Financial News

First Savings Financial Group, Inc. Reports Financial Results for the Third Fiscal Quarter Ended June 30, 2022

JEFFERSONVILLE, Ind., July 25, 2022 (GLOBE NEWSWIRE) -- First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $2.6 million, or $0.37 per diluted share, for the quarter ended June 30, 2022 compared to net income of $4.3 million, or $0.60 per diluted share, for the quarter ended June 30, 2021.

Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “We are very pleased to have reached the $2.0 billion asset mark in this quarter, plus with the performance of the core banking segment, including enhanced profitability, very significant loan originations and portfolio growth, increased net interest margin, improved efficiency ratio and improved asset quality ratios. While the SBA lending segment underperformed in comparison to prior quarters, it was not unexpected and we have rebuilt the lending team and pipeline for enhanced performance in the fourth fiscal quarter and thereafter. We also recognize the headwinds for the mortgage banking segment and continue to right-size expenses in relation to decreasing origination volumes and margin. We are also pleased to report 59,120 shares of the Company’s common shares were repurchased during the quarter, which was slightly less than 1.0% of outstanding shares, as a part of the previously announced 5% share repurchase program. While the Company continues to enhance the performance of the SBA lending and mortgage banking segments, the core banking segment continues to provide solid performance. I remain optimistic that the Company is positioning itself well for the challenges of 2022 and opportunities in 2023 and years thereafter. I believe we are poised to thrive and continue to deliver exceptional value to our shareholders.”

Results of Operations for the Three Months Ended June 30, 2022 and 2021

Net interest income increased $1.7 million, or 11.8%, to $15.9 million for the three months ended June 30, 2022 as compared to the same period in 2021. The increase in net interest income was due to a $2.3 million increase in interest income, partially offset by a $647,000 increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $182.7 million, from $1.55 billion for 2021 to $1.74 billion for 2022, and an increase in the weighted-average tax-equivalent yield, from 4.25% for 2021 to 4.36% for 2022. The increase in the average balance of interest-earning assets was due to increases in the average balance of investment securities and total loans of $111.4 million and $84.4 million, respectively. When excluding the impact from PPP loan payoffs, the increase in the average balance of loans was $225.4 million when comparing the two periods. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $160.0 million, from $1.21 billion for 2021 to $1.37 billion for 2022, and an increase in the average cost of interest-bearing liabilities, from 0.63% for 2021 to 0.75% for 2022. The increase in the average cost of interest-bearing liabilities for 2022 was due primarily to higher rates paid for brokered deposits during the period.

The Company recognized a provision for loan losses of $532,000 for the three months ended June 30, 2022, due to loan portfolio growth, compared to a credit of $2.7 million for the same period in 2021. The increase in the provision for loan losses for 2022 is primarily due to loan growth during the quarter ended June 30, 2022. The Company recognized net charge-offs of $27,000 for the three months ended June 30, 2022 compared to net charge-offs of $47,000 for the same period in 2021.

Noninterest income decreased $8.8 million for the three months ended June 30, 2022 as compared to the same period in 2021. The decrease was due primarily to decreases in mortgage banking income and net gain on sale of SBA loans of $7.3 million and $1.8 million, respectively. The decrease in mortgage banking income was primarily due to a $16.6 million decrease in production revenue from lower originations for sale and a $2.5 million decrease in capitalized residential mortgage loan servicing rights, partially offset by $6.1 million in realized and unrealized hedging gains in 2022 compared to $6.3 million in realized and unrealized hedging losses in 2021. Mortgage loans originated for sale were $421.4 million in the three months ended June 30, 2022 as compared to $739.5 million in the same period in 2021. The decrease in net gain on sales of SBA loans was due primarily to decreases in production and sales volume from the SBA lending segment, as well as lower premiums in the secondary market.

Noninterest expense decreased $7.8 million for the three months ended June 30, 2022 as compared to the same period in 2021. The decrease was due primarily to a decrease in compensation and benefits of $6.1 million. The decrease in compensation and benefits expense is due primarily to a reduction in incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking income.

