JEFFERSONVILLE, Ind., Oct. 27, 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 $16.4 million, or $2.30 per diluted share, for the year ended September 30, 2022 compared to net income of $29.6 million, or $4.12 per diluted share, for the year ended September 30, 2021.
Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “While fiscal 2022 was a challenging year, we are pleased in delivering another year of increased value to our shareholders. The core banking segment, which is the strength of the organization, experienced positive trends that included significant loan originations and portfolio growth, stable net interest margin, improved efficiency and asset quality ratios, and enhanced profitability. The SBA lending segment underperformed in recent quarters, but we have continued to rebuild the lending team and pipeline for expected enhanced performance in the new fiscal year. We continue to fight headwinds for the mortgage banking segment and reduce expenses, including cost reductions made that will be fully recognized in the following fiscal quarter and year, in light of decreasing origination volumes and margin. Lastly, the Company repurchased 143,030 of its common shares during the quarter, in addition to the 59,120 purchased in the preceding quarter, which together totaled more than 2.8% of outstanding shares. We are encouraged by the strong performance of the core banking segment and perceive opportunity for enhanced performance of the SBA lending and mortgage banking segments. I’m optimistic that each of these business lines will thrive and deliver exceptional value to our shareholders in fiscal 2023.”
Results of Operations for the Fiscal Years Ended September 30, 2022 and 2021
Net interest income increased $3.5 million, or 6.1%, to $60.7 million for the year ended September 30, 2022 as compared to 2021. The increase in net interest income was due to a $5.7 million increase in interest income, partially offset by a $2.2 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $76.1 million, from $1.59 billion for 2021 to $1.67 billion for 2022, and an increase in the weighted-average tax-equivalent yield, from 4.18% for 2021 to 4.35% for 2022. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of investment securities and total loans of $69.9 million and $21.1 million, respectively. When excluding the impact from PPP loan payoffs, the increase in the average balance of loans was $144.6 million when comparing the two periods. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $54.3 million, from $1.27 billion for 2021 to $1.32 billion for 2022, and an increase in the average cost of interest-bearing liabilities, from 0.64% for 2021 to 0.78% 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 $1.9 million for the year ended September 30, 2022 due primarily to loan portfolio growth, compared to a credit of $1.8 million for 2021. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, decreased $4.6 million from $15.5 million at September 30, 2021 to $10.9 million at September 30, 2022. The Company recognized net charge-offs of $849,000 for the year ended September 30, 2022, of which $733,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $958,000 in 2021, of which $894,000 was related to unguaranteed portions of SBA loans.
Noninterest income decreased $69.2 million for the year ended September 30, 2022 as compared to 2021. The decrease was due primarily to decreases in mortgage banking income and net gain on sale of SBA loans of $66.2 million and $5.0 million, respectively. The decrease in mortgage banking income was primarily due to a $84.6 million decrease in production revenue from lower originations for sale and a $25.5 million decrease in capitalized residential mortgage loan servicing rights, partially offset by a $16.3 million increase in realized and unrealized hedging gains in 2022, a $4.2 million decrease in the fair value of loans held for sale and interest rate lock commitments as compared to a $18.8 million decrease in fair value recognized in 2021, and a $2.5 million increase in the fair value of the residential mortgage loan servicing rights portfolio in 2022 as compared to an $8.8 million decrease in fair value recognized in 2021. Mortgage loans originated for sale were $1.61 billion in the year ended September 30, 2022 as compared to $4.09 billion 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 $48.3 million for the year ended September 30, 2022 as compared to 2021. The decrease was due primarily to decreases in compensation and benefits and advertising expense of $41.4 million and $3.4 million, respectively. The decrease in compensation and benefits expense was due primarily to a reduction in staff and 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 year ended September 30, 2022 compared to tax expense of $10.0 million for 2021. The effective tax rate for 2022 was 12.6% as compared to 25.0% 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.
Results of Operations for the Three Months Ended September 30, 2022 and 2021
The Company reported net income of $2.5 million, or $0.35 per diluted share, for the three months ended September 30, 2022 compared to net income of $4.8 million, or $0.67 per diluted share, for the three months ended September 30, 2021.
Net interest income increased $2.4 million, or 16.6%, to $16.8 million for the three months ended September 30, 2022 as compared to the same period in 2021. The increase in net interest income was due to a $4.7 million increase in interest income, partially offset by a $2.3 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $296.8 million, from $1.56 billion for 2021 to $1.85 billion for 2022, and an increase in the weighted-average tax-equivalent yield, from 4.26% for 2021 to 4.64% 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 $130.4 million and $200.6 million, respectively. When excluding the impact from PPP loan payoffs, the increase in the average balance of loans was $283.6 million when comparing the two periods. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $254.1 million, from $1.22 billion for 2021 to $1.48 billion for 2022, and an increase in the average cost of interest-bearing liabilities, from 0.60% for 2021 to 1.12% for 2022. The increase in the average cost of interest-bearing liabilities was due to increases in the cost of brokered deposits and FHLB borrowings due to rising market interest rates during the period.
