UBCD Unionbancorp

UnionBancorp, Inc. Announces First Quarter Earnings OTTAWA, Ill., May 13 /PRNewswire-FirstCall/ -- Dewey R. Yaeger, President and Chief Executive Officer of UnionBancorp, Inc. , reported net income for the quarter ended March 31, 2004 of $800,000 or $0.18 per diluted share compared to $1,807,000 or $0.43 per diluted share earned in the period ended March 31, 2003. First Quarter 2004 Highlights: -- The Board of Directors of UnionBancorp, Inc., in a continuing effort to enhance shareholder value, approved the payment of an 11.1% increase in the quarterly cash dividend to $0.10 from $0.09 on the Company's common stock during the first quarter, marking the 76th consecutive quarter of dividends paid to stockholders. -- UnionBank/West and UnionBank/Northwest, two stand-alone bank subsidiaries, were successfully merged into the Company's flagship bank, UnionBank. -- The net interest margin decreased to 3.34% during the first quarter 2004 as compared with 3.89% for the same period 2003, but did increase from the 3.29% during the fourth quarter 2003. -- In an effort to divest of high risk, low profit margin product lines, the Company sold its credit card portfolio. The impact to earnings, net of taxes, was approximately $0.04 per diluted share. -- Noninterest income, excluding securities gains, decreased $583,000 or 16.6% during the first quarter of 2004 as compared to the same period in 2003. The year-over-year decrease is primarily attributable to a drop in revenue generated from the mortgage banking division. Noninterest expense experienced a $38,000 decrease or 0.5% during the first quarter 2004 as compared to the same period 2003. -- Loan demand in the first quarter remained soft, as total loans decreased $10.2 million to $466.6 million. Net Interest Margin The net interest margin decreased to 3.34% during the first quarter 2004 as compared with 3.89% for the same period 2003 and increased from 3.29% in the fourth quarter 2003. The majority of the change on a year-over-year basis in interest income was related to a decline in yields earned on average loans as competitive pricing on new and refinanced loans, as well as the repricing of variable rate loans in a lower interest rate environment put downward pressure on loan yields. Also adversely contributing to the change was a shift in the earning-asset mix away from higher yielding loans to lower yielding investments. Tax-equivalent net interest income was reported at $6.0 million for the first quarter of 2004 as compared to $6.8 million for the first quarter 2003. Noninterest Income and Expense Noninterest income, excluding securities gains, decreased $583,000 or 16.6% during the first quarter of 2004 as compared to the same period in 2003. The year-over-year decrease is primarily attributable to a drop in revenue generated from the mortgage banking division, a decrease in other fee-based revenue and the divestiture of the merchant POS and ISP product lines. Positively contributing to noninterest income was a gain on the sale of the credit card portfolio. Noninterest expense experienced a $38,000 decrease or 0.5% during the first quarter of 2004 as compared to the same period in 2003. This favorable improvement was due, in large part, to savings in expenses related to the divestiture of the POS and ISP product lines and a decrease in net OREO expense. These savings were partially offset by increases in salaries and employee benefits, incurred as a result of the Company's expansion into the Yorkville market, and normal merit increases. Asset Quality During the first quarter, the loan portfolio decreased to $466.6 million as compared to $476.8 million at December 31, 2003. The slight decrease resulted from tighter underwriting standards, a continued softening of overall loan demand, aggressive workout strategies of problem credits, and normal paydowns. The level of nonperforming loans to end of period loans totaled 1.53% as of March 31, 2004 compared to 0.86% at March 31, 2003 and 1.78 % on December 31, 2003. Net charge-offs for the first quarter of 2004 were (0.03%) of average loans, as compared to 0.12% for the same period 2003 and 0.44% for fourth quarter 2003. The reserve coverage ratio (allowance to nonperforming loans) was reported at 138.13% as of March 31, 2004 as compared to 159.58% as of March 31, 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. and Subsidiaries Unaudited Quarterly and Year to Date Highlights (In Thousands, Except Share Data) Three Months Ended March 31, 2004 2003 Operating Highlights Net income $800 $1,807 Return on average total assets 0.41% 0.94% Return on average stockholders equity 4.67% 10.58% Net interest margin 3.34% 3.89% Efficiency ratio 80.33% 66.38% Per Share Data Diluted earnings per common share $0.18 $0.43 Book value per common share $16.88 $17.29 Diluted weighted average common shares outstanding 4,114,385 4,044,782 Period end common shares outstanding 4,035,900 3,986,046 Stock Performance Data Market Price: Quarter End $21.50 $16.67 High $22.23 $16.86 Low $21.00 $15.15 Period end price to book value 1.27 0.96 UnionBancorp, Inc. and Subsidiaries Unaudited Consolidated Balance Sheets March 31, 2004 and December 31, 2003 (In Thousands, Except Share Data) March 31, December 31, 2004 2003 ASSETS Cash and cash equivalents $19,585 $22,198 Securities available-for-sale 250,282 252,248 Loans 466,591 476,812 Allowance for loan losses (9,882) (9,011) Net loans 456,709 467,801 Cash surrender value of life insurance 14,551 14,379 