The Company recognized an income tax benefit of $61,000 for the three months ended June 30, 2022 compared to tax expense of $817,000 for the same period in 2021. The tax benefit for 2022 was primarily the result of the Company’s utilization of capital loss carryovers during the period and the purchase of additional tax-exempt municipal bonds during the period.

Results of Operations for the Nine Months Ended June 30, 2022 and 2021

The Company reported net income of $14.0 million, or $1.95 per diluted share, for the nine months ended June 30, 2022 compared to net income of $24.7 million, or $3.45 per diluted share, for the nine months ended June 30, 2021.

Net interest income increased $1.1 million, or 2.5%, to $43.8 million for the nine months ended June 30, 2022 as compared to the same period in 2021. The increase in net interest income was due to a $1.0 million increase in interest income and a $53,000 decrease in interest expense. Interest income increased due to an increase in the weighted-average tax-equivalent yield, from 4.15% for 2021 to 4.25% for 2022, and a $1.7 million increase in the average balance of interest-earning assets. Interest expense decreased primarily due to a decrease in the average balance of interest-bearing liabilities of $13.0 million, from $1.28 billion for 2021 to $1.27 billion for 2022. The average cost of interest-bearing liabilities was 0.65% for both 2021 and 2022.

The Company recognized a provision for loan losses of $1.0 million for the nine months ended June 30, 2022, due to loan portfolio growth, compared to a credit of $1.8 million for the same period in 2021. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, decreased $5.6 million from $15.5 million at September 30, 2021 to $9.9 million at June 30, 2022. The Company recognized net charge-offs of $349,000 for the nine months ended June 30, 2022, of which $218,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $609,000 for the same period in 2021, of which $565,000 was related to unguaranteed portions of SBA loans.

Noninterest income decreased $57.2 million for the nine months ended June 30, 2022 as compared to the same period in 2021. The decrease was due primarily to a decrease in mortgage banking income and gain on sale of SBA loans of $55.4 million and $3.4 million, respectively. The decrease in mortgage banking income was primarily due to a $73.9 million decrease in production revenue from lower originations for sale and a $22.1 million decrease in capitalized residential mortgage loan servicing rights, partially offset by a $13.8 million increase in realized and unrealized hedging gains, a $3.1 million decrease in the fair value of loans held for sale and interest rate lock commitments as compared to a $15.6 million decrease in fair value recognized in 2021, and a $4.7 million increase in the fair value of the residential mortgage loan servicing rights portfolio in 2022 as compared to a $7.0 million decrease in fair value recognized in 2021. Mortgage loans originated for sale were $1.42 billion in the nine months ended June 30, 2022 as compared to $3.51 billion in the same period in 2021. The decrease in net gain on sales of SBA loans was due primarily to decreases in production and sales volume from the SBA lending segment, as well as lower premiums in the secondary market.

Noninterest expense decreased $41.2 million for the nine months ended June 30, 2022 as compared to the same period in 2021. The decrease was due primarily to decreases in compensation and benefits and advertising expense of $34.7 million and $3.1 million, respectively. The decrease in compensation and benefits expense is due primarily to a reduction in incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking income. The decrease in advertising expense was related to the reduced loan origination volume of the mortgage banking segment.

The Company recognized income tax expense of $2.4 million for the nine months ended June 30, 2022 compared to $9.0 million for the same period in 2021. The effective tax rate for 2022 was 14.5% as compared to 26.5% for 2021. The lower effective tax rate for 2022 was primarily due to lower taxable income and lower nondeductible executive compensation expense in 2022 as compared to 2021.

Comparison of Financial Condition at June 30, 2022 and September 30, 2021

Total assets increased $285.3 million, from $1.72 billion at September 30, 2021 to $2.01 billion at June 30, 2022. Net loans held for investment increased $191.9 million during the nine months ended June 30, 2022, due primarily to growth in residential mortgage loans, single-tenant net lease commercial real estate loans and non-SBA commercial business loans, partially offset by a $54.9 million decrease in PPP loans. Residential mortgage and SBA loans held for sale decreased $73.1 million and $4.0 million, respectively, during the nine months ended June 30, 2022 due to loan sales outpacing originations. Single tenant net lease loans held for sale increased $50.3 million during the nine months ended June 30, 2022, due to originations and transfers from held-for-investment to held-for-sale outpacing sales during the period. Residential mortgage loan servicing rights increased $15.3 million, or 30.8%, to $64.8 million at June 30, 2022.

