Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v3.4.0.3
SEGMENT REPORTING DISCLOSURES
 3 Months Ended
Mar. 31, 2016
SEGMENT REPORTING DISCLOSURES [Abstract]  
SEGMENT REPORTING DISCLOSURES

11.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 124 retail locations in Virginia.  The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North 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.  The interest rate on the warehouse line of credit for both the three months ended March 31, 2016 and 2015 was the three month LIBOR rate plus 0.15% with no floor.  These transactions are eliminated in the consolidation process. 



During 2015, the mortgage segment began originating loans with the intent that they be held for investment purposes. The community bank segment provides the mortgage segment with the long-term funds needed to originate these loans through a long-term funding facility and charges the mortgage segment interest. The interest charged is determined by the community bank segment based on the cost of funds available to the community bank segment for similar durations of the loans being funded by the mortgage segment.



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, 2016 and 2015 is as follows (dollars in thousands):









 

 

 

 

 

 

 

 

 

 

 

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

SEGMENT FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Community Bank

 

Mortgage

 

Eliminations

 

Consolidated

Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

 63,425 

 

$

 306 

 

$

 -

 

$

 63,731 

Provision for credit losses

 

 2,500 

 

 

 104 

 

 

 -

 

 

 2,604 

Net interest income after provision for credit losses

 

 60,925 

 

 

 202 

 

 

 -

 

 

 61,127 

Noninterest income

 

 13,608 

 

 

 2,477 

 

 

 (171)

 

 

 15,914 

Noninterest expenses

 

 51,844 

 

 

 2,599 

 

 

 (171)

 

 

 54,272 

Income before income taxes

 

 22,689 

 

 

 80 

 

 

 -

 

 

 22,769 

Income tax expense

 

 5,782 

 

 

 26 

 

 

 -

 

 

 5,808 

Net income

$

 16,907 

 

$

 54 

 

$

 -

 

$

 16,961 

Total assets

$

 7,825,652 

 

$

 55,069 

 

$

 (48,110)

 

$

 7,832,611 



 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2015

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

 61,723 

 

$

 246 

 

$

 -

 

$

 61,969 

Provision for credit losses

 

 1,750 

 

 

 -

 

 

 -

 

 

 1,750 

Net interest income after provision for credit losses

 

 59,973 

 

 

 246 

 

 

 -

 

 

 60,219 

Noninterest income

 

 12,848 

 

 

 2,376 

 

 

 (170)

 

 

 15,054 

Noninterest expenses

 

 50,972 

 

 

 3,038 

 

 

 (170)

 

 

 53,840 

Income (loss) before income taxes

 

 21,849 

 

 

 (416)

 

 

 -

 

 

 21,433 

Income tax expense (benefit)

 

 5,881 

 

 

 (149)

 

 

 -

 

 

 5,732 

Net income (loss)

$

 15,968 

 

$

 (267)

 

$

 -

 

$

 15,701 

Total assets

$

 7,382,266 

 

$

 55,380 

 

$

 (49,087)

 

$

 7,388,559