UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000
Commission File No. 0-20293
UNION BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1598552
(State of Incorporation) (I.R.S. Employer Identification No.)
212 North Main Street
P.O. Box 446
Bowling Green, Virginia 22427
(Address of principal executive offices)
(804) 633-5031
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON
STOCK, $2 PAR VALUE
Union Bankshares Corporation (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
----- -----
As of August 10, 2000, Union Bankshares Corporation had 7,515,332 shares of
Common Stock outstanding.
UNION BANKSHARES CORPORATION
FORM 10-Q
June 30, 2000
INDEX
-----
PART 1 - FINANCIAL INFORMATION Page
----
Item 1 - Financial Statements
Consolidated Balance Sheets as of June 30, 2000 and 1999 (Unaudited)
and December 31, 1999 (Audited).................................................. 1
Consolidated Statements of Income
For the three months and six months ended June 30, 2000 and 1999 (Unaudited) 2
Consolidated Statements of Changes in Shareholders' Equity
For the six months ended June 30, 2000 and 1999 (Unaudited) 3
Consolidated Statements of Cash Flows
For the six months ended June 30, 2000 and 1999 (Unaudited) 4
Notes to Consolidated Financial Statements (Unaudited).............................. 5-9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations............................. 10-18
Item 3 - Quantitative and Qualitative Disclosures about Market Risk.................... 19
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K.............................................. 20
Signatures............................................................................. 21
Index to Exhibits...................................................................... 22
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands)
June 30, December 31, June 30,
ASSETS 2000 1999 1999
- -------- ---- ---- ----
(Unaudited) (Unaudited)
Cash and cash equivalents:
Cash and due from banks $ 22,189 $ 18,804 $ 31,296
Interest-bearing deposits in other banks 4,759 867 2,336
Federal funds sold 49 248 5,128
--------------- -------------- --------------
Total cash and cash equivalents 26,997 19,919 38,760
--------------- -------------- --------------
Securities available for sale, at fair value 216,993 201,721 196,389
Investment securities
fair value of $6,644, $9,518 and $10,799 , respectively 6,687 9,578 10,790
--------------- -------------- --------------
Total securities 223,680 211,299 207,179
--------------- -------------- --------------
Loans held for sale 16,004 6,680 16,028
Loans, net of unearned income 576,012 543,367 505,966
Less allowance for loan losses 7,594 6,617 7,303
--------------- -------------- --------------
Net loans 568,418 536,750 498,663
--------------- -------------- --------------
Bank premises and equipment, net 20,940 21,458 22,928
Other real estate owned 1,774 2,016 1,032
Other assets 25,097 23,705 22,367
--------------- -------------- --------------
Total assets $ 882,910 $ 821,827 $ 806,957
=============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits $ 91,224 $ 79,048 $ 103,190
Interest-bearing deposits:
Savings accounts 56,521 58,209 61,823
NOW accounts 107,192 95,882 81,312
Money market accounts 59,227 63,249 62,930
Time deposits of $100,000 and over 107,972 107,654 92,352
Other time deposits 264,763 242,824 235,376
--------------- -------------- --------------
Total interest-bearing deposits 595,675 567,818 533,793
--------------- -------------- --------------
Total deposits 686,899 646,866 636,983
--------------- -------------- --------------
Short-term borrowings 37,943 39,159 27,607
Long-term borrowings 80,728 54,420 52,145
Other liabilities 6,884 12,588 20,046
--------------- -------------- --------------
Total liabilities 812,454 753,033 736,781
--------------- -------------- --------------
Stockholders' equity:
Common stock, $2 par value. Authorized 24,000,000 shares;
issued and outstanding, 7,515,332, 7,487,829 and
7,475,220 shares, respectively 15,031 14,976 14,950
Surplus 411 163 -
Retained earnings 60,418 58,603 56,992
Accumulated other comprehensive income (losses) (5,404) (4,948) (1,766)
--------------- -------------- --------------
Total stockholders' equity 70,456 68,794 70,176
--------------- -------------- --------------
Total liabilities and stockholders' equity $ 882,910 $ 821,827 $ 806,957
=============== ============== ==============
See accompanying notes to consolidated financial statements.
1
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
------------------------------- -----------------------------
2000 1999 2000 1999
---- ---- ---- ----
Interest income:
Interest and fees on loans $ 12,677 $ 10,470 $ 24,575 $ 20,788
Interest on securities:
Nontaxable 1,232 1,126 2,477 2,198
Taxable 2,302 1,915 4,490 3,453
Interest on Federal funds sold 1 29 20 88
Interest on interest-bearing deposits in other banks 16 1 32 29
------------- ------------- -------------- ---------------
Total interest income 16,228 13,541 31,594 26,556
------------- ------------- -------------- ---------------
Interest expense:
Interest on deposits 6,521 5,664 12,550 11,342
Interest on short term borrowings 763 177 1,356 329
Interest on long term borrowings 1,098 742 2,156 1,195
------------- ------------- -------------- ---------------
Total interest expense 8,382 6,583 16,062 12,866
------------- ------------- -------------- ---------------
Net interest income 7,846 6,958 15,532 13,690
Provision for loan losses 581 751 1,145 1,513
------------- ------------- -------------- ---------------
Net interest income after provision
for loan losses 7,265 6,207 14,387 12,177
------------- ------------- -------------- ---------------
Noninterest income:
Service charges on deposit accounts 911 738 1,717 1,430
Other service charges and fees 538 389 1,022 822
Gains on securities transactions, net 64 - 86 19
Gains on sales of loans 1,593 2,558 2,638 4,993
Gains (losses) on sales of other real estate owned
and bank premises, net - - 5 (2)
Other operating income 113 105 212 191
------------- ------------- -------------- ---------------
Total noninterest income 3,219 3,790 5,680 7,453
------------- ------------- -------------- ---------------
Noninterest expenses:
Salaries and benefits 4,832 4,999 9,475 9,507
Occupancy expenses 554 522 1,161 918
Furniture and equipment expenses 740 589 1,471 1,053
Other operating expenses 2,037 2,360 4,087 4,352
------------- ------------- -------------- ---------------
Total noninterest expenses 8,163 8,470 16,194 15,830
------------- ------------- -------------- ---------------
Income before income taxes 2,321 1,527 3,873 3,800
Income tax expense 427 195 558 653
------------- ------------- -------------- ---------------
Net income $ 1,894 $ 1,332 $ 3,315 $ 3,147
============= ============= ============== ===============
Basic net income per share $ 0.25 $ 0.18 $ 0.44 $ 0.42
============= ============= ============== ===============
Diluted net income per share $ 0.25 $ 0.18 $ 0.44 $ 0.41
============= ============= ============== ===============
Dividends per share $ 0.20 $ 0.20 $ 0.20 $ 0.20
============= ============= ============== ===============
See accompanying notes to consolidated financial statements.
