University Bancorp, Inc. Announces Results for 2011
May 09 2012 - 11:16AM
Marketwired
University Bancorp, Inc. (OTCQB: UNIB) (PINKSHEETS: UNIB) announced
today that it had an audited net loss of $932,074 in 2011 versus
net income of $169,359 in 2010. After taking into account preferred
stock dividends and net income attributable to the minority
interests held by outside shareholders in University Bank's
subsidiaries, net income attributable to the common stockholders of
University Bancorp, Inc. was a net loss of $380,384 ($0.089 per
share) in 2011 versus a net loss of $318,575 ($0.073 per share) in
2010.
President & CEO Stephen Lange Ranzini noted, "The
bottom-line 2011 results were disappointing after the $2.9 million
in unusual expenses we incurred. Increased profitability at both
Midwest Loan Services and University Islamic Financial were
insufficient to offset these lost profits. Ranzini noted, "Our
rapidly growing subsidiaries generated 86.2% of our bank's
$21,280,296 revenues in 2011."
For 2012 the Company is projecting $5.7 million of pre-tax
income, and for the first three months of the year, our pre-tax
profits were $668,931 ahead of the budget projection. For the first
three months of 2012 all of the bank's subsidiaries are performing
ahead of the budgeted net income, and the bank's Tier 1 Capital had
risen to 9.66%.
Unusual expenses during the year decreased the final result by
$2,931,808:
- Valuation reserves from the write-down of mortgage servicing
rights of $1,381,808 as the value of mortgage servicing rights
plunged during the year due to both the impact of the record low
long term mortgage rates available to customers and the new HARP2
refinancing program initiative;
- University Lending Group's wholesale lending group shut down
causing a loss of $1,050,000, after its business model was severely
challenged and its volume dropped 75% when many of its customers
ceased doing business following the imposition of costly new
regulatory mandates. From inception in May 2008 through closure in
July 2011, the wholesale lending business had earned approx.
$715,000 on a total investment of $1,400,000 on total loans closed
of $927.4 million. The bank earned substantial additional profits
over the years from net interest income generated from financing
the loans.
- In response to the closure of its wholesale lending business
unit, University Lending Group established a network of 12 new
retail lending offices in SE Michigan, Indiana and the Florida
Panhandle and start-up costs of approx. $500,000 were incurred in
2011. In the first quarter of 2012, these offices had a pre-tax
profit of $548,192 on total mortgage originations of $74.2 million,
of which Realtor® referred purchase loans comprised 61%.
As of the close of business December 31, 2011, the Company
issued 366,720 shares of common stock (in addition to the $250,000
paid earlier) to acquire 37.4925% of its subsidiary, University
Lending Group, LLC, increasing its ownership interest to
87.5025%.
Highlights for the year include:
- Mortgages subserviced by Midwest Loan Services grew 8.4% to
70,889 from 65,367, the total of mortgages subserviced grew to
$10.03 billion and revenue at Midwest Loan Services rose 0.7% to
$8,620,516 from $8,558,864;
- Deposit mortgage escrow deposits at University Bank grew 9.2%
to $112,866,935 from $103,390,466;
- Our Islamic division booked its second annual operating profit,
$296,938 up 49.0% from $199,280 in 2010, and the amount of loans
serviced for FHLMC rose 64.9% and revenues grew 55.2% to $2,856,983
from $1,841,422;
- University Bank and its subsidiaries continue to actively lend
in our local communities despite the ongoing business recession,
with $313,815,218 in residential mortgage originations in
2011.
Key metrics for the year ended December 31, 2011 were:
- Total Revenue increased to $21.3 million from $20.4 million, up
4.1%;
- Total Assets increased to $120.4 million from $117.3 million,
up 2.7%;
- Net Interest and financing income increased to $3.94 million,
up 0.4%;
- Loans and financings held for portfolio decreased 2.1% to $57.7
million;
- Residential mortgage originations fell 17.7% to $313,815,218
from $381,380,905 in 2010;
- Islamic revenue grew 25.2% to $3,439,611 from $2,747,026 in
2010;
- Islamic residential originations grew 96.7% to $79,504,125 from
$40,414,381 in 2010;
- Tier 1 Capital fell to 8.90% from 9.27% at 12/31/2010;
- Return on common stockholders' equity was minus 6.4%;
- Total employees rose 24.5% to 269 from 216 at 12/31/2010.
Ann Arbor-based University Bancorp owns 100% of University Bank
which, together with its subsidiaries, holds and manages a total of
over $10.8 billion in loans and assets. University Bank is an
FDIC-insured, locally owned and managed community bank, and meets
the financial needs of its community through its creative and
innovative services. Founded in 1890, University Bank® is proud to
have been selected as the "Community Bankers of the Year" by
American Banker magazine and as the recipient of the American
Bankers Association's Community Bank Award.
Shareholders and investors are encouraged to refer to the
financial information including the audited financial statements,
available on our investor relations web page at:
http://www.university-bank.com/Bancorp.html.
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 and net
income, the sustainability of past results, 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.
Contact: Stephen Lange Ranzini President and CEO Phone:
734-741-5858, Ext. 226 Email: Email Contact
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