Total liabilities increased $296.4 million due primarily to increases in FHLB borrowings, total deposits and other borrowings of $154.1 million, $118.1 million and $30.3 million, respectively. The increase in FHLB borrowings was primarily used to fund loan growth. The increase in other borrowings was due to a $31.0 million subordinated debt issuance in March 2022.

Common stockholders’ equity decreased $11.2 million, from $180.4 million at September 30, 2021 to $169.2 million at June 30, 2022, due primarily to a decrease in accumulated other comprehensive income of $21.5 million, partially offset by retained net income of $11.3 million. The decrease in accumulated other comprehensive income was primarily due to increasing market interest rates during the nine months ended June 30, 2022, which resulted in a decrease in the fair value of the available-for-sale securities portfolio. At June 30, 2022 and September 30, 2021, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

First Savings Bank is an entrepreneurial community bank headquartered in Jeffersonville, Indiana, which is directly across the Ohio River from Louisville, Kentucky, and operates fifteen depository branches within Southern Indiana. The Bank also has three national lending programs, including single-tenant net lease commercial real estate, SBA lending and residential mortgage banking, with offices located throughout the United States. The Bank is a recognized leader, both in its local communities and nationally for its lending programs. The employees of First Savings Bank strive daily to achieve the organization’s vision, We Expect To Be The BEST community BANK, which fuels our success. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “FSFG.”

This release may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions.

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including the duration, extent and severity of the COVID-19 pandemic, including its effect on our customers, service providers and on the economy and financial markets in general; changes in market interest rates; changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission.

Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf. Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

Contact:
Tony A. Schoen, CPA
Chief Financial Officer
812-283-0724



FIRST SAVINGS FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
          
* All share and per share amounts have been adjusted to reflect the three-for-one stock split effective September 15, 2021.      
          
 Three Months Ended Nine Months Ended  
OPERATING DATA:June 30, June 30,  
(In thousands, except share and per share data)2022 2021 2022 2021  
          
Total interest income$18,479  $16,150  $50,042  $49,016   
Total interest expense 2,568   1,921   6,215   6,268   
          
Net interest income 15,911   14,229   43,827   42,748   
Provision (credit) for loan losses 532   (2,730)  1,028   (1,775)  
          
Net interest income after provision (credit) for loan losses 15,379   16,959   42,799   44,523   
          
Total noninterest income 10,033   18,785   46,696   103,941   
Total noninterest expense 22,835   30,619   73,148   114,305   
          
Income before income taxes 2,577   5,125   16,347   34,159   
Income tax expense (benefit) (61)  817   2,369   9,039   
          
Net income 2,638   4,308   13,978   25,120   
          
Less: Net income attributable to noncontrolling interests -   -   -   402   
          
Net income attributable to the Company$2,638  $4,308  $13,978  $24,718   
          
Net income per share, basic$0.37  $0.61  $1.97  $3.48   
Weighted average shares outstanding, basic 7,073,204   7,109,481   7,082,034   7,106,505   
          
Net income per share, diluted$0.37  $0.60  $1.95  $3.45   
Weighted average shares outstanding, diluted 7,145,288   7,178,943   7,166,632   7,166,235   
          
          
Performance ratios (three-month and nine-month data annualized)         
Return on average assets 0.55%  1.00%  1.04%  1.87%  
Return on average equity 6.06%  9.94%  10.33%  19.95%  
Return on average common stockholders' equity 6.06%  9.94%  10.33%  19.65%  
Net interest margin (tax equivalent basis) 3.77%  3.75%  3.73%  3.63%  
Efficiency ratio 88.02%  92.75%  80.81%  77.92%  
          
          
     QTD   FYTD
FINANCIAL CONDITION DATA:June 30, March 31, Increase September 30, Increase
(In thousands, except per share data)2022 2022 (Decrease) 2021 (Decrease)
          
