustments related to the acquisition of FMB.
(7) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.

 

Page 16 of 16