LYNNWOOD, WA / ACCESS Newswire / April 29, 2025 / U & I Financial Corp. (OTCQX:UNIF), the holding company ("Company") for UniBank ("Bank"), today reported a quarterly Net Loss of $2.1 million or a loss of $0.38 per share in the first quarter of 2025, compared to Net Income of $1.3 million or $0.23 earnings per share for the same quarter of 2024. There was $3.1 million of Provision for Credit Losses recognized during the first quarter of 2025 as compared to none recognized for the same quarter last year. However, the Bank had an Income Tax Benefit of $1.1 million during this quarter, primarily due to an adjustment to the Deferred Tax Assets Valuation Allowance.
At March 31, 2025, Total Assets were $441.9 million, a decrease of $152.7 million or 25.7% from $594.7 million at March 31, 2024. Net Loans were $359.4 million at March 31, 2025, decreasing by $97.0 million or 21.3% from $456.4 million at March 31, 2024. Total Deposits decreased by $91.6 million or 19.3% to $383.4 million at March 31, 2025 compared to $474.9 million a year earlier.
The charge-offs of commercial-equipment loans declined to $2.2 million during the first quarter of 2025 as compared to $18.2 million during the first quarter of 2024. Furthermore, the Bank had commercial-equipment loans recoveries of $392 thousand during the first quarter of 2025 as compared to $102 thousand of recoveries during the fourth quarter of 2024. However, the Bank experienced charge-offs of other loan types totaling $4.0 million during the first quarter of 2025, primarily due to a $3.7 million impairment of a $6.2 million commercial real estate loan, which has been on non-accrual status since the fourth quarter of 2024.
The total non-accrual balance was $10.2 million at March 31, 2025 as compared to $11.0 million at December 31, 2024. The nonperforming assets to total assets was 2.31% at March 31, 2025 compared to 2.11% at December 31, 2024. This ratio increased from the prior quarter due to the decrease in Total Assets, as there were no nonperforming assets other than the non-accrual loans.
The Bank's capital ratios were 5.98%, 7.76% and 9.01% for Tier 1 Leverage Ratio, Tier 1 Risk-Based Capital Ratio and Total Risk-Based Capital Ratio, respectively, as of March 31, 2025, increasing from 5.60%, 7.53% and 8.80%, respectively, as of December 31, 2024. The Bank was "adequately capitalized" per the regulatory guidelines as of March 31, 2025.
"The first quarter 2025 results did not improve as much as we would have liked due to the impairment of a single, large hotel loan," said President & CEO Stephanie Yoon. "However, because of our continued deleveraging efforts, the regulatory capital ratios still improved. Also, we had more recoveries this quarter thanks to the efforts of the Credit staff."
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.
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; the potential for new or increased tariffs, trade restrictions or geopolitical tensions that could affect economic activity or specific industry sectors, 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 (LOSS) (Unaudited)
Mar-25
Dec-24
Mar-24
Mar-24
Mar-24
(Dollars in thousands except EPS)
QTD
QTD
QTD
$ Var
% Var
Interest Income
$
6,643
$
7,165
$
9,285
$
(2,642
)
(28.5
%)
Interest Expense
3,906
4,643
4,698
(792
)
(16.9
%)
Net Interest Income
2,737
2,522
4,587
(1,850
)
(40.3
%)
Provision for Credit Losses
3,104
5,801
-
3,104
-
Gain (Loss) on Loan Sales
-
-
-
-
100.0
%
Loan Servicing Fees, Net of Amortization
123
141
184
(61
)
(33.2
%)
Other Non-interest Income
156
184
185
(29
)
(15.7
%)
Non-interest Income
279
325
369
(90
)
(24.4
%)
Salaries & Benefits
1,628
1,629
1,989
(361
)
(18.1
%)
Occupancy Expense
201
193
192
9
4.7
%
Other Expense
1,249
1,238
1,184
65
5.5
%
Non-interest Expense
3,078
3,060
3,365
(287
)
(8.5
%)
Net Income (Loss) before Income Taxes
(3,166
)
(6,014
)
1,591
(4,757
)
(299.0
%)
Income Tax Expense (Benefit)
(1,093
)
10,543
322
(1,415
)
(439.4
%)
Net Income (Loss)
$
(2,073
)
$
(16,557
)
$
1,269
$
(3,342
)
(263.4
%)
Total Outstanding Shares (in thousands)
5,477
5,477
5,476
1
Basic Earnings (Loss) per Share
$
(0.38
)
$
(3.02
)
$
