CORRECTION BY SOURCE: University Bancorp 2Q2023 Net Income $1,557,298, $0.32 Per Share
- Unaudited net income of $1.6 million in 2Q2023
- ROE reaching 17.4% in June 2023
- Business development efforts ongoing
- Total assets at $833.5 million
- Mortgage origination volumes at 27-year lows
- Delinquent loans totaling $2.7 million
This release has been corrected from the earlier version by correcting a date error in the prior headline and inserts the correct graphic for Annual Originations in Millions of Units.
ANN ARBOR, MI / ACCESSWIRE / September 8, 2023 / University Bancorp, Inc. (OTCQB:UNIB) announced that it had an unaudited net income attributable to University Bancorp, Inc. common stock shareholders in 2Q2023 of
For the 6 months ended June 30, 2023, net income was
For the 12 months ended June 30, 2023, net income was
Shareholders' equity attributable to University Bancorp, Inc. common stock shareholders was
President Stephen Lange Ranzini noted, "Industry-wide mortgage origination volumes are at 27-year lows. The Mortgage Bankers Association notes that mortgage applications have not been this low since December 1996." Here is a chart of U.S. mortgage origination volume going back to 2010, not in dollars but in millions of units. The 2023 number is an estimate:
President Stephen Lange Ranzini noted, "Industry-wide gain on sale margins also dropped to record low levels in 1Q2023 and have now been negative for six quarters." Here is a chart of industry-wide profitability each quarter since Q32021:
"Despite the extremely poor industry conditions, during the six quarters that the mortgage origination industry lost money, University Bank earned profits each quarter, and our profitability has been steadily rising since December 2022, due to a shift in strategy."
Here is a chart that shows the quarterly profitability of University Bank starting in 1Q2020:
Starting in March 2022, we began to increase our residential loans held for investment. Overall, our loan portfolio, which was
April 2023
May 2023
June 2023
July 2023
August results are not yet finalized and appear to be in line with June's. The improvement in results is driven by net interest income generated from the larger portfolio of loans held for investment combined with multiple rounds of cost-cutting.
Our subservicing business, Midwest Loan Services, has been negatively impacted by financial institution customers opting to sell MSRs to book gains on sale to offset the lower profitability from loan originations. The number of mortgages serviced fell to 166,030, approximately 24,000 mortgages under the recent high-water mark. The escrow deposits controlled by Midwest fell in line with the lower numbers of loans subserviced and the substantial decline in mortgage payoff activity. In June 2023, Midwest generated an average balance of
Overall, our business development efforts continue at a rapid pace. For example, in February 2023 we opted to become a Financial Holding Company instead of a Bank Holding Company and then used this new status to form a captive insurance company, Crescent Assurance, PCC, with an initial capital investment of
Earnings in 2Q 2023, were assisted by three factors that had a net positive impact of
- Mortgage Servicing Rights Valuation adjustment:
With the rise in long term mortgage interest rates during the quarter the valuation of our MSRs increased$229,754 ;
- Mortgage Origination Pipeline valuation adjustment:
The fair market value of the hedged mortgage origination pipeline (FMV) fell$151,508 as the value of locked loans fell over the level at 1Q 2023;
- Allowance for Loan Losses adjustment:
The Allowance for Loan Losses was increased by$71,000.
Earnings in 1Q 2023, were assisted by two factors that with a net positive impact of
- Mortgage Servicing Rights Valuation adjustment:
With the fall in long term mortgage interest rates during the quarter the valuation of our MSRs decreased$476,817 ;
- Mortgage Origination Pipeline valuation adjustment:
The fair market value of the hedged mortgage origination pipeline (FMV) rose$793,675 as the amount of locked loans rose over the level at 4Q 2022 due to seasonal factors.
Mortgage origination volumes decreased in 1H2023, with closings of
For 2Q2023, the Company had an annualized return on equity attributable to common stock shareholders of
Total Assets at 6/30/23 were
The Tier 1 Leverage Capital Ratio at 6/30/2023 declined to
Basel 3 Common Equity Tier 1 Capital at 6/30/2023 was
At 6/30/2023, the Company had
Treasury shares as of 6/30/2023 were 277,381 shares.
The performance of our portfolio loans and our overall asset quality continues to perform well. We had two foreclosed other real estate owned properties at quarter-end (both residential homes related to GNMA buybacks) with a balance of
At 6/30/2023, we had the following with respect to delinquent loans (including both delinquent portfolio loans and delinquent loans held for sale):
Delinquent 30 Days to 59 Days,
Delinquent 60 Days to 89 Days,
Delinquent Over 90 Days & on Non-Accrual,
*This balance consisted of seven residential loans, and excludes GNMA loans that are
Other Key statistics as of 6/30/2023:
· 10-year annual average revenue growth*, | |
· 5-year annual average revenue growth*, | |
· 1H2023 vs. 1H2022 revenue growth*, | |
· TTM Revenue | |
· 10 Year Average ROE | |
· 5 Year Average ROE | |
· LLR/NPAs>90 % | |
· Debt to equity ratio, | |
· Current Ratio, # | 169.5x |
· Efficiency Ratio, %+ | |
· Total Assets, | |
· Loans Held for Sale, before Reserves, | |
· NPAs >90 days | |
· TTM ROA% | |
· TCE/TA % | |
· Total Capital Ratio % | |
· NPAs/Assets % | |
· Texas Ratio % | |
· NIM % | |
· NCOs/Loans | - |
· Trailing 12 Months P-E Ratio | 18.2x |
*Using TTM, 1H2023, 1H2022, 2022, 2021, 2020, 2019, 2018, 2017, 2016, 2015 and 2014 revenue which were
#Parent company only current assets divided by 12-month projected cash expenses.
+Calculated as: (non-interest expense/ (net interest income + non-interest income)).
xBased on last sale of
Excluding goodwill & other intangibles related to the acquisition of Midwest Loan Services and Ann Arbor Insurance Center, net tangible shareholders' equity attributable to University Bancorp, Inc. common stock shareholders was
Shareholders and investors are encouraged to refer to the financial information including the investor presentations, audited financial statements, strategic plan and prior press releases, available on our investor relations web page at: http://www.university-bank.com/bancorp/. A detailed income statement, balance sheet and other financial information for University Bank as of 6/30/2023 are available here: https://www.university-bank.com/wp-content/uploads/2023/09/University-Bank-Detailed-Financial-Information-June-2023.pdf.
Ann Arbor-based University Bancorp owns
- UIF, a faith-based banking firm based in Southfield, MI;
- University Lending Group, a retail residential mortgage originator based in Clinton Township, MI;
- Midwest Loan Services, a residential mortgage subservicer based in Houghton, MI;
- Community Banking, based in Ann Arbor, MI, which provides traditional community banking services in the Ann Arbor area;
- Midwest Loan Solutions, a reverse residential mortgage lender and warehouse lender based in Southfield, MI;
- Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor.
CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning future growth in assets, pre-tax income and net income, budgeted income levels, the sustainability of past results, mortgage origination levels and margins, valuations, and other expectations and/or goals. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting our operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update any information or forward-looking statement.
Contact:
Stephen Lange Ranzini, President and CEO
Phone: 734-741-5858, Ext. 9226
Email: ranzini@university-bank.com
SOURCE: University Bancorp, Inc.
View source version on accesswire.com:
https://www.accesswire.com/782310/correction-by-source-university-bancorp-2q2023-net-income-1557298-032-per-share