2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (unaudited)
(dollars in thousands)
Shares Common
Outstanding Stock Surplus
----------- ----- -------
Balance - December 31, 1998 7,507,394 15,015 311
Comprehensive income:
Net income - for six months ended June 30, 1999
Other comprehensive income net of tax:
Unrealized holding losses arising during the period (net of tax, $2111)
Reclassification adjustment (net of tax, $6)
Other comprehensive income (net of tax, $2,117)
Total comprehensive income
Cash dividends - 1999 ($.40 per share semi annually)
Issuance of common stock under Dividend Reinvestment Plan (10,848 shares) 10,848 22 145
Stock repurchased under Stock Repurchase Plan (104,912 shares) (104,912) (210) (1,704)
Discretionary transfer of retained earnings to surplus 367
Issuance of common stock under Incentive Stock Option Plan (400 shares) 400 1 4
Issuance of common stock in exchange for net assets in
acquisition (61,490 shares) 61,490 122 877
----------------------------
Balance - June 30, 1999 7,475,220 $ 14,950 $ 0
============================
Balance - December 31, 1999 7,487,829 14,976 163
Comprehensive income:
Net income - for six months ended June 30, 2000
Other comprehensive income net of tax:
Unrealized holding losses arising during the period (net of tax, $206)
Reclassification adjustment (net of tax, $29)
Other comprehensive income (net of tax, $ 235)
Total comprehensive income
Cash dividends - 2000 ($.40 per share semi annually)
Issuance of common stock under Dividend Reinvestment Plan (16,090 shares) 16,090 33 140
Stock repurchased under Stock Repurchase Plan (11,300 shares) (11,300) (23) (115)
Issuance of common stock under Incentive Stock Option Plan (5040 shares) 5,040 10 22
Issuance of common stock in exchange for net assets in
acquisition (17,673 shares) 17,673 35 201
----------------------------
Balance - June 30, 2000 7,515,332 $ 15,031 $ 411
============================
See accompanying notes to consolidated financial statements
Accumulated
Other
Comprehensive Comprehensive
Income (Loss) Income (Loss) Total
------------- ------------- -----
Balance - December 31, 1998 2,343 73,359
Comprehensive income:
Net income - for six months ended June 30, 1999 3,147 3,147
Other comprehensive income net of tax:
Unrealized holding losses arising during the period (net of tax, $2111) (4,096)
Reclassification adjustment (net of tax, $6) (13)
-----------------
Other comprehensive income (net of tax, $2,117) (4,109) (4,109) (4,109)
-----------------
Total comprehensive income (962)
=================
Cash dividends - 1999 ($.40 per share semi annually) (1,495)
Issuance of common stock under Dividend Reinvestment Plan (10,848 shares) 167
Stock repurchased under Stock Repurchase Plan (104,912 shares) (1,914)
Discretionary transfer of retained earnings to surplus -
Issuance of common stock under Incentive Stock Option Plan (400 shares) 5
Issuance of common stock in exchange for net assets in
acquisition (61,490 shares) 1,016
---------------- -------------
Balance - June 30, 1999 $ (1,766) $ 70,176
================ =============
Balance - December 31, 1999 (4,948) 68,794
Comprehensive income:
Net income - for six months ended June 30, 2000 3,315 3,315
Other comprehensive income net of tax:
Unrealized holding losses arising during the period (net of tax, $206 ) (399)
Reclassification adjustment (net of tax, $29) (57)
-----------------
Other comprehensive income (net of tax, $ 235) (456) (456) (456)
-----------------
Total comprehensive income 2,859 -
=================
Cash dividends - 2000 ($.40 per share semi annually) (1,500)
Issuance of common stock under Dividend Reinvestment Plan (16,090 shares) 173
Stock repurchased under Stock Repurchase Plan (11,300 shares) (138)
Issuance of common stock under Incentive Stock Option Plan (5040 shares) 32
Issuance of common stock in exchange for net assets in
acquisition (17,673 shares) 236
---------------- -------------
Balance - June 30, 2000 $ (5,404) $ 70,456
================ =============
3
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 2000 and 1999
(dollars in thousands)
2000 1999
------------ -----------
Operating activities:
Net income $ 3,315 $ 3,147
Adjustments to reconcile net income to net cash and
cash equivalents used in operating activities:
Depreciation of bank premises and equipment 1,232 1,244
Amortization 284 430
Provision for loan losses 1,145 1,513
(Gains) on sales of securities available for sale (86) (19)
(Gains) losses on sale of other real estate owned
and fixed assets, net (5) 2
(Increase) in loans held for sale (9,324) (16,028)
(Increase) in other assets (1,395) (1,605)
Increase (decrease) in other liabilities (5,469) 17,005
------------ ------------
Net cash and cash equivalents (used in) provided by
operating activities (10,303) 5,689
------------ ------------
Investing activities:
Net increase in securities (13,018) (36,211)
Net increase in loans (32,874) (26,881)
Acquisition of bank premises and equipment (880) (3,115)
Proceeds from sales of bank premises and equipment 181 -
Proceeds from sales of other real estate owned 280 190
------------ ------------
Net cash and cash equivalents used in
investing activities (46,311) (66,017)
------------ ------------
Financing activities:
Net increase in noninterest-bearing deposits 12,176 21,861
Net increase in interest-bearing deposits 27,857 7,493
Net increase (decrease) in short-term borrowings (1,216) 8,131
Proceeds from long-term borrowings 26,500 23,880
Issuance of common stock 205 172
Repurchase of common stock (138) (1,914)
Cash dividends paid (1,500) (1,495)
Repayment of long-term borrowings (192) (60)
------------ ------------
Net cash and cash equivalents provided by
financing activities 63,692 58,068
------------ ------------
Increase (decrease) in cash and cash equivalents 7,078 (2,260)
Cash and cash equivalents at beginning of period 19,919 41,020
------------ ------------
Cash and cash equivalents at end of period $ 26,997 $ 38,760
============ ============
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest 15,618 11,860
Income taxes 545 564
See accompanying notes to consolidated financial statements.