Total assets$2,006,666  $1,801,944  $204,722  $1,721,394  $285,272 
Cash and cash equivalents 37,468   31,105   6,363   33,428   4,040 
Investment securities 309,027   284,674   24,353   208,518   100,509 
Loans held for sale 188,031   152,652   35,379   214,940   (26,909)
Gross loans (1) 1,282,796   1,141,293   141,503   1,090,237   192,559 
Allowance for loan losses 14,980   14,475   505   14,301   679 
Interest earning assets 1,809,588   1,602,321   207,267   1,540,111   269,477 
Goodwill 9,848   9,848   -   9,848   - 
Core deposit intangibles 828   882   (54)  988   (160)
Loan servicing rights 69,039   68,267   772   54,026   15,013 
Noninterest-bearing deposits 343,292   311,738   31,554   291,039   52,253 
Interest-bearing deposits (2) 1,002,415   909,451   92,964   936,541   65,874 
Federal Home Loan Bank borrowings 404,098   296,592   107,506   250,000   154,098 
Total liabilities 1,837,453   1,621,991   215,462   1,541,017   296,436 
Stockholders' equity, net of noncontrolling interests 169,213   179,953   (10,740)  180,377   (11,164)
          
Book value per share$23.80  $25.10  $(1.30) $25.31   (1.51)
Tangible book value per share (3) 22.30   23.60   (1.30)  23.79   (1.49)
          
Non-performing assets:         
Nonaccrual loans - SBA guaranteed$5,165  $5,214  $(49) $6,748  $(1,583)
Nonaccrual loans - unguaranteed 4,717   4,842   (125)  8,252   (3,535)
Total nonaccrual loans$9,882  $10,056  $(174) $15,000  $(5,118)
Accruing loans past due 90 days -   -   -   472   (472)
Total non-performing loans 9,882   10,056   (174)  15,472   (5,590)
Troubled debt restructurings classified as performing loans 2,822   3,017   (195)  1,743   1,079 
Total non-performing assets$12,704  $13,073  $(369) $17,215  $(4,511)
          
Asset quality ratios:         
Allowance for loan losses as a percent of total gross loans 1.17%  1.27%  (0.10%)  1.31%  (0.14%)
Allowance for loan losses as a percent of total gross loans, excluding PPP loans (4) 1.17%  1.28%  (0.11%)  1.38%  (0.21%)
Allowance for loan losses as a percent of nonperforming loans 151.59%  143.94%  7.65%  92.43%  59.16%
Nonperforming loans as a percent of total gross loans 0.77%  0.88%  (0.11%)  1.42%  (0.65%)
Nonperforming assets as a percent of total assets 0.63%  0.73%  (0.10%)  1.00%  (0.37%)
          
(1) Includes $1.8 million, $13.4 million and $56.7 million of PPP loans at June 30, 2022, March 31, 2022 and September 30, 2021, respectively.    
          
(2) Includes $159.1 million, $69.8 million and $100.1 million of brokered certificates of deposit at June 30, 2022, March 31, 2022 and September 30, 2021, respectively.  
          
(3) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item.      
          
(4) Denominator excludes PPP loans, which are fully guaranteed by the SBA. This ratio is non-GAAP, but is believed by management to be meaningful because it provides a comparable ratio
after eliminating PPP loans.         
          
          
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):        
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company's     
performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to    
evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the    
Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.    
          
     QTD   FYTD
 June 30, March 31, Increase September 30, Increase
Tangible Book Value Per Share2022 2022 (Decrease) 2021 (Decrease)
(In thousands, except share and per share data)         
          
Stockholders' equity, net of noncontrolling interests (GAAP)$169,213  $179,953  $(10,740) $180,377  $(11,164)
Less: goodwill and core deposit intangibles (10,676)  (10,730)  54   (10,836)  160 
Tangible equity (non-GAAP)$158,537  $169,223   (10,686) $169,541   (11,004)
          
Outstanding common shares 7,110,706   7,169,826   (59,120)  7,125,888   (15,182)
          
Tangible book value per share (non-GAAP)$22.30  $23.60  $(1.30) $23.79  $(1.49)
          
