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CST: 19/07/2019 07:45:41   

Union Bankshares Reports Fourth Quarter and Full Year Results

178 Days ago

RICHMOND, Va., Jan. 22, 2019 (GLOBE NEWSWIRE) -- Union Bankshares Corporation (the “Company” or “Union”) (Nasdaq: UBSH) today reported net income of $44.1 million and earnings per share of $0.67 for its fourth quarter ended December 31, 2018.  Net operating earnings(1) were $46.2 million and operating earnings per share(1) was $0.70 for its fourth quarter ended December 31, 2018; these operating results exclude $2.2 million in after-tax merger-related costs but include losses from discontinued operations of $192,000.

For the year ended December 31, 2018, net income was $146.2 million and earnings per share was $2.22. Net operating earnings(1) were $178.3 million and operating earnings per share(1) was $2.71 for the year ended December 31, 2018; these operating results exclude $32.1 million in after-tax merger-related costs but include losses from discontinued operations of $3.2 million.

Union closed out our transformative 2018 year with a strong fourth quarter,” said John C. Asbury, President and CEO of Union Bankshares Corporation. “We accomplished what we said we would do by hitting each one of our top tier financial targets showing the underlying strength and earnings potential of this uniquely valuable franchise.

“We had stronger than expected loan growth for the quarter which brought our full year loan growth back in line with our initial expectations for 2018.  With the Access National Corporation acquisition about to close, 2019 looks to be another year of positive change and financial improvement as Union evolves into a mid-Atlantic regional bank.”

On January 11, 2019, the Company and Access National Corporation ("Access") jointly announced the receipt of regulatory approval from the Federal Reserve Bank of Richmond and from the Virginia State Corporation Commission to move forward with the proposed merger of Access into the Company (the "Pending Access Merger"). Further, on January 15, 2019, the Company and Access jointly announced that, at separate special meetings, the shareholders of both the Company and Access approved the Pending Access Merger. The Pending Access Merger is expected to close February 1, 2019.

Select highlights for the fourth quarter of 2018

  • Return on Average Assets (“ROA”) was 1.29% compared to 1.17% in the third quarter of 2018. Operating ROA(1) was 1.36% compared to 1.21% in the third quarter of 2018.
  • Return on Average Equity (“ROE”) was 9.21% compared to 8.06% in the third quarter of 2018. Operating ROE(1) was 9.66% compared to 8.30% in the third quarter of 2018.
  • Return on Average Tangible Common Equity (“ROTCE”)(1) was 16.42% compared to 14.72% in the third quarter of 2018. Operating ROTCE(1) was 17.18% compared to 15.13% in the third quarter of 2018.
  • Efficiency ratio decreased to 56.2% compared to 60.7% in the third quarter of 2018. Operating efficiency ratio (FTE)(1) decreased to 53.5% compared to 58.6% in the third quarter of 2018.

Select highlights for the full year 2018

  • ROA was 1.11% compared to 0.83% for the year ended 2017. Operating ROA(1) was 1.35% compared to 0.95% for the year ended 2017.
  • ROE was 7.85% compared to 7.07% for the year ended 2017. Operating ROE(1) was 9.57% compared to 8.11% for the year ended 2017.
  • ROTCE(1) was 14.40% compared to 10.75% for the year ended 2017. Operating ROTCE(1) was 17.35% compared to 12.24% for the year ended 2017.
  • Efficiency ratio decreased to 63.6% compared to 66.1% for the year ended 2017. Operating efficiency ratio (FTE)(1) decreased to 55.3% compared to 62.4% for the year ended 2017.

(1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

NET INTEREST INCOME

For the fourth quarter of 2018, net interest income was $109.1 million, an increase of $3.1 million from the third quarter of 2018.  Net interest income (FTE)(1) was $111.4 million in the fourth quarter of 2018, an increase of $3.4 million from the third quarter of 2018. The increases in both net interest income and net interest income (FTE) were primarily driven by loan growth during the quarter ended December 31, 2018. The fourth quarter net interest margin decreased 7 basis points to 3.62% from 3.69% in the previous quarter, while the net interest margin (FTE)(1) decreased 6 basis points to 3.70% from 3.76% during the same periods.  The decreases in the net interest margin and net interest margin (FTE) were principally due to an approximately 15 basis point increase in the cost of funds, partially offset by an approximately 9 basis point increase in the yield on earnings assets..

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments.  During the fourth quarter of 2018, net accretion related to acquisition accounting decreased $182,000 from the prior quarter to $3.8 million for the quarter ended December 31, 2018.  The third and fourth quarters of 2018 and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):

  Loan
Accretion
  Deposit
Accretion
  Borrowings
Amortization
  Total
For the quarter ended September 30, 2018 3,496   592   (143 )   $ 3,945  
For the quarter ended December 31, 2018 3,479   445   (161 )   3,763  
For the year ended December 31, 2018 17,145   2,553   (506 )   19,192  
For the years ending (estimated):(2)              
2019 10,538   1,170   (660 )   11,048  
2020 8,130   284   (734 )   7,680  
2021 6,614   108   (805 )   5,917  
2022 4,984   21   (827 )   4,178  
2023 2,996     (850 )   2,146  
Thereafter 10,550     (11,633 )   (1,083 )

(1) For the reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of Key Financial Results.
(2) Estimated net accretion only includes accretion for the previously completed acquisitions.  The accretion effects of the Pending Access Merger are not included in the information above.

ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the fourth quarter of 2018, the Company experienced decreases in nonperforming asset (“NPA”) balances from the prior quarter, primarily due to an increase in charge-offs related to two credit relationships composed of construction and land development loans. Past due loan levels as a percentage of total loans held for investment at December 31, 2018 were higher than past due loan levels at September 30, 2018 and December 31, 2017. Charge-off levels increased from the third quarter of 2018 and were primarily related to the consumer loan portfolio; as a result, the provision for loan losses increased from the third quarter of 2018.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $90.2 million (net of fair value mark of $23.3 million) at December 31, 2018.

