Unionbancorp (NASDAQ:UBCD)
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UnionBancorp, Inc. Reports Second Quarter Earnings
OTTAWA, Ill., July 28 /PRNewswire-FirstCall/ -- Dewey R. Yaeger, President and
Chief Executive Officer of UnionBancorp, Inc. (NASDAQ:UBCD), announced second
quarter earnings of $913,000 or $0.21 per diluted share. This compares to
$1,446,000 or $0.34 per diluted share earned in the second quarter of 2003. For
the six months ended June 30, 2004, net income equaled $1,713,000 or $0.39 per
diluted share compared to $3,253,000 or $0.77 per diluted share earned in the
same period during 2003.
Commenting on the quarter, Yaeger stated, "Management's sustained focus on
improving asset quality is beginning to show results by way of improved
processes, stronger reserves and lower levels of non-performing loans. We are
also encouraged by favorable trends in expense control and low charge-off
levels. Net interest income growth will remain a challenge as we attempt to
strike a balance between a conservative approach to lending and growth of our
portfolio, while mitigating the continued pressure on our margin."
Second Quarter 2004 Highlights:
-- Earnings per share increased 16.7% over the first quarter of 2004.
-- The Company completed the sale of its Blandinsville sales and service
office that resulted in a net gain on the sale. The impact to
earnings, net of taxes, was approximately $0.07 per diluted share.
-- The Company entered into a Definitive Purchase and Assumption Agreement
with First Bankers Trust Company to purchase approximately $90 million
in deposits and $40 million in loans from UnionBank, thus exiting the
Company from its Quincy, Macomb, Carthage, Rushville and Paloma
markets. The transaction is expected to be completed late in the third
quarter, pending the timing of regulatory approval by the Federal
Reserve System and the Office of the Comptroller of the Currency.
-- The Company announced that it has filed the necessary applications to
merge UnionFinancial Services & Trust Company into UnionBank.
-- The net interest margin remained relatively stable over the previous
three quarters, reported at 3.31% at the end of the second quarter
2004.
-- The Company experienced favorable trends in expense control as
noninterest expense levels decreased $140,000 or 2.0% during the second
quarter of 2004 in comparison to the second quarter of 2003.
-- The reserve coverage ratio (allowance to nonperforming loans) was
reported at 176.43% as of June 30, 2004 as compared to 117.69% as of
June 30, 2003 and 106.30% as of December 31, 2003.
-- Contributions to the provision for loan losses decreased $250,000 as
compared with the first quarter 2004.
-- The level of non-performing loans to total end of period loans totaled
1.28% as of June 30, 2004 compared to 1.29% on June 30, 2003 and 1.78%
at December 31, 2003.
-- Loan demand in the second quarter remained soft, as total loans
decreased $23.1 million to $453.7 million since December 31, 2003.
-- The Company's Board of Directors approved the payment of a $0.10
quarterly cash dividend on the Company's common stock, marking the 77th
consecutive quarter of dividends paid to stockholders.
Net Interest Margin
Net interest margin for second quarter 2004 was 3.31%, down from 3.66% for
second quarter 2003 and 3.34% from first quarter 2004. Tax-equivalent net
interest income decreased 12.5% to $5,713,000 for second quarter 2004 as
compared to $6,529,000 for 2003's second quarter. This decrease resulted from
repricing of earning assets in a lower rate environment and a shift in our
earning assets from higher yielding loans to lower yielding investments.
Noninterest Income and Expense
Noninterest income, excluding securities gains and the gain on sale of
Blandinsville, decreased from $3,649,000 to $2,714,000. The decrease was
primarily related to a drop in revenue generated from the mortgage banking
division (including gains on sale and servicing income, net of non-cash
amortization charges in the carrying value of the mortgage servicing rights
portfolio), merchant POS and credit card fees due to the sale of those product
lines.
Noninterest expense experienced a $140,000 or 1.95% decrease on a quarter-
over-quarter basis. The significant improvement was primarily a result of
enhanced operational efficiencies. Offsetting the decrease was an increase in
legal fees related to the work-out of nonperforming loans and personnel and
facility expenses related to the opening of the Yorkville sales and service
center.
Asset Quality
During the first six months of 2004, the loan portfolio decreased 0.05% to
$453.7 million, as compared to $476.8 million at December 31, 2003. This was
due to tighter underwriting standards, a continued softening of overall loan
demand and normal paydowns. The level of nonperforming loans to total end of
period loans totaled 1.26% as of June 30, 2004 compared to 1.29% on June 30,
2003 and 1.78% at December 31, 2003. Net charge-offs for the second quarter
were 0.03% of average loans, as compared to 0.10% for second quarter 2003. The
reserve coverage ratio (allowance to nonperforming loans) was reported at
176.43% as of June 30, 2004 as compared to 117.69% as of June 30, 2003 and
106.30% as of December 31, 2003.
About the Company
UnionBancorp, Inc. is a regional financial services company based in Ottawa,
Illinois, and devotes special attention to personal service and offers Bank,
Trust, Insurance and Investment services at each of its locations. The
Company's market area extends from the far Western suburbs of the Chicago
metropolitan area across Central and Northern Illinois to the Mississippi River
in Western Illinois.