The Company recognized a provision for loan losses of $880,000 for the three months ended September 30, 2022, due to loan portfolio growth, compared to $8,000 for the same period in 2021. The Company recognized net charge-offs of $500,000 for the three months ended September 30, 2022, compared to net charge-offs of $349,000 for the same period in 2021.
Noninterest income decreased $12.0 million for the three months ended September 30, 2022 as compared to the same period in 2021. The decrease was due primarily to decreases in mortgage banking income and gain on sale of SBA loans of $10.3 million and $1.7 million, respectively. The decrease in mortgage banking income was primarily due to a $10.2 million decrease in production revenue from lower originations for sale and a $3.4 million decrease in capitalized residential mortgage loan servicing rights, partially offset by a $1.3 million realized and unrealized hedging gain in 2022 compared to a $1.2 million loss in 2021, and a $1.1 million decrease in the fair value of loans held for sale and interest rate lock commitments as compared to a $3.3 million decrease in fair value recognized in 2021. Mortgage loans originated for sale were $186.0 million in the three months ended September 30, 2022 as compared to $579.5 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 $7.1 million for the three months ended September 30, 2022 as compared to the same period in 2021. The decrease was due primarily to a decrease in compensation and benefits of $6.7 million. The decrease in compensation and benefits expense is due primarily to a reduction in staff and incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking income.
The Company recognized income tax expense of $9,000 for the three months ended September 30, 2022 compared to $958,000 for the same period in 2021. The effective tax rate for 2022 was 0.4% as compared to 16.5% for 2021. The lower effective tax rate for 2022 was primarily due to lower taxable income in 2022 as compared to 2021.
Comparison of Financial Condition at September 30, 2022 and September 30, 2021
Total assets increased $336.3 million, from $1.72 billion at September 30, 2021 to $2.06 billion at September 30, 2022. Net loans held for investment increased $360.6 million during the year ended September 30, 2022, due primarily to growth in single-tenant net lease commercial real estate loans and residential mortgage loans, partially offset by a $55.8 million decrease in PPP loans. Residential mortgage and SBA loans held for sale decreased $129.2 million and $2.2 million, respectively, during the year ended September 30, 2022 due to lower loan originations. Single tenant net lease loans held for sale decreased $23.0 million during the year ended September 30, 2022, due to loan sales and transfers from held-for-sale to held-for-investment during the period. Residential mortgage loan servicing rights increased $13.7 million, or 27.6%, to $63.3 million at September 30, 2022.
Total liabilities increased $364.0 million due primarily to increases in total deposits, FHLB borrowings and other borrowings of $288.3 million, $57.3 million and $30.4 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 $27.8 million, from $180.4 million at September 30, 2021 to $152.6 million at September 30, 2022, due primarily to a decrease in accumulated other comprehensive income of $36.0 million, partially offset by retained net income of $12.8 million. The decrease in accumulated other comprehensive income was primarily due to increasing market interest rates during the year ended September 30, 2022, which resulted in a decrease in the fair value of the available-for-sale securities portfolio. At September 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 | Years Ended | ||||||||||||||||||
| OPERATING DATA: | September 30, | September 30, | |||||||||||||||||
| (In thousands, except share and per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Total interest income | $ | 20,956 | $ | 16,243 | $ | 70,998 | $ | 65,259 | |||||||||||
| Total interest expense | 4,131 | 1,819 | 10,346 | 8,087 | |||||||||||||||
| Net interest income | 16,825 | 14,424 | 60,652 | 57,172 | |||||||||||||||
| Provision (credit) for loan losses | 880 | 8 | 1,908 | (1,767 | ) | ||||||||||||||