Nonperforming Assets
At December 31, 2018, NPAs totaled $33.7 million, a decline of $1.2 million, or 3.5%, from September 30, 2018 and an increase of $6.7 million, or 24.7%, from December 31, 2017.  NPAs as a percentage of total outstanding loans at December 31, 2018 were 0.35%, a decrease of 2 basis points from 0.37% at September 30, 2018 and a decline of 3 basis points from 0.38% at December 31, 2017.  As the Company's NPAs have been at or near historic lows over the last several quarters, certain changes from quarter to quarter might stand out in comparison to one another but do not have a significant impact on the Company's overall asset quality position.

The following table shows a summary of nonperforming asset balances at the quarter ended (dollars in thousands):

  December 31,   September 30,   June 30,   March 31,   December 31,
  2018   2018   2018   2018   2017
Nonaccrual loans $ 26,953     $ 28,110     $ 25,662     $ 25,138     $ 21,743  
Foreclosed properties 6,722     6,800     7,241     8,079     5,253  
Total nonperforming assets $ 33,675     $ 34,910     $ 32,903     $ 33,217     $ 26,996  

The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

  December 31,   September 30,   June 30,   March 31,   December 31,
  2018   2018   2018   2018   2017
Beginning Balance $ 28,110     $ 25,662     $ 25,138     $ 21,743     $ 20,122  
Net customer payments (3,077 )   (2,459 )   (2,651 )   (1,455 )   (768 )
Additions 4,659     6,268     5,063     5,451     4,335  
Charge-offs (2,069 )   (1,137 )   (539 )   (403 )   (1,305 )
Loans returning to accruing status (420 )   (70 )   (1,349 )   (182 )   (448 )
Transfers to foreclosed property (250 )   (154 )       (16 )   (193 )
Ending Balance $ 26,953     $ 28,110     $ 25,662     $ 25,138     $ 21,743  

The following table shows the activity in foreclosed properties for the quarter ended (dollars in thousands):

  December 31,   September 30,   June 30,   March 31,   December 31,
  2018   2018   2018   2018   2017
Beginning Balance $ 6,800     $ 7,241     $ 8,079     $ 5,253     $ 6,449  
Additions of foreclosed property 432     165     283     44     325  
Acquisitions of foreclosed property (1)         (162 )   4,204      
Valuation adjustments (140 )   (42 )   (383 )   (759 )   (1,046 )
Proceeds from sales (286 )   (889 )   (580 )   (684 )   (479 )
Gains (losses) from sales (84 )   325     4     21     4  
Ending Balance $ 6,722     $ 6,800     $ 7,241     $ 8,079     $ 5,253  

(1) Includes subsequent measurement period adjustments.

Past Due Loans
Past due loans still accruing interest totaled $61.9 million, or 0.64% of total loans, at December 31, 2018 compared to $46.6 million, or 0.49% of total loans, at September 30, 2018 and $27.8 million, or 0.39% of total loans, at December 31, 2017.  Of the total past due loans still accruing interest, $8.9 million, or 0.09% of total loans, were loans past due 90 days or more at December 31, 2018, compared to $9.5 million, or 0.10% of total loans, at September 30, 2018 and $3.5 million, or 0.05% of total loans, at December 31, 2017. The increase in past due loans was primarily driven by a seasonal increase related to residential 1-4 family loans that were 30 days past due as of year-end of which the majority subsequently became current.

Net Charge-offs
For the fourth quarter of 2018, net charge-offs were $5.0 million, or 0.21% of total average loans on an annualized basis, compared to $3.2 million, or 0.13%, for the prior quarter and $2.7 million, or 0.15%, for the same quarter last year. The majority of net charge-offs in the fourth quarter of 2018 were related to consumer loans. For the year ended December 31, 2018, net charge-offs were $11.1 million, or 0.12% of total average loans, compared to $10.1 million, or 0.15%, for the year ended 2017.

Provision for Loan Losses
The provision for loan losses for the fourth quarter of 2018 was $4.8 million, an increase of $1.7 million compared to the previous quarter and an increase of $1.0 million compared to the same quarter in 2017.  The increase in provision for loan losses from the third quarter of 2018 was primarily driven by loan growth and higher levels of net charge-offs in the fourth quarter of 2018.

Allowance for Loan Losses (“ALL”)
The ALL decreased $249,000 from September 30, 2018 to $41.0 million at December 31, 2018 primarily due to a decrease in historical loss rates.  The ALL as a percentage of the total loan portfolio was 0.42% at December 31, 2018, 0.44% at September 30, 2018, and 0.54% at December 31, 2017. The year-over-year decline in the allowance ratio was primarily attributable to the acquisition of Xenith Bankshares, Inc. ("Xenith") on January 1, 2018. In acquisition accounting, there is no carryover of previously established allowance for loan losses.

The ratio of the ALL to nonaccrual loans was 152.3% at December 31, 2018, compared to 146.9% at September 30, 2018 and 175.7% at December 31, 2017.  The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.

NONINTEREST INCOME

Noninterest income increased $3.6 million to $23.5 million for the quarter ended December 31, 2018 from $19.9 million in the prior quarter. The increase in noninterest income was primarily driven by life insurance proceeds of approximately $976,000, an increase in customer-related fee income of $222,000 due to higher overdraft fees and fiduciary and asset management fees, an increase in interest rate swap fees of $814,000 due to an increase in transaction volume, and $933,000 adjustment made in the third quarter to reduce the previously recorded gain from the sale of Shore Premier.

NONINTEREST EXPENSE

Noninterest expense decreased $1.8 million to $74.5 million for the quarter ended December 31, 2018 from $76.3 million in the prior quarter. Excluding merger-related costs of $2.3 million and $1.4 million in the fourth and third quarters of 2018, respectively, operating noninterest expense(1) decreased $2.7 million, or 3.6%, to $72.2 million when compared to the third quarter of 2018. The decrease in operating noninterest expense included a decline in marketing and advertising expense of $898,000 due to the timing of marketing campaigns and digital marketing related expenses. Salaries and benefits expenses declined $698,000, primarily due to decreases in incentive compensation and benefit costs. Professional services declined $692,000 primarily due to a decrease in consulting fees. Additionally, operating noninterest expense declined due to lower amortization of intangibles of $536,000 and a decline in branch closure costs of approximately $475,000 compared to the third quarter of 2018.

