The Company’s second quarter 2023 operating results reflected the following changes from the first quarter of 2023: (1) lower net interest income due to the impact of higher deposit liability costs, partially offset by higher asset yields due to loan and security repricing and the addition of new loans; (2) increased provision for credit losses primarily due to the forecasted worsening economic scenario, partially offset by reductions in specific reserves; (3)
“We continue efforts to improve franchise value not withstanding a challenging economic climate and yield curve inversion. During the second quarter, we expanded our tangible book value per share and tangible common equity to assets ratio. Operationally, we continue to control expenses to lessen the impact of net interest margin compression and its impact on our efficiency ratio,” stated
Book value per share was
- Quarterly earnings of
$3.2 million , or$0.31 per diluted share for the quarter endedJune 30, 2023 , decreased from the quarter endedMarch 31, 2023 , earnings of$3.7 million or$0.35 per diluted share, and decreased from the quarter endedJune 30, 2022 , earnings of$4.4 million or$0.41 per diluted share. During the quarters reported, net income as adjusted is not reported as nothing occurred for which adjustments to earnings would better reflect performance. - Earnings for the six months ended
June 30, 2023 , were$6.9 million , or$0.66 per diluted share, which is a decrease from$9.1 million , or$0.86 per diluted share, for the same period in the prior year. - Net interest income decreased
$1.1 million to$11.7 million for the quarter endedJune 30, 2023 , from$12.8 million the previous quarter and decreased$2.6 million from the second quarter of 2022. The decrease in net interest income and net interest margin from first quarter 2023 is due to the change in the deposit mix to higher yielding CD’s, an increase in indexed municipal deposits rates and other customer rate increases more than offsetting the 20 basis point increase in asset yields. - The net interest margin without loan purchase accretion and SBA PPP net loan fee accretion was 2.69% for the quarter ended
June 30, 2023 , compared to 2.99% for the previous quarter and 3.29% for the comparable quarter one year earlier. - The second quarter provision for credit losses was
$0.45 million due to the impact of forecasted future worsening economic conditions and modest loan growth partially offset by reductions in specific reserves of$0.9 million , compared to$0.05 million for the preceding quarter. A provision of$0.40 million was recorded during the second quarter a year ago due to loan growth. - The efficiency ratio was flat at 66% for the quarter ended
June 30, 2023 , compared to the quarter endedMarch 31, 2023 , as higher non-interest income and lower non-interest expense offset the impact of lower net interest income. - Gross loans increased by
$4.0 million during the second quarter of 2023. As a result of the current interest rate environment, residential 10/1 ARM loan originations were added to the portfolio which resulted in residential mortgage loan growth of$9.3 million . New construction funding was more than offset by a$20 million loan payoff as the construction period ended and other construction loans converted to permanent financing. - Nonperforming assets were
$17.4 million atJune 30, 2023 , compared to$11.7 million atMarch 31, 2023 . - Substandard loans increased by
$3.8 million to$19.2 million atJune 30, 2023 , compared to$15.4 million atMarch 31, 2023 . This increase was due to the movement from special mention of a$5.4 million hotel loan which, while current on its payments, has not fully recovered from the negative impact of the pandemic resulting in lower business travel, partially offset by nonaccrual substandard loan payoffs. - Special mention loans increased
$4.6 million . Special mention loans reflect the addition of a$9.6 million relationship offset by movement of the$5.4 million hotel from special mention to substandard. The$9.6 million relationship is a commercial business, secured by real estate, where the underlying business performance is weaker than forecasted, but the collateral position is strong. - Specific reserves declined
$0.95 million as agricultural real estate and commercial and industrial loans with specific reserves repaid in full. No new specific reserves were necessary on any new individually evaluated or substandard loans. - Our office loan portfolio is
$45.1 million and consists of 73 loans. There are no criticized loans in this portfolio and there have been no charge-offs in the trailing twelve months. - Stockholders’ equity as a percent of total assets was 9.05% at
June 30, 2023 , compared to 8.84% atMarch 31, 2023 . Tangible common equity (“TCE”) as a percent of tangible assets (non-GAAP)1 was 7.35% atJune 30, 2023 , compared to 7.16% atMarch 31, 2023 . The increase in TCE was primarily due to the modest shrinkage in assets largely due to decreases in cash and securities which we used to reduce FHLB advances. The positive impact of net income and amortization of intangibles was largely offset by an increase in the unrealized losses in the available for sale investment portfolio. - From
March 31, 2023 , consumer, commercial and government deposits have been stable with some movement between non-maturity deposit accounts and CD’s. There are no material customer or industry concentrations. - At
June 30, 2023 , our deposit portfolio composition was 54% consumer, 27% commercial, 12% public and 7% brokered deposits compared to 55% consumer, 27% commercial, 14% public and 4% brokered deposits atMarch 31, 2023 . - Uninsured and uncollateralized deposits were
$268.1 million , or 18% of total deposits, atJune 30, 2023 , and$252.7 million , or 18% of total deposits, atMarch 31, 2023 . Uninsured deposits alone atJune 30, 2023 , were$413.0 million , or 28% of total deposits, and$413.5 million , or 29% of total deposits atMarch 31, 2023 , with the difference being fully secured government deposits. - On-balance sheet liquidity, collateralized new borrowing capacity and uncommitted federal funds borrowing availability was 228% of uninsured and uncollateralized deposits at
June 30, 2023 , and 205% atMarch 31, 2023 . - On-balance sheet liquidity, collateralized new borrowing capacity and uncommitted federal funds borrowing availability was
$611.1 million atJune 30, 2023 , and$517.4 million atMarch 31, 2023 .
