Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE
UNIONBANCORP, INC. ANNOUNCES YEAR-END AND FOURTH QUARTER RESULTS
OTTAWA, IL, February 11, 2005 - Dewey R. Yaeger, President and Chief Executive
Officer of UnionBancorp, Inc. (Nasdaq: UBCD), reported net income for the year
ended December 31, 2004 of $4,803,000 or $1.12 per diluted share compared to
$2,130,000 or $0.48 per diluted share earned in the year ended December 31,
2003. During the fourth quarter of 2004, the Company reported net income of
$473,000 or $0.10 per diluted share. This compares to a net loss of ($206,000)
or ($0.06) per diluted share for the same period in 2003.
"We are extremely encouraged by the improvement in core earnings over 2003 and
believe that the full impact of many of our recent initiatives will continue to
favorably impact results," remarked Yaeger on 2004 earnings. "The completion of
our charter consolidation initiative, our exit from the western Illinois market
area and improvement in credit quality and our overall lending process all
indicate that we are trending in the right direction. With the core foundation
now in place, an emphasis on revenue generation will be made throughout 2005."
Fourth Quarter 2004 Highlights:
o The Board of Directors of UnionBancorp, Inc. approved the payment of a
$0.10 quarterly cash dividend on the Company's common stock during the
fourth quarter, marking the 79th consecutive quarter of dividends paid
to stockholders.
o The Company completed the merger of UnionFinancial Services & Trust
Company into UnionBank early in the fourth quarter. This action was the
final step in the Company's efforts to consolidate its entities into a
single bank charter.
o During the fourth quarter, the Company incurred approximately $300,000
in nonrecurring expenses. A major contributor to the activity were
expenses incurred from the write-down of one of the Company's sales and
service center buildings in association with its anticipated closing.
The impact to earnings, net of taxes, was approximately $0.05 per
diluted share.
o Noninterest expense experienced a $930,000 decrease or 12.82% during
the fourth quarter of 2004 as compared to the same period in 2003 and
fell $1,626,000 to $27.0 million for the year ending December 31, 2004
as compared to the year ending December 31, 2003.
o The net interest margin increased to 3.33% during the fourth quarter of
2004 as compared with 3.29% for the same period in 2003.
o Net charge-offs for the fourth quarter of 2004 were 0.13% of average
loans, as compared to 0.44% for fourth quarter of 2003.
o The reserve coverage ratio (allowance to nonperforming loans) was
reported at 231.60% as of December 31, 2004 as compared to 106.30% as
of December 31, 2003.
5.
Net Interest Margin
The net interest margin increased to 3.33% during the fourth quarter of 2004 as
compared with 3.29% for the same period in 2003 and decreased from 3.38% in the
third quarter of 2004. The majority of the quarter-over-quarter improvement in
the net interest margin was related to an increase in yields earned on average
loans through competitive pricing on new and refinanced loans, an overall
improvement in asset quality with respect to nonperforming loans and net
charge-offs, and the divesture of the Company's western Illinois sales and
service centers which historically had lower yields than other markets.
Tax-equivalent net interest income was reported at $4.8 million for the fourth
quarter of 2004 as compared to $6.0 million for the fourth quarter 2003.
Noninterest Income and Expense
Noninterest income, excluding securities gains, decreased $800,000 or 28.8%
during the fourth quarter of 2004 as compared to the same period in 2003. For
the year ending December 31, 2004, noninterest income increased $209,000 to
$13.9 million as compared to the same period in 2003. The increase for the year
ending December 31, 2004 was primarily driven by the $3.4 million gain in
connection with the sale of the Company's western Illinois sales and service
centers. Conversely, a loss in incremental income from those offices during the
fourth quarter attributed to a decrease in noninterest income on a
quarter-over-quarter basis.
Noninterest expense experienced a $930,000 decrease or 12.82% during the fourth
quarter of 2004 as compared to the same period in 2003 and fell $1,626,000 to
$27.0 million for the period ending December 31, 2004 as compared to the same
period in 2003. The decrease was due, in large part, to the sale of the
Company's western Illinois sales and service centers.
Asset Quality
During 2004, the loan portfolio decreased to $419.3 million as of December 31,
2004, as compared to $476.8 million as of December 31, 2003. The decrease was
due, in large part, to the sale of the Company's western Illinois sales and
service centers which resulted in the sale of approximately $40.4 million in
loans. The remaining decrease resulted from a continued softening of overall
loan demand and normal paydowns. The level of nonperforming loans to end of
period loans totaled 1.00% as of December 31, 2004 compared to 1.77% as of
December 31, 2003. Net charge-offs for the fourth quarter of 2004 were 0.13% of
average loans, as compared to 0.44% for the fourth quarter of 2003. The reserve
coverage ratio (allowance to nonperforming loans) was reported at 231.60% as of
December 31, 2004 as compared to 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.
UnionBancorp common stock is listed on The Nasdaq National Market Securities
Stock Market under the symbol "UBCD." Further information about UnionBancorp,
Inc. can be found at the Company's website at http://www.ubcd.com.
6.
Safe Harbor Statement
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 1993, 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.
Contact: Dewey R. Yaeger Kurt R. Stevenson
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer
UnionBancorp, Inc. UnionBancorp, Inc.
dewey.yaeger@ubcd.com kurt.stevenson@ubcd.com
Accompanying Financial Statements and Tables
Accompanying this press release is the following unaudited financial
information:
o Unaudited Quarterly and Year to Date Highlights
o Unaudited Consolidated Balance Sheets
o Unaudited Consolidated Statements of Income/(Loss)
o Unaudited Selected Quarterly Consolidated Financial Data
7.
UnionBancorp, Inc. and Subsidiaries
Unaudited Quarterly and Year to Date Highlights (Dollars In Thousands, Except
Share Data)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------- -------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Operating Highlights
Net income (loss) $ 473 $ (206) $ 4,803 $ 2,130
Return on average total assets 0.28% (0.10)% 0.65% 0.28%
Return on average stockholders equity 2.78% (1.10)% 7.06% 3.16%
Net interest margin 3.33% 3.29% 3.34% 3.65%
Efficiency ratio 88.32% 85.04% 82.90% 72.25%
Per Share Data
Diluted earnings (loss) per common share $ 0.10 $ (0.06) $ 1.12 $ 0.48
Book value per common share $ 17.30 $ 16.77 $ 17.30 $ 16.77
Diluted weighted average common
shares outstanding 4,109,357 4,098,841 4,109,999 4,069,220
Period end common shares outstanding 4,032,144 4,026,850 4,032,144 4,026,850
Stock Performance Data
Market Price:
Quarter End $ 21.25 $ 21.84 $ 21.25 $ 21.84
High $ 21.94 $ 24.04 $ 23.00 $ 24.04
Low $ 20.29 $ 20.00 19.20 $ 15.15
Period end price to book value 1.23 1.30 1.23 1.30
8.