0.23
$
(0.61
)
Statement of Condition (Unaudited)
Mar-25
Dec-24
Mar-24
Mar-24
Mar-24
(Dollars in thousands)
Qtr End
Qtr End
Qtr End
$ Var
% Var
Cash and Due from Banks
$
22,564
$
61,684
$
46,495
$
(23,931
)
(51.5
%)
Investments
47,090
48,511
52,355
(5,265
)
(10.1
%)
Loans Held for Sale
-
-
6,110
(6,110
)
(100.0
%)
Gross Loans
366,427
395,768
471,081
(104,654
)
(22.2
%)
Allowance for Credit Losses (ACL) on Loans
(6,991
)
(9,620
)
(14,634
)
7,643
(52.2
%)
Net Loans
359,436
386,148
456,447
(97,011
)
(21.3
%)
Fixed Assets
5,791
5,936
6,268
(477
)
(7.6
%)
Deferred Tax Assets
13,180
12,542
6,953
6,227
89.6
%
Valuation Allowance
(11,709
)
(12,014
)
-
(11,709
)
(100.0
%)
Net Deferred Tax Assets
1,471
528
6,953
(5,482
)
(78.8
%)
Other Assets
5,585
19,512
20,076
(14,491
)
(72.2
%)
Total Assets
$
441,937
$
522,319
$
594,704
$
(152,767
)
(25.7
%)
Checking
$
72,303
$
76,165
$
95,698
$
(23,395
)
(24.4
%)
NOW
5,984
5,739
13,025
(7,041
)
(54.1
%)
Money Market
79,451
124,530
151,058
(71,607
)
(47.4
%)
Savings
5,232
6,184
7,468
(2,236
)
(29.9
%)
Certificates of Deposit
220,382
226,984
207,696
12,686
6.1
%
Total Deposits
383,352
439,602
474,945
(91,593
)
(19.3
%)
Borrowed Funds
29,000
50,000
52,000
(23,000
)
(44.2
%)
ACL on Off-Balance Sheet Credit Exposure
68
65
2,256
(2,188
)
100.0
%
Other Liabilities
1,810
2,721
3,039
(1,229
)
(40.4
%)
Total Liabilities
414,230
492,388
532,240
(118,010
)
(22.2
%)
Shareholders' Equity
27,707
29,931
62,464
(34,757
)
(55.6
%)
Total Liabilities & Equity
$
441,937
$
522,319
$
594,704
$
(152,767
)
(25.7
%)
Financial Ratios
Mar-25
Dec-24
Mar-24
(Dollars in thousands except BVS)
QTD
QTD
QTD
Performance Ratios
Return on Average Assets*
(1.73
%)
(11.87
%)
0.86
%
Return on Average Equity*
(28.13
%)
(141.93
%)
8.25
%
Net Interest Margin*
2.35
%
1.86
%
3.10
%
Efficiency Ratio
102.06
%
107.48
%
67.87
%
*Quarterly results are annualized
Adequately
Well
Mar-25
Dec-24
Mar-24
Capitalized
Capitalized
Capital
QTD
QTD
QTD
Minimum
Minimum
Tier 1 Leverage Ratio**
5.98
%
5.60
%
10.22
%
4.00
%
5.00
%
Common Equity Tier 1 Ratio**
7.76
%
7.53
%
12.56
%
4.50
%
6.50
%
Tier 1 Risk-Based Capital Ratio**
7.76
%
7.53
%
12.56
%
6.00
%
8.00
%
Total Risk-Based Capital Ratio **
9.01
%
8.80
%
13.83
%
8.00
%
10.00
%
Book Value per Share (BVS)
$
5.06
$
5.47
$
11.41
**Represents Bank capital ratios
Mar-25
Dec-24
Mar-24
Asset Quality
QTD
QTD
QTD
Charge Offs: Commercial-Equipment
$
2,173
$
18,166
$
14,611
(Recoveries): Commercial-Equipment
$
(392
)
$
(102
)
$
0
Charge Offs: All Other
$
4,020
$
0
$
0
(Recoveries): All Other
$
(71
)
$
0
$
0
Allowance for Credit Losses to Loans %
1.91
%
2.43
%
3.11
%
Non-accrual Loans
$
10,202
$
11,038
$
4,631
Nonperforming Assets to Total Assets%
2.31
%
2.11
%
0.78
%
Additional Credit Disclosures
Loan Segmentation - The following tables present the Bank's total loans outstanding at amortized cost by portfolio segment and by internally assigned grades as of March 31, 2025 and December 31, 2024 (in thousands):
March 31, 2025
Special
Portfolio Segment
Pass
Mention
Substandard
Doubtful
Loss
Total
Commercial real estate
$
171,421
$
18,182
$
5,437
$
3,566
$
-
$
198,606
Residential real estate
135,280
10,886
2,623
-
-
148,789
Commercial - equipment
-
-
5,195
2,423
-
7,618
Commercial - all other
7,479
257
-
-
-
7,736
Multifamily
2,780
-
-
-
-
2,780
Construction and land
857
-
-
-
-
857
Consumer and other
41
-
-
-
-
41
$
317,858
$
29,325
$
13,255
$
5,989
$
-
$
366,427
December 31, 2024
Special
Portfolio Segment
Pass
Mention
Substandard
Doubtful
Loss
Total
Commercial real estate
$
181,316
$
24,012
$
6,762
$
924
$
-
$
213,014
Residential real estate
159,725
234
-
-
-
159,959
Commercial - equipment
-
881
7,986
1,899
-
10,766
Commercial - all other
8,124
-
100
-
-
8,224
Multifamily
2,802
-
-
-
-
2,802
Construction and land
883
-
-
-
-
883
Consumer and other
120
-
-
-
-
120
$
352,970
$
25,127
$
14,848
$
2,823
$
-
$
395,768
Descriptions of the various risk grades are as follows:
Special Mention: Assets having potential weaknesses that if left uncorrected, may result in decline in borrower's repayment ability. However, these assets are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification.
