University Bancorp, Inc. · OTC:UNIB
University Bancorp — Investor Presentation (August 2024)
25 slides from University Bancorp's investor presentation, August 2024
Slide 1: University Bancorp Investor Presentation
August 2024 University Bancorp Investor Presentation
Slide 2: About University Bancorp
About University Bancorp Overview Mortgage Originations • Focused on profitable growth through niche financial services provided locally, nationally, and via the Internet; Company remains profitable even in a challenging mortgage market • Complimentary Business Lines: Mortgage Servicing, Mortgage Ba
Slide 3: Experienced Management Team
Experienced Management Team Stephen Lange Ranzini • Stephen Lange Ranzini is President and CEO of University Bank and University Bancorp, Inc., a role in which he has served for 36 years. In 1988, Mr. Ranzini led a leveraged buyout of The Newberry State Bank which subsequently changed its name to Un
Slide 4: Summary of Key Business Lines
Summary of Key Business Lines Mortgage Servicing Mortgage Banking Community Banking Midwest Loan Services University Lending Group • Primarily serves local businesses, individuals, and nonprofits in Ann Arbor and Ypsilanti, Michigan • Division of University Bank and a full-service mortgage • • Divis
Slide 5: Recent Developments (1 of 2) – Hyrex Servicing
Recent Developments (1 of 2) – Hyrex Servicing Background • On August 1 st, 2024 University Bancorp, Inc. (the "Company") announced the completion of an internal restructuring by acquiring Hyrex Servicing from University Bank for $5.5MM through the Company's wholly owned subsidiary, Hyrex Servicing
Slide 6: Recent Developments (2 of 2) – Blue Water
Recent Developments (2 of 2) – Blue Water Background • On July 30th, 2024 the Company announced that it will enter into a strategic partnership with Voxtur Analytics Corp. • Under the terms of the agreement, the Company will lead a group of strategic mortgage industry investors, acquiring a 50.5% st
Slide 7: Innovative and Complimentary Business Model
Innovative and Complimentary Business Model University’s business model creates a flywheel of complementary business Historical Model Current Model Monthly loan Originations originations held on primarily sold balance sheet; into some still sold secondary into market secondary Internal $38.9 billion
Slide 8: Diverse Revenue Streams
Diverse Revenue Streams Sources of Income ($M) (Bank) Noninterest Income (%) (Bank) 2022Y 2023Y $73.6 MM $60.6 MM With the shifting of our business model, we anticipate that net interest income will continue to comprise a larger percentage of total income (i.e. less gain on sale, more net 2024 YTD i
Slide 9: Mortgage Servicing
Mortgage Servicing 200 $40.0 Highlights $39.0 • $38.9 billion in loans serviced and sub-serviced in as of July 31, 2024 • Our mortgage servicing business has an estimated 0.19% market 190 $38.0 share of ~$20 trillion of outstanding mortgage debt $3 .0 • This represents an excellent long-term opportu
Slide 10: Balance Sheet Summary
Balance Sheet Summary Total Assets ($M) Gross Loans ($M) $878 $798 $622 The significant growth in assets, loans and $332 deposits is a result of shifting towards $306 holding more loans on balance- sheet Securities/ Total Assets 1.1% 2.3% 3.3% 4.4% 4.1% ross Loans FI ross Loans FS Total Total Deposi
Slide 11: Mortgage Originations
Mortgage Originations Highlights $ 00 6.0% • UNIB’s Retail Mortgage Operations, which are $600 5.0% focused on purchase transactions, originating a combined $563M loans in 2024YTD $500 4.0% Originations ($M) Gain on Sale (%) • University Lending roup (“UL ”) - Government, $400 Conventional & HELOC M
Slide 12: UIF Loan Structure Details
UIF Loan Structure Details • For several years, UIF offered three distinct financing methods offered to both residential and commercial customers, which include redeemable lease, installment sale contracts, and declining balance partnerships. However, due to a significant shift in demand, UIF shifte
Slide 13: Mortgage Origination Composition