UnionBancorp common stock is listed on The Nasdaq Stock Market under the symbol
"UBCD." Further information about UnionBancorp, Inc. can be found at the
Company's website at http://www.ubcd.com/ .
Safe Harbor Statement
This release may contain "forward-looking" statements. Forward-looking
statements are identifiable by the inclusion of such qualifications as
"expects", "intends", "believes", "may", "likely" or other indications that the
particular statements are not based upon fact but are rather based upon the
Company's beliefs as of the date of this release. Actual events and results
may differ significantly from those described in such forward-looking
statements, due to changes in the economy, interest rates or other factors. For
additional information about these factors, please review our filings with the
Securities and Exchange Commission.
Accompanying Financial Statements and Tables
Accompanying this press release is the following unaudited financial
information:
-- Unaudited Quarterly and Year to Date Highlights
-- Unaudited Consolidated Balance Sheets
-- Unaudited Consolidated Statements of Income
-- Unaudited Selected Quarterly Consolidated Financial Data
UnionBancorp, Inc.
Unaudited Quarterly and Year to Date Highlights
(In Thousands, Except Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Operating Highlights
Net income $913 $1,446 $1,713 $3,253
Return on average
total assets 0.49% 0.74% 0.45% 0.84%
Return on average
stockholders equity 5.44 8.10 5.05 9.37
Net interest margin 3.31 3.66 3.33 3.77
Efficiency ratio 82.45 69.30 81.38 67.83
Per Share Data
Diluted earnings per
common share $0.21 $0.34 $0.39 $0.77
Book value per common share $16.47 $17.55 $16.47 $17.55
Diluted weighted average
common shares
outstanding 4,115,166 4,068,284 4,114,251 4,053,126
Period end common
shares outstanding 4,038,800 3,998,946 4,038,800 3,998,946
Stock Performance Data
Market Price:
Quarter End $19.46 $20.00 $19.46 $20.00
High $23.00 $20.48 $23.00 $20.48
Low $19.25 $16.05 $19.25 $15.15
Period end price to
book value 1.18 1.14 1.18 1.14
UnionBancorp, Inc.
Unaudited Consolidated Balance Sheets (In Thousands)
June 30, December 31,
2004 2003
ASSETS
Cash and cash equivalents $26,972 $22,198
Securities available-for-sale 211,733 252,248
Loans 453,676 476,812
Allowance for loan losses (10,224) (9,011)
Net loans 443,452 467,801
Cash surrender value of life insurance 14,725 14,379
Mortgage servicing rights 2,804 2,775
Premises and equipment, net 16,200 16,576
Goodwill 7,642 7,642
Intangible assets, net 1,129 1,232
Other real estate 164 227
Other assets 7,198 8,344
Total assets $732,019 $793,422
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Non-interest-bearing $77,072 $89,424
Interest-bearing 506,540 548,608
Total deposits 583,612 638,032
Federal funds purchased and
securities sold under agreements
to repurchase 1,336 1,533
Advances from the Federal Home Loan Bank 67,700 72,450
Notes payable 7,296 7,873
Series B mandatory redeemable preferred stock 831 831
Other liabilities 4,212 4,656
Total liabilities 664,987 725,375
Stockholders' equity
Series A convertible preferred stock 500 500
Common stock 4,640 4,628
Surplus 22,572 22,484
Retained earnings 44,412 43,609
Accumulated other comprehensive income 221 2,141
Unearned compensation under stock
option plans - (2)
72,345 73,360
Treasury stock, at cost (5,313) (5,313)
Total stockholders' equity 67,032 68,047
Total liabilities and stockholders'
equity $732,019 $793,422
UnionBancorp, Inc.
Unaudited Consolidated Statements of Income
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Interest income
Loans $7,035 $8,281 $14,303 $16,820
Securities
Taxable 1,485 1,689 3,390 3,577
Exempt from federal
income taxes 318 398 643 793
Federal funds sold and other 5 13 15 31
Total interest income 8,843 10,381 18,351 21,221
Interest expense
Deposits 2,456 3,189 5,287 6,647
Federal funds purchased
and securities sold under
agreements to repurchase 40 40 53 70
Advances from the Federal
Home Loan Bank 728 770 1,499 1,457
Series B Mandatory Redeemable 13 - 25 -
Notes payable 75 81 155 165
Total interest expense 3,312 4,080 7,019 8,339
Net interest income 5,531 6,301 11,332 12,882
Provision for loan losses 500 1,257 1,250 1,869
Net interest income after
Provision for loan losses 5,031 5,044 10,082 11,013
Noninterest income
Service charges 803 794 1,514 1,550
Merchant fee income 12 210 68 489
Trust income 180 146 364 323
Mortgage banking income 647 1,192 1,215 2,221
Insurance commissions and fees 608 641 1,241 1,235
Securities gains, net 10 129 10 221
Gain on sale of assets 466 309 725 309
Other income 464 666 977 1,338
3,190 4,087 6,114 7,686
Noninterest expenses
Salaries and employee benefits 4,136 3,979 8,286 7,809
Occupancy expense, net 559 470 1,111 968
Furniture and equipment expense 573 524 1,130 1,017
Supplies and printing 115 122 230 248
Telephone 142 281 296 538
Other real estate owned expense (3) 40 4 168
Amortization of intangible assets 51 52 103 106
Other expenses 1,456 1,701 2,848 3,332
7,029 7,169 14,008 14,186
Income before income taxes 1,192 1,962 2,188 4,513
Income taxes 279 516 475 1,260
Net income 913 1,446 1,713 3,253
Preferred stock dividends 52 64 104 128
Net income for common stockholders $861 $1,382 $1,609 $3,125
Basic earnings per share $0.21 $0.34 $0.40 $0.78
Diluted earnings per common share $0.21 $0.34 $0.39 $0.77
UnionBancorp, Inc.
