Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE
UNIONBANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
OTTAWA, IL, April 22, 2005 - 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:
o 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.
o 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.
o The Company announced plans to close its Tiskilwa sales and service center
during the second quarter of 2005.
o 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.
o 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.
o 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.
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
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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
o 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
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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)
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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
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Total assets $ 661,424 $ 669,546
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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
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Total liabilities 591,014 599,299
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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 - -
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76,122 75,716
Treasury stock, at cost (5,712) (5,469)
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Total stockholders' equity 70,410 70,247
----------- -----------
Total liabilities and stockholders' equity $ 661,424 $ 669,546
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UnionBancorp, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
Three Months Ended March 31, 2005 and 2004
(Dollars in Thousands, Except Per Share Data)
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Three Months Ended
March 31,
-------------------------
2005 2004
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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
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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
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Total interest expense 3,057 3,707
----------- -----------
Net interest income 5,085 5,801
Provision for loan losses 100 750
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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
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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
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5,546 6,979
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Income before income taxes 1,289 996
Income taxes 325 196
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Net income 964 800
Preferred stock dividends 52 52
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Net income for common stockholders $ 912 $ 748
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Basic earnings per share $ 0.23 $ 0.19
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Diluted earnings per common share $ 0.22 $ 0.18
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UnionBancorp, Inc.
Unaudited Selected Quarterly Consolidated Financial Data
(Dollars in Thousands, Except Share Data)
- --------------------------------------------------------------------------------
Quarters Ended
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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
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(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.