First Savings Financial Group, Inc. Reports Financial Results For The Fiscal Year Ended September 30, 2023
JEFFERSONVILLE, Ind., Oct. 31, 2023 (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 $8.2 million, or $1.19 per diluted share, for the year ended September 30, 2023 compared to net income of $15.4 million, or $2.15 per diluted share, for the year ended September 30, 2022. Excluding nonrecurring items, the Company reported net income of $12.7 million (non-GAAP measure)(1) and net income per diluted share of $1.85 (non-GAAP measure)(1) for the year ended September 30, 2023; compared to net income of $17.1 million (non-GAAP measure)(1) and net income per diluted share of $2.40 (non-GAAP measure)(1) for the year ended September 30, 2022.
Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “As we navigated the challenging environment for the banking industry during fiscal 2023, we focused on reducing balance sheet and operating inefficiencies, risks that could result in earnings volatility, and complexity of the organization, particularly in the fourth fiscal quarter. Many of these measures are highlighted below and quantified in the included table reconciling GAAP and non-GAAP financial measures. In addition to these repositioning measures, we focused on core banking; asset quality; selective high-quality lending; deposit growth; building the SBA lending pipeline; and improvement of liquidity, capital and interest rate sensitivity positions. We believe the measures taken will deliver shareholder value and we’ll continue to evaluate options that will further position the Company for future success.”
Recent Actions to Reduce Inefficiencies and Potential Earnings Volatility
In the June 2023 quarter ended, utilized gain on repurchase of subordinated debt as an opportunity to sell $78.5 million of available for sale securities that were yielding less than the marginal cost of funding.
In August 2023, converted the Bank’s data processing system to FIS Horizon.
In September 2023, entered into a letter of intent to sell the Bank’s residential mortgage servicing rights portfolio with a close anticipated for November 30, 2023.
In September 2023, dissolved First Savings Insurance Risk Management, Inc., the Company’s captive insurance subsidiary.
In October 2023, announced that the Bank will cease national originate-to-sell mortgage banking operations during the quarter ending December 31, 2023.
(1) Non-GAAP net income and net income per diluted share exclude certain nonrecurring items. A reconciliation to GAAP and discussion of the use of non-GAAP measures is included in the table at the end of this release.
Results of Operations for the Fiscal Years Ended September 30, 2023 and 2022
Net interest income increased $922,000, or 1.5%, to $61.6 million for the year ended September 30, 2023 as compared to the prior year. The increase in net interest income was due to a $32.0 million increase in interest income, partially offset by a $31.1 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $385.8 million, from $1.67 billion for 2022 to $2.05 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.35% for 2022 to 5.13% for 2023. The increase in the average balance of interest-earning assets was primarily due to an increase in the average balance of loans of $322.9 million and an increase in the average balance of investment securities of $67.2 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $390.6 million, from $1.32 billion for 2022 to $1.71 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 0.78% for 2022 to 2.44% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates paid for FHLB borrowings, brokered deposits, and money market deposit accounts primarily as a result of increased market interest rates and a $91.4 million migration of deposit balances from noninterest-bearing to interest-bearing.
The Company recognized a provision for loan losses of $2.6 million for the year ended September 30, 2023 due primarily to loan portfolio growth, compared to a provision for loan losses of $1.9 million for the prior year. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $3.1 million from $10.9 million at September 30, 2022 to $13.9 million at September 30, 2023. The Company recognized net charge-offs of $1.1 million for the year ended September 30, 2023, of which $873,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $849,000 in 2022, of which $733,000 was related to unguaranteed portions of SBA loans.
Noninterest income decreased $25.9 million for the year ended September 30, 2023 as compared to the prior year. The decrease was due primarily to a $24.0 million decrease in mortgage banking income in 2023 compared to the same period in 2022. The decrease in mortgage banking income was primarily due to lower origination and sales volume in 2023 compared to 2022. Mortgage loans originated for sale were $587.7 million in the year ended September 30, 2023 as compared to $1.61 billion for the prior year.
Noninterest expense decreased $16.5 million for the year ended September 30, 2023 as compared to the prior year. The decrease was due primarily to a decrease in compensation and benefits and professional fees of $17.3 million and $3.7 million, respectively, partially offset by a $2.2 million increase in data processing expense. 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 volume. The decrease in professional fees was due primarily to a $2.0 million consulting fee incurred in 2022 in connection with negotiating a new core processing contract. The increase in data processing expense is primarily due to one-time charges totaling $1.4 million in connection with the conversion of the Bank’s data processing system.
The Company recognized income tax expense of $10,000 for the year ended September 30, 2023 compared to income tax expense of $1.9 million for the prior year. The effective tax rate for the 2023 period was 0.1% as compared to 11.1% for 2022. The decrease in the effective tax rate in 2023 was primarily due to the recognition of investment tax credits related to solar projects in 2023 and lower pre-tax income in 2023 as compared to 2022. The lower pre-tax income for 2023 is due primarily to losses incurred for mortgage banking operations, professional fees related to mortgage banking loss contingencies, and expenses related to the conversion of the Bank’s data processing system.
Results of Operations for the Three Months Ended September 30, 2023 and 2022
The Company reported a net loss of $747,000, or $0.11 per diluted share, for the three months ended September 30, 2023 compared to net income of $1.4 million, or $0.20 per diluted share, for the three months ended September 30, 2022. Excluding nonrecurring items, the Company reported net income of $2.8 million (non-GAAP measure)(1) and net income per diluted share of $0.41 (non-GAAP measure)(1) for the three months ended September 30, 2023; compared to net income of $3.1 million (non-GAAP measure)(1) and net income per diluted share of $0.44 (non-GAAP measure)(1) for the three months ended September 30, 2022.
Net interest income decreased $1.3 million, or 7.7%, to $15.5 million for the three months ended September 30, 2023 as compared to the same period 2022. The decrease in net interest income was due to an $8.3 million increase in interest expense, partially offset by a $7.0 million increase in interest income. Interest income increased due to an increase in the average balance of interest-earning assets of $257.0 million, from $1.85 billion for 2022 to $2.11 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.64% for 2022 to 5.42% for 2023. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of loans $317.6 million, partially offset by a decrease in the average balance of investment securities of $58.9 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $311.5 million, from $1.48 billion for 2022 to $1.79 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 1.12% for 2022 to 2.82% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates for FHLB borrowings, brokered deposits, and money market deposit accounts as a result of increased market interest rates.
The Company recognized a provision for loan losses of $815,000 for the three months ended September 30, 2023, compared to $880,000 for the same period in 2022. The Company recognized net charge-offs of $753,000 for the three months ended September 30, 2023, of which $609,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $500,000 in 2022, of which $404,000 was related to unguaranteed portions of SBA loans.
