Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v3.8.0.1
SEGMENT REPORTING DISCLOSURES
9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
SEGMENT REPORTING DISCLOSURES
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 111 retail locations in Virginia as of September 30, 2017. 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 segment's business is a primarily fee-based business, while the community bank segment is driven principally by net interest income. The community 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 the three and nine months ended September 30, 2017 and 2016 was the three month LIBOR rate plus 0.15% with no floor. 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 nine months ended September 30, 2017 and 2016 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
 
Community Bank
 
Mortgage
 
Eliminations
 
Consolidated
Three Months Ended September 30, 2017
 

 
 

 
 

 
 

Net interest income
$
70,718

 
$
480

 
$

 
$
71,198

Provision for credit losses
3,056

 
(6
)
 

 
3,050

Net interest income after provision for credit losses
67,662

 
486

 

 
68,148

Noninterest income
15,121

 
2,527

 
(112
)
 
17,536

Noninterest expenses
55,133

 
2,475

 
(112
)
 
57,496

Income before income taxes
27,650

 
538

 

 
28,188

Income tax expense
7,339

 
191

 

 
7,530

Net income
$
20,311

 
$
347

 
$

 
$
20,658

Total assets
$
9,020,486

 
$
97,154

 
$
(88,204
)
 
$
9,029,436

 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 

 
 

 
 

 
 

Net interest income
$
66,605

 
$
423

 
$

 
$
67,028

Provision for credit losses
2,455

 
17

 

 
2,472

Net interest income after provision for credit losses
64,150

 
406

 

 
64,556

Noninterest income
15,589

 
3,501

 
(140
)
 
18,950

Noninterest expenses
54,353

 
2,700

 
(140
)
 
56,913

Income before income taxes
25,386

 
1,207

 

 
26,593

Income tax expense
5,770

 
422

 

 
6,192

Net income
$
19,616

 
$
785

 
$

 
$
20,401

Total assets
$
8,251,351

 
$
90,692

 
$
(83,813
)
 
$
8,258,230

 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017
 

 
 

 
 

 
 

Net interest income
$
205,534

 
$
1,231

 
$

 
$
206,765

Provision for credit losses
7,344

 
1

 

 
7,345

Net interest income after provision for credit losses
198,190

 
1,230

 

 
199,420

Noninterest income
47,080

 
7,743

 
(393
)
 
54,430

Noninterest expenses
167,643

 
7,571

 
(393
)
 
174,821

Income before income taxes
77,627

 
1,402

 

 
79,029

Income tax expense
20,791

 
501

 

 
21,292

Net income
$
56,836

 
$
901

 
$

 
$
57,737

Total assets
$
9,020,486

 
$
97,154

 
$
(88,204
)
 
$
9,029,436

 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016
 

 
 

 
 

 
 

Net interest income
$
195,508

 
$
1,027

 
$

 
$
196,535

Provision for credit losses
7,215

 
161

 

 
7,376

Net interest income after provision for credit losses
188,293

 
866

 

 
189,159

Noninterest income
44,137

 
9,185

 
(465
)
 
52,857

Noninterest expenses
158,964

 
7,937

 
(465
)
 
166,436

Income before income taxes
73,466

 
2,114

 

 
75,580

Income tax expense
18,145

 
736

 

 
18,881

Net income
$
55,321

 
$
1,378

 
$

 
$
56,699

Total assets
$
8,251,351

 
$
90,692

 
$
(83,813
)
 
$
8,258,230