Partially offsetting these declines, other real estate owned (“OREO”) and credit-related expenses increased $574,000 primarily due to losses on sales of property in the fourth quarter of 2018 compared to gains recognized in the third quarter of 2018.

(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

INCOME TAXES

The effective tax rate for the three months ended December 31, 2018 was 16.5% compared to 15.9% for the three months ended September 30, 2018. The increase in the effective tax rate was primarily due to an increase in non-deductible merger expenses related to the Pending Access Merger.

BALANCE SHEET

At December 31, 2018, total assets were $13.8 billion, an increase of $394.0 million from September 30, 2018, and an increase of $4.5 billion from December 31, 2017. The increase in assets from the previous quarter was primarily a result of loan growth and increases in the investment securities portfolio during the fourth quarter of 2018. The increase from the prior year was primarily a result of the Xenith acquisition and loan growth.

At December 31, 2018, loans held for investment (net of deferred fees and costs) were $9.7 billion, an increase of $304.6 million, or 12.9% (annualized), from September 30, 2018, while average loans increased $259.9 million, or 11.2% (annualized), from the prior quarter. The increase was primarily driven by a combined growth of $256.9 million in commercial and industrial and commercial real estate portfolios. Loans held for investment increased $2.6 billion, or 36.1%, from December 31, 2017, while quarterly average loans increased $2.6 billion or 37.3%, from the prior year. The increase from the prior year was primarily a result of the Xenith acquisition.

At December 31, 2018, total deposits were $10.0 billion, an increase of $136.3 million, or 5.5% (annualized), from September 30, 2018, while average deposits increased $148.5 million, or 6.1% (annualized), from the prior quarter. Deposits increased $3.0 billion, or 42.6%, from December 31, 2017, while quarterly average deposits increased $3.0 billion, or 43.1%, from the prior year. The increase from the prior year was primarily a result of the Xenith acquisition.

The following table shows the Company's capital ratios at the quarters ended:

  December 31,   September 30,   December 31,
  2018   2018   2017
Common equity Tier 1 capital ratio (1) 9.93 %   9.92 %   9.04 %
Tier 1 capital ratio (1) 11.10 %   11.12 %   10.14 %
Total capital ratio (1) 12.88 %   12.97 %   12.43 %
Leverage ratio (Tier 1 capital to average assets) (1) 9.71 %   9.89 %   9.42 %
Common equity to total assets 13.98 %   14.06 %   11.23 %
Tangible common equity to tangible assets (2) 8.84 %   8.74 %   8.14 %
           
(1) All ratios at December 31, 2018 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(2) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

During the fourth quarter of 2018, the Company declared and paid cash dividends of $0.23 per common share consistent with the third quarter of 2018 and an increase of $0.02, or 9.5%, compared to the fourth quarter of 2017.

ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union Bankshares Corporation (Nasdaq: UBSH) is the holding company for Union Bank & Trust. Union Bank & Trust has 140 branches, 7 of which are operated as Xenith Bank, a division of Union Bank & Trust of Richmond, Virginia, and approximately 190 ATMs located throughout Virginia and in portions of Maryland and North Carolina. Non-bank affiliates of the holding company include: Old Dominion Capital Management, Inc., as well as its subsidiary Outfitter Advisors, Ltd., and Dixon, Hubard, Feinour, & Brown, Inc., all of which provide investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.

FOURTH QUARTER AND FULL YEAR 2018 EARNINGS RELEASE CONFERENCE CALL

Union will hold a conference call on Tuesday, January 22nd, 2019 at 9:00 a.m. Eastern Time during which management will review the fourth quarter and full year 2018 financial results and provide an update on recent activities.  Interested parties may participate in the call toll-free by dialing (877) 668-4908; international callers wishing to participate may do so by dialing (973) 453-3058.  The conference ID number is 4563297.

NON-GAAP FINANCIAL MEASURES

In reporting the results of the quarter and full year ended December 31, 2018, the Company has provided supplemental performance measures on a tax-equivalent, tangible, or operating basis.  These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP.  In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies.  The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance.  For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results that are not statements of historical fact. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements.  Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of Union and its management about future events.  Although Union believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of Union will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to:

  • changes in interest rates;
  • general economic and financial market conditions in the United States generally and particularly in the markets in which Union operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels, slowdowns in economic growth, and prolonged government shutdown;
  • Union’s ability to manage its growth or implement its growth strategy;
  • the ability to close the Pending Access Merger on the expected timeframe, or at all, that closing may be more difficult, time-consuming or costly than expected, and that if the Pending Access Merger is consummated, the businesses of Union and Access may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected;
  • Union’s ability to recruit and retain key employees;
  • an insufficient allowance for loan losses;
  • the quality or composition of the loan or investment portfolios;
  • concentrations of loans secured by real estate, particularly commercial real estate;
  • the effectiveness of Union’s credit processes and management of Union’s credit risk;
  • demand for loan products and financial services in Union’s market area;
  • Union’s ability to compete in the market for financial services;
  • technological risks and developments, and cyber threats, attacks, or events;
  • performance by Union’s counterparties or vendors;
  • deposit flows;
  • the availability of financing and the terms thereof;
  • the level of prepayments on loans and mortgage-backed securities;
  • legislative or regulatory changes and requirements;
  • the impact of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), including, but not limited to, the effect of the lower corporate tax rate, including on the valuation of Union's tax assets and liabilities;
  • any future refinements to Union's preliminary analysis of the impact of the Tax Act on Union;
  • changes in the effect of the Tax Act due to issuance of interpretive regulatory guidance or enactment of corrective or supplement legislation;
  • monetary and fiscal policies of the U.S. government including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System;
  • changes to applicable accounting principles and guidelines; and
  • other factors, many of which are beyond the control of Union.

