Union Bankshares(UNB) - 2024 Q2 - Quarterly Report

Financial Performance - Consolidated net income decreased by $680 thousand, or 25.2%, to $2.0 million for Q2 2024 compared to $2.7 million for Q2 2023[67] - The efficiency ratio increased to 78.55% for Q2 2024, compared to 73.78% for Q2 2023[69] - Net interest income for the six months ended June 30, 2024, was $18,492 thousand, down from $19,593 thousand in 2023, representing a decrease of 5.6%[75] - Total noninterest income rose to $2,765 thousand for the three months ended June 30, 2024, reflecting an 11.4% increase from $2,483 thousand in 2023[78] - Total noninterest expenses reached $9,781 thousand for the three months ended June 30, 2024, a 7.9% increase from $9,063 thousand in 2023[79] Asset and Liability Management - Total consolidated assets were $1.40 billion as of June 30, 2024, with total loans of $1.01 billion and deposits of $1.05 billion[68] - The Company reported total consolidated assets of $1.40 billion as of June 30, 2024, a decrease of 4.8% from $1.47 billion at December 31, 2023[82] - Total liabilities rose to $1,366,187 thousand in 2024 from $1,296,365 thousand in 2023, marking an increase of 5.4%[74] - Total deposits decreased by $252.3 million, or 19.3%, to $1.05 billion at June 30, 2024[83] - Federal funds sold and overnight deposits decreased by $47.2 million, or 64.5%, to $26.0 million as of June 30, 2024[82] Capital and Equity - The Company's total capital decreased to $64.0 million at June 30, 2024, from $65.8 million at December 31, 2023[68] - Stockholders' equity decreased from $65.8 million at December 31, 2023, to $64.0 million at June 30, 2024, reflecting a net income of $4.4 million for the first six months of 2024[83] - The Company declared quarterly cash dividends of $0.36 per share during the second quarter of 2024, payable on August 1, 2024[106] Credit Quality - Nonperforming assets to total assets ratio remained stable at 0.14% as of June 30, 2024, compared to 0.15% in the previous year[69] - Credit loss expense for loans was $238 thousand for the three months ended June 30, 2024, compared to a benefit of $(151) thousand in 2023, indicating a shift in credit quality[77] - Total credit loss expense, net for the six months ended June 30, 2024, was $158 thousand, compared to a benefit of $(22) thousand in 2023, indicating a deterioration in credit conditions[77] - Nonaccrual loans totaled $1.77 million as of June 30, 2024, down from $1.86 million at December 31, 2023[87] Interest Income and Expense - Net interest margin was 2.74% for the six months ended June 30, 2024, down from 3.05% for the same period in 2023[67] - Interest expense increased by $6.4 million to $13.7 million for the six months ended June 30, 2024, compared to $7.3 million for the same period in 2023[71] - The net interest spread decreased by 43 basis points to 2.29% for the six months ended June 30, 2024, from 2.72% for the same period last year[71] - Interest income on loans increased by $2.7 million due to an increase in the average volume of loans outstanding of $67.9 million and an increase of 74 basis points in the average yield[71] Investment and Securities - The net unrealized losses in the Company's Available-for-Sale (AFS) investment securities portfolio increased to $45.1 million as of June 30, 2024, compared to $41.0 million as of December 31, 2023, primarily due to rising long-term interest rates[94] - Investment securities classified as AFS decreased by $11.9 million to $252.5 million, comprising 18.1% of total assets as of June 30, 2024[93] - The Company has no securities classified as Held-to-Maturity (HTM) as of June 30, 2024, indicating a focus on liquidity and flexibility in its investment strategy[94] Loan Portfolio - Average loans increased by $64.4 million, or 6.6%, to $1.0 billion for the six months ended June 30, 2024, contributing to a $4.8 million increase in interest income on loans[71] - The total loan portfolio increased by $73.5 million compared to June 30, 2023, reaching $1.01 billion[83] - The Company originated commercial real estate and commercial loans with $2.3 million guaranteed under various government programs as of June 30, 2024[85] Deposits and Funding - Average total deposits decreased by $24.4 million, or 2.0%, to $1.180 billion for the six months ended June 30, 2024, compared to the same period in 2023[96] - The average balance of noninterest-bearing deposits fell by $33.3 million, while average time deposits increased by $48.5 million, indicating a shift in customer preferences towards higher-yielding products[96] - The Company had outstanding Federal Home Loan Bank (FHLB) advances of $212.1 million at a weighted average rate of 4.41% as of June 30, 2024, compared to $55.7 million at 3.68% on December 31, 2023[98]