Balance Sheet and Asset Quality
Total assets decreased modestly by
Cash and cash equivalents decreased
Securities available for sale decreased
Securities held to maturity decreased
Total loans receivable increased to
The allowance for credit losses on loans increased by
Allowance for Credit Losses (“ACL”) - Loans Percentage
(in thousands, except ratios)
Loans, end of period | $ | 1,424,988 | $ | 1,420,955 | $ | 1,411,784 | $ | 1,346,855 | |||||||
Allowance for credit losses - Loans | $ | 23,164 | $ | 22,679 | |||||||||||
Allowance for loan losses “ALL” | $ | 17,939 | $ | 16,825 | |||||||||||
ACL - Loans as a percentage of loans, end of period | 1.63 | % | 1.60 | % | |||||||||||
ALL as a percentage of loans, end of period | 1.27 | % | 1.25 | % |
Allowance for Credit Losses - Unfunded Commitments:
(in thousands)
In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of
ACL - Unfunded commitments - beginning of period | $ | 1,530 | $ | — | $ | — | $ | — | |||
Cumulative effect of ASU 2016-13 adoption | — | — | 1,537 | — | |||||||
Additions (reductions) to ACL - Unfunded commitments via provision for credit losses charged to operations | 14 | — | 7 | — | |||||||
ACL - Unfunded commitments - end of period | $ | 1,544 | $ | — | $ | 1,544 | $ | — |
Nonperforming assets increased
(in thousands) | ||||||||||||||
Special mention loan balances | $ | 11,194 | $ | 6,636 | $ | 12,170 | $ | 20,178 | $ | 17,274 | ||||
Substandard loan balances | 19,203 | 15,439 | 17,319 | 20,227 | 20,680 | |||||||||
Criticized loans, end of period | $ | 30,397 | $ | 22,075 | $ | 29,489 | $ | 40,405 | $ | 37,954 |
Special mention loans increased
Substandard loans increased by
Total deposits increased
Deposit Portfolio Composition
(in thousands)
Consumer deposits | $ | 790,404 | $ | 786,614 | $ | 805,598 | ||
Commercial deposits | 401,079 | 391,534 | 405,733 | |||||
Public deposits | 175,869 | 194,683 | 173,548 | |||||
Brokered deposits | 97,330 | 63,962 | 39,841 | |||||
Total deposits | $ | 1,464,682 | $ | 1,436,793 | $ | 1,424,720 |
Deposit Composition
(in thousands)
Non-interest bearing demand deposits | $ | 261,876 | $ | 247,735 | $ | 284,722 | $ | 276,815 | |||
Interest bearing demand deposits | 358,226 | 390,730 | 371,210 | 401,857 | |||||||
Savings accounts | 206,380 | 214,537 | 220,019 | 239,322 | |||||||
Money market accounts | 288,934 | 309,005 | 323,435 | 328,718 | |||||||
Certificate accounts | 349,266 | 274,786 | 225,334 | 153,498 | |||||||
Total deposits | $ | 1,464,682 | $ | 1,436,793 | $ | 1,424,720 | $ | 1,400,210 |
The Company repurchased 14 thousand shares of the Company’s common stock in the second quarter of 2023. As of
Review of Operations
Net interest income was
Net interest income and net interest margin analysis:
(in thousands, except yields and rates)
Three months ended | ||||||||||||||||||||||||||||||||||
Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | Net Interest Income | Net Interest Margin | |||||||||||||||||||||||||
As reported | $ | 11,686 | 2.72 | % | $ | 12,795 | 3.02 | % | $ | 14,478 | 3.40 | % | $ | 14,457 | 3.43 | % | $ | 14,267 | 3.46 | % | ||||||||||||||
Less non-accretable difference realized as interest from payoff of purchased credit impaired (“PCI”) loans | — | — | % | — | — | % | (109 | ) | (0.02)% | (34 | ) | (0.01)% | (70 | ) | (0.02)% | |||||||||||||||||||
Less accelerated accretion from payoff of certain PCI loans with transferred non- accretable differences | — | — | % | — | — | % | (32 | ) | (0.01)% | (117 | ) | (0.06)% | (308 | ) | (0.08)% | |||||||||||||||||||
Less accretion for PCD loans | (39 | ) | (0.01)% | (37 | ) | (0.01)% | — | — | % | — | — | % | — | — | % | |||||||||||||||||||
Less scheduled accretion interest | (85 | ) | (0.02)% | (84 | ) | (0.02)% | (169 | ) | (0.04)% | (247 | ) | (0.03)% | (255 | ) | (0.06)% | |||||||||||||||||||
Without loan purchase accretion | $ | 11,562 | 2.69 | % | $ | 12,674 | 2.99 | % | $ | 14,168 | 3.33 | % | $ | 14,059 | 3.33 | % | $ | 13,634 | 3.30 | % | ||||||||||||||
Less SBA PPP net loan fee accretion | — | — | % | — | — | % | — | — | % | — | — | % | (39 | ) | (0.01)% | |||||||||||||||||||
Without SBA PPP net loan fee accretion and loan purchase accretion | $ | 11,562 | 2.69 | % | $ | 12,674 | 2.99 | % | $ | 14,168 | 3.33 | % | $ | 14,059 | 3.33 | % | $ | 13,595 | 3.29 | % |