Noninterest income increased $911,000 for the three months ended September 30, 2023 as compared to the same period in 2022. The increase was due primarily to an increases in mortgage banking income of $772,000. The increase in mortgage banking income was primarily due to higher origination, sales volume, and gain on sale margins in the 2023 period compared to 2022. Mortgage loans originated for sale were $195.5 million in the three months ended September 30, 2023 as compared to $186.0 million in the same period in 2022.
Noninterest expense increased $2.1 million for the three months ended September 30, 2023 as compared to the same period in 2022. The increase was due primarily to increases in other operating expense and data processing of $2.7 million and $1.4 million, respectively, partially offset by a decrease of $2.6 million in professional fees. The increase in other operating expense was primarily due to SBA-guaranteed loan contingencies and mortgage banking loss contingencies, including related professional fees, of $1.0 million and $1.6 million, respectively, during the three months ended September 30, 2023. The increase in data processing expense is primarily due to one-time charges totaling $1.3 million in connection with the conversion of the Bank’s data processing system. The decrease in professional fees was primarily due to a $2.0 million consulting fee incurred in the 2022 period in connection with negotiating the new data processing contract.
The Company recognized income tax benefit of $737,000 for the three months ended September 30, 2023 compared to tax benefit of $446,000 for the same period in 2022. The increase in the income tax benefit was primarily due to the recognition of investment tax credits related to solar projects in 2023 and a pre-tax loss in 2023 compared to pre-tax income in 2022.
Comparison of Financial Condition at September 30, 2023 and September 30, 2022
Total assets increased $195.1 million, from $2.09 billion at September 30, 2022 to $2.29 billion at September 30, 2023. Net loans held for investment increased $295.7 million during the year ended September 30, 2023 due primarily to growth in residential mortgage and single-tenant net lease commercial real estate loans. Available-for-sale securities decreased $88.8 million during the year ended September 30, 2023 due primarily to the sale of $78.5 million of securities in June 2023 and scheduled amortization and maturities. The proceeds from which were used to repay brokered deposits and FHLB borrowings.
Total liabilities increased $195.7 million due primarily to increases in total deposits and FHLB borrowings of $172.5 million and $55.9 million, respectively, partially offset by a $39.8 million decrease in other borrowings primarily due to the reversal of secured borrowings recorded at September 30, 2022. The increase in total deposits was due primarily increases in brokered deposits, money market deposit accounts, retail time deposits, and interest-bearing checking of $145.8 million, $85.5 million, $41.1 million and $21.6 million, respective, partially offset by decreases in noninterest-bearing deposits and savings accounts of $91.4 million and $30.1 million, respectively. The increases in deposits and FHLB borrowings were primarily used to fund loan growth. As of September 30, 2023, deposits exceeding the FDIC insurance limit of $250,000 per insured account were 27.5% of total deposits and excluding public funds insured by the Indiana Public Deposit Insurance Fund, uninsured deposits totaled 12.8% of total deposits.
Common stockholders’ equity decreased $584,000, from $151.6 million at September 30, 2022 to $151.0 million at September 30, 2023, due primarily to a $2.6 million increase in treasury stock and an increase in accumulated other comprehensive loss of $2.5 million, partially offset by an increase in retained net income of $4.4 million. The increase in treasury stock was due to the repurchase of 124,710 of Company common shares during the year ended September 30, 2023. The increase in accumulated other comprehensive loss was primarily due to increasing long term market interest rates during the year ended September 30, 2023, which resulted in a decrease in the fair value of the available-for-sale securities portfolio. At September 30, 2023 and September 30, 2022, 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 two national lending programs, including single-tenant net lease commercial real estate and SBA lending, with offices located predominately in the Midwest. 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; 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 | |||||||||||||||||||
YEARS ENDED SEPTEMBER 30, 2023 AND 2022 | |||||||||||||||||||
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| Three Months Ended |
| Years Ended |
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OPERATING DATA: | September 30, |
| September 30, |
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(In thousands, except share and per share data) |
| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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Total interest income | $ | 28,137 |
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| $ | 21,152 |
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| $ | 103,229 |
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| $ | 71,194 |
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Total interest expense |
| 12,601 |
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|
| 4,327 |
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| 41,655 |
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| 10,542 |
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Net interest income |
| 15,536 |
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|
| 16,825 |
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| 61,574 |
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| 60,652 |
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Provision for loan losses |
| 815 |
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|
| 880 |
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| 2,612 |
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| 1,908 |
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Net interest income after provision for loan losses |
| 14,721 |
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| 15,945 |
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| 58,962 |
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| 58,744 |
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Total noninterest income |
| 5,442 |
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| 4,531 |
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| 25,342 |
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| 51,227 |
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Total noninterest expense |
| 21,647 |
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| 19,514 |
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| 76,122 |
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| 92,662 |
