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Union Bank Releases Third Quarter Earnings, Announces 3% Stock Dividend and Increase in Semi-Annual Cash Dividend

GREENVILLE, N.C.--(BUSINESS WIRE)-- 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

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Union Bank
Doyle M. Thigpen, 252-317-2804
Chief Financial Officer

Source: Union Bank