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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

First Savings Financial Group, Inc. Reports Financial Results for the First Fiscal Quarter Ended December 31, 2019

February 6, 2020 GMT

CLARKSVILLE, Ind., Feb. 05, 2020 (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 $3.4 million, or $1.44 per diluted share, for the quarter ended December 31, 2019 compared to net income of $2.9 million, or $1.24 per diluted share, for the quarter ended December 31, 2018, resulting in an increase of 16.1% on a per share basis.

Net interest income increased $1.3 million, or 13.7%, to $10.9 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018. The increase in net interest income was due to a $2.0 million increase in interest income, which was partially offset by a $650,000 increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $176.0 million, from $989.8 million for 2018 to $1.17 billion for 2019, partially offset by a decrease in the weighted average tax-equivalent yield, from 4.88% for 2018 to 4.82% for 2019. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $158.0 million, from $777.1 million for 2018 to $935.1 million for 2019, and an increase in the average cost of interest-bearing liabilities, from 1.15% for 2018 to 1.23% for 2019. The increase in the average cost of interest-bearing liabilities for 2019 was due primarily to increasing market interest rates on deposits including brokered deposits. Additional details are included in the “Summarized Consolidated Average Balance Sheets” table at the end of this release.

The Company recognized $505,000 in provision for loan losses for the quarter ended December 31, 2019, compared to $315,000 in provision for loan losses recognized in 2018. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $328,000, from $5.2 million at September 30, 2019 to $5.5 million at December 31, 2019. The Company recognized net charge-offs of $15,000 for the quarter ended December 31, 2019 compared to $18,000 for the same quarter in 2018.

Noninterest income increased $12.3 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018. The increase was due primarily to an increase in mortgage banking income of $12.5 million partially offset by a decrease in the net gain on sale of loans guaranteed by the SBA of $203,000. The increase in mortgage banking income is due to production from the secondary-market residential mortgage lending segment that commenced operations in April 2018. The Bank’s SBA lending activities are performed under Q2 Business Capital, LLC (“Q2”), which specializes in the origination and servicing of SBA loans. The Bank owns 51% of Q2 with the option to purchase the minority interest in September 2020. Gross revenues and expenses related to Q2 are reported in the consolidated statements of income, and the net income or net loss attributable to noncontrolling interests is then subtracted from (in the case of net income) or added to (in the case of net loss) net income to arrive at net income attributable to the Company. Additional details regarding the financial performance of the mortgage banking and SBA lending segments are included in the “Segmented Statements of Income Information” table at the end of this release.

Noninterest expense increased $12.9 million for the quarter ended December 31, 2019 as compared to the same quarter in 2018. The increase was due primarily to increases in compensation and benefits, advertising, and occupancy and equipment expense of $10.6 million, $1.1 million and $597,000, respectively. The increase in compensation and benefits expense is attributable to the addition of new employees to support the growth of the Company, primarily its mortgage banking and SBA lending activities, and normal salary and benefits adjustments. The increase in advertising is primarily due to the mortgage banking segment. The increase in occupancy and equipment expense is primarily attributable to increases in lease and rental, depreciation and equipment, and software licensing expenses that are all primarily related to the mortgage banking segment.

The Company recognized income tax expense of $638,000 for the quarter ended December 31, 2019, for an effective tax rate of 15.0%, as compared to income tax expense of $522,000, for an effective tax rate of 14.4%, for 2018. The increase in the effective tax rate for 2019 compared to 2018 is primarily due to an increase in taxable income and a decrease in bond tax credits.

Comparison of Financial Condition at December 31, 2019 and September 30, 2019

Total assets increased $70.0 million, from $1.22 billion at September 30, 2019 to $1.29 billion at December 31, 2019. Net loans increased $41.0 million during the quarter ended December 31, 2019, due primarily to continued growth in the commercial real estate and SBA loan portfolios. Residential mortgage loans held for sale also increased by $13.1 million during the quarter ended December 31, 2019 due to increased production from the mortgage banking segment. Total liabilities increased $67.1 million primarily due to a $51.2 million increase in total deposits and a $17.0 million increase in Federal Home Loan Bank borrowings.

Common stockholders’ equity increased $2.7 million, from $121.1 million at September 30, 2019 to $123.8 million at December 31, 2019, due primarily to retained net income of $3.2 million. At December 31, 2019 and September 30, 2019, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

Prior Period Restatement

On November 19, 2019, the Company filed with the Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K to report the Company’s conclusion that its interim consolidated financial statements, and related notes, contained in its Form 10-Q for the period ended June 30, 2019 should no longer be relied upon. The accounting matters underlying this conclusion relate primarily to significant accounting assumptions used in the fair value calculations for interest rate lock commitments and mortgage loans held-for-sale relating to the Company’s mortgage banking operations segment and unrecognized accruals for incentive compensation related to such segment. On December 4, 2019, the Company filed with the SEC an amended Form 10-Q for the period ended June 30, 2019, containing restated interim consolidated financial statements, and related noted, for the period then ended. All financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated accordingly.