| Net interest income after provision (credit) for loan losses | 15,945 | 14,416 | 58,744 | 58,939 | |||||||||||||||
| Total noninterest income | 4,531 | 16,495 | 51,227 | 120,436 | |||||||||||||||
| Total noninterest expense | 18,001 | 25,104 | 91,149 | 139,409 | |||||||||||||||
| Income before income taxes | 2,475 | 5,807 | 18,822 | 39,966 | |||||||||||||||
| Income tax expense | 9 | 958 | 2,378 | 9,997 | |||||||||||||||
| Net income | 2,466 | 4,849 | 16,444 | 29,969 | |||||||||||||||
| Less: Net income attributable to noncontrolling interests | - | - | - | 402 | |||||||||||||||
| Net income attributable to the Company | $ | 2,466 | $ | 4,849 | $ | 16,444 | $ | 29,567 | |||||||||||
| Net income per share, basic | $ | 0.35 | $ | 0.68 | $ | 2.33 | $ | 4.16 | |||||||||||
| Weighted average shares outstanding, basic | 6,988,873 | 7,111,594 | 7,058,550 | 7,107,786 | |||||||||||||||
| Net income per share, diluted | $ | 0.35 | $ | 0.67 | $ | 2.30 | $ | 4.12 | |||||||||||
| Weighted average shares outstanding, diluted | 7,056,138 | 7,200,357 | 7,141,846 | 7,173,733 | |||||||||||||||
| Performance ratios (three-month data annualized) | |||||||||||||||||||
| Return on average assets | 0.49 | % | 1.12 | % | 0.89 | % | 1.69 | % | |||||||||||
| Return on average equity | 5.78 | % | 10.92 | % | 9.25 | % | 17.59 | % | |||||||||||
| Return on average common stockholders' equity | 5.78 | % | 10.92 | % | 9.25 | % | 17.37 | % | |||||||||||
| Net interest margin (tax equivalent basis) | 3.75 | % | 3.79 | % | 3.73 | % | 3.67 | % | |||||||||||
| Efficiency ratio | 84.29 | % | 81.19 | % | 81.47 | % | 78.49 | % | |||||||||||
| QTD | FYTD | ||||||||||||||||||
| FINANCIAL CONDITION DATA: | September 30, | June 30, | Increase | September 30, | Increase | ||||||||||||||
| (In thousands, except per share data) | 2022 | 2022 | (Decrease) | 2021 | (Decrease) | ||||||||||||||
| Total assets | $ | 2,057,662 | $ | 2,006,666 | $ | 50,996 | $ | 1,721,394 | $ | 336,268 | |||||||||
| Cash and cash equivalents | 41,665 | 37,468 | 4,197 | 33,428 | 8,237 | ||||||||||||||
| Investment securities | 318,075 | 309,027 | 9,048 | 208,518 | 109,557 | ||||||||||||||
| Loans held for sale (1) | 60,462 | 188,031 | (127,569 | ) | 214,940 | (154,478 | ) | ||||||||||||
| Gross loans (1) (2) | 1,451,915 | 1,282,796 | 169,119 | 1,090,237 | 361,678 | ||||||||||||||
| Allowance for loan losses | 15,360 | 14,980 | 380 | 14,301 | 1,059 | ||||||||||||||
| Interest earning assets | 1,860,062 | 1,809,588 | 50,474 | 1,540,111 | 319,951 | ||||||||||||||
| Goodwill | 9,848 | 9,848 | - | 9,848 | - | ||||||||||||||
| Core deposit intangibles | 775 | 828 | (53 | ) | 988 | (213 | ) | ||||||||||||
| Loan servicing rights | 67,194 | 69,039 | (1,845 | ) | 54,026 | 13,168 | |||||||||||||
| Noninterest-bearing deposits | 340,172 | 343,292 | (3,120 | ) | 291,039 | 49,133 | |||||||||||||
| Interest-bearing deposits (3) | 1,175,662 | 1,002,415 | 173,247 | 936,541 | 239,121 | ||||||||||||||
| Federal Home Loan Bank borrowings | 307,303 | 404,098 | (96,795 | ) | 250,000 | 57,303 | |||||||||||||
| Total liabilities | 1,905,039 | 1,837,453 | 67,586 | 1,541,017 | 364,022 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (27,079 | ) | (12,560 | ) | (14,519 | ) | 8,900 | (35,979 | ) | ||||||||||
| Stockholders' equity, net of noncontrolling interests | 152,623 | 169,213 | (16,590 | ) | 180,377 | (27,754 | ) | ||||||||||||
| Book value per share | $ | 21.90 | $ | 23.80 | $ | (1.90 | ) | $ | 25.31 | (3.41 | ) | ||||||||
| Tangible book value per share (4) | 20.37 | 22.30 | (1.92 | ) | 23.79 | (3.41 | ) | ||||||||||||
| Non-performing assets: | |||||||||||||||||||
| Nonaccrual loans - SBA guaranteed | $ | 5,474 | $ | 5,165 | $ | 309 | $ | 6,748 | $ | (1,274 | ) | ||||||||
| Nonaccrual loans - unguaranteed | 5,382 | 4,717 | 665 | 8,252 | (2,870 | ) | |||||||||||||
| Total nonaccrual loans | $ | 10,856 | $ | 9,882 | $ | 974 | $ | 15,000 | $ | (4,144 | ) | ||||||||
| Accruing loans past due 90 days | - | - | - | 472 | (472 | ) | |||||||||||||
| Total non-performing loans | 10,856 | 9,882 | 974 | 15,472 | (4,616 | ) | |||||||||||||
| Troubled debt restructurings classified as performing loans | 2,714 | 2,822 | (108 | ) | 1,743 | 971 | |||||||||||||
| Total non-performing assets | $ | 13,570 | $ | 12,704 | $ | 866 | $ | 17,215 | $ | (3,645 | ) | ||||||||