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Income (loss) before income taxes |
| (1,484 | ) |
|
| 962 |
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| 8,182 |
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| 17,309 |
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Income tax expense (benefit) |
| (737 | ) |
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| (446 | ) |
|
| 10 |
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| 1,923 |
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Net income (loss) | $ | (747 | ) |
| $ | 1,408 |
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| $ | 8,172 |
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| $ | 15,386 |
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Net income (loss) per share, basic | $ | (0.11 | ) |
| $ | 0.20 |
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| $ | 1.19 |
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| $ | 2.18 |
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Weighted average shares outstanding, basic |
| 6,817,365 |
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| 6,988,873 |
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| 6,848,311 |
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| 7,058,550 |
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Net income (loss) per share, diluted | $ | (0.11 | ) |
| $ | 0.20 |
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| $ | 1.19 |
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| $ | 2.15 |
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Weighted average shares outstanding, diluted |
| 6,837,919 |
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| 7,056,138 |
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| 6,880,072 |
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| 7,141,846 |
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Performance ratios (annualized) |
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Return on average assets |
| (0.13 | %) |
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| 0.28 | % |
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| 0.37 | % |
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| 0.83 | % |
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Return on average equity |
| (1.82 | %) |
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| 3.30 | % |
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| 5.04 | % |
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| 8.65 | % |
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Return on average common stockholders' equity |
| (1.82 | %) |
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| 3.30 | % |
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| 5.04 | % |
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| 8.65 | % |
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Net interest margin (tax equivalent basis) |
| 3.03 | % |
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| 3.75 | % |
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| 3.10 | % |
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| 3.72 | % |
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Efficiency ratio |
| 103.19 | % |
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| 91.37 | % |
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| 87.58 | % |
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| 82.82 | % |
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| QTD |
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| FYTD | ||||||||||
FINANCIAL CONDITION DATA: | September 30, |
| June 30, |
| Increase |
| September 30, |
| Increase | ||||||||||
(In thousands, except per share data) |
| 2023 |
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| 2023 |
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| (Decrease) |
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| 2022 |
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| (Decrease) | ||||
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Total assets | $ | 2,288,854 |
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| $ | 2,260,421 |
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| $ | 28,433 |
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| $ | 2,093,725 |
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| $ | 195,129 |
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Cash and cash equivalents |
| 30,845 |
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| 42,475 |
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| (11,630 | ) |
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| 41,665 |
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| (10,820 | ) |
Investment securities |
| 229,039 |
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| 249,788 |
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| (20,749 | ) |
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| 318,075 |
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| (89,036 | ) |
Loans held for sale |
| 45,855 |
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| 63,142 |
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| (17,287 | ) |
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| 60,462 |
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| (14,607 | ) |
Gross loans |
| 1,787,143 |
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| 1,708,127 |
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| 79,016 |
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| 1,489,904 |
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| 297,239 |
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Allowance for loan losses |
| 16,900 |
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| 16,838 |
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|
| 62 |
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| 15,360 |
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| 1,540 |
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Interest earning assets |
| 2,083,397 |
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| 2,048,891 |
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| 34,506 |
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| 1,898,051 |
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| 185,346 |
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Goodwill |
| 9,848 |
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| 9,848 |
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| - |
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| 9,848 |
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| - |
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Core deposit intangibles |
| 561 |
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| 614 |
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| (53 | ) |
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| 775 |
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| (214 | ) |
Loan servicing rights |
| 62,819 |
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| 64,139 |