4
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
June 30, 2000
1. ACCOUNTING POLICIES
-------------------
The consolidated financial statements include the accounts of Union
Bankshares Corporation and its subsidiaries (the "Company"). Significant
intercompany accounts and transactions have been eliminated in consolidation.
The information contained in the financial statements is unaudited and does
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However,
in the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of the
interim periods presented have been made. Operating results for the three and
six month period ended June 30, 2000 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2000.
These financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
1999 Annual Report to Shareholders. Certain previously reported amounts have
been reclassified to conform to current period presentation.
2. ALLOWANCE FOR LOAN LOSSES
-------------------------
The following summarizes activity in the allowance for loan losses for the
six months ended June 30, (in thousands):
2000 1999
---- ----
Balance, January 1 $6,617 $6,407
Provisions charged to operations 1,145 1,513
Recoveries credited to allowance 200 192
Loans charged off (368) (809)
------ ------
Balance, June 30 $7,594 $7,303
====== ======
5
3. Earnings Per Share
------------------
Basic earnings per share (EPS) is computed by dividing net income by the
weighted average number of shares outstanding during the period. Weighted
average shares used for the computation of basic EPS were 7,503,816 and
7,494,300 for the three months ended June 30, 2000 and 1999. Weighted average
shares used for the computation of basic EPS were 7,499,143 and 7,511,420 for
the six months ended June 30, 2000 and 1999. Diluted EPS is computed using
the weighted number of common shares outstanding during the period, including
the effect of dilutive potential common shares outstanding attributable to
stock options. Weighted average shares used for the computation of diluted
EPS were 7,503,816 and 7,598,455 for the three months ended June 30, 2000 and
1999. Weighted average shares used for the computation of diluted EPS were
7,503,755 and 7,615,180 for the six months ended June 30, 2000 and 1999.
4. SEGMENT REPORTING DISCLOSURES
-----------------------------
Union Bankshares Corporation has two reportable segments: its traditional
full service community banks and its mortgage loan origination business. The
community bank business includes four banks, which provide loan, deposit,
investment, and trust services to retail and commercial customers throughout
their locations in Virginia. Through its mortgage subsidiary, the Company
provides a variety of mortgage loan products in a multi-state market. These
loans are originated and sold principally in the secondary market through
purchase commitments from investors, which subject the company to only de
minimis market risk.
Profit and loss is measured by net income after taxes including realized
gains and losses on the Company's investment portfolio. The accounting
policies of the reportable segments are the same as those described in the
summary of significant accounting policies. Intersegment transactions are
recorded at cost and eliminated as part of the consolidation process.
Both of the Company's reportable segments are service based. The banks offer
a distribution and referral network for the mortgage services to their
customers. Due largely to the lack of overlapping geographic markets, the
mortgage company does not offer a similar network for the banks Another major
distinction between the segments is the source of income. The mortgage
business is a fee based business while the banks are driven principally by
net interest income.
Information about reportable segments and reconciliation of such information
to the consolidated financial statements as of June 30, 2000 and June 30,
1999 follows:
6
Three Months ended June 30, 2000
(in thousands) Banks Mortgage Other Elimination Consolidated
--------------- ------------- --------- ------------ --------------
Net interest income $ 7,939 $ 2 $ (95) $ - $ 7,846
Provision for loan losses 581 - - - 581
--------------------------------------------------------------------------
Net interest income after provision for loan losses 7,358 2 (95) - 7,265
Noninterest income 1,341 1,593 1,854 (1,569) 3,219
Noninterest expense 5,643 2,091 1,994 (1,565) 8,163
--------------------------------------------------------------------------
Income before taxes 3,056 (496) (235) (4) 2,321
Income tax expense (benefit) 646 (180) (39) - 427
--------------------------------------------------------------------------
- - - - -
Net income (loss) $ 2,410 $ (316) $ (196) $ (4) $ 1,894
==========================================================================
-
Total assets $882,733 $ 17,651 $ 76,157 $ (93,631) $ 882,910
==========================================================================
The following summary reconciles segment profit (loss) to income after taxes
(in thousands):
Net Income
Segment profit $ 2,094
Other subsidiary 60
Parent (256)
Intersegment profit elimination (4)
--------------
Net Income $ 1,894
==============
Three Months ended June 30, 1999
(in thousands) Banks Mortgage Other Elimination Consolidated
------------ ------------- ------------ ------------- -------------
Net interest income $ 7,045 $ - $ (87) $ - $ 6,958
Provision for loan losses 751 - - - 751
--------------------------------------------------------------------------
Net interest income after provision for loan losses 6,294 - (87) - 6,207
Noninterest income 1,086 2,558 146 - 3,790
Noninterest expense 4,826 2,859 785 - 8,470
--------------------------------------------------------------------------
Income before taxes 2,554 (301) (726) - 1,527
Income tax expense (benefit) 533 (109) (229) - 195
--------------------------------------------------------------------------
- - - - -
Net income (loss) $ 2,021 $ (192) $ (497) $ - $ 1,332
==========================================================================
Total assets $791,761 $ 19,524 $ 79,013 $ (83,341) $ 806,957
==========================================================================
The following summary reconciles segment profit (loss) to income after
taxes (in thousands):
Net Income
Segment profit $ 1,829
Other subsidiary 56
Parent (553)
Intersegment profit elimination -
--------------
Net Income $ 1,332
==============
7
Six Months ended June 30, 2000
(in thousands)
Banks Mortgage Other Elimination Consolidated
-------------- ---------- ----------- -------------- --------------
Net interest income $ 15,730 $ (11) $ (187) $ - $ 15,532
Provision for loan losses 1,145 1,145
--------------------------------------------------------------------------
Net interest income after provision for loan losses 14,585 (11) (187) 14,387
Noninterest income 2,493 2,638 3,642 (3,093) 5,680
Noninterest expense 11,275 4,087 3,921 (3,089) 16,194
--------------------------------------------------------------------------