| Asset quality ratios: | |||||||||||||||||||
| Allowance for loan losses as a percent of total gross loans | 1.06 | % | 1.17 | % | (0.11 | %) | 1.31 | % | (0.25 | %) | |||||||||
| Allowance for loan losses as a percent of total gross loans, excluding PPP loans (5) | 1.06 | % | 1.17 | % | (0.11 | %) | 1.38 | % | (0.33 | %) | |||||||||
| Allowance for loan losses as a percent of nonperforming loans | 141.49 | % | 151.59 | % | (10.10 | %) | 92.43 | % | 49.06 | % | |||||||||
| Nonperforming loans as a percent of total gross loans | 0.75 | % | 0.77 | % | (0.02 | %) | 1.42 | % | (0.67 | %) | |||||||||
| Nonperforming assets as a percent of total assets | 0.66 | % | 0.63 | % | 0.03 | % | 1.00 | % | (0.34 | %) | |||||||||
| (1) The $127.6 million decrease in loans held for sale and $169.1 million increase in gross loans from June 30, 2022 to September 30, 2022 include a transfer of $73.3 million of single tenant net lease loans from held-for-sale to held-for-investment. | |||||||||||||||||||
| (2) Includes $862,000, $1.8 million and $56.7 million of PPP loans at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. | |||||||||||||||||||
| (3) Includes $292.5 million, $159.1 million and $100.1 million of brokered certificates of deposit at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. | |||||||||||||||||||
| (4) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item. | |||||||||||||||||||
| (5) 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 | ||||||||||||||||||
| September 30, | June 30, | Increase | September 30, | Increase | |||||||||||||||
| Tangible Book Value Per Share | 2022 | 2022 | (Decrease) | 2021 | (Decrease) | ||||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||||||
| Stockholders' equity, net of noncontrolling interests (GAAP) | $ | 152,623 | $ | 169,213 | $ | (16,590 | ) | $ | 180,377 | $ | (27,754 | ) | |||||||
| Less: goodwill and core deposit intangibles | (10,623 | ) | (10,676 | ) | 53 | (10,836 | ) | 213 | |||||||||||
| Tangible equity (non-GAAP) | $ | 142,000 | $ | 158,537 | (16,537 | ) | $ | 169,541 | (27,541 | ) | |||||||||
| Outstanding common shares | 6,970,631 | 7,110,706 | (140,075 | ) | 7,125,888 | (155,257 | ) | ||||||||||||
| Tangible book value per share (non-GAAP) | $ | 20.37 | $ | 22.30 | $ | (1.93 | ) | $ | 23.79 | $ | (3.42 | ) | |||||||
| Book value per share (GAAP) | $ | 21.90 | $ | 23.80 | $ | (1.90 | ) | $ | 25.31 | $ | (3.41 | ) | |||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED): | As of | ||||||||||||||||||
| Summarized Consolidated Balance Sheets | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except per share data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Total cash and cash equivalents | $ | 41,665 | $ | 37,468 | $ | 31,105 | $ | 40,592 | $ | 33,428 | |||||||||
| Total investment securities | 318,075 | 309,027 | 284,674 | 220,926 | 208,518 | ||||||||||||||
| Total loans held for sale | 60,462 | 188,031 | 152,652 | 161,218 | 214,940 | ||||||||||||||
| Total loans, net of allowance for loan losses | 1,436,555 | 1,267,816 | 1,126,818 | 1,142,655 | 1,075,936 | ||||||||||||||
| PPP loans | 862 | 1,766 | 13,415 | 46,020 | 56,656 | ||||||||||||||
| Loan servicing rights | 67,194 | 69,039 | 68,267 | 59,187 | 54,026 | ||||||||||||||
| Total assets | 2,057,662 | 2,006,666 | 1,801,944 | 1,764,589 | 1,721,394 | ||||||||||||||
| Retail deposits | $ | 1,223,330 | $ | 1,186,582 | $ | 1,151,437 | $ | 1,146,454 | $ | 1,127,522 | |||||||||
| Brokered deposits | 292,504 | 159,125 | 69,752 | 120,581 | 100,058 | ||||||||||||||
| Total deposits | 1,515,834 | 1,345,707 | 1,221,189 | 1,267,035 | 1,227,580 | ||||||||||||||
| Federal Home Loan Bank borrowings | 307,303 | 404,098 | 296,592 | 258,377 | 250,000 | ||||||||||||||
| Common stock and additional paid-in capital | $ | 26,848 | $ | 27,236 | $ | 27,154 | $ | 27,073 | $ | 25,799 | |||||||||
| Retained earnings - substantially restricted | 162,985 | 161,438 | 159,732 | 153,630 | 150,185 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (27,079 | ) | (12,560 | ) | (1,336 | ) | 9,219 | 8,900 | |||||||||||
| Unearned stock compensation | (969 | ) | (1,075 | ) | (1,180 | ) | (1,285 | ) | (138 | ) | |||||||||
| Less treasury stock, at cost | (9,162 | ) | (5,826 | ) | (4,417 | ) | (4,417 | ) | (4,369 | ) | |||||||||
