University Bancorp, Inc.: University Bancorp 2Q2024 Net Income $3,039,641 $0.59 Per Share

ANN ARBOR, MI / ACCESSWIRE / August 19, 2024 / University Bancorp, Inc. (OTCQB:UNIB) announced that it had an unaudited net income attributable to University Bancorp, Inc. common stock shareholders in 2Q2024 of $3,039,641 $0.59 per share on average shares outstanding of 5,169,518 for the second quarter, versus an unaudited net income of $1,557,298, $0.32 per share on average shares outstanding of 4,929,518 for 2Q2023.

For the 6 months ended June 30, 2024, net income was $5,169,493 $1.00 per share on average shares outstanding of 5,169,518 for the period, versus $2,413,116, $0.49 per share on average shares outstanding of 4,929,518 for the 6 months ended June 30, 2022.

For the 12 months ended June 30, 2024, net income was $8,182,935, $1.58 per share on average shares outstanding of 5,055,518 for the period.

Shareholders' equity attributable to University Bancorp, Inc. common stock shareholders was $89,472,148 or $17.31 per share, based on shares outstanding at June 30, 2024 of 5,169,518.

President Stephen Lange Ranzini noted, "Since the shift in our business model when the mortgage origination industry began its slump in 1Q2022, our quarterly net income has continued to rise as we execute on our business plan:

Net Income, 2Q2022	$141,370
Net Income, 3Q2022	$350,574
Net Income, 4Q2022	$955,817
Net Income, 1Q2023	$855,818
Net Income, 2Q2023	$1,557,298
Net Income, 3Q2023	$1,629,672
Net Income, 4Q2023	$1,383,770
Net Income, 1Q2024	$2,129,852
Net Income, 2Q2024	$3,039,641

Starting in March 2022, we began to increase our residential loans held for investment. Overall, our loan portfolio, which was $190.5 million at 12/31/2021, rose as we retained a mix of 7-year ARMs and monthly adjusting first mortgage HELOCs. At 12/31/2022 our loan portfolio held for investment was $553.9 million, at 12/31/2023 it was $734.1 million, and at 6/30/2024 is was $785.1 million. Return on Equity (ROE) at University Bancorp is now reaching acceptable levels, despite mortgage originations nationwide continuing to be at 30-year lows with respect to units originated, with the annualized ROE rising as follows:

Year Ended 2022	5.1%
Year Ended 2023	7.1%
12M Ended 2Q2024	10.2%
1Q2024	12.3%
2Q2024	14.5%

The improvement in results is driven by net interest income generated from the larger portfolio of loans held for investment combined with multiple rounds of cost-cutting.

University Bancorp 2Q2023 Net Income $1,557,298, $0.32 Per Share PAGE TWO OF SIX

Our subservicing business, Midwest Loan Services, has been negatively impacted by financial institution customers opting to sell MSRs to book gains on sale to offset the lower profitability from loan originations. Despite this trend, the number of mortgages serviced rose to 170,037 up from 167,176 at 12/31/2023, however on 7/1/2024 Midwest onboard approximately 22,000 mortgages from a large institutional investor, and an additional 22,000 mortgages are scheduled to onboard from this institutional investor on 10/1/2024, which is expected to push Midwest past its previous high-water mark of 192,000 mortgages subserviced. Midwest continues to face headwinds from client MSR sales, however, it has a robust business development pipeline, and the new Hyrex Servicing capabilities discussed here, give Midwest access to additional institutional clients not previously addressable. If the Hyrex business plan is carried out and the synergies are realized from the Blue Water transaction, it would have a materially positive impact on Midwest. In June 2024, Midwest generated an average balance of $436.3 million of non-interest-bearing escrow deposits. Of note, the new institutional investor client relationship does not bring any additional escrow deposits to Midwest.

Overall, our business development efforts continue at a rapid pace. For example, faith-based deposits grew past $50 million, and University Bank is now licensed for both conventional mortgage lending and reverse mortgage lending in all 50 states.

Earnings in 2Q 2024, were assisted by two factors, partially offset by one factor, that had an overall net positive impact of $264,650 before taxes as follows:

1. Mortgage Servicing Rights Valuation adjustment:
   With the sale of MSRs to Hyrex during the quarter we realized a gain on sale and the overall valuation of our MSRs increased $360,775;

2. Mortgage Origination Pipeline valuation adjustment:
   The fair market value of the hedged mortgage origination pipeline (FMV) rose $47,829 as the value of locked loans rose over the level at 1Q 2023;

3. Allowance for Loan Losses adjustment:
   The Allowance for Loan Losses was increased by $143,954. We view this as an unusual factor because, due to a conservative credit culture, University Bank continues to have cumulative net recoveries and not net loan charge-offs over the past 15 years.

