Greenville, NC – (Business Wire) – October 21, 2022 – UB Bancorp (OTCQX: UBNC), (the “Company”) the parent of Union Bank (the “Bank”), is pleased to report its results for the quarter and nine months ended September 30, 2022.
Some of the Company’s highlights through the first nine months of 2022 include:
- On June 1, 2022, the Company announced the signing of a definitive merger agreement for FNB Corporation
(FNB) to acquire the Company in an all-stock transaction which is contemplated to be completed in December
- On September 21, 2022, the Company’s shareholders approved the proposed merger with FNB
- On October 5, 2022, FNB announced that the Board of Governors of the Federal Reserve System and the Office
of the Comptroller of the Currency had both provided clearance for the pending merger between FNB and UB
- Net income of $3.0 million, or 51 cents per basic common share for the quarter ended September 30, 2022
- Net income for the first nine months of $8.2 million or $1.36 per basic common share
- The Company incurred $515,000 of merger related expenses during the first three quarters of 2022
- Total assets of $1.14 billion as of quarter end, a year-over-year increase of $32.3 million or 2.9%
- Core loans (excluding PPP loans) grew $38.3 million or 6.0% during the first nine months of 2022
- Total deposits of $1.02 billion at the end of the third quarter with non-interest deposits growing $52.6 million
or 13.5% during 2022
- Sound credit quality metrics
- Solid capital at the Bank, above the regulatory ‘Well Capitalized’ thresholds
- Strong liquidity levels
- 5,980,177 common shares outstanding with tangible book value per share of $10.86 (*) at quarter end
- At their October 2022, meeting the Company’s Board of Directors declared a cash dividend of $0.11 per
Rob Jones, President and CEO, commented “I am pleased and proud to report these outstanding results for what is anticipated to be our final earnings report. As previously stated, all regulatory and shareholder hurdles have been cleared for our previously announced merger with FNB Corporation. The merger is expected to be completed in December of 2022.”
Mr. Jones went on to say, “Our earnings, balance sheet levels, and credit quality metrics have been outstanding since the announcement of our merger with FNB in June of this year, which is a testament to the continued quality and dedication of our employees. We have built a strong company over the past 24 years. Now our company will get even stronger through our merger with FNB.”
Mr. Jones also noted, “I especially want to take a moment to thank my teammates at Union Bank. It has been a pleasure to serve as your leader for the past 20 years. I am confident that you will continue to shine in the future, and I look forward to watching your progress. In addition, I also want to thank our shareholders and customers for their dedicated support over the last 24 years.”
Net income for the third quarter of 2022 was $3.0 million, or $0.51 per basic common share, versus $3.1 million, or $0.52 per basic common share, earned for the same period in 2021. The Company’s return on average assets and average tangible equity (*) for the third quarter of 2022 was 1.05% and 17.25%, respectively. Revenues were positively impacted by solid growth in our earning base. This growth helped offset the reduction in net Paycheck Protection Program (PPP) revenue. Average earning assets for third quarter of 2022 were $1.1 billion, an increase of $79.7 million from the same three-month period one year ago. Net pretax revenue from PPP fees totaled $8,000 for the three-month period ended September 30, 2022, versus $632,000 during the third quarter of 2021. When comparing pretax earnings adjusted to exclude net PPP revenues, provisions for loan losses, and merger related expenses the Company earned $4.0 million for the third quarter of 2022. These results compare favorably to $2.8 million of adjusted earnings generated by the Company during the same three month period of 2021.
Net income for the nine month period ended September 30, 2022, was $8.2 million, or $1.36 per basic common share, and represented a 0.95% return on average assets and a 14.71% return on average tangible equity (*). For the same nine month period of 2021, the Company posted $9.0 million of net income, or $1.51 per basic common share. During the first three quarters of 2021, PPP activity contributed $2.4 million to net pretax revenues for the Company versus $500,000 during the same nine period of 2022. When adjusting earnings to exclude net PPP revenues, provisions for loan losses, and merger related expenses on a pretax basis the Company earned $10.3 million through the first three quarters of 2022. These results compare favorably to $8.5 million of adjusted earnings generated by the Company during the same nine month period of 2021.
Asset quality metrics for the Company remain sound. Our level of nonperforming assets relative to total assets was 0.06% at the end of the third quarter of 2022. In addition, our level of nonperforming loans comprised only 0.10% of total loans outstanding at the end of the quarter. Our allowance for loan losses at $7.7 million as of September 30, 2022, represented 1.13% of total loans outstanding.
Capital levels at our Bank continue to be strong with total risk-based capital of 16.19%, common equity tier 1 to risk-weighted assets 14.39% and the tier 1 leverage ratio at 9.37% as of September 30, 2022. In addition, the parent company, UB Bancorp, has the capacity to act as a source of strength for the Bank should a need arise.
On October 20, 2022, the Company’s Board of Directors approved a cash dividend of $0.11 per share to be paid on December 8, 2022, to shareholders of record at the close of business on December 2, 2022.
UB Bancorp and Union Bank are headquartered in Greenville, North Carolina and operate 14 branches located in 12 counties throughout Eastern and Central North Carolina. UB Bancorp 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 Company 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 Company’s management uses these non-GAAP financial measures in their analysis of the Company’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 Company’s core businesses.
For More Information Contact:
Scott C. McLean
Chief Financial Officer
Consolidated Balance Sheets ($000’s omitted)
|As of the Period Ended|
|September 30, 2022
|December 31, 2021*||September 30, 2021
|Cash and due from banks||$10,837||$7,296||$11,682|
|Interest-bearing deposits with banks||163,594||171,795||97,540|
|Investment securities available-for-sale||221,080||275,498||285,571|
|Loans – gross||684,384||653,221||664,117|
|Net fair value marks||(490)||(1,061)||(1,374)|
|Allowance for loan losses||(7,706)||(7,593)||(9,615)|
|Bank premises and equipment, net||15,195||14,108||14,283|
|Bank-owned life insurance||21,275||20,864||20,728|
|Other real estate owned||–||–||–|
|Core deposit intangible||116||304||387|
|LIABILITIES & STOCKHOLDERS’ EQUITY|
|Advances from the Federal Home Loan Bank||–||8,000||8,000|
|Accrued expenses and other liabilities||5,675||5,120||4,912|
|Common stock, no par value||70,690||69,742||69,746|
|Accumulated other comprehensive income / (loss)||(29,590)||587||2,937|
|Total Stockholders’ Equity||77,938||99,647||98,568|
|Total Liabilities and Stockholders’ Equity||$1,138,418||$1,157,819||$1,106,115|
*Derived from audited financial statements
Consolidated Statements of Operations
($000’s omitted except per share data)
|For the Three Months Ended||For the Nine Months Ended|
|Sept 30, 2022
|Sept 30, 2021
|Sept 30, 2022 (un-audited)||Sept 30, 2021 (un-audited)|
|Net Interest Income||8,941||8,468||25,405||25,014|
|Provision for Loan Losses||70||(489)||95||(489)|
|Net Interest Income after Provision for Loan Losses||8,871||8,957||25,310||25,503|
|Income Before Income Taxes||3,792||3,903||10,181||11,297|
|Net Income Available Per Basic Common Share||$0.51||$0.52||$1.36||$1.51|