U & I Financial Corp. (OTCQX:UNIF), the holding company ("Company") for UniBank ("Bank"), today reported a quarterly Net Loss of $16.6 million or a loss of $3.02 per share in the fourth quarter of 2024, compared to a Net Loss of $18.2 million or a loss of $3.33 per share for the same quarter of 2023. The Provision for Credit Losses of $5.8 million recognized during the fourth quarter of 2024 was $20.5 million lower than the $26.3 million recognized for the same quarter last year. However, the Bank had an Income Tax Expense of $10.5 million during this quarter as a result of a $12.0 million Deferred Tax Assets Valuation Allowance expense as compared to an Income Tax Benefit of $5.1 million for the same quarter last year, resulting is a $15.7 million increase in Income Tax Expense.
For the year ended December 31, 2024, the Net Loss was $31.1 million or a loss of $5.67 per share, compared to a Net Loss of $10.8 million or a loss of $1.98 per share for the same period of 2023. The decrease was primarily due to less Net Interest Income of $7.1 million and higher Interest Tax Expense of $9.8 million.
At December 31, 2024, Total Assets were $522.3 million, a decrease of $87.7 million or 14.4% from $610.0 million at December 31, 2023. Net Loans were $386.1 million at December 31, 2024, decreasing by $78.5 million or 16.9% from $464.7 million at December 31, 2023. Total Deposits decreased by $74.8 million or 14.5% to $439.6 million at December 31, 2024 compared to $514.4 million a year earlier.
The Bank continued to experience credit deterioration in commercial-equipment loans, with a $18.1 million charged off during the fourth quarter of 2024. As of December 31, 2024, the remaining loans totaled $10.8 million compared to $29.6 million as of September 30, 2024. As of December 31, 2024 the Allowance for Credit Losses ("ACL") on Loans and ACL on Off-Balance Sheet Credit Exposure were $6.3 million and $65 thousand, respectively, compared to $15.4 million and $1.7 million, respectively, as of September 30, 2024.
The Bank's capital ratios were 5.60%, 7.53% and 8.80% for Tier 1 Leverage Ratio, Tier 1 Risk-Based Capital Ratio and Total Risk-Based Capital Ratio, respectively, as of December 31, 2024. The Tier 1 Risk-Based Capital Ratio and Total Risk-Based Capital Ratio were "adequately capitalized" per the regulatory guidelines.
"The Company had a very challenging year in 2024 due to the deterioration of the commercial-equipment loans. While the credit exposure of these loans has decreased by year end, the Bank is still actively working with borrowers to prevent further deterioration," said President & CEO Stephanie Yoon. "Looking ahead, we still have much work to do. Hence, we have added new talent in key areas of the Bank in addition to the new Chief Credit Officer who started in September 2024. With a strengthened team, I am hopeful that we can turn things around and continue the rebuilding process."
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)
| | | Dec-24 | | | Sep-24 | | | Dec-23 | | | Dec-24 | | | Dec-23 | |
| (Dollars in thousands except EPS) | | QTD | | | QTD | | | QTD | | | YTD | | | YTD | |
| Interest Income | | $ | 7,165 | | | $ | 8,270 | | | $ | 9,306 | | | $ | 34,082 | | | $ | 37,652 | |
| Interest Expense | | | 4,643 | | | | 4,820 | | | | 4,592 | | | | 18,930 | | | | 15,388 | |
| Net Interest Income | | | 2,522 | | | | 3,450 | | | | 4,714 | | | | 15,152 | | | | 22,264 | |
| Provision for Credit Losses | | | 5,801 | | | | 19,479 | | | | 26,253 | | | | 28,246 | | | | 26,411 | |
| Gain (Loss) on Loan Sales | | | - | | | | - | | | | (23 | ) | | | 179 | | | | 1,410 | |
