Union Bankshares Reports Fourth Quarter and Full Year Results

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

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

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

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

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

Select highlights for the fourth quarter of 2018

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

Select highlights for the full year 2018

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

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

NET INTEREST INCOME

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

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

 Loan
Accretion
 Deposit
Accretion
 Borrowings
Amortization
 Total
For the quarter ended September 30, 20183,496 592 (143) $3,945 
For the quarter ended December 31, 20183,479 445 (161) 3,763 
For the year ended December 31, 201817,145 2,553 (506) 19,192 
For the years ending (estimated):(2)       
201910,538 1,170 (660) 11,048 
20208,130 284 (734) 7,680 
20216,614 108 (805) 5,917 
20224,984 21 (827) 4,178 
20232,996  (850) 2,146 
Thereafter10,550  (11,633) (1,083)

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

ASSET QUALITY/LOAN LOSS PROVISION

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

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

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

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

 December 31, September 30, June 30, March 31, December 31,
 2018 2018 2018 2018 2017
Nonaccrual loans$26,953  $28,110  $25,662  $25,138  $21,743 
Foreclosed properties6,722  6,800  7,241  8,079  5,253 
Total nonperforming assets$33,675  $34,910  $32,903  $33,217  $26,996 

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

 December 31, September 30, June 30, March 31, December 31,
 2018 2018 2018 2018 2017
Beginning Balance$28,110  $25,662  $25,138  $21,743  $20,122 
Net customer payments(3,077) (2,459) (2,651) (1,455) (768)
Additions4,659  6,268  5,063  5,451  4,335 
Charge-offs(2,069) (1,137) (539) (403) (1,305)
Loans returning to accruing status(420) (70) (1,349) (182) (448)
Transfers to foreclosed property(250) (154)   (16) (193)
Ending Balance$26,953  $28,110  $25,662  $25,138  $21,743 

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

 December 31, September 30, June 30, March 31, December 31,
 2018 2018 2018 2018 2017
Beginning Balance$6,800  $7,241  $8,079  $5,253  $6,449 
Additions of foreclosed property432  165  283  44  325 
Acquisitions of foreclosed property (1)    (162) 4,204   
Valuation adjustments(140) (42) (383) (759) (1,046)
Proceeds from sales(286) (889) (580) (684) (479)
Gains (losses) from sales(84) 325  4  21  4 
Ending Balance$6,722  $6,800  $7,241  $8,079  $5,253 

(1) Includes subsequent measurement period adjustments.

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

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

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

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

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

NONINTEREST INCOME

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

NONINTEREST EXPENSE

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

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

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

INCOME TAXES

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

BALANCE SHEET

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

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

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

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

 December 31, September 30, December 31,
 2018 2018 2017
Common equity Tier 1 capital ratio (1)9.93% 9.92% 9.04%
Tier 1 capital ratio (1)11.10% 11.12% 10.14%
Total capital ratio (1)12.88% 12.97% 12.43%
Leverage ratio (Tier 1 capital to average assets) (1)9.71% 9.89% 9.42%
Common equity to total assets13.98% 14.06% 11.23%
Tangible common equity to tangible assets (2)8.84% 8.74% 8.14%
      
(1) All ratios at December 31, 2018 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(2) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

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

ABOUT UNION BANKSHARES CORPORATION

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

FOURTH QUARTER AND FULL YEAR 2018 EARNINGS RELEASE CONFERENCE CALL

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

NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENTS

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

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

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


     
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
 As of & For Three Months Ended As of & For Year Ended
 12/31/18 9/30/18 12/31/17 12/31/18 12/31/17
Results of Operations(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Interest and dividend income$140,636  $131,363  $87,179  $528,788  $329,044 
Interest expense31,547  25,400  14,089  102,097  50,037 
Net interest income109,089  105,963  73,090  426,691  279,007 
Provision for credit losses4,725  3,340  3,458  13,736  10,802 
Net interest income after provision for credit losses104,364  102,623  69,632  412,955  268,205 
Noninterest income23,487  19,887  15,124  104,241  62,429 
Noninterest expenses74,533  76,349  57,796  337,767  225,668 
Income before income taxes53,318  46,161  26,960  179,429  104,966 
Income tax expense9,041  7,399  11,867  30,016  32,790 
Income from continuing operations44,277  38,762  15,093  149,413  72,176 
Discontinued operations, net of tax(192) (565) 92  (3,165) 747 
Net income$44,085  $38,197  $15,185  $146,248  $72,923 
          
Interest earned on earning assets (FTE) (1)$142,970  $133,377  $90,263  $536,981  $340,810 
Net interest income (FTE) (1)111,424  107,977  76,173  434,884  290,774 
          
Key Ratios         
Earnings per common share, diluted$0.67  $0.58  $0.35  $2.22  $1.67 
Return on average assets (ROA)1.29% 1.17% 0.66% 1.11% 0.83%
Return on average equity (ROE)9.21% 8.06% 5.75% 7.85% 7.07%
Return on average tangible common equity (ROTCE) (2)16.42% 14.72% 8.70% 14.40% 10.75%
Efficiency ratio56.22% 60.67% 65.52% 63.62% 66.09%
Net interest margin3.62% 3.69% 3.51% 3.67% 3.48%
Net interest margin (FTE) (1)3.70% 3.76% 3.64% 3.74% 3.63%
Yields on earning assets (FTE) (1)4.74% 4.65% 4.32% 4.62% 4.25%
Cost of interest-bearing liabilities1.34% 1.15% 0.87% 1.12% 0.80%
Cost of deposits0.76% 0.65% 0.44% 0.61% 0.39%
Cost of funds1.04% 0.89% 0.68% 0.88% 0.62%
          
Operating Measures (4)         
Net operating earnings$46,248  $39,326  $22,821  $178,313  $83,578 
Operating earnings per share, diluted$0.70  $0.60  $0.52  $2.71  $1.91 
Operating ROA1.36% 1.21% 1.00% 1.35% 0.95%
Operating ROE9.66% 8.30% 8.63% 9.57% 8.11%
Operating ROTCE17.18% 15.13% 12.82% 17.35% 12.24%
Operating efficiency ratio (FTE) (1)53.53% 58.59% 61.21% 55.28% 62.36%
          
Per Share Data         
Earnings per common share, basic$0.67  $0.58  $0.35  $2.22  $1.67 
Earnings per common share, diluted0.67  0.58  0.35  2.22  1.67 
Cash dividends paid per common share0.23  0.23  0.21  0.88  0.81 
Market value per share28.23  38.53  36.17  28.23  36.17 
Book value per common share29.34  28.68  24.10  29.34  24.10 
Tangible book value per common share (2)17.51  16.79  16.88  17.51  16.88 
Price to earnings ratio, diluted12.72  16.74  26.05  10.62  21.66 
Price to book value per common share ratio0.96  1.34  1.50  0.96  1.50 
Price to tangible book value per common share ratio (2)1.61  2.29  2.14  1.61  2.14 
Weighted average common shares outstanding, basic65,982,304  65,974,702  43,740,001  65,859,165  43,698,897 
Weighted average common shares outstanding, diluted66,013,326  66,013,152  43,816,018  65,908,571  43,779,744 
Common shares outstanding at end of period65,977,149  65,982,669  43,743,318  65,977,149  43,743,318 


 As of & For Three Months Ended As of & For Year End
 12/31/18 9/30/18 12/31/17 12/31/18 12/31/17
Capital Ratios(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Common equity Tier 1 capital ratio (5)9.93% 9.92% 9.04% 9.93% 9.04%
Tier 1 capital ratio (5)11.10% 11.12% 10.14% 11.10% 10.14%
Total capital ratio (5)12.88% 12.97% 12.43% 12.88% 12.43%
Leverage ratio (Tier 1 capital to average assets) (5)9.71% 9.89% 9.42% 9.71% 9.42%
Common equity to total assets13.98% 14.06% 11.23% 13.98% 11.23%
Tangible common equity to tangible assets (2)8.84% 8.74% 8.14% 8.84% 8.14%
          
