Union Bankshares(US:UNB)2025-05-14 20:03PART I FINANCIAL INFORMATION Financial Statements Union Bankshares' Q1 2025 unaudited financials show total assets at $1.52 billion, net income of $2.5 million, and stockholders' equity at $70.1 million Consolidated Balance Sheets As of March 31, 2025, total assets slightly decreased to $1.52 billion, while stockholders' equity increased to $70.1 million due to reduced comprehensive loss Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $1,524,832 | $1,528,358 | | Net Loans | $1,155,211 | $1,150,218 | | Total Investments | $249,631 | $252,258 | | Total Liabilities | $1,454,758 | $1,461,878 | | Total Deposits | $1,181,376 | $1,168,894 | | Borrowed Funds | $240,696 | $259,696 | | Total Stockholders' Equity | $70,074 | $66,480 | Consolidated Statements of Income Q1 2025 net income increased to $2.5 million, driven by a 14.0% rise in net interest income to $10.3 million Q1 Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $10,270 | $9,008 | | Credit Loss Expense (Benefit) | $235 | $(230) | | Noninterest Income | $2,440 | $2,567 | | Noninterest Expenses | $9,824 | $9,223 | | Net Income | $2,501 | $2,417 | | Diluted EPS | $0.55 | $0.53 | | Dividends per Common Share | $0.36 | $0.36 | Consolidated Statements of Comprehensive Income (Loss) Q1 2025 total comprehensive income was $5.1 million, a significant turnaround from a $0.5 million loss in Q1 2024, driven by net income and unrealized gains Comprehensive Income (Loss) (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $2,501 | $2,417 | | Other Comprehensive Income (Loss) | $2,563 | $(2,939) | | Total Comprehensive Income (Loss) | $5,064 | $(522) | Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased to $70.1 million by March 31, 2025, from $66.5 million at year-end 2024, primarily due to net income and other comprehensive income - Key drivers for the $3.6 million increase in stockholders' equity during Q1 2025 were net income ($2.5M) and other comprehensive income ($2.6M), which were partially offset by cash dividends ($1.6M)15 Consolidated Statements of Cash Flows Q1 2025 cash flows: $4.1M from operations, $1.9M from investing, $8.1M used in financing, resulting in a $2.1M net decrease Net Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $4,060 | $1,861 | | Net Cash from (used in) Investing Activities | $1,948 | $(6,298) | | Net Cash used by Financing Activities | $(8,134) | $(50,570) | | Net Decrease in Cash | $(2,126) | $(55,007) | Notes to Unaudited Interim Consolidated Financial Statements These notes provide details on accounting policies, investment and loan portfolios, credit loss allowance, fair value measurements, and a post-period dividend declaration Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights Q1 2025 net income of $2.5 million, driven by net interest income growth and margin expansion, despite rising nonperforming assets - Consolidated net income increased by $84 thousand, or 3.5%, to $2.5 million for Q1 2025 compared to Q1 2024, primarily due to a $1.26 million increase in net interest income104 Key Performance Ratios | Ratio | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Return on average assets | 0.65% | 0.68% | | Return on average equity | 14.60% | 15.08% | | Net interest margin | 2.88% | 2.68% | | Efficiency ratio | 75.73% | 79.68% | | Nonperforming assets to total assets | 0.98% | 0.13% | Results of Operations Q1 2025 operating results show net interest income up 14.0% to $10.3 million, net interest margin at 2.88%, with noninterest income down and expenses up - Net interest margin increased by 20 basis points to 2.88% in Q1 2025 from 2.68% in Q1 2024, as the average yield on earning assets grew faster than the cost of interest-bearing liabilities108116 - Noninterest income decreased by $127 thousand (4.9%) YoY, mainly due to a $130 thousand swing from gains to losses on other investments and a $117 thousand drop in other income125126 - Noninterest expenses rose by $601 thousand (6.5%) YoY, driven by increases in salaries and wages (+$358k), employee benefits (+$92k), and FDIC insurance assessments (+$96k)127128 Financial Condition As of March 31, 2025, total assets were $1.52 billion; nonperforming assets surged to $15.0 million, but deposits increased and capital ratios remained strong - Total loans increased by $4.3 million (0.4%) to $1.17 billion at March 31, 2025, compared to year-end 2024133 - Nonperforming assets surged to $15.0 million at March 31, 2025, from $1.9 million at December 31, 2024, primarily due to a commercial construction loan being placed on nonaccrual status142 - The Allowance for Credit Losses (ACL) on loans increased to $8.1 million (0.70% of loans) from $7.7 million (0.66% of loans) at year-end 2024143147 - Total deposits increased by $12.5 million (1.1%) since year-end, with customers shifting funds from noninterest-bearing and interest-bearing checking accounts into higher-rate time deposits133 Capital Resources Q1 2025 capital strengthened, with stockholders' equity at $70.1 million, and both the company and Union Bank exceeding 'well capitalized' regulatory requirements Company Regulatory Capital Ratios (as of March 31, 2025) | Ratio | Actual | Minimum for Adequacy | | :--- | :--- | :--- | | Total capital to risk weighted assets | 12.63% | 8.00% | | Tier I capital to risk weighted assets | 10.07% | 6.00% | | Common Equity Tier 1 to risk weighted assets | 10.07% | 4.50% | | Tier I capital to average assets | 6.31% | 4.00% | - Union Bank, the subsidiary, also exceeded all capital adequacy requirements to be considered 'well capitalized' under Prompt Corrective Action provisions179180 - A regular quarterly cash dividend of $0.36 per share was declared in April 2025, consistent with the previous quarter181 Quantitative and Qualitative Disclosures About Market Risk This section is omitted by the company, as permitted for smaller reporting companies under SEC regulations - The company, as a smaller reporting company, has omitted the Quantitative and Qualitative Disclosures About Market Risk section in accordance with SEC regulatory relief182 Controls and Procedures The company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management's evaluation concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report183 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls184 PART II OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings, but management believes their outcomes will not materially affect financial condition or operations - In the opinion of management, any liability resulting from ongoing legal proceedings is not expected to materially impact the Company's consolidated financial condition or operations185 Risk Factors No material changes to risk factors have occurred since the company's 2024 Annual Report on Form 10-K - No material changes in risk factors have occurred since the filing of the 2024 Annual Report186 Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company neither issued unregistered equity securities nor repurchased any of its equity securities - The company did not issue any unregistered shares during Q1 2025187 - There were no repurchases of the Company's equity securities during Q1 2025187 Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and interactive data files (iXBRL) - Filed exhibits include CEO/CFO certifications under SOX Sections 302 and 906, and iXBRL financial data191193 Signatures