Income before taxes 5,803 (1,460) (466) (4) 3,873
Income tax expense (benefit) 1,173 (508) (107) - 558
--------------------------------------------------------------------------
Net income (loss) $ 4,630 $ (952) $ (359) $ (4) $ 3,315
==========================================================================
-
Total assets $882,733 $ 17,651 $ 76,157 $ (93,631) $ 882,910
==========================================================================
The following summary reconciles segment profit (loss) to income after taxes (in
thousands):
Net Income
Segment profit $ 3,678
Other subsidiary 97
Parent (456)
Intersegment profit elimination (4)
--------------
Net Income $ 3,315
==============
Six Months ended June 30, 1999
(in thousands)
Banks Mortgage Other Elimination Consolidated
-------------- ---------- ----------- -------------- --------------
Net interest income $ 13,805 $ - $ (115) $ - $ 13,690
Provision for loan losses 1,513 1,513
--------------------------------------------------------------------------
Net interest income after provision for loan losses 12,292 - (115) 12,177
Noninterest income 2,093 4,993 367 - 7,453
Noninterest expense 9,734 4,630 1,466 - 15,830
--------------------------------------------------------------------------
Income before taxes 4,651 363 (1,214) - 3,800
Income tax expense (benefit) 946 68 (361) - 653
--------------------------------------------------------------------------
Net income (loss) $ 3,705 $ 295 $ (853) $ - $ 3,147
==========================================================================
Total assets $791,761 $ 19,524 $ 79,013 $ (83,341) $ 806,957
==========================================================================
The following summary reconciles segment profit (loss) to income after taxes (in
thousands):
Net Income
Segment profit $ 4,000
Other subsidiary 52
Parent (905)
Intersegment profit elimination -
--------------
Net Income $ 3,147
==============
8
5. RECENT ACCOUNTING STATEMENTS
----------------------------
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which establishes accounting
and reporting standards for derivative instruments and for hedging
activities. It requires that a company recognize all derivative instruments
as either assets or liabilities in the consolidated balance sheet and measure
those instruments at fair value. The accounting for changes in the fair
value of a derivative depends on the intended use of the derivative and the
resulting designation. In June of 1999, the FASB issued SFAS 137, "Accounting
for Derivative Instruments Hedging Activities--Deferral of the Effective Date
of FASB Statement 133". SFAS 137 delayed the effective date of SFAS133 until
fiscal years beginning after June 15, 2000. As such, the effective date for
the Company will be January 1, 2001. The impact of adopting SFAS 133 will
be dependent on the specific derivative instruments in place at the date of
adoption. At this time management believes the adoption of this new standard
will not have a material impact on the financial condition or results of
operations of the Company.
6. FORWARD- LOOKING STATEMENTS
----------------------------
Certain statements in this report may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although the Company believes that its expectations with respect to certain
forward-looking statements are based upon reasonable assumptions within the
bounds of its 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 future results, performance or
achievements expressed or implied by such forward-looking statements.
9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results OF OPERATIONS
Union Bankshares Corporation (the "Company") is a multi-bank holding company
organized under Virginia law which provides financial services through its
wholly-owned subsidiaries, Union Bank & Trust Company, Northern Neck State Bank,
Rappahannock National Bank, the Bank of Williamsburg, Union Investment Services,
Inc., and Mortgage Capital Investors, Inc. The four subsidiary banks, Union
Bank & Trust Company, Northern Neck State Bank, Rappahannock National Bank and
the Bank of Williamsburg are full service retail commercial banks offering a
wide range of banking and related financial services, including demand and time
deposits, as well as commercial, industrial, residential construction,
residential mortgage and consumer loans. Union Investment Services Inc., is a
full service discount brokerage company, which offers a full range of investment
services and sells mutual funds, stocks and bonds. Mortgage Capital Investors,
Inc. provides a wide array of mortgage products through its 13 offices in
Virginia, Maryland, New Jersey, Connecticut, and South Carolina.
The Company's primary trade area stretches from Rappahannock County to
Fredericksburg, south to Hanover County, east to Williamsburg and throughout the
Northern Neck area of Virginia. The Corporate Headquarters is located in
Bowling Green, Virginia. Through its banking subsidiaries, the Company operates
29 branches in its primary trade area. In addition to the primary banking trade
area, Mortgage Capital Investors, Inc. expands the Company's mortgage
origination business to four additional states.
In February 1999, the Company opened the Bank of Williamsburg in temporary
headquarters in the Williamsburg Crossing Shopping Center. In March 2000, the
Bank of Williamsburg moved into its permanent location at 5125 John Tyler
Parkway, which should enhance its continued growth in this community. Deposits
have increased significantly since the move, and we expect this bank to achieve
monthly profitability during the fourth quarter of 2000.
Management's discussion and analysis is presented to aid the reader in
understanding and evaluating the financial condition and results of operations
of the Company. The analysis focuses on the consolidated financial statements,
the footnotes thereto, and the other financial data herein. Highlighted in the
discussion are material changes from prior reporting periods and any
identifiable trends affecting the Company. Amounts are rounded for presentation
purposes, while the percentages presented are computed based on unrounded
amounts.
Results of Operations
- ---------------------
Net income for the second quarter of 2000 was $1.9 million, up from $1.3
million for the same period in 1999. The increase in net income for the period
was caused primarily by an increase in net interest income of $888,000 over the
same period in 1999. The net interest income increase reflects the growth of the
community banking business and higher interest rates. Diluted earnings per share
amounted to $.25 in the second quarter of 2000, as compared to $.18 in the
second quarter of 1999. The Company's annualized return on
10
average assets for the second quarter of 2000 was .88% as compared to .67% a
year ago. The Company's annualized return on average equity totaled 10.94% and
7.19% for the three months ended June 30, 2000 and 1999, respectively.