Please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Union’s Annual Report on Form 10-K for the year ended December 31, 2017 and comparable “Risk Factors” sections of Union’s Quarterly Reports on Form 10-Q and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Union or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and Union does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.


         
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
  As of & For Three Months Ended   As of & For Year Ended
  12/31/18   9/30/18   12/31/17   12/31/18   12/31/17
Results of Operations (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Interest and dividend income $ 140,636     $ 131,363     $ 87,179     $ 528,788     $ 329,044  
Interest expense 31,547     25,400     14,089     102,097     50,037  
Net interest income 109,089     105,963     73,090     426,691     279,007  
Provision for credit losses 4,725     3,340     3,458     13,736     10,802  
Net interest income after provision for credit losses 104,364     102,623     69,632     412,955     268,205  
Noninterest income 23,487     19,887     15,124     104,241     62,429  
Noninterest expenses 74,533     76,349     57,796     337,767     225,668  
Income before income taxes 53,318     46,161     26,960     179,429     104,966  
Income tax expense 9,041     7,399     11,867     30,016     32,790  
Income from continuing operations 44,277     38,762     15,093     149,413     72,176  
Discontinued operations, net of tax (192 )   (565 )   92     (3,165 )   747  
Net income $ 44,085     $ 38,197     $ 15,185     $ 146,248     $ 72,923  
                   
Interest earned on earning assets (FTE) (1) $ 142,970     $ 133,377     $ 90,263     $ 536,981     $ 340,810  
Net interest income (FTE) (1) 111,424     107,977     76,173     434,884     290,774  
                   
Key Ratios                  
Earnings per common share, diluted $ 0.67     $ 0.58     $ 0.35     $ 2.22     $ 1.67  
Return on average assets (ROA) 1.29 %   1.17 %   0.66 %   1.11 %   0.83 %
Return on average equity (ROE) 9.21 %   8.06 %   5.75 %   7.85 %   7.07 %
Return on average tangible common equity (ROTCE) (2) 16.42 %   14.72 %   8.70 %   14.40 %   10.75 %
Efficiency ratio 56.22 %   60.67 %   65.52 %   63.62 %   66.09 %
Net interest margin 3.62 %   3.69 %   3.51 %   3.67 %   3.48 %
Net interest margin (FTE) (1) 3.70 %   3.76 %   3.64 %   3.74 %   3.63 %
Yields on earning assets (FTE) (1) 4.74 %   4.65 %   4.32 %   4.62 %   4.25 %
Cost of interest-bearing liabilities 1.34 %   1.15 %   0.87 %   1.12 %   0.80 %
Cost of deposits 0.76 %   0.65 %   0.44 %   0.61 %   0.39 %
Cost of funds 1.04 %   0.89 %   0.68 %   0.88 %   0.62 %
                   
Operating Measures (4)                  
Net operating earnings $ 46,248     $ 39,326     $ 22,821     $ 178,313     $ 83,578  
Operating earnings per share, diluted $ 0.70     $ 0.60     $ 0.52     $ 2.71     $ 1.91  
Operating ROA 1.36 %   1.21 %   1.00 %   1.35 %   0.95 %
Operating ROE 9.66 %   8.30 %   8.63 %   9.57 %   8.11 %
Operating ROTCE 17.18 %   15.13 %   12.82 %   17.35 %   12.24 %
Operating efficiency ratio (FTE) (1) 53.53 %   58.59 %   61.21 %   55.28 %   62.36 %
                   
Per Share Data                  
Earnings per common share, basic $ 0.67     $ 0.58     $ 0.35     $ 2.22     $ 1.67  
Earnings per common share, diluted 0.67     0.58     0.35     2.22     1.67  
Cash dividends paid per common share 0.23     0.23     0.21     0.88     0.81  
Market value per share 28.23     38.53     36.17     28.23     36.17  
Book value per common share 29.34     28.68     24.10     29.34     24.10  
Tangible book value per common share (2) 17.51     16.79     16.88     17.51     16.88  
Price to earnings ratio, diluted 12.72     16.74     26.05     10.62     21.66  
Price to book value per common share ratio 0.96     1.34     1.50     0.96     1.50  
Price to tangible book value per common share ratio (2) 1.61     2.29     2.14     1.61     2.14  
Weighted average common shares outstanding, basic 65,982,304     65,974,702     43,740,001     65,859,165     43,698,897  
Weighted average common shares outstanding, diluted 66,013,326     66,013,152     43,816,018     65,908,571     43,779,744  
Common shares outstanding at end of period 65,977,149     65,982,669     43,743,318     65,977,149     43,743,318  


  As of & For Three Months Ended   As of & For Year End
  12/31/18   9/30/18   12/31/17   12/31/18   12/31/17
Capital Ratios (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Common equity Tier 1 capital ratio (5) 9.93 %   9.92 %   9.04 %   9.93 %   9.04 %
Tier 1 capital ratio (5) 11.10 %   11.12 %   10.14 %   11.10 %   10.14 %
Total capital ratio (5) 12.88 %   12.97 %   12.43 %   12.88 %   12.43 %
Leverage ratio (Tier 1 capital to average assets) (5) 9.71 %   9.89 %   9.42 %   9.71 %   9.42 %
Common equity to total assets 13.98 %   14.06 %   11.23 %   13.98 %   11.23 %
Tangible common equity to tangible assets (2) 8.84 %   8.74 %   8.14 %   8.84 %   8.14 %
                   