Financial Condition         
Assets$13,765,599  $13,371,742  $9,315,179  $13,765,599  $9,315,179 
Loans held for investment9,716,207  9,411,598  7,141,552  9,716,207  7,141,552 
Securities2,391,695  2,258,239  1,249,144  2,391,695  1,249,144 
Earning Assets12,202,023  11,808,717  8,513,145  12,202,023  8,513,145 
Goodwill727,168  727,699  298,528  727,168  298,528 
Amortizable intangibles, net48,685  51,563  14,803  48,685  14,803 
Deposits9,970,960  9,834,695  6,991,718  9,970,960  6,991,718 
Borrowings1,756,278  1,554,642  1,219,414  1,756,278  1,219,414 
Stockholders' equity1,924,581  1,880,029  1,046,329  1,924,581  1,046,329 
Tangible common equity (2)1,148,728  1,100,767  732,998  1,148,728  732,998 
          
Loans held for investment, net of deferred fees and costs         
Construction and land development$1,194,821  $1,178,054  $948,791  $1,194,821  $948,791 
Commercial real estate - owner occupied1,337,345  1,283,125  943,933  1,337,345  943,933 
Commercial real estate - non-owner occupied2,467,410  2,427,251  1,713,659  2,467,410  1,713,659 
Multifamily real estate548,231  542,662  357,079  548,231  357,079 
Commercial & Industrial1,317,135  1,154,583  612,023  1,317,135  612,023 
Residential 1-4 Family - commercial713,750  719,798  612,395  713,750  612,395 
Residential 1-4 Family - mortgage600,578  611,728  485,690  600,578  485,690 
Auto301,943  306,196  282,474  301,943  282,474 
HELOC613,383  612,116  537,521  613,383  537,521 
Consumer379,694  345,320  408,667  379,694  408,667 
Other Commercial241,917  230,765  239,320  241,917  239,320 
Total loans held for investment$9,716,207  $9,411,598  $7,141,552  $9,716,207  $7,141,552 
          
Deposits         
NOW accounts$2,288,523  $2,205,262  $1,929,416  $2,288,523  $1,929,416 
Money market accounts2,875,301  2,704,480  1,685,174  2,875,301  1,685,174 
Savings accounts622,823  635,788  546,274  622,823  546,274 
Time deposits of $100,000 and over1,067,181  1,078,448  624,112  1,067,181  624,112 
Other time deposits1,022,525  1,020,830  704,534  1,022,525  704,534 
Total interest-bearing deposits$7,876,353  $7,644,808  $5,489,510  $7,876,353  $5,489,510 
Demand deposits2,094,607  2,189,887  1,502,208  2,094,607  1,502,208 
Total deposits$9,970,960  $9,834,695  $6,991,718  $9,970,960  $6,991,718 
          
Averages         
Assets$13,538,160  $12,947,352  $9,085,211  $13,181,609  $8,820,142 
Loans held for investment9,557,160  9,297,213  6,962,299  9,584,785  6,701,101 
Securities2,340,051  1,966,010  1,238,663  1,877,018  1,230,105 
Earning assets11,961,234  11,383,320  8,293,366  11,620,893  8,016,311 
Deposits9,951,983  9,803,475  6,955,949  9,717,663  6,701,475 
Time deposits2,083,270  2,079,686  1,335,357  2,078,073  1,271,649 
Interest-bearing deposits7,789,642  7,635,710  5,435,705  7,617,174  5,234,102 
Borrowings1,575,173  1,155,093  1,022,307  1,489,542  1,028,434 
Interest-bearing liabilities9,364,815  8,790,803  6,458,012  9,106,716  6,262,536 
Stockholders' equity1,899,249  1,880,582  1,048,632  1,863,215  1,030,847 
Tangible common equity (2)1,121,788  1,103,530  734,847  1,086,272  715,125 


 As of & For Three Months Ended As of & For Year Ended
 12/31/18 9/30/18 12/31/17 12/31/18 12/31/17
Asset Quality(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Allowance for Loan Losses (ALL)         
Beginning balance$41,294  $41,270  $37,162  $38,208  $37,192 
Add: Recoveries830  1,401  696  4,912  3,255 
Less: Charge-offs5,875  4,560  3,361  15,974  13,310 
Add: Provision for loan losses4,800  3,100  3,758  14,084  11,117 
Add: Provision for loan losses included in discontinued operations(4) 83  (47) (185) (46)
Ending balance$41,045  $41,294  $38,208  $41,045  $38,208 
          
