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

Continues Growth with PPP Loans

U & I Financial Corp. UNIF, the holding company for UniBank, today reported second quarter net income of $1.5 million or $0.26 per share, as compared to $1.4 million or $0.26 per share for the same quarter of 2019, despite $300 thousand in higher Provision for Loan and Lease Losses expense. For the year, net income exceeded $2.8 million or $0.51 per share, increasing by $150 thousand or $0.02 per share from the same period last year, despite $550 thousand in higher Provision for Loan and Lease Losses expense.

As of June 30, 2020, total assets ended at $380.4 million, increasing by $57.2 million or 17.7% from the year earlier period of $323.2 million. Net loans reached $281.5 million, increasing by $63.9 million or 29.4% from the year earlier period of $217.6 million. During this quarter, the Bank funded 391 PPP loans, totaling $41.4 million. Finally, total deposits grew by $48.8 million or 18.5% to $313.4 million from the year earlier period of $264.6 million.

"We had another solid quarter, despite the continuing operational and financial challenges caused by the COVID-19 pandemic," said Peter Park, President and CEO. He added that, "Fortunately, due to our swift pandemic responses taken early on, we were able to operate safely with minimal disruptions. On the financial side, I am very proud of our staff for their accomplishments in generating the PPP loans, which helped drive much of the growth this quarter. Although our nonperforming assets ratio remained relatively unchanged, we significantly increased our provision for loan losses for the second quarter in a row, due to the continued economic uncertainties. All in all, despite further challenges looming ahead, due to the dedication of our capable staff and astute guidance from our board, we believe that we have built a strong foundation to continuously deliver favorable returns to our shareholders."

2020 Second Quarter Financial Highlights

Total assets grew 17.7% to $380.4 million as compared to $323.2 million a year ago.

Net loans grew 29.4% to $281.5 million as compared to $217.6 million a year ago.

Total deposits grew 18.5% to $313.4 million as compared to $264.6 million a year ago.

Net income year-to-date grew 5.6% to $2.8 million as compared to $2.7 million one year ago.

Net interest margin for the year was 4.26% as compared to 4.15% one year ago.

Gain on sale of SBA/USDA loans for the year was $1.0 million as compared to $1.3 million a year ago.

Return on average equity for the year was 10.95% as compared to 12.06% a year ago.

Return on average assets for the year was 1.59% as compared to 1.75% a year ago.

The Allowance for Loan Losses to Loans, excluding PPP loans, was 1.43% as compared to 1.14% a year ago.

Nonperforming assets to total assets was 0.22% as compared to 0.14% a year ago.

Efficiency ratio (noninterest expense divided by revenue) for the year was 54.60% as compared to 56.83% a year ago.

About U & I Financial Corp.

UniBank, the wholly-owned subsidiary of U & I Financial Corp. 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)

Jun-20

 

Mar-20

 

Jun-19

 

Jun-20

 

Jun-19

(Dollars in thousands except EPS)

QTD

 

QTD

 

QTD

 

YTD

 

YTD

Interest Income

$

4,576

 

$

3,919

 

$

3,967

 

$

8,495

 

$

7,818

 

Interest Expense

 

469

 

 

904

 

 

942

 

 

1,373

 

 

1,841

 

Net Interest Income

 

4,107

 

 

3,015

 

 

3,025

 

 

7,122

 

 

5,977

 

Provision for Loan and Lease Losses

 

400

 

 

300

 

 

100

 

 

700

 

 

150

 

Gain on Sale of SBA/USDA Loans

 

151

 

 

871

 

 

690

 

 

1,022

 

 

1,257

 

Gain on Sale of Securities

 

-

 

 

78

 

 

151

 

 

78

 

 

151

 

Other Non-interest Income

 

293

 

 

267

 

 

233

 

 

560

 

 

423

 

Non-interest Income

 

444

 

 

1,216

 

 

1,074

 

 

1,660

 

 

1,831

 

Salaries & Benefits

 

1,576

 

 

1,617

 

 

1,410

 

 

3,193

 

 

2,890

 

Occupancy Expense

 

170

 

 

167

 

 

154

 

 

337

 

 

321

 

Other Expense

 

609

 

 

613

 

 

657

 

 

1,222

 

 

1,184

 

Non-interest Expense

 

2,355

 

 

2,397

 

 

2,221

 

 

4,752

 

 

4,395

 

Net Income before Income Taxes

 

1,796

 

 

1,534

 

 

1,778

 

 

3,330

 

 

3,263

 

Income Taxes

 

342

 