Financial Condition                  
Assets $ 13,765,599     $ 13,371,742     $ 9,315,179     $ 13,765,599     $ 9,315,179  
Loans held for investment 9,716,207     9,411,598     7,141,552     9,716,207     7,141,552  
Securities 2,391,695     2,258,239     1,249,144     2,391,695     1,249,144  
Earning Assets 12,202,023     11,808,717     8,513,145     12,202,023     8,513,145  
Goodwill 727,168     727,699     298,528     727,168     298,528  
Amortizable intangibles, net 48,685     51,563     14,803     48,685     14,803  
Deposits 9,970,960     9,834,695     6,991,718     9,970,960     6,991,718  
Borrowings 1,756,278     1,554,642     1,219,414     1,756,278     1,219,414  
Stockholders' equity 1,924,581     1,880,029     1,046,329     1,924,581     1,046,329  
Tangible common equity (2) 1,148,728     1,100,767     732,998     1,148,728     732,998  
                   
Loans held for investment, net of deferred fees and costs                  
Construction and land development $ 1,194,821     $ 1,178,054     $ 948,791     $ 1,194,821     $ 948,791  
Commercial real estate - owner occupied 1,337,345     1,283,125     943,933     1,337,345     943,933  
Commercial real estate - non-owner occupied 2,467,410     2,427,251     1,713,659     2,467,410     1,713,659  
Multifamily real estate 548,231     542,662     357,079     548,231     357,079  
Commercial & Industrial 1,317,135     1,154,583     612,023     1,317,135     612,023  
Residential 1-4 Family - commercial 713,750     719,798     612,395     713,750     612,395  
Residential 1-4 Family - mortgage 600,578     611,728     485,690     600,578     485,690  
Auto 301,943     306,196     282,474     301,943     282,474  
HELOC 613,383     612,116     537,521     613,383     537,521  
Consumer 379,694     345,320     408,667     379,694     408,667  
Other Commercial 241,917     230,765     239,320     241,917     239,320  
Total loans held for investment $ 9,716,207     $ 9,411,598     $ 7,141,552     $ 9,716,207     $ 7,141,552  
                   
Deposits                  
NOW accounts $ 2,288,523     $ 2,205,262     $ 1,929,416     $ 2,288,523     $ 1,929,416  
Money market accounts 2,875,301     2,704,480     1,685,174     2,875,301     1,685,174  
Savings accounts 622,823     635,788     546,274     622,823     546,274  
Time deposits of $100,000 and over 1,067,181     1,078,448     624,112     1,067,181     624,112  
Other time deposits 1,022,525     1,020,830     704,534     1,022,525     704,534  
Total interest-bearing deposits $ 7,876,353     $ 7,644,808     $ 5,489,510     $ 7,876,353     $ 5,489,510  
Demand deposits 2,094,607     2,189,887     1,502,208     2,094,607     1,502,208  
Total deposits $ 9,970,960     $ 9,834,695     $ 6,991,718     $ 9,970,960     $ 6,991,718  
                   
Averages                  
Assets $ 13,538,160     $ 12,947,352     $ 9,085,211     $ 13,181,609     $ 8,820,142  
Loans held for investment 9,557,160     9,297,213     6,962,299     9,584,785     6,701,101  
Securities 2,340,051     1,966,010     1,238,663     1,877,018     1,230,105  
Earning assets 11,961,234     11,383,320     8,293,366     11,620,893     8,016,311  
Deposits 9,951,983     9,803,475     6,955,949     9,717,663     6,701,475  
Time deposits 2,083,270     2,079,686     1,335,357     2,078,073     1,271,649  
Interest-bearing deposits 7,789,642     7,635,710     5,435,705     7,617,174     5,234,102  
Borrowings 1,575,173     1,155,093     1,022,307     1,489,542     1,028,434  
Interest-bearing liabilities 9,364,815     8,790,803     6,458,012     9,106,716     6,262,536  
Stockholders' equity 1,899,249     1,880,582     1,048,632     1,863,215     1,030,847  
Tangible common equity (2) 1,121,788     1,103,530     734,847     1,086,272     715,125  


  As of & For Three Months Ended   As of & For Year Ended
  12/31/18   9/30/18   12/31/17   12/31/18   12/31/17
Asset Quality (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Allowance for Loan Losses (ALL)                  
Beginning balance $ 41,294     $ 41,270     $ 37,162     $ 38,208     $ 37,192  
Add: Recoveries 830     1,401     696     4,912     3,255  
Less: Charge-offs 5,875     4,560     3,361     15,974     13,310  
Add: Provision for loan losses 4,800     3,100     3,758     14,084     11,117  
Add: Provision for loan losses included in discontinued operations (4 )   83     (47 )   (185 )   (46 )
Ending balance $ 41,045     $ 41,294     $ 38,208     $ 41,045     $ 38,208  
                   
ALL / total outstanding loans 0.42 %   0.44 %   0.54 %   0.42 %   0.54 %
Net charge-offs / total average loans 0.21 %   0.13 %   0.15 %   0.12 %   0.15 %
Provision / total average loans 0.20 %   0.13 %   0.21 %   0.15 %   0.17 %
                   
Total PCI loans, net of fair value mark $ 90,221     $ 94,746     $ 39,021     $ 90,221     $ 39,021  
Remaining fair value mark on purchased performing loans 30,281     33,428     13,726     30,281     13,726  
                   