The provision for credit losses for the quarter ended
Non-interest income increased to
Total non-interest expense decreased
Provision for income taxes decreased to
These financial results are preliminary until the Form 10-Q is filed in
About the Company
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this release are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified using forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “estimates,” “intend,” “may,” “on pace,” “preliminary,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Such forward-looking statements in this release are inherently subject to many uncertainties arising in the operations and business environment of the Company and the Bank. These uncertainties include conditions in the financial markets and economic conditions generally; adverse impacts to the Company or Bank arising from the COVID-19 pandemic; acts of terrorism and political or military actions by
1 Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, such as tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on average tangible common equity, which management believes may be helpful in understanding the Company’s results of operations or financial position and comparing results over different periods.
Tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on average tangible common equity are non-GAAP measures that eliminate the impact of goodwill and intangible assets on our financial position. Management believes these measures are useful in assessing the strength of our financial position.
Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions.
Contact:
(715)-836-9994
(CZWI-ER)
Consolidated Balance Sheets (in thousands, except shares and per share data) | |||||||||||||||
Assets | |||||||||||||||
Cash and cash equivalents | $ | 42,969 | $ | 65,050 | $ | 35,363 | $ | 31,743 | |||||||
Other interest bearing deposits | — | 249 | 249 | 1,505 | |||||||||||
Securities available for sale “AFS” | 161,135 | 173,423 | 165,991 | 177,068 | |||||||||||
Securities held to maturity “HTM” | 93,800 | 95,301 | 96,379 | 99,249 | |||||||||||
Equity investments | 2,299 | 2,151 | 1,794 | 1,365 | |||||||||||
Other investments | 16,347 | 17,428 | 15,834 | 14,899 | |||||||||||
Loans receivable | 1,424,988 | 1,420,955 | 1,411,784 | 1,346,855 | |||||||||||
Allowance for credit losses | (23,164 | ) | (22,679 | ) | (17,939 | ) | (16,825 | ) | |||||||
Loans receivable, net | 1,401,824 | 1,398,276 | 1,393,845 | 1,330,030 | |||||||||||
Loans held for sale | 2,394 | 761 | — | 1,172 | |||||||||||
Mortgage servicing rights, net | 4,008 | 4,120 | 4,262 | 4,520 | |||||||||||
Office properties and equipment, net | 19,827 | 20,197 | 20,493 | 21,589 | |||||||||||
Accrued interest receivable | 5,702 | 5,550 | 5,285 | 4,243 | |||||||||||
Intangible assets | 2,052 | 2,245 | 2,449 | 3,100 | |||||||||||
31,498 | 31,498 | 31,498 | 31,498 | ||||||||||||
Foreclosed and repossessed assets, net | 1,199 | 1,113 | 1,271 | 1,437 | |||||||||||
Bank owned life insurance (“BOLI”) | 25,290 | 25,118 | 24,954 | 24,622 | |||||||||||
Other assets | 19,493 | 18,240 | 16,719 | 15,567 | |||||||||||
TOTAL ASSETS | $ | 1,829,837 | $ | 1,860,720 | $ | 1,816,386 | $ | 1,763,607 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||||||
Liabilities: | |||||||||||||||
Deposits | $ | 1,464,682 | $ | 1,436,793 | $ | 1,424,720 | $ | 1,400,210 | |||||||
122,530 | 182,530 | 142,530 | 102,030 | ||||||||||||
Other borrowings | 67,357 | 67,300 | 72,409 | 87,124 | |||||||||||
Other liabilities | 9,710 | 9,536 | 9,639 | 9,500 | |||||||||||
Total liabilities | 1,664,279 | 1,696,159 | 1,649,298 | 1,598,864 | |||||||||||
Stockholders’ equity: | |||||||||||||||
Common stock— | 105 | 105 | 104 | 105 | |||||||||||
Additional paid-in capital | 119,404 | 119,327 | 119,240 | 119,987 | |||||||||||
Retained earnings | 64,926 | 61,720 | 65,400 | 56,928 | |||||||||||
Accumulated other comprehensive loss | (18,877 | ) | (16,591 | ) | (17,656 | ) | (12,277 | ) | |||||||
Total stockholders’ equity | 165,558 | 164,561 | 167,088 | 164,743 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,829,837 | $ | 1,860,720 | $ | 1,816,386 | $ | 1,763,607 |
Note: Certain items previously reported were reclassified for consistency with the current presentation.