Book value per share (GAAP)$23.80  $25.10  $(1.30) $25.31  $(1.51)
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):As of
Summarized Consolidated Balance SheetsJune 30, March 31, December 31, September 30, June 30,
(In thousands, except per share data) 2022   2022   2021   2021   2021 
Total cash and cash equivalents$37,468  $31,105  $40,592  $33,428  $22,909 
Total investment securities 309,027   284,674   220,926   208,518   209,551 
Total loans held for sale 188,031   152,652   161,218   214,940   277,374 
Total loans, net of allowance for loan losses 1,267,816   1,126,818   1,142,655   1,075,936   1,065,852 
PPP loans 1,766   13,415   46,020   56,656   100,573 
Loan servicing rights 69,039   68,267   59,187   54,026   51,778 
Total assets 2,006,666   1,801,944   1,764,589   1,721,394   1,759,330 
          
Retail deposits$1,186,582  $1,151,437  $1,146,454  $1,127,522  $1,064,358 
Brokered deposits 159,125   69,752   120,581   100,058   62,797 
Total deposits 1,345,707   1,221,189   1,267,035   1,227,580   1,127,155 
Federal Home Loan Bank borrowings 404,098   296,592   258,377   250,000   283,289 
Federal Reserve PPPLF borrowings -   -   -   -   107,829 
          
Common stock and additional paid-in capital$27,236  $27,154  $27,073  $25,799  $25,741 
Retained earnings - substantially restricted 161,438   159,732   153,630   150,185   146,191 
Accumulated other comprehensive income (loss) (12,560)  (1,336)  9,219   8,900   10,358 
Unearned stock compensation (1,075)  (1,180)  (1,285)  (138)  (184)
Less treasury stock, at cost (5,826)  (4,417)  (4,417)  (4,369)  (4,371)
Total stockholders' equity 169,213   179,953   184,220   180,377   177,735 
          
Outstanding common shares 7,110,706   7,169,826   7,169,826   7,125,888   7,124,388 
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Summarized Consolidated Statements of IncomeJune 30, March 31, December 31, September 30, June 30,
(In thousands, except per share data)2022 2022 2021 2021 2021
Total interest income$18,479  $15,801  $15,762  $16,243  $16,150 
Total interest expense 2,568   1,788   1,859   1,819   1,921 
Net interest income 15,911   14,013   13,903   14,424   14,229 
Provision (credit) for loan losses 532   (30)  526   8   (2,730)
Net interest income after provision (credit) for loan losses 15,379   14,043   13,377   14,416   16,959 
          
Total noninterest income 10,033   20,072   16,591   16,495   18,785 
Total noninterest expense 22,835   25,461   24,852   25,104   30,619 
Income before income taxes 2,577   8,654   5,116   5,807   5,125 
Income tax expense (benefit) (61)  1,619   811   958   817 
Net income attributable to the Company$2,638  $7,035  $4,305  $4,849  $4,308 
          
          
Net income per share, basic$0.37  $0.99  $0.60  $0.68  $0.61 
Weighted average shares outstanding, basic 7,073,204   7,076,355   7,116,790   7,111,594   7,109,481 
          
Net income per share, diluted$0.37  $0.98  $0.60  $0.67  $0.60 
Weighted average shares outstanding, diluted 7,145,288   7,156,229   7,207,210   7,200,357   7,178,943 
          
 Three Months Ended
 June 30, March 31, December 31, September 30, June 30,
Consolidated Performance Ratios (Annualized)2022 2022 2021 2021 2021
Return on average assets 0.55%  1.61%  1.01%  1.12%  1.00%
Return on average equity 6.06%  15.24%  9.45%  10.92%  9.94%
Return on average common stockholders' equity 6.06%  15.24%  9.45%  10.92%  9.94%
Net interest margin (tax equivalent basis) 3.77%  3.68%  3.73%  3.79%  3.75%
Efficiency ratio 88.02%  74.70%  81.50%  81.19%  92.75%
          
