Putting two companies together can be costly.
Union Bankshares, the parent holding company of Union Bank & Trust, will spend almost $10 million in coming quarters to consummate its acquisition of First Market Bank.
The cost of blending the two companies into one will be about $10.8 million. About $948,000 has been spent so far, much of it on legal fees.
The expenses include such things such as accounting fees, lease and contract terminations, and employee severances, according to a quarterly report filed with the SEC.
In late September, the bank said it would cut 50 jobs. You can read more about that in a BizSense story here.
Union Bankshares also reported a net income of $2.8 million in the third quarter, down from $4.2 million for the same quarter last year but up from $953,000 for the second quarter, which ended June 30. One reason for the gain in profits was that the bank could borrow money more cheaply as interest the bank pays to customers in the form or CDs and money markets reset.
Loans past due continue to rise, hitting $28.8 million as of Sept. 30, or 1.53 percent of the total loans. That’s more than double the loans past due from a year ago (.65 percent) and up slightly from 1.49 percent in the second quarter of 2009.
Aaron Kremer is the BizSense editor. Please send news tips to Editor@richmondbizsense.com.
A Kremer
Keep up the good work reporting on banks.
In your UBSH story today you wrote // that the bank could borrow money from the federal government at zero percent // Where did you get that? If you referred to the Fed Funds rate of 0.25% or less, that is not borrowing money from the Fed, but from other banks. True, the Fed can and does intervene in the daily “overnight” market for surplus funds, but the market is run out of NY houses.
keep writing…
jack
Hi Jack,
We realize the error and were not able to fix it until this weekend. Thanks,
AARON