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Union Bankshares Reports Second Quarter Results

RICHMOND, Va., July 18, 2018 (GLOBE NEWSWIRE) -- Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ:UBSH) today reported net income of $47.3 million and earnings per share of $0.72 for its second quarter ended June 30, 2018.  Net operating earnings(1) were $53.9 million and operating earnings per share(1) was $0.82 for its second quarter ended June 30, 2018; these operating results exclude $6.5 million in after-tax merger-related costs.

Net income was $64.0 million and earnings per share was $0.97 for the six months ended June 30, 2018.  Net operating earnings(1) were $92.7 million and operating earnings per share(1) were $1.41 for the six months ended June 30, 2018; these operating results exclude $28.8 million in after-tax merger-related costs.

Union followed up on our strong first quarter with a number of accomplishments during the second quarter that align with our stated strategic priorities - positioning us for profitable growth and the delivery of top tier financial metrics, which we expect to achieve in the fourth quarter of 2018,” said John C. Asbury, President and CEO of Union Bankshares Corporation.  “This quarter’s accomplishments included successfully converting the core data systems for Xenith Bank, exiting the mortgage origination business, divesting the national scope marine finance business acquired from Xenith Bank, divesting a non-strategic third party consumer lending portfolio and continuing to build out the commercial banking teams across the franchise.

Our second quarter actions demonstrate Union is executing on its strategic priorities with intensity and a sharp focus on our core business lines.  We are especially pleased that our commercial banking build out is occurring at an accelerated pace and that we have achieved our long-term loan to deposit ratio target.   Union has never been better positioned to achieve its profitability and growth objectives.

Select highlights for the second quarter of 2018 include:

  • Performance metrics linked quarter
    • Return on Average Assets (“ROA”) was 1.44% compared to 0.52% in the first quarter of 2018. Operating ROA(1) increased to 1.63% compared to 1.21% in the first quarter of 2018.
    • Return on Average Equity (“ROE”) was 10.28% compared to 3.70% in the first quarter of 2018. Operating ROE(1) was 11.69% compared to 8.64% in the first quarter of 2018.
    • Return on Average Tangible Common Equity (“ROTCE”) was 17.74% compared to 6.43% in the first quarter of 2018. Operating ROTCE(1) increased to 20.19% compared to 15.03% in the first quarter of 2018.
    • Efficiency ratio declined to 57.2% compared to 82.2% in the first quarter of 2018 and the efficiency ratio (FTE) declined to 56.5% compared to 81.0% in the first quarter of 2018.  Operating efficiency ratio(1) improved to 51.0% compared to 59.0% in the first quarter of 2018.
  • Notable activity during the second quarter
    • On May 23, 2018, the Company's wholly-owned bank subsidiary, Union Bank & Trust, announced that it had entered into a definitive agreement with a third party mortgage company to team together to offer residential mortgages.  As a result of this arrangement, Union Bank & Trust began winding-down the operations of Union Mortgage Group, its wholly-owned subsidiary.  In connection with this transaction, the Company recorded exit costs totaling approximately $3.4 million, which includes goodwill impairment of approximately $864,000.  These costs and the Company's mortgage segment results are reported within discontinued operations results.
    • On June 29, 2018, Union Bank & Trust entered into an agreement to sell substantially all of the assets and certain specific liabilities of its Shore Premier Finance division, consisting primarily of marine loans totaling approximately $383.9 million, for a purchase price consisting of approximately $375.0 million in cash and 1,250,000 shares of the purchasing company's common stock. The sale generated an after-tax gain of approximately $16.5 million, net of transaction and other related costs.
    • On June 29, 2018, Union Bank & Trust sold approximately $206.3 million in consumer home improvement loans that had been originated through a third-party lending program.  These loans were sold at par.
    • The Company closed three branches during the second quarter of 2018 as part of conversion activities related to its acquisition of Xenith Bankshares, Inc. (“Xenith”).  After further analyzing its branch footprint, the Company has decided to consolidate an additional seven branches, approximately 5% of the Company's branch network, during the third quarter of 2018.  The upcoming branch closures resulted in after-tax branch closure costs of approximately $474,000 that were recorded in the second quarter of 2018.
    • On April 1, 2018, Union Bank & Trust completed its acquisition of Dixon, Hubard, Feinour, & Brown, Inc. ("DHFB"), a Roanoke, Virginia based investment advisory firm with approximately $600 million in assets under management and advisement.  DHFB operates as a subsidiary of Union Bank & Trust and from its offices in Roanoke, Virginia.

(1) For a reconciliation of the non-GAAP operating measures that exclude merger-related costs unrelated to the Company’s normal operations, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.


NET INTEREST INCOME

For the second quarter of 2018, net interest income was $108.2 million, an increase of $4.7 million from the first quarter of 2018.  Tax-equivalent net interest income was $110.2 million in the second quarter of 2018, an increase of $4.9 million from the first quarter of 2018. The increases in both net interest income and tax-equivalent net interest income were primarily driven by higher earning asset balances and higher yields on those balances.  The second quarter net interest margin increased 6 basis points to 3.72% from 3.66% in the previous quarter, while the tax-equivalent net interest margin increased 7 basis points to 3.79% from 3.72% during the same periods.  The increases in the net interest margin and tax-equivalent net interest margin were principally due to an approximate 16 basis point increase in the yield on earning assets, partially offset by an approximate 9 basis point increase in the cost of funds.