Mortgage servicing rights 2,792 2,775 Premises and equipment, net 16,735 16,576 Goodwill 7,642 7,642 Intangible assets, net 1,180 1,232 Other real estate 246 227 Other assets 6,677 8,344 Total assets $776,399 $793,422 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest-bearing $81,923 $89,424 Interest-bearing 533,052 548,608 Total deposits 614,975 638,032 Federal funds purchased and securities sold under agreements to repurchase 4,435 1,533 Advances from the Federal Home Loan Bank 74,700 72,450 Notes payable 7,816 7,873 Series B mandatory redeemable preferred stock 831 831 Other liabilities 5,023 4,656 Total liabilities 707,780 725,375 Stockholders' equity Series A convertible preferred stock 500 500 Common stock 4,637 4,628 Surplus 22,549 22,484 Retained earnings 43,993 43,609 Accumulated other comprehensive income 2,253 2,141 Unearned compensation under stock option plans - (2) 73,932 73,360 Treasury stock, at cost (5,313) (5,313) Total stockholders' equity 68,619 68,047 Total liabilities and stockholders' equity $776,399 $793,422 UnionBancorp, Inc. and Subsidiaries Unaudited Consolidated Statements of Income Three Months Ended March 31, 2004 and 2003 (In Thousands, Except Per Share Data) Three Months Ended March 31, 2004 2003 Interest income Loans $7,268 $8,541 Securities Taxable 1,905 1,886 Exempt from federal income taxes 325 395 Federal funds sold and other 10 18 Total interest income 9,508 10,840 Interest expense Deposits 2,831 3,458 Federal funds purchased and securities sold under agreements to repurchase 13 30 Advances from the Federal Home Loan Bank 771 687 Series B mandatory redeemable preferred stock 12 -- Notes payable 80 84 Total interest expense 3,707 4,259 Net interest income 5,801 6,581 Provision for loan losses 750 612 Net interest income after Provision for loan losses 5,051 5,969 Noninterest income Service charges 711 756 Merchant fee income 56 279 Trust income 184 177 Mortgage banking income 568 1,029 Insurance commissions and fees 633 594 Securities gains, net -- 92 Gain on sale of the credit card portfolio 259 -- Other income 513 672 2,924 3,599 Noninterest expenses Salaries and employee benefits 4,150 3,830 Occupancy expense, net 552 498 Furniture and equipment expense 557 493 Supplies and printing 115 126 Telephone 154 257 Other real estate owned expense 7 128 Amortization of intangible assets 52 54 Other expenses 1,392 1,631 6,979 7,017 Income before income taxes 996 2,551 Income taxes 196 744 Net income 800 1,807 Preferred stock dividends 52 64 Net income for common stockholders $748 $1,743 Basic earnings per share $0.19 $0.44 Diluted earnings per common share $0.18 $0.43 UnionBancorp, Inc. Unaudited Selected Quarterly Consolidated Financial Data (In Thousands, Except Share Data) Quarters Ended 03/31/04 12/31/03 09/30/03 06/30/03 03/31/03 (Dollars in Thousands, Except Per Share Data) Statement of Income Data Interest income $9,508 $9,591 $10,274 $10,381 $10,840 Interest expense (3,707) (3,847) (3,775) (4,080) (4,259) Net interest income 5,801 5,744 6,499 6,301 6,581 Provision for loan losses 750 2,011 4,356 1,257 612 Net interest income after provision for loan losses 5,051 3,733 2,143 5,044 5,969 Noninterest income 2,924 2,774 3,259 4,087 3,599 Noninterest expense 6,979 7,260 7,161 7,169 7,017 Income (loss) before income taxes 996 (753) (1,759) 1,962 2,551 Provision (benefit) for income taxes 196 (499) (890) 516 744 Net income (loss) $800 $(254) $(869) $1,446 $1,807 Net income (loss) on common stock $748 $(254) $(934) $1,382 $1,743 Per Share Data Basic earnings (loss) per common shares $0.19 $(0.07) $(0.23) $0.34 $0.44 Diluted earnings (loss) per common shares 0.18 (0.07) (0.23) 0.34 0.43 Cash dividends on common stock 0.10 0.09 0.09 0.09 0.09 Dividend payout ratio for common stock 53.96 -- -- 18.56% 20.60% Book value per common share $16.88 $16.77 $16.87 $17.55 $17.29 Basic weighted average common shares outstanding 4,031,181 4,010,111 4,000,546 3,994,564 3,984,319 Diluted weighted average common shares outstanding 4,114,385 4,098,841 4,097,793 4,068,284 4,044,782 Period-end common shares outstanding 4,035,900 4,026,850 4,000,646 3,998,946 3,986,046 Balance Sheet Data Securities $250,282 $252,248 $235,508 $220,937 $230,123 Loans 466,591 476,812 483,042 476,386 477,406 Allowance for loan losses 9,882 9,011 9,082 7,253 6,498 Assets 776,399 793,422 792,481 772,931 779,424 Deposits 614,975 638,032 622,952 606,955 626,076 Stockholders' equity 68,619 68,047 67,989 70,701 69,423 Earnings Performance Data Return on average total assets 0.41% (0.10)% (0.45)% 0.74% 0.94% Return on average stockholders' equity 4.67 (1.10) (4.98) 8.10 10.58 Net interest margin ratio 3.34 3.29 3.76 3.66 3.89 Efficiency ratio (1) 80.33 85.04 71.59 69.30 66.38 Asset Quality Ratios Nonperforming assets to total end of period assets 0.95% 1.10% 1.30% 0.84% 0.68% Nonperforming loans to total end of period loans 1.53 1.78 2.11 1.29 0.86 Net loan charge-offs to total average loans (0.03) 0.44 0.52 0.10 0.12 Allowance for loan losses to total end of period loans 2.12 1.89 1.88 1.52 1.38 Allowance for loan losses to nonperforming loans 138.13 106.30 89.01 117.69 159.58 Capital Ratios Average equity to average assets 8.72% 8.63% 8.94% 9.04% 8.89% Total capital to risk adjusted assets 12.32 12.52 12.20 12.63 12.26 Tier 1 leverage ratio 7.83 7.60 7.63 8.01 7.79 (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 of UnionBancorp, Inc., +1-800-352-8223 Web site: http://www.ubcd.com/

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