 

166

 

 

350

 

 

508

 

 

591

 

Net Income/(Loss)

 

1,454

 

 

1,368

 

 

1,428

 

$

2,822

 

$

2,672

 

 
Total Outstanding Shares (in thousands)

 

5,573

 

 

5,573

 

 

5,568

 

 

5,573

 

 

5,568

 

Basic Earnings per Share

$

0.26

 

$

0.25

 

$

0.26

 

$

0.51

 

$

0.49

 

 
 
Statement of Condition (Unaudited)

Jun-20

 

Mar-20

 

Variance

 

Jun-19

 

Variance

(Dollars in thousands)

Qtr End

 

Qtr End

 

Prior Qtr

 

Qtr End

 

Prior Year

 
Cash and Due from Banks

$

13,319

 

$

38,101

 

($

24,782

)

$

40,359

 

($

27,040

)

Investments

 

58,625

 

 

54,810

 

 

3,815

 

 

46,835

 

 

11,790

 

Loans Held For Sale

 

7,577

 

 

1,774

 

 

5,803

 

 

-

 

 

7,577

 

Gross Loans

 

284,999

 

 

243,505

 

 

41,494

 

 

220,077

 

 

64,922

 

Reserve for Loan Losses

 

(3,495

)

 

(3,086

)

 

(409

)

 

(2,504

)

 

(991

)

Net Loans

 

281,504

 

 

242,193

 

 

39,311

 

 

217,573

 

 

63,931

 

Fixed Assets

 

5,976

 

 

6,105

 

 

(129

)

 

6,423

 

 

(447

)

Other Assets

 

13,399

 

 

12,686

 

 

713

 

 

11,979

 

 

1,420

 

Total Assets

$

380,400

 

$

353,895

 

$

26,505

 

$

323,169

 

$

57,231

 

 
Checking

 

68,711

 

 

49,018

 

 

19,693

 

 

45,303

 

 

23,408

 

NOW

 

9,284

 

 

11,786

 

 

(2,502

)

 

9,540

 

 

(256

)

Money Market

 

111,710

 

 

154,079

 

 

(42,369

)

 

95,098

 

 

16,612

 

Savings

 

10,349

 

 

8,797

 

 

1,552

 

 

8,489

 

 

1,860

 

Certificates of Deposit

 

113,375

 

 

68,962

 

 

44,413

 

 

106,152

 

 

7,223

 

Total Deposits

 

313,429

 

 

292,642

 

 

20,787

 

 

264,582

 

 

48,847

 

Borrowed Funds

 

11,200

 

 

8,000

 

 

3,200

 

 

10,000

 

 

1,200

 

Other Liabilities

 

1,271

 

 

1,370

 

 

(99

)

 

1,630

 

 

(359

)

Total Liabilities

 

325,900

 

 

302,012

 

 

23,888

 

 

276,212

 

 

49,688

 

Shareholders' Equity

 

54,500

 

 

51,883

 

 

2,617

 

 

46,957

 

 

7,543

 

Total Liabilities & Equity

$

380,400

 

$

353,895

 

$

26,505

 

$

323,169

 

$

57,231

 

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

 

1.57

%

 

1.62

%

 

1.84

%

 

1.59

%

 

1.75

%

Return on Average Equity

 

11.08

%

 

10.76

%

 

12.54

%

 

10.95

%

 

12.06

%

Net Interest Margin

 

4.65

%

 

3.77

%

 

4.15

%

 

4.26

%

 

4.15

%

Efficiency Ratio

 

51.75

%

 

57.74

%

 

55.14

%

 

54.60

%

 

56.83

%

 
Capital
Tier 1 Leverage Ratio

 

14.28

%

 

15.10

%

 

15.01

%

Common Equity Tier 1 Ratio

 

18.82

%

 

18.48

%

 

18.53

%

Tier 1 Risk-Based Capital Ratio

 

18.82

%

 

18.48

%

 

18.53

%

Total Risk-Based Capital Ratio

 

20.07

%

 

19.59

%

 

19.52

%

Book Value per Share

$9.78

 

$9.31

 

$8.43

 

 
Asset Quality
Net Loan Charge-Offs (Recoveries)

($10

)

 

($10

)

($17

)

Allowance for Loan Losses to Loans

 

1.23

%

 

1.27

%

 

1.14

%

Allowance Ratio, Excluding PPP Loans

 

1.43

%

 

1.27

%

 

1.14

%

Nonperforming Assets to Total Assets

 

0.22

%

 

0.19

%

 

0.14

%

 

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