U & I Financial Corp. Reports Third Quarter 2018 Results

Year to Date Net Income Increases 88% from the Prior Year

LYNNWOOD, Wash.–(BUSINESS WIRE)–U & I Financial Corp. (OTC Pink: UNIF), the holding company for UniBank,
today reported year to date net income of $3.5 million or $0.64 per
share for the quarter ending September 30, 2018, as compared to $1.9
million or $0.37 per share for the year earlier period. The year to date
net income increased $1.6 million or 88% from the prior year.

As compared to September 30, 2017, total assets increased by $56.0
million (23%) to $296.1 million in 2018, driven by both loans growth of
$32.4 million (19%) to $199.5 million, and deposits growth of $37.5
million (19%) to $237.7 million.

“We are very pleased with the financial results as we have continued to
increase our top line growth from the robust loan production, while
maintaining relatively low funding costs. We have been able to do this
without compromising our tight credit standards. These excellent results
are testaments to the hard work of our staff and the diligent oversight
of our board. We look forward to continuing our success,” said Peter
Park, President and CEO of UniBank.

2018 Third Quarter Highlights

Total assets grew 23% to $296.1 million as compared to $240.1 million a
year ago.

Total loans, net of provision, grew 19% to $199.5 million as compared to
$167.1 million a year ago.

Total deposits grew 19% to $237.7 million as compared to $200.2 million
a year ago.

Net income year to date grew 88% to $3.5 million as compared to $1.9
million one year ago.

Net interest income year to date grew 21% to $8.1 million as compared to
$6.7 million one year ago.

Net interest income for the quarter of $2.9 million grew 23% as compared
to $2.3 million one year ago, and 3% or $87 thousand as compared to $2.8
million in the second quarter 2018.

Net interest margin was 4.23% for the quarter as compared to 4.13% one
year ago.

Gain on sale of SBA loans was $1.5 million year to date as compared to
$311 thousand a year ago.

Return on average equity for the quarter was 13.08% as compared to 6.13%
a year ago.

Return on average assets for the quarter was 1.88% as compared to 1.00%
a year ago.

Nonperforming assets to total assets was 0.49% as compared to 0.64% a
year ago.

The efficiency ratio (noninterest expense divided by revenue) was 54.69%
for the quarter as compared to 66.80% a year ago.

About U & I Financial Corp.

UniBank, the wholly-owned subsidiary of U & I Financial Corp. (OTC Pink:
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 UniBank’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. UniBank 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-18 Jun-18 Sep-17 Sep-18 Sep-17
(Dollars in thousands except EPS) QTD     QTD     QTD YTD     YTD
Interest Income 3,537 3,354 2,664 9,867 7,765
Interest Expense (685 )     (589 )     (348 ) (1,745 )     (1,073 )
Net Interest Income 2,852 2,765 2,316 8,122 6,692
Provision for Loan and Lease Losses (10 ) (200 ) (294 ) (260 )
Gain on Sale of SBA/USDA Loans 630 764 1,538 311
Other Non-interest Income 217       154       79   619       855  
Non-interest Income 847 918 79 2,157 1,166
Salaries & Benefits (1,282 ) (1,175 ) (861 ) (3,549 ) (2,764 )
Occupancy Expense (161 ) (158 ) (156 ) (483 ) (464 )
Other Expense (580 )     (522 )     (530 ) (1,666 )     (1,921 )
Non-interest Expense (2,023 ) (1,855 ) (1,547 ) (5,698 ) (5,149 )
Net Income before Income Taxes 1,667 1,627 848 4,288 2,450
Income Taxes (312 )     (317 )     (240 ) (781 )     (589 )
Net Income/(Loss) 1,355       1,310       608   3,507       1,861  
 
Average Shares Outstanding 5,495 5,495 5,148 5,475 5,058
Earnings per Share 0.25 0.24 0.12 0.64 0.37
 
                   
Statement of Condition (Unaudited)
Sep-18 Jun-18 Variance Sep-17 Variance
(Dollars in thousands) Qtr End     Qtr End     Prior Qtr Qtr End     Prior Year
 
Cash and Due from Banks 38,141 26,690 11,451 28,577 9,564
Investments 40,493 41,375 (882 ) 26,891 13,602
Gross Loans 201,774 204,378 (2,604 ) 168,898 32,876
Reserve for Loan Losses (2,300 )     (2,280 )     (20 ) (1,832 )     (468 )
Net Loans 199,474 202,098 (2,624 ) 167,066 32,408
Fixed Assets 5,842 5,908 (66 ) 6,029 (187 )
Foreclosed Assets 100 100 100
Other Assets 12,073       12,676       (603 ) 11,447       626  
Total Assets 296,123       288,525       7,598   240,110       56,013  
 
Checking 41,744 39,982 1,762 42,045 (301 )
NOW 4,321 4,831 (510 ) 5,983 (1,662 )
Money Market 110,466 102,172 8,294 85,437 25,029
Savings 8,250 8,512 (262 ) 10,365 (2,115 )
Certificates of Deposit 72,930       81,375       (8,445 ) 56,381       16,549  
Total Deposits 237,711 236,872 839 200,211 37,500
Borrowed Funds 16,000 10,000 6,000 16,000
Other Liabilities 820       662       158   641       179  
Total Liabilities 254,531       247,534       6,997   200,852       53,679  
Shareholders’ Equity 41,593       40,991       602   39,258       2,335  
Total Liabilities & Equity 296,124       288,525       7,599   240,110       56,014  
 
           
Financial Ratios
Sep-18 Jun-18 Sep-17
(Dollars in thousands except BVS) QTD     QTD     QTD
Performance Ratios
Return on Average Assets 1.88 % 1.87 % 1.00 %
Return on Average Equity 13.08 % 12.99 % 6.13 %
Net Interest Margin 4.23 % 4.19 % 4.13 %
Efficiency Ratio 54.69 % 50.39 % 66.80 %
 
Capital
Tier 1 Leverage Ratio Not Avail 14.82 % 16.23 %
Common Equity Tier 1 Ratio Not Avail 17.78 % 20.18 %
Tier 1 Risk-Based Capital Ratio Not Avail 17.78 % 20.18 %
Total Risk-Based Capital Ratio Not Avail 18.75 % 21.12 %
Book Value per Share 7.6 7.5 7.6
 
Asset Quality
Net Loan Charge-Offs (Recoveries) (26 ) 20 (32 )
Allowance for Loan Losses to Loans 1.14 % 1.12 % 1.08 %
Nonperforming Assets to Assets 0.49 % 0.47 % 0.64 %

Contacts

U & I Financial Corp.
Investor Relations
Stephanie Yoon,
425-275-9727