Union Bankshares, Inc. (NASDAQ - UNB) today announced results for
the three months and year ended December 31, 2022. Net income was
$3.4 million and $12.6 million for the three months and year ended
December 31, 2022 resulting in earnings per share of $0.77 and
$2.81 for the same periods, respectively.
The Board of Directors also declared a cash
dividend of $0.36 per share for the quarter, an increase of 2.9%
from the cash dividend of $0.35 paid in recent prior quarters,
payable February 2, 2023 to shareholders of record as of January
28, 2023.
Fourth Quarter Highlights
Consolidated net income increased $66 thousand,
or 2.0%, to $3.4 million for the fourth quarter of 2022 compared to
the fourth quarter of 2021 due to an increase in net interest
income of $1.1 million and a decrease in noninterest expenses of
$76 thousand, partially offset by a decrease in noninterest income
of $702 thousand and an increase in income tax expense of $189
thousand. Also, a credit of $225 thousand was recorded for the
provision for loan losses for the fourth quarter of 2021, which
represented the reversal of the provision recorded during the first
half of 2021. No provision for loan losses was recorded for the
three and twelve months ended December 31, 2022.
Interest income increased $2.3 million to $12.4
million for the three months ended December 31, 2022 compared to
$10.0 million for the three months ended December 31, 2021 due to
the larger earning asset base coupled with upward movement in
interest rates. Interest expense increased $1.2 million to $2.0
million for the three months ended December 31, 2022 compared to
$779 thousand for the three months ended December 31, 2021 due to
an increase in rates paid on customer deposits, the utilization of
wholesale funding which is at a higher cost and the larger funding
base. These changes resulted in net interest income $10.4 million
for the three months ended December 31, 2022 compared to $9.2
million for the three months ended December 31, 2021, an increase
of $1.1 million, or 12.0%.
The decrease in noninterest income was primarily
related to a decrease in the gain on sale of residential loans of
$726 thousand for the comparison period. Loan sales were $17.8
million for the three months ended December 31, 2022 compared to
sales of $52.6 million for the same period in 2021.
Noninterest expenses were $8.4 million for the
three months ended December 31, 2022 compared to $8.5 million for
the same period in 2021, a decrease of $76 thousand, or 0.9%. The
decrease during the comparison periods was primarily due to a
decrease of $316 thousand, or 8.1%, in salaries and wages,
partially offset by increases of $240 thousand in employee benefits
and $15 thousand in occupancy expenses. Income tax expense
increased $189 thousand, to $817 thousand, for the three months
ended December 31, 2022.
Year-to-Date Highlights
Consolidated net income was $12.6 million, or
$2.81 per share, compared to $13.2 million, or $2.94 per share, for
the year ended December 31, 2022 and 2021, respectively. The
decrease in earnings was due to a decrease of $4.0 million in
noninterest income, a $309 thousand increase in noninterest
expenses, partially offset by an increase in net interest income of
$3.7 million and a decrease of $14 thousand in income tax
expense.
Interest income increased $4.7 million, or
11.9%, to $43.9 million for the year ended December 31, 2022
compared to $39.3 million for the year ended December 31, 2021.
Interest expense was $4.5 million for the year ended December 31,
2022 compared to $3.6 million for the year ended December 31,
2021.
Noninterest income was $9.0 million for the year
ended December 31, 2022 compared to $13.0 million for the year
ended December 31, 2021, a decrease of $4.0 million, or 30.7%,
primarily due to the reduction in net gains on sales of residential
loans. Sales of qualifying residential loans to the secondary
market for the year ended December 31, 2022 were $78.0 million
resulting in net gains of $1.0 million, compared to sales of $216.8
million and net gains on sales of $5.0 million for year ended
December 31, 2021. The increases in interest rates negatively
impacted the premium obtained on sales of qualifying loans during
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 $309 thousand, or
0.9%, during the comparison periods due to increases of $430
thousand in employee benefits, $23 thousand in occupancy expenses
and $245 thousand in equipment expenses partially offset by
decreases of $365 thousand in salaries and wages and $24 thousand
in other expenses. Income tax expense decreased $14 thousand, to
$2.6 million as of December 31, 2022.
Total assets were $1.3 billion as of
December 31, 2022 compared to $1.2 billion as of
December 31, 2021, an increase of $131.0 million, or 10.9%.
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, were $268.0 million at
December 31, 2022 compared to $282.1 million at
December 31, 2021. The net decrease is primarily attributable
to the decline in fair market value during 2022 due to increases in
interest rates. As of December 31, 2022, unrealized losses
were $47.4 million. 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 December 31,
2022 were $960.7 million compared to $801.6 million as of
December 31, 2021, an increase of $159.1 million, or 19.8%.
Loan growth in 2022 was due to retaining more residential loans on
the balance sheet, and increases in residential construction and
commercial real estate loans. These increases were partially offset
by a reduction of $13.4 million of PPP loans forgiven during 2022.
As mentioned above, funding of asset growth continues to be
primarily from customer deposits which increased to $1.2 billion as
of December 31, 2022 compared to $1.1 billion as of
December 31, 2021, an increase of $106.8 million, or 9.8%.
Brokered deposits of $33.0 million were included in total deposits
as of December 31, 2022 and none were outstanding as of
December 31, 2021. Also, $50.0 million of Federal Home Loan
Bank advances were outstanding as of December 31, 2022 to
bridge funding gaps.
The Company had total equity capital of $55.2
million and a book value per share of $12.25 as of
December 31, 2022 compared to $84.3 million and $18.77 per
share as of December 31, 2021. The decrease in total capital
was primarily attributable to the increase in accumulated
comprehensive loss of $35.9 million as it relates to unrealized
losses in the investment portfolio discussed above. The unrealized
losses in other comprehensive income do not impact regulatory
capital ratios.
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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