Union Bankshares Reports Third Quarter Earnings and Dividend Announcement
Union Bankshares, Inc. (NASDAQ: UNB) recently revealed its financial performance for the third quarter of 2024, marking a significant moment for the company. The data presents a consolidated net income of $1.3 million, translating to $0.29 per share. This reflects a decrease compared to the $2.5 million, or $0.56 per share, recorded in the same quarter of 2023. Analyzing the performance over nine months, the income stood at $5.8 million, or $1.27 per share, down from $8.2 million, or $1.82 per share during the previous year.
Understanding the Financial Shift
The year-over-year decrease in earnings primarily stems from the strategic balance sheet repositioning that was previously announced. Notably, the management executed the sale of $38.8 million worth of lower-yielding available-for-sale debt securities, leading to a pre-tax realized loss of $1.3 million recorded during this quarter. This decision is part of a broader initiative to ensure the bank's long-term financial health while adapting to current market conditions.
Balance Sheet Insights
As of September 30, 2024, Union Bankshares reported total assets of $1.52 billion, a notable increase of $123.9 million, or 8.9%, from the previous year’s total of $1.40 billion. A significant factor contributing to this growth was the expansion of total loans, which reached $1.13 billion. The loan growth included $8.4 million in loans held for sale, showing a robust increase compared to $1.03 billion total loans from the previous year.
Loan Demand and Deposit Status
The bank experienced robust loan demand during the third quarter with increases across residential, commercial, and municipal lending portfolios, despite challenging economic factors, such as rising interest rates and limited residential inventory. In fact, qualifying residential loans of $76.1 million were sold in the first nine months of 2024, compared to $54.2 million during the same timeframe in 2023.
Moreover, total deposits stood at $1.17 billion as of September 30, 2024, comprising $80.0 million of purchased brokered deposits. This reflects a slight decline from the prior year, which saw deposits of $1.22 billion inclusive of $153.0 million of purchased deposits. Additionally, Federal Home Loan Bank advances increased significantly from $90.7 million in the previous year to $230.7 million.
Income Statement Overview
The income statement for the third quarter indicates consolidated net income of $1.3 million, a drop from $2.5 million for the same quarter last year. This decrease was influenced by multiple factors, including the aforementioned net loss from the bond sale and higher credit loss expenses amounting to $564 thousand. However, there was some offset with an uptick in net interest income by $282 thousand and noninterest income rising by $431 thousand.
Net Interest Income Performance
For the third quarter of 2024, net interest income reported was $9.4 million, a slight increase from $9.1 million a year prior. This progression was driven by an increase in interest income, which reached $17.2 million, illustrating a robust 15.8% growth due to a larger earning asset base coupled with heightened interest rates on new loans. Conversely, interest expenses rose to $7.8 million, compared to $5.7 million from the previous year, largely attributable to reliance on higher-cost funding options.
Dividend Declaration from the Board of Directors
In addition to financial performance, the Board of Directors announced a cash dividend of $0.36 per share for the quarter, scheduled for distribution on November 7, 2024, to shareholders of record as of October 26, 2024.
About Union Bankshares, Inc.
Union Bankshares, Inc. is a prominent bank holding company based in Morrisville, Vermont, overseeing the Union Bank brand, which specializes in commercial, retail, and municipal banking services, along with wealth management across northern Vermont and New Hampshire. With a legacy dating back to 1891, Union Bank has earned a stellar reputation for its community-focused services, particularly in residential lending while actively participating in initiatives to enhance community living.
Union Bank serves its clients through 19 banking offices, three loan centers, and numerous ATMs, delivering robust financial solutions and a commitment to ethical banking practices. As an independent community bank, it remains steadfast in its dedication to safe deposit taking, convenient financial services, and local lending initiatives that support the community's growth.
Frequently Asked Questions
What were the earnings for Union Bankshares in Q3 2024?
Union Bankshares reported net earnings of $1.3 million for the third quarter of 2024.
Why did the net income decrease year-over-year?
The decrease was primarily due to a strategic balance sheet repositioning and a loss from the sale of certain securities.
How much was the declared dividend for this quarter?
The declared dividend was $0.36 per share, payable on November 7, 2024.
What is the total asset value for Union Bankshares as of September 30, 2024?
The total assets of Union Bankshares amounted to $1.52 billion as of September 30, 2024.
What are the loan growth figures for Union Bankshares?
Loan growth was significant, with total loans reaching $1.13 billion including $8.4 million in loans held for sale as of September 30, 2024.