Net income from the Company's community banking segment increased from
approximately $1.6 million in the second quarter of 1999 to over $2.2 million in
the second quarter of 2000. Continued growth in existing markets, as well as
the performance of acquired and denovo banks and branches and previously
implemented initiatives to consolidate backoffice functions are reflected in
improved operating efficiencies and contributed to the improvement in the
profitability of the community banking segment.
Rising interest rates, coupled with continued strong loan demand and
competition for deposits, have continued to compress the net interest margin.
Deposit competition has heightened as banks, seeking to fund this loan growth,
have offered higher rates on deposits, often repricing their liabilities more
rapidly than their assets. In addition to increasing certain deposit rates to
attract deposits, the Company has also utilized Federal Home Loan Bank Advances
and other borrowings to fund this growth. Such funding is typically more
expensive than lower cost customer deposits and compresses the net interest
margin, but increases net interest income by enabling the Company to grow
earning assets.
The mortgage banking segment continued to suffer from the effects of higher
mortgage rates, the inversion in the yield curve and, in some markets, reduced
inventories of homes. Due to the decline in volumes, the mortgage company has
reduced its noncommission personnel, closed several marginal loan production
offices, and opened two loan production offices in higher volume locations in
Connecticut and New Jersey. The second quarter reflected a slowing of the losses
experienced by the mortgage business to $316,000 versus $636,000 in the first
quarter of 2000. Despite a reduction of $965,000 in gains on sales of loans from
1999 levels, the mortgage banking segment loss increased only $43,000 from
$273,000 loss in the second quarter of 1999. The Company is continuing to make
adjustments to increase the production volumes and improve operating
efficiencies of this segment of our business.
Net income for the first six months of 2000 was $3.3 million, up from $3.1
million for the same period in 1999. The increase in net income for the period
was caused primarily by an increase in net interest income of $1.8 million and a
decrease of $368,000 in the provision for loan loss over the same period in
1999. The net interest income increase reflects the growth of the core banking
business, while a decline in the gain on sale of loans is reflective of the
effect of higher mortgage rates on mortgage loan production volumes. Diluted
earnings per share amounted to $.44 in the first six months of 2000, as compared
to $.41 in the same period of 1999. The Company's annualized return on average
assets for the first six months of 2000 was .79% as compared to .82% a year ago.
The Company's annualized return on average equity totaled 9.70% and 8.61% for
the six months ended June 30, 2000 and 1999, respectively.
Net Interest Income
Net interest income on a tax-equivalent basis for the second quarter of 2000
increased by 13.5% to $8.4 million from $7.4 million for the same period a year
ago. By managing its interest rate spread and increasing the volume of earning
assets over interest-bearing liabilities, the Company has been able to maintain
a strong net interest margin. The current interest rate environment and
11
competition for deposits continue to put pressure on net interest margins. In
addition, the subsidiary banks have periodically engaged in wholesale leverage
transactions, borrowing funds to invest in securities at lower margins of 150 -
200 basis points. Although such transactions increase net income and return on
equity, they do reduce the net interest margin. As of June 30, 2000 such
transactions accounted for $25 million of the Company's total borrowings.
However, with more of its funds going into loans this year, it should begin
contributing to the margin. Average earning assets during the second quarter of
2000 increased by $86.6 million to $804.3 million from the second quarter of
1999, while average interest-bearing deposits grew by $50.8 million to $590.0
million over this same period. The Company's yield on average earning assets was
8.39%, up 50 basis point from 7.89% a year ago, while its cost of average
interest-bearing liabilities increased 51 basis points from 4.29% in second
quarter 1999 to 4.80% in first quarter 2000.
12
Union Bankshares Corporation
Average Balances, Income and Expenses, Yields and Rates (Taxable Equivalent Basis)
---------------------------------------------------------------------------------
Three Months June 30,
---------------------------------------------------------------------------------
2000 1999
---------------------------------------------------------------------------------
Interest
Average Income/ Yield/ Average
Balance Expense Rate Balance
---------------------------------------------------------------------------------
(Dollars in thousands)
Assets:
Securities:
Taxable ............................... $ 123,582 $ 2,302 7.50% $131,210
Tax-exempt(1) ......................... 98,094 1,786 7.32% 86,134
-------------------------- --------------------
Total securities .................. 221,676 4,088 7.42% 217,344
Loans, net................................... 581,678 12,677 8.77% 495,598
Federal funds sold .......................... 77 1 5.22% 4,015
Interest-bearing deposits
in other banks ......................... 856 16 7.52% 775
-------------------------- --------------------
Total earning assets................ 804,287 16,782 8.39% 717,732
Allowance for loan losses..................... (7,341) (7,058)
Total non-earning assets...................... 64,229 83,264
------------ --------------------
Total assets.................................. $ 861,175 $793,938
============ ====================
Liabilities & Stockholders' Equity:
Interest-bearing deposits:
Checking................................ 103,018 554 2.16% $ 87,240
Regular savings......................... 57,072 337 2.37% 59,757
Money market savings.................... 61,971 511 3.31% 64,008
Certificates of deposit:
$100,000 and over....................... 107,307 1,489 5.58% 93,642
Under $100,000.......................... 260,668 3,630 5.60% 234,631
-------------------------- --------------------
Total interest-bearing
deposits....................... 590,036 6,521 4.44% 539,278
Other borrowings.............................. 112,646 1,861 6.65% 76,676
-------------------------- --------------------
Total interest-bearing
liabilities.................... 702,682 8,382 4.80% 615,954
Non-interest bearing liabilities:
Demand deposits......................... 86,161 84,153
Other liabilities....................... 2,725 19,556
------------ --------------------
Total liabilities................... 791,568 719,663
Stockholders' equity.......................... 69,607 74,275
------------ --------------------
Total liabilities and
stockholders' equity.................... $ 861,175 $793,938
============ ====================
Net interest income........................... $ 8,400
==============
Interest rate spread.......................... 3.59%
Interest expense as a percent
of average earning assets............... 4.19%
Net interest margin........................... 4.20%
Union Bankshares Corporation
Average Balances, Income and Expenses, Yields and Rates (Taxable Equivalent Basis)
---------------------------------------------------------------------------------
Three Months June 30,
---------------------------------------------------------------------------------
1999 1998
---------------------------------------------------------------------------------
Interest Interest
Income/ Yield/ Average Income/ Yield/
Expense Rate Balance Expense Rate
---------------------------------------------------------------------------------
(Dollars in thousands)
Assets:
Securities:
Taxable ............................... $ 1,915 5.85% $ 92,147 $ 1,500 6.53%
