Union Bankshares, Inc. (NASDAQ - UNB) today announced results for
the three and six months ended June 30, 2022 and declared a regular
quarterly cash dividend. Consolidated net income for the three
months ended June 30, 2022 was $2.9 million, or $0.65 per share,
compared to $3.0 million, or $0.67 cents per share, for the same
period in 2021, and $5.4 million, or $1.20 per share, for the six
months ended June 30, 2022, compared to $5.9 million, or $1.31 per
share for the same period in 2021.
Second Quarter Highlights
Consolidated net income decreased $60 thousand,
or 2.0%, to $2.9 million for the second quarter of 2022 compared to
the second quarter of 2021 due to a decrease in noninterest income
of $974 thousand and an increase of $7 thousand in income tax
expense, partially offset by an increase in net interest income of
$752 thousand, a reduction of $75 thousand in the provision for
loan losses and a decrease in noninterest expenses of $94 thousand.
The decrease in noninterest income was primarily related to a
decrease in the gain on sale of residential loans of $865 thousand
for the comparison period due to lower sales volume and lower
premiums related to the increase in interest rates.
Net interest income improved to $9.7 million for
the three months ended June 30, 2022 compared to $8.9 million for
the three months ended June 30, 2021, an increase of $752 thousand,
or 8.4%. The larger earning asset base coupled with stable deposit
costs have improved net interest income.
No provision for loan losses was recorded for
the three and six months ended June 30, 2022 compared to $75
thousand and $225 thousand for the three and six months ended June
30, 2021, respectively. The allowance for loan losses as of
June 30, 2022 is determined to be sufficient based on the
current size and mix of the loan portfolio and positive asset
quality metrics .
Noninterest expenses were $8.3 million for the
three months ended June 30, 2022 compared to $8.4 million for the
same period in 2021, a decrease of $94 thousand, or 1.1%.
Year-to-Date Highlights
Consolidated net income was $5.4 million, or
$1.20 per share, compared to $5.9 million, or $1.31 per share, for
the six months ended June 30, 2022 and 2021, respectively. The
decrease in earnings was due a decrease of $1.5 million in
noninterest income, a $567 thousand increase in noninterest
expenses, partially offset by an increase in net interest income of
$1.3 million and decreases of $225 thousand in the provision for
loan losses and $112 thousand in income tax expense.
Interest income increased $732 thousand, or
3.8%, to $20.1 million for the six months ended June 30, 2022
compared to $19.4 million for the six months ended June 30, 2021.
Interest expense was $1.5 million for the six months ended June 30,
2022 compared to $2.1 million for the six months ended June 30,
2021.
Noninterest income was $4.2 million for the six
months ended June 30, 2022 compared to $5.8 million for the six
months ended June 30, 2021, a decrease of $1.5 million, or 26.7%,
caused primarily due to the reduction in net gains on sales of
residential loans. Sales of qualifying residential loans to the
secondary market for the first six months of 2022 were $34.4
million resulting in net gains of $300 thousand, compared to sales
of $85.2 million and net gains on sales of $2.0 million for the
first six months of 2021. The rapid increase in the 10-year
treasury yield negatively impacted the premium obtained on sales of
qualifying loans during the first six months of 2022 compared to
the same period in 2021. This resulted in lower sales volume and
more residential loans retained on the balance sheet. Noninterest
expenses increased $567 thousand, or 3.6%, during the comparison
periods due to increases of $294 thousand in salaries and wages,
$228 thousand in employee benefits, $180 thousand in equipment
expenses, partially offset by decreases of $15 thousand in
occupancy expenses and $120 thousand in other expenses. Income tax
expense decreased $112 thousand.
Total assets were $1.2 billion as of
June 30, 2022 compared to $1.1 billion as of June 30,
2021, an increase of $125.8 million, or 11.8%. Asset growth
continued to be fueled by increases in customer deposits that were
reinvested into our communities through loans to individuals,
businesses, and municipalities as well as investment
securities.
Investment securities, including interest
bearing deposits in other banks reached $276.8 million at
June 30, 2022 compared to $172.2 million at June 30,
2021. The $104.5 million increase for the comparison period was the
result of investing low yielding excess liquidity funds into higher
yielding investments, primarily mortgage backed securities
classified as available-for-sale. As seen last quarter, the rapid
increase in interest rates, specifically the 10-year treasury rate,
has resulted in net unrealized losses of $35.9 million as of
June 30, 2022. Based on management's assessment, the losses
are not representative of a deterioration in credit quality but are
the result of rising interest rates.
Total loans outstanding as of June 30, 2022
were $823.0 million compared to $783.0 million as of June 30,
2021, an increase of $39.9 million, or 5.1%, net of PPP loan
forgiveness of $54.0 million. As of June 30, 2022 outstanding
PPP loan balances were $3.3 million compared to $57.3 million a
year ago. Loan demand remained strong for the first six months of
2022 despite low housing inventory and rising interest rates.
As mentioned above, funding of asset growth
continues to be primarily from customer deposits which increased to
$1.1 billion as of June 30, 2022 compared to $967.7 million as
of June 30, 2021, an increase of $135.4 million, or 14.0%. The
increase in customer deposits has allowed for a reduction in
wholesale funding of $7.2 million since June 30, 2021.
The Company had total equity capital of $59.9
million and a book value per share of $13.34 as of June 30,
2022 compared to $82.4 million and $18.37 per share as of
June 30, 2021. The decrease in total capital was primarily
attributable to the reduction in accumulated comprehensive loss of
$29.4 million as it relates to unrealized losses in the investment
portfolio discussed above. The unrealized losses in other
comprehensive income during the quarter do not impact regulatory
capital ratios.
The Board of Directors declared a cash dividend
of $0.35 per share for the quarter payable August 4, 2022 to
shareholders of record as of July 30, 2022.
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, wealth 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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