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Section 1: 8-K (8-K)

Document


United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 

 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): April 24, 2018
 
UNION BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
 

 
Virginia
 
0-20293
 
54-1598552
(State or other jurisdiction
 
(Commission
 
(I.R.S. Employer
of incorporation)
 
File Number)
 
Identification No.)
 
1051 East Cary Street
Suite 1200
Richmond, Virginia 23219
(Address of principal executive offices, including Zip Code)
 

 
Registrant’s telephone number, including area code: (804) 633-5031
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13c-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

¨

1



Item 2.02 Results of Operations and Financial Condition.
 
On April 24, 2018, Union Bankshares Corporation (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2018. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.
 
(d)
Exhibits.
Exhibit No.
 
Description
99.1
 

2



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
UNION BANKSHARES CORPORATION
 
 
 
Date: April 25, 2018
By:
/s/ Robert M. Gorman
 
 
Robert M. Gorman
 
 
Executive Vice President and
 
 
Chief Financial Officer


3
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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

393170528_unionbankshares_image1a12.jpg

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

UNION BANKSHARES REPORTS FIRST QUARTER RESULTS

Richmond, Va., April 24, 2018 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $16.6 million and earnings per share of $0.25 for its first quarter ended March 31, 2018. Net operating earnings(1) were $38.9 million and operating earnings per share(1) were $0.59 for its first quarter ended March 31, 2018; these operating results exclude $22.2 million in after-tax merger-related costs.

The Company's first quarter of 2018 results include the financial results of Xenith Bankshares, Inc. (“Xenith”), which the Company acquired on January 1, 2018.

Union is off to a strong start to the year as demonstrated by our financial results and the Xenith integration continues to go well,” said John C. Asbury, President and CEO of Union Bankshares Corporation. “With solid loan and deposit growth and meaningful improvements to our profitability metrics, on an operating basis, I believe our first quarter results signal the underlying strength and earnings potential of this uniquely valuable franchise - Virginia’s regional bank.

The ‘new Union’ team is energized and has come together seamlessly. Core systems conversion remains on track to be completed in May and we have a clear line of sight to fully achieve our cost savings target beginning in the fourth quarter of 2018. We remain focused on achieving our 2018 priorities and generating top-tier financial performance for our shareholders.

Select highlights for the first quarter of 2018 include:
Performance metrics linked quarter
Return on Average Assets (“ROA”) was 0.52% compared to 0.66% in the fourth quarter of 2017. The decline was driven by the increased merger-related costs in the first quarter of 2018 compared to the prior quarter. Operating ROA(1) increased to 1.21% compared to 1.00% in the fourth quarter of 2017.
Return on Average Equity (“ROE”) was 3.70% compared to 5.75% in the fourth quarter of 2017. The decline in ROE was related to the increased merger-related costs in the first quarter of 2018 compared to the prior quarter. Operating ROE(1) was 8.64% compared to 8.63% in the fourth quarter of 2017.
Return on Average Tangible Common Equity (“ROTCE”) was 6.40% compared to 8.20% in the fourth quarter of 2017. The decline in ROTCE was related to the increased merger-related costs in the first quarter of 2018 compared to the prior quarter. Operating ROTCE(1) increased to 14.95% compared to 12.32% in the fourth quarter of 2017.
Efficiency ratio increased to 82.5% compared to 66.1% in the fourth quarter of 2017 and the efficiency ratio (FTE) increased to 81.5% compared to 64.2% in the fourth quarter of 2017 driven by the increased merger-related costs in the first quarter of 2018 compared to the prior quarter. Operating efficiency ratio(1) improved to 59.8% compared to 62.1% in the fourth quarter of 2017.
Segment results
Net income for the community bank segment was $16.4 million, or $0.25 per share; operating earnings(1) for the community bank segment were $38.7 million, or $0.59 per share.
Net income for the mortgage segment was $208,000 compared to net income of $199,000 and operating earnings(1), which excludes nonrecurring tax expenses, of $329,000 in the fourth quarter of 2017.
(1) For a reconciliation of the non-GAAP operating measures that exclude merger-related costs and/or nonrecurring tax expenses unrelated to the Company’s normal operations, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.




NET INTEREST INCOME

For the first quarter of 2018, net interest income was $103.7 million, an increase of $30.4 million from the fourth quarter of 2017. Tax-equivalent net interest income was $105.3 million in the first quarter of 2018, an increase of $29.1 million from the fourth quarter of 2017. The increases in both net interest income and tax-equivalent net interest income were primarily the result of a $3.2 billion increase in average interest-earning assets and a $2.6 billion increase in average interest-bearing liabilities from the full quarter impact of the Xenith acquisition. The first quarter net interest margin increased 16 basis points to 3.67% from 3.51% in the previous quarter, while the tax-equivalent net interest margin increased 8 basis points to 3.72% from 3.64% during the same periods. The increase in the net interest margin was principally due to an increase in the yield on earning assets, partially offset by a smaller increase in cost of funds.

