UBCD Unionbancorp

UnionBancorp, Inc. Announces First Quarter Earnings OTTAWA, Ill., April 22 /PRNewswire-FirstCall/ -- Dewey R. Yaeger, President and Chief Executive Officer of UnionBancorp, Inc. (NASDAQ:UBCD) reported net income for the quarter ended March 31, 2005 of $964,000 or $0.22 per diluted share compared to $800,000 or $0.18 per diluted share earned in the period ended March 31, 2004. Commenting on the quarter, Yaeger noted, "Our first quarter results are indicative of the efforts set forth over the past 18 months, particularly with respect to asset quality. During the first quarter, we booked more recoveries than charge-offs, our loan portfolio grew, and we had a healthy loan loss reserve. A more disciplined approach to pricing loans is also yielding positive outcomes." He also remarked that "improvements in our margin, expense control and an ongoing commitment to our sales and service culture are also beginning to impact the bottom line." First Quarter 2005 Highlights: -- The Board of Directors of UnionBancorp, Inc., in a continuing effort to enhance shareholder value, approved the payment of an 10.0% increase in the quarterly cash dividend to $0.11 from $0.10 on the Company's common stock during the first quarter, marking the 80th consecutive quarter of dividends paid to stockholders. -- Asset quality trends continued to show improvement, as a result of the Company's ongoing efforts to enhance the credit process. The reserve coverage ratio (allowance to nonperforming loans) was reported at 198.09% as of March 31, 2005 as compared to 138.13% as of March 31, 2004 and 231.60% as of December 31, 2004. The Company also experienced a decrease of $650,000 in the first quarter 2005 provision as compared with the same period 2004. -- The Company announced plans to close its Tiskilwa sales and service center during the second quarter of 2005. -- The net interest margin increased to 3.52% during the first quarter of 2005 as compared with 3.34% for the same period in 2004 and 3.33% in the fourth quarter of 2004. -- Noninterest income, excluding securities gains, decreased $1,074,000 or 36.7% during the first quarter of 2005 as compared to the same period in 2004. The year-over-year decrease is attributable to a drop in revenue generated from the mortgage banking division and a decrease in other fee-based revenue related to the divestiture of the Company's western Illinois sales and service centers. -- Noninterest expense experienced a $1,433,000 or 20.5% decrease during the first quarter 2005 as compared to the same period 2004. This decrease was due, in large part, to savings related to the divestiture of the Company's western Illinois sales and service centers, a decrease in legal fees associated with the workout of problem credits and cost containment in most categories of expense. Net Interest Margin The net interest margin increased to 3.52% during the first quarter 2005 as compared with 3.34% for the same period in 2004 and 3.33% in the fourth quarter of 2004. The majority of the change on a quarter-over-quarter basis in interest income was related to a more disciplined approach to the pricing of loans and the overall rising interest rate environment. Tax-equivalent net interest income was reported at $5.1 million for the first quarter of 2005 as compared to $6.0 million for the first quarter of 2004. Noninterest Income and Expense Noninterest income, excluding securities gains, decreased $1,074,000 or 36.7% during the first quarter of 2005 as compared to the same period in 2004. The quarter-over-quarter decrease was attributable to a drop in revenue generated from the mortgage banking division and a decrease in other fee-based revenue related to the divestiture of the Company's western Illinois sales and service centers. Noninterest expense experienced a $1,433,000 decrease or 20.5% during the first quarter of 2005 as compared to the same period in 2004. This decrease was due, in large part, to savings related to the divestiture of the Company's western Illinois sales and service centers, a decrease in legal fees associated with the workout of problem credits and cost containment