UnionBancorp, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
December 31, 2004 and December 31, 2003 (Dollars in Thousands)
- --------------------------------------------------------------------------------
December 31, December 31,
2004 2003
------------ ------------
ASSETS
Cash and cash equivalents $ 22,802 $ 22,198
Securities available-for-sale 191,661 252,248
Loans 419,275 476,812
Allowance for loan losses (9,732) (9,011)
------------ ------------
Net loans 409,543 467,801
Cash surrender value of life insurance 14,953 14,379
Mortgage servicing rights 2,772 2,775
Premises and equipment, net 13,463 16,576
Goodwill 6,963 7,642
Intangible assets, net 703 1,232
Other real estate 420 227
Other assets 6,266 8,344
------------ ------------
Total assets $ 669,546 $ 793,422
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 55,800 $ 89,424
Interest-bearing 456,677 548,608
------------ ------------
Total deposits 512,477 638,032
Federal funds purchased and securities sold
under agreements to repurchase 12,722 1,533
Advances from the Federal Home Loan Bank 61,900 72,450
Notes payable 6,629 7,873
Series B mandatory redeemable preferred stock 831 831
Other liabilities 4,740 4,656
------------ ------------
Total liabilities 599,299 725,375
------------ ------------
Stockholders' equity
Series A convertible preferred stock 500 500
Common stock 4,641 4,628
Surplus 22,632 22,484
Retained earnings 46,592 43,609
Accumulated other comprehensive income 1,351 2,141
Unearned compensation under stock option plans -- (2)
------------ ------------
75,716 73,360
Treasury stock, at cost (5,469) (5,313)
------------ ------------
Total stockholders' equity 70,247 68,047
------------ ------------
Total liabilities and stockholders' equity $ 669,546 $ 793,422
============ ============
9.
UnionBancorp, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income (Loss)
Three Months and Twelve Months Ended December 31, 2004 and December 31, 2003
(Dollars in Thousands, Except Per Share Data)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Interest income
Loans $ 6,543 $ 7,495 $ 27,718 $ 32,693
Securities
Taxable 1,231 1,731 5,925 6,805
Exempt from federal income taxes 266 361 1,221 1,533
Federal funds sold and other 16 4 48 55
---------- ---------- ---------- ----------
Total interest income 8,056 9,591 34,912 41,086
Interest expense
Deposits 2,275 2,910 9,909 12,453
Federal funds purchased and securities sold
under agreements to repurchase 31 26 98 122
Advances from the Federal Home Loan Bank 697 769 2,887 2,997
Series B mandatory redeemable preferred stock 13 16 50 64
Notes payable 73 78 306 325
---------- ---------- ---------- ----------
Total interest expense 3,089 3,799 13,250 15,961
---------- ---------- ---------- ----------
Net interest income 4,967 5,792 21,662 25,125
Provision for loan losses 300 2,011 1,750 8,236
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 4,667 3,781 19,912 16,889
Noninterest income
Service charges 610 750 2,866 3,090
Merchant fee income -- 32 56 560
Trust income 197 198 740 701
Mortgage banking income 355 625 2,020 3,947
Insurance commissions and fees 480 503 2,234 2,318
Bank owned life insurance (BOLI) 99 151 573 681
Securities gains, net (9) 1 123 281
Gain on sale of assets (5) -- 4,089 --
Other income 237 514 1,227 2,141
---------- ---------- ---------- ----------
1,964 2,774 13,928 13,719
Noninterest expenses
Salaries and employee benefits 3,296 3,955 15,410 16,020
Occupancy expense, net 737 692 2,461 2,138
Furniture and equipment expense 522 559 2,215 2,094
Marketing 153 210 615 709
Supplies and printing 114 182 435 541
Telephone 121 137 546 874
Other real estate owned expense -- 10 8 178
Amortization of intangible assets 56 31 337 247
Other expenses 1,331 1,484 4,954 5,806
---------- ---------- ---------- ----------
6,330 7,260 26,981 28,607
---------- ---------- ---------- ----------
Income (loss) before income taxes 301 (705) 6,859 2,001
Income taxes (172) (499) 2,056 (129)
---------- ---------- ---------- ----------
Net income (loss) 473 (206) 4,803 2,130
Preferred stock dividends 52 48 207 193
---------- ---------- ---------- ----------
Net income (loss) for common stockholders $ 421 $ (254) $ 4,596 $ 1,937
========== ========== ========== ==========
Basic earnings (loss) per common share $ 0.10 $ (0.07) $ 1.14 $ 0.48
========== ========== ========== ==========
Diluted earnings (loss) per common share $ 0.10 $ (0.06) $ 1.12 $ 0.48
========== ========== ========== ==========
10.
