Union Bankshares(UNB)2025-03-25 20:08Financial Performance - The Company's consolidated net income for 2024 was 1.94, down from 2.50 in 2023[185]. - For the year ended December 31, 2024, net income decreased to 11.3 million in 2023, reflecting a decline of approximately 22.1%[193]. - The net interest margin decreased to 2.77% in 2024 from 2.88% in 2023, while net interest spreads fell from 2.50% to 2.30% during the same period[183]. - Total consolidated assets increased by 4.0% to 1.47 billion in 2023[187]. - Total capital increased to 65.8 million in 2023, reflecting net income and other factors[189]. - The efficiency ratio increased to 77.62% in 2024 from 72.83% in 2023, indicating a decline in operational efficiency[197]. - Basic earnings per share fell to 2.50 in 2023, reflecting a decrease of 22.4%[197]. - Noninterest expenses increased by 181 thousand, or 1.8%, to 1.3 million[207]. Loan and Deposit Activity - Net loans and loans held for sale rose by 12.6% to 1.17 billion, primarily due to a reduction in wholesale deposit funding[188]. - The loan to deposit ratio rose significantly to 99.32% in 2024 from 78.99% in 2023, suggesting increased reliance on loans relative to deposits[197]. - The gross loan portfolio increased by 1.16 billion at December 31, 2024, with real estate secured loans representing 87.3% of total loans[214]. - The Company serviced a residential real estate mortgage portfolio of 1.07 billion at December 31, 2023[216]. - The Company sold 75.6 million in 2023, indicating a significant increase in sales[217]. Regulatory and Compliance - The Company is subject to regulation and supervision by the FRB, FDIC, and DFR, which impacts its operational framework[32][34]. - The Dodd-Frank Act has introduced new capital standards and regulatory requirements that affect the Company's operations[36][37]. - The Company is subject to various federal and state consumer protection laws, including the Dodd-Frank Act, which mandates certain disclosures and prohibits unfair practices[59]. - The Company and Union are required to maintain a comprehensive written information security program to protect customer information as mandated by the GLBA[62]. - The Company is subject to federal laws under the Bank Secrecy Act, requiring compliance with record-keeping and reporting requirements related to suspicious transactions[68]. - The Company adopted a clawback policy in November 2023 to recover executive compensation in the event of a financial restatement[45]. Market and Economic Factors - The Company is exposed to real estate and economic factors in Vermont and New Hampshire, which could adversely affect operations and lead to higher rates of loss and delinquency[78]. - Changes in market interest rates can significantly impact the company's net interest income, which is the difference between interest earned from loans and interest paid on deposits[84]. - The company's financial condition and results of operations are adversely affected by external economic factors, including inflation and interest rates, which significantly impact performance due to the monetary nature of assets and liabilities[131]. - Market volatility, including interest rate changes and credit market fluctuations, may adversely affect the company's business performance and stock price[112]. Competition and Operational Risks - Competition for customer deposits remains high, with a 100 basis point decline in short-term interest rates occurring in 2024[27]. - The company faces competition from various financial institutions, which may impair its ability to attract and retain customers[125][126]. - The company must adapt to technological changes in the financial services industry, which could require significant capital spending and impact its reputation[129]. - The company relies on third-party vendors for key components of its business infrastructure, and any issues with these vendors could adversely affect operations[124]. - Operational risks, including cybersecurity threats and breaches, could result in financial losses and damage to the company's reputation[117][118]. Capital and Funding - The company is subject to stringent capital requirements, including a common equity Tier 1 capital ratio of 4.5% and a capital conservation buffer of 2.5%, which could limit its ability to pay dividends or repurchase shares[102]. - The company's access to funding through the Federal Home Loan Bank (FHLB) is critical, and any deterioration in the FHLB's financial position could restrict funding availability and adversely impact financial results[91]. - The company must maintain sufficient liquidity to meet the needs of depositors and borrowers, with deposits being the primary source of funds, and any reliance on more expensive funding could adversely affect operating margins and profitability[89]. Employee and Community Engagement - The Company employed 191 full-time employees as of December 31, 2024, focusing on creating a supportive workplace and providing numerous training opportunities[22]. - The Company focuses on community banking, aiming to build relationships and trust within its market areas[25]. Shareholder Information - As of February 28, 2025, there were 4,538,596 shares of common stock outstanding, held by 476 stockholders of record, indicating a stable shareholder base[158]. - The company did not repurchase any equity securities during the quarter ended December 31, 2024, maintaining its current capital structure[159].