The Company’s tax-equivalent net interest margin includes the impact of acquisition accounting fair value adjustments.  During the second quarter of 2018, net accretion related to acquisition accounting increased $325,000 from the prior quarter to $5.9 million for the quarter ended June 30, 2018.  The first and second 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 March 31, 2018 $ 4,846   $ 832   $ (98 )   $ 5,580  
For the quarter ended June 30, 2018 5,324   685   (104 )   5,905  
For the remaining six months of 2018 (estimated) 5,650   1,036   (304 )   6,382  
For the years ending (estimated):              
2019 9,626   1,170   (660 )   10,136  
2020 7,655   284   (734 )   7,205  
2021 6,023   108   (805 )   5,326  
2022 4,319   21   (827 )   3,513  
2023 2,739     (850 )   1,889  
Thereafter 9,670     (11,633 )   (1,963 )


ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the second quarter of 2018, the Company experienced declines in nonperforming asset (“NPA”) balances from the prior quarter, primarily related to sales of other real estate owned (“OREO”).  Past due loan levels as a percentage of total loans held for investment at June 30, 2018 were consistent with past due loan levels at March 31, 2018 and June 30, 2017.  Charge-off levels increased from the first quarter of 2018 and were primarily related to the consumer loan portfolio, while the provision for loan losses declined from the first quarter of 2018.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $101.5 million (net of fair value mark of $23.1 million).

Nonperforming Assets
At June 30, 2018, NPAs totaled $33.7 million, a decrease of $1.6 million, or 4.5%, from March 31, 2018 and a decline of $399,000, or 1.2%, from June 30, 2017.  In addition, NPAs as a percentage of total outstanding loans at June 30, 2018 was 0.36%, consistent with March 31, 2018 and a decline of 14 basis points from 0.50% at June 30, 2017.  As the Company's NPAs have been at historic lows over the last several quarters, certain changes from quarter to quarter might stand out in comparison to one another but have no significant impact on the Company's overall asset quality position.

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

  June 30,   March 31,   December 31,   September 30,   June 30,
  2018   2018   2017   2017   2017
Nonaccrual loans $ 25,662     $ 25,138     $ 21,743     $ 20,122     $ 24,574  
Foreclosed properties 7,241     8,079     5,253     6,449     6,828  
Former bank premises 754     2,020     1,383     2,315     2,654  
Total nonperforming assets $ 33,657     $ 35,237     $ 28,379     $ 28,886     $ 34,056  


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

  June 30,   March 31,   December 31,   September 30,   June 30,
  2018   2018   2017   2017   2017
Beginning Balance $ 25,138     $ 21,743     $ 20,122     $ 24,574     $ 22,338  
Net customer payments (2,651 )   (1,455 )   (768 )   (4,642 )   (1,498 )
Additions 5,063     5,451     4,335     4,114     5,979  
Charge-offs (539 )   (403 )   (1,305 )   (3,376 )   (2,004 )
Loans returning to accruing status (1,349 )   (182 )   (448 )       (134 )
Transfers to OREO     (16 )   (193 )   (548 )   (107 )
Ending Balance $ 25,662     $ 25,138     $ 21,743     $ 20,122     $ 24,574  


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

  June 30,   March 31,   December 31,   September 30,   June 30,
  2018   2018   2017   2017   2017
Beginning Balance $ 10,099     $ 6,636     $ 8,764     $ 9,482     $ 9,605  
Additions of foreclosed property 283     44     325     621     132  
Acquisitions of foreclosed property (1) (162 )   4,204              
Acquisitions of former bank premises     1,208              
Valuation adjustments (383 )   (759 )   (1,046 )   (588 )   (19 )
Proceeds from sales (1,858 )   (1,255 )   (1,419 )   (648 )   (272 )
Gains (losses) from sales 16     21     12     (103 )   36  
Ending Balance $ 7,995     $ 10,099     $ 6,636     $ 8,764     $ 9,482  

(1) Includes subsequent measurement period adjustments.


Past Due Loans

Past due loans still accruing interest totaled $38.2 million, or 0.41% of total loans, at June 30, 2018 compared to $41.6 million, or 0.42% of total loans, at March 31, 2018 and $27.4 million, or 0.40% of total loans, at June 30, 2017.  Of the total past due loans still accruing interest, $6.9 million, or 0.07% of total loans, were loans past due 90 days or more at June 30, 2018, compared to $2.6 million, or 0.03% of total loans, at March 31, 2018 and $3.6 million, or 0.05% of total loans, at June 30, 2017.

Net Charge-offs
For the second quarter of 2018, net charge-offs were $1.8 million, or 0.07% of total average loans on an annualized basis, compared to $1.1 million, or 0.05%, for the prior quarter and $2.5 million, or 0.15%, for the same quarter last year.  Of the net charge-offs in the second quarter of 2018, the majority were related to consumer loans.

Provision for Loan Losses
The provision for loan losses for the second quarter of 2018 was $2.7 million, a decrease of $864,000 compared to the previous quarter and an increase of $349,000 compared to the same quarter in 2017.  The decrease in provision from the first quarter of 2018 was primarily driven by lower levels of loan growth in the current quarter.

Allowance for Loan Losses (“ALL”)
The ALL increased $641,000 from March 31, 2018 to $41.3 million at June 30, 2018 primarily due to organic loan growth during the quarter.  The ALL as a percentage of the total loan portfolio was 0.44% at June 30, 2018, 0.41% at March 31, 2018, and 0.56% at June 30, 2017.  The quarter-over-quarter increase in the allowance ratio was primarily due to the sale of loans during the second quarter of 2018, while the year-over-year decline in the allowance ratio was primarily attributable to the acquisition of Xenith.  In acquisition accounting, there is no carryover of previously established allowance for loan losses.

