Ann Arbor, Michigan, May 26, 2015, — University Bancorp, Inc. (OTCQB: UNIB) has been informed by Fundamental Global Partners, L.P. & Fundamental Global Master Fund, L.P. that they hold a total of 503,058 shares of common stock of the Company, or 9.86% of the 5,102,844 currently outstanding shares. Fundamental Global is a money management firm whose principals are Kyle Cerminara, Lewis Johnson and Joseph Moglia. Prior to joining Fundamental Global, Mr. Cerminara and Mr. Johnson were employed at T. Rowe Price, where Mr. Cerminara was a Vice President and bank and financial services stock analyst and Mr. Johnson was a Vice President and metals and mining, agriculture, commodity chemicals, and specialty chemicals analyst. Mr. Moglia’s investment career included 17 years at Merrill Lynch, where he was a member of the executive committees for both the institutional business and the private client business before leaving to take the role of chief executive officer at TD Ameritrade.
The Company has also been informed that Fundamental Global has received notice from the Federal Reserve Bank of Chicago that it does not object to Fundamental Global acquiring between 10.00% and 24.99% of the Company. As part of the application process, Fundamental Global executed an agreement that requires it to vote its shares in the Company as recommended by management and not to take any steps to control or exercise control over the Company. While Fundamental Global has received approval to acquire more shares, they have informed us that they may or may not acquire additional shares based on future developments both in their own business and ours.
University Bancorp, Inc. President & CEO Stephen Lange Ranzini stated, “We welcome these savvy bank stock investors as key shareholders in our bank holding company. It is our understanding that they have made this investment through purchases on the open market over the past year because they are impressed with our track record of value creation for our shareholders and are very impressed with our business strategy.”
American Banker newspaper recently noted we are the second most profitable publicly traded community bank in the U.S. based on our 18.75% average Return on Equity over the period 2012 to 2014. See: www.americanbanker.com/news/community-banking/what-the-top-200-publicly-traded-community-banks-do-better-than-peers-1073985-1.html
Update on Operations
University Bank had an excellent result in April with net income of $768,534, consolidated after-tax net income before minority interest was $790,295 and pre-tax income was $1,197,417 on average assets of $119.7 million. The net income was $635,129 above the budget for the month. Unusual gains were $709,230, including a $568,662 increase in the value of the hedged mortgage origination pipeline as the amount of locked loans rose over the month from the level at quarter-end, $41,429 in profit on sale of ORE and a $99,139 recovery of foreclosure advances from a GSE, and there were no material unusual expenses.
Residential mortgage loan closings in April were higher than budgeted. Closings in May are above April’s closings and also above budget, and the locked pipeline increased significantly during April which bodes well for future closings. Overall in April, 87% of our retail origination division’s closings were purchase transactions and 63% of UIF’s retail originations were purchase transactions. The pipeline of locked and hedged loans in the process of being closed is at record levels.
Shareholders and investors are encouraged to refer to the financial information including the audited financial statements, strategic plan and prior press releases, available on our investor relations web page at: http://www.university-bank.com/bancorp/.
Ann Arbor-based University Bancorp owns 100% of University Bank which, together with its Michigan-based subsidiaries, holds and manages a total of over $16.7 billion in loans and assets and our 326 employees make us the 9th largest bank based in Michigan. 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. University Bank is a Member FDIC. The operating subsidiaries of University Bank which are members of our corporate family, ranked by their size of revenues are:
- University Lending Group, a retail residential mortgage originator based in Clinton Township;
- Midwest Loan Services, a residential mortgage subservicer based in Houghton;
- UIF, an Islamic banking firm based in Farmington Hills;
- Community Banking, based in Ann Arbor, which provides traditional community banking services in the Ann Arbor area;
- Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor.
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, pre-tax income and net income, budgeted income levels, 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.