UnionBancorp, Inc.
Unaudited Selected Quarterly Consolidated Financial Data (Dollars in Thousands,
Except Share Data)
- --------------------------------------------------------------------------------
Quarters Ended
-------------------------------------------------------------------------------
12/31/04 09/30/04 06/30/04 03/31/04 12/31/03
----------- ----------- ----------- ----------- -----------
(Dollars in Thousands, Except Per Share Data)
Statement of Income Data
Interest income $ 8,056 $ 8,505 $ 8,843 $ 9,508 $ 9,591
Interest expense (3,089) (3,142) (3,312) (3,707) (3,847)
----------- ----------- ----------- ----------- -----------
Net interest income 4,967 5,363 5,531 5,801 5,744
Provision for loan losses 300 200 500 750 2,011
----------- ----------- ----------- ----------- -----------
Net interest income after provision for
loan losses 4,667 5,163 5,031 5,051 3,733
Noninterest income 1,964 5,850 3,190 2,924 2,774
Noninterest expense 6,330 6,643 7,029 6,979 7,260
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes 301 4,370 1,192 996 (753
Provision (benefit) for income taxes (172) 1,753 279 196 (499)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 473 $ 2,617 $ 913 $ 800 $ (254)
=========== =========== =========== =========== ===========
Net income (loss) on common stock $ 421 $ 2,565 $ 861 $ 748 $ (254)
=========== =========== =========== =========== ===========
Per Share Data
Basic earnings (loss) per common share $ 0.10 $ 0.64 $ 0.21 $ 0.19 $ (0.07)
Diluted earnings (loss) per common share 0.10 0.62 0.21 0.18 (0.06)
Cash dividends on common stock 0.10 0.10 0.10 0.10 0.09
Dividend payout ratio for common stock 110.21% 15.71% 46.92% 53.96% --
Book value per common share $ 17.30 $ 17.38 $ 16.47 $ 16.88 $ 16.77
Basic weighted average common shares
outstanding 4,031,552 4,034,365 4,037,347 4,031,181 4,010,111
Diluted weighted average common shares
outstanding 4,109,357 4,105,872 4,115,166 4,114,385 4,098,841
Period-end common shares outstanding 4,032,144 4,030,800 4,038,800 4,035,900 4,026,850
Balance Sheet Data
Securities $ 191,661 $ 190,385 $ 211,733 $ 250,282 $ 252,248
Loans 419,275 413,941 453,676 466,591 476,812
Allowance for loan losses 9,732 9,962 10,224 9,882 9,011
Assets 669,546 667,818 732,019 776,399 793,422
Deposits 512,477 511,568 583,612 614,975 638,032
Stockholders' equity 70,247 70,561 67,032 68,619 68,047
Earnings Performance Data
Return on average total assets 0.28% 1.46% 0.49% 0.41% (0.10)%
Return on average stockholders' equity 2.78 15.40 5.44 4.67 (1.10)
Net interest margin ratio 3.33 3.38 3.31 3.34 3.29
Efficiency ratio (1) 88.32 81.85 82.45 80.33 85.04
Asset Quality Ratios
Nonperforming assets to total end of period
assets 0.69% 0.69% 0.81% 0.95% 1.10%
Nonperforming loans to total end of period loans 1.01 1.09 1.28 1.53 1.78
Net loan charge-offs to total average loans 0.13 0.10 0.03 (0.03) 0.44
Allowance for loan losses to total end of
period loans 2.32 2.41 2.25 2.12 1.89
Allowance for loan losses to nonperforming loans 231.60 220.20 176.43 138.13 106.30
Capital Ratios
Average equity to average assets 9.98% 9.47% 8.92% 8.72% 8.63%
Total capital to risk adjusted assets 14.30 14.36 12.73 12.32 12.52
Tier 1 leverage ratio 9.54 9.55 8.38 7.83 7.60
- ---------------------------------------
(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.
11.