Nonperforming Assets                  
Construction and land development $ 8,018     $ 9,221     $ 5,610     $ 8,018     $ 5,610  
Commercial real estate - owner occupied 3,636     3,202     2,708     3,636     2,708  
Commercial real estate - non-owner occupied 1,789     1,812     2,992     1,789     2,992  
Commercial & Industrial 1,524     1,404     316     1,524     316  
Residential 1-4 Family - commercial 2,481     1,956     1,085     2,481     1,085  
Residential 1-4 Family - mortgage 7,276     8,535     6,269     7,276     6,269  
Auto 576     525     413     576     413  
HELOC 1,518     1,273     2,075     1,518     2,075  
Consumer and all other 135     182     275     135     275  
Nonaccrual loans $ 26,953     $ 28,110     $ 21,743     $ 26,953     $ 21,743  
Foreclosed property 6,722     6,800     5,253     6,722     5,253  
Total nonperforming assets (NPAs) $ 33,675     $ 34,910     $ 26,996     $ 33,675     $ 26,996  
Construction and land development $ 180     $ 442     $ 1,340     $ 180     $ 1,340  
Commercial real estate - owner occupied 3,193     3,586         3,193      
Commercial real estate - non-owner occupied         194         194  
Commercial & Industrial 132     256     214     132     214  
Residential 1-4 Family - commercial 1,409     378     579     1,409     579  
Residential 1-4 Family - mortgage 2,437     2,543     546     2,437     546  
Auto 195     211     40     195     40  
HELOC 440     1,291     217     440     217  
Consumer and all other 870     825     402     870     402  
Loans ≥ 90 days and still accruing $ 8,856     $ 9,532     $ 3,532     $ 8,856     $ 3,532  
Total NPAs and loans ≥ 90 days $ 42,531     $ 44,442     $ 30,528     $ 42,531     $ 30,528  
NPAs / total outstanding loans 0.35 %   0.37 %   0.38 %   0.35 %   0.38 %
NPAs / total assets 0.24 %   0.26 %   0.29 %   0.24 %   0.29 %
ALL / nonaccrual loans 152.28 %   146.90 %   175.73 %   152.28 %   175.73 %
ALL / nonperforming assets 121.89 %   118.29 %   141.53 %   121.89 %   141.53 %
Past Due Detail                  
Construction and land development $ 759     $ 1,351     $ 1,248     $ 759     $ 1,248  
Commercial real estate - owner occupied 8,755     4,218     444     8,755     444  
Commercial real estate - non-owner occupied 338     492     187     338     187  
Multifamily real estate     553              
Commercial & Industrial 3,353     2,239     1,147     3,353     1,147  
Residential 1-4 Family - commercial 6,619     2,535     1,682     6,619     1,682  
Residential 1-4 Family - mortgage 12,049     4,506     3,838     12,049     3,838  
Auto 3,320     2,414     3,541     3,320     3,541  
HELOC 4,611     4,783     2,382     4,611     2,382  
Consumer and all other 1,630     2,640     2,404     1,630     2,404  
Loans 30-59 days past due $ 41,434     $ 25,731     $ 16,873     $ 41,434     $ 16,873  


  As of & For Three Months Ended   As of & For Year Ended
  12/31/18   9/30/18   12/31/17   12/31/18   12/31/17
Past Due Detail cont'd (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Construction and land development $ 6     $ 1,826     $ 898     $ 6     $ 898  
Commercial real estate - owner occupied 1,142     539     81     1,142     81  
Commercial real estate - non-owner occupied 41         84     41     84  
Multifamily Real Estate 146             146      
Commercial & Industrial 389     428     109     389     109  
Residential 1-4 Family - commercial 1,577     1,892     700     1,577     700  
Residential 1-4 Family - mortgage 5,143     3,793     2,541     5,143     2,541  
Auto 403     299     185     403     185  
HELOC 1,644     1,392     717     1,644     717  
Consumer and all other 1,096     1,140     2,052     1,096     2,052  
Loans 60-89 days past due $ 11,587     $ 11,309     $ 7,367     $ 11,587     $ 7,367  
                   
Troubled Debt Restructurings                  
Performing $ 19,201     $ 19,854     $ 14,553     $ 19,201     $ 14,553  
Nonperforming 7,397     8,425     2,849     7,397     2,849  
Total troubled debt restructurings $ 26,598     $ 28,279     $ 17,402     $ 26,598     $ 17,402  
                   
Alternative Performance Measures (non-GAAP)                  
Net interest income (FTE)                  
Net interest income (GAAP) $ 109,089     $ 105,963     $ 73,090     $ 426,691     $ 279,007  
FTE adjustment 2,335     2,014     3,083     8,193     11,767  
Net interest income (FTE) (non-GAAP) (1) $ 111,424     $ 107,977     $ 76,173     $ 434,884     $ 290,774  
Average earning assets 11,961,234     11,383,320     8,293,366     11,620,893     8,016,311  
Net interest margin 3.62 %   3.69 %   3.51 %   3.67 %   3.48 %
Net interest margin (FTE) (1) 3.70 %   3.76 %   3.64 %   3.74 %   3.63 %
                   
Tangible Assets                  
Ending assets (GAAP) $ 13,765,599     $ 13,371,742     $ 9,315,179     $ 13,765,599     $ 9,315,179  
Less: Ending goodwill 727,168     727,699     298,528     727,168     298,528  
Less: Ending amortizable intangibles 48,685     51,563     14,803     48,685     14,803  
Ending tangible assets (non-GAAP) $ 12,989,746     $ 12,592,480     $ 9,001,848     $ 12,989,746     $ 9,001,848  
                   
Tangible Common Equity (2)                  
Ending equity (GAAP) $ 1,924,581     $ 1,880,029     $ 1,046,329     $ 1,924,581     $ 1,046,329  
Less: Ending goodwill 727,168     727,699     298,528     727,168     298,528  
Less: Ending amortizable intangibles 48,685     51,563     14,803     48,685     14,803  
Ending tangible common equity (non-GAAP) $ 1,148,728     $ 1,100,767     $ 732,998     $ 1,148,728     $ 732,998  
                   
Average equity (GAAP) $ 1,899,249     $ 1,880,582     $ 1,048,632     $ 1,863,216     $ 1,030,847  
Less: Average goodwill 727,544     723,785     298,385     725,597     298,240  
Less: Average amortizable intangibles 49,917     53,267     15,400     51,347     17,482  
Average tangible common equity (non-GAAP) $ 1,121,788     $ 1,103,530     $ 734,847     $ 1,086,272     $ 715,125  
                   
Operating Measures (4)                  
Net income (GAAP) $ 44,085     $ 38,197     $ 15,185     $ 146,248     $ 72,923  
Plus: Merger-related costs, net of tax 2,163     1,129     1,386     32,065     4,405  
Plus: Nonrecurring tax expenses         6,250         6,250  
Net operating earnings (non-GAAP) $ 46,248     $ 39,326     $ 22,821     $ 178,313     $ 83,578  
                   