| Loan Servicing Fees, Net of Amortization | | | 141 | | | | 168 | | | | 83 | | | | 668 | | | | 624 | |
| Other Non-interest Income | | | 184 | | | | 212 | | | | 173 | | | | 776 | | | | 851 | |
| Non-interest Income | | | 325 | | | | 380 | | | | 233 | | | | 1,623 | | | | 2,885 | |
| Salaries & Benefits | | | 1,629 | | | | 1,514 | | | | 1,250 | | | | 6,577 | | | | 8,241 | |
| Occupancy Expense | | | 193 | | | | 205 | | | | 188 | | | | 779 | | | | 729 | |
| Other Expense | | | 1,238 | | | | 1,568 | | | | 586 | | | | 5,619 | | | | 3,712 | |
| Non-interest Expense | | | 3,060 | | | | 3,287 | | | | 2,024 | | | | 12,975 | | | | 12,682 | |
| Net Income (Loss) before Income Taxes | | | (6,014 | ) | | | (18,936 | ) | | | (23,330 | ) | | | (24,446 | ) | | | (13,944 | ) |
| Income Tax Expense (Benefit) | | | 10,543 | | | | (3,983 | ) | | | (5,122 | ) | | | 6,622 | | | | (3,136 | ) |
| Net Income (Loss) | | $ | (16,557 | ) | | $ | (14,953 | ) | | $ | (18,208 | ) | | $ | (31,068 | ) | | $ | (10,808 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Outstanding Shares (in thousands) | | | 5,477 | | | | 5,477 | | | | 5,466 | | | | 5,477 | | | | 5,466 | |
| Basic Earnings (Loss) per Share | | $ | (3.02 | ) | | $ | (2.73 | ) | | $ | (3.33 | ) | | $ | (5.67 | ) | | $ | (1.98 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Statement of Condition (Unaudited) | | | | | | | | | | | | | | | | | | | | |
| (Dollars in thousands) | | Dec-24
Qtr End | | | Sep-24
Qtr End | | | Dec-23
Qtr End | | | Variance
Prior Qtr | | | Variance
Prior Year | |
| | | | | | | | | | | | | | | | | | | | | |
| Cash and Due from Banks | | $ | 61,684 | | | $ | 70,527 | | | $ | 61,254 | | | $ | (8,843 | ) | | $ | 430 | |
| Investments | | | 48,511 | | | | 50,344 | | | | 51,346 | | | | (1,833 | ) | | | (2,835 | ) |
| Gross Loans | | | 395,768 | | | | 430,523 | | | | 490,636 | | | | (34,755 | ) | | | (94,868 | ) |
| Allowance for Credit Losses (ACL) on Loans | | | (9,620 | ) | | | (20,254 | ) | | | (25,950 | ) | | | 10,634 | | | | 16,330 | |
| Net Loans | | | 386,148 | | | | 410,269 | | | | 464,686 | | | | (24,121 | ) | | | (78,538 | ) |
| Fixed Assets | | | 5,936 | | | | 6,078 | | | | 6,438 | | | | (142 | ) | | | (502 | ) |
| Deferred Tax Assets | | | 12,542 | | | | 11,192 | | | | 6,880 | | | | 1,350 | | | | 5,662 | |
| Valuation Allowance | | | (12,014 | ) | | | - | | | | - | | | | (12,014 | ) | | | (12,014 | ) |
| Net Deferred Tax Assets | | | 528 | | | | 11,192 | | | | 6,880 | | | | (10,664 | ) | | | (6,352 | ) |
| Other Assets | | | 19,512 | | | | 21,195 | | | | 19,445 | | | | (1,683 | ) | | | 67 | |
| Total Assets | | $ | 522,319 | | | $ | 569,605 | | | $ | 610,049 | | | $ | (47,286 | ) | | $ | (87,730 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Checking | | $ | 76,165 | | | $ | 86,708 | | | $ | 100,135 | | | $ | (10,543 | ) | | $ | (23,970 | ) |
| NOW | | | 5,739 | | | | 5,233 | | | | 13,504 | | | | 506 | | | | (7,765 | ) |
| Money Market | | | 124,530 | | | | 128,136 | | | | 200,966 | | | | (3,606 | ) | | | (76,436 | ) |
| Savings | | | 6,184 | | | | 6,258 | | | | 8,063 | | | | (74 | ) | | | (1,879 | ) |
| Certificates of Deposit | | | 226,984 | | | | 241,840 | | | | 191,733 | | | | (14,856 | ) | | | 35,251 | |
| Total Deposits | | | 439,602 | | | | 468,175 | | | | 514,401 | | | | (28,573 | ) | | | (74,799 | ) |
| Borrowed Funds | | | 50,000 | | | | 50,000 | | | | 20,000 | | | | - | | | | 30,000 | |
| ACL on Off-Balance Sheet Credit Exposure | | | 65 | | | | 1,695 | | | | 5,551 | | | | (1,630 | ) | | | (5,486 | ) |
| Other Liabilities | | | 2,721 | | | | 2,710 | | | | 8,678 | | | | 11 | | | | (5,957 | ) |