The ratio of the ALL to nonaccrual loans was 160.8% at June 30, 2018, compared to 161.6% at March 31, 2018 and 155.5% at June 30, 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 $20.3 million to $40.6 million for the quarter ended June 30, 2018 from $20.3 million in the prior quarter, primarily driven by the net gain on sale of the Shore Premier Finance division of $20.9 million.  During the first quarter of 2018, noninterest income included a gain of $1.4 million related to the sale of the Company's ownership interest in a payments-related company.  Excluding these gains from their respective quarters, noninterest income increased $847,000, or 4.5%, for the quarter ended June 30, 2018 when compared to the prior quarter.  The increase in customer-related fee income of $1.6 million was primarily due to the acquisition of DHFB as well as higher overdraft fees and debit card interchange fees.  Partially offsetting this increase, the Company experienced losses on the sales of securities in the second quarter of 2018 compared to gains in the first quarter of 2018.

NONINTEREST EXPENSE

Noninterest expense decreased $16.6 million to $85.1 million for the quarter ended June 30, 2018 from $101.7 million in the prior quarter.  Excluding merger-related costs of $8.3 million and $27.7 million in the second and first quarters of 2018, respectively, operating noninterest expense increased $2.8 million, or 3.8%, to $76.9 million when compared to the first quarter of 2018.  The increase in operating noninterest expense was primarily related to increased marketing expenses of $1.9 million associated with the launch of the Union Bank & Trust brand in Xenith's footprint as well as higher levels of debit card rewards expenses. In addition, operating noninterest expense in the second quarter of 2018 included approximately $770,000 in expenses for DHFB and branch closure costs of approximately $600,000 related to the decision to consolidate seven branches in the third quarter of 2018.

INCOME TAXES

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

The effective tax rate for the three months ended June 30, 2018 was 19.0% compared to 10.3% for the three months ended March 31, 2018. The increase in the effective tax rate was primarily due to tax benefits related to stock compensation of approximately $1.2 million recorded during the first quarter of 2018 in accordance with ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” as well as tax-exempt income being a lower component of pre-tax income in the second quarter of 2018 compared to the first quarter of 2018.

BALANCE SHEET

At June 30, 2018, total assets were $13.1 billion, a decrease of $83.2 million from March 31, 2018, a result of the sale of the Shore Premier loans and certain third party lending loans at the end of the quarter.

At June 30, 2018, loans held for investment (net of deferred fees and costs) were $9.3 billion, a decrease of $515.5 million from March 31, 2018, while average loans increased $128.9 million, or 5.3% (annualized), from the prior quarter.  Adjusted for the sale of the Shore Premier loans and certain third party lending program loans, loans held for investment grew $66.7 million, or 2.9% (annualized), from March 31, 2018.

At June 30, 2018, total deposits were $9.8 billion, an increase of $119.3 million, or 4.9% (annualized), from March 31, 2018, while average deposits increased $181.5 million, or 7.7% (annualized), from the prior quarter.

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

  June 30,   March 31,   June 30,
  2018   2018   2017
Common equity Tier 1 capital ratio (1) 9.74 %   9.03 %   9.39 %
Tier 1 capital ratio (1) 10.95 %   10.19 %   10.57 %
Total capital ratio (1) 12.81 %   11.97 %   13.00 %
Leverage ratio (Tier 1 capital to average assets) (1) 9.46 %   9.32 %   9.61 %
Common equity to total assets 14.27 %   13.93 %   11.56 %
Tangible common equity to tangible assets (2) 8.86 %   8.54 %   8.32 %
           
(1) All ratios at June 30, 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 second quarter of 2018, the Company declared and paid cash dividends of $0.21 per common share, consistent with the first quarter of 2018 and an increase of $0.01, or 5.0%, compared to the second quarter of 2017.


ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ:UBSH) is the holding company for Union Bank & Trust, which has 147 branches, 7 of which are operated as Xenith Bank, a division of Union Bank & Trust of Richmond, Virginia, and approximately 200 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. and Dixon, Hubard, Feinour, & Brown, Inc., which both provide investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.

Union Bankshares Corporation will hold a conference call on Wednesday, July 18th, at 9:00 a.m. Eastern Time during which management will review earnings and performance trends.  Callers wishing to participate may call toll-free by dialing (877) 668-4908; international callers wishing to participate may do so by dialing (973) 453-3058.  The conference ID number is 7389206.

NON-GAAP MEASURES

In reporting the results of the quarter and six months ended June 30, 2018, the Company has provided supplemental performance measures on a tax-equivalent, tangible, or operating basis.  These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP.  In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact, are based on certain assumptions as of the time they are made, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.  Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events.  Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in:

  • the possibility that any of the anticipated benefits of the Merger with Xenith will not be realized or will not be realized within the expected time period, the expected revenue synergies and cost savings from the Merger may not be fully realized or realized within the expected time frame, revenues following the Merger may be lower than expected, or customer and employee relationships and business operations may be disrupted by the Merger,
  • changes in interest rates,
  • general economic and financial market conditions,
  • the Company’s ability to manage its growth or implement its growth strategy,
  • the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets,
  • levels of unemployment in Union Bank & Trust’s lending area,
  • real estate values in Union Bank & Trust’s lending area,
  • an insufficient allowance for loan losses,
  • the quality or composition of the loan or investment portfolios,
  • concentrations of loans secured by real estate, particularly commercial real estate,
  • the effectiveness of the Company’s credit processes and management of the Company’s credit risk,
  • demand for loan products and financial services in the Company’s market area,
  • the Company’s ability to compete in the market for financial services,
  • technological risks and developments, and cyber threats, attacks, or events,
  • performance by the Company’s counterparties or vendors,
  • deposit flows,
  • the availability of financing and the terms thereof,
  • the level of prepayments on loans and mortgage-backed securities,
  • legislative or regulatory changes and requirements,
  • the impact of the Tax Act, including, but not limited to, the effect of the lower corporate tax rate, including on the valuation of the Company's tax assets and liabilities,
  • any future refinements to the Company's preliminary analysis of the impact of the Tax Act on the Company,
  • changes in the effect of the Tax Act due to issuance of interpretive regulatory guidance or enactment of corrective or supplement legislation,
  • monetary and fiscal policies of the U.S. government including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, and
  • accounting principles and guidelines.