ALL / total outstanding loans0.42% 0.44% 0.54% 0.42% 0.54%
Net charge-offs / total average loans0.21% 0.13% 0.15% 0.12% 0.15%
Provision / total average loans0.20% 0.13% 0.21% 0.15% 0.17%
          
Total PCI loans, net of fair value mark$90,221  $94,746  $39,021  $90,221  $39,021 
Remaining fair value mark on purchased performing loans30,281  33,428  13,726  30,281  13,726 
          
Nonperforming Assets         
Construction and land development$8,018  $9,221  $5,610  $8,018  $5,610 
Commercial real estate - owner occupied3,636  3,202  2,708  3,636  2,708 
Commercial real estate - non-owner occupied1,789  1,812  2,992  1,789  2,992 
Commercial & Industrial1,524  1,404  316  1,524  316 
Residential 1-4 Family - commercial2,481  1,956  1,085  2,481  1,085 
Residential 1-4 Family - mortgage7,276  8,535  6,269  7,276  6,269 
Auto576  525  413  576  413 
HELOC1,518  1,273  2,075  1,518  2,075 
Consumer and all other135  182  275  135  275 
Nonaccrual loans$26,953  $28,110  $21,743  $26,953  $21,743 
Foreclosed property6,722  6,800  5,253  6,722  5,253 
Total nonperforming assets (NPAs)$33,675  $34,910  $26,996  $33,675  $26,996 
Construction and land development$180  $442  $1,340  $180  $1,340 
Commercial real estate - owner occupied3,193  3,586    3,193   
Commercial real estate - non-owner occupied    194    194 
Commercial & Industrial132  256  214  132  214 
Residential 1-4 Family - commercial1,409  378  579  1,409  579 
Residential 1-4 Family - mortgage2,437  2,543  546  2,437  546 
Auto195  211  40  195  40 
HELOC440  1,291  217  440  217 
Consumer and all other870  825  402  870  402 
Loans ≥ 90 days and still accruing$8,856  $9,532  $3,532  $8,856  $3,532 
Total NPAs and loans ≥ 90 days$42,531  $44,442  $30,528  $42,531  $30,528 
NPAs / total outstanding loans0.35% 0.37% 0.38% 0.35% 0.38%
NPAs / total assets0.24% 0.26% 0.29% 0.24% 0.29%
ALL / nonaccrual loans152.28% 146.90% 175.73% 152.28% 175.73%
ALL / nonperforming assets121.89% 118.29% 141.53% 121.89% 141.53%
Past Due Detail         
Construction and land development$759  $1,351  $1,248  $759  $1,248 
Commercial real estate - owner occupied8,755  4,218  444  8,755  444 
Commercial real estate - non-owner occupied338  492  187  338  187 
Multifamily real estate  553       
Commercial & Industrial3,353  2,239  1,147  3,353  1,147 
Residential 1-4 Family - commercial6,619  2,535  1,682  6,619  1,682 
Residential 1-4 Family - mortgage12,049  4,506  3,838  12,049  3,838 
Auto3,320  2,414  3,541  3,320  3,541 
HELOC4,611  4,783  2,382  4,611  2,382 
Consumer and all other1,630  2,640  2,404  1,630  2,404 
Loans 30-59 days past due$41,434  $25,731  $16,873  $41,434  $16,873 


 As of & For Three Months Ended As of & For Year Ended
 12/31/18 9/30/18 12/31/17 12/31/18 12/31/17
Past Due Detail cont'd(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Construction and land development$6  $1,826  $898  $6  $898 
Commercial real estate - owner occupied1,142  539  81  1,142  81 
Commercial real estate - non-owner occupied41    84  41  84 
Multifamily Real Estate146      146   
Commercial & Industrial389  428  109  389  109 
Residential 1-4 Family - commercial1,577  1,892  700  1,577  700 
Residential 1-4 Family - mortgage5,143  3,793  2,541  5,143  2,541 
Auto403  299  185  403  185 
HELOC1,644  1,392  717  1,644  717 
Consumer and all other1,096  1,140  2,052  1,096  2,052 
Loans 60-89 days past due$11,587  $11,309  $7,367  $11,587  $7,367 
          