| Total Liabilities | | | 492,388 | | | | 522,580 | | | | 548,630 | | | | (30,192 | ) | | | (56,242 | ) |
| Shareholders' Equity | | | 29,931 | | | | 47,025 | | | | 61,419 | | | | (17,094 | ) | | | (31,488 | ) |
| Total Liabilities & Equity | | $ | 522,319 | | | $ | 569,605 | | | $ | 610,049 | | | $ | (47,286 | ) | | $ | (87,730 | ) |
Financial Ratios
| | | Dec-24 | | | Sep-24 | | | Dec-23 | | | Dec-24 | | | Dec-23 | |
| (Dollars in thousands except BVS) | | QTD | | | QTD | | | QTD | | | YTD | | | YTD | |
| Performance Ratios | | | | | | | | | | | | | | | |
| Return on Average Assets* | | | (11.87 | %) | | | (10.30 | %) | | | (11.85 | %) | | | (5.37 | %) | | | (1.85 | %) |
| Return on Average Equity* | | | (141.93 | %) | | | (96.78 | %) | | | (92.41 | %) | | | (53.46 | %) | | | (14.53 | %) |
| Net Interest Margin* | | | 1.86 | % | | | 2.44 | % | | | 3.18 | % | | | 2.67 | % | | | 3.83 | % |
| Efficiency Ratio | | | 107.48 | % | | | 85.82 | % | | | 40.91 | % | | | 77.50 | % | | | 50.36 | % |
| *Quarterly results are annualized | | | | | | | | | | | | | | Adequately | | | Well | |
| | | Dec-24 | | | Sep-24 | | | Dec-23 | | | Capitalized | | | Capitalized | |
| Capital | | QTD | | | QTD | | | QTD | | | Minimum | | | Minimum | |
| Tier 1 Leverage Ratio** | | | 5.60 | % | | | 7.22 | % | | | 10.16 | % | | | 4.00 | % | | | 5.00 | % |
| Common Equity Tier 1 Ratio** | | | 7.53 | % | | | 9.33 | % | | | 12.42 | % | | | 4.50 | % | | | 6.50 | % |
| Tier 1 Risk-Based Capital Ratio** | | | 7.53 | % | | | 9.33 | % | | | 12.42 | % | | | 6.00 | % | | | 8.00 | % |
| Total Risk-Based Capital Ratio ** | | | 8.80 | % | | | 10.62 | % | | | 13.71 | % | | | 8.00 | % | | | 10.00 | % |
| Book Value per Share (BVS) | | $ | 5.47 | | | $ | 8.59 | | | $ | 11.24 | | | | | | | | | |
| **Represents Bank capital ratios | | | | | | | | | | | | | | | | | | | | |
| | | Dec-24 | | | Sep-24 | | | Dec-23 | | | Dec-24 | | | Dec-23 | |
| Asset Quality | | QTD | | | QTD | | | QTD | | | YTD | | | YTD | |
| Net Credit Charge-Offs (Recoveries)*** | | $ | 18,064 | | | $ | 17,386 | | | $ | 0 | | | $ | 50,063 | | | $ | 0 | |
| Allowance for Credit Losses to Loans % | | | 2.43 | % | | | 4.70 | % | | | 5.29 | % | | | | | | | | |
| Nonperforming Assets to Total Assets | | | 2.11 | % | | | 1.29 | % | | | 2.42 | % | | | | | | | | |
| *** Includes Off-Balance Sheet Credit Exposure | | | | | | | | | | | | | | | | | | | | |
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 December 31, 2024 and September 30, 2024 (in thousands):
| 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2024 | | | | | | Special | | | | | | | | | | | | | | | | | |
| Portfolio Segment | | Pass | | | Mention | | | Substandard | | | Doubtful | | | Loss | | | Total | |
| Commercial real estate | | $ | 188,980 | | | $ | 29,274 | | | $ | 792 | | | $ | - | | | $ | - | | | $ | 219,046 | |
| Residential real estate | | | 168,715 | | | | - | | | | - | | | | 499 | | | | - | | | | 169,214 | |
| Commercial - equipment | | | - | | | | 18,066 | | | | 7,985 | | | | 3,554 | | | | - | | | | 29,605 | |
| Commercial - all other | | | 8,857 | | | | - | | | | - | | | | - | | | | - | | | | 8,857 | |
| Multifamily | | | 2,823 | | | | - | | | | - | | | | - | | | | - | | | | 2,823 | |
| Construction and land | | | 907 | | | | - | | | | - | | | | - | | | | - | | | | 907 | |
| Consumer and other | | | 71 | | | | - | | | | - | | | | - | | | | - | | | | 71 | |
| | | $ | 370,353 | | | $ | 47,340 | | | $ | 8,777 | | | $ | 4,053 | | | $ | - | | | $ | 430,523 | |
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 sufficent risk to warrant adverse classificaiton.