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| (1,320 | ) |
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| 67,194 |
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| (4,375 | ) |
Noninterest-bearing deposits |
| 248,759 |
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| 315,602 |
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| (66,843 | ) |
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| 340,172 |
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| (91,413 | ) |
Interest-bearing deposits (1) |
| 1,439,557 |
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| 1,344,163 |
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| 95,394 |
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| 1,175,662 |
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| 263,895 |
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Federal Home Loan Bank borrowings |
| 363,183 |
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| 345,000 |
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| 18,183 |
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| 307,303 |
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| 55,880 |
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Subordinated debt and other borrowings |
| 48,444 |
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| 48,387 |
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| 57 |
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| 88,206 |
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| (39,762 | ) |
Total liabilities |
| 2,137,873 |
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| 2,095,353 |
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| 42,520 |
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| 1,942,160 |
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| 195,713 |
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Accumulated other comprehensive loss |
| (29,587 | ) |
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| (17,565 | ) |
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| (12,022 | ) |
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| (27,079 | ) |
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| (2,508 | ) |
Stockholders' equity |
| 150,981 |
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| 165,068 |
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| (14,087 | ) |
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| 151,565 |
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| (584 | ) |
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Book value per share | $ | 21.99 |
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| $ | 24.04 |
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| $ | (2.06 | ) |
| $ | 21.74 |
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| $ | 0.25 |
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Tangible book value per share (2) |
| 20.47 |
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| 22.52 |
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| (2.05 | ) |
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| 20.22 |
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| 0.25 |
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Non-performing assets: |
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Nonaccrual loans - SBA guaranteed | $ | 5,091 |
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| $ | 5,753 |
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| $ | (662 | ) |
| $ | 5,474 |
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| $ | (383 | ) |
Nonaccrual loans |
| 8,857 |
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| 5,954 |
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| 2,903 |
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| 5,382 |
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| 3,475 |
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Total nonaccrual loans | $ | 13,948 |
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| $ | 11,707 |
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| $ | 2,241 |
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| $ | 10,856 |
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| $ | 3,092 |
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Accruing loans past due 90 days |
| - |
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| - |
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| - |
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| - |
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| - |
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Total non-performing loans |
| 13,948 |
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| 11,707 |
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| 2,241 |
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| 10,856 |
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| 3,092 |
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Foreclosed real estate |
| 474 |
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| 30 |
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|
| 444 |
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|
| - |
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| 474 |
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Troubled debt restructurings classified as performing loans |
| 1,266 |
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| 2,373 |
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| (1,107 | ) |
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| 2,714 |
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| (1,448 | ) |
Total non-performing assets | $ | 15,688 |
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| $ | 14,110 |
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| $ | 1,578 |
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| $ | 13,570 |
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| $ | 2,118 |
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Asset quality ratios: |
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Allowance for loan losses as a percent of total gross loans |
| 0.95 | % |
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| 0.99 | % |
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| (0.04 | %) |
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| 1.03 | % |
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| (0.08 | %) |
Allowance for loan losses as a percent of nonperforming loans |
| 121.16 | % |
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| 143.83 | % |
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| (22.66 | %) |
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| 141.49 | % |
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| (20.32 | %) |
Nonperforming loans as a percent of total gross loans |
| 0.78 | % |
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| 0.69 | % |
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| 0.10 | % |
|
| 0.73 | % |
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| 0.05 | % |
Nonperforming assets as a percent of total assets |
| 0.69 | % |
|
| 0.62 | % |
|
| 0.06 | % |
|
| 0.65 | % |
|
| 0.04 | % |
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(1) Includes $438.3, $414.2 million and $292.5 million of brokered certificates of deposit at September 30, 2023, June 30, 2023 and September 30, 2022, respectively. |
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| ||||||||||
(2) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item. |
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| ||||||||||
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|
|
|
| ||||||||||
|
|
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|
|
|
|
|
|
| ||||||||||
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 |
|
|
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| |||||||||||||
performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to |
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evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the |
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| |||||||||||||||
Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures. |
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|
|
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| ||||||||||||
| Three Months Ended |
| Year Ended |
|
| ||||||||||||||
Net Income | September 30, |
| September 30, |
|
| ||||||||||||||
(In thousands) |
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income (loss) attributable to the Company (non-GAAP) | $ | 2,824 |
|
| $ | 3,137 |
|
| $ | 12,731 |
|
| $ | 17,115 |
|
|
| ||
Plus: Gain from repurchase of subordinated debt, net of tax effect |
| - |
|
|
| - |
|
|
| 513 |
|
|
| - |
|
|
| ||
Less: Net loss on sales of available for sale securities and time deposits, net of tax effect |
| - |
|
|
| - |
|
|
| (429 | ) |
|
| - |
|
|
| ||
Less: Data processing contract consulting, net of tax effect |
| - |
|
|
| (1,575 | ) |
|
| - |
|
|
| (1,575 | ) |
|
| ||
Less: Data processing system conversion, net of tax effect |
| (979 | ) |
|
| - |
|
|
| (1,119 | ) |
|
| - |
|
|
| ||
Less: MSR valuation allowance for intended sale, net of tax effect |
| (598 | ) |
|
| - |
|
|
| (598 | ) |
|
| - |
|
|
| ||
Less: SBA-guaranteed loan contingency, net of tax effect |
| (779 | ) |
|
| (154 | ) |
|
| (1,160 | ) |
|
| (154 | ) |
|
| ||
Less: Mortgage banking loss contingencies, net of tax effect |
| (296 | ) |
|
| - |
|
|
| (847 | ) |
|
| - |
|
|
| ||
Less: Professional fees related to mortgage banking loss contingencies, net of tax effect |
| (919 | ) |
|
| - |
|
|
| (919 | ) |
|
| - |
|
|
| ||
Net income (loss) attributable to the Company (GAAP) | $ | (747 | ) |
| $ | 1,408 |
|
| $ | 8,172 |
|
| $ | 15,386 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
| Three Months Ended |
| Year Ended |
|
| ||||||||||||||
Net Income per Share, Diluted | September 30, |
| September 30, |
|
| ||||||||||||||
|
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income (loss) per share, diluted (non-GAAP) | $ | 0.41 |
|
| $ | 0.44 |
|
| $ | 1.85 |
|
| $ | 2.40 |
|
|
| ||
Plus: Gain from repurchase of subordinated debt, net of tax effect |
| - |
|
|
| - |
|
|
| 0.07 |
|
|
| - |
|
|
| ||
Less: Net loss on sales of available for sale securities and time deposits, net of tax effect |
| - |
|
|
| - |
|
|
| (0.06 | ) |
|
| - |
|
|
| ||
Less: Data processing contract consulting, net of tax effect |
| - |
|
|
| (0.22 | ) |
|
| - |
|
|
| (0.22 | ) |
|
| ||
Less: Data processing system conversion, net of tax effect |
| (0.14 | ) |
|
| - |
|
|
| (0.16 | ) |
|
| - |
|
|
| ||
Less: MSR valuation allowance for intended sale, net of tax effect |
| (0.09 | ) |
|
| - |
|
|
| (0.09 | ) |
|
| - |
|
|
| ||
Less: SBA-guaranteed loan contingency, net of tax effect |
| (0.11 | ) |
|
| (0.02 | ) |
|
| (0.17 | ) |
|
| (0.02 | ) |
|
| ||
Less: Mortgage banking loss contingencies, net of tax effect |
| (0.05 | ) |
|
| - |
|
|
| (0.12 | ) |
|
| - |
|
|
| ||
Less: Professional fees related to mortgage banking loss contingencies, net of tax effect |
| (0.13 | ) |
|
| - |
|
|
| (0.13 | ) |
|
| - |
|
|
| ||
Net income (loss) per share, diluted (GAAP) | $ | (0.11 | ) |
| $ | 0.20 |
|
| $ | 1.19 |
|
| $ | 2.16 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
| Three Months Ended |
| Year Ended |
|
| ||||||||||||||
Efficiency Ratio | September 30, |
| September 30, |
|
| ||||||||||||||
(In thousands) |
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income (GAAP) | $ | 15,536 |
|
| $ | 16,825 |
|
| $ | 61,574 |
|
| $ | 60,652 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest income (GAAP) |
| 5,442 |
|
|
| 4,531 |
|
|
| 25,342 |
|
|
| 51,227 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest expense (GAAP) |
| 21,647 |
|
|
| 19,514 |
|
|
| 76,122 |
|
|
| 92,662 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Efficiency ratio (GAAP) |
| 103.19 | % |
|
| 91.37 | % |
|
| 87.58 | % |
|
| 82.82 | % |
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income (GAAP) | $ | 15,536 |
|
| $ | 16,825 |
|
| $ | 61,574 |
|
| $ | 60,652 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest income (GAAP) |
| 5,442 |
|
|
| 4,531 |
|
|
| 25,342 |
|
|
| 51,227 |
|
|
| ||
Plus: Gain from repurchase of subordinated debt |
| - |
|
|
| - |
|
|
| 660 |
|
|
| - |
|
|
| ||
Less: Net loss on sales of available for sale securities and time deposits |
| - |
|
|
| - |
|
|
| (551 | ) |
|
| - |
|
|
| ||
Noninterest income (Non-GAAP) |
| 5,442 |
|
|
| 4,531 |
|
|
| 25,451 |
|
|
| 51,227 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest expense (GAAP) |
| 21,647 |
|
|
| 19,514 |
|
|
| 76,122 |
|
|
| 92,662 |
|
|
| ||
Less: Data processing contract consulting |
| - |
|
|
| (2,017 | ) |
|
| - |
|
|
| (2,017 | ) |
|
| ||
Less: Data processing system conversion |
| (1,259 | ) |
|
| - |
|
|
| (1,439 | ) |
|
| - |
|
|
| ||
Less: MSR valuation allowance for intended sale |
| (769 | ) |
|
| - |
|
|
| (769 | ) |
|
| - |
|
|
| ||
Less: SBA-guaranteed loan contingency |
| (1,001 | ) |
|
| (197 | ) |
|
| (1,491 | ) |
|
| (197 | ) |
|
| ||
Less: Mortgage banking loss contingencies |
| (380 | ) |
|
| - |
|
|
| (1,089 | ) |
|
| - |
|
|
| ||
Less: Professional fees related to mortgage banking loss contingencies |
| (1,181 | ) |
|
| - |
|
|
| (1,181 | ) |
|
| - |
|
|
| ||
Noninterest expense (non-GAAP) | $ | 17,057 |
|
| $ | 17,300 |
|
| $ | 70,153 |
|
| $ | 90,448 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
Efficiency ratio (excluding nonrecurring items) (non-GAAP) |
| 81.31 | % |
|
| 81.01 | % |
|
| 80.61 | % |
|
| 80.84 | % |
|
| ||
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
| QTD |
|
|
| FYTD | ||||||||||
Tangible Book Value Per Share | September 30, |
| June 30, |
| Increase |
| September 30, |
| Increase | ||||||||||
(In thousands, except share and per share data) |
| 2023 |
|
|
| 2023 |
|
| (Decrease) |
|
| 2022 |
|
| (Decrease) | ||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Stockholders' equity, net of noncontrolling interests (GAAP) | $ | 150,981 |
|
| $ | 165,068 |
|
| $ | (14,087 | ) |
| $ | 151,565 |
|
| $ | (584 | ) |
Less: goodwill and core deposit intangibles |
| (10,409 | ) |
|
