April 19, 2013
Notwithstanding the lingering effects of the Great Recession, UniBank continued its strong growth in 2012. We are pleased to report that total deposits for our newly opened Bellevue, Federal Way and Tacoma branches are steadily growing. With net income of $1.98 million in 2012, UniBank has shown increasing profitability for the past five consecutive years since its inception in 2006. Total assets increased by 14% or $23 million to $188 million. At 2012 year-end, our tangible book value was $5.82 per share (pre-stock split value was to $11.64). Had we continued issuing stock dividends instead of cash dividends, book value would have been $6.05 per share (pre-stock split value would have been $12.10), quite a bit higher than the current book value.
In 2011 and 2012, cash dividends were paid as many shareholders expressed their preference for cash dividends due to the Recession. However, we have decided to issue stock dividends this year. The rationale for stock dividends is that, as we are subject to regulatory capital requirements, we will not be able to sustain our growth or capitalize on M&A opportunities due to inadequate capital if we continue paying cash dividends. Instead, if net income is continuously retained, not only will our capital base be strengthened but stock value would also increase in the long run. Consequently, paying stock dividends is deemed more beneficial for sustained growth and long-term success of the Bank. In addition, stock dividends can be more advantageous as income tax on cash dividends must be paid in the year they are received, whereas stock dividends are not taxed until those shares are actually sold. U&I Financial shareholders of record on March 29th will be issued 7% stock dividends (7 new shares per 100 shares owned) on April 19th. We are also pleased to announce that U&I Financial shares are now being traded in the OTCBB (Over-The-Counter Bulletin Board) with the stock symbol UNIF, thereby offering enhanced liquidity for U&I Financial shares. For stock transfers, please contact Steven Canup with B. Riley & Co. at email@example.com or 310-689-2226 or Stephanie Yoon with UniBank at firstname.lastname@example.org or 425-275-9727.
The construction of our new headquarters building, the symbol of success for UniBank and the pride of shareholders, is well underway as scheduled, with the projected completion in late August. Annual regulatory examination was completed with satisfactory results in February 2013 and the Bank is consistently rated a minimum of 4 stars by independent bank rating agencies. Having successfully withstood the unprecedented Great Recession, UniBank is truly a testament to what safe and sound banking is all about. We’d like to take this opportunity to cordially ask all shareholders to take pride as owners of UniBank and to continue to support the Bank for further growth, actively referring prospective customers.
The M&A boom in the banking industry is continuing as banks are looking to increase their asset base to improve profitability. With the objective of growing the Bank’s total assets to $500 million, U&I Financial unsuccessfully attempted to acquire PI Bank in 2012. Now, UniBank is the only Korean-American bank headquartered in the Washington State. We are deeply committed to fostering the continued success of UniBank to preserve the pride of our shareholders and the community.
Truly yours,John Chang, Chairman of the Board
Daniel Lee, President & CEO
U & I Financial shares are traded on the Over-The-Counter Bulletin Board (OTCBB) with the ticker symbol “UNIF.”
Stock Transfer Agent
UniBank acts as neither agent nor broker in these communications or resulting transactions and makes no representations as to the value of its stock or the relative “fairness” of any asking or offered price. Non FDIC insured. Not a deposit or other obligation of, or guaranteed by, the depository institution. Subject to investment risks, including possible loss of the principal amount invested.