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


UNION BANKSHARES CORPORATION AND SUBSIDIARIES        
KEY FINANCIAL RESULTS        
(Dollars in thousands, except share data)        
(FTE - "Fully Taxable Equivalent")        
  As of & For Three Months Ended   Six Months Ended
  6/30/18   3/31/18   6/30/17   6/30/18   6/30/17
Results of Operations (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Interest and dividend income $ 132,409     $ 124,379     $ 80,926     $ 256,789     $ 157,365  
Interest expense 24,241     20,907     12,222     45,149     22,294  
Net interest income 108,168     103,472     68,704     211,640     135,071  
Provision for credit losses 2,147     3,524     2,184     5,671     4,288  
Net interest income after provision for credit losses 106,021     99,948     66,520     205,969     130,783  
Noninterest income 40,597     20,267     15,262     60,865     32,075  
Noninterest expenses 85,140     101,743     57,575     186,885     112,668  
Income before income taxes 61,478     18,472     24,207     79,949     50,190  
Income tax expense 11,678     1,897     6,725     13,575     13,507  
Income from continuing operations 49,800     16,575     17,482     66,374     36,683  
Discontinued operations, net of tax (2,473 )   64     474     (2,408 )   397  
Net income $ 47,327     $ 16,639     $ 17,956     $ 63,966     $ 37,080  
                   
Interest earned on earning assets (FTE) (1) $ 134,417     $ 126,217     $ 83,869     $ 260,634     $ 163,049  
Net interest income (FTE) (1) 110,176     105,310     71,647     215,485     140,755  
                   
Key Ratios                  
Earnings per common share, diluted $ 0.72     $ 0.25     $ 0.41     $ 0.97     $ 0.85  
Return on average assets (ROA) 1.44 %   0.52 %   0.82 %   0.98 %   0.87 %
Return on average equity (ROE) 10.28 %   3.70 %   7.02 %   7.03 %   7.34 %
Return on average tangible common equity (ROTCE) (2) 17.74 %   6.43 %   10.15 %   12.18 %   10.66 %
Efficiency ratio 57.23 %   82.22 %   68.57 %   68.58 %   67.41 %
Efficiency ratio (FTE) (1) 56.47 %   81.02 %   66.25 %   67.63 %   65.19 %
Net interest margin 3.72 %   3.66 %   3.47 %   3.69 %   3.49 %
Net interest margin (FTE) (1) 3.79 %   3.72 %   3.62 %   3.76 %   3.64 %
Yields on earning assets (FTE) (1) 4.62 %   4.46 %   4.24 %   4.54 %   4.22 %
Cost of interest-bearing liabilities (FTE) (1) 1.06 %   0.93 %   0.79 %   1.00 %   0.74 %
Cost of funds (FTE) (1) 0.83 %   0.74 %   0.62 %   0.78 %   0.58 %
                   
Operating Measures (3)                  
Net operating earnings $ 53,864     $ 38,875     $ 20,314     $ 92,739     $ 39,438  
Operating earnings per share, diluted $ 0.82     $ 0.59     $ 0.46     $ 1.41     $ 0.90  
Operating ROA 1.63 %   1.21 %   0.93 %   1.43 %   0.92 %
Operating ROE 11.69 %   8.64 %   7.94 %   10.19 %   7.81 %
Operating ROTCE 20.19 %   15.03 %   11.48 %   17.65 %   11.35 %
Operating efficiency ratio (FTE) (1) 50.98 %   58.95 %   63.09 %   54.60 %   63.60 %
                   
Per Share Data                  
Earnings per common share, basic $ 0.72     $ 0.25     $ 0.41     $ 0.97     $ 0.85  
Earnings per common share, diluted 0.72     0.25     0.41     0.97     0.85  
Cash dividends paid per common share 0.21     0.21     0.20     0.42     0.40  
Market value per share 38.88     36.71     33.90     38.88     33.90  
Book value per common share 28.47     27.87     23.79     28.47     23.79  
Tangible book value per common share (2) 16.62     16.14     16.50     16.62     16.50  
Price to earnings ratio, diluted 13.46     36.21     20.61     19.88     19.78  
Price to book value per common share ratio 1.37     1.32     1.42     1.37     1.42  
Price to tangible book value per common share ratio (2) 2.34     2.27     2.05     2.34     2.05  
Weighted average common shares outstanding, basic 65,919,055     65,554,630     43,693,427     65,737,849     43,674,070  
Weighted average common shares outstanding, diluted 65,965,577     65,636,262     43,783,952     65,801,926     43,755,045  
Common shares outstanding at end of period 65,939,375     65,895,421     43,706,000     65,939,375     43,706,000  


  As of & For Three Months Ended   As of & For Six Months Ended
  6/30/18   3/31/18   6/30/17   6/30/18   6/30/17
Capital Ratios (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Common equity Tier 1 capital ratio (4) 9.74 %   9.03 %   9.39 %   9.74 %   9.39 %
Tier 1 capital ratio (4) 10.95 %   10.19 %   10.57 %   10.95 %   10.57 %
Total capital ratio (4) 12.81 %   11.97 %   13.00 %   12.81 %   13.00 %
Leverage ratio (Tier 1 capital to average assets) (4) 9.46 %   9.32 %   9.61 %   9.46 %   9.61 %
Common equity to total assets 14.27 %   13.93 %   11.56 %   14.27 %   11.56 %
Tangible common equity to tangible assets (2) 8.86 %   8.54 %   8.32 %   8.86 %   8.32 %
                   