The Company’s tax-equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2018, net accretion related to acquisition accounting increased $3.4 million from the prior quarter to $5.6 million for the quarter ended March 31, 2018. The increase was related to the acquisition of Xenith. The fourth quarter of 2017, first quarter of 2018, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
 
Loan Accretion
 
Deposit Accretion
 
Borrowings Accretion (Amortization)
 
Total
For the quarter ended December 31, 2017
$
2,107

 
$

 
$
27

 
$
2,134

For the quarter ended March 31, 2018
4,846

 
832

 
(98)

 
5,580

For the remaining nine months of 2018
10,083

 
1,722

 
(408)

 
11,397

For the years ending (estimated) :
 
 
 
 
 
 
 
2019
11,145

 
1,170

 
(660)

 
11,655

2020
8,635

 
284

 
(734)

 
8,185

2021
6,776

 
108

 
(805)

 
6,079

2022
4,830

 
21

 
(827)

 
4,024

2023
3,052

 

 
(850)

 
2,202

Thereafter
12,020

 

 
(11,633)

 
387


ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the first quarter of 2018, the Company experienced increases in nonperforming asset (“NPA”) balances from the prior quarter, primarily related to nonaccrual additions of mortgage and commercial & industrial loans and acquired other real estate owned (“OREO”). At March 31, 2018, NPAs as a percentage of total outstanding loans declined compared to the prior quarter and same quarter the prior year. Past due loan levels as a percentage of total loans held for investment at March 31, 2018 were fairly consistent with past due loan levels at December 31, 2017 and March 31, 2017. Charge-off levels and the loan loss provision decreased from the fourth quarter of 2017.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $102.9 million (net of fair value mark of $21.7 million).

Nonperforming Assets
At March 31, 2018, NPAs totaled $35.2 million, an increase of $6.9 million, or 24.2%, from December 31, 2017 and an increase of $3.3 million, or 10.3%, from March 31, 2017. In addition, NPAs as a percentage of total outstanding loans declined 4 basis points from 0.40% at December 31, 2017 and 13 basis points from 0.49% at March 31, 2017 to 0.36% at March 31, 2018. As the Company's NPAs have been at historic lows over the last several quarters, certain changes from quarter to quarter might stand out in comparison to one another but have no significant impact on the Company's overall asset quality position.



The following table shows a summary of asset quality balances at the quarter ended (dollars in thousands):
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
2018
 
2017
 
2017
 
2017
 
2017
Nonaccrual loans
$
25,138

 
$
21,743

 
$
20,122

 
$
24,574

 
$
22,338

Foreclosed properties
8,079

 
5,253

 
6,449

 
6,828

 
6,951

Former bank premises
2,020

 
1,383

 
2,315

 
2,654

 
2,654

Total nonperforming assets
$
35,237

 
$
28,379

 
$
28,886

 
$
34,056

 
$
31,943


The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
2018
 
2017
 
2017
 
2017
 
2017
Beginning Balance
$
21,743

 
$
20,122

 
$
24,574

 
$
22,338

 
$
9,973

Net customer payments
(1,455
)
 
(768
)
 
(4,642
)
 
(1,498
)
 
(1,068
)
Additions
5,451

 
4,335

 
4,114

 
5,979

 
13,557

Charge-offs
(403
)
 
(1,305
)
 
(3,376
)
 
(2,004
)
 
(97
)
Loans returning to accruing status
(182
)
 
(448
)
 

 
(134
)
 
(27
)
Transfers to OREO
(16
)
 
(193
)
 
(548
)
 
(107
)
 

Ending Balance
$
25,138

 
$
21,743

 
$
20,122

 
$
24,574

 
$
22,338


The following table shows the activity in OREO for the quarter ended (dollars in thousands):
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
2018
 
2017
 
2017
 
2017
 
2017
Beginning Balance
$
6,636

 
$
8,764

 
$
9,482

 
$
9,605

 
$
10,084

Additions of foreclosed property
44

 
325

 
621

 
132

 

Acquisitions of foreclosed property
4,204

 

 

 

 

Acquisitions of former bank premises
1,208

 

 

 

 

Valuation adjustments
(759
)
 
(1,046
)
 
(588
)
 
(19
)
 
(238
)
Proceeds from sales
(1,255
)
 
(1,419
)
 
(648
)
 
(272
)
 
(277
)
Gains (losses) from sales
21

 
12

 
(103
)
 
36

 
36

Ending Balance
$
10,099

 
$
6,636

 
$
8,764

 
$
9,482

 
$
9,605


Past Due Loans
Past due loans still accruing interest totaled $41.6 million, or 0.42% of total loans, at March 31, 2018 compared to $27.8 million, or 0.39% of total loans, at December 31, 2017 and $26.9 million, or 0.41% of total loans, at March 31, 2017. Of the total past due loans still accruing interest, $2.6 million, or 0.03% of total loans, were loans past due 90 days or more at March 31, 2018, compared to $3.5 million, or 0.05% of total loans, at December 31, 2017 and $2.3 million, or 0.04% of total loans, at March 31, 2017.

Net Charge-offs
For the first quarter of 2018, net charge-offs were $1.1 million, or 0.05% of total average loans on an annualized basis, compared to $2.7 million, or 0.15%, for the prior quarter and $788,000, or 0.05%, for the same quarter last year. Of the net charge-offs in the first quarter of 2018, the majority were related to consumer loans.

Provision for Loan Losses
The provision for loan losses for the first quarter of 2018 was $3.5 million, a decrease of $211,000 compared to the previous quarter and an increase of $1.5 million compared to the same quarter in 2017. The decrease in provision from the fourth quarter of 2017 was primarily driven by lower levels of charge-offs partially offset by the impact of loan growth in the current quarter. The increase in the provision for loan losses compared to the first quarter of 2017 was primarily driven by loan growth and higher levels of charge-offs in the first quarter of 2018.




Allowance for Loan Losses (“ALL”)
The ALL increased $2.4 million from December 31, 2017 to $40.6 million at March 31, 2018 primarily due to organic loan growth during the quarter. The ALL as a percentage of the total loan portfolio was 0.41% at March 31, 2018, 0.54% at December 31, 2017, and 0.59% at March 31, 2017. The decline in the allowance ratio was primarily attributable to the acquisition of Xenith. In acquisition accounting, there is no carryover of previously established allowance for loan losses.

