Exhibit 99.1
Union Financial Bancshares, Inc. Announces First Quarter Earnings
UNION, S.C.--(BUSINESS WIRE)--April 20, 2005--Union Financial Bancshares,
Inc. (NASDAQ: UFBS) today reported earnings for the three months ended March 31,
2005 of $539,000 compared to net income of $509,000 for the first quarter of
2004, a 5.89% increase. Earnings per share were $0.27 per share (dilutive) for
the first quarter of 2005, versus $0.25 per share (dilutive) for the first
quarter of 2004.
The company also declared a quarterly cash dividend of $0.10 per share
payable on May 16, 2005 to shareholders of record on April 29, 2005.
Net interest income before the loan loss provision for the current quarter
increased $190,000, or 8.41%, to $2.5 million compared to $2.3 million for the
same period in the previous year. The increase was due primarily to higher
average loan balances over the previous year along with an increase in yield on
loans that resulted from a higher concentration of commercial lending. Provision
for loan losses for the current quarter totaled $208,000 compared to $135,000
for the same period in the previous year. The increase in provision for loan
losses as compared to the previous year was primarily due to the 13.6% increase
in net loans over the previous year that was offset by an improvement in asset
quality.
Non interest income for the current quarter decreased $50,000, or 7.97%, to
$577,000 compared to $627,000 for the same period in the previous year. The
decrease was due to lower fees generated from third party investment brokerage
and financing receivables programs due to a reduction in product volumes. Non
interest expense for the current quarter increased $22,000 or 1.06% to $2.10
million compared to $2.08 million for the same period in the previous year.
At March 31, 2005, assets totaled $354.4 million, an 0.80% increase from
$351.6 million at December 31, 2004. Net loans receivable increased $5.2
million, or 3.06%, during the period to $176.3 million at March 31, 2005,
compared to $171.1 million at December 31, 2004. Investment and mortgage-backed
securities at March 31, 2005, increased 0.14% to $143.7 million from $143.5
million at December 31, 2004. Growth in transaction accounts resulted in
deposits increasing 3.75% to $236.1 million at March 31, 2005 compared to $227.6
million at December 31, 2004. The increase in loans was funded with cash on hand
and an increase in deposits.
Commenting on the first quarter results, Dwight V. Neese, President and
Chief Executive Officer, stated: "We are delighted to be able to continue to
report very positive loan and deposit trends along with higher quarterly income
increases. Not only were we able to increase our year to year income by
approximately 6%, we continue to make significant progress in restructuring our
balance sheet to become a stronger core bank. During the last two years, we have
increased our consumer and commercial loan portfolios by 63% while decreasing
our residential loan portfolio by 31%. Clearly, we continue to make changes to
transform the way we do business."
Union Financial Bancshares is the holding company for Provident Community
Bank, which operates seven banking locations in the upstate of South Carolina.
At March 31, 2005, Union Financial had $354.4 million in total assets and total
stockholders' equity of $24.5 million.
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Union Financial Bancshares, Inc.
First Quarter - Year Ending December 31, 2005
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Financial Highlights
(Unaudited) ($ in thousands, except share data)
At At
Balance Sheet 3/31/05 12/31/04 $ Change % Change
- ---------------------- ---------- ---------- -------- ---------
Total assets $ 354,419 $ 351,598 $ 2,821 0.80%
Cash and interest-bearing
deposits 10,714 13,197 -2,483 -18.81%
Investments & mortgage-backed
securities 143,702 143,494 208 0.14%
Loans receivable (net) 176,332 171,094 5,238 3.06%
Goodwill and intangible
assets 4,053 4,212 -159 -3.77%
Deposits 236,131 227,589 8,542 3.75%
Advances and other
borrowings 83,500 87,500 -4,000 -4.57%
Stockholders' equity 24,552 26,019 -1,467 -5.64%
Outstanding shares 1,913,069 1,957,989 -44,920 -2.29%
Book value per share $ 12.83 $ 13.29 -$0.45 -3.42%
Tangible book value per
share $ 10.72 $ 11.14 -$0.42 -3.79%
Three Months Ended
March 31,
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Income Statement 2005 2004 $ Change % Change
- --------------------------- ---------------------------------------
Net interest income $ 2,450 $ 2,260 $ 190 8.41%
Provision for loan losses 208 135 73 54.07%
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Net interest income after
loan loss provision 2,242 2,125 117 5.51%
Noninterest income 577 627 -50 -7.97%
Noninterest expense 2,102 2,080 22 1.06%
Income tax 178 163 15 9.20%
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Net income $ 539 $ 509 $ 30 5.89%
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Earnings per share: basic $ 0.28 $ 0.26 $ 0.02 7.69%
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Earnings per share: diluted $ 0.27 $ 0.25 $ 0.02 8.00%
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Three Months Ended
March 31,
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Key Financial Ratios 2005 2004
-------------------- -------- --------
Return on average assets 0.61% 0.59%
Return on average stockholders' equity 8.43% 7.88%
Operating expense to average assets 2.19% 2.32%
Capital to average assets 9.16% 9.94%
CONTACT: Union Financial Bancshares, Inc.
Dwight V. Neese, 864-429-1863