| (10,462 | ) |
|
| 53 |
|
|
| (10,623 | ) |
|
| 214 |
|
Tangible equity (non-GAAP) | $ | 140,572 |
|
| $ | 154,606 |
|
|
| (14,034 | ) |
| $ | 140,942 |
|
|
| (370 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Outstanding common shares |
| 6,867,121 |
|
|
| 6,865,921 |
|
|
| 1,200 |
|
|
| 6,970,631 |
|
|
| (103,510 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Tangible book value per share (non-GAAP) | $ | 20.47 |
|
| $ | 22.52 |
|
| $ | (2.05 | ) |
| $ | 20.22 |
|
| $ | 0.25 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Book value per share (GAAP) | $ | 21.99 |
|
| $ | 24.04 |
|
| $ | (2.06 | ) |
| $ | 21.74 |
|
| $ | 0.25 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
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) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total cash and cash equivalents | $ | 30,845 |
|
| $ | 42,475 |
|
| $ | 41,810 |
|
| $ | 38,278 |
|
| $ | 41,665 |
|
Total investment securities |
| 229,039 |
|
|
| 249,788 |
|
|
| 336,317 |
|
|
| 330,683 |
|
|
| 318,075 |
|
Total loans held for sale |
| 45,855 |
|
|
| 63,142 |
|
|
| 48,783 |
|
|
| 44,281 |
|
|
| 60,462 |
|
Total loans, net of allowance for loan losses |
| 1,770,243 |
|
|
| 1,691,289 |
|
|
| 1,598,440 |
|
|
| 1,582,940 |
|
|
| 1,474,544 |
|
Loan servicing rights |
| 62,819 |
|
|
| 64,139 |
|
|
| 65,045 |
|
|
| 65,598 |
|
|
| 67,194 |
|
Total assets |
| 2,288,854 |
|
|
| 2,260,421 |
|
|
| 2,239,606 |
|
|
| 2,196,919 |
|
|
| 2,093,725 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Retail deposits | $ | 1,249,997 |
|
| $ | 1,245,534 |
|
| $ | 1,206,154 |
|
| $ | 1,211,677 |
|
| $ | 1,223,330 |
|
Brokered deposits |
| 438,319 |
|
|
| 414,231 |
|
|
| 336,728 |
|
|
| 326,164 |
|
|
| 292,504 |
|
Total deposits |
| 1,688,316 |
|
|
| 1,659,765 |
|
|
| 1,542,882 |
|
|
| 1,537,841 |
|
|
| 1,515,834 |
|
Federal Home Loan Bank borrowings |
| 363,183 |
|
|
| 345,000 |
|
|
| 437,795 |
|
|
| 377,643 |
|
|
| 307,303 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Common stock and additional paid-in capital | $ | 27,064 |
|
| $ | 27,518 |
|
| $ | 27,443 |
|
| $ | 27,425 |
|
| $ | 26,848 |
|
Retained earnings - substantially restricted |
| 166,306 |
|
|
| 168,015 |
|
|
| 166,652 |
|
|
| 163,890 |
|
|
| 161,927 |
|
Accumulated other comprehensive income (loss) |
| (29,587 | ) |
|
| (17,565 | ) |
|
| (14,199 | ) |
|
| (19,000 | ) |
|
| (27,079 | ) |
Unearned stock compensation |
| (1,015 | ) |
|
| (1,113 | ) |
|
| (1,211 | ) |
|
| (1,361 | ) |
|
| (969 | ) |
Less treasury stock, at cost |
| (11,787 | ) |
|
| (11,787 | ) |
|
| (11,787 | ) |
|
| (10,810 | ) |
|
| (9,162 | ) |
Total stockholders' equity |
| 150,981 |
|
|
| 165,068 |
|
|
| 166,898 |
|
|
| 160,144 |
|
|
| 151,565 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Outstanding common shares |
| 6,867,121 |
|
|
| 6,865,921 |
|
|
| 6,865,921 |
|
|
| 6,917,921 |
|
|
| 6,970,631 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
| Three Months Ended | ||||||||||||||||||
Summarized Consolidated Statements of Income | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
(In thousands, except per share data) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total interest income | $ | 28,137 |
|
| $ | 26,798 |
|
| $ | 24,811 |
|
| $ | 23,483 |
|
| $ | 21,152 |
|
Total interest expense |
| 12,601 |
|
|
| 11,933 |
|
|
| 9,899 |
|
|
| 7,222 |
|
|
| 4,327 |
|
Net interest income |
| 15,536 |
|
|
| 14,865 |
|
|
| 14,912 |
|
|
| 16,261 |
|
|
| 16,825 |
|
Provision for loan losses |
| 815 |
|
|
| 441 |
|
|
| 372 |
|
|
| 984 |
|
|
| 880 |
|
Net interest income after provision for loan losses |
| 14,721 |
|
|
| 14,424 |
|
|
| 14,540 |
|
|
| 15,277 |
|
|
| 15,945 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Total noninterest income |
| 5,442 |
|
|
| 7,196 |
|
|
| 7,516 |
|
|
| 5,188 |
|
|
| 4,531 |
|
Total noninterest expense |
| 21,647 |
|
|
| 18,965 |
|
|
| 17,999 |
|
|
| 17,511 |
|
|
| 19,514 |
|
Income (loss) before income taxes |
| (1,484 | ) |
|
| 2,655 |
|
|
| 4,057 |
|
|
| 2,954 |
|
|
| 962 |
|
Income tax expense (benefit) |
| (737 | ) |
|
| 331 |
|
|
| 333 |
|
|
| 83 |
|
|
| (446 | ) |
Net income (loss) | $ | (747 | ) |
| $ | 2,324 |
|
| $ | 3,724 |
|
| $ | 2,871 |
|
| $ | 1,408 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income (loss) per share, basic | $ | (0.11 | ) |
| $ | 0.34 |
|
| $ | 0.54 |
|
| $ | 0.42 |
|
| $ | 0.20 |
|
Weighted average shares outstanding, basic |
| 6,817,365 |
|
|
| 6,816,608 |
|
|
| 6,842,897 |
|
|
| 6,915,909 |
|
|
| 6,988,873 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income (loss) per share, diluted | $ | (0.11 | ) |
| $ | 0.34 |
|
| $ | 0.54 |
|
| $ | 0.41 |
|
| $ | 0.20 |
|
Weighted average shares outstanding, diluted |
| 6,837,919 |
|
|
| 6,819,748 |
|
|
| 6,881,496 |
|
|
| 6,972,055 |
|
|
| 7,056,138 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
| September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
Consolidated Performance Ratios (Annualized) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Return on average assets |
| (0.13 | %) |
|
| 0.41 | % |
|
| 0.68 | % |
|
| 0.54 | % |
|
| 0.28 | % |
Return on average equity |
| (1.82 | %) |
|
| 5.60 | % |
|
| 9.15 | % |
|
| 7.50 | % |
|
| 3.30 | % |
Return on average common stockholders' equity |
| (1.82 | %) |
|
| 5.60 | % |
|
| 9.15 | % |
|
| 7.50 | % |
|
| 3.30 | % |
Net interest margin (tax equivalent basis) |
| 3.03 | % |
|
| 2.94 | % |
|
| 3.06 | % |
|
| 3.41 | % |
|
| 3.75 | % |
Efficiency ratio |
| 103.19 | % |
|
| 85.97 | % |
|
| 80.25 | % |
|
| 81.64 | % |
|
| 91.37 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
| As of or for the Three Months Ended | ||||||||||||||||||
| September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
Consolidated Asset Quality Ratios |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Nonperforming loans as a percentage of total loans |
| 0.78 | % |
|
| 0.69 | % |
|
| 0.77 | % |
|
| 0.72 | % |
|
| 0.73 | % |
Nonperforming assets as a percentage of total assets |
| 0.69 | % |
|
| 0.62 | % |
|
| 0.67 | % |
|
| 0.64 | % |
|
| 0.65 | % |
Allowance for loan losses as a percentage of total loans |
| 0.95 | % |
|
| 0.99 | % |
|
| 1.02 | % |
|
| 1.01 | % |
|
| 1.03 | % |
Allowance for loan losses as a percentage of nonperforming loans |
| 121.16 | % |
|
| 143.83 | % |
|
| 132.20 | % |
|
| 139.55 | % |
|
| 141.49 | % |
Net charge-offs to average outstanding loans |
| 0.04 | % |
|
| 0.00 | % |
|
| -0.00 | % |
|
| 0.02 | % |
|
| 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) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Core Banking Segment: |
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income | $ | 14,167 |
|
| $ | 13,407 |
|
| $ | 13,632 |
|
| $ | 15,008 |
|
| $ | 14,994 |
|
Provision for loan losses |
| 1,266 |
|
|
| 880 |
|
|
| 422 |
|
|
| 701 |
|
|
| 769 |
|
Net interest income after provision for loan losses |
| 12,901 |
|
|
| 12,527 |
|
|
| 13,210 |
|
|
| 14,307 |
|
|
| 14,225 |
|
Noninterest income |
| 2,136 |
|
|
| 1,965 |
|
|
| 1,733 |
|
|
| 1,928 |
|
|
| 1,808 |
|
Noninterest expense |
| 13,559 |
