University Bancorp 2023 Net Income $5,426,558, $1.07 Per Share
University Bancorp (OTCQB: UNIB) reported a 2023 net income of $6,799,619, with $5,426,558 attributable to common shareholders, equating to $1.07 per share. This marks an increase from 2022's $4,212,873 net income. The return on equity for common shareholders rose to 6.9% from 4.9%. Equity per share increased to $16.24. The shift to holding more residential loans in the portfolio, alongside higher mortgage loan yields, boosted the net interest margin but impacted short-term gains due to associated origination costs. Notable expenses included a $1.7 million valuation decline in Mortgage Servicing Rights and a $1.7 million loss in the securities portfolio. UNIB's total assets reached $931.63 million, with the Tier 1 Capital Ratio at 10.05% and a 2023 revenue growth of 12.2% compared to 2022.
- Net income increased to $6,799,619 for 2023 from $4,212,873 in 2022.
- Net income attributable to common shareholders rose to $5,426,558 ($1.07 per share) from $3,789,400 ($0.74 per share) in 2022.
- Return on equity for common shareholders improved to 6.9% from 4.9% in the previous year.
- Shareholders' equity per share increased to $16.24 from $15.96 at the end of 2022.
- University Bancorp reported a 12.2% revenue growth in 2023 compared to 2022.
- Portfolio loans at University Bank rose significantly, boosting the net interest margin to almost $3 million per month.
- Equity attributable to common shareholders increased, indicating a solid financial position.
- University Bank achieved licensing to originate mortgage loans in 48 states and the District of Columbia.
- The Captive Insurance Company, Crescent Assurance, was profitable in its first year.
- Faith-based business UIF expanded its products and launched new financial offerings.
- The Mortgage Servicing Rights experienced a $1,694,134 valuation decline.
- UNIB's securities portfolio incurred a $1,685,228 loss.
- Short-term income was negatively impacted by the expense of originating mortgage loans, totaling about $19.8 million.
- Net income in both 2022 and 2023 suffered due to low profitability in the residential mortgage origination business.
- The industry-wide low profitability in residential mortgage origination affected results, as noted by the Mortgage Bankers Association.
ANN ARBOR, MI / ACCESSWIRE / May 14, 2024 / University Bancorp, Inc. (OTCQB:UNIB)("UNIB") announced that it had audited net income of
For 2023, UNIB had a return on equity attributable to common stock shareholders of
Net income in both 2022 and 2023 were negatively impacted by low profitability industrywide in the residential mortgage origination business units of University Bank. The Mortgage Bankers Association reports that
Due to a shift in market opportunities, with the yields on mortgage loans rising sharply above the industry's cost of funds, the bank has retained more of its over a billion dollars of annual mortgage originations in recent years (the bank originated
President Stephen Lange Ranzini noted, "Considering the 30-year low in mortgage origination units, our 2023 results were outstanding. We have put into place several key projects that should result in higher earnings in 2024 and future years. University Bank is now licensed to originate mortgage loans in 48 states and the District of Columbia and by the end of June 2024 we will have all the complaint document sets built for our whole suite of mortgage origination products in every state nationwide.
In 2023 UNIB also opted to be designated as a Financial Holding Company, which gives us a greater range of investment and business development options. We used this authority in early 2023 to establish a Captive Insurance Company owned by UNIB, chartered in Washington DC, Crescent Assurance, PCC. This firm was profitable in its first year of operation. Our faith-based business, UIF, successfully launched a vehicle financing product, expanded its core products into additional states, and UIF also successfully introduced a term deposit and savings account product with these faith-based deposits held at University Bank. University Bank and UNIB have regulatory approval and are finalizing steps to launch additional products in mid-2024.
In addition to the shift discussed above to holding more residential loans in portfolio instead of selling them on the secondary market, results in 2023 were negatively impacted by two items, partially offset by an unusual positive factor which had a net overall negative impact of
Unusual expenses:
- Management booked a valuation decline in our Mortgage Servicing Rights of
$1,694,134 ; - The UNIB securities portfolio incurred a loss of
$1,685,228.
Unusual gains:
3. The value of the hedged mortgage origination pipeline rose
Results in 2022 were also assisted by two unusual items, partially offset by two unusual negative factors, which had a net overall positive cumulative impact of
Unusual expenses:
- The value of the hedged mortgage origination pipeline fell
$1,864,049 as the amount of locked loans at year-end 2023 declined over the level at year-end 2022. - The UNIB securities portfolio incurred a loss of
$1,381,075.