Noninterest expense (GAAP) $ 74,533     $ 76,349     $ 57,796     $ 337,767     $ 225,668  
Less: Merger-related costs 2,314     1,429     1,917     39,728     5,393  
Operating noninterest expense (non-GAAP) $ 72,219     $ 74,920     $ 55,879     $ 298,039     $ 220,275  
                   
Net interest income (FTE) (non-GAAP) (1) $ 111,424     $ 107,977     $ 76,173     $ 434,886     $ 290,774  
Noninterest income (GAAP) 23,487     19,887     15,124     104,241     62,429  
                   
Efficiency ratio 56.22 %   60.67 %   65.52 %   63.62 %   66.09 %
Operating efficiency ratio (FTE) 53.53 %   58.59 %   61.21 %   55.28 %   62.36 %
                   
  As of & For Three Months Ended   As of & For Year Ended
  12/31/18   9/30/18   12/31/17   12/31/18   12/31/17
ROTCE (2)(3) (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Net Income (GAAP) $ 44,085     $ 38,197     $ 15,185     $ 146,248     $ 72,923  
Plus: Amortization of intangibles, tax effected 2,334     2,757     928     10,143     3,957  
Net Income before amortization of intangibles (non-GAAP) $ 46,419     $ 40,954     $ 16,113     $ 156,391     $ 76,880  
                   
Average tangible common equity (non-GAAP) $ 1,121,788     $ 1,103,530     $ 734,847     $ 1,086,272     $ 715,125  
Return on average tangible common equity (non-GAAP) 16.42 %   14.72 %   8.70 %   14.40 %   10.75 %
                   
Operating ROTCE (2)(3)                  
Operating Net Income (non-GAAP) $ 46,248     $ 39,326     $ 22,821     $ 178,313     $ 83,578  
Plus: Amortization of intangibles, tax effected 2,334     2,757     928     10,143     3,957  
Net Income before amortization of intangibles (non-GAAP) $ 48,582     $ 42,083     $ 23,749     $ 188,456     $ 87,535  
                   
Average tangible common equity (non-GAAP) $ 1,121,788     $ 1,103,530     $ 734,847     $ 1,086,272     $ 715,125  
Operating return on average tangible common equity (non-GAAP) 17.18 %   15.13 %   12.82 %   17.35 %   12.24 %
                   
Other Data                  
End of period full-time employees 1,609     1,621     1,419     1,609     1,419  
Number of full-service branches 140     140     111     140     111  
Number of full automatic transaction machines ("ATMs") 188     190     176     188     176  

(1)  These are non-GAAP financial measures. Net interest income (FTE), which is used in computing net interest margin (FTE) and efficiency ratio (FTE), provides valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources.  The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets.  Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.

(2)  These are non-GAAP financial measures. Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios.  The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

(3)  These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.

In prior periods, the Company has not added amortization of intangibles, tax effected to net income (GAAP) and operating net income (non-GAAP) when calculating ROTCE and operating ROTCE, respectively. The Company has adjusted its presentation for all periods in this release.

(4)  These are non-GAAP financial measures. Operating measures exclude merger-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization's operations.

(5)  All ratios at December 31, 2018 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.


UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)      
  December 31,   December 31,
  2018   2017
ASSETS (unaudited)   (unaudited)
Cash and cash equivalents:      
Cash and due from banks $ 166,927     $ 117,586  
Interest-bearing deposits in other banks 94,056     81,291  
Federal funds sold 216     496  
Total cash and cash equivalents 261,199     199,373  
Securities available for sale, at fair value 1,774,821     974,222  
Securities held to maturity, at carrying value 492,272     199,639  
Restricted stock, at cost 124,602     75,283  
Loans held for investment, net of deferred fees and costs 9,716,207     7,141,552  
Less allowance for loan losses 41,045     38,208  
Net loans held for investment 9,675,162     7,103,344  
Premises and equipment, net 146,967     119,604  
Goodwill 727,168     298,528  
Amortizable intangibles, net 48,685     14,803  
Bank owned life insurance 263,034     182,854  
Other assets 250,210     102,871  
Assets of discontinued operations 1,479     44,658  
Total assets $ 13,765,599     $ 9,315,179  
LIABILITIES      
Noninterest-bearing demand deposits $ 2,094,607     $ 1,502,208  
Interest-bearing deposits 7,876,353     5,489,510  
Total deposits 9,970,960     6,991,718  
Securities sold under agreements to repurchase 39,197     49,152  
Other short-term borrowings 1,048,600     745,000  
Long-term borrowings 668,481     425,262  
Other liabilities 112,093     54,008  
Liabilities of discontinued operations 1,687     3,710  
Total liabilities 11,841,018     8,268,850  
Commitments and contingencies      
STOCKHOLDERS' EQUITY      
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 65,977,149 shares, and 43,743,318 shares, respectively. 87,250     57,744  
Additional paid-in capital 1,380,259     610,001  
Retained earnings 467,345     379,468  
Accumulated other comprehensive income (loss) (10,273 )   (884 )
Total stockholders' equity 1,924,581     1,046,329  
Total liabilities and stockholders' equity $ 13,765,599     $ 9,315,179  
               