|
|
| 11,010 |
|
|
| 10,651 |
|
|
| 9,797 |
|
|
| 10,499 |
|
Income before income taxes |
| 1,478 |
|
|
| 3,482 |
|
|
| 4,292 |
|
|
| 6,438 |
|
|
| 5,534 |
|
Income tax expense |
| 3 |
|
|
| 561 |
|
|
| 401 |
|
|
| 946 |
|
|
| 735 |
|
Net income | $ | 1,475 |
|
| $ | 2,921 |
|
| $ | 3,891 |
|
| $ | 5,492 |
|
| $ | 4,799 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
SBA Lending Segment (Q2): |
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income | $ | 990 |
|
| $ | 1,098 |
|
| $ | 1,093 |
|
| $ | 995 |
|
| $ | 1,182 |
|
Provision (credit) for loan losses |
| (451 | ) |
|
| (439 | ) |
|
| (50 | ) |
|
| 283 |
|
|
| 111 |
|
Net interest income after provision (credit) for loan losses |
| 1,441 |
|
|
| 1,537 |
|
|
| 1,143 |
|
|
| 712 |
|
|
| 1,071 |
|
Noninterest income |
| 367 |
|
|
| 580 |
|
|
| 1,636 |
|
|
| 754 |
|
|
| 480 |
|
Noninterest expense |
| 2,907 |
|
|
| 2,107 |
|
|
| 2,662 |
|
|
| 1,924 |
|
|
| 1,891 |
|
Income (loss) before income taxes |
| (1,099 | ) |
|
| 10 |
|
|
| 117 |
|
|
| (458 | ) |
|
| (340 | ) |
Income tax expense (benefit) |
| (273 | ) |
|
| (21 | ) |
|
| 20 |
|
|
| (107 | ) |
|
| (123 | ) |
Net income (loss) | $ | (826 | ) |
| $ | 31 |
|
| $ | 97 |
|
| $ | (351 | ) |
| $ | (217 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Mortgage Banking Segment: |
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income | $ | 379 |
|
| $ | 360 |
|
| $ | 187 |
|
| $ | 258 |
|
| $ | 649 |
|
Provision for loan losses |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net interest income after provision for loan losses |
| 379 |
|
|
| 360 |
|
|
| 187 |
|
|
| 258 |
|
|
| 649 |
|
Noninterest income |
| 2,939 |
|
|
| 4,651 |
|
|
| 4,147 |
|
|
| 2,506 |
|
|
| 2,243 |
|
Noninterest expense |
| 5,181 |
|
|
| 5,848 |
|
|
| 4,686 |
|
|
| 5,790 |
|
|
| 7,124 |
|
Loss before income taxes |
| (1,863 | ) |
|
| (837 | ) |
|
| (352 | ) |
|
| (3,026 | ) |
|
| (4,232 | ) |
Income tax benefit |
| (467 | ) |
|
| (209 | ) |
|
| (88 | ) |
|
| (756 | ) |
|
| (1,058 | ) |
Net loss | $ | (1,396 | ) |
| $ | (628 | ) |
| $ | (264 | ) |
| $ | (2,270 | ) |
| $ | (3,174 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net Income (Loss) Per Share by Segment |
|
|
|
|
|
|
|
|
| ||||||||||
Net income per share, basic - Core Banking | $ | 0.22 |
|
| $ | 0.43 |
|
| $ | 0.57 |
|
| $ | 0.80 |
|
| $ | 0.68 |
|
Net income (loss) per share, basic - SBA Lending (Q2) |
| (0.12 | ) |
|
| - |
|
|
| 0.01 |
|
|
| (0.05 | ) |
|
| (0.03 | ) |
Net income (loss) per share, basic - Mortgage Banking |
| (0.21 | ) |
|
| (0.09 | ) |
|
| (0.04 | ) |
|
| (0.33 | ) |
|
| (0.45 | ) |
Total net income (loss) per share, basic | $ | (0.11 | ) |
| $ | 0.34 |
|
| $ | 0.54 |
|
| $ | 0.42 |
|
| $ | 0.20 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net Income (Loss) Per Diluted Share by Segment |
|
|
|
|
|
|
|
|
| ||||||||||
Net income per share, diluted - Core Banking | $ | 0.22 |
|
| $ | 0.43 |
|
| $ | 0.57 |
|
| $ | 0.79 |
|
| $ | 0.68 |
|
Net income (loss) per share, diluted - SBA Lending (Q2) |
| (0.12 | ) |
|
| - |
|
|
| 0.01 |
|
|
| (0.05 | ) |
|
| (0.03 | ) |
Net income (loss) per share, diluted - Mortgage Banking |
| (0.21 | ) |
|
| (0.09 | ) |
|
| (0.04 | ) |
|
| (0.33 | ) |
|
| (0.45 | ) |
Total net income (loss) per share, diluted | $ | (0.11 | ) |
| $ | 0.34 |
|
| $ | 0.54 |
|
| $ | 0.41 |
|
| $ | 0.20 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Return on Average Assets by Segment (annualized) |
|
|
|
|
|
|
|
|
| ||||||||||
Core Banking |
| 0.28 | % |
|
| 0.61 | % |
|
| 0.85 | % |
|
| 1.17 | % |
|
| 1.08 | % |
SBA Lending |
| (3.81 | %) |
|
| 0.15 | % |
|
| 0.42 | % |
|
| (1.38 | %) |
|
| (0.85 | %) |
Mortgage Banking |
| (6.31 | %) |
|
| (2.24 | %) |
|
| (1.14 | %) |
|
| (9.31 | %) |
|
| (9.44 | %) |
|
|
|
|
|
|
|
|
|
| ||||||||||
Efficiency Ratio by Segment (annualized) |
|
|
|
|
|
|
|
|
| ||||||||||
Core Banking |
| 83.17 | % |
|
| 71.62 | % |
|
| 69.32 | % |
|
| 57.85 | % |
|
| 62.49 | % |
SBA Lending |
| 214.22 | % |
|
| 125.57 | % |
|
| 97.54 | % |
|
| 110.01 | % |
|
| 113.78 | % |
Mortgage Banking |
| 156.15 | % |
|
| 116.70 | % |
|
| 108.12 | % |
|
| 209.48 | % |
|
| 246.33 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
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) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Core Banking Segment: |
|
|
|
|
|
|
|
|
| ||||||||||
Compensation (3) | $ | 6,528 |
|
| $ | 4,978 |
|
| $ | 5,578 |
|
| $ | 5,275 |
|
| $ | 4,444 |
|
Occupancy |
| 1,418 |
|
|
| 1,738 |
|
|
| 1,401 |
|
|
| 1,443 |
|
|
| 1,374 |
|
Advertising |
| 404 |
|
|
| 334 |
|
|
| 298 |
|
|
| 213 |
|
|
| 272 |
|
Other |
| 5,209 |
|
|
| 3,960 |
|
|
| 3,374 |
|
|
| 2,866 |
|
|
| 4,409 |
|
Total Noninterest Expense | $ | 13,559 |
|
| $ | 11,010 |
|
| $ | 10,651 |
|
| $ | 9,797 |
|
| $ | 10,499 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
SBA Lending Segment (Q2): |
|
|
|
|
|
|
|
|
| ||||||||||
Compensation | $ | 1,533 |
|
| $ | 1,803 |
|
| $ | 1,800 |
|
| $ | 1,622 |
|
| $ | 1,690 |
|
Occupancy |
| 68 |
|
|
| 70 |
|
|
| 70 |
|
|
| 54 |
|
|
| 41 |
|
Advertising |
| 10 |
|
|
| 11 |
|
|
| 8 |
|
|
| 2 |
|
|
| 8 |
|
Other |
| 1,296 |
|
|
| 223 |
|
|
| 784 |
|
|
| 246 |
|
|
| 152 |
|
Total Noninterest Expense | $ | 2,907 |
|
| $ | 2,107 |
|
| $ | 2,662 |
|
| $ | 1,924 |
|
| $ | 1,891 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Mortgage Banking Segment: |
|
|
|
|
|
|
|
|
| ||||||||||
Compensation (3) | $ | 3,647 |
|
| $ | 4,357 |
|
| $ | 3,029 |
|
| $ | 3,788 |
|
| $ | 5,091 |
|
Occupancy |
| 395 |
|
|
| 469 |
|
|
| 449 |
|
|
| 363 |
|
|
| 491 |
|
Advertising |
| 129 |
|
|
| 191 |
|
|
| 213 |
|
|
| 203 |
|
|
| 319 |
|
Other |
| 1,010 |
|
|
| 831 |
|
|
| 995 |
|
|
| 1,436 |
|
|
| 1,223 |
|
Total Noninterest Expense | $ | 5,181 |
|
| $ | 5,848 |
|
| $ | 4,686 |
|
| $ | 5,790 |
|
| $ | 7,124 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
(3) 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: | $ | 1,516 |
|
| $ | 1,440 |
|
| $ | 1,328 |
|
| $ | 1,192 |
|
| $ | 945 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): | Three Months Ended | ||||||||||||||||||
Mortgage Banking Noninterest Expense Fixed vs. Variable | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
(In thousands) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest Expense - Fixed Expenses | $ | 3,467 |
|
| $ | 3,715 |
|
| $ | 3,513 |
|
| $ | 4,561 |
|
| $ | 5,724 |
|
Noninterest Expense - Variable Expenses (4) |
| 1,714 |
|
|
| 2,133 |
|
|
| 1,173 |
|
|
| 1,229 |
|
|
| 1,400 |
|
Total Noninterest Expense | $ | 5,181 |
|
| $ | 5,848 |
|
| $ | 4,686 |
|
| $ | 5,790 |
|
| $ | 7,124 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
| Three Months Ended | ||||||||||||||||||
SBA Lending (Q2) Data | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
(In thousands, except percentage data) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Final funded loans guaranteed portion sold, SBA | $ | 8,431 |
|
| $ | 7,721 |
|
| $ | 15,337 |
|
| $ | 11,293 |
|
| $ | 3,772 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Gross gain on sales of loans, SBA | $ | 809 |
