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U & I Financial Corp. Reports Second Quarter 2023 Financial Results

LYNNWOOD, WA / ACCESSWIRE / July 27, 2023 / U & I Financial Corp. (OTCQX:UNIF), the holding company for UniBank, today reported quarterly earnings of $2.4 million or $0.44 per share in the second quarter, as compared to $2.6 million or $0.48 per share for the same quarter of 2022, decreasing by $265 thousand or $0.04 per share, primarily from attaining less Gain on Sale of SBA/USDA Loans.

As of June 30, 2023, Total Assets reached $607.2 million, increasing by $84.3 million or 16.1% from the year earlier period of $522.9 million. Net Loans ended at $482.1 million, increasing by $60.3 million or 14.3% from the year earlier period of $421.7 million. Finally, Total Deposits grew by $89.4 million or 20.9% to $516.9 million from the year earlier period of $427.5 million.

"Although we experienced a year-over-year quarterly earnings decline primarily caused by the decrease in the SBA loan demand, our earning assets have continued to grow, while diversifying out of the CRE concentration," said Peter Park, President and CEO. He added that, "In the foreseeable future, however, we anticipate slowdown in overall loan demand and ongoing compression of the Net Interest Margin. On the credit side, we are beginning to see signs of credit deterioration due to economic uncertainties as well as the increased loan payment burden of our variable rate borrowers. Although the current environment is not favorable to the community banking industry, we believe that we are strategically well positioned to sustain our commitment to creating shareholder value in the long run."

2023 Second Quarter Financial Highlights

Total assets grew 16.1% to $607.2 million as compared to $522.9 million a year ago.

Net loans increased 14.3% to $482.1 million as compared to $421.7 million a year ago.

Total deposits grew 20.9% to $516.9 million as compared to $427.5 million a year ago.

Net income quarter-to-date decreased 10.1% to $2.4 million as compared to $2.6 million a year ago.

Net income year-to-date grew 7.2% to $5.0 million as compared to $4.7 million a year ago.

Net interest margin for the year was 4.24% as compared to 4.73% a year ago.

Gain on sale of SBA/USDA loans for the year was $824 thousand as compared to $1.2 million a year ago.

Return on average equity for the year was 13.59% as compared to 14.17% a year ago.

Return on average assets for the year was 1.72% as compared to 2.10% a year ago.

The allowance for loan losses to loans was 1.04% as compared to 1.07% a year ago.

Nonperforming assets to total assets was 0% as compared to 0.05% a year ago.

Efficiency ratio (noninterest expense divided by revenue) for the year was 53.51% as compared to 50.87% a year ago.

About U & I Financial Corp.

UniBank, the wholly owned subsidiary of U & I Financial Corp. (OTCQX:UNIF), is one of the highest performing banks in Washington state in terms of return on assets. Founded in 2006 and based in Lynnwood, Washington, the Bank serves small to medium-sized businesses, professionals, and individuals across the United States with a particular emphasis on government guaranteed loan programs. Customers can access their accounts in any of the 4 branches - Lynnwood, Bellevue, Federal Way and Tacoma - online, or through the Bank's ATM network.

For more information visit www.unibankusa.com or call (425) 275-9700.

Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe U & I Financial Corp.'s projections, estimates, plans and expectations of future results and can be identified by words such as "believe," "intend," "estimate," "likely," "anticipate," "expect," "looking forward," and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; adverse changes in local, national and international economies; changes in the Federal Reserve's actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the ongoing uncertainties from COVID-19; the impact of technological advances; changes in tax laws; and other risk factors. U & I Financial Corp. undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.

