Executive Summary

Q4 2024 EPS of $0.67 and net income of $3.00M were essentially flat YoY (Q4 2023: $0.68 and $3.05M) as higher net interest income and lower taxes were offset by higher credit loss expense and operating costs .
Sequentially, earnings rebounded from Q3’s $0.29 EPS/$1.3M net income as the one-time $1.3M securities loss in Q3 did not recur and core banking revenues/expenses normalized .
Management highlighted “higher for longer” rates and a positively steepening curve as constructive for net interest margin, while cautioning that funding costs remain a headwind in 2025; strategy remains to originate appropriately priced loans and pursue profitability strategies .
Balance sheet trends were constructive: robust loan growth to $1.16B (+12.6% YoY) and elimination of purchased brokered deposits by year-end; FHLB advances rose to $259.7M to fund growth .
Dividend maintained at $0.36 per share for the quarter (payable Feb 6, 2025), supporting income profile while the balance sheet repositioning executed in Q3 rolls off .

What Went Well and What Went Wrong

What Went Well
- Loan growth remained strong: loans reached $1.16B (+$130.0M, +12.6% YoY), with healthy asset quality and minimal past dues; management emphasized robust demand through 2024 .
- Mix improvement in deposits: brokered deposits fell to zero at Dec 31, 2024 (vs. $153.0M a year ago), while overall deposits held at $1.17B, reducing reliance on purchased funding .
- Rates backdrop turning supportive for margin: “higher for longer” with a positively steepening curve is “good for our net interest margin,” per management .
What Went Wrong
- Operating costs rose: Q4 noninterest expense was $9.61M vs. $8.63M in Q4 2023 (+11.4%), with higher salaries/wages and equipment costs; this pressured bottom-line leverage .
- Provisioning normalized higher: credit loss expense of $347K in Q4 vs. a $338K benefit in Q4 2023; for the full year, provision swung to $930K vs. a $499K benefit in 2023, reflecting growth support rather than credit deterioration .
- AOCI moved unfavorably vs. Q3: accumulated other comprehensive loss was $34.0M at Dec 31, 2024 (vs. $26.8M at Sep 30, 2024), indicating renewed rate pressure on the AFS portfolio value .

Financial Results

Income statement summary (quarterly; USD thousands, except EPS)

Metric	Q2 2024	Q3 2024	Q4 2024
Interest Income	16,600	17,200	18,590
Interest Expense	7,100	7,800	8,148
Net Interest Income	9,500	9,400	10,442
Credit Loss Expense (Benefit)	388	425	347
Noninterest Income (reported)	2,800	Note: $2,900 ex-loss; $(1,293) securities loss	2,512
Noninterest Expenses	9,800	9,400	9,614
Income Before Taxes	—	—	3,267
Income Tax (Benefit) Expense	61	(123) benefit	266
Net Income	2,000	1,300	3,001
Diluted EPS	$0.45	$0.29	$0.67

Notes: Q3 noninterest income included a $(1.293)M realized loss from securities repositioning; the company highlights $2.9M noninterest income excluding that loss .

Key balance sheet and KPI trends

KPI	Q2 2024	Q3 2024	Q4 2024
Total Assets	$1.40B	$1.52B	$1.53B
Loans (EOP)	$1.01B	$1.13B	$1.16B (incl. $5.2M HFS)
Deposits	$1.05B (incl. $65.0M purchased)	$1.17B (incl. $80.0M purchased)	$1.17B (no purchased deposits)
FHLB Advances	$212.1M	$230.7M	$259.7M
BTFP Advances	$35.0M	$10.0M	— (FY23: $10.0M)
Equity Capital	$64.0M	$72.3M	$66.5M
Book Value/Share	$14.16	$15.98	$14.65
AOCI (unrealized loss)	$35.2M	$26.8M	$34.0M
Dividend/Share	$0.36 (pay. Aug 1, 2024)	$0.36 (pay. Nov 7, 2024)	$0.36 (pay. Feb 6, 2025)

KPIs and additional context

Asset quality: minimal past dues; net recoveries of $7K (Q4) and $22K (FY24) .
Mortgage banking: $113.5M qualifying residential loans sold in 2024 vs. $75.6M in 2023; 9M 2024 sales were $76.1M vs. $54.2M in 9M 2023 .

Estimates comparison

S&P Global consensus estimates for Q4 2024 EPS and revenue were not retrievable at this time due to an S&P Global request limit; therefore estimate comparisons are unavailable (see Estimates Context) [GetEstimates error].

