LYNNWOOD, WA / ACCESS Newswire / July 31, 2025 / U & I Financial Corp. (OTCQX:UNIF), the holding company ("Company") for UniBank ("Bank"), today reported quarterly Net Income of $757 thousand or earnings of $0.14 per share in the second quarter of 2025, compared to a net loss of $827 thousand or $0.15 loss per share for the same quarter of 2024. The Company recognized a negative Provision for Credit Losses of $2.2 million during the second quarter of 2025 as compared to a provision expense of $3.0 million recognized for the same quarter last year.

At June 30, 2025, Total Assets were $409.6 million, a decrease of $163.0 million or 28.5% from $572.6 million at June 20, 2024. Net Loans were $314.3 million at June 30, 2025, a decrease of $127.2 million or 28.8% from $441.5 million at June 30, 2024. Total Deposits decreased by $93.0 million or 20.6% to $358.9 million at June 30, 2025 compared to $451.9 million a year earlier.

The Company had a Net Charge Off of $903 thousand during the second quarter of 2025 as compared to $5.7 million during the first quarter of 2025. The total balance of non-accrual loans was $5.6 million at June 30, 2025 as compared to $10.2 million at March 31, 2025. The ratio of nonperforming assets to total assets was 1.36% at June 30, 2025 compared to 2.31% at March 31, 2025.

The Bank's capital ratios were 7.18%, 9.22% and 10.43% for Tier 1 Leverage Ratio, Tier 1 Risk-Based Capital Ratio and Total Risk-Based Capital Ratio, respectively, as of June 30, 2025, increasing from 5.98%, 7.76% and 9.01%, respectively, as of March 31, 2025. All capital ratios increased above the "well capitalized" minimum regulatory guidelines as of June 30, 2025.

"Due to our credit improvement and deleveraging efforts, we returned to being ‘well capitalized' as provided in the regulatory guidelines in the second quarter 2025. We also started to see improved credit metrics, reflecting all of the hard work by our credit team," said President & CEO Stephanie Yoon. "We thank our shareholders and customers for their patience and loyalty."

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 result of litigation and investigations; 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.

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 June 30, 2025 and March 31, 2025 (in thousands):

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 June 30, 2025 and March 31, 2025 (in thousands):

Past due loans -The following table presents past due loans at amortized cost by portfolio segment as of June 30, 2025 and March 31, 2025 (in thousands):

Non-accrual loans -Loans are placed on non-accrual 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 June 30, 2025 and March 31, 2025 (in thousands):