Exhibit 99.1
Union Financial Bancshares, Inc. Announces Second Quarter Earnings
UNION, S.C.--(BUSINESS WIRE)--July 20, 2004--Union Financial
Bancshares, Inc. (NASDAQ: UFBS) announced earnings of $548,000 for the
quarter ended June 30, 2004 compared to earnings of $484,000 for the
second quarter of 2003, a 13.22% increase. Earnings per share were
$.27 per share (dilutive) for the second quarter of 2004, versus $.23
per share (dilutive) for the second quarter of 2003.
Net interest income before the loan loss provision for the current
quarter increased $432,000, or 21.77%, to $2,416,000 compared to
$1,984,000 for the same period in the previous year. The increase was
due primarily to loan growth over the previous year along with an
increase in yield on investments. Provision for loan losses for the
current quarter totaled $250,000 compared to $190,000 for the same
period in the previous year. The increase in provision for loan losses
from the previous year quarter was primarily due to the net growth in
the loan portfolio of 5.38% that was driven by a 28.27% increase in
the consumer/commercial loan sector. Non interest income for the
current quarter decreased $82,000, or 12.95%, to $551,000 compared to
$633,000 for the same period in the previous year. The decrease was
due to $220,000 from the gain on sale of securities in the previous
year compared to $0 for the current year. This decrease was offset by
an increase in bank and loan fees of $132,000, or 31.96%, to $545,000
compared to $413,000 for the same period in the previous year as a
result of the growth in loans and deposits from the new Rock Hill
office that was opened in July, 2003. Non interest expense for the
current quarter increased $185,000 or 10.30% to $1,981,000 compared to
$1,796,000 for the same period in the previous year. The increase over
the previous year was due to additional operating expenses for the new
Rock Hill office.
At June 30, 2004, assets totaled $353.1 million, an 6.79% increase
from $330.6 million at December 31, 2003. Net loans receivable
increased $8,247,000, or 5.38%, during the period to $161.5 million at
June 30, 2004, compared to $153.3 million at December 31, 2003.
Investment and mortgage-backed securities at June 30, 2004, increased
28.78% to $159.4 million from $123.8 million at December 31, 2003. The
increase in securities was funded with cash on hand and an increase in
borrowings of $18.7 million. Deposits at June 30, 2004, increased
1.68% to $226.9 million from $223.1 million at December 31, 2003.
Commenting on the second quarter results, Dwight V. Neese,
President and Chief Executive Officer, stated: "We are pleased to
report our earnings performance improvement over the comparable period
in the previous year. Not only did our second quarter results show an
earnings increase of 13% over the previous year quarter, our earnings
per share also rose 17%. We continued to have positive growth on our
balance sheet, marked by an increase in the consumer and commercial
loan portfolios of 28% over the same period last year. Overall, we are
pleased with the results of the quarter."
The Company announced the declaration of a quarterly dividend of
$0.10 per share on its outstanding common stock, payable August 16,
2004 to shareholders of record on July 30, 2004.
Union Financial Bancshares is the holding company for Provident
Community Bank, N.A., which operates seven banking locations in the
upstate of South Carolina. At June 30, 2004, Union Financial had
$353.1 million in total assets and total stockholders' equity of $23.6
million.
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Union Financial Bancshares, Inc.
Second Quarter - Year Ending December 31, 2004
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Financial Highlights
(Unaudited) ($ in thousands, except share data)
Quarter Year
Ended Ended
Balance Sheet 6/30/04 12/31/03 $Change %Change
- ---------------------- -------------------------------------
Total assets $353,124 $330,665 $22,459 6.79%
Cash and interest-bearing
deposits 7,285 28,702 -21,417 -74.62%
Investments & mortgage-backed
securities 159,419 123,789 35,630 28.78%
Loans receivable (net) 161,548 153,301 8,247 5.38%
Goodwill and intangible
assets 4,530 4,848 -318 -6.56%
Deposits 226,871 223,131 3,740 1.68%
Advances and other borrowings 92,250 73,500 18,750 25.51%
Trust preferred corporate
obligations 8,000 8,000 0 0.00%
Stockholders' equity 23,614 25,508 -1,894 -7.43%
Outstanding shares 1,948,109 1,966,204 -18,095 -0.92%
Book value per share $12.12 $12.97 -$0.85 -6.57%
Tangible book value per share $9.80 $10.51 -$0.71 -6.77%
Three Months Ended Six Months Ended
June 30, June 30,
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Income Statement 2004 2003 2004 2003
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Net interest income $2,416 $1,984 $4,676 $4,112
Provision for loan losses 250 190 385 425
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Net interest income after
loan loss provision 2,166 1,794 4,291 3,687
Noninterest income 551 633 1,097 1,192
Noninterest expense 1,981 1,796 3,980 3,585
Income tax 188 147 351 312
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Net income $548 $484 $1,057 $982
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Earnings per share: basic $0.28 $0.25 $0.54 $0.50
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Earnings per share: diluted $0.27 $0.23 $0.51 $0.47
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Six Months Ended
June 30,
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Key Financial Ratios 2004 2003
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Return on average assets 0.60% 0.58%
Return on average
stockholders' equity 8.08% 7.08%
Operating expense to average
assets 2.26% 2.12%
Capital to average assets 9.25% 10.56%
CONTACT: Union Financial Bancshares, Inc.
Dwight V. Neese, 864-429-1863