Exhibit 99.1
Union Financial Bancshares, Inc. Announces Third Quarter Earnings
UNION, S.C.--(BUSINESS WIRE)--Oct. 14, 2004--Union Financial
Bancshares, Inc. (NASDAQ: UFBS) today reported earnings for the three
and nine months ending September 30, 2004. The company also declared a
quarterly cash dividend of $0.10 per share payable on November 17,
2004 to shareholders of record on October 29, 2004.
Net income for the three months ended September 30, 2004 was
$508,000 compared to net income of $426,000 for the third quarter of
2003, a 19.25% increase. Earnings per share were $0.25 per share
(dilutive) for the third quarter of 2004, versus $0.21 per share
(dilutive) for the third quarter of 2003.
Income for the nine months ended September 30, 2004 was $1,565,000
compared to net income of $1,407,000 for the third quarter of 2003, an
11.23% increase. Earnings per share were $0.76 per share (dilutive)
for the third quarter of 2004, versus $0.68 per share (dilutive) for
the third quarter of 2003.
Net interest income before the loan loss provision for the third
quarter increased $403,000, or 19.51%, to $2,469,000 compared to
$2,066,000 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 $390,000 compared to $120,000 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 9.62% that was driven by a 26.46% increase in
the consumer/commercial loan sector. Non interest income for the third
quarter decreased $56,000, or 9.67%, to $523,000 compared to $579,000
for the same period in the previous year. The decrease was due to
$189,000 from the gain on sale of securities in the previous year
compared to a loss on sale of securities of $8,000 for the current
year. This decrease was offset by an increase in bank and loan fees of
$141,000, or 36.15%, to $531,000 compared to $390,000 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 third quarter decreased $63,000, or
3.15%, to $1,935,000 compared to $1,998,000 for the same period in the
previous year. The decrease from the previous year was due to an
overall reduction in operating expenses to improve the efficiency
level of the Bank.
At September 30, 2004, assets totaled $350.6 million, a 6.04%
increase from $330.6 million at December 31, 2003. Net loans
receivable increased $14,325,000, or 9.34%, during the period to
$167.6 million at September 30, 2004, compared to $153.3 million at
December 31, 2003. Investment and mortgage-backed securities at
September 30, 2004, increased 25.15% to $154.9 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 $16.5 million.
Deposits at September 30, 2004, increased 0.60% to $224.5 million from
$223.1 million at December 31, 2003.
Commenting on the third quarter results, Dwight V. Neese,
President and Chief Executive Officer, stated: "We are delighted to
report improved earnings over the comparable period in the previous
year. We continue to have positive growth on our balance sheet, marked
by an increase in the consumer and commercial loan portfolios of 26%.
The improvement in earnings over the previous year was driven by solid
revenue growth. Our core non-interest income, excluding gain on sale
of loans and investments, increased at a very healthy rate of 11%,
while net interest income increased 19%. Overall, we are very pleased
with the results of the quarter."
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 September 30, 2004, Union Financial had
$350.6 million in total assets and total stockholders' equity of $26.1
million.
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Union Financial Bancshares, Inc.
Third Quarter - Year Ending December 31, 2004
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Financial Highlights
(Unaudited) ($ in thousands, except share data)
Quarter Year
Ended Ended
Balance Sheet 9/30/04 12/31/03 $Change % Change
- ---------------------- -------------------------------------
Total assets $350,641 $330,665 $19,976 6.04%
Cash and interest-bearing
deposits 4,958 28,702 (23,744) -82.73%
Investments & mortgage-backed
securities 154,921 123,789 31,132 25.15%
Loans receivable (net) 167,626 153,301 14,325 9.34%
Goodwill and intangible
assets 4,371 4,848 (477) -9.84%
Deposits 224,459 223,131 1,328 0.60%
Advances and other borrowings 90,000 73,500 16,500 22.45%
Trust preferred corporate
obligations 8,000 8,000 0 0.00%
Stockholders' equity 26,051 25,507 544 2.13%
Outstanding shares 1,967,261 1,969,770 (2,509) -0.13%
Book value per share $13.24 $12.95 $0.29 2.26%
Tangible book value per share $11.02 $10.49 $0.53 5.08%
Three Months Nine Months
Ended Ended
September 30, September 30,
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Income Statement 2004 2003 2004 2003
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Net interest income $2,469 $2,066 $7,145 $6,178
Provision for loan losses 390 120 775 545
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Net interest income after
loan loss provision 2,079 1,946 6,370 5,633
Noninterest income 523 579 1,620 1,771
Noninterest expense 1,935 1,998 5,915 5,584
Income tax 159 101 510 413
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Net income $508 $426 $1,565 $1,407
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Earnings per share: basic $0.26 $0.22 $0.80 $0.72
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Earnings per share: diluted $0.25 $0.21 $0.76 $0.68
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Nine Months Ended
September 30,
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Key Financial Ratios 2004 2003
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Return on average assets 0.59% 0.56%
Return on average stockholders' equity 8.21% 6.94%
Operating expense to average assets 2.24% 2.02%
Capital to average assets 9.69% 10.17%
CONTACT: Union Financial Bancshares, Inc.
Dwight V. Neese, 864-429-1863