Tax-exempt(1) ......................... 1,703 7.93% 73,753 1,468 7.98%
------------- ---------------------------
Total securities .................. 3,618 6.68% 165,900 2,968 7.18%
Loans, net................................... 10,470 8.47% 440,108 10,190 9.29%
Federal funds sold .......................... 29 2.90% 6,947 110 6.35%
Interest-bearing deposits
in other banks ......................... 1 0.52% 1,241 21 6.79%
------------- ---------------------------
Total earning assets................ 14,118 7.89% 614,196 13,289 8.68%
Allowance for loan losses..................... (5,106)
Total non-earning assets...................... 67,855
--------------
Total assets.................................. $676,945
==============
Liabilities & Stockholders' Equity:
Interest-bearing deposits:
Checking................................ 410 1.89% $ 73,552 438 2.39%
Regular savings......................... 391 2.62% 58,703 445 3.04%
Money market savings.................... 561 3.52% 61,294 522 3.42%
Certificates of deposit:
$100,000 and over....................... 1,178 5.05% 66,952 927 5.55%
Under $100,000.......................... 3,124 5.34% 222,623 3,080 5.55%
------------- ---------------------------
Total interest-bearing
deposits....................... 5,664 4.21% 483,124 5,412 4.49%
Other borrowings.............................. 919 4.81% 41,647 657 6.33%
------------- ---------------------------
Total interest-bearing
liabilities.................... 6,583 4.29% 524,771 6,069 4.64%
Non-interest bearing liabilities:
Demand deposits......................... 76,185
Other liabilities....................... 5,488
--------------
Total liabilities................... 606,444
Stockholders' equity.......................... 70,501
--------------
Total liabilities and
stockholders' equity.................... $676,945
==============
Net interest income........................... $ 7,535 $ 7,220
============= =============
Interest rate spread.......................... 3.60% 4.04%
Interest expense as a percent
of average earning assets............... 3.68% 3.96%
Net interest margin........................... 4.21% 4.71%
(1) Income and yields are reported on a taxable equivalent basis.
13
Union Bankshares Corporation
Average Balances, Income and Expenses, Yields and Rates (Taxable Equivalent Basis)
----------------------------------------------------------------------------------
Six Months Ended June 30,
----------------------------------------------------------------------------------
2000 1999
----------------------------------------------------------------------------------
Interest
Average Income/ Yield/ Average
Balance Expense Rate Balance
----------------------------------------------------------------------------------
(Dollars in thousands)
Assets:
Securities:
Taxable................................ $ 121,776 $ 4,490 7.42% $115,527
Tax-exempt(1).......................... 98,353 3,590 7.34% 85,977
----------------------------- -----------------
Total securities................... 220,129 8,080 7.38% 201,504
Loans, net................................... 568,881 24,575 8.69% 488,719
Federal funds sold .......................... 422 20 9.53% 4,175
Interest-bearing deposits
in other banks.......................... 972 32 6.62% 1,344
----------------------------- -----------------
Total earning assets................ 790,404 32,707 8.32% 695,742
Allowance for loan losses..................... (7,092) (6,887)
Total non-earning assets...................... 65,454 81,625
--------------- -----------------
Total assets.................................. $ 848,766 $770,480
=============== =================
Liabilities & Stockholders' Equity:
Interest-bearing deposits:
Checking................................ 100,076 1,056 2.12% $ 84,775
Regular savings......................... 57,881 688 2.39% 58,804
Money market savings.................... 62,567 1,016 3.27% 64,024
Certificates of deposit:
$100,000 and ove........................ 105,473 2,853 5.44% 90,913
Under $100,000.......................... 254,342 6,937 5.48% 236,648
----------------------------- -----------------
Total interest-bearing
deposits....................... 580,339 12,550 4.35% 535,164
Other borrowings ............................. 113,546 3,512 6.22% 61,260
----------------------------- -----------------
Total interest-bearing
liabilitie..................... 693,885 16,062 4.66% 596,424
Non-interest bearing liabilities:
Demand deposits......................... 83,301 81,328
Other liabilities....................... 2,879 18,984
--------------- ----------------
Total liabilities................... 780,065 696,736
Stockholders' equity.......................... 68,701 73,744
--------------- ----------------
Total liabilities and
stockholders' equity.................... $ 848,766 $770,480
=============== ================
Net interest income........................... $ 16,645
==============
Interest rate spread.......................... 3.66%
Interest expense as a percent
of average earning assets............... 4.09%
Net interest margin........................... 4.23%
Union Bankshares Corporation
Average Balances, Income and Expenses, Yields and Rates (Taxable Equivalent Basis)
-----------------------------------------------------------------------------------
Six Months Ended June 30,
-----------------------------------------------------------------------------------
1999 1998
-----------------------------------------------------------------------------------
Interest Interest
Income/ Yield/ Average Income/ Yield/
Expense Rate Balance Expense Rate
-----------------------------------------------------------------------------------
(Dollars in thousands)
Assets:
Securities:
Taxable................................ $ 3,453 6.03% $ 94,446 $ 3,017 6.44%
Tax-exempt(1).......................... 3,327 7.80% 72,616 2,900 8.05%
------------- ---------------------------
Total securities................... 6,780 6.79% 167,062 5,917 7.14%
Loans, net................................... 20,788 8.58% 432,005 19,721 9.21%
Federal funds sold .......................... 88 4.25% 8,767 299 6.88%
Interest-bearing deposits
in other banks.......................... 29 4.35% 1,206 46 7.69%
------------- ---------------------------
Total earning assets................ 27,685 8.02% 609,040 25,983 8.60%
Allowance for loan losses..................... (5,028)
Total non-earning assets...................... 60,806
--------------
Total assets.................................. $664,818
==============
Liabilities & Stockholders' Equity:
Interest-bearing deposits:
Checking................................ 871 2.07% $ 69,318 818 2.38%
Regular savings......................... 789 2.71% 57,042 861 3.04%
Money market savings.................... 1,076 3.39% 59,171 1,012 3.45%
Certificates of deposit:
$100,000 and ove........................ 2,349 5.21% 66,245 1,784 5.43%
Under $100,000.......................... 6,257 5.33% 215,790 5,984 5.59%
------------- ---------------------------
Total interest-bearing
deposits....................... 11,342 4.27% 467,566 10,459 4.51%
Other borrowings ............................. 1,524 5.02% 49,105 1,392 5.72%
------------- ---------------------------
Total interest-bearing
liabilitie..................... 12,866 4.35% 516,671 11,851 4.63%
Non-interest bearing liabilities:
Demand deposits......................... 72,846
Other liabilities....................... 5,203
--------------
Total liabilities................... 594,720
Stockholders' equity.......................... 70,098
--------------
Total liabilities and
stockholders' equity..................... $664,818
==============
Net interest income........................... $ 14,819 $ 14,132
============= =============
Interest rate spread.......................... 3.67% 3.98%
Interest expense as a percent
of average earning assets............... 3.71% 3.90%
Net interest margin........................... 4.30% 4.65%
(1) Income and yields are reported on a taxable equivalent basis.