First Savings Bank has fifteen offices in the Indiana communities of Clarksville, Jeffersonville, Charlestown, Sellersburg, New Albany, Georgetown, Corydon, Lanesville, Elizabeth, English, Marengo, Salem, Odon and Montgomery. Access to First Savings Bank accounts, including online banking and electronic bill payments, is available anywhere with Internet access through the Bank’s website at www.fsbbank.net.

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

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and 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, CPAChief Financial Officer812-283-0724

FIRST SAVINGS FINANCIAL GROUP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) Three Months Ended December 31, ---------------------------- OPERATING DATA: 2019 2018 ------------- ------------- (In thousands, except share and per share data) Total interest income $ 13,767 $ 11,801 Total interest expense 2,875 2,225 - --------- - - --------- - Net interest income 10,892 9,576 Provision for loan losses 505 315 - --------- - - --------- - Net interest income after provision 10,387 9,261 for loan losses Total noninterest income 18,126 5,781 Total noninterest expense 24,272 11,416 - --------- - - --------- - Income before income taxes 4,241 3,626 Income tax expense 638 522 - --------- - - --------- - Net income 3,603 3,104 Less: Net income attributable to 164 173 noncontrolling interests - --------- - - --------- - Net income attributable to the $ 3,439 $ 2,931 Company - --------- - - --------- - Net income per share, basic $ 1.47 $ 1.28 - --------- - - --------- - Weighted average shares outstanding, 2,340,619 2,284,665 basic Net income per share, diluted $ 1.44 $ 1.24 - --------- - - --------- - Weighted average shares outstanding, 2,382,754 2,371,480 diluted Performance ratios (three-month data annualized) Return on average assets 1.09 % 1.11 % Return on average common 11.24 % 11.82 % stockholders’ equity Interest rate spread 3.59 % 3.73 % Net interest margin 3.83 % 3.98 % Efficiency ratio 83.64 % 74.34 % December 31, September 30, Increase FINANCIAL CONDITION DATA: 2019 2019 (Decrease) ------------- ------------- ------------- (In thousands, except per share data) Total assets $ 1,292,573 $ 1,222,579 $ 69,994 Cash and cash equivalents 41,327 41,432 (105 ) Investment securities 179,991 179,638 353 Loans held for sale 110,523 96,070 14,453 Gross loans 862,230 820,698 41,532 Allowance for loan losses 10,530 10,040 490 Interest earning assets 1,186,149 1,130,095 56,054 Goodwill 9,848 9,848 - Core deposit intangibles 1,362 1,416 (54 ) Noninterest-bearing deposits 180,321 173,072 7,249 Interest-bearing deposits 705,277 661,312 43,965 FHLB borrowings 239,566 222,544 17,022 Total liabilities 1,168,395 1,101,322 67,073 Stockholders’ equity, net of 123,810 121,053 2,757 noncontrolling interests Book value per share $ 52.52 $ 51.51 $ 1.01 Tangible book value per share (1) 47.77 46.71 1.05 Non-performing assets: Nonaccrual loans $ 5,498 $ 5,168 $ 330 Accruing loans past due 90 days 10 12 (2 ) - --------- - - --------- - - --------- - Total non-performing loans 5,508 5,180 328 Foreclosed real estate - 55 (55 ) Troubled debt restructurings 7,332 7,265 67 classified as performing loans - --------- - - --------- - - --------- - Total non-performing assets $ 12,840 $ 12,500 $ 340 - --------- - - --------- - - --------- - Asset quality ratios: Allowance for loan losses as a 1.22 % 1.22 % 0.00 % percent of total gross loans Allowance for loan losses as a 191.18 % 193.82 % -2.65 % percent of nonperforming loans Nonperforming loans as a percent of 0.64 % 0.63 % 0.01 % total gross loans Nonperforming assets as a percent of 0.99 % 1.02 % -0.03 % total assets (1) See reconciliation of GAAP and Non-GAAP financial measures for additional information relating to calculation of this item RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED): The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company’s performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures. December 31, September 30, Tangible Book Value Per Share 2019 2019 ------------- ------------- (In thousands, except share and per share data) Stockholders’ equity, net of $ 123,810 $ 121,053 noncontrolling interests (GAAP) Less: goodwill and core deposit (11,210 ) (11,264 ) intangibles - --------- - - --------- - Tangible equity (non-GAAP) $ 112,600 $ 109,789 - --------- - - --------- - Outstanding common shares 2,357,369 2,350,229 Tangible book value per share $ 47.77 $ 46.71 (non-GAAP) - --------- - - --------- - Book value