 As of or for the Three Months Ended
 June 30, March 31, December 31, September 30, June 30,
Consolidated Asset Quality Ratios2022 2022 2021 2021 2021
Nonperforming loans as a percentage of total loans 0.77%  0.88%  1.10%  1.42%  1.15%
Nonperforming assets as a percentage of total assets 0.63%  0.73%  0.82%  1.00%  0.81%
Allowance for loan losses as a percentage of total loans 1.17%  1.27%  1.28%  1.31%  1.36%
Allowance for loan losses as a percentage of nonperforming loans 151.59%  143.94%  116.12%  92.43%  117.88%
Net charge-offs to average outstanding loans 0.00%  0.02%  0.00%  0.03%  0.00%
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Segmented Statements of Income InformationJune 30, March 31, December 31, September 30, June 30,
(In thousands, except per share data)2022 2022 2021 2021 2021
Core Banking Segment:         
Net interest income$13,848  $11,847  $11,495  $11,517  $11,401 
Provision (credit) for loan losses 910   (240)  (144)  (189)  (2,401)
Net interest income after provision (credit) for loan losses 12,938   12,087   11,639   11,706   13,802 
Noninterest income 2,379   2,163   1,942   1,780   1,509 
Noninterest expense 10,187   9,811   9,482   8,800   9,364 
Income before income taxes 5,310   4,439   4,099   4,686   5,947 
Income tax expense 568   330   500   569   792 
Net income attributable to the Company$4,562  $4,109  $3,599  $4,117  $5,155 
          
SBA Lending Segment (Q2):         
Net interest income (5)$1,449  $1,602  $1,875  $2,455  $2,510 
Provision (credit) for loan losses (378)  210   670   197   (329)
Net interest income after provision (credit) for loan losses 1,827   1,392   1,205   2,258   2,839 
Noninterest income 584   1,658   1,901   2,194   2,675 
Noninterest expense 2,341   2,253   2,236   1,973   2,206 
Income before income taxes 70   797   870   2,479   3,308 
Income tax expense 26   240   265   612   790 
Net income attributable to the Company (6)$44  $557  $605  $1,867  $2,518 
          
Mortgage Banking Segment:         
Net interest income$614  $564  $533  $452  $318 
Provision for loan losses -   -   -   -   - 
Net interest income after provision for loan losses 614   564   533   452   318 
Noninterest income 7,070   16,251   12,748   12,521   14,601 
Noninterest expense 10,307   13,397   13,134   14,331   19,049 
Income (loss) before income taxes (2,623)  3,418   147   (1,358)  (4,130)
Income tax expense (benefit) (655)  1,049   46   (223)  (765)
Net income (loss) attributable to the Company$(1,968) $2,369  $101  $(1,135) $(3,365)
          
(5) Includes net interest income derived from PPP loans of:$173  $239  $550  $1,145  $1,220 
          
(6) Includes net income attributable to the Company derived from PPP loans (tax effected) of:$130  $179  $413  $859  $915 
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Segmented Statements of Income InformationJune 30, March 31, December 31, September 30, June 30,
(In thousands, except per share data)2022 2022 2021 2021 2021
Net Income (Loss) Per Share by Segment         
Net income per share, basic - Core Banking$0.64  $0.58  $0.50  $0.58  $0.73 
Net income per share, basic - SBA Lending (Q2) (7) 0.01   0.08   0.09   0.26   0.35 
Net income (loss) per share, basic - Mortgage Banking (0.28)  0.33   0.01   (0.16)  (0.47)
Total net income per share, basic (7)$0.37  $0.99  $0.60  $0.68  $0.61 
          
Net Income (Loss) Per Diluted Share by Segment         
Net income per share, diluted - Core Banking$0.64  $0.57  $0.50  $0.57  $0.72 
Net income per share, diluted - SBA Lending (Q2) (8) 0.01   0.08   0.09   0.26   0.35 
Net income (loss) per share, diluted - Mortgage Banking (0.28)  0.33   0.01   (0.16)  (0.47)
Total net income per share, diluted (8)$0.37  $0.98  $0.60  $0.67  $0.60 
          
Return on Average Assets by Segment (three-month data annualized)         
Core Banking 1.12%  1.14%  1.05%  1.24%  1.62%
SBA Lending 0.17%  1.80%  1.55%  4.01%  4.09%
Mortgage Banking (4.50%)  5.38%  0.23%  (2.11%)  (6.84%)
          
Efficiency Ratio by Segment (three-month data annualized)         
Core Banking 62.78%  70.03%  70.57%  66.18%  72.53%
SBA Lending 115.15%  69.11%  59.22%  42.44%  42.55%
Mortgage Banking 134.14%  79.67%  98.89%  110.47%  127.68%
          