Troubled Debt Restructurings         
Performing$19,201  $19,854  $14,553  $19,201  $14,553 
Nonperforming7,397  8,425  2,849  7,397  2,849 
Total troubled debt restructurings$26,598  $28,279  $17,402  $26,598  $17,402 
          
Alternative Performance Measures (non-GAAP)         
Net interest income (FTE)         
Net interest income (GAAP)$109,089  $105,963  $73,090  $426,691  $279,007 
FTE adjustment2,335  2,014  3,083  8,193  11,767 
Net interest income (FTE) (non-GAAP) (1)$111,424  $107,977  $76,173  $434,884  $290,774 
Average earning assets11,961,234  11,383,320  8,293,366  11,620,893  8,016,311 
Net interest margin3.62% 3.69% 3.51% 3.67% 3.48%
Net interest margin (FTE) (1)3.70% 3.76% 3.64% 3.74% 3.63%
          
Tangible Assets         
Ending assets (GAAP)$13,765,599  $13,371,742  $9,315,179  $13,765,599  $9,315,179 
Less: Ending goodwill727,168  727,699  298,528  727,168  298,528 
Less: Ending amortizable intangibles48,685  51,563  14,803  48,685  14,803 
Ending tangible assets (non-GAAP)$12,989,746  $12,592,480  $9,001,848  $12,989,746  $9,001,848 
          
Tangible Common Equity (2)         
Ending equity (GAAP)$1,924,581  $1,880,029  $1,046,329  $1,924,581  $1,046,329 
Less: Ending goodwill727,168  727,699  298,528  727,168  298,528 
Less: Ending amortizable intangibles48,685  51,563  14,803  48,685  14,803 
Ending tangible common equity (non-GAAP)$1,148,728  $1,100,767  $732,998  $1,148,728  $732,998 
          
Average equity (GAAP)$1,899,249  $1,880,582  $1,048,632  $1,863,216  $1,030,847 
Less: Average goodwill727,544  723,785  298,385  725,597  298,240 
Less: Average amortizable intangibles49,917  53,267  15,400  51,347  17,482 
Average tangible common equity (non-GAAP)$1,121,788  $1,103,530  $734,847  $1,086,272  $715,125 
          
Operating Measures (4)         
Net income (GAAP)$44,085  $38,197  $15,185  $146,248  $72,923 
Plus: Merger-related costs, net of tax2,163  1,129  1,386  32,065  4,405 
Plus: Nonrecurring tax expenses    6,250    6,250 
Net operating earnings (non-GAAP)$46,248  $39,326  $22,821  $178,313  $83,578 
          
Noninterest expense (GAAP)$74,533  $76,349  $57,796  $337,767  $225,668 
Less: Merger-related costs2,314  1,429  1,917  39,728  5,393 
Operating noninterest expense (non-GAAP)$72,219  $74,920  $55,879  $298,039  $220,275 
          
Net interest income (FTE) (non-GAAP) (1)$111,424  $107,977  $76,173  $434,886  $290,774 
Noninterest income (GAAP)23,487  19,887  15,124  104,241  62,429 
          
Efficiency ratio56.22% 60.67% 65.52% 63.62% 66.09%
Operating efficiency ratio (FTE)53.53% 58.59% 61.21% 55.28% 62.36%
          
 As of & For Three Months Ended As of & For Year Ended
 12/31/18 9/30/18 12/31/17 12/31/18 12/31/17
ROTCE (2)(3)(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Net Income (GAAP)$44,085  $38,197  $15,185  $146,248  $72,923 
Plus: Amortization of intangibles, tax effected2,334  2,757  928  10,143  3,957 
Net Income before amortization of intangibles (non-GAAP)$46,419  $40,954  $16,113  $156,391  $76,880 
          
Average tangible common equity (non-GAAP)$1,121,788  $1,103,530  $734,847  $1,086,272  $715,125 
Return on average tangible common equity (non-GAAP)16.42% 14.72% 8.70% 14.40% 10.75%
          
Operating ROTCE (2)(3)         
Operating Net Income (non-GAAP)$46,248  $39,326  $22,821  $178,313  $83,578 
Plus: Amortization of intangibles, tax effected2,334  2,757  928  10,143  3,957 
Net Income before amortization of intangibles (non-GAAP)$48,582  $42,083  $23,749  $188,456  $87,535 
          
