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

LYNNWOOD, Wash.–(BUSINESS WIRE)–Jan 28, 2021–

U & I Financial Corp. (OTCQX: UNIF), the holding company for UniBank, today reported record quarterly earnings of $1.8 million or $0.33 per share in the fourth quarter, as compared to $1.4 million or $0.26 per share for the same quarter of 2019. For the year, net income was an annual record of $6.2 million or $1.12 per share, increasing by $589 thousand or $0.10 per share from the same period last year, despite $1.4 million in higher provision for loan losses expense.

As of December 31, 2020, total assets ended at a record, $403.9 million, increasing by $56.4 million or 16.2% from the year earlier period of $347.5 million. Net loans reached $290.1 million, increasing by $51.0 million or 21.4% from the year earlier period of $239.0 million. Finally, total deposits grew by $47.9 million or 16.5% to a record, $337.6 million, from the year earlier period of $289.6 million.

“We had an exceptional fourth quarter and year, despite the uncertain economic and public health conditions. The Bank exceeded $400 million in total assets, and made other achievements during the year such as being the #1 SBA lender in our market area among community banks, and opening our first LPO office,” said Peter Park, President and CEO. He added, “Although the financial performance of the Bank and the industry, as a whole, have generally been positive, there is still tremendous uncertainty. However, we believe that we are well positioned to succeed in the long run, due to the solid leadership by our Board and management, and sound business model and strategies. We thank our customers and shareholders for trusting in us, and look forward to another productive year.”

2020 Fourth Quarter Financial Highlights

Total assets grew 16.2% to $403.9 million as compared to $347.5 million a year ago.

Net loans grew 21.4% to $290.1 million as compared to $239.0 million a year ago.

Loans held for sale increased 178.7% to $6.7 million as compared to $2.4 million a year ago.

Total deposits grew 16.5% to $337.6 million as compared to $289.6 million a year ago.

Net income year-to-date grew 10.5% to $6.2 million as compared to $5.6 million one year ago.

Net interest margin for the year was 4.22% as compared to 4.20% one year ago.

Gain on sale of SBA/USDA loans for the year was $3.4 million as compared to $2.8 million a year ago.

Return on average equity for the year was 11.45% as compared to 12.03% a year ago.

Return on average assets for the year was 1.68% as compared to 1.78% a year ago.

The allowance for loan losses to loans, excluding PPP loans, was 1.78% as compared to 1.14% a year ago.

Nonperforming assets to total assets was 0.19% as compared to 0.21% a year ago.

Efficiency ratio (noninterest expense divided by revenue) for the year was 52.22% as compared to 55.23% 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, the SBA’s Paycheck Protection Program; 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.

STATEMENT OF INCOME (Unaudited)
	Dec-20		Sep-20		Dec-19				Dec-20		Dec-19
(Dollars in thousands except EPS)	QTD		QTD		QTD				YTD		YTD
Interest Income	$	3,961			$	4,316			$	3,988		$	16,772		$	16,291
Interest Expense		292				379				961			2,044			3,783
Net Interest Income		3,669				3,937				3,027			14,728			12,508
Provision for Loan Losses		250				800				40			1,750			390
Gain on Sale of SBA/USDA Loans		1,402				974				992			3,398			2,841
Gain on Sale of Securities		–				–				–			78			151
Other Non-interest Income		272				272				209			1,104			876
Non-interest Income		1,674				1,246				1,201			4,580			3,868
Salaries & Benefits		1,922				1,627				1,446			6,742			5,854
Occupancy Expense		172				176				156			685			637
Other Expense		751				642				762			2,615			2,514
Non-interest Expense		2,845				2,445				2,364			10,042			9,005
Net Income before Income Taxes		2,248				1,938				1,824			7,516			6,981
Income Taxes		428				367				389			1,303			1,357
Net Income/(Loss)		1,820				1,571				1,435		$	6,213		$	5,624

Total Outstanding Shares (in thousands)		5,581				5,581				5,573			5,581			5,573
Basic Earnings per Share	$	0.33			$	0.28			$	0.26		$	1.12		$	1.02


Statement of Condition (Unaudited)
	Dec-20		Sep-20		Variance				Dec-19		Variance
(Dollars in thousands)	Qtr End		Qtr End		Prior Qtr				Qtr End		Prior Year

Cash and Due from Banks	$	24,936			$	16,089			$	8,847		$	38,754		($	13,818	)
Investments		58,573				58,490				83			48,994			9,579
Loans Held for Sale		6,689				18,296				(11,607	)		2,400			4,289
Gross Loans		294,618				285,010				9,608			241,788			52,830
Allowance for Loan Losses		(4,568	)			(4,304	)			(264	)		(2,775	)		(1,793	)
Net Loans		290,050				280,706				9,344			239,013			51,037
Fixed Assets		5,891				5,864				27			6,234			(343	)
Other Assets		17,759				13,524				4,235			12,060			5,699
Total Assets	$	403,898			$	392,969			$	10,929		$	347,455		$	56,443

Checking		79,648				77,163				2,485			44,988			34,660
NOW		8,837				14,768				(5,931	)		8,767			70
Money Market		152,719				117,795				34,924			121,622			31,097
Savings		11,015				10,998				17			9,059			1,956
Certificates of Deposit		85,349				107,919				(22,570	)		105,203			(19,854	)
Total Deposits		337,568				328,643				8,925			289,639			47,929
Borrowed Funds		5,000				6,000				(1,000	)		5,000			–
Other Liabilities		2,244				1,790				454			2,361			(117	)
Total Liabilities		344,812				336,433				8,379			297,000			47,812
Shareholders’ Equity		59,086				56,536				2,550			50,455			8,631
Total Liabilities & Equity	$	403,898			$	392,969			$	10,929		$	347,455		$	56,443


Financial Ratios
	Dec-20		Sep-20		Dec-19				Dec-20		Dec-19
(Dollars in thousands except BVS)	QTD		QTD		QTD				YTD		YTD
Performance Ratios
Return on Average Assets		1.87	%			1.64	%			1.75	%		1.68	%		1.78	%
Return on Average Equity		12.59	%			11.20	%			11.50	%		11.45	%		12.03	%
Net Interest Margin		4.02	%			4.37	%			3.95	%		4.22	%		4.20	%
Efficiency Ratio		53.25	%			47.17	%			55.91	%		52.22	%		55.23	%

Capital
Tier 1 Leverage Ratio		14.65	%			14.45	%			15.38	%
Common Equity Tier 1 Ratio		19.79	%			20.06	%			18.27	%
Tier 1 Risk-Based Capital Ratio		19.79	%			20.06	%			18.27	%
Total Risk-Based Capital Ratio		21.04	%			21.31	%			19.28	%
Book Value per Share	$	10.59			$	10.13			$	9.05

Asset Quality
Net Loan Charge-Offs (Recoveries)	($13	)		($9	)		($15	)
Allowance for Loan Losses to Loans		1.55	%			1.51	%			1.14	%
Allowance Ratio, Excluding PPP Loans		1.78	%			1.77	%			1.14	%
Nonperforming Assets to Total Assets		0.19	%			0.20	%			0.21	%