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Quarterly	$0.36 (Q3 2024)	$0.36 (Q4 2024; payable Feb 6, 2025)	Maintained
Formal Revenue/Margin/OpEx guidance	FY25	Not provided	Not provided	—
Management qualitative outlook	2025	—	“Higher for longer” and positively steepening curve good for NIM; funding costs remain elevated; focus on appropriately priced loan growth and profitability strategies	Qualitative update

No numeric guidance ranges were provided for revenue, margins, OpEx, OI&E, or tax rate in Q4 materials .

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was furnished with SEC filings or press materials; the company provided a press release (Jan 15) and a shareholder report (Feb 6) as the principal disclosures .

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Interest rates/NIM	Q2: Higher rates lifted asset yields; funding costs rose . Q3: Wholesale funding and deposit pricing pressure NII; securities loss recorded .	Management: “higher for longer” with positively steepening curve is good for NIM; funding costs still a challenge in 2025 .	Improving NIM backdrop; funding cost headwind persists .
Funding mix	Q2: Brokered deposits $65.0M . Q3: Brokered $80.0M .	Q4: No purchased deposits; FHLB up to $259.7M .	Lower reliance on brokered deposits; higher FHLB leverage .
Loan growth	Q2: Loans $1.01B . Q3: Loans $1.13B with broad-based demand .	Q4: Loans $1.16B (+12.6% YoY); robust demand .	Strong growth sustained .
Securities/AOCI	Q2: AOCI $(35.2)M . Q3: AOCI $(26.8)M after repositioning loss .	Q4: AOCI $(34.0)M .	AOCI volatility with rates; widened vs Q3 .
Asset quality	Q2: Minimal past dues, net recoveries $10K . Q3: Minimal past dues, net recoveries $15K YTD .	Q4: Minimal past dues, net recoveries $7K (Q4), $22K (FY) .	Stable/benign credit .

Management Commentary

Strategic and rate outlook: “It appears that interest rates will be ‘higher for longer’ with the yield curve moving from inverted to positively steepening… This is good for our net interest margin, though funding costs remain higher than hoped for. This will be a continued challenge in 2025. We continue to seek to originate sound, appropriately priced loans… as well as exploring other strategies to increase profitability.”
2024 profitability drivers: Earnings affected by Q3 bond sale ($38.8M AFS sold; $1.3M pre-tax loss) and higher credit loss expense to support loan growth; not due to credit deterioration .
Dividend policy: Quarterly cash dividend maintained at $0.36 per share for Q4 2024 (payable Feb 6, 2025) .

Q&A Highlights

No public Q&A transcript was available in the furnished Q4 2024 materials; disclosures consisted of the 8-K/press release (Jan 15) and the Q4 2024 shareholder report (Feb 6) .

Estimates Context

S&P Global (Capital IQ) consensus for Q4 2024 EPS and revenue could not be retrieved due to an S&P Global request limit at the time of query; as a result, numerical estimate comparisons are unavailable. Management did not cite external consensus in the press materials .

Key Takeaways for Investors

Core earnings normalized post-Q3 repositioning loss: Q4 EPS rebounded to $0.67 from $0.29 in Q3 as the securities loss did not recur and NII improved .
Margin setup improving: Management sees a positively steepening curve as supportive of NIM into 2025, though elevated funding costs remain a key watch item .
Funding mix improved at year-end: brokered deposits were eliminated by Q4, reducing purchased funding reliance; FHLB advances increased to fund growth .
Credit remains benign despite growth: minimal past dues and net recoveries suggest no emerging credit stress; provision build reflects portfolio expansion .
AOCI sensitivity persists: accumulated unrealized losses widened versus Q3, reflecting rate moves; this impacts tangible book/book value optics and capital flexibility .
Dividend maintained: $0.36 per share for Q4 supports income investors while management focuses on margin and profitability levers .
Focus for the next quarter: track NII trajectory vs. funding costs, deposit mix stability without brokered balances, and pace of loan growth under “appropriately priced” underwriting .

Supporting documents and data points:

Q4 2024 earnings 8-K and press release (Jan 15, 2025): EPS $0.67; net income $3.00M; loans $1.16B; deposits $1.17B; FHLB $259.7M; AOCI $(34.0)M; dividend $0.36 .
Q4 2024 shareholder report (Feb 6, 2025): Detailed Q4 and prior-year quarter P&L comparisons (interest income/expense, NII, provision, noninterest income/expenses, taxes), EPS $0.67 .
Q3 2024 8-K/press: Q3 EPS $0.29; $1.3M securities loss; NII $9.4M; noninterest expenses $9.4M; dividend $0.36 .
Q2 2024 8-K/press: NII $9.5M; noninterest income $2.8M; noninterest expenses $9.8M; tax $61K; EPS $0.45; funding and AOCI context .

UNION BANKSHARES INC (UNB)·Q4 2024 Earnings Summary