Average tangible common equity (non-GAAP)$1,121,788  $1,103,530  $734,847  $1,086,272  $715,125 
Operating return on average tangible common equity (non-GAAP)17.18% 15.13% 12.82% 17.35% 12.24%
          
Other Data         
End of period full-time employees1,609  1,621  1,419  1,609  1,419 
Number of full-service branches140  140  111  140  111 
Number of full automatic transaction machines ("ATMs")188  190  176  188  176 

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

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

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

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

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

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


UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)   
 December 31, December 31,
 2018 2017
ASSETS(unaudited) (unaudited)
Cash and cash equivalents:   
Cash and due from banks$166,927  $117,586 
Interest-bearing deposits in other banks94,056  81,291 
Federal funds sold216  496 
Total cash and cash equivalents261,199  199,373 
Securities available for sale, at fair value1,774,821  974,222 
Securities held to maturity, at carrying value492,272  199,639 
Restricted stock, at cost124,602  75,283 
Loans held for investment, net of deferred fees and costs9,716,207  7,141,552 
Less allowance for loan losses41,045  38,208 
Net loans held for investment9,675,162  7,103,344 
Premises and equipment, net146,967  119,604 
Goodwill727,168  298,528 
Amortizable intangibles, net48,685  14,803 
Bank owned life insurance263,034  182,854 
Other assets250,210  102,871 
Assets of discontinued operations1,479  44,658 
Total assets$13,765,599  $9,315,179 
LIABILITIES   
Noninterest-bearing demand deposits$2,094,607  $1,502,208 
Interest-bearing deposits7,876,353  5,489,510 
Total deposits9,970,960  6,991,718 
Securities sold under agreements to repurchase39,197  49,152 
Other short-term borrowings1,048,600  745,000 
Long-term borrowings668,481  425,262 
Other liabilities112,093  54,008 
Liabilities of discontinued operations1,687  3,710 
Total liabilities11,841,018  8,268,850 
Commitments and contingencies   
STOCKHOLDERS' EQUITY   
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 65,977,149 shares, and 43,743,318 shares, respectively.87,250  57,744 
Additional paid-in capital1,380,259  610,001 
Retained earnings467,345  379,468 
Accumulated other comprehensive income (loss)(10,273) (884)
Total stockholders' equity1,924,581  1,046,329 
Total liabilities and stockholders' equity$13,765,599  $9,315,179 
        


     
UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data) 
 Three Months Ended Year Ended
 December 31, September 30, December 31, December 31, December 31,
 2018 2018 2017 2018 2017
Interest and dividend income:(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Interest and fees on loans$121,846  $115,817  $78,198  $469,856  $293,996 
Interest on deposits in other banks309  492  172  2,125  539 
Interest and dividends on securities:         
Taxable11,623  10,145  5,225  36,851  20,305 
Nontaxable6,858  4,909  3,584  19,956  14,204 
Total interest and dividend income140,636  131,363  87,179  528,788  329,044 
Interest expense:         
Interest on deposits19,149  15,928  7,696  59,336  26,106 
Interest on short-term borrowings5,663  3,379  1,813  18,458  6,035 
Interest on long-term borrowings6,735  6,093  4,580  24,303  17,896 
Total interest expense31,547  25,400  14,089  102,097  50,037 
Net interest income109,089  105,963  73,090  426,691  279,007 
Provision for credit losses4,725  3,340  3,458  13,736  10,802 
Net interest income after provision for credit losses104,364  102,623  69,632  412,955  268,205 
Noninterest income:         
Service charges on deposit accounts6,873  6,483  4,925  25,439  18,850 
Other service charges and fees1,467  1,625  1,202  5,603  4,593 
Interchange fees, net4,640  4,882  3,769  18,803  14,974 
Fiduciary and asset management fees4,643  4,411  2,933  16,150  11,245 
Gains (losses) on securities transactions, net161  97  18  383  800 
Bank owned life insurance income2,072  1,732  1,306  7,198  6,144 
Loan-related interest rate swap fees1,376  562  424  3,554  3,051 
Gain on Shore Premier Finance sale  (933)   19,966   
Other operating income2,255  1,028  547  7,145  2,772 
Total noninterest income23,487  19,887  15,124  104,241  62,429 
Noninterest expenses:         
Salaries and benefits38,581  39,279  28,228  159,378  115,968 
Occupancy expenses6,590  6,551  4,775  25,368  18,558 
Furniture and equipment expenses2,967  2,983  2,529  11,991  10,047 
Printing, postage, and supplies1,125  1,183  1,237  4,650  4,901 
Communications expense923  872  738  3,898  3,304 
Technology and data processing4,675  4,841  4,339  18,397  16,132 
Professional services2,183  2,875  2,155  10,283  7,767 
Marketing and advertising expense2,211  3,109  1,863  10,043  7,795 
FDIC assessment premiums and other1,214  1,363  1,255  6,644  4,048 
Other taxes2,882  2,878  2,022  11,542  8,087 
Loan-related expenses2,109  1,939  1,249  7,206  4,733 
OREO and credit-related expenses1,026  452  1,741  4,131  3,764 
Amortization of intangible assets2,954  3,490  1,427  12,839  6,088 
Training and other personnel costs1,104  1,024  1,014  4,259  3,843 
Merger-related costs2,314  1,429  1,917  39,728  5,393 
Other expenses1,675  2,081  1,307  7,410  5,240 
Total noninterest expenses74,533  76,349  57,796  337,767  225,668 
Income from continuing operations before income taxes53,318  46,161  26,960  179,429  104,966 
Income tax expense9,041  7,399  11,867  30,016  32,790 
Income from continuing operations44,277  38,762  $15,093  149,413  $72,176 
                 


