Ann Arbor, Michigan, December 21, 2018,– University Bancorp, Inc. (OTCQB: UNIB) (the “Company”) announced that it has issued to a company controlled by Robert Kauffman, a co-founder of Fortress Investment Group, $5 million of a newly created series of 6% convertible preferred stock, to be designated as Series 5 Convertible Preferred Stock (the “Preferred Stock”). The shares of Preferred Stock were issued for $4.75 million, or 95% of face value, and are convertible into common stock at $10 per share.
Effective immediately, Mr. Kauffman has joined the Board of Directors of both University Bank® and the Company.
Stephen Lange Ranzini, President and CEO, noted, “This additional capital investment will be invested in growing the Company’s current business lines and related activities and will allow us to better take advantage of market opportunities.”
Mr. Kauffman stated, “I was really impressed with the business that Stephen and his team have built at the Company. I believe the bank has a lot of potential, and this additional capital should give them more flexibility to grow. I’m excited to work with them to further their plans and build on the success they have already achieved.”
Mr. Kauffman is an experienced financial services executive and investor and was one of the co-founders of Fortress Investment Group, a global alternative asset fund manager. While at Fortress, he was involved in many aspects of finance including mortgages, real estate, distressed debt and loan servicing businesses in both the U.S. and Europe. Since his retirement in 2012, he has focused on his personal investment activities.
The Preferred Stock was issued in a private placement exempt from registration pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and does not trade in the OTC Market. The Preferred Stock has not been and will not be registered under the Securities Act or any state securities laws. Therefore, unless so registered, the Preferred Stock may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, shares of the Preferred Stock, or any other securities.
The primary legal adviser on the transaction for the Company was Varnum LLP. The primary legal adviser on the transaction for Robert Kauffman was Cleary Gottlieb Steen & Hamilton LLP. Donnelly Penman & Partners was the sales agent and provided a fairness opinion to the Company’s Board of Directors in connection with the transaction.
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 $21.6 billion in financial assets for over 125,000 customers, and our 394 employees make us the 5th 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 the 15th oldest bank headquartered in Michigan. We are 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 members of University Bank’s corporate family, ranked by their size of revenues are:
- University Lending Group, a retail residential mortgage originator based in Clinton Township, MI;
- Midwest Loan Services, a residential mortgage subservicer based in Houghton, MI;
- UIF, a faith-based banking firm based in Southfield, MI;
- Community Banking, based in Ann Arbor, MI, which provides traditional community banking services in the Ann Arbor area;
- Midwest Loan Solutions, a residential mortgage correspondent lender based in Southfield, MI, also doing business as American Mortgage Solutions;
- Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor.
Contact: Stephen Lange Ranzini, President and CEO
Phone: 734-741-5858, Ext. 9226
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 changes in assets, pre-tax income, net income and 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, technological and legal 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. ###