Consolidated Statements of Operations (in thousands, except per share data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||
Interest and fees on loans | $ | 17,960 | $ | 17,126 | $ | 14,893 | $ | 35,086 | $ | 28,660 | |||||||||
Interest on investments | 2,817 | 2,547 | 1,810 | 5,364 | 3,419 | ||||||||||||||
Total interest and dividend income | 20,777 | 19,673 | 16,703 | 40,450 | 32,079 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Interest on deposits | 6,162 | 4,348 | 985 | 10,510 | 2,053 | ||||||||||||||
Interest on FHLB borrowed funds | 1,892 | 1,493 | 297 | 3,385 | 608 | ||||||||||||||
Interest on other borrowed funds | 1,037 | 1,037 | 1,154 | 2,074 | 1,984 | ||||||||||||||
Total interest expense | 9,091 | 6,878 | 2,436 | 15,969 | 4,645 | ||||||||||||||
Net interest income before provision for credit losses | 11,686 | 12,795 | 14,267 | 24,481 | 27,434 | ||||||||||||||
Provision for credit losses | 450 | 50 | 400 | 500 | 400 | ||||||||||||||
Net interest income after provision for credit losses | 11,236 | 12,745 | 13,867 | 23,981 | 27,034 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Service charges on deposit accounts | 488 | 485 | 482 | 973 | 970 | ||||||||||||||
Interchange income | 591 | 551 | 614 | 1,142 | 1,163 | ||||||||||||||
Loan servicing income | 499 | 569 | 600 | 1,068 | 1,301 | ||||||||||||||
Gain on sale of loans | 904 | 298 | 414 | 1,202 | 1,136 | ||||||||||||||
Loan fees and service charges | 88 | 80 | 141 | 168 | 233 | ||||||||||||||
Net gains (losses) on investment securities | 10 | 56 | (75 | ) | 66 | (112 | ) | ||||||||||||
Other | 333 | 253 | 196 | 586 | 394 | ||||||||||||||
Total non-interest income | 2,913 | 2,292 | 2,372 | 5,205 | 5,085 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Compensation and related benefits | 5,336 | 5,338 | 5,589 | 10,674 | 10,987 | ||||||||||||||
Occupancy | 1,359 | 1,423 | 1,343 | 2,782 | 2,708 | ||||||||||||||
Data processing | 1,444 | 1,460 | 1,415 | 2,904 | 2,716 | ||||||||||||||
Amortization of intangible assets | 193 | 204 | 399 | 397 | 798 | ||||||||||||||
Mortgage servicing rights expense, net | 148 | 158 | 195 | 306 | (132 | ) | |||||||||||||
Advertising, marketing and public relations | 151 | 136 | 250 | 287 | 462 | ||||||||||||||
203 | 201 | 118 | 404 | 233 | |||||||||||||||
Professional services | 306 | 505 | 368 | 811 | 770 | ||||||||||||||
Gains on repossessed assets, net | (9 | ) | (29 | ) | (2 | ) | (38 | ) | (9 | ) | |||||||||
New market tax credit depletion | — | — | 162 | — | 325 | ||||||||||||||
Other | 715 | 725 | 625 | 1,440 | 1,272 | ||||||||||||||
Total non-interest expense | 9,846 | 10,121 | 10,462 | 19,967 | 20,130 | ||||||||||||||
Income before provision for income taxes | 4,303 | 4,916 | 5,777 | 9,219 | 11,989 | ||||||||||||||
Provision for income taxes | 1,097 | 1,254 | 1,411 | 2,351 | 2,917 | ||||||||||||||
Net income attributable to common stockholders | $ | 3,206 | $ | 3,662 | $ | 4,366 | $ | 6,868 | $ | 9,072 | |||||||||
Per share information: | |||||||||||||||||||
Basic earnings | $ | 0.31 | $ | 0.35 | $ | 0.41 | $ | 0.66 | $ | 0.86 | |||||||||
Diluted earnings | $ | 0.31 | $ | 0.35 | $ | 0.41 | $ | 0.66 | $ | 0.86 | |||||||||
Cash dividends paid | $ | — | $ | 0.29 | $ | — | $ | 0.29 | $ | 0.26 | |||||||||
Book value per share at end of period | $ | 15.81 | $ | 15.70 | $ | 15.64 | $ | 15.81 | $ | 15.64 | |||||||||
Tangible book value per share at end of period (non-GAAP) | $ | 12.61 | $ | 12.48 | $ | 12.36 | $ | 12.61 | $ | 12.36 |
Note: Certain items previously reported were reclassified for consistency with the current presentation.