Unusual gains:
3. Management booked a valuation gain in our Mortgage Servicing Rights of
4. The liability related to contingent consideration related to an employee lift out transaction in prior years was fully reserved, increasing income by
During late 2022 and early 2023, UNIB issued
At 12/31/2023 cash & equity investment securities at the Company, available to meet working capital needs and to support investment opportunities at University Bancorp were
A portion of UNIB's working capital has been invested in a portfolio of publicly traded financial services related investments. Three of these investments are large and the remainder are relatively small. The three largest investments at 12/31/2023 were:
- Currency Exchange International (Symbol CURN), a Canadian bank holding company that specializes in foreign exchange, of which we own
4.6% of the common stock; - VersaBank (Symbol VBNK), a single branch Canadian bank, of which we own
4.6% of the common stock; - A third large investment which had been down in value
$1.3 million at year-end 2022 and$0.5 million at year-end 2023 was sold in May 2024 for a$190,000 profit versus our cost basis.
Due to a conservative credit culture, University Bank has had net recoveries on net loan charge-offs over the past 15 years. Over the past two economic cycles, the following loan provisions and charge-offs (in $'000s) were sustained by University Bank:
Year | Provision Expense | Net Charge-offs | ||||||
2008 | $ | 1.0 | $ | 0.8 | ||||
2009 | 1.5 | 1.3 | ||||||
2010 | 0.9 | 0.5 | ||||||
2011 | 0.3 | 0.7 | ||||||
2012 | 1.4 | 1.5 | ||||||
2013 | 0.1 | 0.3 | ||||||
2014 | -0.3 | 0.0 | ||||||
2015 | -0.3 | -0.1 | ||||||
2016 | 0.0 | -0.0 | ||||||
2017 | 153.0 | 170.0 | ||||||
2018 | -226.0 | -207.0 | ||||||
2019 | 285.0 | 34.0 | ||||||
2020 | 3,951.0 | -16.0 | ||||||
2021 | -344.0 | -21.0 | ||||||
2022 | 130.0 | -21.0 | ||||||
2023 | 961.0 | 28.8 | ||||||
Maximum Since Start of 2008 Financial Crisis | $ | 3,951.0 | $ | 170.0 | ||||
Cumulative Since Start of 2008 Financial Crisis | $ | 4,914.6 | $ | -27.2 |
University Bank has engaged an outside vendor to perform Stress Testing analysis and these tests assume a severely adverse (depressionary) national economic scenario worse than the most recent business depressions that we have experienced, in which we assume
The Bank currently has
At 12/31/2023, 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,
+In addition, we owned the MSRs on
The allowance for loan losses stood at
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
Unaudited net income was
Total Assets at 12/31/2023 were
The Tier 1 Leverage Capital Ratio at 12/31/2023 was
Common Equity Tier 1 Capital at 12/31/2023 was
Other key statistics as of 12/31/2023:
· 10-year annual average revenue growth*, | |
· 5-year annual average revenue growth*, | |
· 2023 vs. 2022 revenue growth*, | |
· TTM Revenue | |
· 10 Year Average ROE | |
· 5 Year Average ROE | |
· LLR/NPAs>90 % | |
· Debt to equity ratio, UNIB only | |
· Current Ratio,# | 230.0 |
· Efficiency Ratio, %+ | |
· Total Assets |
· Loans Held for Sale, at fair value, | |
· NPAs >90 days | |
· TTM ROA % | |
· TCE/TA % | |
· Total Capital Ratio % | |
· NPAs/Assets % | |
· Texas Ratio % | |
· NIM % | |
· NCOs/Loans % | |
· Trailing 12 Months P-E Ratio x | 11.8 |
*Using 2023, 2022, 2021, 2020, 2019, 2018 and 2013 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
Treasury shares as of 12/31/2023 were 37,381.
The audited financial statements are available on the Company website at: https://www.university-bank.com/bancorp-financial-statements/.
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/.
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;
- Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor.
- Reverse Mortgage Lending, a reverse residential mortgage lender based in Southfield, MI; and
- Mortgage Warehouse Lending, a mortgage warehouse lender based in Southfield, MI.
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 the original press release on accesswire.com
FAQ
What was University Bancorp's net income for 2023?
How much did University Bancorp common shareholders earn per share in 2023?
What was the return on equity for University Bancorp common shareholders in 2023?
How did University Bancorp's 2023 net income compare to 2022?
What were the notable expenses impacting University Bancorp’s income in 2023?
What was University Bancorp's total asset value at the end of 2023?
What was the increase in shareholders' equity per share for University Bancorp in 2023?
What was University Bancorp’s Tier 1 Capital Ratio at the end of 2023?
How did the shift in holding more residential loans affect University Bancorp's short-term gains?