Vermont Business Magazine Union Bankshares, Inc (NASDAQ - UNB) today announced results for the three and nine months ended September 30, 2020 and declared a regular quarterly cash dividend. Consolidated net income for the three months ended September 30, 2020 was $4.1 million, or $0.92 per share, compared to $2.7 million, or $0.62 per share, for the same period in 2019 and $9.0 million, or $2.01 per share, for the nine months ended September 30, 2020, compared to $7.9 million, or $1.77 per share, for the same period in 2019.
President and CEO David Silverman commented on the third quarter results, "Over the past weeks and months we have had to adapt to new ways of operating and serving our customers and communities due to the pandemic. Our operations have run smoothly and we have served our customers and communities admirably. We are pleased with our financial performance thus far in 2020 and I could not be more proud of the way our teammates have stepped up and handled their respective tasks with grace."
Third Quarter Highlights
Consolidated net income increased $1.4 million, or 51.5%, to $4.1 million for the third quarter of 2020 compared to the third quarter of 2019 due to increases in net interest income of $538 thousand and noninterest income of $2.8 million, partially offset by increases in the provision for loan losses of $650 thousand and noninterest expenses of $990 thousand.
The provision for loan losses has been increased substantially compared to prior years as management continues to evaluate and plan for the impact of the economic disruptions caused by COVID-19 on its customers.
Sales of qualifying residential loans to the secondary market for the third quarter of 2020 were $89.8 million resulting in gain on sales of $3.3 million, compared to sales of $44.7 million and gain on sales of $824 thousand for the third quarter of 2019.
Consolidated net income was $9.0 million, or $2.01 per share, compared to $7.9 million, or $1.77 per share, for the nine months ended September 30, 2020 and 2019, respectively. The increase in earnings from the 2019 comparison period was due to increases of $950 thousand in net interest income, $3.6 million in noninterest income partially offset by increases of $1.3 million in the provision for loan losses, $1.9 million in noninterest expenses, and $220 thousand in income tax expense.
As discussed above, the provision for loan losses has increased significantly for the nine months ended September 30, 2020 compared to the same period in 2019. A provision of $1.6 million has been recorded for the nine months ended September 30, 2020. The increase in the provision is supported by management's assessment of the economic qualitative factors utilized to estimate the allowance for loan losses due to the economic disruption currently impacting our borrowers.
Total noninterest income amounted to $11.0 million for the nine months ended September 30, 2020 compared to $7.4 million for the nine months ended September 30, 2019, an increase of $3.6 million, or 48.3%. The increase is primarily due to an increase in the gain on sale of residential loans. Sales of qualifying residential loans amounted to $187.5 million for the nine months ended September 30, 2020 compared to $101.3 million for the same period in 2019.
Total noninterest expenses were $22.3 million for the nine months ended September 30, 2020 compared to $20.3 million for the same period in 2019. Increases of $895 thousand in salaries and wages, $309 thousand in employee benefits, $124 thousand in occupancy expenses, $502 thousand in equipment expenses, and $116 thousand in other expenses occurred during the comparison periods due to planned technology infrastructure spending, discretionary hiring of high value staff to allow continued growth in the franchise, and continued development of newer branch locations.
Total assets increased to $1.009 billion as of September 30, 2020 from $872.9 million as of December 31, 2019. Loan growth continues to drive asset growth with total loans of $798.3 million as of September 30, 2020 compared to $678.7 million as of December 31, 2019. The increase in loans is due to origination of Paycheck Protection Program loans, and increased volumes of residential loans and municipal loans. Total deposits increased to $910.1 million due to proceeds of PPP loans deposited into Union Bank accounts, receipt of stimulus money, and continued lack of spending by Union's customers.
The Company had total equity capital of $78.4 million with a book value per share of $17.52 as of September 30, 2020 compared to $71.8 million and $16.06 per share as of December 31, 2019.
The Board of Directors declared a cash dividend of $0.32 per share for the quarter payable November 6, 2020 to shareholders of record as of October 31, 2020.
The Board of Directors, along with management, continue to monitor and assess the extent to which the COVID-19 pandemic impacts our business, operations, and financial results that will depend on numerous factors that we may not be able to accurately predict.
About Union Bankshares, Inc.
Union Bankshares, Inc., headquartered in Morrisville, Vermont, is the bank holding company parent of Union Bank, which provides commercial, retail, and municipal banking services, as well as, asset management services throughout northern Vermont and New Hampshire. Union Bank operates 20 banking offices, two loan centers, and multiple ATMs throughout its geographical footprint.
Since 1891, Union Bank has helped people achieve their dreams of owning a home, saving for retirement, starting or expanding a business and assisting municipalities to improve their communities. Union Bank has earned an exceptional reputation for residential lending programs and has been recognized by the US Department of Agriculture, Rural Development for the positive impact made in lives of low to moderate home buyers. Union Bank is consistently one of the top Vermont Housing Finance Agency mortgage originators and has also been designated as an SBA Preferred lender for its participation in small business lending. Union Bank's employees contribute to the communities where they work and reside, serving on non-profit boards, raising funds for worthwhile causes, and giving countless hours in serving our fellow residents. All of these efforts have resulted in Union receiving and "Outstanding" rating for its compliance with the Community Reinvestment Act ("CRA") in its most recent examination. Union Bank is proud to be one of the few independent community banks serving Vermont and New Hampshire and we maintain a strong commitment to our core traditional values of keeping deposits safe, giving customers convenient financial choices and making loans to help people in our local communities buy homes, grow businesses, and create jobs. These values--combined with financial expertise, quality products and the latest technology--make Union Bank the premier choice for your banking services, both personal and business. Member FDIC. Equal Housing Lender.
Source: MORRISVILLE, Vt., Oct. 21, 2020 (GLOBE NEWSWIRE) -- Union Bankshares, Inc www.ublocal.com.