The ratio of the ALL to nonaccrual loans was 161.6% at March 31, 2018, compared to 175.7% at December 31, 2017 and 172.0% at March 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 $5.1 million, or 29.4%, to $22.3 million for the quarter ended March 31, 2018 from $17.2 million in the prior quarter, primarily driven by the acquisition of Xenith. Other operating income includes a gain of $1.4 million related to the sale of the Company's ownership interest in a payments-related company.

Mortgage banking income decreased $77,000, or 3.6%, to $2.0 million in the first quarter of 2018 compared to the fourth quarter of 2017, primarily related to declines in mortgage loan originations offset by unrealized gains on mortgage banking derivatives in the first quarter of 2018 compared to losses in the fourth quarter of 2017. Mortgage loan originations declined by $29.4 million, or 24.1%, in the first quarter of 2018 to $92.5 million from $121.9 million in the fourth quarter of 2017. Of the mortgage loan originations in the first quarter of 2018, 38.5% were refinances compared with 34.4% in the prior quarter.

NONINTEREST EXPENSE

Noninterest expense increased $44.1 million to $104.0 million for the quarter ended March 31, 2018 from $59.9 million in the prior quarter. Excluding merger-related costs of $27.7 million and $1.9 million in the first quarter of 2018 and the fourth quarter of 2017, respectively, operating noninterest expense increased $18.3 million to $76.3 million when compared to the fourth quarter of 2017. The increase in operating noninterest expense was primarily related to the acquisition of Xenith.

INCOME TAXES

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. Among other things, the Tax Act permanently reduced the corporate tax rate to 21% from the prior maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate tax rate to 21%, companies are required to revalue their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the fourth quarter of 2017. The Company continues to evaluate the impact on its 2017 tax expense of the revaluation required by the lower corporate tax rate implemented by the Tax Act, which management has estimated to fall between $5.0 million and $8.0 million. During the fourth quarter of 2017, the Company recorded $6.3 million in additional tax expense based on the Company's preliminary analysis of the impact of the Tax Act. The Company's preliminary estimate of the impact of the Tax Act is based on currently available information and interpretation of its provisions. The actual results may differ from the current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies and/or changes in interpretations and assumptions that the Company has preliminarily made. The Company's evaluation of the impact of the Tax Act is subject to refinement for up to one year after enactment. No additional adjustments related to the Tax Act were recorded in the first quarter of 2018.

The effective tax rate for the three months ended March 31, 2018 was 10.3%. During the first quarter of 2018, tax benefits related to stock compensation of approximately $1.2 million were recorded in accordance with ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.





BALANCE SHEET

At March 31, 2018, total assets were $13.1 billion, an increase of $3.8 billion from December 31, 2017, reflecting the impact of the Xenith acquisition.

On January 1, 2018 the Company completed its acquisition of Xenith. Below is a summary of the transaction and related impact on the Company's balance sheet.

The fair value of assets acquired equaled $3.249 billion, and the fair value of liabilities assumed equaled $2.868 billion.
Loans held for investment acquired totaled $2.507 billion with a fair value of $2.459 billion.
Total deposits assumed totaled $2.546 billion with a fair value of $2.550 billion.
Total goodwill arising from the transaction equaled $419.6 million.
Core deposit intangibles acquired totaled $38.5 million.

Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition, in accordance with ASC 805, Business Combinations. Xenith's 12/31/17 balance sheet can be found at the end of this release.

At March 31, 2018, loans held for investment (net of deferred fees and costs) were $9.8 billion, an increase of $2.7 billion, or 37.3%, from December 31, 2017, while average loans increased $2.7 billion, or 39.0%, from the prior quarter. Loans held for investment increased $3.3 billion, or 49.6%, from March 31, 2017, while average loans increased $3.3 billion, or 51.6%, from the prior year.

At March 31, 2018, total deposits were $9.7 billion, an increase of $2.7 billion, or 38.4%, from December 31, 2017, while average deposits increased $2.5 billion, or 36.1%, from the prior quarter. Total deposits grew $3.1 billion, or 46.3%, from March 31, 2017, while average deposits increased $3.1 billion, or 47.7%, from the prior year.

The following table shows the Company's regulatory capital ratios at the quarters ended:
 
March 31,
 
December 31,
 
March 31,
 
2018
 
2017
 
2017
Common equity Tier 1 capital ratio (1)
9.03%

 
9.04
%
 
9.55
%
Tier 1 capital ratio (1)
10.19%

 
10.14
%
 
10.77
%
Total capital ratio (1)
11.97%

 
12.43
%
 
13.30
%
Leverage ratio (Tier 1 capital to average assets) (1)
9.32%

 
9.42
%
 
9.79
%
Common equity to total assets
13.93
%
 
11.23
%
 
11.71
%
Tangible common equity to tangible assets (2)
8.59
%
 
8.14
%
 
8.36
%
 
 
 
 
 
 
(1) All ratios at March 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 first quarter of 2018, the Company declared and paid cash dividends of $0.21 per common share, consistent with the fourth quarter of 2017 and an increase of $0.01, or 5.0%, compared to the first quarter of 2017.

ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union Bank & Trust, which has 150 branches, 39 of which are operated as Xenith Bank, a division of Union Bank & Trust of Richmond, Virginia, and approximately 216 ATMs located throughout Virginia and in portions of Maryland and North Carolina. Union Bank & Trust also operates Shore Premier Finance, a specialty marine lender. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage



products, Old Dominion Capital Management, Inc. and Dixon, Hubard, Feinour, & Brown, Inc., which both provide investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.

