Exhibit 99.1
Union Financial Bancshares, Inc. Reports 30% Increase in First Quarter Earnings
UNION, S.C--(BUSINESS WIRE)--April 19, 2006--Union Financial
Bancshares, Inc. (NASDAQ: UFBS) today reported earnings of $699,000
for the three months ended March 31, 2006 compared to earnings of
$539,000 for the first quarter of 2005, a 29.7% increase. Earnings per
share were $0.36 per share (diluted) for the first quarter of 2006,
versus $0.27 per share (diluted) for the first quarter of 2005.
Net interest income before the loan loss provision for the first
quarter increased $204,000, or 8.3%, to $2.7 million compared to $2.5
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 the yield on loans that resulted from a higher
concentration of consumer and commercial loans. The increase in
interest income was partially offset by higher deposit costs as a
result of an increase in balances and rising rates. The provision for
loan losses for the first quarter totaled $175,000 compared to
$208,000 for the same period in the previous year. The decrease in
provision for loan losses was due to a $1.1 million reduction in
classified loans to $3.4 million compared to $4.5 million for the same
period in the previous year., offset by a 14.4% increase in net loans
over the previous year and a higher concentration of commercial loans
in the portfolio which carry a higher risk of default.
Non-interest income for the first quarter increased $109,000, or
18.9%, to $686,000 compared to $577,000 for the same period in the
previous year. The increase was due to higher fees generated from
third party investment brokerage and financing receivables programs
due to an increase in product volumes, along with higher fees for
financial services that resulted from an increase in transaction
accounts. Non-interest expense for the first quarter increased
$84,000, or 4.0%, to $2.2 million compared to $2.1 million for the
same period in the previous year. The increase was due primarily to
higher compensation and benefits costs for normal merit salary
increases and the opening of a new banking center location in
Simpsonville, South Carolina.
At March 31, 2006, assets totaled $368.1 million, a 0.8% decrease
from $371.0 million at December 31, 2005. Net loans receivable
increased $9.1 million, or 4.7%, during the period to $201.7 million
at March 31, 2006, compared to $192.6 million at December 31, 2005.
The net growth in loans was driven by a 9.3% increase in the
consumer/commercial loan portfolio as the Company continues to focus
on these lending segments with specialized loan officers and products.
Growth in lower cost transaction accounts resulted in deposits
increasing 6.1% to $254.2 million at March 31, 2006 compared to $239.6
million at December 31, 2005. Reductions in lower yielding investments
and mortgage-backed securities of $11 million and the increase in
deposits funded the increase in loans and a reduction in borrowings of
$16.7 million.
Commenting on the results, Dwight V. Neese, President and Chief
Executive Officer, stated: "We are delighted to be able to report
another quarter of very positive results. Loan growth has been strong
and asset quality trends are improving. We have continued to grow
deposits even while focusing on transactional accounts. These positive
trends are all reflected in our first quarter results of a 30%
increase in net income over the previous year period with earnings per
share increasing 33%. Overall, we are very pleased with the results of
the first quarter."
The Company is moving forward in the construction of a third Rock
Hill banking center location in Manchester Village that is expected to
open in the third quarter of 2006. This follows the recent openings of
a satellite office in Westminster Towers in Rock Hill and a
full-service banking center in Simpsonville.
The Company also announced a 10% increase in the quarterly
dividend from $0.10 to $0.11 per share payable on May 15, 2006 to
shareholders of record on April 28, 2006. Union Financial Bancshares
has a dividend reinvestment plan and information about the plan can be
obtained from Registrar and Transfer Company at 800-368-5948.
Union Financial Bancshares is the holding company for Provident
Community Bank, N.A., which operates nine banking locations in the
upstate of South Carolina. At March 31, 2006, Union Financial had $368
million in total assets and total stockholders= equity of $24.8
million. Please visit our website at www.providentonline.com or
contact Wanda J. Wells, SVP/Shareholder Relations Officer at
wwells@providentonline.com or Richard H. Flake, EVP/CFO at
rflake@providentonline.com.
Certain matters set forth in this news release may contain
forward-looking statements that are provided to assist in the
understanding of anticipated future financial performance. However,
such performance involves risks and uncertainties that may cause
actual results to differ materially from those in such statements. For
a discussion of certain factors that may cause such forward-looking
statements to differ materially from the Corporation's actual results,
see the Corporation's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 2005, June 30, 2005 and March 31, 2005 and the
Corporation's Annual Report in Form 10-K for the year ended December
31, 2005.
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Union Financial Bancshares, Inc.
First Quarter - Year Ending December 31, 2006
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Financial Highlights
(Unaudited) ($ in thousands, except share data)
At At
Balance Sheet 3/31/06 12/31/05 $ Change % Change
- -------------------- ----------- ---------- -----------------
Total assets $ 368,175 $ 371,042 -$2,867 -0.77%
Cash and due from banks 8,004 8,380 -376 -4.49%
Investments & mortgage-
backed securities 135,303 146,283 -10,980 -7.51%
Loans receivable (net) 201,705 192,577 9,128 4.74%
Goodwill and intangible
assets 3,417 3,576 -159 -4.45%
Deposits 254,218 239,603 14,615 6.10%
Advances and other
borrowings 79,000 95,715 -16,715 -17.46%
Stockholders' equity 24,832 25,333 -501 -1.98%
Outstanding shares 1,897,259 1,905,897 -8,638 -0.45%
Book value per share $ 13.09 $ 13.29 -$0.20 -1.53%
Three Months Ended
March 31,
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Income Statement 2006 2005 $ Change % Change
- ---------------------------- ----------- ---------- -----------------
Net interest income $ 2,654 $ 2,450 $ 204 8.33%
Provision for loan losses 175 208 -33 -15.87%
----------- ---------- -----------------
Net interest income after
loan loss provision 2,479 2,242 237 10.57%
Non-interest income 686 577 109 18.89%
Non-interest expense 2,186 2,102 84 4.00%
Income tax 280 178 102 57.30%
----------- ---------- -----------------
Net income $ 699 $ 539 $ 160 29.68%
=========== ========== =================
Earnings per share: basic $ 0.37 $ 0.28 $ 0.09 32.14%
=========== ========== =================
Earnings per share:
diluted $ 0.36 $ 0.27 $ 0.09 33.33%
=========== ========== =================
Weighted Average Number
of Common Shares
Outstanding
Basic 1,896,210 1,928,946
Diluted 1,917,866 1,992,002
Three Months Ended
March 31,
-----------------------
Key Financial Ratios 2006 2005
-------------------- -----------------------
Return on average assets 0.75% 0.61%
Return on average
stockholders' equity 11.10% 8.43%
Operating expense to average
assets 2.19% 2.19%
Capital to average assets 8.86% 9.16%
CONTACT: Union Financial Bancshares, Inc.
Dwight V. Neese, 864-429-1863