Financial Condition                  
Assets $ 13,066,106     $ 13,149,292     $ 8,915,187     $ 13,066,106     $ 8,915,187  
Loans held for investment 9,290,259     9,805,723     6,771,490     9,290,259     6,771,490  
Earning Assets 11,494,113     11,595,325     8,094,574     11,494,113     8,094,574  
Goodwill 725,195     724,106     298,191     725,195     298,191  
Amortizable intangibles, net 51,211     50,092     17,422     51,211     17,422  
Deposits 9,797,272     9,677,955     6,764,434     9,797,272     6,764,434  
Stockholders' equity 1,864,870     1,831,077     1,030,869     1,864,870     1,030,869  
Tangible common equity (2) 1,088,464     1,056,879     715,256     1,088,464     715,256  
                   
Loans held for investment, net of deferred fees and costs                  
Construction and land development $ 1,250,448     $ 1,249,196     $ 799,938     $ 1,250,448     $ 799,938  
Commercial real estate - owner occupied 1,293,791     1,279,155     888,285     1,293,791     888,285  
Commercial real estate - non-owner occupied 2,318,589     2,230,463     1,698,329     2,318,589     1,698,329  
Multifamily real estate 541,730     547,520     367,257     541,730     367,257  
Commercial & Industrial 1,093,771     1,125,733     568,602     1,093,771     568,602  
Residential 1-4 Family - commercial 723,945     714,660     589,398     723,945     589,398  
Residential 1-4 Family - mortgage 607,155     604,354     477,121     607,155     477,121  
Auto 296,706     288,089     274,162     296,706     274,162  
HELOC 626,916     642,084     535,088     626,916     535,088  
Consumer 298,021     839,699     387,782     298,021     387,782  
Other Commercial 239,187     284,770     185,528     239,187     185,528  
Total loans held for investment $ 9,290,259     $ 9,805,723     $ 6,771,490     $ 9,290,259     $ 6,771,490  
                   
Deposits                  
NOW accounts $ 2,147,999     $ 2,185,562     $ 1,882,287     $ 2,147,999     $ 1,882,287  
Money market accounts 2,758,704     2,692,662     1,559,895     2,758,704     1,559,895  
Savings accounts 643,894     654,931     558,472     643,894     558,472  
Time deposits of $100,000 and over 1,019,577     819,056     580,962     1,019,577     580,962  
Other time deposits 1,034,171     1,268,319     681,248     1,034,171     681,248  
Total interest-bearing deposits $ 7,604,345     $ 7,620,530     $ 5,262,864     $ 7,604,345     $ 5,262,864  
Demand deposits 2,192,927     2,057,425     1,501,570     2,192,927     1,501,570  
Total deposits $ 9,797,272     $ 9,677,955     $ 6,764,434     $ 9,797,272     $ 6,764,434  
                   
Averages                  
Assets $ 13,218,227     $ 13,019,572     $ 8,747,377     $ 13,119,448     $ 8,607,225  
Loans held for investment 9,809,083     9,680,195     6,628,011     9,744,995     6,506,632  
Securities 1,625,273     1,567,269     1,229,593     1,596,431     1,218,741  
Earning assets 11,661,189     11,475,099     7,934,405     11,568,658     7,798,427  
Deposits 9,645,186     9,463,697     6,637,742     9,554,943     6,523,148  
Time deposits 2,063,414     2,085,930     1,248,818     2,074,610     1,230,045  
Interest-bearing deposits 7,549,953     7,489,893     5,179,774     7,520,089     5,097,004  
Borrowings 1,617,322     1,614,691     1,023,599     1,616,013     1,005,224  
Interest-bearing liabilities 9,167,275     9,104,584     6,203,373     9,136,102     6,102,228  
Stockholders' equity 1,847,366     1,824,588     1,026,148     1,836,072     1,018,277  
Tangible common equity (2) 1,069,886     1,048,824     709,793     1,059,446     701,138  


  As of & For Three Months Ended   As of & For Six Months Ended
  6/30/18   3/31/18   6/30/17   6/30/18   6/30/17
Asset Quality (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Allowance for Loan Losses (ALL)                  
Beginning balance $ 40,629     $ 38,208     $ 38,414     $ 38,208     $ 37,192  
Add: Recoveries 1,201     1,480     827     2,681     1,672  
Less: Charge-offs 2,980     2,559     3,327     5,539     4,960  
Add: Provision for loan losses 2,660     3,524     2,311     6,184     4,303  
Add: Provision for loan losses included in discontinued operations (240 )   (24 )   (11 )   (264 )   7  
Ending balance $ 41,270     $ 40,629     $ 38,214     $ 41,270     $ 38,214  
                   
ALL / total outstanding loans 0.44 %   0.41 %   0.56 %   0.44 %   0.56 %
Net charge-offs / total average loans 0.07 %   0.05 %   0.15 %   0.06 %   0.10 %
Provision / total average loans 0.11 %   0.15 %   0.14 %   0.13 %   0.13 %
                   
Total PCI loans, net of fair value mark $ 101,524     $ 102,861     $ 56,167     $ 101,524     $ 56,167  
Remaining fair value mark on purchased performing loans 36,207     44,766     15,382     36,207     15,382  
                   
