Union Bankshares Reports Earnings and Quarterly Dividend
Union Bankshares, Inc. (NASDAQ: UNB) has recently shared its financial results for the quarter and nine months ending September 30, 2024, alongside the announcement of a quarterly cash dividend. The Bank's consolidated net income for the third quarter was reported at $1.3 million, equating to $0.29 per share. This marks a decrease compared to $2.5 million, or $0.56 per share, from the same quarter a year prior. Analyzing the nine-month figures, earnings were $5.8 million, translating to $1.27 per share, a decline from $8.2 million or $1.82 per share for the same period in 2023. The company mentioned that the decline in earnings was primarily a consequence of a strategic repositioning of the balance sheet implemented during the third quarter.
Significant Balance Sheet Insights
As of the end of September 2024, Union Bankshares' total assets stood at $1.52 billion, reflecting an increase of $123.9 million, or 8.9%, year-over-year. The growth was largely driven by a substantial rise in loans, which reached $1.13 billion compared to $1.03 billion a year earlier. This loan portfolio includes $8.4 million in loans held for sale, indicative of a robust demand for lending despite current market conditions.
Asset Quality and Loan Demand
The asset quality remains strong, with minimal past-due loans reported for the quarter. During the third quarter of 2024, net recoveries were recorded at $5 thousand and $15 thousand for the three and nine months, respectively. Loan demand has been resilient, showing significant activity across residential, commercial, and municipal lending sectors. The total qualifying residential loans sold during the first nine months amounted to $76.1 million, illustrating an upward trend compared to $54.2 million during the same timeframe last year.
Deposit Trends and Borrowing Activities
Union Bankshares reported total deposits of $1.17 billion as of September 30, 2024. This figure includes purchased brokered deposits amounting to $80 million. Comparatively, deposits stood at $1.22 billion for the same period in 2023. Additionally, the bank's reliance on Federal Home Loan Bank advances rose significantly, with outstanding advances of $230.7 million compared to just $90.7 million in the same quarter last year. The bank also utilized $10 million in advances from the Federal Reserve's Bank Term Funding Program as of the end of September 2024.
Equity Capital Position
The total equity capital for Union Bankshares increased to $72.3 million, yielding a book value per share of $15.98. This is a notable improvement from $49.2 million and a book value of $10.92 per share as of September 30, 2023. However, the total equity capital is diminished by accumulated other comprehensive losses related to investment securities.
Analyzing Income Statement Performance
The income statement paints a clear picture of the challenges and successes faced by the organization. For Q3 2024, net income decreased to $1.3 million, reflecting a drop of $1.2 million compared to the same quarter in 2023. This decline stemmed from several factors, including a loss related to the sale of available-for-sale securities, heightened credit loss expenses, and noninterest expenses, although it was somewhat mitigated by increased net interest income and noninterest income.
Growth in Interest Income
Net interest income rose to $9.4 million for the quarter, a modest increase of 3.1% from $9.1 million in Q3 2023. An impressive growth in interest income is also highlighted; for the three months ending September 30, 2024, it reached $17.2 million compared to $14.8 million in the previous year, largely attributed to a larger earning asset base and higher interest rates impacting new loan volumes.
Dividend Announcement
The Board of Directors declared a cash dividend of $0.36 per share for the quarter, scheduled to be paid on November 7, 2024, to shareholders of record as of October 26, 2024. This dividend announcement reinforces the company's commitment to returning value to its shareholders.
About Union Bankshares, Inc.
Union Bankshares, Inc. is the parent company of Union Bank, which operates various banking services including commercial, retail, and municipal banking, alongside wealth management services within northern Vermont and New Hampshire. The Bank, established in 1891, has built a reputation for providing essential services such as residential lending, supporting local businesses, and contributing positively to community initiatives. Their dedication to strong community engagement has earned Union Bank an "Outstanding" rating for compliance with the Community Reinvestment Act (CRA), differentiating it as one of the independent community banks in the region.
Frequently Asked Questions
What were the earnings of Union Bankshares for the third quarter?
Union Bankshares reported net income of $1.3 million for the third quarter of 2024.
How has the asset size of Union Bankshares changed?
The total assets of Union Bankshares increased to $1.52 billion as of September 30, 2024, growing by 8.9% year-over-year.
What was the cash dividend declared by Union Bankshares?
The cash dividend declared was $0.36 per share for the quarter, payable on November 7, 2024.
What contributed to the decline in earnings?
The decrease in earnings was mainly due to a strategic balance sheet repositioning and the loss on the sale of certain securities.
What services does Union Bank provide?
Union Bank offers a range of services including commercial, retail, municipal banking, and wealth management services throughout northern Vermont and New Hampshire.
