U & I Financial Corp. Reports Amended and Restated Third Quarter 2024 Financial Results

Rhea-AI Summary

U & I Financial Corp (OTCQX:UNIF) has amended its Q3 2024 financial results, reporting significant changes in key metrics. The restatement shows decreases of $8.7 million each in Gross Loans and Allowance for Credit Losses (ACL) on Loans due to commercial equipment loan charge-offs. While the restatement had no impact on earnings, it led to notable changes: ACL to Loans ratio dropped from 6.59% to 4.70%, Net Credit Charge-Offs doubled to $17.4 million for the quarter, and Nonperforming Assets to Total Assets ratio improved from 2.74% to 1.23%. Capital ratios also decreased slightly, with Tier 1 Leverage Ratio falling from 7.53% to 7.22%.

Positive

• Nonperforming Assets to Total Assets ratio improved significantly from 2.74% to 1.23%
• No impact on company earnings despite restatement

Negative

• Net Credit Charge-Offs doubled to $17.4 million for Q3 2024
• ACL to Loans ratio decreased from 6.59% to 4.70%
• $8.7 million decrease in Gross Loans
• All capital ratios declined, including Tier 1 Leverage Ratio dropping to 7.22%

LYNNWOOD, WA / ACCESSWIRE / December 6, 2024 / U & I Financial Corp. (OTCQX:UNIF), the holding company (the "Company") for UniBank (the "Bank"), today reported amended and restated results for its third quarter with decreases in Gross Loans and Allowance for Credit Losses (ACL) on Loans by $8.7 million each, reflecting loan charge offs against the ACL. These were all commercial equipment loans that had the principal balances fully reserved as of September 30, 2024. The Bank also amended and refiled its Call Report on the same day. The restatement did not have any impact on the Company's earnings.

As a result of the restatement, at September 30, 2024:

• ACL to Loans ratio decreased from 6.59% to 4.70%;

• Net Credit Charge-Offs increased from $8.7 million to $17.4 million for the quarter;

• Net Credit Charge-Offs increased from $23.3 million to $32.0 million for the nine months ended;

• Nonperforming Assets to Total Assets ratio decreased from 2.74% to 1.23%;

• Tier 1 Leverage Ratio, Common Equity Tier 1 Ratio, Tier 1 Risk-Based Capital Ratio, Total Risk-Based Capital Ratio decreased from 7.53%, 9.56%, 9.56%, 10.87%, respectively, to 7.22%, 9.33%, 9.33%, 10.62% respectively.

Non-GAAP Financial Metrics

This news release contains certain non-GAAP financial measure disclosures. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company's operational performance, credit quality and capital levels.

About U & I Financial Corp.

UniBank, the wholly owned subsidiary of U & I Financial Corp. (OTCQX: UNIF). Founded in 2006 and based in Lynnwood, Washington, the Bank serves small to medium-sized businesses, professionals, and individuals across the United States with a particular emphasis on government guaranteed loan programs. Customers can access their accounts in any of the four 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 the Company'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 compliance with the Written Agreement with the Federal Reserve Bank of San Francisco and the Washington Department of Financial Institutions; 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; further declines in the quality of the loan portfolio that results in continued losses and our ability to succeed in our problem-asset resolution efforts; including, but not limited to, continued credit deterioration of commercial-equipment loans and future increases in the Provision for Credit Losses, 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)
		Sep-24				Jun-24				Sep-23				Sep-24				Sep-23				Dec-23
(Dollars in thousands except EPS)		QTD				QTD				QTD				YTD				YTD				YTD
Interest Income		$	8,270			$	9,362			$	9,616			$	26,917			$	28,346			$	37,652
Interest Expense			4,820				4,769				4,173				14,287				10,796				15,388
Net Interest Income			3,450				4,593				5,443				12,630				17,550				22,264
Provision for Credit Losses			19,479				2,966				158				22,445				158				26,411
Gain (Loss) on Loan Sales			-				179				609				179				1,433				1,410
Loan Servicing Fees, Net of Amortization			168				175				164				527				541				624
Other Non-interest Income			212				195				176				592				678				851
Non-interest Income			380				549				949				1,298				2,652				2,885
Salaries & Benefits			1,514				1,445				1,962				4,948				6,991				8,241
Occupancy Expense			205				189				187				586				541				729
Other Expense			1,568				1,629				1,120				4,381				3,126				3,712
Non-interest Expense			3,287				3,263				3,269				9,915				10,658				12,682
Net Income (Loss) before Income Taxes			(18,936	)			(1,087	)			2,965				(18,432	)			9,386				(13,944	)
Income Tax Expense (Benefit)			(3,983	)			(260	)			610				(3,921	)			1,986				(3,136	)
Net Income (Loss)		$	(14,953	)		$	(827	)		$	2,355			$	(14,511	)		$	7,400			$	(10,808	)
Total Outstanding Shares (in thousands)			5,477				5,477				5,466				5,477				5,466				5,466
Basic Earnings (Loss) per Share		$	(2.73	)		$	(0.15	)		$	0.43			$	(2.65	)		$	1.36			$	(1.98	)