Nonperforming Assets                  
Construction and land development $ 6,485     $ 6,391     $ 5,659     $ 6,485     $ 5,659  
Commercial real estate - owner occupied 2,845     2,539     1,279     2,845     1,279  
Commercial real estate - non-owner occupied 3,068     2,089     4,765     3,068     4,765  
Commercial & Industrial 1,387     1,969     4,281     1,387     4,281  
Residential 1-4 Family 9,550     9,441     6,128     9,550     6,128  
Auto 463     394     270     463     270  
HELOC 1,669     2,072     2,059     1,669     2,059  
Consumer and all other 195     243     133     195     133  
Nonaccrual loans $ 25,662     $ 25,138     $ 24,574     $ 25,662     $ 24,574  
Other real estate owned 7,995     10,099     9,482     7,995     9,482  
Total nonperforming assets (NPAs) $ 33,657     $ 35,237     $ 34,056     $ 33,657     $ 34,056  
Construction and land development $ 144     $ 322     $ 83     $ 144     $ 83  
Commercial real estate - owner occupied 2,512         56     2,512     56  
Commercial real estate - non-owner occupied         298         298  
Commercial & Industrial 100     200     55     100     55  
Residential 1-4 Family 2,801     1,261     2,369     2,801     2,369  
Auto 121     170     35     121     35  
HELOC 570     306     544     570     544  
Consumer and all other 673     371     185     673     185  
Loans ≥ 90 days and still accruing $ 6,921     $ 2,630     $ 3,625     $ 6,921     $ 3,625  
Total NPAs and loans ≥ 90 days $ 40,578     $ 37,867     $ 37,681     $ 40,578     $ 37,681  
NPAs / total outstanding loans 0.36 %   0.36 %   0.50 %   0.36 %   0.50 %
NPAs / total assets 0.26 %   0.27 %   0.38 %   0.26 %   0.38 %
ALL / nonaccrual loans 160.82 %   161.62 %   155.51 %   160.82 %   155.51 %
ALL / nonperforming assets 122.62 %   115.30 %   112.21 %   122.62 %   112.21 %
                   
Past Due Detail                  
Construction and land development $ 648     $ 403     $ 602     $ 648     $ 602  
Commercial real estate - owner occupied 3,775     4,985     3,148     3,775     3,148  
Commercial real estate - non-owner occupied 44     1,867     1,530     44     1,530  
Multifamily real estate 86         500     86     500  
Commercial & Industrial 1,921     2,608     1,652     1,921     1,652  
Residential 1-4 Family 7,142     9,917     2,477     7,142     2,477  
Auto 2,187     2,167     1,562     2,187     1,562  
HELOC 2,505     3,564     1,405     2,505     1,405  
Consumer and all other 2,722     4,179     1,891     2,722     1,891  
Loans 30-59 days past due $ 21,030     $ 29,690     $ 14,767     $ 21,030     $ 14,767  


  As of & For Three Months Ended   As of & For Six Months Ended
  6/30/18   3/31/18   6/30/17   6/30/18   6/30/17
Past Due Detail cont'd (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Construction and land development $ 292     $ 1,291     $ 26     $ 292     $ 26  
Commercial real estate - owner occupied 1,819     777     194     1,819     194  
Commercial real estate - non-owner occupied         571         571  
Commercial & Industrial 1,567     1,254     113     1,567     113  
Residential 1-4 Family 3,742     2,357     5,663     3,742     5,663  
Auto 419     193     240     419     240  
HELOC 1,622     1,346     964     1,622     964  
Consumer and all other 761     2,074     1,242     761     1,242  
Loans 60-89 days past due $ 10,222     $ 9,292     $ 9,013     $ 10,222     $ 9,013  
                   
Troubled Debt Restructurings                  
Performing $ 15,696     $ 13,292     $ 14,947     $ 15,696     $ 14,947  
Nonperforming 4,001     4,284     4,454     4,001     4,454  
Total troubled debt restructurings $ 19,697     $ 17,576     $ 19,401     $ 19,697     $ 19,401  
                   
Alternative Performance Measures (non-GAAP)                  
Net interest income (FTE)                  
Net interest income (GAAP) $ 108,168     $ 103,472     $ 68,704     $ 211,640     $ 135,071  
FTE adjustment 2,008     1,838     2,943     3,845     5,684  
Net interest income (FTE) (non-GAAP) (1) $ 110,176     $ 105,310     $ 71,647     $ 215,485     $ 140,755  
Average earning assets 11,661,189     11,475,099     7,934,405     11,568,658     7,798,427  
Net interest margin 3.72 %   3.66 %   3.47 %   3.69 %   3.49 %
Net interest margin (FTE) (1) 3.79 %   3.72 %   3.62 %   3.76 %   3.64 %
                   
Tangible Assets                  
Ending assets (GAAP) $ 13,066,106     $ 13,149,292     $ 8,915,187     $ 13,066,106     $ 8,915,187  
Less: Ending goodwill 725,195     724,106     298,191     725,195     298,191  
Less: Ending amortizable intangibles 51,211     50,092     17,422     51,211     17,422  
Ending tangible assets (non-GAAP) $ 12,289,700     $ 12,375,094     $ 8,599,574     $ 12,289,700     $ 8,599,574  
                   
Tangible Common Equity (2)                  
Ending equity (GAAP) $ 1,864,870     $ 1,831,077     $ 1,030,869     $ 1,864,870     $ 1,030,869  
Less: Ending goodwill 725,195     724,106     298,191     725,195     298,191  
Less: Ending amortizable intangibles 51,211     50,092     17,422     51,211     17,422  
Ending tangible common equity (non-GAAP) $ 1,088,464     $ 1,056,879     $ 715,256     $ 1,088,464     $ 715,256  
                   
Average equity (GAAP) $ 1,847,366     $ 1,824,588     $ 1,026,148     $ 1,836,072     $ 1,018,277  
Less: Average goodwill 726,934     724,106     298,191     725,527     298,191  
Less: Average amortizable intangibles 50,546     51,658     18,164     51,099     18,948  
Average tangible common equity (non-GAAP) $ 1,069,886     $ 1,048,824     $ 709,793     $ 1,059,446     $ 701,138  
                   