Union Bankshares Corporation will hold a conference call on Tuesday, April 24th, at 9:00 a.m. Eastern Time during which management will review earnings and performance trends. Callers wishing to participate may 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 4278718.

NON-GAAP MEASURES
In reporting the results of the quarter ended March 31, 2018, the Company has provided supplemental performance measures on a tax-equivalent, tangible, or operating basis. These measures are a supplement to GAAP 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 measures may not be comparable to non-GAAP measures of other companies.

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 are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact, are based on certain assumptions as of the time they are made, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.  Such statements are often characterized by the use of qualified words (and their derivatives) 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 the Company and its management about future events.  Although the Company 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 the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in:

the possibility that any of the anticipated benefits of the Merger with Xenith will not be realized or will not be realized within the expected time period, the businesses of the Company and Xenith may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, the expected revenue synergies and cost savings from the Merger may not be fully realized or realized within the expected time frame, revenues following the Merger may be lower than expected, or customer and employee relationships and business operations may be disrupted by the Merger,
changes in interest rates,
general economic and financial market conditions,
the Company’s ability to manage its growth or implement its growth strategy,
the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets,
levels of unemployment in the Bank’s lending area,
real estate values in the Bank’s lending area,
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 the Company’s credit processes and management of the Company’s credit risk,
demand for loan products and financial services in the Company’s market area,
the Company’s ability to compete in the market for financial services,
technological risks and developments, and cyber attacks or events,
performance by the Company’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 Act, including, but not limited to, the effect of the lower corporate tax rate, including on the valuation of the Company's tax assets and liabilities,
any future refinements to the Company's preliminary analysis of the impact of the Tax Act on the Company,
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, and
accounting principles and guidelines.

More information on risk factors that could affect the Company’s forward-looking statements is available on the Company’s website, http://investors.bankatunion.com or the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed with the Securities and Exchange Commission. The information on the Company’s website is not a part of this press release. All risk factors and uncertainties described in those documents should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.




UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
(FTE - "Fully Taxable Equivalent")
 
As of & For Three Months Ended
 
3/31/18
 
12/31/17
 
3/31/17
Results of Operations
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and dividend income
$
124,654

 
$
87,482

 
$
76,640

Interest expense
20,907

 
14,090

 
10,073

Net interest income
103,747

 
73,392

 
66,567

Provision for credit losses
3,500

 
3,411

 
2,122

Net interest income after provision for credit losses
100,247

 
69,981

 
64,445

Noninterest income
22,309

 
17,243

 
18,839

Noninterest expenses
104,008

 
59,944

 
57,395

Income before income taxes
18,548

 
27,280

 
25,889

Income tax expense
1,909

 
12,095

 
6,765

Net income
$
16,639

 
$
15,185

 
$
19,124

 
 
 
 
 
 
Interest earned on earning assets (FTE) (1)
$
126,217

 
$
90,263

 
$
79,180

Net interest income (FTE) (1)
105,310

 
76,173

 
69,107

 
 
 
 
 
 
Net income - community bank segment
$
16,431

 
$
14,986

 
$
19,120

Net income - mortgage segment
208

 
199

 
4

 
 
 
 
 
 
Key Ratios
 
 
 
 
 
Earnings per common share, diluted
$
0.25

 
$
0.35

 
$
0.44

Return on average assets (ROA)
0.52
%
 
0.66
%
 
0.92
%
Return on average equity (ROE)
3.70
%
 
5.75
%
 
7.68
%
Return on average tangible common equity (ROTCE) (2)
6.40
%
 
8.20
%
 
11.20
%
Efficiency ratio
82.51
%
 
66.14
%
 
67.20
%
Efficiency ratio (FTE) (1)
81.50
%
 
64.17
%
 
65.26
%
Net interest margin
3.67
%
 
3.51
%
 
3.52
%
Net interest margin (FTE) (1)
3.72
%
 
3.64
%
 
3.66
%
Yields on earning assets (FTE) (1)
4.46
%
 
4.32
%
 
4.19
%
Cost of interest-bearing liabilities (FTE) (1)
0.93
%
 
0.87
%
 
0.68
%
Cost of funds (FTE) (1)
0.74
%
 
0.68
%
 
0.53
%
 
 
 
 
 
 
Operating Measures (3)
 
 
 
 
 
Net operating earnings
$
38,875

 
$
22,821

 
$
19,124

Operating earnings per share, diluted
$
0.59

 
$
0.52

 
$
0.44

Operating ROA
1.21
%
 
1.00
%
 
0.92
%
Operating ROE
8.64
%
 
8.63
%
 
7.68
%
Operating ROTCE
14.95
%
 
12.32
%
 
11.20
%
Operating efficiency ratio (FTE) (1)
59.79
%
 
62.12
%
 
65.26
%
Community bank segment net operating earnings
$
38,667

 
$
22,492

 
$
19,120

Community bank segment operating earnings per share, diluted
$
0.59

 
$
0.51

 
$
0.44

Mortgage segment net operating earnings
$
208

 
$
329

 
$
4

 
 
 
 
 
 
Per Share Data
 
 
 
 
 
Earnings per common share, basic
$
0.25

 
$
0.35

 
$
0.44

Earnings per common share, diluted
0.25

 
0.35

 
0.44

Cash dividends paid per common share
0.21

 
0.21

 
0.20

Market value per share
36.71

 
36.17

 
35.18

Book value per common share
27.87

 
24.10

 
23.44

Tangible book value per common share (2)
16.14

 
16.88

 
16.12

Price to earnings ratio, diluted
36.21

 
26.05

 
19.71

Price to book value per common share ratio
1.32

 
1.50

 
1.50

Price to tangible book value per common share ratio (2)
2.27

 
2.14

 
2.18

Weighted average common shares outstanding, basic
65,554,630

 
43,740,001

 
43,654,498

Weighted average common shares outstanding, diluted
65,636,262

 
43,816,018

 
43,725,923

Common shares outstanding at end of period
65,895,421

 
43,743,318

 
43,679,947






 
As of & For Three Months Ended
 
3/31/18
 
12/31/17
 
3/31/17
Capital Ratios
(unaudited)
 