Contact:

U & I Financial Corp.
Investor Relations
Simon Bai, 425-275-9704

STATEMENT OF INCOME (Unaudited)
Jun-23 Mar-23 Jun-22 Jun-23 Jun-22
(Dollars in thousands except EPS)
QTD QTD QTD YTD YTD
Interest Income
$ 9,955 $ 8,775 $ 5,601 $ 18,730 $ 10,479
Interest Expense
3,723 2,900 257 6,623 424
Net Interest Income
6,232 5,875 5,344 12,107 10,055
Provision for Loan Losses
- - - - -
Gain on Sale of SBA/USDA Loans
- 824 737 824 1,157
Loan Servicing Fees, Net of Amortization
172 205 80 377 189
Other Non-interest Income
329 173 174 502 345
Non-interest Income
501 1,202 991 1,703 1,691
Salaries & Benefits
2,395 2,634 2,018 5,029 3,939
Occupancy Expense
175 179 181 354 355
Other Expense
1,055 951 884 2,006 1,681
Non-interest Expense
3,625 3,764 3,083 7,389 5,975
Net Income before Income Taxes
3,108 3,313 3,252 6,421 5,771
Income Taxes
738 638 617 1,376 1,066
Net Income/(Loss)
$ 2,370 $ 2,675 $ 2,635 $ 5,045 $ 4,705

Total Outstanding Shares (in thousands)
5,441 5,441 5,505 5,441 5,505
Basic Earnings per Share
$ 0.44 $ 0.49 $ 0.48 $ 0.93 $ 0.85


Statement of Condition (Unaudited)
Jun-23 Mar-23 Jun-22 Variance Variance
(Dollars in thousands) Qtr End Qtr End Qtr End Prior Qtr Prior Year
Cash and Due from Banks
$ 48,684 $ 47,550 $ 18,620 $ 1,134 $ 30,064
Investments
49,714 50,303 51,927 (589) (2,213)
Loans Held for Sale
- - 4,703 - (4,703)
Gross Loans
487,126 469,614 426,316 17,512 60,810
Allowance for Loan Losses
(5,076) (4,580) (4,580) (496) (496)
Net Loans
482,050 465,034 421,736 17,016 60,314
Fixed Assets
6,702 6,840 6,897 (138) (195)
Other Assets
20,089 20,062 19,028 27 1,061
Total Assets
$ 607,239 $ 589,789 $ 522,911 $ 17,450 $ 84,328

Checking
$ 107,476 $ 111,023 $ 114,365 $ (3,547) $ (6,889)
NOW
13,905 14,339 13,794 (434) 111
Money Market
213,825 221,312 130,024 (7,487) 83,801
Savings
9,744 11,448 17,852 (1,704) (8,108)
Certificates of Deposit
171,986 145,614 151,513 26,372 20,473
Total Deposits
516,936 503,736 427,548 13,200 89,388
Borrowed Funds
10,000 7,000 25,000 3,000 (15,000)
Other Liabilities
3,192 3,816 3,124 (624) 68
Total Liabilities
530,128 514,552 455,672 15,576 74,456
Shareholders' Equity
77,111 75,237 67,239 1,874 9,872
Total Liabilities & Equity
$ 607,239 $ 589,789 $ 522,911 $ 17,450 $ 84,328


Financial Ratios
Jun-23 Mar-23 Jun-22 Jun-23 Jun-22
(Dollars in thousands except BVS) QTD QTD QTD YTD YTD
Performance Ratios
Return on Average Assets
1.59% 1.84% 2.25% 1.72% 2.10%
Return on Average Equity
12.48% 14.73% 15.84% 13.59% 14.17%
Net Interest Margin
4.32% 4.17% 4.79% 4.24% 4.73%
Efficiency Ratio
53.85% 53.20% 48.67% 53.51% 50.87%

Capital
Tier 1 Leverage Ratio
13.11% 12.93% 14.49%
Common Equity Tier 1 Ratio
16.31% 16.30% 16.25%
Tier 1 Risk-Based Capital Ratio
16.31% 16.30% 16.25%
Total Risk-Based Capital Ratio
17.36% 17.27% 17.33%
Book Value per Share
$ 14.17 $ 13.83 $ 12.21

Asset Quality
Net Loan Charge-Offs (Recoveries)
$ (942) $ 0 $ 0
Allowance for Loan Losses to Loans
1.04% 0.98 % 1.07 %
Nonperforming Assets to Total Assets
0.00% 0.05 % 0.05 %

SOURCE: U & I Financial Corp. (Washington)



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