Union Bank (OTCQX: UBNC) reports earnings results for the quarter and nine months ended September 30, 2017, and announces stock and cash dividends. The little bank acquired Union Banc Corp. and its subsidiary Union Bank and Trust, on July 7, 2017, and as part of the merger agreement changed its name to Union Bank.
Union Bank (the “Bank”) is pleased to report earnings results for the quarter ended September 30, 2017. Unaudited net income for the three months ended September 30, 2017 was $663,000, or $.12 per basic share, compared to $906,000 or $.16 per basic share for the quarter ended September 30, 2016. Merger and conversion related expenses totaled $1,393,000 for the third quarter. Core earnings, a non-GAAP measure, which exclude merger and conversion related expenses, were approximately $1,595,000, or $.28 per basic share, for the three months ended September 30, 2017, compared to $906,000 or $.16 per basic share for the quarter ended September 30, 2016. This represents a 76.0% increase in core earnings. Based on core earnings, return on average assets (“ROAA”) and return on average equity (“ROAE”) was .89% and 8.67%, respectively, for the quarter. The Bank’s acquisition of Oxford, NC based Union Banc Corp. was completed on July 7, 2017.
Unaudited net income for the first nine months of 2017 was $2,183,000, or $.39 per basic share, compared to $2,462,000, or $.44 per basic share for the first nine months of 2016. Merger and conversion related expenses, included in these earnings results totaled $1,609,000 for the nine month period. Core earnings, a non-GAAP measure, which exclude merger and conversion related expenses, were approximately $3,273,000, or $.58 per basic share, for the nine month period ended September 30, 2017, compared to $2,462,000 or $.44 per basic share for the same nine month period in 2016. This represents a 32.9% increase in core earnings.
The acquisition of Union Bank & Trust, and its holding company, Union Bank Corp., during the third quarter resulted in significant increases in the Bank’s total assets, loans and deposits. Total assets as of September 30, 2017 were $715.1 million, compared to total assets of $366.5 million as of September 30, 2016. Total loans, net of reserves, were $503.9 million and deposits were $611.4 million, as of September 30, 2017. As of September 30, 2017, 5,643,852 shares of common stock were issued and outstanding.
Rob Jones, President and Chief Executive Officer stated, “We are pleased to present a very positive earnings report for the third quarter and first nine months of 2017. While we realize sustained low interest rates and a general flattening of the yield curve has the potential to create a challenge to earnings for the industry as a whole, our commitment to asset quality, low cost funding, and flexibility in the investment portfolio continue to position us for success.” Jones added, “We continue to be excited about the acquisition of Union Banc Corp. and the anticipated results of this strategic combination.”
The Company’s Board of Directors has authorized the issuance of a 3% stock dividend to shareholders. The 3% stock dividend will be payable November 30, 2017 to shareholders of record as of November 15, 2017. Cash-in-lieu will be paid on fractional shares based on the stock’s market value at the close of business on November 15, 2017. EPS calculations will reflect the stock dividend after the record date.
The Board of Directors has also approved a semi-annual cash dividend, payable December 29, 2017 to shareholders of record as of the close of business on December 15, 2017. The amount payable is at the rate of $0.090 per common share. This represents a 6% increase over the $0.085 cash dividend paid in June. Jones commented, “We are pleased to increase our cash dividends based on our solid results for the period.”
Union Bank is headquartered in Greenville, North Carolina and operates 15 branches located in 11 counties throughout Eastern and Central North Carolina. Union Bank stock is traded on the OTCQX trading under the symbol UBNC.
This press release includes certain forward-looking statements in reliance on the “safe-harbor” provisions of The Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are subject to a number of risks and uncertainties. Actual results may differ materially from those anticipated in any such forward-looking statements. The Company undertakes no obligation to update or revise any such forward-looking statements. This press release contains financial information determined by methods other than in accordance with GAAP. The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses.