in most categories of expense. Asset Quality During the first quarter, the loan portfolio increased to $421.5 million as compared to $419.3 million at December 31, 2004. The slight increase resulted primarily from a more disciplined approach to loan pricing and an improvement in overall loan demand. The level of nonperforming loans to end of period loans totaled 1.19% as of March 31, 2005 compared to 1.53% at March 31, 2004 and 1.00 % on December 31, 2004. Net charge-offs for the first quarter of 2005 were (0.03%) of average loans, as compared to (0.03)% for the same period 2004 and 0.13% for fourth quarter 2004. The reserve coverage ratio (allowance to nonperforming loans) was reported at 198.09% as of March 31, 2005 as compared to 138.13% as of March 31, 2004 and 231.60% as of December 31, 2004. 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. 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 Under the Private Securities Litigation Reform Act of 1995 This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "estimate," or "project" or similar expressions. The Company's ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and the subsidiaries include, but are not limited to, changes in: interest rates; general economic conditions; legislative/regulatory changes; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality and composition of the loan or securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the Company's market areas; the Company's implementation of new technologies; the Company's ability to develop and maintain secure and reliable electronic systems; and accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. 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. and Subsidiaries Unaudited Quarterly and Year to Date Highlights (Dollars in Thousands, Except Share Data) Three Months Ended March 31, 2005 2004 Operating Highlights Net income $964 $800 Return on average total assets 0.59% 0.41% Return on average stockholders equity 5.52% 4.67% Net interest margin 3.52% 3.34% Efficiency ratio 77.42% 80.33% Per Share Data Diluted earnings per common share $0.22 $0.18 Book value per common share $17.27 $16.88 Diluted weighted average common shares outstanding 4,116,342 4,114,385 Period end common shares outstanding 4,047,610 4,035,900 Stock Performance Data Market Price: Quarter End $21.50 $21.50 High $21.78 $22.23 Low $20.55 $21.00 Period end price to book value 1.24 1.27 UnionBancorp, Inc. and Subsidiaries Unaudited Consolidated Balance Sheets March 31, 2005 and December 31, 2004 (Dollars in Thousands) March 31, December 31, 2005 2004 ASSETS Cash and cash equivalents $18,860 $22,802 Securities available-for-sale 185,766 191,661 Loans 421,523 419,275 Allowance for loan losses (9,948) (9,732) Net loans 411,575 409,543 Cash surrender value of life insurance 15,087 14,953 Mortgage servicing rights 2,745 2,772 Premises and equipment, net 13,827 13,463 Goodwill 6,963 6,963 Intangible assets, net 659 703 Other real estate 400 420 Other assets 5,542 6,266 Total assets $661,424 $669,546 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest-bearing $64,117 $55,800 Interest-bearing 439,184 456,677 Total deposits 503,301 512,477 Federal funds purchased and securities sold under agreements to repurchase 19,297 12,722 Advances from the Federal Home Loan Bank 57,100 61,900 Notes payable 6,858 6,629 Series B mandatory redeemable preferred stock 831 831 Other liabilities 3,627 4,740 Total liabilities 591,014 599,299 Stockholders' equity Series A convertible preferred stock 500 500 Common stock 4,668 4,641 Surplus 22,971 22,632 Retained earnings 47,057 46,592 Accumulated other comprehensive income 926 1,351 Unearned compensation under stock option plans - - 76,122 75,716 Treasury stock, at cost (5,712) (5,469) Total stockholders' equity 70,410 70,247 Total liabilities and stockholders' equity $661,424 $669,546 UnionBancorp, Inc. and Subsidiaries Unaudited Consolidated Statements of Income Three Months Ended March 31, 2005 and 2004 (Dollars in Thousands, Except Per Share Data) Three Months Ended March 31, 2005 2004 Interest income Loans $6,450 $7,268 Securities Taxable 1,425 1,905 