Operating Measures (3)                  
Net income (GAAP) $ 47,327     $ 16,639     $ 17,956     $ 63,966     $ 37,080  
Plus: Merger-related costs, net of tax 6,537     22,236     2,358     28,773     2,358  
Net operating earnings (non-GAAP) $ 53,864     $ 38,875     $ 20,314     $ 92,739     $ 39,438  
                   
Noninterest expense (GAAP) $ 85,140     $ 101,743     $ 57,575     $ 186,885     $ 112,668  
Less: Merger-related costs 8,273     27,712     2,744     35,985     2,744  
Operating noninterest expense (non-GAAP) $ 76,867     $ 74,031     $ 54,831     $ 150,900     $ 109,924  
                   
Net interest income (FTE) (non-GAAP) (1) $ 110,176     $ 105,310     $ 71,647     $ 215,485     $ 140,755  
Noninterest income (GAAP) 40,597     20,267     15,262     60,865     32,075  
                   
Efficiency ratio 57.23 %   82.22 %   68.57 %   68.58 %   67.41 %
Efficiency ratio (FTE) (1) 56.47 %   81.02 %   66.25 %   67.63 %   65.19 %
Operating efficiency ratio (FTE) 50.98 %   58.95 %   63.09 %   54.60 %   63.60 %


  As of & For Three Months Ended   As of & For Six Months Ended
  6/30/18   3/31/18   6/30/17   6/30/18   6/30/17
Other Data (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
End of period full-time employees 1,702     1,824     1,432     1,702     1,432  
Number of full-service branches 147     150     112     147     112  
Number of full automatic transaction machines ("ATMs") 199
    216     174     199
    174  

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

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

(3) Operating measures exclude merger-related costs 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.

(4) All ratios at June 30, 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)          
  June 30,   December 31,   June 30,
  2018   2017   2017
ASSETS (unaudited)   (audited)   (unaudited)
Cash and cash equivalents:          
Cash and due from banks $ 153,078     $ 117,586     $ 135,759  
Interest-bearing deposits in other banks 417,423     81,291     45,473  
Federal funds sold 7,552     496     678  
Total cash and cash equivalents 578,053     199,373     181,910  
Securities available for sale, at fair value 1,586,248     974,222     960,537  
Securities held to maturity, at carrying value 47,604     199,639     205,630  
Restricted stock, at cost 104,837     75,283     69,631  
Loans held for investment, net of deferred fees and costs 9,290,259     7,141,552     6,771,490  
Less allowance for loan losses 41,270     38,208     38,214  
Net loans held for investment 9,248,989     7,103,344     6,733,276  
Premises and equipment, net 160,508     119,604     121,367  
Other real estate owned, net of valuation allowance 7,995     6,636     9,482  
Goodwill 725,195     298,528     298,191  
Amortizable intangibles, net 51,211     14,803     17,422  
Bank owned life insurance 260,124     182,854     180,110  
Other assets 251,878     96,235     90,297  
Assets of discontinued operations 43,464     44,658     47,334  
Total assets $ 13,066,106     $ 9,315,179     $ 8,915,187  
LIABILITIES          
Noninterest-bearing demand deposits $ 2,192,927     $ 1,502,208     $ 1,501,570  
Interest-bearing deposits 7,604,345     5,489,510     5,262,864  
Total deposits 9,797,272     6,991,718     6,764,434  
Securities sold under agreements to repurchase 50,299     49,152     34,543  
Other short-term borrowings 742,900     745,000     602,000  
Long-term borrowings 507,077     425,262     434,260  
Other liabilities 99,327     54,008     45,026  
Liabilities of discontinued operations 4,361     3,710     4,055  
Total liabilities 11,201,236     8,268,850     7,884,318  
Commitments and contingencies          
STOCKHOLDERS' EQUITY          
Common stock, $1.33 par value, shares authorized 100,000,000;
issued and outstanding, 65,939,375 shares, 43,743,318 shares, and
43,706,000 shares, respectively.
87,129     57,744     57,643  
Additional paid-in capital 1,376,294     610,001     607,666  
Retained earnings 415,492     379,468     361,552  
Accumulated other comprehensive income (loss) (14,045 )   (884 )   4,008  
Total stockholders' equity 1,864,870     1,046,329     1,030,869  
Total liabilities and stockholders' equity $ 13,066,106     $ 9,315,179     $ 8,915,187  


