Fourth Quarter Earnings 2018

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Union Bank Releases Fourth Quarter Earnings Today

Greenville, NC – (Business Wire) – January 30, 2019 – Union Bank (OTCQX: UBNC) reports earnings results for the quarter and twelve months ended December 31, 2018.

Union Bank (the “Bank”) is pleased to report earnings results for the quarter and twelve months ended December 31, 2018. Unaudited net income for the twelve months ended December 31, 2018 was $6,737,000 or $1.12 per basic share, compared to $2,653,000, or $0.56 per basic share in the prior year. This represents a 154% increase in earnings for the comparable twelve-month periods. Return on average assets and return on average equity was 0.94% and 9.01%, respectively, for the twelve months ended December 31, 2018. The significant increase in earnings was related to the acquisition of Union Banc Corp. and its subsidiary Union Bank and Trust in July 2017. Considerable merger and conversion expenses were included in the 2017 financial results. The Bank’s 2018 earnings were favorably impacted by a full year of operations as a combined entity, coupled with efficiencies in operations gained as a larger institution. The 2017 year-to-date, and fourth quarter results, also included a one-time charge of $960,000 to income tax expense specifically related to tax reforms enacted in December 2017.

Unaudited net income for the fourth quarter of 2018 was $1,737,000, or $0.29 per basic share, compared to $470,000, or $0.08 per basic share for the quarter ended December 31, 2017. Return on average assets and return on average equity was 0.92% and 9.07%, respectively, for the quarter ended December 31, 2018.

Total assets as of December 31, 2018 were $745.2 million, compared to total assets of $702.5 million as of December 31, 2017. Total loans, net of reserves, were $504.6 million and deposits were $627.2 million, as of December 31, 2018 compared to net loan balances of $505.0 million, and deposits of $593.7 million as of December 31, 2017. As of December 31, 2018, shares of common stock issued and outstanding totaled 5,998,618.

Rob Jones, President and Chief Executive Officer stated, “We are pleased to present this positive earnings report for the quarter and fiscal year end. The Bank experienced excellent loan growth late in the fourth quarter and the loan pipeline is solid as we enter into 2019. As was reported last quarter, Hurricane Florence, although overwhelming for so many in our market area, has had very little impact on the overall credit quality of our loan portfolio collateral. Our loan quality metrics remain outstanding. The Bank intends to maintain lending discipline as we work towards a natural contraction of the economic cycle.

Union Bank is headquartered in Greenville, North Carolina and operates 15 branches located in 11 counties throughout Eastern and Central North Carolina. Union Bank stock is traded on the OTCQX under the symbol UBNC.

This press release includes certain forward-looking statements in reliance on the “safe-harbor” provisions of The Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are subject to a number of risks and uncertainties. Actual results may differ materially from those anticipated in any such forward-looking statements. The Bank undertakes no obligation to update or revise any such forward-looking statements. This press release contains financial information determined by methods other than in accordance with GAAP. The

Bank’s management uses these non-GAAP financial measures in their analysis of the Bank’s performance. These measures typically adjust GAAP performance measures to exclude the effects of transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Bank’s core businesses.

For More Information Contact:

Doyle M. Thigpen
Chief Financial Officer
(252) 317-2804

Union Bank
Summary of Operations (un-audited)
($000’s omitted except per share data)

 

Three Months
Ended
December 31, 2018(un-audited)
Three Months
Ended
December 31, 2017(un-audited)
Twelve Months
Ended
December 31, 2018(un-audited)
Twelve Months
Ended
December 31, 2017*
Interest Income $8,136 $7,447 $31,041 $21,522
Interest Expense 1,488 779 4,842 2,170
Net Interest Income 6,675 6,668 26,199 19,352
Provision for loan losses 242 150 779 460
Net interest income after Provision for losses 6,433 6,518 25,420 18,892
Non-interest income 830 766 3,299 2,415
Non-interest expense 5,118 5,156 20,261 15,851
Income before taxes 2,145 2,128 8,458 5,456
Income taxes 408 1,658 1,721 2,803
Net Income $1,737 $470 $6,737 $2,653
Net Income available per basic common share $0.29 $0.08 $1.12 $0.56

*Derived from audited financial statements

Union Bank
Balance Sheets ($000’s omitted)

December 31, 2018
(un-audited)
September 30, 2018
(un-audited)
December 31, 2017
*
Assets
Cash and due from banks $9,355  $8,526 $21,427
Interest-bearing deposits with banks 25,753 39,062 11,342
Investment securities AFS 148,575 133,988 109,077
Loans – gross 513,675 501,929 514,078
Net Fair Value Marks (5,047) (6,312) (5,536)
Allowance for loan losses (4,046) (3,939) (3,501)
Net Loans 504,582 491,678 505,041
Bank premises and equipment, net 16,793 16,990 17,034
Other Real Estate Owned 327 408 627
Goodwill 13,466 13,466 10,988
Core Deposit Intangibles 1,951 2,153 2,817
Bank-Owned Life Insurance 16,450 16,338 16,004
Other Assets 7,934 8,591 8,171
Total Assets $745,186 $731,200 $702,528
Liabilities & Stockholders’ Equity
Liabilities
Deposits $627,171 $611,644 $593,726
Advances from the Federal Home Loan Bank 32,000 36,000 34,000
Subordinated Debentures 6,000 6,000
Accrued Expenses and Other liabilities 1,821 2,504 1,633
Total Liabilities 666,992 656,148 629,359
Stockholders’ Equity
Common stock, no par value 71,879 69,199 69,027
Retained earnings 7,629 8,665 4,643
Accumulated other comprehensive income loss (1,314) (2,812) (501)
Total stockholders’ equity $78,194 $75,052 $73,169
Total liabilities and stockholders’ equity $745,186 $731,200 $702,528

*Derived from audited financial statements