U & I Financial Corp. Reports First Quarter 2020 Financial Results

Sets New Records as Growth Continues

LYNNWOOD, Wash.--()--U & I Financial Corp. (OTCQX: UNIF), the holding company for UniBank, today reported first quarter net income of $1.4 million or $0.25 per share, as compared to $1.2 million or $0.23 per share for the first quarter of 2019. This represents an increase of $124 thousand or 10.0%, despite a higher Provision for Loan and Lease Losses expense of $300 thousand, as compared to $50 thousand for the first quarter of 2019.

As of March 31, 2020, total assets ended at a record level at $353.9 million, increasing by $37.2 million or 11.8% from the year earlier period of $316.7 million. Net loans also reached a record level at $242.2 million, increasing by $31.2 million or 14.8% from the year earlier period of $211.0 million. Finally, total deposits grew by $37.4 million or 14.6% to a record level of $292.7 million from the year earlier period of $255.3 million.

“Despite a tumultuous quarter, we are very pleased with the first quarter growth and earnings,” said Peter Park, President and CEO. He added that, “The banking industry has been hard-hit by the heightened credit risk from COVID-19, compelling banks to ramp-up loan loss reserves. Although our nonperforming assets ratio as of March 31st remained relatively unchanged, due to the current economic conditions, we concluded that significantly increasing our loan loss reserve was necessary. However, I am confident that because of our robust capital and liquidity positions, our defensive strategy implemented long before the pandemic, and our extensive government guaranteed loan programs experience, we will weather this storm, and perhaps even come out ahead.”

2020 First Quarter Financial Highlights

Total assets grew 11.8% to $353.9 million as compared to $316.7 million a year ago.

Net loans grew 14.8% to $242.2 million as compared to $211.0 million a year ago.

Total deposits grew 14.6% to $292.6 million as compared to $255.3 million a year ago.

Net income increased 10.0% to $1.4 million as compared to $1.2 million one year ago.

Net interest margin was 3.77% as compared to 4.14% one year ago.

Gain on sale of SBA loans was $871 thousand as compared to $567 thousand a year ago.

Return on average equity was 10.76% as compared to 11.55% a year ago.

Return on average assets was 1.62% as compared to 1.65% a year ago.

Nonperforming assets to total assets was 0.19% as compared to 0.18% a year ago.

Efficiency ratio (noninterest expense divided by revenue) was 57.74% as compared to 58.62% 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. Based in Lynnwood, Washington, the bank was founded in 2006 to serve the small to medium-sized businesses, professionals, and residents with a particular emphasis on Korean and other ethnic minority communities. 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 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.

STATEMENT OF INCOME (Unaudited)
Mar-20 Dec-19 Mar-19 Mar-19 Mar-19
(Dollars in thousands except EPS) QTD QTD QTD $ Var % Var
Interest Income

$

3,919

 

$

3,988

 

$

3,851

 

$

68

 

1.8

%

Interest Expense

 

904

 

 

961

 

 

899

 

 

5

 

0.6

%

Net Interest Income

 

3,015

 

 

3,027

 

 

2,952

 

 

63

 

2.1

%

Provision for Loan and Lease Losses

 

300

 

 

40

 

 

50

 

 

250

 

500.0

%

Gain on Sale of SBA/USDA Loans

 

871

 

 

992

 

 

567

 

 

304

 

53.6

%

Gain on Sale of Securities

 

78

 

 

-

 

 

-

 

 

78

 

100.0

%

Other Non-interest Income

 

267

 

 

209

 

 

190

 

 

77

 

40.5

%

Non-interest Income

 

1,216

 

 

1,201

 

 

757

 

 

459

 

60.6

%

Salaries & Benefits

 

1,617

 

 

1,446

 

 

1,480

 

 

137

 

9.3

%

Occupancy Expense

 

167

 

 

156

 

 

167

 

 

-

 

0.0

%

Other Expense

 

613

 

 

762

 

 

527

 

 

86

 

16.3

%

Non-interest Expense

 

2,397

 

 

2,364

 

 

2,174

 

 

223

 

10.3

%

Net Income before Income Taxes

 

1,534

 

 

1,824

 

 

1,485

 

 

49

 

3.3

%

Income Taxes

 

166

 

 

389

 

 

241

 

 

(75

)

(31.1

%)

