Union Bankshares (UNB) closed FY 2025 with fourth quarter total revenue of US$14.1 million and basic EPS of US$0.60, alongside net income of US$2.7 million. On a trailing twelve month basis, revenue was US$53.7 million with EPS of US$2.43 and net income of US$11.1 million. Over the past year, the company has seen revenue move from US$47.2 million to US$53.7 million on a trailing basis, with EPS shifting from US$1.94 to US$2.43. This sets up a story where improving margins and a 20.6% trailing net profit margin sit against a longer history of softer earnings and may shape how investors read this latest update.

With the headline numbers on the table, the next step is to set them against the widely held narratives around Union Bankshares to assess which stories hold up and which ones the latest margins and profit trends call into question.

Net Interest Margin Holds Near 3%

• Across FY 2025, net interest margin sat between 2.88% and 3.03%, with Q3 at 3.03% and Q1 at 2.88%, while the latest annual net profit margin was 20.6%.
• For investors with a bullish view, margins appear supported on both sides, with net interest margin around 3% across the year and trailing net profit margin at 20.6%. However, the longer five year earnings trend shows an average 7.7% annual decline, so investors weighing a bullish stance see healthier current profitability but need to factor in a weaker longer history.

Loan Quality And 62% Loss Allowance

• Non performing loans were US$13.5 million to US$15.3 million through FY 2025, versus US$1.9 million a year earlier in Q4 2024, while the allowance for bad loans is reported at 62%.
• Investors with a bearish view point to credit risk here, and the numbers give them material support. Non performing loans moved from around US$2 million in late FY 2024 to over US$13 million through FY 2025, while coverage of bad loans is 62%. Critics highlight that a relatively modest allowance and higher impaired balances can limit how much comfort investors take from the current 20.6% net profit margin if credit costs increase.

Valuation Gap Versus 10.3x P/E

• The shares trade at US$24.84, with a P/E of 10.3x against a DCF fair value of US$30.42 and industry and peer P/E levels of 12x and 14.5x, while the stock also carries a 5.8% dividend yield.
• Investors considering a bullish angle often focus on this valuation gap. The current share price sits below the DCF fair value of US$30.42 and under both industry and peer P/E multiples, while investors are also receiving a 5.8% dividend yield. This combination of a lower multiple and ongoing income is used to support the view that recent 26.5% earnings growth is not fully reflected in the 10.3x P/E.

Some investors will want to go deeper into whether this valuation gap and the recent earnings pickup justify more attention to Union Bankshares, and the community narratives are a helpful way to see how others connect these numbers to the longer term story. 📊 Read the full Union Bankshares Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Union Bankshares's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Union Bankshares carries higher non performing loans of over US$13.0 million and a 62% allowance for bad loans, which may concern risk aware investors.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.