| Total stockholders' equity | 152,623 | 169,213 | 179,953 | 184,220 | 180,377 | ||||||||||||||
| Outstanding common shares | 6,970,631 | 7,110,706 | 7,169,826 | 7,169,826 | 7,125,888 | ||||||||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| Summarized Consolidated Statements of Income | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except per share data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Total interest income | $ | 20,956 | $ | 18,479 | $ | 15,801 | $ | 15,762 | $ | 16,243 | |||||||||
| Total interest expense | 4,131 | 2,568 | 1,788 | 1,859 | 1,819 | ||||||||||||||
| Net interest income | 16,825 | 15,911 | 14,013 | 13,903 | 14,424 | ||||||||||||||
| Provision (credit) for loan losses | 880 | 532 | (30 | ) | 526 | 8 | |||||||||||||
| Net interest income after provision (credit) for loan losses | 15,945 | 15,379 | 14,043 | 13,377 | 14,416 | ||||||||||||||
| Total noninterest income | 4,531 | 10,033 | 20,072 | 16,591 | 16,495 | ||||||||||||||
| Total noninterest expense | 18,001 | 22,835 | 25,461 | 24,852 | 25,104 | ||||||||||||||
| Income before income taxes | 2,475 | 2,577 | 8,654 | 5,116 | 5,807 | ||||||||||||||
| Income tax expense (benefit) | 9 | (61 | ) | 1,619 | 811 | 958 | |||||||||||||
| Net income attributable to the Company | $ | 2,466 | $ | 2,638 | $ | 7,035 | $ | 4,305 | $ | 4,849 | |||||||||
| Net income per share, basic | $ | 0.35 | $ | 0.37 | $ | 0.99 | $ | 0.60 | $ | 0.68 | |||||||||
| Weighted average shares outstanding, basic | 6,988,873 | 7,073,204 | 7,076,355 | 7,116,790 | 7,111,594 | ||||||||||||||
| Net income per share, diluted | $ | 0.35 | $ | 0.37 | $ | 0.98 | $ | 0.60 | $ | 0.67 | |||||||||
| Weighted average shares outstanding, diluted | 7,056,138 | 7,145,288 | 7,156,229 | 7,207,210 | 7,200,357 | ||||||||||||||
| Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| Consolidated Performance Ratios (Annualized) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Return on average assets | 0.49 | % | 0.55 | % | 1.61 | % | 1.01 | % | 1.12 | % | |||||||||
| Return on average equity | 5.78 | % | 6.06 | % | 15.24 | % | 9.45 | % | 10.92 | % | |||||||||
| Return on average common stockholders' equity | 5.78 | % | 6.06 | % | 15.24 | % | 9.45 | % | 10.92 | % | |||||||||
| Net interest margin (tax equivalent basis) | 3.75 | % | 3.77 | % | 3.68 | % | 3.73 | % | 3.79 | % | |||||||||
| Efficiency ratio | 84.29 | % | 88.02 | % | 74.70 | % | 81.50 | % | 81.19 | % | |||||||||
| As of or for the Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| Consolidated Asset Quality Ratios | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Nonperforming loans as a percentage of total loans | 0.75 | % | 0.77 | % | 0.88 | % | 1.10 | % | 1.42 | % | |||||||||
| Nonperforming assets as a percentage of total assets | 0.66 | % | 0.63 | % | 0.73 | % | 0.82 | % | 1.00 | % | |||||||||
| Allowance for loan losses as a percentage of total loans | 1.06 | % | 1.17 | % | 1.27 | % | 1.28 | % | 1.31 | % | |||||||||
| Allowance for loan losses as a percentage of nonperforming loans | 141.49 | % | 151.59 | % | 143.94 | % | 116.12 | % | 92.43 | % | |||||||||
| Net charge-offs to average outstanding loans | 0.03 | % | 0.00 | % | 0.02 | % | 0.00 | % | 0.03 | % | |||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| Segmented Statements of Income Information | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except per share data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Core Banking Segment: | |||||||||||||||||||
| Net interest income | $ | 14,994 | $ | 13,848 | $ | 11,847 | $ | 11,495 | $ | 11,517 | |||||||||
| Provision (credit) for loan losses | 769 | 910 | (240 | ) | (144 | ) | (189 | ) | |||||||||||
| Net interest income after provision (credit) for loan losses | 14,225 | 12,938 | 12,087 | 11,639 | 11,706 | ||||||||||||||
| Noninterest income | 1,808 | 2,379 | 2,163 | 1,942 | 1,780 | ||||||||||||||
| Noninterest expense | 8,986 | 10,187 | 9,811 | 9,482 | 8,800 | ||||||||||||||
| Income before income taxes | 7,047 | 5,130 | 4,439 | 4,099 | 4,686 | ||||||||||||||
| Income tax expense | 1,190 | 568 | 330 | 500 | 569 | ||||||||||||||
| Net income attributable to the Company | $ | 5,857 | $ | 4,562 | $ | 4,109 | $ | 3,599 | $ | 4,117 | |||||||||
| SBA Lending Segment (Q2): | |||||||||||||||||||