(7) Includes basic net income per share derived from PPP loans (tax effected) of:$0.02  $0.03  $0.06  $0.12  $0.13 
          
(8) Includes diluted net income per share derived from PPP loans (tax effected) of:$0.02  $0.03  $0.06  $0.12  $0.13 
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Noninterest Expense Detail by SegmentJune 30, March 31, December 31, September 30, June 30,
(In thousands)2022 2022 2021 2021 2021
Core Banking Segment:         
Compensation (9)$5,995  $5,207  $5,776  $5,220  $5,039 
Occupancy 1,412   1,393   1,357   1,415   1,473 
Advertising 284   297   232   268   213 
Other 2,496   2,914   2,117   1,897   2,639 
Total Noninterest Expense$10,187  $9,811  $9,482  $8,800  $9,364 
          
SBA Lending Segment (Q2):         
Compensation$1,619  $1,724  $1,685  $1,602  $1,697 
Occupancy 60   64   78   83   101 
Advertising 3   9   9   6   3 
Other 659   456   464   282   405 
Total Noninterest Expense$2,341  $2,253  $2,236  $1,973  $2,206 
          
Mortgage Banking Segment:         
Compensation (9)$7,601  $10,292  $9,867  $11,456  $14,594 
Occupancy 597   622   678   723   1,012 
Advertising 519   696   551   588   1,133 
Other 1,590   1,787   2,038   1,564   2,310 
Total Noninterest Expense$10,307  $13,397  $13,134  $14,331  $19,049 
          
(9) Compensation includes increases for Core Banking and corresponding decreases for Mortgage Banking segments that represent intersegment allocations for loans originated by the Mortgage Banking segment to be held for investment in the Core Banking loan portfolio of:$1,164  $869  $975  $678  $- 
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
 June 30, March 31, December 31, September 30, June 30,
Mortgage Banking Noninterest Expense Fixed vs. Variable2022 2022 2021 2021 2021
(In thousands)         
Noninterest Expense - Fixed Expenses$6,989  $7,936  $7,752  $7,779  $9,764 
Noninterest Expense - Variable Expenses (10) 3,318   5,461   5,382   6,552   9,285 
Total Noninterest Expense$10,307  $13,397  $13,134  $14,331  $19,049 
          
          
 Three Months Ended
SBA Lending (Q2) DataJune 30, March 31, December 31, September 30, June 30,
(In thousands, except percentage data)2022 2022 2021 2021 2021
Final funded loans guaranteed portion sold, SBA$5,364  $14,355  $14,131  $14,894  $17,969 
          
Gross gain on sales of loans, SBA$592  $1,670  $1,841  $2,134  $2,551 
Weighted average gross gain on sales of loans, SBA 11.04%  11.63%  13.03%  14.33%  14.20%
          
Net gain on sales of loans, SBA (11)$486  $1,327  $1,636  $1,912  $2,322 
Weighted average net gain on sales of loans, SBA 9.06%  9.24%  11.58%  12.84%  12.92%
          
          
 Three Months Ended
Mortgage Banking DataJune 30, March 31, December 31, September 30, June 30,
(In thousands, except percentage data)2022 2022 2021 2021 2021
          
Mortgage originations for sale in the secondary market$421,426  $459,434  $541,074  $579,458  $739,502 
          
Mortgage sales$426,200  $478,816  $587,928  $670,107  $716,425 
          
Gross gain on sales of loans, mortgage banking (12)$7,419  $10,988  $11,082  $10,796  $11,999 
Weighted average gross gain on sales of loans, mortgage banking 1.74%  2.29%  1.88%  1.61%  1.67%
          
Mortgage banking income (13)$7,093  $16,254  $12,744  $12,538  $14,616 
          
(10) Variable expenses represent incentive compensation and advertising expenses.         
          
(11) Inclusive of gains on servicing assets, and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.    
          
(12) Inclusive of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees, and net of lender credits and other investor expenses.    
          
