Union Bankshares(UNB) - 2025 Q3 - Quarterly Report

Financial Performance - Consolidated net income increased by $2.1 million, or 159.5%, to $3.4 million for Q3 2025 compared to $1.3 million for Q3 2024[110] - For the nine months ended September 30, 2025, consolidated net income rose by $2.6 million, or 44.7%, to $8.3 million compared to $5.8 million for the same period in 2024[111] - Net interest income increased by $1.7 million for Q3 2025, driven by higher interest earned on average earning assets and increased average loan volume[110] - Noninterest income for Q3 2025 was $3.350 million, a significant increase of 108.7% from $1.605 million in Q3 2024, and for the nine months ended September 30, 2025, it rose to $8.549 million from $6.937 million in 2024[142] - Total noninterest expenses for Q3 2025 were $10.343 million, an increase of 9.9% from $9.409 million in Q3 2024, and for the nine months, it rose to $30.654 million from $28.413 million in 2024[142] Assets and Liabilities - Total consolidated assets as of September 30, 2025, were $1.57 billion, with gross loans totaling $1.18 billion and deposits of $1.19 billion[112] - The Company's total consolidated assets increased by $45.6 million, or 3.0%, to $1.57 billion as of September 30, 2025, compared to $1.53 billion at December 31, 2024[150] - Total loans, including loans held for sale, increased by $17.9 million, or 1.5%, to $1.18 billion as of September 30, 2025, representing 74.9% of total assets[152] - Total deposits increased by $20.7 million, or 1.8%, to $1.19 billion at September 30, 2025, from $1.17 billion at December 31, 2024[152] Interest and Yield - The net interest margin improved to 3.03% for Q3 2025, up from 2.71% in Q3 2024[117] - Interest earned on average earning assets for Q3 2025 was $19.4 million, an increase of $2.0 million or 11.5% from Q3 2024[122] - Average yield on earning assets increased by 30 bps to 5.15% in Q3 2025 compared to 4.85% in Q3 2024[122] - Interest income on loans increased by $1.8 million due to an increase in average loan volume of $78.3 million and a 22 bps increase in average yield[124] - The net interest spread increased by 20 bps to 2.47% for the nine months ended September 30, 2025, reflecting a 33 bps increase in average yield on earning assets[130] Expenses and Salaries - Salaries and wages increased by $421 thousand in Q3 2025 compared to Q3 2024, totaling $4.436 million, and for the nine months, it rose by $1.090 million to $12.432 million[142] - The number of full-time equivalent employees increased from 189 in September 2024 to 201 in September 2025, contributing to the rise in salaries and wages[144] Taxation - Net provision for income taxes was $414 thousand for the three months ended September 30, 2025, compared to a net benefit of $123 thousand for the same period in 2024, resulting in an effective federal corporate income tax rate of 9.8%[146] - The effective federal corporate income tax rate for the nine months ended September 30, 2025, was 6.8%, compared to 2.9% for the same period in 2024[147] Capital and Equity - Stockholders' equity rose from $66.5 million at December 31, 2024, to $77.7 million at September 30, 2025, reflecting net income of $8.3 million for the first nine months of 2025[152] - The Company maintained a Common Equity Tier 1 to risk-weighted assets ratio of 10.38% as of September 30, 2025[205] - Union's Common Equity Tier 1 to risk-weighted assets ratio was 11.98%[205] - The Company issued 30,397 shares for gross proceeds of $802 thousand during Q3 2025, with net proceeds of $749 thousand after costs[195] Credit Quality - Nonaccrual loans increased to $12.987 million as of September 30, 2025, compared to $1.652 million at December 31, 2024[161] - The Allowance for Credit Losses (ACL) on loans was $8.4 million as of September 30, 2025, up from $7.7 million at December 31, 2024[166] - Nonperforming loans to total loans increased to 1.14% as of September 30, 2025, from 0.16% at December 31, 2024[163] Market Conditions - The current macroeconomic environment presents uncertainties that could negatively impact the company's financial condition and results of operations[116]