14
Provision for Loan Losses
The provision for loan losses totaled $581,000 for the second quarter of
2000, down from $751,000 for the second quarter of 1999. For the first six
months of 2000, the provision was $1,145,000 versus $1,513,000 for the same
period in 1999. The provision for loan losses for the first quarter and first
six months of 1999 included $350,000 related to a single credit relationship.
These provisions reflect the performance of the loan portfolio and management's
assessment of the credit risk in the portfolio. (See Asset Quality)
Noninterest Income
Noninterest income for the three months ended June 30, 2000 totaled $3.2
million, down from $3.8 million for the same period a year ago. This decrease is
due principally to the decrease in income from gains on sales of loans in the
mortgage banking segment which decreased $965,000 totaling $1.6 million for the
second quarter versus $2.5 million for the second three months of 1999. All
other categories of noninterest income for second quarter 2000 increased over
the same period in 1999 with deposit service charges up $173,000 and other
service charges and fees up $157,000, reflecting deposit growth and initiatives
to enhance fee income. Management continues to seek additional sources of
noninterest income, including increased emphasis on cross-selling services and
better leveraging the financial services available throughout the organization.
Noninterest Expense
Noninterest expense in the second quarter of 2000 totaled $8.1 million, a
decrease of $307,000 over the same period in 1999. Personnel costs comprised
$167,000 of the decrease and include a decline of $587,000 for the mortgage
banking segment. Occupancy expense was up $32,000 and furniture & equipment
expense was up $151,000 while Other operating expenses were down $323,000 over
last year's second quarter. The increases reflect depreciation expenses for
major technology investments made in the second and third quarters of 1999. The
decrease in salary and other expenses reflect the volume declines and cost
reductions initiatives in the mortgage segment.
Financial Condition
- -------------------
Total assets as of June 30, 2000 were $882.9 million, an increase of 9.41%
from $807.0 million at June 30, 1999. Asset growth was fueled by loan growth,
as loans totaled $576 million at June 30, 2000, an increase of 13.8% from $506
million at June 30, 1999. Stockholders' equity totaled $70.5 million at June
30, 2000, which represents a book value of $9.37 per share.
14
Deposit growth was strong as the banks continued to increase market share but
was outpaced by the loan growth. Total deposits at June 30, 2000 were $686.9
million, up 7.8% from $636.9 million at June 30, 1999. Other borrowings totaled
$118.7 million at June 30, 2000, a 48.8% increase over $79.8 million at June 30,
1999. As a result of the loan growth, the Company utilizes other borrowings to
fund the excess growth which compresses the net interest margin but increases
net interest income. The Company also periodically engages in wholesale leverage
transactions to better leverage its capital position. The increases in other
borrowings reflect about $25 million in net leverage transactions over the last
five quarters. These wholesale leverage transactions have typically been
executed at spreads of approximately 150 to 200 basis points and, although they
have negatively impacted the Company's net interest margin (as a percentage),
they have had a positive effect on earnings and return on equity.
Continued competition for deposits, particularly as it impacts certificate of
deposit rates, is reflected in the deposit mix. Management continues to focus
on increasing lower cost deposit products, including noninterest bearing demand
deposits and savings accounts and effective management of competitive rates on
interest sensitive products. Increased competition for funds, by banks seeking
to fund strong loan growth and by non-banks, continues to contribute to a
narrowing of the net interest margin, which has been largely offset by increases
in the volume of earning assets.
Asset Quality
- -------------
The allowance for loan losses is an estimate of an amount adequate to provide
for potential losses in the loan portfolio. General economic trends as well as
conditions affecting individual borrowers affect the level of credit losses.
The allowance is also subject to regulatory examinations and determination as to
adequacy, which may take into account such factors as the methodology used to
calculate the allowance and comparison to peer groups.
The allowance for loan losses totaled $7.6 million at June 30, 2000 or 1.32%
of total loans, as compared to 1.22% at December 31, 1999 and 1.44% at June 30,
1999.
June 30, December 31, June 30,
2000 1999 1999
------ ------ ------
(dollars in thousands)
Non-accrual loans $1,694 $1,487 $2,484
Foreclosed properties 1,774 2,016 1,742
------ ------ ------
Non-performing assets $3,468 $3,503 $4,226
====== ====== ======
Allowance for loan losses $7,594 $6,617 $7,303
Allowance as % of total loans 1.32% 1.22% 1.44%
Non-performing assets to loans
and foreclosed properties .60% .64% .83%
At June 30, 1999, the allowance for loan losses included reserves of
approximately $1.4 million related to a single credit relationship totaling
approximately $1.8 million. Management has previously restructured this credit
with the borrowers in an attempt to work out repayment of this debt, but
collection is uncertain and accordingly, in late 1999, $1.1 million of this
credit was charged off against previously established reserves.