Mortgage Origination Composition By Geography By Credit Scores FICO Score Metrics UIF Avg: 752 ULG Avg: 741 Portfolio Avg: 747 By Stratification LTV Metrics UIF Avg: 78.6% ULG Avg: 85.0% Portfolio Avg: 81.7% Note: Composition of mortgages originated 2024 YTD as of 6/30/2024; Reflects “UNIB” unless o
Slide 14: Community Banking
Community Banking Commentary • Total assets had a CAGR of 13.9% from 2020 to 2’2024 • $117M CRE portfolio is approximately 79% variable and 21% fixed rate² • Total assets were $558M in 2020, increasing to $1.0B as of 2’2024 • 55% in Washtenaw County; 85% in southeast MI³ • Gross loans increased from
Slide 15: Profitability
Profitability Return on Average Assets (%)¹ Return on Average Tangible Common Equity (%)¹ The bank’s UL mortgage origination Between 2008-2012, the bank remained division made 7 rounds of cost cutting cumulatively profitable, with a maximum initiatives during 2022 and 2023 annual net loss of $233K d
Slide 16: Asset Quality Trends
Asset Quality Trends NPAs / Assets (%) (Bank) Net Charge-Offs / Avg. Loans (%) (Bank) Delinquencies and NPAs were generally elevated Quarterly average NCOs / Avg. Loans from 2008- from 2020-2022 due to the pandemic and have 2012 was 1.29%, and quarterly average NCOs / normalized subsequently Avg. Lo
Slide 17: Deposits
Deposits Total Deposits ($M) Deposit Composition ($M) $269 $236 Deposits n Balance Sheet Deposits Balance Sheet Non Int. Bearing Deposits Int. Bearing Deposits Cost of Interest-Bearing Liabilities (%) (Bank) Cost of Total Deposits (%) (Bank) Note: Off-balance sheet deposits are deposits derived from
Slide 18: Funding Overview
Funding Overview Deposits Breakout ($000) FHLB Line Type Book Value Percentage • The Bank has a line of credit available from the FHLB. The limit on this line is Fiduciary Accounts 403,013 54.30% $184M. There is $164M available as of June 30, 2024. Money Market 13,985 1.88% Savings 37,033 4.99% HC C
Slide 19: Interest Rate Risk Management
Interest Rate Risk Management Sensitivity of Net Economic Value of Equity (NEVE) to Interest Rate Changes Percentage Change in Net Economic Value of Equity (NEVE) versus Policy as of 5/30/2024 (in millions) Limits as of 5/30/2024 EVE calculations do not take into account the positive impact of a Ful
Slide 20: Balance Sheet Liquidity
Balance Sheet Liquidity Our core business lines create a balance sheet with a generally liquid asset base Total: $987M Cash ▪ We regularly perform liquidity stress tests to inform our Bank and HoldCo liquidity position ▪ $15M of cash at the holding company level ▪ The securities are a mix of MBS, FH
Slide 21: Capital Ratios
Capital Ratios Tangible Common Equity / Tangible Assets (%) Leverage Ratio (%) (Bank) Common Equity Tier 1 (%) (Bank) Total Risk Based Capital (%) (Bank) Hyrex transaction removes $4.0M of MSRs from the bank’s CRE / TRBC: 82.6%¹ balance sheet, all of which were deducted from regulatory ADC / TRBC: 1
Slide 22: Corporate Organizational Chart
Corporate Organizational Chart Hyrex Capital Holding Company, LLC University Bancorp, Inc. Ann Arbor, MI Other Ann Arbor, MI Mortgage Investment Advisory Investors Delaware Corporation Company Contractual Agreement 100% Hyrex Servicing Holding University Bank Crescent Assurance, PCC Company, LLC Ann
Slide 23: Investment Highlights
Investment Highlights Management and Board of Directors • Seasoned management team and board with significant community and mortgage banking experience • High insider and founder ownership (>35%) aligns with shareholders Superior Credit Quality • Diversified and conservative lending culture produces
Slide 24: Industry Awards & Accolades
Industry Awards & Accolades ▪ Bank Director magazine selected us as a top performing U.S. bank. We are very proud to be honored among all banks in the U.S. as having the: ▪ #1 Best Growth Strategy ▪ #2 Best Community Banks ▪ #7 Best Leadership Teams (just behind Jamie Dimon at Chase) ▪ American Bank
Slide 25: Questions?
Questions? •FAQ list at www.university-bank.com/bancorp •Press Releases •Newspaper & Magazine Articles •Comprehensive Financial Data •Contact me: Stephen Lange Ranzini, President & CEO: (734) 741-5858 xt 9226 ranzini@university-bank.com CAUTIONARY STATEMENT: This Investor Presentation contains ce
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