UB Bancorp Releases Results for the Quarter and Nine Months Ended September 30, 2022

Rhea-AI Summary

UB Bancorp (OTCQX: UBNC) reported net income of $3.0 million for Q3 2022, a slight decrease from $3.1 million in Q3 2021. For the first nine months of 2022, net income was $8.2 million, down from $9.0 million in 2021. Total assets increased to $1.14 billion, with core loans rising by $38.3 million or 6.0%. The company also incurred $515,000 in merger-related expenses as it prepares for an all-stock acquisition by FNB Corporation, expected to finalize in December 2022. A cash dividend of $0.11 per share was approved for December 8, 2022.

Positive

• Total assets increased by $32.3 million or 2.9% year-over-year.
• Core loans grew by $38.3 million or 6.0% in the first nine months of 2022.
• Non-interest deposits increased by $52.6 million or 13.5% during 2022.
• Adjusted earnings for Q3 2022 were $4.0 million, up from $2.8 million in Q3 2021.

Negative

• Net income for Q3 2022 decreased to $3.0 million from $3.1 million in Q3 2021.
• Net income for the first nine months of 2022 fell to $8.2 million compared to $9.0 million in 2021.
• Reduction in net PPP revenue, with only $8,000 earned in Q3 2022 versus $632,000 in Q3 2021.

GREENVILLE, N.C.--(BUSINESS WIRE)-- 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 of 2022
• 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 Bancorp
• 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 common share

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.

UB Bancorp
Consolidated Balance Sheets
($000's omitted)
					As of the Period Ended
					September 30,			December 31,			September 30,
					2022			2021			2021
ASSETS					(un-audited)			*			(un-audited)
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					681,384			653,221			664,117
Net fair value marks					(490)			(1,061)			(1,374)
Allowance for loan losses					(7,706)			(7,593)			(9,615)
	Net Loans				673,189			644,567			653,128
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					-			-			-
Goodwill					12,897			12,897			12,897
Core deposit intangible					116			304			387
Other assets					20,237			10,490			9,899
		Total Assets		$	1,138,418		$	1,157,819		$	1,106,115
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
	Deposits			$	1,023,775		$	1,004,016		$	942,713
	Advances from the Federal Home Loan Bank				-			8,000			8,000
	Subordinated debentures				30,702			30,672			30,663
	Other borrowings				329			10,364			21,259
	Accrued expenses and other liabilities				5,675			5,120			4,912
		Total Liabilities			1,060,480			1,058,172			1,007,547
Stockholders' Equity
	Common stock, no par value				70,690			69,742			69,746
	Retained earnings				36,837			29,318			25,885
	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

UB Bancorp
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			Sept 30, 2021
			(un-audited)
Interest Income		$	10,108		$	9,267		$	27,988		$	27,502
Interest Expense			1,167			799			2,583			2,488
	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
Noninterest Income			795			773			2,439			2,449
Noninterest Expense			5,874			5,827			17,568			16,655
	Income Before Income Taxes		3,792			3,903			10,181			11,297
Income Taxes			761			793			2,019			2,302
	Net Income	$	3,031		$	3,110		$	8,162		$	8,995
	Net Income Per Basic Common Share	$	0.51		$	0.52		$	1.36		$	1.51

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221021005473/en/

Scott C. McLean

Chief Financial Officer

(252) 917-5735

Source: UB Bancorp

FAQ

What were UB Bancorp's net income results for Q3 2022?

UB Bancorp reported a net income of $3.0 million for Q3 2022, slightly down from $3.1 million in Q3 2021.

What is the status of UB Bancorp's merger with FNB Corporation?

UB Bancorp's merger with FNB Corporation is expected to be completed in December 2022, with all regulatory and shareholder approvals obtained.

How did UB Bancorp's total assets perform as of Q3 2022?

As of Q3 2022, UB Bancorp's total assets reached $1.14 billion, reflecting a $32.3 million or 2.9% increase year-over-year.

What dividend was declared by UB Bancorp for December 2022?

UB Bancorp declared a cash dividend of $0.11 per share, payable on December 8, 2022.

How much did UB Bancorp's core loans increase in 2022?

UB Bancorp's core loans increased by $38.3 million or 6.0% during the first nine months of 2022.