Exempt from federal income taxes 258 325 Federal funds sold and other 9 10 Total interest income 8,142 9,508 Interest expense Deposits 2,319 2,831 Federal funds purchased and securities sold under agreements to repurchase 74 13 Advances from the Federal Home Loan Bank 583 771 Series B mandatory redeemable preferred stock 12 12 Notes payable 69 80 Total interest expense 3,057 3,707 Net interest income 5,085 5,801 Provision for loan losses 100 750 Net interest income after Provision for loan losses 4,985 5,051 Noninterest income Service charges 483 711 Merchant fee income - 56 Trust income 215 184 Mortgage banking income 340 568 Insurance commissions and fees 421 633 Bank owned life insurance (BOLI) 134 172 Securities gains, net - - Gain on sale of assets 2 259 Other income 255 341 1,850 2,924 Noninterest expenses Salaries and employee benefits 3,476 4,150 Occupancy expense, net 394 552 Furniture and equipment expense 424 557 Marketing 96 168 Supplies and printing 77 115 Telephone 107 154 Other real estate owned expense 5 7 Amortization of intangible assets 44 52 Other expenses 923 1,224 5,546 6,979 Income before income taxes 1,289 996 Income taxes 325 196 Net income 964 800 Preferred stock dividends 52 52 Net income for common stockholders $912 $748 Basic earnings per share $0.23 $0.19 Diluted earnings per common share $0.22 $0.18 UnionBancorp, Inc. Unaudited Selected Quarterly Consolidated Financial Data (Dollars in Thousands, Except Share Data) Quarters Ended 03/31/05 12/31/04 09/30/04 06/30/04 03/31/04 (Dollars in Thousands, Except Per Share Data) Statement of Income Data Interest income $8,142 $8,056 $8,505 $8,843 $9,508 Interest expense (3,057) (3,089) (3,142) (3,312) (3,707) Net interest income 5,085 4,967 5,363 5,531 5,801 Provision for loan losses 100 300 200 500 750 Net interest income after provision for loan losses 4,985 4,667 5,163 5,031 5,051 Noninterest income 1,850 1,964 6,721 3,190 2,924 Noninterest expense 5,546 6,330 7,514 7,029 6,979 Income before income taxes 1,289 301 4,370 1,192 996 Provision (benefit) for income taxes 325 (172) 1,753 279 196 Net income $964 $473 $2,617 $913 $800 Net income on common stock $912 $421 $2,565 $861 $748 Per Share Data Basic earnings per common shares $0.23 $0.10 $0.64 $0.21 $0.19 Diluted earnings per common shares 0.22 0.10 0.62 0.21 0.18 Cash dividends on common stock 0.11 0.10 0.10 0.10 0.10 Dividend payout ratio for common stock 48.79% 110.21% 15.71% 46.92% 53.96% Book value per common share $17.27 $17.30 $17.38 $16.47 $16.88 Basic weighted average common shares outstanding 4,049,579 4,031,552 4,034,365 4,037,347 4,031,181 Diluted weighted average common shares outstanding 4,116,342 4,109,357 4,105,872 4,115,166 4,114,385 Period-end common shares outstanding 4,047,610 4,032,144 4,030,800 4,038,800 4,035,900 Balance Sheet Data Securities $185,766 $191,661 $190,385 $211,733 $250,282 Loans 421,523 419,275 413,941 453,676 466,591 Allowance for loan losses 9,948 9,732 9,962 10,224 9,882 Assets 661,424 669,546 667,818 732,019 776,399 Deposits 503,301 512,477 511,568 583,612 614,975 Stockholders' equity 70,410 70,247 70,561 67,032 68,619 Earnings Performance Data Return on average total assets 0.59% 0.28% 1.46% 0.49% 0.41% Return on average stockholders' equity 5.52 2.78 15.40 5.44 4.67 Net interest margin ratio 3.52 3.33 3.38 3.31 3.34 Efficiency ratio(1) 77.42 88.32 81.85 82.45 80.33 Asset Quality Ratios Nonperforming assets to total end of period assets 0.61% 0.69% 0.69% 0.81% 0.95% Nonperforming loans to total end of period loans 1.19 1.01 1.09 1.28 1.53 Net loan charge-offs to total average loans (0.03) 0.13 0.10 0.03 (0.03) Allowance for loan losses to total end of period loans 2.36 2.32 2.41 2.25 2.12 Allowance for loan losses to nonperforming loans 198.09 231.60 220.20 176.43 138.13 Capital Ratios Average equity to average assets 10.61% 9.98% 9.47% 8.92% 8.72% Total capital to risk adjusted assets 14.33 14.30 14.36 12.73 12.32 Tier 1 leverage ratio 9.75 9.54 9.55 8.38 7.83 (1) 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 for UnionBancorp, Inc. Web site: http://www.ubcd.com/

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