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 December 31, 2024 and September 30, 2024 (in thousands):
| 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2024 | | | | | | Special | | | | | | | | | | | | | | | | | |
| Portfolio Segment | | Pass | | | Mention | | | Substandard | | | Doubtful | | | Loss | | | Total | |
| Commercial real estate | | $ | 1,234 | | | $ | 113 | | | $ | 48 | | | $ | - | | | $ | - | | | $ | 1,395 | |
| Residential real estate | | | 3,088 | | | | - | | | | - | | | | 195 | | | | - | | | | 3,283 | |
| Commercial - equipment | | | - | | | | 9,033 | | | | 3,901 | | | | 2,475 | | | | - | | | | 15,409 | |
| Commercial - all other | | | 135 | | | | - | | | | - | | | | - | | | | - | | | | 135 | |
| Multifamily | | | 2 | | | | - | | | | - | | | | - | | | | - | | | | 2 | |
| Construction and land | | | 27 | | | | - | | | | - | | | | - | | | | - | | | | 27 | |
| Consumer and other | | | 3 | | | | - | | | | - | | | | - | | | | - | | | | 3 | |
| | | $ | 4,489 | | | $ | 9,146 | | | $ | 3,949 | | | $ | 2,670 | | | $ | - | | | $ | 20,254 | |
Past due loans -The following table presents past due loans at amortized cost by portfolio segment as of December 31, 2024 and September 30, 2024 (in thousands):
| 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 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 | | $ | 930 | | | $ | 3,896 | | | $ | - | | | $ | 4,826 | | | $ | 214,220 | | | $ | 219,046 | |
| Residential real estate | | | - | | | | - | | | | - | | | | - | | | | 169,214 | | | | 169,214 | |
| Commercial - equipment | | | 6,425 | | | | 5,810 | | | | 3,272 | | | | 15,507 | | | | 14,098 | | | | 29,605 | |
| Commercial - all other | | | - | | | | - | | | | - | | | | - | | | | 8,857 | | | | 8,857 | |
| Multifamily | | | - | | | | - | | | | - | | | | - | | | | 2,823 | | | | 2,823 | |
| Construction and land | | | - | | | | - | | | | - | | | | - | | | | 907 | | | | 907 | |
| Consumer and other | | | - | | | | - | | | | - | | | | - | | | | 71 | | | | 71 | |
| | | $ | 7,355 | | | $ | 9,706 | | | $ | 3,272 | | | $ | 20,333 | | | $ | 410,190 | | | $ | 430,523 | |
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 December 31, 2024 and September 30, 2024 (in thousands):
| December 31, 2024
Portfolio Segment | | Nonaccrual with no Allowance for Credit Losses | | | Nonaccrual with Allowance for Credit Losses | | | Total Nonaccrual | | | Loans Past Due Over 89 Days Still Accruing | |
| Commercial real estate | | $ | - | | | $ | 9,401 | | | $ | 9,401 | | | $ | - | |
| Residential real estate | | | - | | | | - | | | | - | | | | - | |
| Commercial - equipment | | | - | | | | 1,638 | | | | 1,638 | | | | - | |
| | | | | | | | | | | | | | | | | |
| | | $ | - | | | $ | 11,039 | | | $ | 11,039 | | | $ | - | |
| | | | | | | | | | | | | | | | | |
| September 30, 2024
Portfolio Segment | | Nonaccrual with no Allowance for Credit Losses | | | Nonaccrual with Allowance for Credit Losses | | | Total Nonaccrual | | | Loans Past Due Over 89 Days Still Accruing | |
| Commercial real estate | | $ | - | | | $ | 2,564 | | | $ | 2,564 | | | $ | - | |
| Residential real estate | | | - | | | | 500 | | | | 500 | | | | - | |
| Commercial - equipment | | | - | | | | 4,265 | | | | 4,265 | | | | - | |
| | | | | | | | | | | | | | | | | |
| | | $ | - | | | $ | 7,329 | | | $ | 7,329 | | | $ | - | |
Off-Balance Sheet Credit Exposure - The Bank has originated certain loans in the commercial-equipment segment with government guarantees and has subsequently sold many of the guaranteed portions of these loans in the secondary market. Upon defaults by the borrowers, the Bank would be required to repurchase the guaranteed portions of the loans and submit the repayment requests to the respective government agency. The agency may decide not to honor the guarantees if certain conditions are not met. Guarantees, as defined under ASC 460, Guarantees, that create off-balance sheet credit exposure are in the scope of ASC 326-20 (CECL) when such guarantees for loans have an implicit repurchase arrangement and thus may present an off-balance sheet credit risk. As of December 31, 2024 and September 30, 2024 the Bank had $126 thousand and $2.6 million, respectively, of such guarantees sold of commercial-equipment loans that were graded below Pass. The Allowance for Credit Losses on Off-Balance Sheet Credit Exposure for these sold guarantees was $65 thousand and $1.7 million as of December 31, 2024 and September 30, 2024, respectively.
U & I Financial Corp.
Investor Relations
IR@unibankusa.com
SOURCE: U & I Financial Corp. (Washington)
