Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v3.8.0.1
SEGMENT REPORTING DISCLOSURES
 3 Months Ended
Mar. 31, 2018
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 150 retail locations throughout Virginia and in portions of Maryland and North Carolina as of March 31, 2018. 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 months ended March 31, 2018 and 2017 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 months ended March 31, 2018 and 2017 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
 
Community Bank
 
Mortgage
 
Eliminations
 
Consolidated
Three Months Ended March 31, 2018
 

 
 

 
 

 
 

Net interest income
$
103,314

 
$
433

 
$
—

 
$
103,747

Provision for credit losses
3,524

 
(24
)
 
—

 
3,500

Net interest income after provision for credit losses
99,790

 
457

 
—

 
100,247

Noninterest income
20,157

 
2,278

 
(126
)
 
22,309

Noninterest expenses
101,669

 
2,465

 
(126
)
 
104,008

Income before income taxes
18,278

 
270

 
—

 
18,548

Income tax expense
1,847

 
62

 
—

 
1,909

Net income
$
16,431

 
$
208

 
$
—

 
$
16,639

Total assets
$
13,140,316

 
$
100,587

 
$
(91,611
)
 
$
13,149,292

 
 
 
 
 
 
 
 
Three Months Ended March 31, 2017
 

 
 

 
 

 
 

Net interest income
$
66,234

 
$
333

 
$
—

 
$
66,567

Provision for credit losses
2,104

 
18

 
—

 
2,122

Net interest income after provision for credit losses
64,130

 
315

 
—

 
64,445

Noninterest income
16,757

 
2,223

 
(141
)
 
18,839

Noninterest expenses
55,014

 
2,522

 
(141
)
 
57,395

Income before income taxes
25,873

 
16

 
—

 
25,889

Income tax expense
6,753

 
12

 
—

 
6,765

Net income
$
19,120

 
$
4

 
$
—

 
$
19,124

Total assets
$
8,660,987

 
$
76,818

 
$
(67,885
)
 
$
8,669,920