Statement of Condition (Unaudited)
		Sep-24				Jun-24				Sep-23				Variance				Variance				Dec-23
(Dollars in thousands)		Qtr End				Qtr End				Qtr End				Prior Qtr				Prior Year				Qtr End
Cash and Due from Banks		$	70,527			$	46,299			$	58,923			$	24,228			$	11,604			$	61,254
Investments			50,344				50,996				48,841				(652	)			1,503				51,346
Loans Held for Sale			-				-				-				-				-				-
Gross Loans			430,523				459,196				482,132				(28,673	)			(51,609	)			490,636
Allowance for Credit Losses (ACL) on Loans			(20,254	)			(17,680	)			(5,234	)			(2,574	)			(15,020	)			(25,950	)
Net Loans			410,269				441,516				476,898				(31,247	)			(66,629	)			464,686
Fixed Assets			6,078				6,140				6,577				(62	)			(499	)			6,438
Other Assets			32,387				27,676				20,978				4,711				11,409				26,325
Total Assets		$	569,605			$	572,627			$	612,217			$	(3,022	)		$	(42,612	)		$	610,049
Checking		$	86,708			$	88,860			$	105,770			$	(2,152	)		$	(19,062	)		$	100,135
NOW			5,233				10,925				14,588				(5,692	)			(9,355	)			13,504
Money Market			128,136				144,471				197,296				(16,335	)			(69,160	)			200,966
Savings			6,258				6,895				9,050				(637	)			(2,792	)			8,063
Certificates of Deposit			241,840				200,758				195,429				41,082				46,411				191,733
Total Deposits			468,175				451,909				522,133				16,266				(53,958	)			514,401
Borrowed Funds			50,000				54,000				8,000				(4,000	)			42,000				20,000
ACL on Off-Balance Sheet Credit Exposure			1,695				2,176				15				(481	)			1,680				5,551
Other Liabilities			2,710				3,387				3,901				(677	)			(1,191	)			8,678
Total Liabilities			522,580				511,472				534,049				11,108				(11,469	)			548,630
Shareholders' Equity			47,025				61,155				78,168				(14,130	)			(31,143	)			61,419
Total Liabilities & Equity		$	569,605			$	572,627			$	612,217			$	(3,022	)		$	(42,612	)		$	610,049

Financial Ratios
		Sep-24				Jun-24				Sep-23				Sep-24				Sep-23				Dec-23
(Dollars in thousands except BVS)		QTD				QTD				QTD				YTD				YTD				YTD
Performance Ratios
Return on Average Assets*			(10.30	%)			(0.57	%)			1.54	%			(3.30	%)			1.65	%			(1.85	%)
Return on Average Equity*			(96.78	%)			(5.29	%)			11.92	%			(31.24	%)			13.01	%			(14.53	%)
Net Interest Margin*			2.44	%			3.21	%			3.65	%			2.92	%			4.05	%			3.83	%
Efficiency Ratio			85.82	%			63.43	%			51.14	%			71.36	%			52.76	%			50.36	%
*Quarterly results are annualized
		Sep-24				Jun-24				Sep-23				Well Capitalized
Capital		QTD				QTD				QTD				Minimum
Tier 1 Leverage Ratio**			7.22	%			10.22	%			13.26	%			5.00	%
Common Equity Tier 1 Ratio**			9.33	%			12.82	%			16.54	%			6.50	%
Tier 1 Risk-Based Capital Ratio**			9.33	%			12.82	%			16.54	%			8.00	%
Total Risk-Based Capital Ratio **			10.62	%			14.10	%			17.61	%			10.00	%
Book Value per Share (BVS)		$	8.59			$	11.17			$	14.30
**Represents Bank capital ratios
		Sep-24				Jun-24				Sep-23				Sep-24				Sep-23				Dec-23
Asset Quality		QTD				QTD				QTD				YTD				YTD				YTD
Net Credit Charge-Offs (Recoveries)***		$	17,386			$	0			$	0			$	31,998			$	0			$	0
Allowance for Credit Losses to Loans %			4.70	%			3.85	%			1.09	%
Nonperforming Assets to Total Assets			1.23	%			1.02	%			0.74	%
*** Includes Off-Balance Sheet Credit Exposure

U & I Financial Corp.
Investor Relations
IR@unibankusa.com

SOURCE: U & I Financial Corp. (Washington)

View the original press release on accesswire.com

FAQ

What changes did UNIF report in its Q3 2024 restatement?

UNIF reported $8.7 million decreases in both Gross Loans and ACL on Loans, doubled Net Credit Charge-Offs to $17.4 million, improved Nonperforming Assets ratio to 1.23%, and slightly decreased capital ratios.

How did UNIF's Net Credit Charge-Offs change in Q3 2024?

Net Credit Charge-Offs increased from $8.7 million to $17.4 million for the quarter, and from $23.3 million to $32.0 million for the nine months ended September 30, 2024.

What happened to UNIF's capital ratios in Q3 2024?

All capital ratios decreased: Tier 1 Leverage Ratio to 7.22%, Common Equity Tier 1 Ratio to 9.33%, Tier 1 Risk-Based Capital Ratio to 9.33%, and Total Risk-Based Capital Ratio to 10.62%.