Net Income/(Loss)

 

1,368

 

 

1,435

 

 

1,244

 

 

124

 

10.0

%

 
Total Outstanding Shares (in thousands)

 

5,573

 

 

5,573

 

 

5,575

 

Basic Earnings per Share

$

0.25

 

$

0.26

 

$

0.23

 

 
 
Statement of Condition (Unaudited)
Mar-20 Dec-19 Mar-19 Mar-19 Mar-19
(Dollars in thousands) Qtr End Qtr End Qtr End $ Var % Var
 
Cash and Due from Banks

$

38,101

 

$

38,754

 

$

38,567

 

($

466

)

-1.2

%

Investments

 

54,810

 

 

48,994

 

 

48,760

 

 

6,050

 

12.4

%

Gross Loans

 

245,279

 

 

244,188

 

 

213,400

 

 

31,879

 

14.9

%

Reserve for Loan Losses

 

(3,086

)

 

(2,775

)

 

(2,387

)

 

(699

)

29.3

%

Net Loans

 

242,193

 

 

241,413

 

 

211,013

 

 

31,180

 

14.8

%

Fixed Assets

 

6,105

 

 

6,234

 

 

6,555

 

 

(450

)

-6.9

%

Other Assets

 

12,686

 

 

12,060

 

 

11,689

 

 

997

 

8.5

%

Total Assets

$

353,895

 

$

347,455

 

$

316,684

 

$

37,211

 

11.8

%

 
Checking

 

49,018

 

 

44,988

 

 

44,863

 

 

4,155

 

9.3

%

NOW

 

11,786

 

 

8,767

 

 

6,264

 

 

5,522

 

88.2

%

Money Market

 

154,079

 

 

121,622

 

 

90,122

 

 

63,957

 

71.0

%

Savings

 

8,797

 

 

9,059

 

 

7,907

 

 

890

 

11.3

%

Certificates of Deposit

 

68,962

 

 

105,203

 

 

106,128

 

 

(37,166

)

-35.0

%

Total Deposits

 

292,642

 

 

289,639

 

 

255,284

 

 

37,358

 

14.6

%

Borrowed Funds

 

8,000

 

 

5,000

 

 

15,000

 

 

(7,000

)

-46.7

%

Other Liabilities

 

1,370

 

 

2,361

 

 

1,422

 

 

(52

)

-3.7

%

Total Liabilities

 

302,012

 

 

297,000

 

 

271,706

 

 

30,306

 

11.2

%

Shareholders' Equity

 

51,883

 

 

50,455

 

 

44,978

 

 

6,905

 

15.4

%

Total Liabilities & Equity

$

353,895

 

$

347,455

 

$

316,684

 

$

37,211

 

11.8

%

 
 
Financial Ratios
Mar-20 Dec-19 Mar-19
(Dollars in thousands except BVS) QTD QTD QTD
Performance Ratios
Return on Average Assets

 

1.62

%

 

1.75

%

 

1.65

%

Return on Average Equity

 

10.76

%

 

11.50

%

 

11.55

%

Net Interest Margin

 

3.77

%

 

3.95

%

 

4.14

%

Efficiency Ratio

 

57.74

%

 

55.91

%

 

58.62

%

 
Capital
Tier 1 Leverage Ratio

 

15.10

%

 

15.38

%

 

14.77

%

Common Equity Tier 1 Ratio

 

18.48

%

 

18.27

%

 

18.35

%

Tier 1 Risk-Based Capital Ratio

 

18.48

%

 

18.27

%

 

18.35

%

Total Risk-Based Capital Ratio

 

19.59

%

 

19.28

%

 

19.32

%

Book Value per Share

$

9.31

 

$

9.05

 

$

8.07

 

 
Asset Quality
Net Loan Charge-Offs (Recoveries)

($10

)

($15

)

($27

)

Allowance for Loan Losses to Loans

 

1.26

%

 

1.14

%

 

1.12

%

Nonperforming Assets to Total Assets

 

0.19

%

 

0.21

%

 

0.18

%

 

Contacts

U & I Financial Corp.
Investor Relations
Stephanie Yoon, 425-275-9727

Release Summary

U & I Financial Corp. Sets New Records as Growth Continues in the First Quarter 2020

Contacts

U & I Financial Corp.
Investor Relations
Stephanie Yoon, 425-275-9727