16
Capital Resources
- -----------------
Capital resources represent funds, earned or obtained, over which financial
institutions can exercise greater or longer control in comparison with deposits
and borrowed funds. The adequacy of the Company's capital is reviewed by
management on an ongoing basis with reference to the size, composition, and
quality of the Company's resources and consistency with regulatory requirements
and industry standards. Management seeks to maintain a capital structure that
will assure an adequate level of capital to support anticipated asset growth and
absorb potential losses.
The Federal Reserve, along with the Comptroller of the Currency and the
Federal Deposit Insurance Corporation, has adopted capital guidelines to
supplement the existing definitions of capital for regulatory purposes and to
establish minimum capital standards. Specifically, the guidelines categorize
assets and off-balance sheet items into four risk-weighted categories. The
minimum ratio of qualifying total assets is 8.0%, of which 4.0% must be Tier 1
capital, consisting of common equity and retained earnings, less certain
goodwill items.
At June 30, 2000, the Company's ratio of total capital to risk-weighted
assets was 11.55% and its ratio of Tier 1 capital to risk-weighted assets was
10.41%. Both ratios exceed the fully phased-in capital requirements. The
following summarizes the Company's regulatory capital and related ratios at June
30, 2000 (dollars in thousands):
Tier 1 capital $ 69,568
Tier 2 capital 7,594
Total risk-based capital 77,162
Total risk-weighted assets 668,336
Capital Ratios:
Tier 1 risk-based capital ratio 10.4%
Total risk-based capital ratio 11.6%
Leverage ratio (Tier I capital to
average adjusted total assets) 8.0%
Equity to assets ratio 8.0%
The Company's book value per share at June 30, 2000 was $9.37. Dividends to
stockholders are typically declared and paid semi-annually in June and December.
Liquidity
- -----------
Liquidity represents an institution's ability to meet present and future
financial obligations through either the sale or maturity of existing assets or
the acquisition of additional funds through liability management. Liquid assets
include cash, interest bearing deposits with banks, federal funds sold,
investments (available for sale) and loans maturing within one year. The
Company's ability to obtain deposits and purchase funds at favorable rates
determines its liability liquidity. Additional sources of liquidity available
to the Company include its capacity to borrow additional funds when necessary
through federal funds lines with several regional banks and a line of credit
17
with the Federal Home Loan Bank. Management considers the Company's overall
liquidity to be sufficient to satisfy its depositors' requirements and to meet
its customers' credit needs.
At June 30, 2000 cash, interest-bearing deposits in other banks, Federal
funds sold, securities available for sale and loans maturing or repricing in one
year were 21.0% of total earning assets. At June 30, 2000 approximately $154.8
million or 26.2% of total loans would mature or reprice within the next year.
The Company utilizes Federal funds purchased, FHLB advances, securities sold
under agreements to repurchase and customer repurchase agreements, in addition
to deposits, to fund the growth in its loan portfolio, and to fund securities
purchases, periodically in wholesale leverage transactions.
18
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Earnings Simulation Analysis
Management uses simulation analysis to measure the sensitivity of net
interest income to changes in interest rates. The model calculates an earnings
estimate based on current and projected balances and rates. This method is
subject to the accuracy of the assumptions that underlie the process, but it
provides a better analysis of the sensitivity of earnings to changes in interest
rates than other analysis such as the static gap analysis.
Assumptions used in the model, including loan and deposit growth rates, are
derived from seasonal trends and management's outlook, as are the assumptions
used to project yields and rates for new loans and deposits. All maturities,
calls and prepayments in the securities portfolio are assumed to be reinvested
in like instruments. Mortgage loans and mortgage backed securities prepayment
assumptions are based on industry estimates of prepayment speeds for portfolios
with similar coupon ranges and seasoning. Different interest rate scenarios and
yield curves are used to measure the sensitivity of earnings to changing
interest rates. Interest rates on different asset and liability accounts move
differently when the prime rate changes and are accounted for in the different
rate scenarios.
The following table represents the interest rate sensitivity on net interest
income for the Company using different rate scenarios as of June 30, 2000:
% Change in
Change in Prime Rate Net Interest Income
-------------------- -------------------
+200 basis points -2.17%
Flat 0
-200 basis points +8.35%
Market Value Simulation
Market value simulation is used to calculate the estimated fair value of
assets and liabilities over different interest rate environments. Market values
are calculated based on discounted cash flow analysis. The net market value is
the market value of all assets minus the market value of all liabilities. The
change in net market value over different rate environments is an indication of
the longer term repricing risk in the balance sheet. The same assumptions are
used in the market value simulation as in the earnings simulation.
The following chart reflects the change in net market value over different
rate environments as of June 30, 2000:
Change in Net Market Value
Change in Prime Rate (dollars in thousands)
- -------------------- --------------------------
+200 basis points $-42,271
+100 basis points -25,343
Flat 6,696
-100 basis points 11,110
-200 basis points 27,633
19
PART II - OTHER INFORMATION
---------------------------
Item 6 - Exhibits and Reports on Form 8-K
(a) See attached list of exhibits
20
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 thereunto duly authorized.
Union Bankshares Corporation
----------------------------
(Registrant)
August 14, 2000 ______________________________________
(Date) G. William Beale,
President, Chief Executive Officer
and Director
August 14, 2000
(Date) ______________________________________
D. Anthony Peay,
Vice President and Chief Financial Officer
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
Index to Exhibits
Form 10-Q /June 30, 2000
Exhibit
No. Description
- --- -----------
2 Plan of acquisition, reorganization, arrangement,
liquidation or succession - Not Applicable
4 Instruments defining the rights of security holders,
including indentures Not Applicable
10 Material contracts Not Applicable
11 Statement re: computation of per share earnings Not Applicable
15 Letter re: unaudited interim financial
information Not Applicable
18 Letter re: change in accounting principles Not Applicable
19 Previously unfiled documents Not Applicable
20 Report furnished to security holders Not Applicable
22 Published report re: matters submitted to
vote of security holders None
23 Consents of experts and counsel Not Applicable
24 Power of Attorney Not Applicable
99 Additional Exhibits None