| Net interest income (6) | $ | 1,182 | $ | 1,449 | $ | 1,602 | $ | 1,875 | $ | 2,455 | |||||||||
| Provision (credit) for loan losses | 111 | (378 | ) | 210 | 670 | 197 | |||||||||||||
| Net interest income after provision (credit) for loan losses | 1,071 | 1,827 | 1,392 | 1,205 | 2,258 | ||||||||||||||
| Noninterest income | 480 | 584 | 1,658 | 1,901 | 2,194 | ||||||||||||||
| Noninterest expense | 1,891 | 2,341 | 2,253 | 2,236 | 1,973 | ||||||||||||||
| Income (loss) before income taxes | (340 | ) | 70 | 797 | 870 | 2,479 | |||||||||||||
| Income tax expense (benefit) | (123 | ) | 26 | 240 | 265 | 612 | |||||||||||||
| Net income (loss) attributable to the Company (7) | $ | (217 | ) | $ | 44 | $ | 557 | $ | 605 | $ | 1,867 | ||||||||
| Mortgage Banking Segment: | |||||||||||||||||||
| Net interest income | $ | 649 | $ | 614 | $ | 564 | $ | 533 | $ | 452 | |||||||||
| Provision for loan losses | - | - | - | - | - | ||||||||||||||
| Net interest income after provision for loan losses | 649 | 614 | 564 | 533 | 452 | ||||||||||||||
| Noninterest income | 2,243 | 7,070 | 16,251 | 12,748 | 12,521 | ||||||||||||||
| Noninterest expense | 7,124 | 10,307 | 13,397 | 13,134 | 14,331 | ||||||||||||||
| Income (loss) before income taxes | (4,232 | ) | (2,623 | ) | 3,418 | 147 | (1,358 | ) | |||||||||||
| Income tax expense (benefit) | (1,058 | ) | (655 | ) | 1,049 | 46 | (223 | ) | |||||||||||
| Net income (loss) attributable to the Company | $ | (3,174 | ) | $ | (1,968 | ) | $ | 2,369 | $ | 101 | $ | (1,135 | ) | ||||||
| (6) Includes net interest income derived from PPP loans of: | $ | 16 | $ | 173 | $ | 239 | $ | 550 | $ | 1,145 | |||||||||
| (7) Includes net income attributable to the Company derived from PPP loans (tax effected) of: | $ | 12 | $ | 130 | $ | 179 | $ | 413 | $ | 859 | |||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| Segmented Statements of Income Information | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except per share data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Net Income (Loss) Per Share by Segment | |||||||||||||||||||
| Net income per share, basic - Core Banking | $ | 0.83 | $ | 0.64 | $ | 0.58 | $ | 0.50 | $ | 0.58 | |||||||||
| Net income (loss) per share, basic - SBA Lending (Q2) (8) | (0.03 | ) | 0.01 | 0.08 | 0.09 | 0.26 | |||||||||||||
| Net income (loss) per share, basic - Mortgage Banking | (0.45 | ) | (0.28 | ) | 0.33 | 0.01 | (0.16 | ) | |||||||||||
| Total net income per share, basic (8) | $ | 0.35 | $ | 0.37 | $ | 0.99 | $ | 0.60 | $ | 0.68 | |||||||||
| Net Income (Loss) Per Diluted Share by Segment | |||||||||||||||||||
| Net income per share, diluted - Core Banking | $ | 0.83 | $ | 0.64 | $ | 0.57 | $ | 0.50 | $ | 0.57 | |||||||||
| Net income (loss) per share, diluted - SBA Lending (Q2) (9) | (0.03 | ) | 0.01 | 0.08 | 0.09 | 0.26 | |||||||||||||
| Net income (loss) per share, diluted - Mortgage Banking | (0.45 | ) | (0.28 | ) | 0.33 | 0.01 | (0.16 | ) | |||||||||||
| Total net income per share, diluted (9) | $ | 0.35 | $ | 0.37 | $ | 0.98 | $ | 0.60 | $ | 0.67 | |||||||||
| Return on Average Assets by Segment (three-month data annualized) | |||||||||||||||||||
| Core Banking | 1.31 | % | 1.12 | % | 1.14 | % | 1.05 | % | 1.24 | % | |||||||||
| SBA Lending | (0.85 | %) | 0.17 | % | 1.80 | % | 1.55 | % | 4.01 | % | |||||||||
| Mortgage Banking | (9.44 | %) | (4.50 | %) | 5.38 | % | 0.23 | % | (2.11 | %) | |||||||||
| Efficiency Ratio by Segment (three-month data annualized) | |||||||||||||||||||
| Core Banking | 53.48 | % | 62.78 | % | 70.03 | % | 70.57 | % | 66.18 | % | |||||||||
| SBA Lending | 113.78 | % | 115.15 | % | 69.11 | % | 59.22 | % | 42.44 | % | |||||||||
| Mortgage Banking | 246.33 | % | 134.14 | % | 79.67 | % | 98.89 | % | 110.47 | % | |||||||||
| (8) Includes basic net income per share derived from PPP loans (tax effected) of: | $ | 0.00 | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.12 | |||||||||
| (9) Includes diluted net income per share derived from PPP loans (tax effected) of: | $ | 0.00 | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.12 | |||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| Noninterest Expense Detail by Segment | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Core Banking Segment: | |||||||||||||||||||