(unaudited)
 
(unaudited)
Common equity Tier 1 capital ratio (4)
9.03
%
 
9.04
%
 
9.55
%
Tier 1 capital ratio (4)
10.19
%
 
10.14
%
 
10.77
%
Total capital ratio (4)
11.97
%
 
12.43
%
 
13.30
%
Leverage ratio (Tier 1 capital to average assets) (4)
9.32
%
 
9.42
%
 
9.79
%
Common equity to total assets
13.93
%
 
11.23
%
 
11.71
%
Tangible common equity to tangible assets (2)
8.59
%
 
8.14
%
 
8.36
%
 
 
 
 
 
 
Financial Condition
 
 
 
 
 
Assets
$
13,143,318

 
$
9,315,179

 
$
8,669,920

Loans held for investment
9,805,723

 
7,141,552

 
6,554,046

Earning Assets
11,595,325

 
8,513,145

 
7,859,563

Goodwill
718,132

 
298,528

 
298,191

Amortizable intangibles, net
50,092

 
14,803

 
18,965

Deposits
9,677,955

 
6,991,718

 
6,614,195

Stockholders' equity
1,831,077

 
1,046,329

 
1,015,631

Tangible common equity (2)
1,062,853

 
732,998

 
698,475

 
 
 
 
 
 
Loans held for investment, net of deferred fees and costs
 
 
 
 
 
Construction and land development
$
1,249,196

 
$
948,791

 
$
770,287

Commercial real estate - owner occupied
1,279,155

 
943,933

 
870,559

Commercial real estate - non-owner occupied
2,230,463

 
1,713,659

 
1,631,767

Multifamily real estate
547,520

 
357,079

 
353,769

Commercial & Industrial
1,125,733

 
612,023

 
576,567

Residential 1-4 Family - commercial
714,660

 
612,395

 
580,568

Residential 1-4 Family - mortgage
604,354

 
485,690

 
476,871

Auto
288,089

 
282,474

 
271,466

HELOC
642,084

 
537,521

 
527,863

Consumer
839,699

 
410,089

 
342,134

Other Commercial
284,770

 
237,898

 
152,195

Total loans held for investment
$
9,805,723

 
$
7,141,552

 
$
6,554,046

 
 
 
 
 
 
Deposits
 
 
 
 
 
NOW accounts
$
2,185,562

 
$
1,929,416

 
$
1,792,531

Money market accounts
2,692,662

 
1,685,174

 
1,499,585

Savings accounts
654,931

 
546,274

 
602,851

Time deposits of $100,000 and over
819,056

 
624,112

 
555,431

Other time deposits
1,268,319

 
704,534

 
672,998

Total interest-bearing deposits
$
7,620,530

 
$
5,489,510

 
$
5,123,396

Demand deposits
2,057,425

 
1,502,208

 
1,490,799

Total deposits
$
9,677,955

 
$
6,991,718

 
$
6,614,195

 
 
 
 
 
 
Averages
 
 
 
 
 
Assets
$
13,013,598

 
$
9,085,211

 
$
8,465,517

Loans held for investment
9,680,195

 
6,962,299

 
6,383,905

Loans held for sale
28,709

 
31,448

 
27,359

Securities
1,567,269

 
1,238,663

 
1,207,768

Earning assets
11,475,099

 
8,293,366

 
7,660,937

Deposits
9,463,697

 
6,955,949

 
6,407,281

Certificates of deposit
2,085,930

 
1,335,357

 
1,211,064

Interest-bearing deposits
7,489,893

 
5,435,705

 
5,013,315

Borrowings
1,614,691

 
1,022,307

 
986,645

Interest-bearing liabilities
9,104,584

 
6,458,012

 
5,999,960

Stockholders' equity
1,824,588

 
1,048,632

 
1,010,318

Tangible common equity (2)
1,054,798

 
734,847

 
692,384







 
As of & For Three Months Ended
 
3/31/18
 
12/31/17
 
3/31/17
Asset Quality
(unaudited)
 
(unaudited)
 
(unaudited)
Allowance for Loan Losses (ALL)
 
 
 
 
 
Beginning balance
$
38,208

 
$
37,162

 
$
37,192

Add: Recoveries
1,480

 
696

 
845

Less: Charge-offs
2,559

 
3,361

 
1,633

Add: Provision for loan losses
3,500

 
3,711

 
2,010

Ending balance
$
40,629

 
$
38,208

 
$
38,414

 
 
 
 
 
 
ALL / total outstanding loans
0.41
%
 
0.54
%
 
0.59
%
Net charge-offs / total average loans
0.05
%
 
0.15
%
 
0.05
%
Provision / total average loans
0.15
%
 
0.21
%
 
0.13
%
 
 
 
 
 
 
Total PCI Loans
$
102,861

 
$
39,021

 
$
57,770

Remaining fair value mark on purchased performing loans
44,766

 
13,726

 
16,121

 
 
 
 
 
 
Nonperforming Assets
 
 
 
 
 
