Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING DISCLOSURES

v3.3.0.814
SEGMENT REPORTING DISCLOSURES
 9 Months Ended
Sep. 30, 2015
SEGMENT REPORTING DISCLOSURES [Abstract]  
SEGMENT REPORTING DISCLOSURES

 

12.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 the three and nine months ended September 30, 2015 was the three month LIBOR rate plus 0.15% with no floor.  During 2014, the interest rate on the warehouse line of credit was 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 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, 2015 and 2014 is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

SEGMENT FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Bank

 

Mortgage

 

Eliminations

 

Consolidated

Three Months Ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
63,075 

 

$
369 

 

$

 -

 

$
63,444 

Provision for credit losses

 
2,000 

 

 
62 

 

 

 -

 

 
2,062 

Net interest income after provision for credit losses

 
61,075 

 

 
307 

 

 

 -

 

 
61,382 

Noninterest income

 
14,287 

 

 
2,608 

 

 
(170)

 

 
16,725 

Noninterest expenses

 
50,674 

 

 
2,821 

 

 
(170)

 

 
53,325 

Income (loss) before income taxes

 
24,688 

 

 
94 

 

 

 -

 

 
24,782 

Income tax expense (benefit)

 
6,531 

 

 
35 

 

 

 -

 

 
6,566 

Net income (loss)

$
18,157 

 

$
59 

 

$

 -

 

$
18,216 

Total assets

$
7,588,606 

 

$
62,127 

 

$
(56,420)

 

$
7,594,313 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
64,162 

 

$
317 

 

$

 -

 

$
64,479 

Provision for credit losses

 
1,800 

 

 

 -

 

 

 -

 

 
1,800 

Net interest income after provision for credit losses

 
62,362 

 

 
317 

 

 

 -

 

 
62,679 

Noninterest income

 
13,884 

 

 
2,604 

 

 
(170)

 

 
16,318 

Noninterest expenses

 
55,680 

 

 
3,903 

 

 
(170)

 

 
59,413 

Income (loss) before income taxes

 
20,566 

 

 
(982)

 

 

 -

 

 
19,584 

Income tax expense (benefit)

 
5,121 

 

 
(354)

 

 

 -

 

 
4,767 

Net income (loss)

$
15,445 

 

$
(628)

 

$

 -

 

$
14,817 

Total assets

$
7,188,596 

 

$
41,857 

 

$
(36,570)

 

$
7,193,883 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
188,240 

 

$
989 

 

$

 -

 

$
189,229 

Provision for credit losses

 
7,450 

 

 
111 

 

 

 -

 

 
7,561 

Net interest income after provision for credit losses

 
180,790 

 

 
878 

 

 

 -

 

 
181,668 

Noninterest income

 
40,658 

 

 
7,844 

 

 
(512)

 

 
47,990 

Noninterest expenses

 
154,011 

 

 
8,906 

 

 
(512)

 

 
162,405 

Income (loss) before income taxes

 
67,437 

 

 
(184)

 

 

 -

 

 
67,253 

Income tax expense (benefit)

 
18,060 

 

 
(71)

 

 

 -

 

 
17,989 

Net income (loss)

$
49,377 

 

$
(113)

 

$

 -

 

$
49,264 

Total assets

$
7,588,606 

 

$
62,127 

 

$
(56,420)

 

$
7,594,313 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
191,090 

 

$
863 

 

$

 -

 

$
191,953 

Provision for credit losses

 
3,300 

 

 

 -

 

 

 -

 

 
3,300 

Net interest income after provision for credit losses

 
187,790 

 

 
863 

 

 

 -

 

 
188,653 

Noninterest income

 
38,964 

 

 
7,932 

 

 
(511)

 

 
46,385 

Noninterest expenses

 
173,268 

 

 
12,908 

 

 
(511)

 

 
185,665 

Income (loss) before income taxes

 
53,486 

 

 
(4,113)

 

 

 -

 

 
49,373 

Income tax expense (benefit)

 
13,678 

 

 
(1,504)

 

 

 -

 

 
12,174 

Net income (loss)

$
39,808 

 

$
(2,609)

 

$

 -

 

$
37,199 

Total assets

$
7,188,596 

 

$
41,857 

 

$
(36,570)

 

$
7,193,883