Substandard: An asset is considered substandard if it is inadequately protected by the current net worth and pay capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Doubtful: Assets classified as doubtful have all the weaknesses inherent in those classified substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions, and values.
Loss: Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Any loans downgraded to this category are generally charged off soon after.
Allowance for Credit Losses on Loans - The following tables present the allowance for credit losses under ASC 326, Financial Instruments - Credit Losses by portfolio segment and by internally assigned grades as of March 31, 2025 and December 31, 2024 (in thousands):
March 31, 2025
Special
Portfolio Segment
Pass
Mention
Substandard
Doubtful
Loss
Total
Commercial real estate
$
1,195
$
66
$
14
$
-
$
-
$
1,275
Residential real estate
1,044
68
125
-
-
1,237
Commercial - equipment
-
-
2,597
1,624
-
4,221
Commercial - all other
237
3
-
-
-
240
Multifamily
1
-
-
-
-
1
Construction and land
15
-
-
-
-
15
Consumer and other
2
-
-
-
-
2
$
2,494
$
137
$
2,736
$
1,624
$
-
$
6,991
December 31, 2024
Special
Portfolio Segment
Pass
Mention
Substandard
Doubtful
Loss
Total
Commercial real estate
$
1,214
$
163
$
49
$
79
$
-
$
1,505
Residential real estate
1,629
2
-
-
-
1,631
Commercial - equipment
-
441
3,993
1,899
-
6,333
Commercial - all other
121
-
2
-
-
123
Multifamily
2
-
-
-
-
2
Construction and land
23
-
-
-
-
23
Consumer and other
3
-
-
-
-
3
$
2,992
$
606
$
4,044
$
1,978
$
-
$
9,620
Past due loans -The following table presents past due loans at amortized cost by portfolio segment as of March 31, 2025 and December 31, 2024 (in thousands):
March 31, 2025
30 - 59 Days
60 - 89 Days
90 Days or
Total
Total
Portfolio Segment
Past Due
Past Due
More
Past Due
Current
Loans
Commercial real estate
$
3,566
$
-
$
2,646
$
6,212
$
192,394
$
198,606
Residential real estate
-
-
-
-
148,789
148,789
Commercial - equipment
1,692
405
-
2,097
5,521
7,618
Commercial - all other
257
-
-
257
7,479
7,736
Multifamily
-
-
-
-
2,780
2,780
Construction and land
-
-
-
-
857
857
Consumer and other
-
-
-
-
41
41
$
5,515
$
405
$
2,646
$
8,566
$
357,861
$
366,427
December 31, 2024
30 - 59 Days
60 - 89 Days
90 Days or
Total
Total
Portfolio Segment
Past Due
Past Due
More
Past Due
Current
Loans
Commercial real estate
$
-
$
-
$
7,306
$
7,306
$
205,708
$
213,014
Residential real estate
-
-
-
-
159,959
159,959
Commercial - equipment
1,817
754
403
2,974
7,792
10,766
Commercial - all other
100
-
-
100
8,124
8,224
Multifamily
-
-
-
-
2,802
2,802
Construction and land
-
-
-
-
883
883
Consumer and other
-
-
-
-
120
120
$
1,917
$
754
$
7,709
$
10,380
$
385,388
$
395,768
Non-accrual loans -Loans are placed on nonaccrual once the loan is 90 days past due or sooner if, in management's opinion, the borrower may be unable to meet payment of obligations as they become due, as well as when required by regulatory provisions. The following table presents the nonaccrual loans at amortized cost by portfolio segment as of March 31, 2025 and December 31, 2024 (in thousands):
