Union Bankshares, Inc. (NASDAQ - UNB) today announced results for
the three months and year ended December 31, 2021. Net income was
$3.4 million and $13.2 million for the three months and year ended
December 31, 2021, resulting in earnings per share of $0.76 and
$2.94 for the same periods, respectively.
The Board of Directors also declared a cash
dividend of $0.35 per share for the quarter, an increase of 6.1%
from the cash dividend of $0.33 paid in recent prior quarters,
payable February 3, 2022 to shareholders of record as of January
29, 2022.
Fourth Quarter Highlights
Consolidated net income decreased $416 thousand,
or 11.0%, to $3.4 million for the fourth quarter of 2021 compared
to the fourth quarter of 2020 due to increases in net interest
income of $1.1 million, a reduction in the provision for loan
losses of $825 thousand, and a reduction of $197 thousand in income
tax expense. These items were offset by a reduction in noninterest
income of $2.0 million and an increase in noninterest expenses of
$561 thousand.
The downward pressure put on asset yields in
2021 was offset by increases in the investment and loan portfolios
for the comparison quarters. The increases in volumes along with a
$354 thousand increase in PPP fee income contributed to interest
income of $10.0 million for the fourth quarter of 2021 compared to
$9.3 million for the same quarter in 2020, an increase of $718
thousand, or 7.7%. The current interest rate environment allowed
rates on customer deposit accounts to remain low which contributed
to a $392 thousand, or 33.4%, reduction in interest expense despite
an increase in average balances in customer accounts. These changes
resulted in net interest income of $9.2 million, an increase of
$1.1 million, or 13.6%, quarter over quarter.
A credit of $225 thousand was recorded for the
provision for loan losses for the fourth quarter of 2021, which
represents the reversal of the provision recorded during the first
half of 2021. The continued improvement in the economy and positive
trends in loans that were previously in forbearance allowed for the
reversal of the provision during the fourth quarter.
Noninterest income was $3.0 million for the
three months ended December 31, 2021 compared to $5.0 million for
the same period in 2020. The decrease of $2.0 million is primarily
attributable to a reduction in the gain on sales of real estate
loans of $1.8 million for the comparison periods. Sales of
qualifying residential loans to the secondary market for the fourth
quarter of 2021 were $52.6 million resulting in gain on sales of
$982 thousand, compared to sales of $75.5 million and gain on sales
of $2.8 million for the fourth quarter of 2020.
Noninterest expenses were $8.5 million for the
three months ended December 31, 2021 compared to $7.9 million for
the same period in 2020 primarily due to increases of $342 thousand
in salaries and wages, $159 thousand in occupancy and equipment
expenses, and $194 thousand in other expenses. Other expenses
included a one-time charge of $226 thousand for the early payoff of
a Federal Home Loan Bank advance.
Year-to-Date Highlights
Consolidated net income was $13.2 million, or
$2.94 per share, compared to $12.8 million, or $2.86 per share, for
the year ended December 31, 2021 and 2020, respectively. The
improvement in earnings was due to a $4.1 million increase in net
interest income and a decrease of $2.2 million in the provision for
loan losses, partially offset by a decrease in noninterest income
of $3.0 million and increases in noninterest expenses of $2.7
million and income tax expense of $227 thousand.
Interest income increased $2.5 million, or 6.9%,
to $39.3 million for the year ended December 31, 2021 compared to
$36.8 million for the year ended December 31, 2020. A larger
earning asset base and a $1.9 million increase in PPP fee income
contributed to the increase in interest income. Interest expense
was $3.6 million for the year ended December 31, 2021 compared to
$5.1 million for the year ended December 31, 2020. The decrease in
expense is attributable to the maturity of high rate paying
promotional certificates of deposit during 2021 into lower rate
paying accounts and the low interest rate environment despite the
increase in customer deposit accounts.
Total noninterest income amounted to $13.0
million for the year ended December 31, 2021 compared to $16.0
million for the year ended December 31, 2020, a decrease of $3.0
million, or 19.0%. The decrease is due to a decrease in gains on
sales of residential loans partially offset by an increase in ATM
network income as a result of increased debit card usage. Gain on
sales of qualifying residential loans amounted to $5.0 million for
the year ended December 31, 2021 and $8.2 million for the year
ended December 31, 2020 resulting from sales of $216.8 million for
the year ended December 31, 2021 compared to $263.1 million for the
same period in 2020.
Total noninterest expenses were $32.9 million
for the year ended December 31, 2021 compared to $30.2 million for
the same period in 2020, an increase of $2.7 million, or 8.9%.