Union Bank
Summary of Operations (un-audited)
(000’s omitted except per share data)
| ||||||||||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
September 30,
2017 |
September 30,
2016 |
September 30,
2017 |
September 30,
2016 | |||||||||||||
| Interest Income | $ | 7,289 | $ | 3,370 |
$
|
14,047
|
$
|
9,907
| ||||||||
| Interest Expense | 724 | 339 |
1,391
|
964
| ||||||||||||
| Net interest income | 6,565 | 3,031 |
12,656
|
8,943
| ||||||||||||
| Provision for loan losses |
310
|
0
|
310
|
0
| ||||||||||||
| Net interest income after | ||||||||||||||||
| Provision for losses | 6,255 | 3,031 | 12,346 | 8,943 | ||||||||||||
| Non-interest income | 672 | 500 | 1,659 | 1,349 | ||||||||||||
| Non-interest expense | 5,883 | 2,183 | 10,677 | 6,644 | ||||||||||||
| Income before taxes | 1,044 | 1,348 | 3,328 | 3,648 | ||||||||||||
| Income taxes | 381 | 442 | 1,145 |
1,186
| ||||||||||||
| Net Income | $ | 663 | $ | 906 | $ | 2,183 | $ | 2,462 | ||||||||
Net Income available per basic common share
| $ | 0.12 | $ | 0.16 | $ | 0.39 | $ | 0.44 | ||||||||
Union Bank
Balance Sheets
(000’s omitted except per share data)
| |||||||||||||||
| September 30, | December 31, | September 30, | |||||||||||||
| 2017 | 2016 * | 2016 | |||||||||||||
| (un-audited) | (un-audited) | ||||||||||||||
| Assets | |||||||||||||||
| Cash and due from banks | $ | 16,805 | $ | 9,085 | $ | 6,538 | |||||||||
| Overnight investments | 23,616 | 6,070 | 12,643 | ||||||||||||
| Investment securities AFS | 114,889 | 85,744 | 83,227 | ||||||||||||
| Loans | 507,288 | 246,522 | 250,107 | ||||||||||||
| Less Allowance for loan losses | (3,361 | ) | (3,444 | ) | (3,506 | ) | |||||||||
| Net Loans | 503,927 | 243,078 | 246,601 | ||||||||||||
| Premises and Equipment, net | 17,173 | 4,464 | 4,536 | ||||||||||||
| Other Real Estate Owned | 549 | 50 | 0 | ||||||||||||
| Core Deposit Intangibles | 3,059 | 0 | 0 | ||||||||||||
| Goodwill | 11,876 | 0 | 0 | ||||||||||||
| Bank-Owned Life Insurance | 15,889 | 9,016 | 8,940 | ||||||||||||
| Other Assets | 7,344 | 4,502 | 4,016 | ||||||||||||
| Total Assets | $ | 715,127 | $ | 362,009 | $ | 366,501 | |||||||||
Liabilities & Stockholders’ Equity
| |||||||||||||||
| Liabilities | |||||||||||||||
| Deposits | $ | 611,373 | $ | 300,574 | $ | 299,215 | |||||||||
| FHLB Advances | 29,000 | 24,000 | 29,000 | ||||||||||||
| Other liabilities | 1,039 | 837 | 969 | ||||||||||||
| Total liabilities | 641,412 | 325,411 | 329,184 | ||||||||||||
Stockholders’ Equity
| |||||||||||||||
| Common stock, no par value | 66,239 | 31,507 | 29,447 | ||||||||||||
| Retained earnings | 7,444 | 5,544 | 7,260 | ||||||||||||
| Accumulated other comprehensive income (loss) |
32
|
(453
|
)
|
610
| |||||||||||
Total stockholders’ equity
| $ | 73,715 | $ | 36,598 | $ | 37,317 | |||||||||
Total liabilities and stockholders’ equity
| $ | 715,127 | $ | 362,009 | $ | 366,501 | |||||||||
* Derived from audited financial statements
| |||||||||||||||
