Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v2.4.0.8
SEGMENT REPORTING DISCLOSURES
 6 Months Ended
Jun. 30, 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 one banking subsidiary which has 131 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 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 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 charged the mortgage banking segment interest at the three month LIBOR rate plus 1.5% with a floor of 2.0% through May 31, 2014; beginning on June 1, 2014, the interest rate was the one month LIBOR rate plus 1.5% 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 six months ended June 30, 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 June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
63,401 

 

$
314 

 

$

 -

 

$
63,715 

Provision for loan losses

 
1,500 

 

 

 -

 

 

 -

 

 
1,500 

Net interest income after provision for loan losses

 
61,901 

 

 
314 

 

 

 -

 

 
62,215 

Noninterest income

 
13,846 

 

 
3,028 

 

 
(170)

 

 
16,704 

Noninterest expenses

 
55,349 

 

 
4,296 

 

 
(170)

 

 
59,475 

Income (loss) before income taxes

 
20,398 

 

 
(954)

 

 

 -

 

 
19,444 

Income tax expense (benefit)

 
5,016 

 

 
(352)

 

 

 -

 

 
4,664 

Net income (loss)

$
15,382 

 

$
(602)

 

$

 -

 

$
14,780 

Total assets

$
7,305,078 

 

$
77,299 

 

$
(75,297)

 

$
7,307,080 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
36,960 

 

$
443 

 

$

 -

 

$
37,403 

Provision for loan losses

 
1,000 

 

 

 -

 

 

 -

 

 
1,000 

Net interest income after provision for loan losses

 
35,960 

 

 
443 

 

 

 -

 

 
36,403 

Noninterest income

 
6,798 

 

 
4,668 

 

 
(167)

 

 
11,299 

Noninterest expenses

 
29,793 

 

 
4,657 

 

 
(167)

 

 
34,283 

Income before income taxes

 
12,965 

 

 
454 

 

 

 -

 

 
13,419 

Income tax expense

 
3,796 

 

 
160 

 

 

 -

 

 
3,956 

Net income

$
9,169 

 

$
294 

 

$

 -

 

$
9,463 

Total assets

$
4,045,163 

 

$
121,392 

 

$
(109,998)

 

$
4,056,557 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
126,927 

 

$
546 

 

$

 -

 

$
127,473 

Provision for loan losses

 
1,500 

 

 

 -

 

 

 -

 

 
1,500 

Net interest income after provision for loan losses

 
125,427 

 

 
546 

 

 

 -

 

 
125,973 

Noninterest income

 
25,917 

 

 
5,328 

 

 
(341)

 

 
30,904 

Noninterest expenses

 
118,591 

 

 
9,006 

 

 
(341)

 

 
127,256 

Income (loss) before income taxes

 
32,753 

 

 
(3,132)

 

 

 -

 

 
29,621 

Income tax expense (benefit)

 
8,176 

 

 
(1,150)

 

 

 -

 

 
7,026 

Net income (loss)

$
24,577 

 

$
(1,982)

 

$

 -

 

$
22,595 

Total assets

$
7,305,078 

 

$
77,299 

 

$
(75,297)

 

$
7,307,080 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
74,147 

 

$
1,010 

 

$

 -

 

$
75,157 

Provision for loan losses

 
3,050 

 

 

 -

 

 

 -

 

 
3,050 

Net interest income after provision for loan losses

 
71,097 

 

 
1,010 

 

 

 -

 

 
72,107 

Noninterest income

 
12,945 

 

 
8,522 

 

 
(334)

 

 
21,133 

Noninterest expenses

 
59,338 

 

 
8,779 

 

 
(334)

 

 
67,783 

Income before income taxes

 
24,704 

 

 
753 

 

 

 -

 

 
25,457 

Income tax expense

 
6,731 

 

 
280 

 

 

 -

 

 
7,011 

Net income

$
17,973 

 

$
473 

 

$

 -

 

$
18,446 

Total assets

$
4,045,163 

 

$
121,392 

 

$
(109,998)

 

$
4,056,557