Construction and land development
$
6,391

 
$
5,610

 
$
6,545

Commercial real estate - owner occupied
2,539

 
2,708

 
1,298

Commercial real estate - non-owner occupied
2,089

 
2,992

 
2,798

Commercial & Industrial
1,969

 
316

 
3,245

Residential 1-4 Family
9,441

 
7,354

 
5,856

Auto
394

 
413

 
393

HELOC
2,072

 
2,075

 
1,902

Consumer and all other
243

 
275

 
301

Nonaccrual loans
$
25,138

 
$
21,743

 
$
22,338

Other real estate owned
10,099

 
6,636

 
9,605

Total nonperforming assets (NPAs)
$
35,237

 
$
28,379

 
$
31,943

Construction and land development
$
322

 
$
1,340

 
$
16

Commercial real estate - owner occupied

 

 
93

Commercial real estate - non-owner occupied

 
194

 
711

Commercial & Industrial
200

 
214

 

Residential 1-4 Family
1,261

 
1,125

 
686

Auto
170

 
40

 
11

HELOC
306

 
217

 
680

Consumer and all other
371

 
402

 
126

Loans ≥ 90 days and still accruing
$
2,630

 
$
3,532

 
$
2,323

Total NPAs and loans ≥ 90 days
$
37,867

 
$
31,911

 
$
34,266

NPAs / total outstanding loans
0.36
%
 
0.40
%
 
0.49
%
NPAs / total assets
0.27
%
 
0.30
%
 
0.37
%
ALL / nonaccrual loans
161.62
%
 
175.73
%
 
171.97
%
ALL / nonperforming assets
115.30
%
 
134.63
%
 
120.26
%
 
 
 
 
 
 
Past Due Detail
 
 
 
 
 
Construction and land development
$
403

 
$
1,248

 
$
630

Commercial real estate - owner occupied
4,985

 
444

 
878

Commercial real estate - non-owner occupied
1,867

 
187

 
1,487

Commercial & Industrial
2,608

 
1,147

 
453

Residential 1-4 Family
9,917

 
5,520

 
11,615

Auto
2,167

 
3,541

 
1,534

HELOC
3,564

 
2,382

 
1,490

Consumer and all other
4,179

 
2,404

 
1,766

Loans 30-59 days past due
$
29,690

 
$
16,873

 
$
19,853






 
As of & For Three Months Ended
 
3/31/18
 
12/31/17
 
3/31/17
Past Due Detail cont'd
(unaudited)
 
(unaudited)
 
(unaudited)
Construction and land development
$
1,291

 
$
898

 
$
376

Commercial real estate - owner occupied
777

 
81

 

Commercial real estate - non-owner occupied

 
84

 

Commercial & Industrial
1,254

 
109

 
126

Residential 1-4 Family
2,357

 
3,241

 
2,104

Auto
193

 
185

 
250

HELOC
1,346

 
717

 
365

Consumer and all other
2,074

 
2,052

 
1,460

Loans 60-89 days past due
$
9,292

 
$
7,367

 
$
4,681

 
 
 
 
 
 
Troubled Debt Restructurings
 
 
 
 
 
Performing
$
13,292

 
$
14,553

 
$
14,325

Nonperforming
4,284

 
2,849

 
4,399

Total troubled debt restructurings
$
17,576

 
$
17,402

 
$
18,724

 
 
 
 
 
 
Alternative Performance Measures (non-GAAP)
 
 
 
 
 
Net interest income (FTE)
 
 
 
 
 
Net interest income (GAAP)
$
103,747

 
$
73,392

 
$
66,567

FTE adjustment
1,563

 
2,781

 
2,540

Net interest income (FTE) (non-GAAP) (1)
$
105,310

 
$
76,173

 
$
69,107

Average earning assets
11,475,099

 
8,293,366

 
7,660,937

Net interest margin
3.67
%
 
3.51
%
 
3.52
%
Net interest margin (FTE) (1)
3.72
%
 
3.64
%
 
3.66
%
 
 
 
 
 
 
Tangible Assets
 
 
 
 
 
Ending assets (GAAP)
$
13,143,318

 
$
9,315,179

 
$
8,669,920

Less: Ending goodwill
718,132

 
298,528

 
298,191

Less: Ending amortizable intangibles
50,092

 
14,803

 
18,965

Ending tangible assets (non-GAAP)
$
12,375,094

 
$
9,001,848

 
$
8,352,764

 
 
 
 
 
 
Tangible Common Equity (2)
 
 
 
 
 
Ending equity (GAAP)
$
1,831,077

 
$
1,046,329

 
$
1,015,631

Less: Ending goodwill
718,132

 
298,528

 
298,191

Less: Ending amortizable intangibles
50,092

 
14,803

 
18,965

Ending tangible common equity (non-GAAP)
$
1,062,853

 
$
732,998

 
$
698,475

 
 
 
 
 
 
Average equity (GAAP)
$
1,824,588

 
$
1,048,632

 
$
1,010,318

Less: Average goodwill
718,132

 
298,385

 
298,191

Less: Average amortizable intangibles
51,658

 
15,400

 
19,743

Average tangible common equity (non-GAAP)
$
1,054,798

 
$
734,847

 
$
692,384

 
 
 
 
 
 
Operating Measures (3)
 
 
 
 
 
Net income (GAAP)
$
16,639

 
$
15,185

 
$
19,124

Plus: Merger-related costs, net of tax
22,236

 
1,386

 

Plus: Nonrecurring tax expenses

 
6,250

 

Net operating earnings (non-GAAP)
$
38,875

 
$
22,821

 
$
19,124

 
 
 
 
 
 
Noninterest expense (GAAP)
$
104,008

 
$
59,944

 
$
57,395

Less: Merger-related costs
27,712

 
1,917

 

Operating noninterest expense (non-GAAP)
$
76,296

 
$
58,027

 
$
57,395

 
 
 
 
 
 