Loan Composition
(in thousands)
Total Loans: | |||||||||||||||
Commercial/Agricultural real estate: | |||||||||||||||
Commercial real estate | $ | 732,435 | $ | 726,748 | $ | 725,971 | $ | 702,917 | |||||||
Agricultural real estate | 87,198 | 90,958 | 87,908 | 77,807 | |||||||||||
Multi-family real estate | 208,211 | 207,786 | 208,908 | 179,929 | |||||||||||
Construction and land development | 105,625 | 114,951 | 102,492 | 115,188 | |||||||||||
C&I/Agricultural operating: | |||||||||||||||
Commercial and industrial | 133,763 | 130,943 | 136,013 | 139,002 | |||||||||||
Agricultural operating | 24,358 | 24,146 | 28,806 | 24,469 | |||||||||||
Residential mortgage: | |||||||||||||||
Residential mortgage | 119,724 | 110,379 | 105,389 | 88,575 | |||||||||||
Purchased HELOC loans | 3,216 | 3,206 | 3,262 | 3,419 | |||||||||||
Consumer installment: | |||||||||||||||
Originated indirect paper | 8,189 | 9,314 | 10,236 | 12,736 | |||||||||||
Other consumer | 6,487 | 6,728 | 7,150 | 7,785 | |||||||||||
Gross loans | $ | 1,429,206 | $ | 1,425,159 | $ | 1,416,135 | $ | 1,351,827 | |||||||
Unearned net deferred fees and costs and loans in process | (2,827 | ) | (2,689 | ) | (2,585 | ) | (2,338 | ) | |||||||
Unamortized discount on acquired loans | (1,391 | ) | (1,515 | ) | (1,766 | ) | (2,634 | ) | |||||||
Total loans receivable | $ | 1,424,988 | $ | 1,420,955 | $ | 1,411,784 | $ | 1,346,855 |
Nonperforming Assets
(in thousands, except ratios)
Nonperforming assets: | |||||||||||||||
Nonaccrual loans | |||||||||||||||
Commercial real estate | $ | 11,359 | $ | 5,514 | $ | 5,736 | $ | 5,275 | |||||||
Agricultural real estate | 1,712 | 2,496 | 2,742 | 3,169 | |||||||||||
Construction and land development | 94 | — | — | 43 | |||||||||||
Commercial and industrial (“C&I”) | 4 | 452 | 552 | 211 | |||||||||||
Agricultural operating | 1,436 | 794 | 890 | 555 | |||||||||||
Residential mortgage | 1,029 | 1,131 | 1,253 | 1,122 | |||||||||||
Consumer installment | 29 | 23 | 31 | 59 | |||||||||||
Total nonaccrual loans | $ | 15,663 | $ | 10,410 | $ | 11,204 | $ | 10,434 | |||||||
Accruing loans past due 90 days or more | 492 | 224 | 246 | 714 | |||||||||||
Total nonperforming loans (“NPLs”) | 16,155 | 10,634 | 11,450 | 11,148 | |||||||||||
Foreclosed and repossessed assets, net | 1,199 | 1,113 | 1,271 | 1,437 | |||||||||||
Total nonperforming assets (“NPAs”) | $ | 17,354 | $ | 11,747 | $ | 12,721 | $ | 12,585 | |||||||
Loans, end of period | $ | 1,424,988 | $ | 1,420,955 | $ | 1,411,784 | $ | 1,346,855 | |||||||
Total assets, end of period | $ | 1,829,837 | $ | 1,860,720 | $ | 1,816,386 | $ | 1,763,607 | |||||||
Ratios: | |||||||||||||||
NPLs to total loans | 1.13 | % | 0.75 | % | 0.81 | % | 0.83 | % | |||||||
NPAs to total assets | 0.95 | % | 0.63 | % | 0.70 | % | 0.71 | % |
(1) Loan balances are at amortized cost.