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


AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
 For the Quarter Ended
 December 31, 2018 September 30, 2018
 Average
Balance
 Interest
Income /
Expense (1)
 Yield /
Rate (1)(2)
 Average
Balance
 Interest
Income /
Expense (1)
 Yield /
Rate (1)(2)
Assets:(unaudited) (unaudited)
Securities:           
Taxable$1,477,670  $11,623  3.12% $1,333,960  $10,145  3.02%
Tax-exempt862,381  8,681  3.99% 632,050  6,214  3.90%
Total securities2,340,051  20,304  3.44% 1,966,010  16,359  3.30%
Loans, net (3) (4)9,557,160  122,330  5.08% 9,297,213  116,266  4.96%
Other earning assets64,023  336  2.09% 120,097  752  2.49%
Total earning assets11,961,234  $142,970  4.74% 11,383,320  $133,377  4.65%
Allowance for loan losses(41,556)     (41,799)    
Total non-earning assets1,618,482      1,605,831     
Total assets$13,538,160      $12,947,352     
            
Liabilities and Stockholders' Equity:           
Interest-bearing deposits:           
Transaction and money market accounts$5,080,120  $11,086  0.87% $4,915,070  $8,789  0.71%
Regular savings626,252  211  0.13% 640,954  209  0.13%
Time deposits (5)2,083,270  7,851  1.50% 2,079,686  6,930  1.32%
Total interest-bearing deposits7,789,642  19,148  0.98% 7,635,710  15,928  0.83%
Other borrowings (6)1,575,173  12,398  3.12% 1,155,093  9,472  3.25%
Total interest-bearing liabilities9,364,815  31,546  1.34% 8,790,803  25,400  1.15%
            
Noninterest-bearing liabilities:           
Demand deposits2,162,341      2,167,765     
Other liabilities111,755      108,202     
Total liabilities11,638,911      11,066,770     
Stockholders' equity1,899,249      1,880,582     
Total liabilities and stockholders' equity$13,538,160      $12,947,352     
            
Net interest income  $111,424      $107,977   
            
Interest rate spread    3.40%     3.50%
Cost of funds    1.04%     0.89%
Net interest margin    3.70%     3.76%
            
(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21% for both the three months ended December 31, 2018 and December 31, 2017.
(2) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(3) Nonaccrual loans are included in average loans outstanding.
(4) Interest income on loans includes $3.5 million for both the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $445,000 and $592,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $161,000 and $143,000 for the three months ended December 31, 2018 and September 30, 2018, respectively, in amortization of the fair market value adjustments related to acquisitions.
 


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

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