|
| $ | 780 |
|
| $ | 1,293 |
|
| $ | 936 |
|
| $ | 393 |
|
Weighted average gross gain on sales of loans, SBA |
| 9.60 | % |
|
| 10.10 | % |
|
| 8.43 | % |
|
| 8.29 | % |
|
| 10.42 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net gain on sales of loans, SBA (5) | $ | 538 |
|
| $ | 497 |
|
| $ | 907 |
|
| $ | 775 |
|
| $ | 249 |
|
Weighted average net gain on sales of loans, SBA |
| 6.38 | % |
|
| 6.44 | % |
|
| 5.91 | % |
|
| 6.86 | % |
|
| 6.60 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
| Three Months Ended | ||||||||||||||||||
Mortgage Banking Data | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, | ||||||||||
(In thousands, except percentage data) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Mortgage originations for sale in the secondary market | $ | 195,469 |
|
| $ | 199,601 |
|
| $ | 115,011 |
|
| $ | 77,605 |
|
| $ | 185,981 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Mortgage sales | $ | 220,609 |
|
| $ | 185,557 |
|
| $ | 99,711 |
|
| $ | 96,177 |
|
| $ | 241,804 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Gross gain on sales of loans, mortgage banking (6) | $ | 3,304 |
|
| $ | 3,570 |
|
| $ | 2,308 |
|
| $ | 1,217 |
|
| $ | 2,630 |
|
Weighted average gross gain on sales of loans, mortgage banking |
| 1.50 | % |
|
| 1.92 | % |
|
| 2.31 | % |
|
| 1.27 | % |
|
| 1.09 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
Mortgage banking income (7) | $ | 3,018 |
|
| $ | 4,668 |
|
| $ | 4,149 |
|
| $ | 2,496 |
|
| $ | 2,246 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
(4) Variable expenses include incentive compensation and advertising expenses. |
|
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
(5) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment. |
|
|
|
| |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
(6) Inclusive of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees, and net of lender credits and other investor expenses. |
|
|
|
| |||||||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
(7) 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) |
| 2023 |
|
|
| 2023 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2022 |
|
Interest-earning assets |
|
|
|
|
|
|
|
|
| ||||||||||
Average balances: |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits with banks | $ | 21,631 |
|
| $ | 20,661 |
|
| $ | 27,649 |
|
| $ | 19,379 |
|
| $ | 28,318 |
|
Loans |
| 1,796,749 |
|
|
| 1,719,733 |
|
|
| 1,621,147 |
|
|
| 1,583,182 |
|
|
| 1,479,167 |
|
Investment securities - taxable |
| 105,393 |
|
|
| 109,319 |
|
|
| 110,373 |
|
|
| 111,936 |
|
|
| 94,836 |
|
Investment securities - nontaxable |
| 160,829 |
|
|
| 234,118 |
|
|
| 242,530 |
|
|
| 241,504 |
|
|
| 230,312 |
|
FRB and FHLB stock |
| 24,939 |
|
|
| 24,509 |
|
|
| 23,289 |
|
|
| 20,063 |
|
|
| 19,890 |
|
Total interest-earning assets | $ | 2,109,541 |
|
| $ | 2,108,340 |
|
| $ | 2,024,988 |
|
| $ | 1,976,064 |
|
| $ | 1,852,523 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest income (tax equivalent basis): |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits with banks | $ | 266 |
|
| $ | 267 |
|
| $ | 192 |
|
| $ | 144 |
|
| $ | 97 |
|
Loans |
| 25,214 |
|
|
| 23,279 |
|
|
| 21,339 |
|
|
| 20,222 |
|
|
| 18,029 |
|
Investment securities - taxable |
| 969 |
|
|
| 984 |
|
|
| 957 |
|
|
| 955 |
|
|
| 740 |
|
Investment securities - nontaxable |
| 1,695 |
|
|
| 2,456 |
|
|
| 2,533 |
|
|
| 2,505 |
|
|
| 2,352 |
|
FRB and FHLB stock |
| 428 |
|
|
| 423 |
|
|
| 364 |
|
|
| 220 |
|
|
| 265 |
|
Total interest income (tax equivalent basis) | $ | 28,572 |
|
| $ | 27,409 |
|
| $ | 25,385 |
|
| $ | 24,046 |
|
| $ | 21,483 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Weighted average yield (tax equivalent basis, annualized): |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits with banks |
| 4.92 | % |
|
| 5.17 | % |
|
| 2.78 | % |
|
| 2.97 | % |
|
| 1.37 | % |
Loans |
| 5.61 | % |
|
| 5.41 | % |
|
| 5.27 | % |
|
| 5.11 | % |
|
| 4.88 | % |
Investment securities - taxable |
| 3.68 | % |
|
| 3.60 | % |
|
| 3.47 | % |
|
| 3.41 | % |
|
| 3.12 | % |
Investment securities - nontaxable |
| 4.22 | % |
|
| 4.20 | % |
|
| 4.18 | % |
|
| 4.15 | % |
|
| 4.08 | % |
FRB and FHLB stock |
| 6.86 | % |
|
| 6.90 | % |
|
| 6.25 | % |
|
| 4.39 | % |
|
| 5.33 | % |
Total interest-earning assets |
| 5.42 | % |
|
| 5.20 | % |
|
| 5.01 | % |
|
| 4.87 | % |
|
| 4.64 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits | $ | 1,385,994 |
|
| $ | 1,278,776 |
|
| $ | 1,251,080 |
|
| $ | 1,213,419 |
|
| $ | 1,125,659 |
|
Fed funds purchased |
| 76 |
|
|
| 11 |
|
|
| - |
|
|
| - |
|
|
| - |
|
Federal Home Loan Bank borrowings |
| 353,890 |
|
|
| 434,182 |
|
|
| 374,593 |
|
|
| 311,146 |
|
|
| 301,027 |
|
Subordinated debt and other borrowings |
| 48,406 |
|
|
| 49,339 |
|
|
| 50,293 |
|
|
| 88,304 |
|
|
| 50,179 |
|
Total interest-bearing liabilities | $ | 1,788,366 |
|
| $ | 1,762,308 |
|
| $ | 1,675,966 |
|
| $ | 1,612,869 |
|
| $ | 1,476,865 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest expense: |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits | $ | 9,457 |
|
| $ | 7,791 |
|
| $ | 6,265 |
|
| $ | 4,158 |
|
| $ | 2,306 |
|
Repurchase agreements |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Fed funds purchased |
| 1 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Federal Home Loan Bank borrowings |
| 2,459 |
|
|
| 3,446 |
|
|
| 2,915 |
|
|
| 1,919 |
|
|
| 1,111 |
|
Subordinated debt and other borrowings |
| 684 |
|
|
| 696 |
|
|
| 719 |
|
|
| 1,145 |
|
|
| 714 |
|
Total interest expense | $ | 12,601 |
|
| $ | 11,933 |
|
| $ | 9,899 |
|
| $ | 7,222 |
|
| $ | 4,131 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Weighted average cost (annualized): |
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits |
| 2.73 | % |
|
| 2.44 | % |
|
| 2.00 | % |
|
| 1.37 | % |
|
| 0.82 | % |
Fed funds purchased |
| 5.26 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
|
| 0.00 | % |
Federal Home Loan Bank borrowings |
| 2.78 | % |
|
| 3.17 | % |
|
| 3.11 | % |
|
| 2.47 | % |
|
| 1.48 | % |
Subordinated debt and other borrowings |
| 5.65 | % |
|
| 5.64 | % |
|
| 5.72 | % |
|
| 5.19 | % |
|
| 5.69 | % |
Total interest-bearing liabilities |
| 2.82 | % |
|
| 2.71 | % |
|
| 2.36 | % |
|
| 1.79 | % |
|
| 1.12 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net interest income (taxable equivalent basis) | $ | 15,971 |
|
| $ | 15,476 |
|
| $ | 15,486 |
|
| $ | 16,824 |
|
| $ | 17,352 |
|
Less: taxable equivalent adjustment |
| (435 | ) |
|
| (611 | ) |
|
| (574 | ) |
|
| (563 | ) |
|
| (527 | ) |
Net interest income | $ | 15,536 |
|
| $ | 14,865 |
|
| $ | 14,912 |
|
| $ | 16,261 |
|
| $ | 16,825 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest rate spread (tax equivalent basis, annualized) |
| 2.60 | % |
|
| 2.49 | % |
|
| 2.65 | % |
|
| 3.08 | % |
|
| 3.52 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net interest margin (tax equivalent basis, annualized) |
| 3.03 | % |
|
| 2.94 | % |
|
| 3.06 | % |
|
| 3.41 | % |
|
| 3.75 | % |
|
|
|
|
|
|
|
|
|
| ||||||||||