Average Balances, Interest Yields and Rates
(in thousands, except yields and rates)
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Yield/ Rate (1) | Average Balance | Interest Income/ Expense | Average Yield/ Rate (1) | Average Balance | Interest Income/ Expense | Average Yield/ Rate (1) | ||||||||||||||||||
Average interest earning assets: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 24,779 | $ | 327 | 5.29 | % | $ | 18,270 | $ | 140 | 3.11 | % | $ | 25,195 | $ | 43 | 0.68 | % | ||||||||
Loans receivable | 1,414,925 | 17,960 | 5.09 | % | 1,412,409 | 17,126 | 4.92 | % | 1,328,661 | 14,893 | 4.50 | % | ||||||||||||||
Interest bearing deposits | 5 | — | — | % | 249 | 1 | 1.63 | % | 1,509 | 8 | 2.13 | % | ||||||||||||||
Investment securities (1) | 264,579 | 2,210 | 3.34 | % | 270,174 | 2,175 | 3.22 | % | 285,332 | 1,593 | 2.23 | % | ||||||||||||||
Other investments | 17,491 | 280 | 6.42 | % | 16,663 | 231 | 5.62 | % | 14,969 | 166 | 4.45 | % | ||||||||||||||
Total interest earning assets (1) | $ | 1,721,779 | $ | 20,777 | 4.84 | % | $ | 1,717,765 | $ | 19,673 | 4.64 | % | $ | 1,655,666 | $ | 16,703 | 4.05 | % | ||||||||
Average interest bearing liabilities: | ||||||||||||||||||||||||||
Savings accounts | $ | 209,277 | $ | 393 | 0.75 | % | $ | 216,169 | $ | 382 | 0.72 | % | $ | 241,245 | $ | 131 | 0.22 | % | ||||||||
Demand deposits | 366,037 | 1,752 | 1.92 | % | 391,635 | 1,432 | 1.48 | % | 410,468 | 257 | 0.25 | % | ||||||||||||||
Money market accounts | 299,201 | 1,774 | 2.38 | % | 301,710 | 1,096 | 1.47 | % | 323,907 | 277 | 0.34 | % | ||||||||||||||
CD’s | 293,262 | 2,243 | 3.07 | % | 255,567 | 1,438 | 2.28 | % | 159,578 | 320 | 0.80 | % | ||||||||||||||
Total deposits | $ | 1,167,777 | $ | 6,162 | 2.12 | % | $ | 1,165,081 | $ | 4,348 | 1.51 | % | $ | 1,135,198 | $ | 985 | 0.35 | % | ||||||||
FHLB advances and other borrowings | 238,776 | 2,929 | 4.92 | % | 232,166 | 2,530 | 4.42 | % | 186,050 | 1,451 | 3.13 | % | ||||||||||||||
Total interest bearing liabilities | $ | 1,406,553 | $ | 9,091 | 2.59 | % | $ | 1,397,247 | $ | 6,878 | 2.00 | % | $ | 1,321,248 | $ | 2,436 | 0.74 | % | ||||||||
Net interest income | $ | 11,686 | $ | 12,795 | $ | 14,267 | ||||||||||||||||||||
Interest rate spread | 2.25 | % | 2.64 | % | 3.31 | % | ||||||||||||||||||||
Net interest margin (1) | 2.72 | % | 3.02 | % | 3.46 | % | ||||||||||||||||||||
Average interest earning assets to average interest bearing liabilities | 1.22 | 1.23 | 1.25 |
(1) Fully taxable equivalent (FTE). The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21% for the quarters ended
Six Months Ended | Six Months Ended | ||||||||||||||||
Average Balance | Interest Income/ Expense | Average Yield/ Rate (1) | Average Balance | Interest Income/ Expense | Average Yield/ Rate (1) | ||||||||||||
Average interest earning assets: | |||||||||||||||||
Cash and cash equivalents | $ | 17,931 | $ | 467 | 5.25 | % | $ | 30,174 | $ | 56 | 0.37 | % | |||||
Loans receivable | 1,412,870 | 35,086 | 5.01 | % | 1,316,469 | 28,660 | 4.39 | % | |||||||||
Interest bearing deposits | 126 | 1 | 1.60 | % | 1,510 | 15 | 2.00 | % | |||||||||
Investment securities (1) | 266,224 | 4,385 | 3.32 | % | 286,789 | 3,009 | 2.10 | % | |||||||||
Other investments | 16,923 | 511 | 6.09 | % | 15,112 | 339 | 4.52 | % | |||||||||
Total interest earning assets (1) | $ | 1,714,074 | $ | 40,450 | 4.76 | % | $ | 1,650,054 | $ | 32,079 | 3.92 | % | |||||
Average interest bearing liabilities: | |||||||||||||||||