Unaudited Selected Quarterly Consolidated Financial Data
(In Thousands, Except Share Data)
Quarters Ended
06/30/04 03/31/04 12/31/03 09/30/03 06/30/03
(Dollars in Thousands, Except Per Share Data)
Statement of
Income Data
Interest income $8,843 $9,508 $9,591 $10,274 $10,381
Interest expense (3,312) (3,707) (3,847) (3,775) (4,080)
Net interest
income 5,531 5,801 5,744 6,499 6,301
Provision for
loan losses 500 750 2,011 4,356 1,257
Net interest
income after
provision for
loan losses 5,031 5,051 3,733 2,143 5,044
Noninterest
income 3,190 2,924 2,774 3,259 4,087
Noninterest
expense 7,029 6,979 7,260 7,161 7,169
Income (loss)
before income
taxes 1,192 996 (753) (1,759) 1,962
Provision (benefit)
for income taxes 279 196 (499) (890) 516
Net income $913 $800 $(254) $(869) $1,446
Net income on
common stock $861 $748 $(254) $(934) $1,382
Per Share Data
Basic earnings
per common shares $0.21 $0.19 $(0.07) $(0.23) $0.34
Diluted earnings
per common shares 0.21 0.18 (0.07) (0.23) 0.34
Cash dividends on
common stock 0.10 0.10 0.09 0.09 0.09
Dividend payout
ratio for common
stock 46.92% 53.96% -- -- 18.56%
Year-end book
value per common
share $16.47 $16.88 $16.77 $16.87 $17.55
Basic weighted
average common
shares
outstanding 4,037,347 4,031,181 4,010,111 4,000,546 3,994,564
Diluted weighted
average common
shares
outstanding 4,115,166 4,114,385 4,098,841 4,097,793 4,068,284
Period-end
common shares
outstanding 4,038,800 4,035,900 4,026,850 4,000,646 3,998,946
Balance Sheet Data
Securities $211,733 $250,282 $252,248 $235,508 $220,937
Loans 453,676 466,591 476,812 483,042 476,386
Allowance for
loan losses 10,224 9,882 9,011 9,082 7,253
Assets 732,019 776,399 793,422 792,481 772,931
Deposits 583,612 614,975 638,032 622,952 606,955
Stockholders'
equity 67,032 68,619 68,047 67,989 70,701
Earnings
Performance Data
Return on average
total assets 0.49% 0.41% (0.10)% (0.45)% 0.74%
Return on average
stockholders'
equity 5.44 4.67 (1.10) (4.98) 8.10
Net interest
margin ratio 3.31 3.34 3.29 3.76 3.66
Efficiency ratio
(a) 82.45 80.33 85.04 71.59 69.30
Asset Quality Ratios
Nonperforming
assets to total
end of period
assets 0.81% 0.95% 1.10% 1.30% 0.84%
Nonperforming
loans to total
end of period
loans 1.28 1.53 1.78 2.11 1.29
Net loan charge-
offs to total
average loans 0.03 (0.03) 0.44 0.52 0.10
Allowance for loan
losses to total
end of period
loans 2.25 2.12 1.89 1.88 1.52
Allowance for
loan losses to
nonperforming
loans 176.43 138.13 106.30 89.01 117.69
Capital Ratios
Average equity to
average assets 8.92% 8.72% 8.63% 8.94% 9.04%
Total capital to
risk adjusted
assets 12.73 12.32 12.52 12.20 12.63
Tier 1 leverage
ratio 8.38 7.83 7.60 7.63 8.01
(a) Calculated as noninterest expense less amortization of intangibles and
expenses related to other real estate owned divided by the sum of net
interest income before provisions for loan losses and total
noninterest income excluding securities gains and losses and gains on
sale of assets.
DATASOURCE: UnionBancorp, Inc.
CONTACT: Dewey R. Yaeger, President and Chief Executive Officer,
, or Kurt R. Stevenson, Senior Vice President and Chief
Financial Officer, , both of UnionBancorp, Inc.,
+1-800-352-8223
Web site: http://www.ubcd.com/