| Compensation (10) | $ | 4,767 | $ | 5,995 | $ | 5,207 | $ | 5,776 | $ | 5,220 | |||||||||
| Occupancy | 1,374 | 1,412 | 1,393 | 1,357 | 1,415 | ||||||||||||||
| Advertising | 272 | 284 | 297 | 232 | 268 | ||||||||||||||
| Other | 2,573 | 2,496 | 2,914 | 2,117 | 1,897 | ||||||||||||||
| Total Noninterest Expense | $ | 8,986 | $ | 10,187 | $ | 9,811 | $ | 9,482 | $ | 8,800 | |||||||||
| SBA Lending Segment (Q2): | |||||||||||||||||||
| Compensation | $ | 1,690 | $ | 1,619 | $ | 1,724 | $ | 1,685 | $ | 1,602 | |||||||||
| Occupancy | 41 | 60 | 64 | 78 | 83 | ||||||||||||||
| Advertising | 8 | 3 | 9 | 9 | 6 | ||||||||||||||
| Other | 152 | 659 | 456 | 464 | 282 | ||||||||||||||
| Total Noninterest Expense | $ | 1,891 | $ | 2,341 | $ | 2,253 | $ | 2,236 | $ | 1,973 | |||||||||
| Mortgage Banking Segment: | |||||||||||||||||||
| Compensation (10) | $ | 5,091 | $ | 7,601 | $ | 10,292 | $ | 9,867 | $ | 11,456 | |||||||||
| Occupancy | 491 | 597 | 622 | 678 | 723 | ||||||||||||||
| Advertising | 319 | 519 | 696 | 551 | 588 | ||||||||||||||
| Other | 1,223 | 1,590 | 1,787 | 2,038 | 1,564 | ||||||||||||||
| Total Noninterest Expense | $ | 7,124 | $ | 10,307 | $ | 13,397 | $ | 13,134 | $ | 14,331 | |||||||||
| (10) Compensation includes increases for Core Banking and corresponding decreases for Mortgage Banking segment that represent intersegment allocations for loans originated by the Mortgage Banking segment to be held for investment in the Core Banking loan portfolio of: | $ | 945 | $ | 1,164 | $ | 869 | $ | 975 | $ | 678 | |||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| Mortgage Banking Noninterest Expense Fixed vs. Variable | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| (In thousands) | |||||||||||||||||||
| Noninterest Expense - Fixed Expenses | $ | 5,724 | $ | 6,989 | $ | 7,936 | $ | 7,752 | $ | 7,779 | |||||||||
| Noninterest Expense - Variable Expenses (11) | 1,400 | 3,318 | 5,461 | 5,382 | 6,552 | ||||||||||||||
| Total Noninterest Expense | $ | 7,124 | $ | 10,307 | $ | 13,397 | $ | 13,134 | $ | 14,331 | |||||||||
| Three Months Ended | |||||||||||||||||||
| SBA Lending (Q2) Data | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except percentage data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Final funded loans guaranteed portion sold, SBA | $ | 3,772 | $ | 5,364 | $ | 14,355 | $ | 14,131 | $ | 14,894 | |||||||||
| Gross gain on sales of loans, SBA | $ | 393 | $ | 592 | $ | 1,670 | $ | 1,841 | $ | 2,134 | |||||||||
| Weighted average gross gain on sales of loans, SBA | 10.42 | % | 11.04 | % | 11.63 | % | 13.03 | % | 14.33 | % | |||||||||
| Net gain on sales of loans, SBA (12) | $ | 249 | $ | 486 | $ | 1,327 | $ | 1,636 | $ | 1,912 | |||||||||
| Weighted average net gain on sales of loans, SBA | 6.60 | % | 9.06 | % | 9.24 | % | 11.58 | % | 12.84 | % | |||||||||
| Three Months Ended | |||||||||||||||||||
| Mortgage Banking Data | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands, except percentage data) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Mortgage originations for sale in the secondary market | $ | 185,981 | $ | 421,426 | $ | 459,434 | $ | 541,074 | $ | 579,458 | |||||||||
| Mortgage sales | $ | 241,804 | $ | 426,200 | $ | 478,816 | $ | 587,928 | $ | 670,107 | |||||||||
| Gross gain on sales of loans, mortgage banking (13) | $ | 2,630 | $ | 7,419 | $ | 10,988 | $ | 11,082 | $ | 10,796 | |||||||||
| Weighted average gross gain on sales of loans, mortgage banking | 1.09 | % | 1.74 | % | 2.29 | % | 1.88 | % | 1.61 | % | |||||||||
| Mortgage banking income (14) | $ | 2,246 | $ | 7,093 | $ | 16,254 | $ | 12,744 | $ | 12,538 | |||||||||
| (11) Variable expenses include incentive compensation and advertising expenses. | |||||||||||||||||||
| (12) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment. | |||||||||||||||||||
| (13) Inclusive of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees, and net of lender credits and other investor expenses. | |||||||||||||||||||
| (14) 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 Sheets | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Interest-earning assets | |||||||||||||||||||
| Average balances: | |||||||||||||||||||
| Interest-bearing deposits with banks | $ | 28,318 | $ | 25,068 | $ | 36,029 | $ | 33,065 | $ | 63,217 | |||||||||