Savings accounts | $ | 213,106 | $ | 776 | 0.73 | % | $ | 237,464 | $ | 231 | 0.20 | % | |||||
Demand deposits | 378,450 | 3,183 | 1.70 | % | 410,678 | 470 | 0.23 | % | |||||||||
Money market accounts | 299,393 | 2,870 | 1.93 | % | 311,524 | 492 | 0.32 | % | |||||||||
CD’s | 270,819 | 3,681 | 2.74 | % | 174,300 | 860 | 0.99 | % | |||||||||
Total deposits | $ | 1,161,768 | $ | 10,510 | 1.82 | % | $ | 1,133,966 | $ | 2,053 | 0.37 | % | |||||
FHLB advances and other borrowings | 229,825 | 5,459 | 4.79 | % | 176,139 | 2,592 | 2.97 | % | |||||||||
Total interest bearing liabilities | $ | 1,391,593 | $ | 15,969 | 2.31 | % | $ | 1,310,105 | $ | 4,645 | 0.71 | % | |||||
Net interest income | $ | 24,481 | $ | 27,434 | |||||||||||||
Interest rate spread | 2.45 | % | 3.21 | % | |||||||||||||
Net interest margin (1) | 2.88 | % | 3.35 | % | |||||||||||||
Average interest earning assets to average interest bearing liabilities | 1.23 | 1.26 |
(1) Fully taxable equivalent (FTE). The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21% for the six months
Key Financial Metric Ratios:
Three Months Ended | Six Months Ended | |||||||||||||
Ratios based on net income: | ||||||||||||||
Return on average assets (annualized) | 0.70 | % | 0.81 | % | 0.99 | % | 0.76 | % | 1.04 | % | ||||
Return on average equity (annualized) | 7.81 | % | 9.03 | % | 10.63 | % | 8.42 | % | 11.00 | % | ||||
Return on average tangible common equity4 (annualized) | 10.26 | % | 11.85 | % | 14.41 | % | 11.05 | % | 14.85 | % | ||||
Efficiency ratio | 66 | % | 66 | % | 60 | % | 66 | % | 59 | % | ||||
Net interest margin with loan purchase accretion | 2.72 | % | 3.02 | % | 3.46 | % | 2.88 | % | 3.35 | % | ||||
Net interest margin without loan purchase accretion | 2.69 | % | 2.99 | % | 3.30 | % | 2.85 | % | 3.24 | % |
Reconciliation of Return on Average Assets
(in thousands, except ratios)
Three Months Ended | Six Months Ended | ||||||||||||||||||
GAAP earnings after income taxes | $ | 3,206 | $ | 3,662 | $ | 4,366 | $ | 6,868 | $ | 9,072 | |||||||||
Average assets | $ | 1,844,196 | $ | 1,823,748 | $ | 1,764,517 | $ | 1,830,150 | $ | 1,754,722 | |||||||||
Return on average assets (annualized) | 0.70 | % | 0.81 | % | 0.99 | % | 0.76 | % | 1.04 | % |
Reconciliation of Return on Average Equity
(in thousands, except ratios)
Three Months Ended | Six Months Ended | ||||||||||||||||||
GAAP earnings after income taxes | $ | 3,206 | $ | 3,662 | $ | 4,366 | $ | 6,868 | $ | 9,072 | |||||||||
Average equity | $ | 164,661 | $ | 164,426 | $ | 164,737 | $ | 164,541 | $ | 166,348 | |||||||||
Return on average equity (annualized) | 7.81 | % | 9.03 | % | 10.63 | % | 8.42 | % | 11.00 | % |
Reconciliation of Efficiency Ratio
(in thousands, except ratios)
Three Months Ended | Six Months Ended | ||||||||||||||||||
Non-interest expense (GAAP) | $ | 9,846 | $ | 10,121 | $ | 10,462 | $ | 19,967 | $ | 20,130 | |||||||||
Less amortization of intangibles | (193 | ) | (204 | ) | (399 | ) | (397 | ) | (798 | ) | |||||||||
Efficiency ratio numerator (GAAP) | $ | 9,653 | $ | 9,917 | $ | 10,063 | $ | 19,570 | $ | 19,332 | |||||||||
Non-interest income | $ | 2,913 | $ | 2,292 | $ | 2,372 | $ | 5,205 | $ | 5,085 | |||||||||
Loss (Gain) on investment securities | (10 | ) | (56 | ) | 75 | (66 | ) | 112 | |||||||||||
Net interest margin | 11,686 | 12,795 | 14,267 | 24,481 | 27,434 | ||||||||||||||
Efficiency ratio denominator (GAAP) | $ | 14,589 | $ | 15,031 | $ | 16,714 | $ | 29,620 | $ | 32,631 | |||||||||
Efficiency ratio (GAAP) | 66 | % | 66 | % | 60 | % | 66 | % | 59 | % |