(13) Inclusive of loan fees, servicing income, gains or losses on mortgage servicing rights, fair value adjustments and gains or losses on derivative instruments, and net of lender credits and other investor expenses.
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Summarized Consolidated Average Balance SheetsJune 30, March 31, December 31, September 30, June 30,
(In thousands)2022 2022 2021 2021 2021
Interest-earning assets         
Average balances:         
Interest-bearing deposits with banks$25,068  $36,029  $33,065  $63,217  $37,683 
Loans, excluding PPP loans 1,381,366   1,268,983   1,221,879   1,194,277   1,155,958 
PPP loans 4,271   22,066   51,178   84,288   145,227 
Investment securities - taxable 103,536   50,165   47,717   46,005   46,392 
Investment securities - nontaxable 202,534   163,472   153,452   148,723   148,280 
FRB and FHLB stock 18,691   19,021   19,258   19,258   19,258 
Total interest-earning assets$1,735,466  $1,559,736  $1,526,549  $1,555,768  $1,552,798 
          
Interest income (tax equivalent basis):         
Interest-bearing deposits with banks$37  $13  $14  $23  $14 
Loans, excluding PPP loans 15,788   13,745   13,424   13,279   13,017 
PPP loans 177   258   595   1,219   1,347 
Investment securities - taxable 769   420   405   421   447 
Investment securities - nontaxable 1,987   1,571   1,509   1,482   1,496 
FRB and FHLB stock 169   146   149   146   161 
Total interest income (tax equivalent basis)$18,927  $16,153  $16,096  $16,570  $16,482 
          
Weighted average yield (tax equivalent basis, annualized):         
Interest-bearing deposits with banks 0.59%  0.14%  0.17%  0.15%  0.15%
Loans, excluding PPP loans 4.57%  4.33%  4.39%  4.45%  4.50%
PPP loans 16.58%  4.68%  4.65%  5.78%  3.71%
Investment securities - taxable 2.97%  3.35%  3.40%  3.66%  3.85%
Investment securities - nontaxable 3.92%  3.84%  3.93%  3.99%  4.04%
FRB and FHLB stock 3.62%  3.07%  3.09%  3.03%  3.34%
Total interest-earning assets 4.36%  4.14%  4.22%  4.26%  4.25%
          
          
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):Three Months Ended
Summarized Consolidated Average Balance SheetsJune 30, March 31, December 31, September 30, June 30,
(In thousands)2022 2022 2021 2021 2021
Interest-bearing liabilities         
Average balances:         
Interest-bearing deposits$998,868  $922,137  $913,297  $935,800  $807,342 
Federal Home Loan Bank borrowings 325,460   280,190   264,617   255,210   272,834 
Federal Reserve PPPLF borrowings -   -   -   11,937   114,453 
Subordinated debt and other borrowings 50,152   24,592   19,870   19,853   19,836 
Total interest-bearing liabilities$1,374,480  $1,226,919  $1,197,784  $1,222,800  $1,214,465 
          
Interest expense:         
Interest-bearing deposits$1,047  $738  $811  $765  $723 
Federal Home Loan Bank borrowings 811   681   730   725   780 
Federal Reserve PPPLF borrowings -   -   -   12   98 
Subordinated debt and other borrowings 710   369   318   319   320 
Total interest expense$2,568  $1,788  $1,859  $1,821  $1,921 
          
Weighted average cost (annualized):         
Interest-bearing deposits 0.42%  0.32%  0.36%  0.33%  0.36%
Federal Home Loan Bank borrowings 1.00%  0.97%  1.10%  1.14%  1.14%
Federal Reserve PPPLF borrowings 0.00%  0.00%  0.00%  0.40%  0.34%
Subordinated debt and other borrowings 5.66%  6.00%  6.40%  6.43%  6.45%
Total interest-bearing liabilities 0.75%  0.58%  0.62%  0.60%  0.63%
          
Interest rate spread (tax equivalent basis, annualized) 3.61%  3.56%  3.60%  3.66%  3.62%
          
Net interest margin (tax equivalent basis, annualized) 3.77%  3.68%  3.73%  3.79%  3.75%
          
Net interest margin, excluding PPP loans and PPPLF borrowings (non-GAAP), (tax equivalent basis, annualized) 3.74%  3.67%  3.70%  3.68%  3.78%

 

 


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