Pre-tax income (loss) summary for the three and six-months ended June 30, 2007 (in thousands): Three-Months Six-Months Community Banking $ (224) $ (243) Midwest Loan Services 1,170 1,364 Corporate Office (21) (36) --------- --------- Total $ 925 $ 1,085 ========= ========= Pre-tax income (loss) summary for the three and six-months ended June 30, 2006 (in thousands): Three-Months Six-Months Community Banking $ (130) $ (166) Midwest Loan Services 184 249 Corporate Office (283) (297) --------- --------- Total $ (229) $ (214) ========= ========= For the For the Quarter Ended Six-Months Ended June 30, June 30, (in 000s) (in 000s) 2007 2006 2007 2006 Net interest and financing income $ 814 $ 670 $1,688 $1,308 Provision for loan losses 54 29 76 49 Total securities gains 0 0 0 0 Total other income 2,431 1,036 3,693 2,087 Total other expense 2,064 1,856 3,944 3,483 Income tax 20 0 20 0 Minority Interest 203 50 276 77 Net income (loss) 905 (229) 1,065 (214) Preferred stock dividends 10 8 18 14 Net income (loss) available to common shareholders $ 895 $ (237) $1,047 $ (229) Basic earnings (loss) per common share $ 0.21 $(0.06) $ 0.25 $(0.05) Diluted earnings (loss) per common share $ 0.21 $(0.06) $ 0.24 $(0.05) Weighted average shares outstanding Basic 4,248 4,245 4,248 4,197 Diluted 4,287 4,245 4,287 4,197 Net interest & profit margin 4.61% 5.09% 4.79% 4.86% Period-end (in 000s except Book Value per share): June 30, December 31, 2007 2006 2006 Financings & Financings Held for Sale $57,468 $48,548 $52,879 Allowance for loan losses 520 402 466 Deposits 77,156 59,005 78,882 Assets 86,841 67,742 87,272 Equity 6,395 5,409 5,251 Book value per share $1.39 $1.19 $1.15At June 30, 2007 University Bank's Tier 1 Capital Ratio was 10.89%, an increase from 9.80% at December 31, 2006. Tier 1 Capital increased to $9,039,000 from $7,676,000 over this period. Over the past 20 months, the bank's Tier 1 capital has risen dramatically, from $3,159,000 to nearly three times that level through a combination of earnings and strategic management decisions. President Stephen Lange Ranzini noted, "Although University Bank is an active participant in the residential mortgage industry, it has never originated many types of riskier mortgage loans that are currently causing severe losses among our competitors. We've never originated any 'interest-only,' 'optional payment,' 'negatively amortizing' or 'no income verification' loans. We have originated and then sold to the secondary market a few hundred ALT-A and sub-prime loans, however, remarkably, this portfolio of loan servicing as of June 30, 2007 had zero delinquencies. Moreover, the bank owns no mortgage securities other than those guaranteed by GNMA, FNMA or FHLMC." At June 30, 2007, University Bank's single family residential delinquencies over 30 days were 2.23% while press reports indicate that 7.4% of all Michigan residential mortgages are currently delinquent. President Stephen Lange Ranzini commented, "Despite the seventh year of a recession in Michigan, the bank's overall portfolio delinquencies were among the best in the 19 years that I've been with the bank." Ann Arbor-based University Bancorp owns 100% of University Bank which services a total of over $4 billion in loans. University Bank is an FDIC-insured, locally owned and managed community bank, and is the only financial institution headquartered in Washtenaw County rated "Outstanding" by the FDIC for Community Service and Community Reinvestment. University Bank focuses on local businesses, minorities and the non-profit communities primarily serving the cities of Ann Arbor and Ypsilanti of Washtenaw County. Other University Bank specialties include highly competitive deposit products for business owners, residential mortgages, commercial real estate lending and insurance, investments and money management through its wholly owned subsidiary University Insurance & Investments, Inc. University Bank also engages in Islamic Banking through 80%-owned University Islamic Financial Corporation, the first and only Islamic Banking subsidiary of a bank in the U.S. University Islamic Financial Corporation offers mortgage alternative financing, the only FDIC-insured Islamic deposits (offered through University Bank) and Islamic equity mutual funds (offered through University Insurance & Investments, Inc.). University Bank also specializes in mortgage subservicing and mortgage origination primarily serving over 230 credit unions (representing 2.4% of all credit unions nationwide) through its Houghton-based 80%-owned subsidiary, Midwest Loan Services, Inc. Any prediction of the future is inherently not assured. Investors should read the risk factors listed on pages 21 through 22 in the Company's report on Form 10KSB for the year ended December 31, 2006 and any prediction in this release is intended to be covered by the Safe Harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Contact Information: Contact: Stephen Lange Ranzini President and CEO Phone: 734-741-5858, Ext. 226 Email: