Union Bankshares Inc (UNB) Reports Q3 2023 Earnings and Declares Quarterly Dividend Amidst ...
Union Bankshares Inc (NASDAQ:UNB) reports a consolidated net income of $2.5 million for Q3 2023, a decrease from $3.8 million in Q3 2022.
The company declares a regular quarterly cash dividend of $0.36 per share, payable on November 2, 2023.
Despite industry volatility, UNB maintains a strong financial position with a diverse deposit base, strong liquidity, excellent asset quality, and regulatory capital exceeding required levels.
Total assets increased by 7.3% to $1.4 billion as of September 30, 2023, compared to $1.3 billion as of September 30, 2022.
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Union Bankshares Inc (NASDAQ:UNB) released its earnings report for the three and nine months ended September 30, 2023, on October 18, 2023. The report reveals a consolidated net income of $2.5 million for Q3 2023, marking a decrease from $3.8 million in the same period in 2022. The company also declared a regular quarterly cash dividend of $0.36 per share.
Financial Performance and Challenges
Union Bankshares Inc (NASDAQ:UNB) has faced earnings pressure due to the prolonged and steep yield curve inversion, a common challenge in the banking industry in 2023. The sharp increases in short-term rates have significantly impacted the company's funding costs, leading to customer expectations of higher rates on deposit accounts and increased utilization of wholesale funding at higher costs. Despite these challenges, the company continues to focus on gathering deposits, optimizing the net interest margin, and maintaining strong asset quality.
Financial Highlights
For the three months ended September 30, 2023, the consolidated net income decreased by 32.6% to $2.5 million compared to the same period in 2022. This decrease was primarily driven by a decrease in net interest income of $1.3 million, a decrease in noninterest income of $73 thousand, and an increase of $487 thousand in noninterest expense. However, these were partially offset by a reduction of $139 thousand in credit loss expense and a decrease in income tax expense of $487 thousand.
Year-to-date, the consolidated net income decreased by 10.5% to $8.2 million for the first nine months of 2023 compared to the same period in 2022. This was due to a decrease in net interest income of $333 thousand and an increase in noninterest expenses of $1.6 million. However, these were partially offset by an increase of $186 thousand in noninterest income, a reduction in credit loss expense of $161 thousand, and a decrease of $625 thousand in income tax expense.
Asset Growth and Dividend Declaration
Union Bankshares Inc (NASDAQ:UNB) reported total assets of $1.4 billion as of September 30, 2023, marking an increase of 7.3% from $1.3 billion as of September 30, 2022. The asset growth was primarily driven by loans, with total loans outstanding as of September 30, 2023, standing at $1.0 billion. The company also declared a cash dividend of $0.36 per share for the quarter, payable on November 2, 2023, to shareholders of record as of October 28, 2023.
Despite the challenges faced in 2023, Union Bankshares Inc (NASDAQ:UNB) maintains a strong financial position, supported by a diverse deposit base, a strong liquidity position, excellent asset quality, and regulatory capital in excess of all required levels.
This article first appeared on GuruFocus.