UNION BANKSHARES CORPORATION AND SUBSIDIARIES        
CONSOLIDATED STATEMENTS OF INCOME        
(Dollars in thousands, except share data)                  
  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
  2018   2018   2017   2018   2017
Interest and dividend income: (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Interest and fees on loans $ 119,540     $ 112,652     $ 72,317     $ 232,193     $ 140,200  
Interest on deposits in other banks 676     647     115     1,323     186  
Interest and dividends on securities:                  
Taxable 8,012     7,072     4,982     15,084     9,905  
Nontaxable 4,181     4,008     3,512     8,189     7,074  
Total interest and dividend income 132,409     124,379     80,926     256,789     157,365  
Interest expense:                  
Interest on deposits 13,047     11,212     6,100     24,259     11,176  
Interest on short-term borrowings 5,166     4,249     1,400     9,415     2,350  
Interest on long-term borrowings 6,028     5,446     4,722     11,475     8,768  
Total interest expense 24,241     20,907     12,222     45,149     22,294  
Net interest income 108,168     103,472     68,704     211,640     135,071  
Provision for credit losses 2,147     3,524     2,184     5,671     4,288  
Net interest income after provision for credit losses 106,021     99,948     66,520     205,969     130,783  
Noninterest income:                  
Service charges on deposit accounts 6,189     5,894     4,613     12,083     9,129  
Other service charges and fees 1,278     1,233     1,120     2,512     2,259  
Interchange fees, net 4,792     4,489     3,867     9,280     7,449  
Fiduciary and asset management fees 4,040     3,056     2,725     7,096     5,519  
Gains on securities transactions, net (88 )   213     117     125     598  
Bank owned life insurance income 1,728     1,667     1,335     3,395     3,460  
Loan-related interest rate swap fees 898     718     1,031     1,617     2,211  
Gain on Shore Premier sale 20,899             20,899      
Other operating income 861     2,997     454     3,858     1,450  
Total noninterest income 40,597     20,267     15,262     60,865     32,075  
Noninterest expenses:                  
Salaries and benefits 40,777     40,741     28,930     81,518     59,553  
Occupancy expenses 6,159     6,067     4,453     12,226     9,106  
Furniture and equipment expenses 3,103     2,937     2,598     6,041     5,064  
Printing, postage, and supplies 1,282     1,060     1,393     2,342     2,525  
Communications expense 1,009     1,095     870     2,104     1,771  
Technology and data processing 4,322     4,560     3,842     8,881     7,646  
Professional services 2,671     2,554     2,054     5,225     3,664  
Marketing and advertising expense 3,288     1,436     2,270     4,725     4,002  
FDIC assessment premiums and other insurance 1,882     2,185     947     4,067     1,652  
Other taxes 2,895     2,886     2,022     5,782     4,043  
Loan-related expenses 1,843     1,315     1,128     3,158     2,292  
OREO and credit-related expenses 1,122     1,532     342     2,654     884  
Amortization of intangible assets 3,215     3,181     1,544     6,396     3,180  
Training and other personnel costs 1,125     1,006     1,018     2,132     1,967  
Merger-related costs 8,273     27,712     2,744     35,985     2,744  
Other expenses 2,174     1,476     1,420     3,649     2,575  
Total noninterest expenses 85,140     101,743     57,575     186,885     112,668  
Income from continuing operations before income taxes 61,478     18,472     24,207     79,949     50,190  
Income tax expense 11,678     1,897     6,725     13,575     13,507  
Income from continuing operations $ 49,800     $ 16,575     $ 17,482     $ 66,374     $ 36,683  


UNION BANKSHARES CORPORATION AND SUBSIDIARIES        
CONSOLIDATED STATEMENTS OF INCOME (continued)        
(Dollars in thousands, except share data)                  
  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
  2018   2018   2017   2018   2017
Discontinued operations: (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Income (loss) from operations of discontinued mortgage segment $ (3,085 )   $ 76     $ 745     $ (3,008 )   651  
Income tax expense (benefit) (612 )   12     271     (600 )   254  
Income (loss) on discontinued operations (2,473 )   64     474     (2,408 )   397  
Net income $ 47,327     $ 16,639     $ 17,956     $ 63,966     $ 37,080  
Basic earnings per common share $ 0.72     $ 0.25     $ 0.41     $ 0.97     $ 0.85  
Diluted earnings per common share $ 0.72     $ 0.25     $ 0.41     $ 0.97     $ 0.85  


AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
  For the Quarter Ended
  June 30, 2018   March 31, 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 $ 1,077,656     $ 8,012     2.98 %   $ 1,020,691     $ 7,072     2.81 %
Tax-exempt 547,617     5,293     3.88 %   546,578     5,073     3.76 %
Total securities 1,625,273     13,305     3.28 %   1,567,269     12,145     3.14 %
Loans, net (3) (4) 9,809,083     120,039     4.91 %   9,680,195     113,135     4.74 %
Other earning assets 226,833     1,073     1.90 %   227,635     937     1.67 %
Total earning assets 11,661,189     $ 134,417     4.62 %   11,475,099     $ 126,217     4.46 %
Allowance for loan losses (41,645 )           (39,847 )        
Total non-earning assets 1,598,683             1,584,320          
Total assets $ 13,218,227             $ 13,019,572          
                       
Liabilities and Stockholders' Equity:                      
Interest-bearing deposits:                      
Transaction and money market accounts $ 4,836,642     $ 6,790     0.56 %   $ 4,759,523     $ 5,555     0.47 %
Regular savings 649,897     217     0.13 %   644,440     212     0.13 %
Time deposits (5) 2,063,414     6,040     1.17 %   2,085,930     5,445     1.06 %
Total interest-bearing deposits 7,549,953     13,047     0.69 %   7,489,893     11,212     0.61 %
Other borrowings (6) 1,617,322     11,194     2.78 %   1,614,691     9,695     2.44 %
Total interest-bearing liabilities 9,167,275     24,241     1.06 %   9,104,584     20,907     0.93 %
                       
Noninterest-bearing liabilities:                      
Demand deposits 2,095,233             1,973,804          
Other liabilities 108,353             116,596          
Total liabilities 11,370,861             11,194,984          
Stockholders' equity 1,847,366             1,824,588          
Total liabilities and stockholders' equity $ 13,218,227             $ 13,019,572          
                       
Net interest income     $ 110,176             $ 105,310      
                       
Interest rate spread         3.56 %           3.53 %
Cost of funds         0.83 %           0.74 %
Net interest margin         3.79 %           3.72 %
                       
(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21%.
(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 $5.3 million and $4.8 million for the three months ended June 30, 2018 and March 31, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $685,000 and $832,000 for the three months ended June 30, 2018 and March 31, 2018, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $104,000 and $98,000 for the three months ended June 30, 2018 and March 31, 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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