Reconciliation of tangible book value per share (non-GAAP)
(in thousands, except per share data)
Tangible book value per share at end of period | |||||||||||||||
Total stockholders’ equity | $ | 165,558 | $ | 164,561 | $ | 167,088 | $ | 164,743 | |||||||
Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | |||||||
Less: Intangible assets | (2,052 | ) | (2,245 | ) | (2,449 | ) | (3,100 | ) | |||||||
Tangible common equity (non-GAAP) | $ | 132,008 | $ | 130,818 | $ | 133,141 | $ | 130,145 | |||||||
Ending common shares outstanding | 10,470,175 | 10,482,821 | 10,425,119 | 10,530,415 | |||||||||||
Book value per share | $ | 15.81 | $ | 15.70 | $ | 16.03 | $ | 15.64 | |||||||
Tangible book value per share (non-GAAP) | $ | 12.61 | $ | 12.48 | $ | 12.77 | $ | 12.36 |
Reconciliation of tangible common equity as a percent of tangible assets (non-GAAP)
(in thousands, except ratios)
Tangible common equity as a percent of tangible assets at end of period | |||||||||||||||
Total stockholders’ equity | $ | 165,558 | $ | 164,561 | $ | 167,088 | $ | 164,743 | |||||||
Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | |||||||
Less: Intangible assets | (2,052 | ) | (2,245 | ) | (2,449 | ) | (3,100 | ) | |||||||
Tangible common equity (non-GAAP) | $ | 132,008 | $ | 130,818 | $ | 133,141 | $ | 130,145 | |||||||
Total Assets | $ | 1,829,837 | $ | 1,860,720 | $ | 1,816,386 | $ | 1,763,607 | |||||||
Less: | (31,498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | |||||||
Less: Intangible assets | (2,052 | ) | (2,245 | ) | (2,449 | ) | (3,100 | ) | |||||||
Tangible Assets (non-GAAP) | $ | 1,796,287 | $ | 1,826,977 | $ | 1,782,439 | $ | 1,729,009 | |||||||
Total stockholders’ equity to total assets ratio | 9.05 | % | 8.84 | % | 9.20 | % | 9.34 | % | |||||||
Tangible common equity as a percent of tangible assets (non-GAAP) | 7.35 | % | 7.16 | % | 7.47 | % | 7.53 | % |
Reconciliation of Return on Average Tangible Common Equity (non-GAAP)
(in thousands, except ratios)
Three Months Ended | Six Months Ended | ||||||||||||||||||
Total stockholders’ equity | $ | 165,558 | $ | 164.561 | $ | 164,743 | $ | 165,558 | $ | 164,743 | |||||||||
Less: | (31,498 | ) | (31.498 | ) | (31,498 | ) | (31,498 | ) | (31,498 | ) | |||||||||
Less: Intangible assets | (2,052 | ) | (2.245 | ) | (3,100 | ) | (2,052 | ) | (3,100 | ) | |||||||||
Tangible common equity (non-GAAP) | $ | 132,008 | $ | 130.818 | $ | 130,145 | $ | 132,008 | $ | 130,145 | |||||||||
Average tangible common equity (non-GAAP) | $ | 131,016 | $ | 130,582 | $ | 129,939 | $ | 130,796 | $ | 131,351 | |||||||||
GAAP earnings after income taxes | 3,206 | 3,662 | 4,366 | $ | 6,868 | $ | 9,072 | ||||||||||||
Amortization of intangible assets, net of tax | 144 | 152 | 302 | 296 | 604 | ||||||||||||||
Tangible net income | $ | 3,350 | $ | 3,814 | $ | 4,668 | $ | 7,164 | $ | 9,676 | |||||||||
Return on average tangible common equity (annualized) | 10.26 | % | 11.85 | % | 14.41 | % | 11.05 | % | 14.85 | % |
Tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on tangible common equity are non-GAAP measures that management believes enhances investors’ ability to better understand the Company’s financial position. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of tangible book value per share (non-GAAP)”, “Reconciliation of tangible common equity as a percent of tangible assets (non-GAAP)”, and “Reconciliation of return on average tangible common equity)”.
Source:
2023 GlobeNewswire, Inc., source