Salaries and wages increased $1.2 million during the comparison
period due to annual salary increases and hiring of personnel in
preparation for upcoming retirements, partially offset by a
reduction in deferred loan origination costs. Other expenses
increased $979 thousand during the comparison period primarily due
to increases in the FDIC insurance assessment and Vermont Franchise
taxes due to the increases in total assets and the customer deposit
base. Also, as mentioned above, a one-time charge of $226 thousand
was incurred for the early payoff of a Federal Home Loan Bank
advance.
Total assets increased to $1.2 billion as of
December 31, 2021 from $1.1 billion as of December 31, 2020, growth
of $112.1 million, or 10.3%. Balance sheet growth was driven by
loan originations and purchases of investment securities funded by
an increase in customer deposit balances of $100.8 million. The
investment portfolio, including interest bearing deposits in banks,
increased $162.6 million, or 136.1%, to $282.1 million as of
December 31, 2021, from $119.5 million as of December 31, 2020 as
higher yields were sought on excess liquidity. Outstanding loan
balances were $801.6 million as of December 31, 2021 compared to
$803.2 million as of December 31, 2020, a decrease of $1.6 million,
the net effect of overall non-PPP loan portfolio growth of $51.0
million offset by a reduction in PPP loans of $52.7 million. Total
deposits increased to $1.1 billion as of December 31, 2021 compared
to $994.3 million as of December 31, 2020, an increase of $100.8
million, or 10.1%.
As announced on August 26, 2021, the Company
completed a private placement of $16.5 million in aggregate
principal amount of fixed-to-floating rate subordinated notes due
2031 to certain qualified institutional buyers and accredited
investors. Proceeds from the sale of the notes were used to provide
additional capital support to the Company's wholly-owned
subsidiary, Union Bank, to support growth and for other general
corporate purposes.
The Company had total equity capital of $84.3
million with a book value per share of $18.77 as of December 31,
2021 compared to $80.9 million and $18.05 per share as of December
31, 2020.
About Union Bankshares,
Inc.
Union Bankshares, Inc., headquartered in
Morrisville, Vermont, is the bank holding company parent of Union
Bank, which provides commercial, retail, and municipal banking
services, as well as, asset management services throughout northern
Vermont and New Hampshire. Union Bank operates 18 banking offices,
three loan centers, and multiple ATMs throughout its geographical
footprint.
Since 1891, Union Bank has helped people achieve
their dreams of owning a home, saving for retirement, starting or
expanding a business and assisting municipalities to improve their
communities. Union Bank has earned an exceptional reputation for
residential lending programs and has been recognized by the US
Department of Agriculture, Rural Development for the positive
impact made in lives of low to moderate home buyers. Union Bank is
consistently one of the top Vermont Housing Finance Agency mortgage
originators and has also been designated as an SBA Preferred lender
for its participation in small business lending. Union Bank's
employees contribute to the communities where they work and reside,
serving on non-profit boards, raising funds for worthwhile causes,
and giving countless hours in serving our fellow residents. All of
these efforts have resulted in Union receiving and "Outstanding"
rating for its compliance with the Community Reinvestment Act
("CRA") in its most recent examination. Union Bank is proud to be
one of the few independent community banks serving Vermont and New
Hampshire and we maintain a strong commitment to our core
traditional values of keeping deposits safe, giving customers
convenient financial choices and making loans to help people in our
local communities buy homes, grow businesses, and create jobs.
These values--combined with financial expertise, quality products
and the latest technology--make Union Bank the premier choice for
your banking services, both personal and business. Member FDIC.
Equal Housing Lender.
Forward-Looking Statements
Statements made in this press release that are
not historical facts are forward-looking statements. Investors are
cautioned that all forward-looking statements necessarily involve
risks and uncertainties, and many factors could cause actual
results and events to differ materially from those contemplated in
the forward-looking statements. When we use any of the words
“believes,” “expects,” “anticipates” or similar expressions, we are
making forward-looking statements. The following factors, among
others, could cause actual results and events to differ from those
contemplated in the forward-looking statements: uncertainties
associated with general economic conditions; changes in the
interest rate environment; inflation; political, legislative or
regulatory developments; acts of war or terrorism; the markets'
acceptance of and demand for the Company's products and services;
technological changes, including the impact of the internet on the
Company's business and on the financial services market place
generally; the impact of competitive products and pricing; and
dependence on third party suppliers. For further information,
please refer to the Company's reports filed with the Securities and
Exchange Commission at www.sec.gov or on our investor page at
www.ublocal.com.
Contact: David S. Silverman
(802) 888-6600
Union Bankshares (NASDAQ:UNB)
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