MORRISVILLE, Vt. - Union Bankshares, Inc. (NASDAQ:UNB) announced a decrease in earnings for the third quarter ended September 30, 2024, with net income falling to $1.3 million, or $0.29 per share, compared to $2.5 million, or $0.56 per share, during the same period last year. The nine-month earnings also dropped to $5.8 million, or $1.27 per share, from $8.2 million, or $1.82 per share, in the previous year. The decline is primarily attributed to a strategic balance sheet repositioning, which included the sale of $38.8 million in lower-yielding debt securities, resulting in a pre-tax loss of $1.3 million.
The company's total assets increased by 8.9% to $1.52 billion, driven by loan growth, with total loans reaching $1.13 billion. Asset quality remained strong with minimal past due loans and net recoveries of $5 thousand and $15 thousand for the three and nine months, respectively. Loan demand continued to be robust across residential, commercial, and municipal portfolios, despite higher interest rates and low residential inventory.
Total deposits decreased slightly to $1.17 billion, including $80.0 million of brokered deposits, from $1.22 billion the previous year. Federal Home Loan Bank advances increased significantly to $230.7 million from $90.7 million, with an additional $10.0 million in advances from the Federal Reserve's Bank Term Funding Program.
The company's equity capital grew to $72.3 million with a book value per share of $15.98, up from $49.2 million and $10.92 per share, respectively. The accumulated other comprehensive loss improved to $26.8 million from $47.1 million the previous year.
Net interest income for the quarter rose by 3.1% to $9.4 million, while noninterest income, excluding the loss on bond sale, increased to $2.9 million. Noninterest expenses also went up by 5.4% to $9.4 million. The company recorded a credit loss expense of $425 thousand for the quarter, compared to a benefit of $139 thousand in the same period last year, reflecting support for loan growth rather than a deterioration in credit quality.
The Board of Directors declared a quarterly cash dividend of $0.36 per share, payable on November 7, 2024, to shareholders of record as of October 26, 2024.
This financial summary is based on a press release statement from Union Bankshares, Inc.
InvestingPro Insights
Union Bankshares, Inc. (NASDAQ:UNB) presents a mixed financial picture, as reflected in both its recent earnings report and additional data from InvestingPro. Despite the reported decrease in quarterly earnings, UNB maintains some attractive qualities for investors, particularly those interested in dividend stocks.
According to InvestingPro data, UNB boasts a dividend yield of 5.47%, which is notably high in the current market environment. This aligns with one of the InvestingPro Tips, which highlights that UNB "has raised its dividend for 11 consecutive years" and "has maintained dividend payments for 27 consecutive years." These facts underscore the company's commitment to returning value to shareholders, even in challenging economic conditions.
The company's P/E ratio of 11.95 suggests that the stock may be undervalued compared to the broader market. This could be of interest to value investors, especially considering that UNB has been "profitable over the last twelve months," as noted in another InvestingPro Tip.
However, investors should be aware that UNB "suffers from weak gross profit margins," which may explain the recent earnings decline. The company's revenue growth is also negative, with a -5.15% decline over the last twelve months as of Q2 2024.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights, with 8 more tips available for UNB. These additional tips could provide valuable context for understanding the company's financial health and future prospects in light of the recent earnings report.
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