Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v2.4.0.8
SEGMENT REPORTING DISCLOSURES
 3 Months Ended
Mar. 31, 2014
SEGMENT REPORTING DISCLOSURES [Abstract]  
SEGMENT REPORTING DISCLOSURES

 

13.SEGMENT REPORTING DISCLOSURES

 

The Company has two reportable segments: a  traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment provides loan, deposit, investment, and trust services to retail and commercial customers throughout Virginia.  The community bank segment includes the Company’s two banking subsidiaries which have 144 branches in total throughout Virginia as well as trust and wealth management services.  Non-bank affiliates of the Company include Union Investment Services, Inc., which provides full brokerage services, and Union Insurance Group, LLC, which offers various lines of insurance products.  The mortgage segment, which includes UMG and StellarOne’s mortgage operations, provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland, and the Washington D.C. metro area.  These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.  Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service-based.  The mortgage business is a fee-based business while the bank is driven principally by net interest income.  The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business.  The mortgage segment offers a more limited referral network for the bank segment, due largely to the minimal degree of overlapping geographic markets. 

 

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest at the three month LIBOR rate plus 1.5% with a floor of  2.0%.  These transactions are eliminated in the consolidation process.  A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

 

Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three months ended March 31, 2014 and 2013 is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Community Bank

 

Mortgage

 

Eliminations

 

Consolidated

Three Months Ended March 31, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
63,526 

 

$
232 

 

$

 -

 

$
63,758 

Provision for loan losses

 

 -

 

 

 -

 

 

 -

 

 

 -

Net interest income after provision for loan losses

 
63,526 

 

 
232 

 

 

 -

 

 
63,758 

Noninterest income

 
12,071 

 

 
2,300 

 

 
(171)

 

 
14,200 

Noninterest expenses

 
63,242 

 

 
4,710 

 

 
(171)

 

 
67,781 

Income (loss) before income taxes

 
12,355 

 

 
(2,178)

 

 

 -

 

 
10,177 

Income tax expense (benefit)

 
3,160 

 

 
(798)

 

 

 -

 

 
2,362 

Net income (loss)

$
9,195 

 

$
(1,380)

 

$

 -

 

$
7,815 

Total assets

$
7,282,443 

 

$
57,705 

 

$
(45,511)

 

$
7,294,637 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
37,188 

 

$
565 

 

$

 -

 

$
37,753 

Provision for loan losses

 
2,050 

 

 

 -

 

 

 -

 

 
2,050 

Net interest income after provision for loan losses

 
35,138 

 

 
565 

 

 

 -

 

 
35,703 

Noninterest income

 
6,146 

 

 
3,856 

 

 
(167)

 

 
9,835 

Noninterest expenses

 
29,544 

 

 
4,124 

 

 
(167)

 

 
33,501 

Income before income taxes

 
11,740 

 

 
297 

 

 

 -

 

 
12,037 

Income tax expense

 
2,934 

 

 
120 

 

 

 -

 

 
3,054 

Net income

$
8,806 

 

$
177 

 

$

 -

 

$
8,983 

Total assets

$
4,031,302 

 

$
136,238 

 

$
(116,405)

 

$
4,051,135