Earnings in 1Q 2024, were assisted by two factors, partially offset by one factor, that had an overall net positive impact of $191,873 before taxes as follows:

1. Mortgage Servicing Rights Valuation adjustment:
   With the rise in long term mortgage interest rates during the quarter the valuation of our MSRs increased $16,912;

2. Mortgage Origination Pipeline valuation adjustment:
   The fair market value of the hedged mortgage origination pipeline (FMV) rose $368,208 as the amount of locked loans rose over the level at 4Q 2023 due to seasonal factors.

3. Allowance for Loan Losses adjustment:
   The Allowance for Loan Losses was increased by $193,247.

University Bancorp 2Q2023 Net Income $1,557,298, $0.32 Per Share PAGE THREE OF SIX

Earnings in 2Q 2023, were assisted by one factors, partially offset by two factors, that had a net positive impact of $7,246 before taxes as follows:

1. Mortgage Servicing Rights Valuation adjustment:
   With the rise in long term mortgage interest rates during the quarter the valuation of our MSRs increased $229,754;

2. Mortgage Origination Pipeline valuation adjustment:
   The fair market value of the hedged mortgage origination pipeline (FMV) fell $151,508 as the value of locked loans fell over the level at 1Q 2023;

3. Allowance for Loan Losses adjustment:
   The Allowance for Loan Losses was increased by $71,000.

Earnings in 1Q 2023, were assisted by one factor, partially offset by one factor, that with a net positive impact of $316,858 before taxes as follows:

1. Mortgage Origination Pipeline valuation adjustment:
   The fair market value of the hedged mortgage origination pipeline (FMV) rose $793,675 as the amount of locked loans rose over the level at 4Q 2022 due to seasonal factors.

2. Mortgage Servicing Rights Valuation adjustment:
   With the fall in long term mortgage interest rates during the quarter the valuation of our MSRs decreased $476,817;

Mortgage origination volumes rose in 1H2024, with closings of $571.2 million versus $549.0 million in 1H2023, an increase of 4.0%.

For 2Q2024, the Company had an annualized return on equity attributable to common stock shareholders of 14.5% on initial common stockholders' equity of $86,348,746. Return on equity over the trailing twelve months was 10.2% on initial equity attributable to common stock shareholders of $78,550,184.

At 6/30/2024 cash & equity investment securities at the Company, available to meet working capital needs and to support investment opportunities at University Bancorp were $19.2 million. The company also has a $10 million line of credit available with $1,600,000 drawn at 6/30/2024. Subsequent to 6/30/2023, $5 million was drawn on the line of credit to fund the Hyrex Servicing transaction. This line of credit matures October 2025 with interest at Prime Rate, capped at 6.25%. The company has issued $28 million of subordinated bonds which matures 1/31/2033, with interest for the first five years fixed at 8.25% and floating at a variable rate of 4.87% over SOFR for the second five years, however the Company entered into an interest rate swap agreement which effectively fixes the interest rate for the second five years of the term at 8.08%.

A portion of UNIB's working capital has been invested in a portfolio of publicly traded financial services related investments. At 6/30/2024, two of these investments were large:

• Currency Exchange International (Symbol CURN), a Canadian bank holding company that specializes in foreign exchange, of which we own 4.7%;

• VersaBank (Symbol VBNK), a single branch Canadian bank, of which we own 2.1% of the common stock;

University Bancorp 2Q2024 Net Income $3,039,641 $0.59 Per Share PAGE FOUR OF SIX

The performance of our portfolio loans and our overall asset quality continues to be good. We had one foreclosed other real estate owned property at quarter-end (a residential home related to GNMA buybacks) with a balance of $456,734, and substandard assets were 4.7% of Tier 1 Capital at 6/30/2024. The allowance for portfolio loan losses stood at $4,746,905 or 0.60% of portfolio loans, excluding the loans held for sale.

At 6/30/2024, we had the following with respect to delinquent loans (including both delinquent portfolio loans and delinquent loans held for sale):

Delinquent 30 Days to 59 Days, $2,987,129
Delinquent 60 Days to 89 Days, $1,982,893
Delinquent Over 90 Days & on Non-Accrual, $1,027,912*

*This balance consisted of three residential loans, and excludes GNMA loans that are 100% guaranteed. In addition, we own $460.0 million of MSR's related to GNMA originated residential mortgage pool loans, of which $5,042,000 have reached a 90-day delinquency status and are therefore included on our balance sheet per GAAP, and $167,967 in GNMA loans that we have repurchased from GNMA pools that are delinquent over 90 days. Most of these loans are 100% principal guaranteed by FHA, others have smaller percentage guarantees.

Total Assets at 6/30/2024 were $996,079,589 versus $939,861,494 at 3/31/2024, $931,631,250 at 12/31/2023, $865,578,686 at 9/30/2023, $833,497,000 at 6/30/2023, $776,141,240 at 3/31/2023 and $794,235,413 at 12/31/2022.

