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Union Bank Releases Second Quarter Earnings Today

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Union Bank (OTCQX:UBNC) reports earnings results for the quarter and
six months ended June 30, 2018.

Union Bank (the "Bank") is pleased to report earnings results for the
quarter and six months ended June 30, 2018. Unaudited net income for the
six months ended June 30, 2018 was $3,261,000 or $.56 per basic share,
compared to $1,520,000, or $.44 per basic share in the prior year. This
represents a 115% increase in earnings for the comparable six-month
periods. Return on average assets ("ROAA") and return on average equity
("ROAE") was .92% and 8.87% for the six months ended June 30, 2018.

Unaudited net income for the second quarter of 2018 was $1,760,000, or
$.30 per basic share, compared to $846,000, or $.24 per basic share for
the quarter ended June 30, 2017. Return on average assets and return on
average equity was .99% and 9.53%, respectively, for the quarter.

The acquisition of Union Bank & Trust, and its holding company, Union
Banc Corp., during the third quarter of 2017, resulted in significant
increases in the Bank's total assets, loans and deposits. Total assets
as of June 30, 2018 were $716.0 million, compared to total assets of
$702.5 million as of December 31, 2017. Total loans, net of reserves,
were $503.2 million and deposits were $599.7 million, as of June 30,
2018 compared to net loan balances of $505.0 million, and deposits of
$593.7 million as of December 31, 2017. As of June 30, 2018, shares of
stock issued and outstanding totaled 5,833,838. The Bank completed the
private placement of $6.0 million in fixed-to-floating rate subordinated
debt during the second quarter. These notes have a 6% fixed rate coupon
for the period beginning May 15, 2018 through May 15, 2023, after which
the interest rate will reset quarterly to the Three-Month LIBOR Rate
plus 3.50% until the notes mature in 2028. The subordinated debt is
considered regulatory capital and will be used to support certain loan
growth and general corporate purposes.

Rob Jones, President and Chief Executive Officer stated, "I am pleased
to report that since the acquisition of Union Banc Corp. one year ago,
earnings have stabilized over the first two quarters of 2018 and are in
line with our pre-merger forecast. Except for loans outstanding, all
measure of deposits, checking accounts, non-interest income, loan and
mortgage fees have grown during the first and second quarters, including
six straight months of DDA account growth." Jones continued, "While we
know that economic conditions have been very favorable over the past two
quarters, loan growth outside of commercial real estate related loan
categories has been difficult to achieve for many banks including our
own. We continue to focus on asset quality and will maintain lending
discipline over growth as we work through rising interest rates, a
flattening yield curve and the realities of a lengthening economic
cycle."

Union Bank is headquartered in Greenville, North Carolina and operates
15 branches located in 11 counties throughout Eastern and Central North
Carolina. Union Bank stock is traded on the OTCQX under the symbol UBNC.

This press release includes certain forward-looking statements in
reliance on the "safe-harbor" provisions of The Private Securities
Litigation Reform Act of 1995. Any such forward-looking statements are
subject to a number of risks and uncertainties. Actual results may
differ materially from those anticipated in any such forward-looking
statements. The Bank undertakes no obligation to update or revise any
such forward-looking statements. This press release contains financial
information determined by methods other than in accordance with GAAP.
The Bank's management uses these non-GAAP financial measures in their
analysis of the Bank's performance. These measures typically adjust GAAP
performance measures to exclude the effects of transactions that are
infrequent in nature. Management believes presentations of these
non-GAAP financial measures provide useful supplemental information that
is essential to a proper understanding of the operating results of the
Bank's core businesses.

       
Union Bank
Summary of Operations (un-audited)
(000's omitted except per share data)
 

Three Months
Ended
June 30, 2018

Three Months
Ended
June 30, 2017

Six Months
Ended
June 30, 2018

Six Months
Ended
June 30, 2017

 
 
Interest Income $ 7,785 $ 3,481 $ 15,141 $ 6,758
 
Interest Expense 1,114 355 2,031 667
 
Net interest income 6,671 3,126 13,110 6,091
 
Provision for loan losses 305 0 530 0
 

Net interest income after Provision for losses

6,366 3,126 12,580 6,091
 
Non-interest income 911 553 1,700 987
 
Non-interest expense 5,042 2,371 10,146 4,794
 
Income before taxes 2,235 1,308 4,134 2,284
 
 
 
Income taxes 475 462 873 764
 
 
Net Income $ 1,760 $ 846 $ 3,261 $ 1,520

Net Income available per basic common share

$ 0.30 $ 0.24 $ 0.56 $ 0.44
 
     
Union Bank
Balance Sheets
(000's omitted)
 
June 30, 2018 December 31, 2017* June 30, 2017
(un-audited) (un-audited)
 
Assets
 
Cash and due from banks $ 23,861 $ 21,427 $ 9,128
Overnight investments 16,228 7,177 10,356
Investments securities AFS 115,827 113,242 84,347
 
Loans - gross 513,900 514,078 262,201
Net Fair Value Marks (6,778) (5,536) 0
Less Allowance for loan losses (3,939) (3,501) (3,058)
Net Loans 503,183 505,041 259,143
Premises and Equipment, net 17,145 17,034 4,607
Other Real Estate Owned 478 627 0
Core Deposit Intangibles 2,364 2,817 0
Goodwill 13,466 10,988 0
Bank-Owned Life Insurance 16,224 16,004 9,165
Other Assets 7,241 8,171 4,523
Total Assets $ 716,017 $ 702,528 $ 381,269
 
Liabilities & Stockholders' Equity
 
Liabilities
Deposits $ 599,658 $ 593,726 $ 313,899
FHLB Advances 35,000 34,000 28,000
Subordinated Debt 6,000 0 0
Other liabilities 931 1,633 992
Total liabilities 641,589 629,359 342,891
 
Stockholders' Equity
Common stock, no par value 69,142 69,027 31,578
Retained earnings 7,506 4,643 6,782

Accumulated other comprehensive Income/(Loss)

(2,220) (501) 18
Total stockholders' equity $ 74,428 $ 73,169 $ 38,378
 

Total liabilities and stockholders' equity

$ 716,017 $ 702,528 $ 381,269
 
*Derived from audited financial statements

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