Union Bankshares, Inc. (NASDAQ - UNB) today announced results for
the three and nine months ended September 30, 2022 and declared a
regular quarterly cash dividend. Consolidated net income for the
three months ended September 30, 2022 was $3.8 million, or $0.84
per share, compared to $3.9 million, or $0.87 cents per share, for
the same period in 2021, and $9.2 million, or $2.04 per share, for
the nine months ended September 30, 2022, compared to $9.8 million,
or $2.18 per share for the same period in 2021.
Third Quarter Highlights
Consolidated net income decreased $167 thousand,
or 4.3%, to $3.8 million for the third quarter of 2022 compared to
the third quarter of 2021 due to a decrease in noninterest income
of $1.7 million partially offset by an increase in net interest
income of $1.3 million and decreases in noninterest expenses of
$182 thousand and income tax expense of $91 thousand. The decrease
in noninterest income was primarily related to a decrease in the
gain on sale of residential loans of $1.5 million for the
comparison period due to lower sales volume and lower premiums
related to the increase in interest rates.
Net interest income improved to $10.4 million
for the three months ended September 30, 2022 compared to $9.1
million for the three months ended September 30, 2021, an increase
of $1.3 million, or 14.1%. Interest income increased $1.6 million
to $11.5 million for the three months ended September 30, 2022
compared to $9.9 million for the three months ended September 30,
2021 due to the larger earning asset base coupled with upward
movement in interest rates. Interest expense increased $317
thousand to $1.0 million for the three months ended September 30,
2022 compared to $706 thousand for the three months ended September
30, 2021 due to the larger funding base and an increase in rates
paid on customer deposits and other sources.
No provision for loan losses was recorded for
the three and nine months ended September 30, 2022 compared to no
provision for the three months ended September 30, 2021 and $225
thousand for the nine months ended September 30, 2021. The
allowance for loan losses as of September 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 $8.4 million for the
three months ended September 30, 2022 compared to $8.5 million for
the same period in 2021, a decrease of $182 thousand, or 2.1%.
Year-to-Date Highlights
Consolidated net income was $9.2 million, or
$2.04 per share, compared to $9.8 million, or $2.18 per share, for
the nine months ended September 30, 2022 and 2021, respectively.
The decrease in earnings was due to a decrease of $3.3 million in
noninterest income, a $385 thousand increase in noninterest
expenses, partially offset by an increase in net interest income of
$2.6 million and decreases of $225 thousand in the provision for
loan losses and $203 thousand in income tax expense.
Interest income increased $2.3 million, or 8.0%,
to $31.6 million for the nine months ended September 30, 2022
compared to $29.3 million for the nine months ended September 30,
2021. Interest expense was $2.5 million for the nine months ended
September 30, 2022 compared to $2.8 million for the nine months
ended September 30, 2021.
Noninterest income was $6.7 million for the nine
months ended September 30, 2022 compared to $10.0 million for the
nine months ended September 30, 2021, a decrease of $3.3 million,
or 32.9%, 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 nine months of 2022 were $60.2
million resulting in net gains of $748 thousand, compared to sales
of $164.2 million and net gains on sales of $4.0 million for the
first nine 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 nine 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 $385 thousand, or 1.6%, during the comparison
periods due to increases of $190 thousand in employee benefits,
$256 thousand in equipment expenses and $8 thousand in occupancy
expenses, partially offset by decreases of $49 thousand in salaries
and wages and $20 thousand in other expenses. Income tax expense
decreased $203 thousand.
Total assets were $1.3 billion as of
September 30, 2022 compared to $1.2 billion as of
September 30, 2021, an increase of $142.0 million, or 12.3%.
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 $255.7 million at
September 30, 2022 compared to $197.6 million at
September 30, 2021. Low yielding excess liquidity was utilized
to purchase higher yielding investments, primarily mortgage backed
securities classified as available-for-sale. The increase in
interest rates, specifically the 10-year treasury rate, has
resulted in net unrealized losses of $51.8 million as of
September 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 September 30,
2022 were $942.5 million compared to $790.0 million as of
September 30, 2021, an increase of $152.5 million, or 19.3%.
As of September 30, 2022, outstanding PPP loan balances were
$958 thousand compared to $28.2 million a year ago. Loan demand
remained strong for the first nine months of 2022 despite rising
interest rates and low residential inventory. A slow down in loan
originations could occur in the coming months if interest rates
continue to increase.
As mentioned above, funding of asset growth
continues to be primarily from customer deposits which increased to
$1.2 billion as of September 30, 2022 compared to $1.0 billion
as of September 30, 2021, an increase of $123.8 million, or
11.9%. As of September 30, 2022, $32.0 million wholesale
brokered deposits was also used to bridge funding gaps.
The Company had total equity capital of $49.7
million and a book value per share of $11.06 as of
September 30, 2022 compared to $83.7 million and $18.67 per
share as of September 30, 2021. The decrease in total capital
was primarily attributable to the reduction in accumulated
comprehensive loss of $40.8 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 November 3, 2022 to
shareholders of record as of October 29, 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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