| Loans, excluding PPP loans | 1,477,857 | 1,381,366 | 1,268,983 | 1,221,879 | 1,194,277 | ||||||||||||||
| PPP loans | 1,310 | 4,271 | 22,066 | 51,178 | 84,288 | ||||||||||||||
| Investment securities - taxable | 94,836 | 103,536 | 50,165 | 47,717 | 46,005 | ||||||||||||||
| Investment securities - nontaxable | 230,312 | 202,534 | 163,472 | 153,452 | 148,723 | ||||||||||||||
| FRB and FHLB stock | 19,890 | 18,691 | 19,021 | 19,258 | 19,258 | ||||||||||||||
| Total interest-earning assets | $ | 1,852,523 | $ | 1,735,466 | $ | 1,559,736 | $ | 1,526,549 | $ | 1,555,768 | |||||||||
| Interest income (tax equivalent basis): | |||||||||||||||||||
| Interest-bearing deposits with banks | $ | 97 | $ | 37 | $ | 13 | $ | 14 | $ | 23 | |||||||||
| Loans, excluding PPP loans | 18,012 | 15,788 | 13,745 | 13,424 | 13,279 | ||||||||||||||
| PPP loans | 17 | 177 | 258 | 595 | 1,219 | ||||||||||||||
| Investment securities - taxable | 740 | 769 | 420 | 405 | 421 | ||||||||||||||
| Investment securities - nontaxable | 2,352 | 1,987 | 1,571 | 1,509 | 1,482 | ||||||||||||||
| FRB and FHLB stock | 265 | 169 | 146 | 149 | 146 | ||||||||||||||
| Total interest income (tax equivalent basis) | $ | 21,483 | $ | 18,927 | $ | 16,153 | $ | 16,096 | $ | 16,570 | |||||||||
| Weighted average yield (tax equivalent basis, annualized): | |||||||||||||||||||
| Interest-bearing deposits with banks | 1.37 | % | 0.59 | % | 0.14 | % | 0.17 | % | 0.15 | % | |||||||||
| Loans, excluding PPP loans | 4.88 | % | 4.57 | % | 4.33 | % | 4.39 | % | 4.45 | % | |||||||||
| PPP loans | 5.19 | % | 16.58 | % | 4.68 | % | 4.65 | % | 5.78 | % | |||||||||
| Investment securities - taxable | 3.12 | % | 2.97 | % | 3.35 | % | 3.40 | % | 3.66 | % | |||||||||
| Investment securities - nontaxable | 4.08 | % | 3.92 | % | 3.84 | % | 3.93 | % | 3.99 | % | |||||||||
| FRB and FHLB stock | 5.33 | % | 3.62 | % | 3.07 | % | 3.09 | % | 3.03 | % | |||||||||
| Total interest-earning assets | 4.64 | % | 4.36 | % | 4.14 | % | 4.22 | % | 4.26 | % | |||||||||
| SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| Summarized Consolidated Average Balance Sheets | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| (In thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||
| Average balances: | |||||||||||||||||||
| Interest-bearing deposits | $ | 1,125,659 | $ | 998,868 | $ | 922,137 | $ | 913,297 | $ | 935,800 | |||||||||
| Federal Home Loan Bank borrowings | 301,027 | 325,460 | 280,190 | 264,617 | 255,210 | ||||||||||||||
| Federal Reserve PPPLF borrowings | - | - | - | - | 11,937 | ||||||||||||||
| Subordinated debt and other borrowings | 50,179 | 50,152 | 24,592 | 19,870 | 19,853 | ||||||||||||||
| Total interest-bearing liabilities | $ | 1,476,865 | $ | 1,374,480 | $ | 1,226,919 | $ | 1,197,784 | $ | 1,222,800 | |||||||||
| Interest expense: | |||||||||||||||||||
| Interest-bearing deposits | $ | 2,306 | $ | 1,047 | $ | 738 | $ | 811 | $ | 765 | |||||||||
| Federal Home Loan Bank borrowings | 1,111 | 811 | 681 | 730 | 725 | ||||||||||||||
| Federal Reserve PPPLF borrowings | - | - | - | - | 12 | ||||||||||||||
| Subordinated debt and other borrowings | 714 | 710 | 369 | 318 | 319 | ||||||||||||||
| Total interest expense | $ | 4,131 | $ | 2,568 | $ | 1,788 | $ | 1,859 | $ | 1,821 | |||||||||
| Weighted average cost (annualized): | |||||||||||||||||||
| Interest-bearing deposits | 0.82 | % | 0.42 | % | 0.32 | % | 0.36 | % | 0.33 | % | |||||||||
| Federal Home Loan Bank borrowings | 1.48 | % | 1.00 | % | 0.97 | % | 1.10 | % | 1.14 | % | |||||||||
| Federal Reserve PPPLF borrowings | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.40 | % | |||||||||
| Subordinated debt and other borrowings | 5.69 | % | 5.66 | % | 6.00 | % | 6.40 | % | 6.43 | % | |||||||||
| Total interest-bearing liabilities | 1.12 | % | 0.75 | % | 0.58 | % | 0.62 | % | 0.60 | % | |||||||||
| Interest rate spread (tax equivalent basis, annualized) | 3.52 | % | 3.61 | % | 3.56 | % | 3.60 | % | 3.66 | % | |||||||||
| Net interest margin (tax equivalent basis, annualized) | 3.75 | % | 3.77 | % | 3.68 | % | 3.73 | % | 3.79 | % | |||||||||
| Net interest margin, excluding PPP loans and PPPLF borrowings (non-GAAP), (tax equivalent basis, annualized) | 3.75 | % | 3.74 | % | 3.67 | % | 3.70 | % | 3.68 | % | |||||||||