Net interest income (FTE) (non-GAAP) (1)
$
105,310

 
$
76,173

 
$
69,107

Noninterest income (GAAP)
22,309

 
17,243

 
18,839

 
 
 
 
 
 
Efficiency ratio
82.51
%
 
66.14
%
 
67.20
%
Efficiency ratio (FTE) (1)
81.50
%
 
64.17
%
 
65.26
%
Operating efficiency ratio (FTE)
59.79
%
 
62.12
%
 
65.26
%






 
As of & For Three Months Ended
 
3/31/18
 
12/31/17
 
3/31/17
Alternative Performance Measures (non-GAAP) cont'd
(unaudited)
 
(unaudited)
 
(unaudited)
Operating Measures cont'd (3)
 
 
 
 
 
Community bank segment net income (GAAP)
$
16,431

 
$
14,986

 
$
19,120

Plus: Merger-related costs, net of tax
22,236

 
1,386

 

Plus: Nonrecurring tax expenses

 
6,120

 

Community bank segment net operating earnings (non-GAAP)
$
38,667

 
$
22,492

 
$
19,120

 
 
 
 
 
 
Community bank segment earnings per share, diluted (GAAP)
$
0.25

 
$
0.34

 
$
0.44

Community bank segment operating earnings per share, diluted (non-GAAP)
0.59

 
0.51

 
0.44

 
 
 
 
 
 
Mortgage segment net income (GAAP)
$
208

 
$
199

 
$
4

Plus: Nonrecurring tax expenses

 
130

 

Mortgage segment net operating earnings (non-GAAP)
$
208

 
$
329

 
$
4

 
 
 
 
 
 
Mortgage Origination Volume
 
 
 
 
 
Refinance Volume
$
35,599

 
$
41,889

 
$
34,331

Construction Volume
13,867

 
20,186

 
22,669

Purchase Volume
43,082

 
59,840

 
43,216

Total Mortgage loan originations
$
92,548

 
$
121,915

 
$
100,216

% of originations that are refinances
38.5
%
 
34.4
%
 
34.3
%
 
 
 
 
 
 
Other Data
 
 
 
 
 
End of period full-time employees
1,824

 
1,419

 
1,412

Number of full-service branches
150

 
111

 
113

Number of full automatic transaction machines ("ATMs")
216

 
176

 
184


(1) 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) 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) Operating measures exclude merger-related costs and nonrecurring tax expenses unrelated to the Company’s normal operations. Such costs were not incurred during the first quarter of 2017; thus each of these operating measures is equivalent to the corresponding GAAP financial measure for the three months ended March 31, 2017. 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.

(4) All ratios at March 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)
 
 
 
 
 
 
March 31,
 
December 31,
 
March 31,
 
2018
 
2017
 
2017
ASSETS
(unaudited)
 
(audited)
 
(unaudited)
Cash and cash equivalents:
 
 
 
 
 
Cash and due from banks
$
137,761

 
$
117,586

 
$
120,216

Interest-bearing deposits in other banks
196,456

 
81,291

 
62,656

Federal funds sold
8,246

 
496

 
947

Total cash and cash equivalents
342,463

 
199,373

 
183,819

Securities available for sale, at fair value
1,253,179

 
974,222

 
953,058

Securities held to maturity, at carrying value
198,733

 
199,639

 
203,478

Restricted stock, at cost
105,261

 
75,283

 
65,402

Loans held for sale, at fair value
27,727

 
40,662

 
19,976

Loans held for investment, net of deferred fees and costs
9,805,723

 
7,141,552

 
6,554,046

Less allowance for loan losses
40,629

 
38,208

 
38,414

Net loans held for investment
9,765,094

 
7,103,344

 
6,515,632

Premises and equipment, net
163,076

 
119,981

 
122,512

Other real estate owned, net of valuation allowance
10,099

 
6,636

 
9,605

Goodwill
718,132

 
298,528

 
298,191

Amortizable intangibles, net
50,092

 
14,803

 
18,965

Bank owned life insurance
258,381

 
182,854

 
178,774

Other assets
251,081

 
99,854

 
100,508

Total assets
$
13,143,318

 
$
9,315,179

 
$
8,669,920

LIABILITIES
 
 

 
 
Noninterest-bearing demand deposits
$
2,057,425

 
$
1,502,208

 
$
1,490,799

Interest-bearing deposits
7,620,530

 
5,489,510

 
5,123,396

Total deposits
9,677,955

 
6,991,718

 
6,614,195

Securities sold under agreements to repurchase
31,593

 
49,152

 
44,587

Other short-term borrowings
1,022,000

 
745,000

 
522,500

Long-term borrowings
481,433

 
425,262

 
413,779

Other liabilities
99,260

 
57,718

 
59,228

Total liabilities
11,312,241

 
8,268,850

 
7,654,289

Commitments and contingencies
 
 
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
 
 
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 65,895,421 shares, 43,743,318 shares, and 43,679,947 shares, respectively.
87,091

 
57,744

 
57,629

Additional paid-in capital
1,373,997

 
610,001

 
606,078

Retained earnings
382,299

 
379,468

 
352,335

Accumulated other comprehensive income (loss)
(12,310
)
 
(884
)
 
(411
)
Total stockholders' equity
1,831,077

 
1,046,329

 
1,015,631

Total liabilities and stockholders' equity
$
13,143,318

 
$
9,315,179

 
$
8,669,920





UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
 
 
 
 
 
 
Three Months Ended
 
March 31,
 
December 31,
 
March 31,
 
2018
 
2017
 
2017
Interest and dividend income:
(unaudited)
 
(unaudited)
 
