Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v3.2.0.727
SEGMENT REPORTING DISCLOSURES
 6 Months Ended
Jun. 30, 2015
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 includes one subsidiary bank, the Bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 131 retail locations in Virginia.  The mortgage segment includes UMG, which 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 primarily 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.

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 0.15% with no floor, effective January 1, 2015.  During the three and six months ended June 30, 2014, the interest rate on the warehouse line of credit was 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 and six months ended June 30, 2015 and 2014 is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

SEGMENT FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Bank

 

Mortgage

 

Eliminations

 

Consolidated

Three Months Ended June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
63,441 

 

$
375 

 

$

 -

 

$
63,816 

Provision for credit losses

 
3,700 

 

 
49 

 

 

 -

 

 
3,749 

Net interest income after provision for credit losses

 
59,741 

 

 
326 

 

 

 -

 

 
60,067 

Noninterest income

 
13,523 

 

 
2,860 

 

 
(171)

 

 
16,212 

Noninterest expenses

 
52,365 

 

 
3,047 

 

 
(171)

 

 
55,241 

Income before income taxes

 
20,899 

 

 
139 

 

 

 -

 

 
21,038 

Income tax expense

 
5,646 

 

 
44 

 

 

 -

 

 
5,690 

Net income

$
15,253 

 

$
95 

 

$

 -

 

$
15,348 

Total assets

$
7,495,564 

 

$
55,563 

 

$
(53,421)

 

$
7,497,706 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
63,401 

 

$
314 

 

$

 -

 

$
63,715 

Provision for credit losses

 
1,500 

 

 

 -

 

 

 -

 

 
1,500 

Net interest income after provision for credit losses

 
61,901 

 

 
314 

 

 

 -

 

 
62,215 

Noninterest income

 
13,422 

 

 
3,028 

 

 
(170)

 

 
16,280 

Noninterest expenses

 
54,841 

 

 
4,296 

 

 
(170)

 

 
58,967 

Income (loss) before income taxes

 
20,482 

 

 
(954)

 

 

 -

 

 
19,528 

Income tax expense (benefit)

 
5,207 

 

 
(352)

 

 

 -

 

 
4,855 

Net income (loss)

$
15,275 

 

$
(602)

 

$

 -

 

$
14,673 

Total assets

$
7,304,704 

 

$
77,299 

 

$
(75,297)

 

$
7,306,706 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
125,164 

 

$
621 

 

$

 -

 

$
125,785 

Provision for credit losses

 
5,450 

 

 
49 

 

 

 -

 

 
5,499 

Net interest income after provision for credit losses

 
119,714 

 

 
572 

 

 

 -

 

 
120,286 

Noninterest income

 
26,371 

 

 
5,236 

 

 
(341)

 

 
31,266 

Noninterest expenses

 
103,337 

 

 
6,085 

 

 
(341)

 

 
109,081 

Income (loss) before income taxes

 
42,748 

 

 
(277)

 

 

 -

 

 
42,471 

Income tax expense (benefit)

 
11,527 

 

 
(105)

 

 

 -

 

 
11,422 

Net income (loss)

$
31,221 

 

$
(172)

 

$

 -

 

$
31,049 

Total assets

$
7,495,564 

 

$
55,563 

 

$
(53,421)

 

$
7,497,706 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
126,927 

 

$
546 

 

$

 -

 

$
127,473 

Provision for credit losses

 
1,500 

 

 

 -

 

 

 -

 

 
1,500 

Net interest income after provision for credit losses

 
125,427 

 

 
546 

 

 

 -

 

 
125,973 

Noninterest income

 
25,081 

 

 
5,328 

 

 
(341)

 

 
30,068 

Noninterest expenses

 
117,587 

 

 
9,006 

 

 
(341)

 

 
126,252 

Income (loss) before income taxes

 
32,921 

 

 
(3,132)

 

 

 -

 

 
29,789 

Income tax expense (benefit)

 
8,557 

 

 
(1,150)

 

 

 -

 

 
7,407 

Net income (loss)

$
24,364 

 

$
(1,982)

 

$

 -

 

$
22,382 

Total assets

$
7,304,704 

 

$
77,299 

 

$
(75,297)

 

$
7,306,706