The Tier 1 Leverage Capital Ratio at 6/30/2024 was 10.18% on net average assets of $945.1 million, from 10.02% at 3/31/2024 on net average assets of $918.6 million, 10.05% at 12/31/2023 on net average assets of $882.5 million, 10.07% at 9/30/2023 on net average assets of $869.0 million, 10.27% at 6/30/2023 on net average assets of $833.5 million, 10.31% at 3/31/2023 on net average assets of $760.0 million, and 10.30% at 12/31/2022 on net average assets of $686.5 million.

Common Equity Tier 1 Capital at 6/30/2024 was $96,202,000, at 3/31/2024 was $92,012,000, at 12/31/2023 was $88,736,000, at 9/30/2023 was $87,540,000, at 6/30/2023 was $85,576,000, at 3/31/2023 was $78,339,000, and at 12/31/2022 was $70,672,000.

Treasury shares as of 6/30/2024 were 37,381 shares.

Other Key statistics as of 6/30/2024:

10-year annual average revenue growth*,			16.9	%
5-year annual average revenue growth*,			-2.8	%
1H2024 vs. 1H2023 revenue growth*,			18.7	%
TTM Revenue		$	117,595,317
10 Year Average ROE			27.8	%
5 Year Average ROE			34.1	%
LLR/NPAs>90 %			282.4	%

University Bancorp 2Q2024 Net Income $3,039,641 $0.59 Per Share PAGE FIVE OF SIX

Current Ratio, #			217.1	x
Efficiency Ratio, %+			92.5	%
Total Assets,		$	996,079,589
Loans Held for Sale, before Reserves,		$	92,790,000
NPAs >90 days		$	1,027,912
TTM ROA%			0.91	%
TCE/TA %			9.85	%
Total Capital Ratio %			12.99	%
NPAs/Assets %			0.45	%
Texas Ratio %			4.39	%
NIM %			4.29	%
NCOs/Loans			-0.005	%
Trailing 12 Months P-E Ratiox			9.5	x
Price to Book Value Ratiox			87	%

*Using TTM, 1H2024, 1H2023, 2023, 2022, 2021, 2020, 2019, 2018, 2017, 2016 and 2015 revenue which were $117,595,317, $60,777,675, $51,205,302, $108,022,944, $101,651,623, $133,175,856, $136,991,511, $69,112,502, $55,988,570, $54,493,179, $50,948,149 and $43,644,425, respectively.

^#Parent company only current assets divided by 12-month projected cash expenses.
⁺Calculated as: (non-interest expense/ (net interest income + non-interest income)).
^xBased on last sale of $15.00 per share.

Excluding goodwill & other intangibles related to the acquisition of Midwest Loan Services and Ann Arbor Insurance Center, net tangible shareholders' equity attributable to University Bancorp, Inc. common stock shareholders was $88,697,439 or $17.16 per share at 6/30/2024. Please note that we view the current market values of our insurance agency and Midwest Loan Services as substantially in excess of their carrying value including this goodwill.

Shareholders and investors are encouraged to refer to the financial information including the investor presentations, audited financial statements, strategic plan and prior press releases, available on our investor relations web page at: http://www.university-bank.com/bancorp/. A detailed income statement, balance sheet and other financial information for University Bank as of 6/30/2024 will be available here: https://www.university-bank.com/wp-content/uploads/2024/06/University-Bank-Detailed-Financial-Information-June-2024.pdf.

About UNIB

Ann Arbor-based University Bancorp is a Federal Reserve regulated financial holding company that owns:

• 100% of University Bank, a bank based in Ann Arbor, Michigan;

• 100% of Crescent Assurance, PCC, a captive insurance company licensed in Washington DC; and

• 100% of Hyrex Servicing, based in Ann Arbor, Michigan.

University Bancorp 2Q2024 Net Income $3,039,641 $0.59 Per Share PAGE SIX OF SIX

University Bank together with its Michigan-based subsidiaries, holds and manages a total of over $40 billion in financial assets for over 198,000 customers, and our 492 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:

• UIF, a faith-based banking firm based in Southfield, MI;

• University Lending Group, a retail residential mortgage originator based in Clinton Township, MI;

• Midwest Loan Services, a residential mortgage subservicer based in Houghton, MI;

• Community Banking, based in Ann Arbor, MI, which provides traditional community banking services in the Ann Arbor area;

• Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor.

• Reverse Mortgage Lending, a reverse residential mortgage lender based in Southfield, MI; and

• Mortgage Warehouse Lending, a mortgage warehouse lender based in Southfield, MI.

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, mortgage origination levels and margins, valuations, 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. We undertake no obligation to update any information or forward-looking statement.

Contact: Stephen Lange Ranzini, President and CEO
Phone: [phone], Ext. 9226
Email: [e-mail]

SOURCE: University Bancorp, Inc.

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