(unaudited)
Interest and fees on loans
$
112,927

 
$
78,501

 
$
68,084

Interest on deposits in other banks
647

 
172

 
71

Interest and dividends on securities:
 
 
 
 
 
Taxable
7,072

 
5,225

 
4,923

Nontaxable
4,008

 
3,584

 
3,562

Total interest and dividend income
124,654

 
87,482

 
76,640

Interest expense:
 
 
 
 
 
Interest on deposits
11,212

 
7,696

 
5,077

Interest on short-term borrowings
4,249

 
1,814

 
950

Interest on long-term borrowings
5,446

 
4,580

 
4,046

Total interest expense
20,907

 
14,090

 
10,073

Net interest income
103,747

 
73,392

 
66,567

Provision for credit losses
3,500

 
3,411

 
2,122

Net interest income after provision for credit losses
100,247

 
69,981

 
64,445

Noninterest income:
 
 
 
 
 
Service charges on deposit accounts
5,894

 
4,925

 
4,516

Other service charges and fees
1,233

 
1,202

 
1,139

Interchange fees, net
4,489

 
3,769

 
3,582

Fiduciary and asset management fees
3,056

 
2,933

 
2,794

Mortgage banking income, net
2,041

 
2,118

 
2,025

Gains on securities transactions, net
213

 
18

 
481

Bank owned life insurance income
1,667

 
1,306

 
2,125

Loan-related interest rate swap fees
718

 
424

 
1,180

Other operating income
2,998

 
548

 
997

Total noninterest income
22,309

 
17,243

 
18,839

Noninterest expenses:
 
 
 
 
 
Salaries and benefits
42,329

 
29,723

 
32,168

Occupancy expenses
6,310

 
5,034

 
4,903

Furniture and equipment expenses
3,033

 
2,621

 
2,603

Printing, postage, and supplies
1,073

 
1,252

 
1,150

Communications expense
1,097

 
740

 
910

Technology and data processing
4,649

 
4,426

 
3,900

Professional services
2,597

 
2,190

 
1,658

Marketing and advertising expense
1,443

 
1,876

 
1,740

FDIC assessment premiums and other insurance
2,185

 
1,255

 
706

Other taxes
2,886

 
2,022

 
2,022

Loan-related expenses
1,471

 
1,369

 
1,329

OREO and credit-related expenses
1,532

 
1,741

 
541

Amortization of intangible assets
3,181

 
1,427

 
1,637

Training and other personnel costs
1,027

 
1,034

 
969

Merger-related costs
27,712

 
1,917

 

Other expenses
1,483

 
1,317

 
1,159

Total noninterest expenses
104,008

 
59,944

 
57,395

Income before income taxes
18,548

 
27,280

 
25,889

Income tax expense
1,909

 
12,095

 
6,765

Net income
$
16,639

 
$
15,185

 
$
19,124

Basic earnings per common share
$
0.25

 
$
0.35

 
$
0.44

Diluted earnings per common share
$
0.25

 
$
0.35

 
$
0.44





UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Dollars in thousands)
 
 
 
 
 
 
 
 
Community Bank
 
Mortgage
 
Eliminations
 
Consolidated
Three Months Ended March 31, 2018 (unaudited)
 
 
 
 
 
 
 
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

Plus: Merger-related costs, net of tax
22,236

 

 

 
22,236

Net operating earnings (non-GAAP)
$
38,667

 
$
208

 
$

 
$
38,875

Total assets
$
13,134,342

 
$
100,587

 
$
(91,611
)
 
$
13,143,318

Three Months Ended December 31, 2017 (unaudited)
 
 
 
 
 
 
 
Net interest income
$
72,936

 
$
456

 
$

 
$
73,392

Provision for credit losses
3,458

 
(47
)
 

 
3,411

Net interest income after provision for credit losses
69,478

 
503

 

 
69,981

Noninterest income
15,040

 
2,329

 
(126
)
 
17,243

Noninterest expenses
57,722

 
2,348

 
(126
)
 
59,944

Income before income taxes
26,796

 
484

 

 
27,280

Income tax expense
11,810

 
285

 

 
12,095

Net income
14,986

 
199

 

 
15,185

Plus: Merger-related costs, net of tax
1,386

 

 

 
1,386

Plus: Nonrecurring tax expenses
6,120

 
130

 

 
6,250

Net operating earnings (non-GAAP)
$
22,492

 
$
329

 
$

 
$
22,821

Total assets
$
9,305,660

 
$
111,845

 
$
(102,326
)
 
$
9,315,179

Three Months Ended March 31, 2017 (unaudited)
 
 
 
 
 
 
 
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





AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
 
For the Quarter Ended
 
March 31, 2018
 
December 31, 2017
 
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
$
1,020,691

 
$
7,072

 
2.81
%
 
$
758,189

 
$
5,225

 
2.73
%
Tax-exempt
546,578

 
5,073

 
3.76
%
 
480,474

 
5,513

 
4.55
%
Total securities
1,567,269

 
12,145

 
3.14
%
 
1,238,663

 
10,738

 
3.44
%
Loans, net (3) (4)
9,680,195

 
113,135

 
4.74
%
 
6,962,299

 
79,048

 
4.50
%
Other earning assets
227,635

 
937

 
1.67
%
 
92,404

 
477

 
2.05
%
Total earning assets
11,475,099

 
$
126,217

 
4.46
%
 
8,293,366

 
$
90,263

 
4.32
%
Allowance for loan losses
(39,847
)
 
 
 
 
 
(37,449
)
 
 
 

Total non-earning assets
1,578,346

 
 
 
 
 
829,294

 
 
 
 
Total assets
$
13,013,598

 
 
 
 
 
$
9,085,211

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity: