Exhibit 99.1
| Contact: | Robert M. Gorman - (804) 523-7828 | |
| Executive Vice President / Chief Financial Officer |
UNION BANKSHARES REPORTS FIRST QUARTER RESULTS
Richmond, Va., April 20, 2016 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $17.0 million and earnings per share of $0.38 for its first quarter ended March 31, 2016. The quarterly results represent an increase of $1.3 million, or 8.0%, in net income from the first quarter of 2015 and a decrease of $853,000, or 4.8%, in net income from the prior quarter. Earnings per share of $0.38 for the current quarter represent an increase of $0.03, or 8.6%, in earnings per share from the first quarter of 2015 and a decrease of $0.02, or 5.0%, in earnings per share from the fourth quarter of 2015.
“Union’s first quarter results continued to demonstrate steady progress toward achievement of our strategic objectives that will enable Union to consistently generate profitable growth for our shareholders,” said G. William Beale, president and chief executive officer for Union Bankshares Corporation. “Commercial loans grew at a 7.7% annualized rate during the quarter as our lending teams continued the robust loan production momentum they generated in 2015. Asset quality continued to be strong and we are pleased to note that the net interest margin expanded during the quarter as a result of increased short term market interest rates. As part of our continuing effort to improve efficiency, we recently consolidated three in-store branches in Winchester into a new stand-alone branch in the market and closed a branch in Middleburg.
In addition, we were pleased to recently announce that we agreed to acquire Old Dominion Capital Management, Inc., a Charlottesville Virginia based registered investment advisor with nearly $300 million in assets under management. Acquisitions such as this are an important part of our Company’s strategic plan to grow our wealth management business by expanding the reach and capabilities of our wealth management team by adding assets under management, new investment strategies and advisor talent.
Going forward, we remain focused on leveraging Union’s unique franchise for sustainable growth and to deliver top-tier financial performance for our shareholders over the long term.”
Select highlights for the first quarter include:
| · | Net incomefor the community bank segment was $16.9 million, or $0.38 per share, for the first quarter of 2016, compared to $16.0 million, or $0.36 per share, for the first quarter of 2015 and $17.9 million, or $0.40 per share, for the fourth quarter of 2015. |
| · | The mortgage segment reported net income of $54,000 for the first quarter of 2016, an improvement from a net loss of $267,000 in the first quarter of 2015 and a net loss of $90,000 in the fourth quarter of 2015. |
| · | First quarter net income includes after-tax branch closure costs of approximately $195,000 related to the previously announced 2016 branch closures. |
| · | Loans held for investment grew $109.0 million, or 7.7% (annualized), from December 31, 2015 and increased $417.4 million, or 7.8%, from March 31, 2015, adjusting for the sale of the credit card portfolio in the third quarter of 2015. Average loans increased $97.6 million, or 7.0% (annualized), from the prior quarter and increased $373.8 million, or 7.0%, from the same quarter in the prior year. |
| · | Period-end deposits decreased $18.0 million, or 1.2% (annualized), from December 31, 2015 and increased $275.8 million, or 4.9%, from March 31, 2015. Average deposits decreased $6.0 million, or 0.4% (annualized), from the prior quarter and increased $259.5 million, or 4.6%, from the prior year. |
NET INTEREST INCOME
Tax-equivalent net interest income was $66.2 million, an increase of $1.3 million from the fourth quarter of 2015, primarily driven by higher earning asset balances and yields. The first quarter tax-equivalent net interest margin increased 6 basis points to 3.82% from 3.76% in the previous quarter. Core tax-equivalent net interest margin (which excludes the 6 and 7 basis point impact of acquisition accounting accretion in the current and prior quarter, respectively) increased 7 basis points to 3.76% from 3.69% in the previous quarter. The increase in the core tax-equivalent net interest margin was principally due to the 8 basis point increase in interest-earning asset yields partially offset by the 1 basis point increase in cost of funds. The increase in interest-earning asset yields was primarily driven by higher loan yields and higher investment yields in the current quarter, resulting from the impact of re-pricing variable-rate earning assets due to increased short term market interest rates.
The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the first quarter, net accretion related to acquisition accounting declined by $216,000, or 15.9%, from the prior quarter to $1.1 million for the quarter ended March 31, 2016. The fourth quarter of 2015, first quarter of 2016, and remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
| Accretion | Accretion (Amortization) | |||||||||||
| Loan | Borrowings | Total | ||||||||||
| For the quarter ended December 31, 2015 | $ | 1,300 | $ | 62 | $ | 1,362 | ||||||
| For the quarter ended March 31, 2016 | 1,084 | 62 | 1,146 | |||||||||
| For the remaining nine months of 2016 | 3,047 | 271 | 3,318 | |||||||||
| For the years ending: | ||||||||||||
| 2017 | 4,018 | 170 | 4,188 | |||||||||
| 2018 | 3,572 | (143 | ) | 3,429 | ||||||||
| 2019 | 2,718 | (286 | ) | 2,432 | ||||||||
| 2020 | 2,067 | (301 | ) | 1,766 | ||||||||
| 2021 | 1,879 | (316 | ) | 1,563 | ||||||||
| Thereafter | 8,910 | (5,306 | ) | 3,604 | ||||||||
ASSET QUALITY/LOAN LOSS PROVISION
Overview
During the first quarter, the Company experienced declines in past due and nonaccrual loan levels and other real estate owned (“OREO”) balances from the prior year. Past due loans decreased from the prior quarter while nonaccrual loans increased from the prior quarter, as loans were moved from past due status to nonaccrual status during the current quarter. The combined past due and nonaccrual loan balances decreased $6.7 million, or 12.3%, from the previous quarter. The loan loss provision and allowance for loan loss increased from the prior quarter due to loan growth in the current quarter.
All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired loans (“PCI”) totaling $70.1 million (net of fair value mark of $16.2 million).
Nonperforming Assets (“NPAs”)
At March 31, 2016, NPAs totaled $27.3 million, a decrease of $15.5 million, or 36.2%, from March 31, 2015 and an increase of $103,000, or 0.4%, from December 31, 2015. In addition, NPAs as a percentage of total outstanding loans declined 32 basis points from 0.79% a year earlier and decreased 1 basis point from 0.48% last quarter to 0.47% in the current quarter. 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, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Nonaccrual loans, excluding PCI loans | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | ||||||||||
| Foreclosed properties | 10,941 | 11,994 | 18,789 | 18,917 | 21,727 | |||||||||||||||
| Former bank premises | 3,305 | 3,305 | 3,305 | 3,305 | 3,707 | |||||||||||||||
| Total nonperforming assets | $ | 27,338 | $ | 27,235 | $ | 35,060 | $ | 31,743 | $ | 42,819 | ||||||||||
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, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Beginning Balance | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | $ | 19,255 | ||||||||||
| Net customer payments | (1,204 | ) | (1,493 | ) | (1,104 | ) | (4,647 | ) | (2,996 | ) | ||||||||||
| Additions | 5,150 | 2,344 | 5,213 | 581 | 4,379 | |||||||||||||||
| Charge-offs | (1,446 | ) | (1,245 | ) | (541 | ) | (2,171 | ) | (3,107 | ) | ||||||||||
| Loans returning to accruing status | (932 | ) | (402 | ) | (123 | ) | (919 | ) | (53 | ) | ||||||||||
| Transfers to OREO | (412 | ) | (234 | ) | - | (708 | ) | (93 | ) | |||||||||||
| Ending Balance | $ | 13,092 | $ | 11,936 | $ | 12,966 | $ | 9,521 | $ | 17,385 | ||||||||||
During the first quarter, the additions to nonaccrual loans were comprised of several smaller credit relationships, the majority of which were secured by residential 1-4 family property.
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, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2015 | 2015 | ||||||||||||||||
| Beginning Balance | $ | 15,299 | $ | 22,094 | $ | 22,222 | $ | 25,434 | $ | 28,118 | ||||||||||
| Additions of foreclosed property | 456 | 234 | 1,082 | 904 | 158 | |||||||||||||||
| Additions of former bank premises | - | 1,822 | - | - | 402 | |||||||||||||||
| Capitalized improvements | - | - | 9 | 243 | 56 | |||||||||||||||
| Valuation adjustments | (126 | ) | (4,229 | ) | (473 | ) | (710 | ) | (590 | ) | ||||||||||
| Proceeds from sales | (1,390 | ) | (4,961 | ) | (767 | ) | (3,511 | ) | (2,748 | ) | ||||||||||
| Gains (losses) from sales | 7 | 339 | 21 | (138 | ) | 38 | ||||||||||||||
| Ending Balance | $ | 14,246 | $ | 15,299 | $ | 22,094 | $ | 22,222 | $ | 25,434 | ||||||||||
During the first quarter, the majority of sales of OREO were related to land and residential real estate.
Past Due Loans
Past due loans still accruing interest totaled $35.1 million, or 0.61% of total loans, at March 31, 2016 compared to $42.7 million, or 0.79%, a year ago and $42.9 million, or 0.76%, at December 31, 2015. At March 31, 2016, loans past due 90 days or more and accruing interest totaled $5.7 million, or 0.10% of total loans, compared to $7.9 million, or 0.15%, a year ago and $5.8 million, or 0.10%, at December 31, 2015.
Net Charge-offs
For the first quarter, net charge-offs were $2.2 million, or 0.15% on an annualized basis, compared to $3.2 million, or 0.24%, for the same quarter last year and $1.2 million, or 0.09%, for the fourth quarter of 2015.
Provision
The provision for loan losses for the current quarter was $2.5 million, an increase of $754,000 compared to the same quarter a year ago and an increase of $494,000 compared to the previous quarter. The increase in provision for loan losses in the current quarter compared to the prior periods was primarily driven by higher loan balances. Additionally, a $100,000 provision was recognized during the current quarter for unfunded loan commitments, resulting in a total of $2.6 million in provision for credit losses for the quarter.
Allowance for Loan Losses
The allowance for loan losses (“ALL”) increased $352,000 from December 31, 2015 to $34.4 million at March 31, 2016 primarily due to loan growth during the quarter. The allowance for loan losses as a percentage of the total loan portfolio was 0.60% at March 31, 2016, 0.60% at December 31, 2015, and 0.57% at March 31, 2015. The ALL as a percentage of the total loan portfolio, adjusted for purchase accounting (non-GAAP), was 0.95% at March 31, 2016, a decrease from 0.98% from the prior quarter and a decrease from 1.03% from the quarter ended March 31, 2015. In acquisition accounting, there is no carryover of previously established allowance for loan losses, as acquired loans are recorded at fair value.
The nonaccrual loan coverage ratio was 262.8% at March 31, 2016, compared to 285.3% at December 31, 2015 and 178.2% at March 31, 2015. 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 decreased $1.1 million, or 6.5%, to $15.9 million for the quarter ended March 31, 2016 from $17.0 million in the prior quarter, primarily driven by lower gains on the sales of securities and the net benefit from the sale of the credit card portfolio recorded in the fourth quarter of 2015. Excluding these items, noninterest income increased $505,000, or 3.3%, from the prior quarter. Loan-related interest rate swap fees were $662,000 higher and income from bank owned life insurance was $209,000 higher than the prior quarter. Customer-related fee income decreased $339,000, primarily driven by lower overdraft fees and lower wealth management income, partially offset by higher safe deposit box rent income. Gains on the sale of securities decreased $670,000 from $813,000 in the prior quarter to $143,000 in the first quarter of 2016.
Mortgage banking income remained relatively flat, experiencing a modest decline of $39,000, or 1.8%, from the prior quarter to $2.2 million in the first quarter of 2016. Included in mortgage banking income were unrealized gains on mortgage banking derivatives of $175,000 in the current quarter compared to unrealized gains of $2,000 in the prior quarter. Mortgage loan originations decreased by $14.8 million, or 13.1%, in the current quarter to $98.2 million from $113.0 million in the fourth quarter of 2015. Of the mortgage loan originations in the current quarter, 38.0% were refinances, which was an increase from 36.2% in the prior quarter.
NONINTEREST EXPENSE
Noninterest expense decreased $204,000, or 0.4%, to $54.3 million for the quarter ended March 31, 2016 from $54.5 million in the prior quarter. OREO and credit-related costs decreased $3.9 million related to lower valuation adjustments, as the Company recorded $4.2 million in valuation adjustments in the prior quarter related to updated appraisals on two large OREO properties. This decrease was offset by increased salary and benefit expenses of $2.8 million primarily related to seasonal increases in payroll taxes and annual merit adjustments as well as increased group insurance and incentive compensation costs. Professional fees increased $687,000 due to higher audit and project-related consulting expenses, and marketing expenses increased $563,000 primarily related to the timing of advertising campaigns and higher public relations expenses. Noninterest expense in the first quarter included branch closure costs of approximately $300,000 related to previously announced 2016 branch closures.
BALANCE SHEET
At March 31, 2016, total assets were $7.8 billion, an increase of $139.3 million from December 31, 2015 and an increase of $444.1 million from March 31, 2015. The increase in assets was mostly related to loan growth.
At March 31, 2016, loans held for investment were $5.8 billion, an increase of $109.0 million, or 7.7% (annualized), from December 31, 2015, while average loans increased $97.6 million, or 7.0% (annualized), from the prior quarter. Adjusted for the sale of the credit card portfolio that occurred in the third quarter of 2015, loans held for investment increased $417.4 million, or 7.8%, from March 31, 2015, while average loans increased $373.8 million, or 7.0 %, from the prior year.
At March 31, 2016, total deposits were $5.9 billion, a decrease of $18.0 million, or 1.2% (annualized), from December 31, 2015, while average deposits decreased $6.0 million, or 0.4% (annualized), from December 31, 2015. The net decrease in deposits from the prior quarter was primarily related to declines in noninterest-bearing deposits, NOW accounts, and time deposits, partially offset by increases in money markets and savings accounts. Total deposits increased $275.8 million, or 4.9%, from March 31, 2015, while average deposits increased $259.5 million, or 4.6%, from the prior year.
At March 31, 2016, December 31, 2015, and March 31, 2015, respectively, the Company had a common equity Tier 1 capital ratio of 10.26%, 10.55%, and 10.86%; a Tier 1 capital ratio of 11.64%, 11.93%, and 12.32%; a total capital ratio of 12.17%, 12.46%, and 12.82%; and a leverage ratio of 10.25%, 10.68%, and 10.79%.
The Company’s common equity to asset ratios at March 31, 2016, December 31, 2015, and March 31, 2015 were 12.52%, 12.94%, and 13.36%, respectively, while its tangible common equity to tangible assets ratio was 8.86%, 9.20%, and 9.40%, respectively. The decrease in capital ratios from prior periods is primarily due to share repurchases.
During the first quarter, the Company declared and paid cash dividends of $0.19 per common share, consistent with the dividend paid in the prior quarter and an increase of $0.04, or 26.7%, compared to the same quarter in the prior year.
On October 29, 2015, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. This share repurchase program was completed on February 19, 2016. On February 29, 2016, the Company’s Board of Directors authorized another share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The Company repurchased approximately 1.0 million shares during the quarter ended March 31, 2016 and had approximately $22.4 million available for repurchase under the current program.
* * * * * * *
ABOUT UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union Bank & Trust, which has 121 banking offices and 201 ATMs located throughout Virginia. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage products, and Union Insurance Group, LLC, which offers various lines of insurance products.
Additional information on the Company is available athttp://investors.bankatunion.com.
Union Bankshares Corporation will hold a conference call on Wednesday, April 20th, 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. The conference ID number is 87041131.
NON-GAAP MEASURES
In reporting the results of the quarter ended March 31, 2016, the Company has provided supplemental performance measures on a tangible basis. Tangible common equity is used in the calculation of certain 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.
These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. 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. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” 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 and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, information security, and consumer spending and saving habits. More information is available on the Company’s website,http://investors.bankatunion.com. The information on the Company’s website is not a part of this press release. 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")
| Three Months Ended | ||||||||||||
| 03/31/16 | 12/31/15 | 03/31/15 | ||||||||||
| Results of Operations | ||||||||||||
| Interest and dividend income | $ | 70,749 | $ | 69,317 | $ | 67,600 | ||||||
| Interest expense | 7,018 | 6,712 | 5,631 | |||||||||
| Net interest income | 63,731 | 62,605 | 61,969 | |||||||||
| Provision for credit losses | 2,604 | 2,010 | 1,750 | |||||||||
| Net interest income after provision for credit losses | 61,127 | 60,595 | 60,219 | |||||||||
| Noninterest income | 15,914 | 17,016 | 15,054 | |||||||||
| Noninterest expenses | 54,272 | 54,476 | 53,840 | |||||||||
| Income before income taxes | 22,769 | 23,135 | 21,433 | |||||||||
| Income tax expense | 5,808 | 5,321 | 5,732 | |||||||||
| Net income | $ | 16,961 | $ | 17,814 | $ | 15,701 | ||||||
| Interest earned on earning assets (FTE) | $ | 73,238 | $ | 71,655 | $ | 69,761 | ||||||
| Net interest income (FTE) | 66,220 | 64,943 | 64,130 | |||||||||
| Core deposit intangible amortization | 1,880 | 2,010 | 2,222 | |||||||||
| Net income - community bank segment | $ | 16,907 | $ | 17,904 | $ | 15,968 | ||||||
| Net income (loss) - mortgage segment | 54 | (90 | ) | (267 | ) | |||||||
| Key Ratios | ||||||||||||
| Earnings per common share, diluted | $ | 0.38 | $ | 0.40 | $ | 0.35 | ||||||
| Return on average assets (ROA) | 0.88 | % | 0.93 | % | 0.86 | % | ||||||
| Return on average equity (ROE) | 6.89 | % | 7.08 | % | 6.48 | % | ||||||
| Return on average tangible common equity (ROTCE) | 10.13 | % | 10.38 | % | 9.67 | % | ||||||
| Efficiency ratio (FTE) | 66.08 | % | 66.47 | % | 67.99 | % | ||||||
| Efficiency ratio - community bank segment (FTE) | 65.27 | % | 65.38 | % | 66.43 | % | ||||||
| Efficiency ratio - mortgage bank segment (FTE) | 93.36 | % | 105.16 | % | 115.86 | % | ||||||
| Net interest margin (FTE) | 3.82 | % | 3.76 | % | 3.95 | % | ||||||
| Yields on earning assets (FTE) | 4.23 | % | 4.15 | % | 4.30 | % | ||||||
| Cost of interest-bearing liabilities (FTE) | 0.52 | % | 0.51 | % | 0.45 | % | ||||||
| Cost of funds (FTE) | 0.41 | % | 0.39 | % | 0.35 | % | ||||||
| Net interest margin, core (FTE)(1) | 3.76 | % | 3.69 | % | 3.84 | % | ||||||
| Yields on earning assets (FTE), core(1) | 4.16 | % | 4.08 | % | 4.26 | % | ||||||
| Cost of interest-bearing liabilities (FTE), core(1) | 0.53 | % | 0.52 | % | 0.54 | % | ||||||
| Cost of funds (FTE), core(1) | 0.40 | % | 0.39 | % | 0.42 | % | ||||||
| Per Share Data | ||||||||||||
| Earnings per common share, basic | $ | 0.38 | $ | 0.40 | $ | 0.35 | ||||||
| Earnings per common share, diluted | 0.38 | 0.40 | 0.35 | |||||||||
| Cash dividends paid per common share | 0.19 | 0.19 | 0.15 | |||||||||
| Market value per share | 24.63 | 25.24 | 22.21 | |||||||||
| Book value per common share | 22.55 | 22.38 | 21.98 | |||||||||
| Tangible book value per common share | 15.31 | 15.25 | 14.78 | |||||||||
| Price to earnings ratio, diluted | 16.12 | 15.90 | 15.65 | |||||||||
| Price to book value per common share ratio | 1.09 | 1.13 | 1.01 | |||||||||
| Price to tangible common share ratio | 1.61 | 1.66 | 1.50 | |||||||||
| Weighted average common shares outstanding, basic | 44,251,276 | 44,899,629 | 45,105,969 | |||||||||
| Weighted average common shares outstanding, diluted | 44,327,229 | 44,988,577 | 45,187,516 | |||||||||
| Common shares outstanding at end of period | 43,854,381 | 44,785,674 | 45,155,024 | |||||||||
| Three Months Ended | ||||||||||||
| 03/31/16 | 12/31/15 | 03/31/15 | ||||||||||
| Capital Ratios | ||||||||||||
| Common equity Tier 1 capital ratio(2) | 10.26 | % | 10.55 | % | 10.86 | % | ||||||
| Tier 1 capital ratio(2) | 11.64 | % | 11.93 | % | 12.32 | % | ||||||
| Total capital ratio (2) | 12.17 | % | 12.46 | % | 12.82 | % | ||||||
| Leverage ratio (Tier 1 capital to average assets)(2) | 10.25 | % | 10.68 | % | 10.79 | % | ||||||
| Common equity to total assets | 12.52 | % | 12.94 | % | 13.36 | % | ||||||
| Tangible common equity to tangible assets | 8.86 | % | 9.20 | % | 9.40 | % | ||||||
| Financial Condition | ||||||||||||
| Assets | $ | 7,832,611 | $ | 7,693,291 | $ | 7,388,559 | ||||||
| Loans held for investment | 5,780,502 | 5,671,462 | 5,387,755 | |||||||||
| Earning Assets | 7,045,552 | 6,900,023 | 6,602,453 | |||||||||
| Goodwill | 293,522 | 293,522 | 293,522 | |||||||||
| Core deposit intangibles, net | 21,430 | 23,310 | 29,533 | |||||||||
| Deposits | 5,945,982 | 5,963,936 | 5,670,228 | |||||||||
| Stockholders' equity | 980,978 | 995,367 | 986,916 | |||||||||
| Tangible common equity(3) | 666,026 | 678,535 | 663,861 | |||||||||
| Loans held for investment, net of deferred fees and costs | ||||||||||||
| Construction and land development | $ | 777,184 | $ | 749,889 | $ | 658,483 | ||||||
| Commercial real estate - owner occupied | 849,606 | 860,490 | 898,626 | |||||||||
| Commercial real estate - non-owner occupied | 1,296,251 | 1,270,480 | 1,180,464 | |||||||||
| Multifamily real estate | 323,270 | 322,528 | 298,651 | |||||||||
| Commercial & Industrial | 456,893 | 438,528 | 411,641 | |||||||||
| Residential 1-4 Family | 977,454 | 977,690 | 971,110 | |||||||||
| HELOC | 517,122 | 516,726 | 514,750 | |||||||||
| Consumer and all other | 586,273 | 538,088 | 457,292 | |||||||||
| Total loans held for investment | $ | 5,784,053 | $ | 5,674,419 | $ | 5,391,017 | ||||||
| Less: Deferred fees, net | 3,551 | 2,957 | 3,262 | |||||||||
| Total loans held for investment, net of deferred fees | $ | 5,780,502 | $ | 5,671,462 | $ | 5,387,755 | ||||||
| Deposits | ||||||||||||
| NOW accounts | $ | 1,504,227 | $ | 1,521,906 | $ | 1,328,994 | ||||||
| Money market accounts | 1,323,192 | 1,312,612 | 1,258,564 | |||||||||
| Savings accounts | 589,542 | 572,800 | 565,506 | |||||||||
| Time deposits of $100,000 and over | 508,153 | 514,286 | 520,720 | |||||||||
| Other time deposits | 657,625 | 669,395 | 721,509 | |||||||||
| Total interest-bearing deposits | $ | 4,582,739 | $ | 4,590,999 | $ | 4,395,293 | ||||||
| Demand deposits | 1,363,243 | 1,372,937 | 1,274,935 | |||||||||
| Total deposits | $ | 5,945,982 | $ | 5,963,936 | $ | 5,670,228 | ||||||
| Averages | ||||||||||||
| Assets | $ | 7,764,830 | $ | 7,624,416 | $ | 7,362,683 | ||||||
| Loans held for investment | 5,709,998 | 5,612,366 | 5,360,676 | |||||||||
| Loans held for sale | 27,304 | 35,402 | 38,469 | |||||||||
| Securities | 1,187,150 | 1,149,817 | 1,143,632 | |||||||||
| Earning assets | 6,968,988 | 6,845,071 | 6,576,415 | |||||||||
| Deposits | 5,899,404 | 5,905,406 | 5,639,917 | |||||||||
| Certificates of deposit | 1,171,972 | 1,196,127 | 1,269,352 | |||||||||
| Interest-bearing deposits | 4,562,856 | 4,536,643 | 4,416,699 | |||||||||
| Borrowings | 816,943 | 659,567 | 679,341 | |||||||||
| Interest-bearing liabilities | 5,379,799 | 5,196,210 | 5,096,040 | |||||||||
| Stockholders' equity | 989,414 | 998,590 | 982,548 | |||||||||
| Tangible common equity(3) | 673,562 | 680,801 | 658,429 | |||||||||
| Three Months Ended | ||||||||||||
| 03/31/16 | 12/31/15 | 03/31/15 | ||||||||||
| Asset Quality | ||||||||||||
| Allowance for Loan Losses (ALL) | ||||||||||||
| Beginning balance | $ | 34,047 | $ | 33,269 | $ | 32,384 | ||||||
| Add: Recoveries | 828 | 933 | 672 | |||||||||
| Less: Charge-offs | 2,980 | 2,165 | 3,829 | |||||||||
| Add: Provision for loan losses | 2,504 | 2,010 | 1,750 | |||||||||
| Ending balance | $ | 34,399 | $ | 34,047 | $ | 30,977 | ||||||
| ALL / total outstanding loans | 0.60 | % | 0.60 | % | 0.57 | % | ||||||
| ALL / total outstanding loans, adjusted for acquisition accounting(4) | 0.95 | % | 0.98 | % | 1.03 | % | ||||||
| Net charge-offs / total outstanding loans | 0.15 | % | 0.09 | % | 0.24 | % | ||||||
| Provision / total outstanding loans | 0.18 | % | 0.14 | % | 0.13 | % | ||||||
| Total PCI Loans | $ | 70,105 | $ | 73,737 | $ | 91,346 | ||||||
| Nonperforming Assets | ||||||||||||
| Construction and land development | $ | 2,156 | $ | 2,113 | $ | 3,104 | ||||||
| Commercial real estate - owner occupied | 2,816 | 3,904 | 4,954 | |||||||||
| Commercial real estate - non-owner occupied | - | 100 | 2,655 | |||||||||
| Commercial & Industrial | 810 | 429 | 2,018 | |||||||||
| Residential 1-4 Family | 5,696 | 3,563 | 4,000 | |||||||||
| HELOC | 973 | 1,348 | 544 | |||||||||
| Consumer and all other | 641 | 479 | 110 | |||||||||
| Nonaccrual loans | 13,092 | 11,936 | 17,385 | |||||||||
| Other real estate owned | 14,246 | 15,299 | 25,434 | |||||||||
| Total nonperforming assets (NPAs) | 27,338 | 27,235 | 42,819 | |||||||||
| Construction and land development | 544 | 128 | 678 | |||||||||
| Commercial real estate - owner occupied | 196 | 103 | 1,357 | |||||||||
| Commercial real estate - non-owner occupied | 723 | 723 | 328 | |||||||||
| Multifamily real estate | - | 272 | - | |||||||||
| Commercial & Industrial | 422 | 124 | 454 | |||||||||
| Residential 1-4 Family | 2,247 | 3,638 | 3,784 | |||||||||
| HELOC | 1,315 | 762 | 685 | |||||||||
| Consumer and all other | 276 | 79 | 646 | |||||||||
| Loans≥90 days and still accruing | 5,723 | 5,829 | 7,932 | |||||||||
| Total NPAs and loans≥90 days | $ | 33,061 | $ | 33,064 | $ | 50,751 | ||||||
| NPAs / total outstanding loans | 0.47 | % | 0.48 | % | 0.79 | % | ||||||
| NPAs / total assets | 0.35 | % | 0.35 | % | 0.58 | % | ||||||
| ALL / nonperforming loans | 262.75 | % | 285.25 | % | 178.18 | % | ||||||
| ALL / nonperforming assets | 125.83 | % | 125.01 | % | 72.34 | % | ||||||
| Troubled Debt Restructurings | ||||||||||||
| Performing | $ | 11,486 | $ | 10,780 | $ | 21,336 | ||||||
| Nonperforming | 1,470 | 1,921 | 2,740 | |||||||||
| Total troubled debt restructurings | $ | 12,956 | $ | 12,701 | $ | 24,076 | ||||||
| Three Months Ended | ||||||||||||
| 03/31/16 | 12/31/15 | 03/31/15 | ||||||||||
| Past Due Detail | ||||||||||||
| Construction and land development | $ | 2,676 | $ | 3,155 | $ | 1,740 | ||||||
| Commercial real estate - owner occupied | 1,787 | 1,714 | 1,606 | |||||||||
| Commercial real estate - non-owner occupied | 24 | 771 | 1,344 | |||||||||
| Multifamily real estate | 155 | - | - | |||||||||
| Commercial & Industrial | 985 | 1,056 | 1,389 | |||||||||
| Residential 1-4 Family | 13,711 | 15,023 | 16,145 | |||||||||
| HELOC | 1,870 | 2,589 | 3,095 | |||||||||
| Consumer and all other | 2,255 | 3,479 | 2,270 | |||||||||
| Loans 30-59 days past due | $ | 23,463 | $ | 27,787 | $ | 27,589 | ||||||
| Construction and land development | $ | 724 | $ | 380 | $ | 2,397 | ||||||
| Commercial real estate - owner occupied | 963 | 118 | 174 | |||||||||
| Commercial real estate - non-owner occupied | 276 | - | - | |||||||||
| Multifamily real estate | - | - | 656 | |||||||||
| Commercial & Industrial | 284 | 27 | 271 | |||||||||
| Residential 1-4 Family | 1,111 | 6,774 | 2,168 | |||||||||
| HELOC | 388 | 1,112 | 1,119 | |||||||||
| Consumer and all other | 2,122 | 922 | 436 | |||||||||
| Loans 60-89 days past due | $ | 5,868 | $ | 9,333 | $ | 7,221 | ||||||
| Alternative Performance Measures (non-GAAP) | ||||||||||||
| Tangible Common Equity(3) | ||||||||||||
| Ending equity | $ | 980,978 | $ | 995,367 | $ | 986,916 | ||||||
| Less: Ending goodwill | 293,522 | 293,522 | 293,522 | |||||||||
| Less: Ending core deposit intangibles | 21,430 | 23,310 | 29,533 | |||||||||
| Ending tangible common equity (non-GAAP) | $ | 666,026 | $ | 678,535 | $ | 663,861 | ||||||
| Average equity | $ | 989,414 | $ | 998,590 | $ | 982,548 | ||||||
| Less: Average goodwill | 293,522 | 293,522 | 293,522 | |||||||||
| Less: Average core deposit intangibles | 22,330 | 24,267 | 30,597 | |||||||||
| Average tangible common equity (non-GAAP) | $ | 673,562 | $ | 680,801 | $ | 658,429 | ||||||
| ALL to loans, adjusted for acquisition accounting (non-GAAP)(4) | ||||||||||||
| Allowance for loan losses | $ | 34,399 | $ | 34,047 | $ | 30,977 | ||||||
| Remaining fair value mark on purchased performing loans | 19,994 | 20,819 | 23,794 | |||||||||
| Adjusted allowance for loan losses | 54,393 | 54,866 | 54,771 | |||||||||
| Loans, net of deferred fees | 5,780,502 | 5,671,462 | 5,387,755 | |||||||||
| Remaining fair value mark on purchased performing loans | 19,994 | 20,819 | 23,794 | |||||||||
| Less: Purchased credit impaired loans, net of fair value mark | 70,105 | 73,737 | 91,346 | |||||||||
| Adjusted loans, net of deferred fees | $ | 5,730,391 | $ | 5,618,544 | $ | 5,320,203 | ||||||
| ALL / gross loans, adjusted for acquisition accounting | 0.95 | % | 0.98 | % | 1.03 | % | ||||||
| Mortgage Origination Volume | ||||||||||||
| Refinance Volume | $ | 37,304 | $ | 40,943 | $ | 65,549 | ||||||
| Construction Volume | 14,894 | 12,394 | 19,552 | |||||||||
| Purchase Volume | 46,013 | 59,702 | 53,613 | |||||||||
| Total Mortgage loan originations | $ | 98,211 | $ | 113,039 | $ | 138,714 | ||||||
| % of originations that are refinances | 37.98 | % | 36.22 | % | 47.26 | % | ||||||
| Other Data | ||||||||||||
| End of period full-time employees | 1,400 | 1,422 | 1,445 | |||||||||
| Number of full-service branches | 124 | 124 | 131 | |||||||||
| Number of full automatic transaction machines (ATMs) | 201 | 201 | 200 | |||||||||
(1) The core metrics, FTE, exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.
(2) All ratios at March 31, 2016 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(3) Tangible common equity is used in the calculation of certain 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.
(4) The allowance for loan losses ratio, adjusted for acquisition accounting (non-GAAP), includes an adjustment for the fair value mark on purchased performing loans. The purchased performing loans are reported net of the related fair value mark in loans, net of deferred fees, on the Company’s Consolidated Balance Sheet; therefore, the fair value mark is added back to the balance to represent the total loan portfolio. The adjusted allowance for loan losses, including the fair value mark, represents the total reserve on the Company’s loan portfolio. The PCI loans, net of the respective fair value mark, are removed from the loans, net of deferred fees, as these PCI loans are not covered by the allowance established by the Company unless changes in expected cash flows indicate that one of the PCI loan pools are impaired, at which time an allowance for PCI loans will be established. GAAP requires the acquired allowance for loan losses not be carried over in an acquisition or merger. The Company believes the presentation of the allowance for loan losses ratio, adjusted for acquisition accounting, is useful to investors because the acquired loans were purchased at a market discount with no allowance for loan losses carried over to the Company, and the fair value mark on the purchased performing loans represents the allowance associated with those purchased loans. The Company believes that this measure is a better reflection of the reserves on the Company’s loan portfolio.
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
| March 31, | December 31, | March 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| ASSETS | ||||||||||||
| Cash and cash equivalents: | ||||||||||||
| Cash and due from banks | $ | 95,462 | $ | 111,323 | $ | 112,793 | ||||||
| Interest-bearing deposits in other banks | 37,227 | 29,670 | 24,257 | |||||||||
| Federal funds sold | 650 | 1,667 | 312 | |||||||||
| Total cash and cash equivalents | 133,339 | 142,660 | 137,362 | |||||||||
| Securities available for sale, at fair value | 939,409 | 903,292 | 1,089,664 | |||||||||
| Securities held to maturity, at carrying value | 204,444 | 205,374 | - | |||||||||
| Restricted stock, at cost | 58,211 | 51,828 | 53,146 | |||||||||
| Loans held for sale | 25,109 | 36,030 | 46,048 | |||||||||
| Loans held for investment, net of deferred fees and costs | 5,780,502 | 5,671,462 | 5,387,755 | |||||||||
| Less allowance for loan losses | 34,399 | 34,047 | 30,977 | |||||||||
| Net loans held for investment | 5,746,103 | 5,637,415 | 5,356,778 | |||||||||
| Premises and equipment, net | 125,357 | 126,028 | 134,429 | |||||||||
| Other real estate owned, net of valuation allowance | 14,246 | 15,299 | 25,434 | |||||||||
| Core deposit intangibles, net | 21,430 | 23,310 | 29,533 | |||||||||
| Goodwill | 293,522 | 293,522 | 293,522 | |||||||||
| Bank owned life insurance | 175,033 | 173,687 | 140,143 | |||||||||
| Other assets | 96,408 | 84,846 | 82,500 | |||||||||
| Total assets | $ | 7,832,611 | $ | 7,693,291 | $ | 7,388,559 | ||||||
| LIABILITIES | ||||||||||||
| Noninterest-bearing demand deposits | $ | 1,363,243 | $ | 1,372,937 | $ | 1,274,935 | ||||||
| Interest-bearing deposits | 4,582,739 | 4,590,999 | 4,395,293 | |||||||||
| Total deposits | 5,945,982 | 5,963,936 | 5,670,228 | |||||||||
| Securities sold under agreements to repurchase | 91,977 | 84,977 | 39,434 | |||||||||
| Other short-term borrowings | 466,000 | 304,000 | 335,000 | |||||||||
| Long-term borrowings | 291,662 | 291,198 | 299,914 | |||||||||
| Other liabilities | 56,012 | 53,813 | 57,067 | |||||||||
| Total liabilities | 6,851,633 | 6,697,924 | 6,401,643 | |||||||||
| Commitments and contingencies | ||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||
| Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,854,381 shares, 44,785,674 shares, and 45,155,024 shares, respectively. | 57,850 | 59,159 | 59,721 | |||||||||
| Additional paid-in capital | 610,084 | 631,822 | 641,882 | |||||||||
| Retained earnings | 306,685 | 298,134 | 270,618 | |||||||||
| Accumulated other comprehensive income | 6,359 | 6,252 | 14,695 | |||||||||
| Total stockholders' equity | 980,978 | 995,367 | 986,916 | |||||||||
| Total liabilities and stockholders' equity | $ | 7,832,611 | $ | 7,693,291 | $ | 7,388,559 | ||||||
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except share data)
| Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Interest and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 62,947 | $ | 61,880 | $ | 60,452 | ||||||
| Interest on deposits in other banks | 47 | 30 | 17 | |||||||||
| Interest and dividends on securities: | ||||||||||||
| Taxable | 4,316 | 3,985 | 3,807 | |||||||||
| Nontaxable | 3,439 | 3,422 | 3,324 | |||||||||
| Total interest and dividend income | 70,749 | 69,317 | 67,600 | |||||||||
| Interest expense: | ||||||||||||
| Interest on deposits | 4,195 | 4,348 | 3,321 | |||||||||
| Interest on federal funds purchased | 2 | - | 1 | |||||||||
| Interest on short-term borrowings | 621 | 211 | 249 | |||||||||
| Interest on long-term borrowings | 2,200 | 2,153 | 2,060 | |||||||||
| Total interest expense | 7,018 | 6,712 | 5,631 | |||||||||
| Net interest income | 63,731 | 62,605 | 61,969 | |||||||||
| Provision for credit losses | 2,604 | 2,010 | 1,750 | |||||||||
| Net interest income after provision for credit losses | 61,127 | 60,595 | 60,219 | |||||||||
| Noninterest income: | ||||||||||||
| Service charges on deposit accounts | 4,734 | 5,104 | 4,214 | |||||||||
| Other service charges and fees | 4,156 | 3,957 | 3,584 | |||||||||
| Fiduciary and asset management fees | 2,138 | 2,306 | 2,219 | |||||||||
| Mortgage banking income, net | 2,146 | 2,185 | 2,379 | |||||||||
| Gains on securities transactions, net | 143 | 813 | 193 | |||||||||
| Bank owned life insurance income | 1,372 | 1,163 | 1,135 | |||||||||
| Other operating income | 1,225 | 1,488 | 1,330 | |||||||||
| Total noninterest income | 15,914 | 17,016 | 15,054 | |||||||||
| Noninterest expenses: | ||||||||||||
| Salaries and benefits | 28,048 | 25,287 | 27,492 | |||||||||
| Occupancy expenses | 4,976 | 4,832 | 5,133 | |||||||||
| Furniture and equipment expenses | 2,636 | 2,856 | 2,813 | |||||||||
| Printing, postage, and supplies | 1,139 | 1,154 | 1,370 | |||||||||
| Communications expense | 1,089 | 1,153 | 1,179 | |||||||||
| Technology and data processing | 3,814 | 3,647 | 3,255 | |||||||||
| Professional services | 1,989 | 1,302 | 1,348 | |||||||||
| Marketing and advertising expense | 1,938 | 1,375 | 1,687 | |||||||||
| FDIC assessment premiums and other insurance | 1,362 | 1,346 | 1,398 | |||||||||
| Other taxes | 1,618 | 1,553 | 1,551 | |||||||||
| Loan-related expenses | 599 | 513 | 684 | |||||||||
| OREO and credit-related expenses | 569 | 4,496 | 1,186 | |||||||||
| Amortization of intangible assets | 1,880 | 2,010 | 2,222 | |||||||||
| Training and other personnel costs | 744 | 844 | 721 | |||||||||
| Other expenses | 1,871 | 2,108 | 1,801 | |||||||||
| Total noninterest expenses | 54,272 | 54,476 | 53,840 | |||||||||
| Income before income taxes | 22,769 | 23,135 | 21,433 | |||||||||
| Income tax expense | 5,808 | 5,321 | 5,732 | |||||||||
| Net income | $ | 16,961 | $ | 17,814 | $ | 15,701 | ||||||
| Basic earnings per common share | $ | 0.38 | $ | 0.40 | $ | 0.35 | ||||||
| Diluted earnings per common share | $ | 0.38 | $ | 0.40 | $ | 0.35 | ||||||
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
| Community Bank | Mortgage | Eliminations | Consolidated | |||||||||||||
| Three Months Ended March 31, 2016 | ||||||||||||||||
| Net interest income | $ | 63,425 | $ | 306 | $ | - | $ | 63,731 | ||||||||
| Provision for credit losses | 2,500 | 104 | - | 2,604 | ||||||||||||
| Net interest income after provision for credit losses | 60,925 | 202 | - | 61,127 | ||||||||||||
| Noninterest income | 13,608 | 2,477 | (171 | ) | 15,914 | |||||||||||
| Noninterest expenses | 51,844 | 2,599 | (171 | ) | 54,272 | |||||||||||
| Income before income taxes | 22,689 | 80 | - | 22,769 | ||||||||||||
| Income tax expense | 5,782 | 26 | - | 5,808 | ||||||||||||
| Net income | $ | 16,907 | $ | 54 | $ | - | $ | 16,961 | ||||||||
| Total assets | $ | 7,825,652 | $ | 55,069 | $ | (48,110 | ) | $ | 7,832,611 | |||||||
| Three Months Ended December 31, 2015 | ||||||||||||||||
| Net interest income | $ | 62,271 | $ | 334 | $ | - | $ | 62,605 | ||||||||
| Provision for credit losses | 2,000 | 10 | - | 2,010 | ||||||||||||
| Net interest income after provision for credit losses | 60,271 | 324 | - | 60,595 | ||||||||||||
| Noninterest income | 14,987 | 2,200 | (171 | ) | 17,016 | |||||||||||
| Noninterest expenses | 51,982 | 2,665 | (171 | ) | 54,476 | |||||||||||
| Income (loss) before income taxes | 23,276 | (141 | ) | - | 23,135 | |||||||||||
| Income tax expense (benefit) | 5,372 | (51 | ) | - | 5,321 | |||||||||||
| Net income (loss) | $ | 17,904 | $ | (90 | ) | $ | - | $ | 17,814 | |||||||
| Total assets | $ | 7,690,132 | $ | 57,900 | $ | (54,741 | ) | $ | 7,693,291 | |||||||
| Three Months Ended March 31, 2015 | ||||||||||||||||
| Net interest income | $ | 61,723 | $ | 246 | $ | - | $ | 61,969 | ||||||||
| Provision for credit losses | 1,750 | - | - | 1,750 | ||||||||||||
| Net interest income after provision for credit losses | 59,973 | 246 | - | 60,219 | ||||||||||||
| Noninterest income | 12,848 | 2,376 | (170 | ) | 15,054 | |||||||||||
| Noninterest expenses | 50,972 | 3,038 | (170 | ) | 53,840 | |||||||||||
| Income (loss) before income taxes | 21,849 | (416 | ) | - | 21,433 | |||||||||||
| Income tax expense (benefit) | 5,881 | (149 | ) | - | 5,732 | |||||||||||
| Net income (loss) | $ | 15,968 | $ | (267 | ) | $ | - | $ | 15,701 | |||||||
| Total assets | $ | 7,382,266 | $ | 55,380 | $ | (49,087 | ) | $ | 7,388,559 | |||||||
| AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) |
| For the Quarter Ended | ||||||||||||||||||||||||
| March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
| Average Balance | Interest Income / Expense | Yield / Rate (1) | Average Balance | Interest Income / Expense | Yield / Rate (1) | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable | $ | 743,724 | $ | 4,316 | 2.33 | % | $ | 709,645 | $ | 3,985 | 2.23 | % | ||||||||||||
| Tax-exempt | 443,426 | 5,291 | 4.80 | % | 440,172 | 5,264 | 4.74 | % | ||||||||||||||||
| Total securities | 1,187,150 | 9,607 | 3.25 | % | 1,149,817 | 9,249 | 3.19 | % | ||||||||||||||||
| Loans, net (2) (3) | 5,709,998 | 63,326 | 4.46 | % | 5,612,366 | 62,062 | 4.39 | % | ||||||||||||||||
| Loans held for sale | 27,304 | 257 | 3.79 | % | 35,402 | 313 | 3.51 | % | ||||||||||||||||
| Federal funds sold | 813 | 1 | 0.47 | % | 784 | 1 | 0.28 | % | ||||||||||||||||
| Money market investments | - | - | 0.00 | % | 1 | - | 0.00 | % | ||||||||||||||||
| Interest-bearing deposits in other banks | 43,723 | 47 | 0.44 | % | 46,701 | 30 | 0.25 | % | ||||||||||||||||
| Total earning assets | 6,968,988 | $ | 73,238 | 4.23 | % | 6,845,071 | $ | 71,655 | 4.15 | % | ||||||||||||||
| Allowance for loan losses | (35,034 | ) | (33,583 | ) | ||||||||||||||||||||
| Total non-earning assets | 830,876 | 812,928 | ||||||||||||||||||||||
| Total assets | $ | 7,764,830 | $ | 7,624,416 | ||||||||||||||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||
| Transaction and money market accounts | $ | 2,809,961 | $ | 1,393 | 0.20 | % | $ | 2,770,386 | $ | 1,382 | 0.20 | % | ||||||||||||
| Regular savings | 580,923 | 217 | 0.15 | % | 570,130 | 244 | 0.17 | % | ||||||||||||||||
| Time deposits | 1,171,972 | 2,585 | 0.89 | % | 1,196,127 | 2,722 | 0.90 | % | ||||||||||||||||
| Total interest-bearing deposits | 4,562,856 | 4,195 | 0.37 | % | 4,536,643 | 4,348 | 0.38 | % | ||||||||||||||||
| Other borrowings (4) | 816,943 | 2,823 | 1.39 | % | 659,567 | 2,364 | 1.42 | % | ||||||||||||||||
| Total interest-bearing liabilities | 5,379,799 | $ | 7,018 | 0.52 | % | 5,196,210 | $ | 6,712 | 0.51 | % | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Demand deposits | 1,336,548 | 1,368,763 | ||||||||||||||||||||||
| Other liabilities | 59,069 | 60,853 | ||||||||||||||||||||||
| Total liabilities | 6,775,416 | 6,625,826 | ||||||||||||||||||||||
| Stockholders' equity | 989,414 | 998,590 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,764,830 | $ | 7,624,416 | ||||||||||||||||||||
| Net interest income | $ | 66,220 | $ | 64,943 | ||||||||||||||||||||
| Interest rate spread (5) | 3.71 | % | 3.64 | % | ||||||||||||||||||||
| Cost of funds | 0.41 | % | 0.39 | % | ||||||||||||||||||||
| Net interest margin (6) | 3.82 | % | 3.76 | % | ||||||||||||||||||||
(1) Rates and yields are annualized and calculated from actual, not rounded, amounts in thousands, which appear above.
(2) Nonaccrual loans are included in average loans outstanding.
(3) Interest income on loans includes $1.1 million and $1.3 million for the three months ended March 31, 2016 and December 31, 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.
(4) Interest expense on borrowings includes $62,000 for both the three months ended March 31, 2016 and December 31, 2015 in accretion of the fair market value adjustments related to acquisitions.
(5) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.
(6) Core net interest margin excludes purchase accounting adjustments and was 3.76% and 3.69% for the three months ended March 31, 2016 and December 31, 2015, respectively.