         
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data) 
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
  2018   2018   2017   2018   2017
Interest and dividend income: (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Interest and fees on loans $ 121,846     $ 115,817     $ 78,198     $ 469,856     $ 293,996  
Interest on deposits in other banks 309     492     172     2,125     539  
Interest and dividends on securities:                  
Taxable 11,623     10,145     5,225     36,851     20,305  
Nontaxable 6,858     4,909     3,584     19,956     14,204  
Total interest and dividend income 140,636     131,363     87,179     528,788     329,044  
Interest expense:                  
Interest on deposits 19,149     15,928     7,696     59,336     26,106  
Interest on short-term borrowings 5,663     3,379     1,813     18,458     6,035  
Interest on long-term borrowings 6,735     6,093     4,580     24,303     17,896  
Total interest expense 31,547     25,400     14,089     102,097     50,037  
Net interest income 109,089     105,963     73,090     426,691     279,007  
Provision for credit losses 4,725     3,340     3,458     13,736     10,802  
Net interest income after provision for credit losses 104,364     102,623     69,632     412,955     268,205  
Noninterest income:                  
Service charges on deposit accounts 6,873     6,483     4,925     25,439     18,850  
Other service charges and fees 1,467     1,625     1,202     5,603     4,593  
Interchange fees, net 4,640     4,882     3,769     18,803     14,974  
Fiduciary and asset management fees 4,643     4,411     2,933     16,150     11,245  
Gains (losses) on securities transactions, net 161     97     18     383     800  
Bank owned life insurance income 2,072     1,732     1,306     7,198     6,144  
Loan-related interest rate swap fees 1,376     562     424     3,554     3,051  
Gain on Shore Premier Finance sale     (933 )       19,966      
Other operating income 2,255     1,028     547     7,145     2,772  
Total noninterest income 23,487     19,887     15,124     104,241     62,429  
Noninterest expenses:                  
Salaries and benefits 38,581     39,279     28,228     159,378     115,968  
Occupancy expenses 6,590     6,551     4,775     25,368     18,558  
Furniture and equipment expenses 2,967     2,983     2,529     11,991     10,047  
Printing, postage, and supplies 1,125     1,183     1,237     4,650     4,901  
Communications expense 923     872     738     3,898     3,304  
Technology and data processing 4,675     4,841     4,339     18,397     16,132  
Professional services 2,183     2,875     2,155     10,283     7,767  
Marketing and advertising expense 2,211     3,109     1,863     10,043     7,795  
FDIC assessment premiums and other 1,214     1,363     1,255     6,644     4,048  
Other taxes 2,882     2,878     2,022     11,542     8,087  
Loan-related expenses 2,109     1,939     1,249     7,206     4,733  
OREO and credit-related expenses 1,026     452     1,741     4,131     3,764  
Amortization of intangible assets 2,954     3,490     1,427     12,839     6,088  
Training and other personnel costs 1,104     1,024     1,014     4,259     3,843  
Merger-related costs 2,314     1,429     1,917     39,728     5,393  
Other expenses 1,675     2,081     1,307     7,410     5,240  
Total noninterest expenses 74,533     76,349     57,796     337,767     225,668  
Income from continuing operations before income taxes 53,318     46,161     26,960     179,429     104,966  
Income tax expense 9,041     7,399     11,867     30,016     32,790  
Income from continuing operations 44,277     38,762     $ 15,093     149,413     $ 72,176  
                                 


UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (continued)
(Dollars in thousands, except share data) 
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
  2018   2018   2017   2018   2017
Discontinued operations: (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Income (loss) from operations of discontinued mortgage segment $ (509 )   $ (761 )   $ 320     $ (4,280 )   $ 1,344  
Income tax expense (benefit) (317 )   (196 )   228     (1,115 )   597  
Income (loss) on discontinued operations (192 )   (565 )   92     (3,165 )   747  
Net income $ 44,085     $ 38,197     $ 15,185     $ 146,248     $ 72,923  
Basic earnings per common share $ 0.67     $ 0.58     $ 0.35     $ 2.22     $ 1.67  
Diluted earnings per common share $ 0.67     $ 0.58     $ 0.35     $ 2.22     $ 1.67  


AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
  For the Quarter Ended
  December 31, 2018   September 30, 2018
  Average
Balance
  Interest
Income /
Expense (1)
  Yield /
Rate (1)(2)
  Average
Balance
  Interest
Income /
Expense (1)
  Yield /
Rate (1)(2)
Assets: (unaudited)   (unaudited)
Securities:                      
Taxable $ 1,477,670     $ 11,623     3.12 %   $ 1,333,960     $ 10,145     3.02 %
Tax-exempt 862,381     8,681     3.99 %   632,050     6,214     3.90 %
Total securities 2,340,051     20,304     3.44 %   1,966,010     16,359     3.30 %
Loans, net (3) (4) 9,557,160     122,330     5.08 %   9,297,213     116,266     4.96 %
Other earning assets 64,023     336     2.09 %   120,097     752     2.49 %
Total earning assets 11,961,234     $ 142,970     4.74 %   11,383,320     $ 133,377     4.65 %
Allowance for loan losses (41,556 )           (41,799 )        
Total non-earning assets 1,618,482             1,605,831          
Total assets $ 13,538,160             $ 12,947,352          
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing deposits:                      
Transaction and money market accounts $ 5,080,120     $ 11,086     0.87 %   $ 4,915,070     $ 8,789     0.71 %
Regular savings 626,252     211     0.13 %   640,954     209     0.13 %
Time deposits (5) 2,083,270     7,851     1.50 %   2,079,686     6,930     1.32 %
Total interest-bearing deposits 7,789,642     19,148     0.98 %   7,635,710     15,928     0.83 %
Other borrowings (6) 1,575,173     12,398     3.12 %   1,155,093     9,472     3.25 %
Total interest-bearing liabilities 9,364,815     31,546     1.34 %   8,790,803     25,400     1.15 %
                       
Noninterest-bearing liabilities:                      
Demand deposits 2,162,341             2,167,765          
Other liabilities 111,755             108,202          
Total liabilities 11,638,911             11,066,770          
Stockholders' equity 1,899,249             1,880,582          
Total liabilities and stockholders' equity $ 13,538,160             $ 12,947,352          
                       
Net interest income     $ 111,424             $ 107,977      
                       
Interest rate spread         3.40 %           3.50 %
Cost of funds         1.04 %           0.89 %
Net interest margin         3.70 %           3.76 %
                       
(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21% for both the three months ended December 31, 2018 and December 31, 2017.
(2) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(3) Nonaccrual loans are included in average loans outstanding.
(4) Interest income on loans includes $3.5 million for both the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $445,000 and $592,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $161,000 and $143,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in amortization of the fair market value adjustments related to acquisitions.
 


Contact:
Robert M. Gorman - (804) 523-7828
Executive Vice President / Chief Financial Officer

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