Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v2.4.0.8
SEGMENT REPORTING DISCLOSURES
 9 Months Ended
Sep. 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.

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 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 nine months ended September 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 September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
64,162 

 

$
317 

 

$

 -

 

$
64,479 

Provision for loan losses

 
1,800 

 

 

 -

 

 

 -

 

 
1,800 

Net interest income after provision for loan losses

 
62,362 

 

 
317 

 

 

 -

 

 
62,679 

Noninterest income

 
14,308 

 

 
2,604 

 

 
(170)

 

 
16,742 

Noninterest expenses

 
56,188 

 

 
3,903 

 

 
(170)

 

 
59,921 

Income (loss) before income taxes

 
20,482 

 

 
(982)

 

 

 -

 

 
19,500 

Income tax expense (benefit)

 
4,930 

 

 
(354)

 

 

 -

 

 
4,576 

Net income (loss)

$
15,552 

 

$
(628)

 

$

 -

 

$
14,924 

Total assets

$
7,189,047 

 

$
41,857 

 

$
(36,570)

 

$
7,194,334 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
37,465 

 

$
393 

 

$

 -

 

$
37,858 

Provision for loan losses

 
1,800 

 

 

 -

 

 

 -

 

 
1,800 

Net interest income after provision for loan losses

 
35,665 

 

 
393 

 

 

 -

 

 
36,058 

Noninterest income

 
7,322 

 

 
2,062 

 

 
(168)

 

 
9,216 

Noninterest expenses

 
29,904 

 

 
4,396 

 

 
(168)

 

 
34,132 

Income (loss) before income taxes

 
13,083 

 

 
(1,941)

 

 

 -

 

 
11,142 

Income tax expense (benefit)

 
3,902 

 

 
(706)

 

 

 -

 

 
3,196 

Net income (loss)

$
9,181 

 

$
(1,235)

 

$

 -

 

$
7,946 

Total assets

$
4,041,661 

 

$
69,010 

 

$
(63,563)

 

$
4,047,108 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
191,090 

 

$
863 

 

$

 -

 

$
191,953 

Provision for loan losses

 
3,300 

 

 

 -

 

 

 -

 

 
3,300 

Net interest income after provision for loan losses

 
187,790 

 

 
863 

 

 

 -

 

 
188,653 

Noninterest income

 
40,224 

 

 
7,932 

 

 
(511)

 

 
47,645 

Noninterest expenses

 
174,780 

 

 
12,908 

 

 
(511)

 

 
187,177 

Income (loss) before income taxes

 
53,234 

 

 
(4,113)

 

 

 -

 

 
49,121 

Income tax expense (benefit)

 
13,106 

 

 
(1,504)

 

 

 -

 

 
11,602 

Net income (loss)

$
40,128 

 

$
(2,609)

 

$

 -

 

$
37,519 

Total assets

$
7,189,047 

 

$
41,857 

 

$
(36,570)

 

$
7,194,334 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
111,612 

 

$
1,402 

 

$

 -

 

$
113,014 

Provision for loan losses

 
4,850 

 

 

 -

 

 

 -

 

 
4,850 

Net interest income after provision for loan losses

 
106,762 

 

 
1,402 

 

 

 -

 

 
108,164 

Noninterest income

 
20,266 

 

 
10,586 

 

 
(503)

 

 
30,349 

Noninterest expenses

 
89,242 

 

 
13,176 

 

 
(503)

 

 
101,915 

Income (loss) before income taxes

 
37,786 

 

 
(1,188)

 

 

 -

 

 
36,598 

Income tax expense (benefit)

 
10,633 

 

 
(427)

 

 

 -

 

 
10,206 

Net income (loss)

$
27,153 

 

$
(761)

 

$

 -

 

$
26,392 

Total assets

$
4,041,661 

 

$
69,010 

 

$
(63,563)

 

$
4,047,108