per share (GAAP) $ 52.52 $ 51.51 - --------- - - --------- - SUMMARIZED FINANCIAL INFORMATION (UNAUDITED): As of ------------------------------------------------------------------------- Summarized Consolidated Balance December 31, September 30, June 30, March 31, December 31, Sheets (In thousands, except per share 2019 2019 2019 2019 2018 data) ------------- ------------- ------------- ------------- ------------- Total cash and cash equivalents $ 41,327 $ 41,432 $ 65,105 $ 40,442 $ 36,344 Total investment securities 179,991 179,638 182,421 193,547 188,830 Total loans, net of allowance for 851,700 810,658 796,994 762,661 734,061 loan losses Total assets 1,292,573 1,222,579 1,228,953 1,129,722 1,073,989 Total deposits 885,598 834,384 888,145 824,770 832,073 Total borrowings from the Federal 239,566 222,544 189,255 160,938 107,019 Home Loan Bank Stockholders’ equity, net of 123,810 121,053 114,971 108,688 102,968 noncontrolling interests Noncontrolling interests in 368 204 176 1,241 1,593 subsidiary Total equity 124,178 121,257 115,147 109,929 104,561 Outstanding common shares 2,357,369 2,350,229 2,350,229 2,344,836 2,304,310 Three Months Ended ------------------------------------------------------------------------- Summarized Consolidated Statements December 31, September 30, June 30, March 31, December 31, of Income (In thousands, except per share 2019 2019 2019 2019 2018 data) ------------- ------------- ------------- ------------- ------------- Total interest income $ 13,767 $ 13,829 $ 13,058 $ 12,307 $ 11,801 Total interest expense 2,875 3,069 3,166 2,446 2,225 - --------- - - --------- - - --------- - - --------- - - --------- - Net interest income 10,892 10,760 9,892 9,861 9,576 Provision for loan losses 505 471 337 340 315 - --------- - - --------- - - --------- - - --------- - - --------- - Net interest income after provision 10,387 10,289 9,555 9,521 9,261 for loan losses Total noninterest income 18,126 18,340 12,644 7,089 5,781 Total noninterest expense 24,272 21,606 16,488 12,880 11,416 - --------- - - --------- - - --------- - - --------- - - --------- - Income before income taxes 4,241 7,023 5,711 3,730 3,626 Income tax expense 638 1,359 748 466 522 - --------- - - --------- - - --------- - - --------- - - --------- - Net income 3,603 5,664 4,963 3,264 3,104 Less: net income (loss) attributable 164 343 571 (269 ) 173 to noncontrolling interests - --------- - - --------- - - --------- - - --------- - - --------- - Net income attributable to the $ 3,439 $ 5,321 $ 4,392 $ 3,533 $ 2,931 Company - --------- - - --------- - - --------- - - --------- - - --------- - Net income per share, basic $ 1.47 $ 2.28 $ 1.88 $ 1.53 $ 1.28 - --------- - - --------- - - --------- - - --------- - - --------- - Weighted average shares outstanding, 2,340,619 2,337,472 2,333,502 2,307,155 2,284,665 basic Net income per share, diluted $ 1.44 $ 2.24 $ 1.85 $ 1.50 $ 1.24 - --------- - - --------- - - --------- - - --------- - - --------- - Weighted average shares outstanding, 2,382,754 2,378,221 2,373,578 2,360,004 2,371,480 diluted ------------------------------------ As previously discussed, financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated. Three Months Ended ------------------------------------------------------------------------- December 31, September 30, June 30, March 31, December 31, Consolidated Performance Ratios 2019 2019 2019 2019 2018 (Annualized) ------------- ------------- ------------- ------------- ------------- Return on average assets 1.09 % 1.75 % 1.50 % 1.28 % 1.11 % Return on average equity 11.76 % 19.28 % 17.95 % 12.34 % 12.35 % Return on average common 11.24 % 18.12 % 15.90 % 13.55 % 11.82 % stockholders’ equity Net interest margin (tax equlivalent 3.83 % 3.92 % 3.72 % 3.92 % 3.98 % basis) Efficiency ratio 83.64 % 74.25 % 73.16 % 75.99 % 74.34 % As of or for the Three Months Ended ------------------------------------------------------------------------- December 31, September 30, June 30, March 31, December 31, Consolidated Asset Quality Ratios 2019 2019 2019 2019 2018 ------------- ------------- ------------- ------------- ------------- Nonperforming loans as a percentage 0.64 % 0.63 % 0.63 % 0.70 % 0.62 % of total loans Nonperforming assets as a percentage 1.00 % 1.02 % 1.09 % 1.23 % 1.28 % of total assets Allowance for loan losses as a 1.22 % 1.22 % 1.19 % 1.29 % 1.29 % percentage of total loans Allowance for loan losses as a 191.18 % 193.82 % 188.29 % 184.96 % 208.77 % percentage of nonperforming loans Net charge-offs (recoveries) to 0.00 % 0.01 % 0.08 % 0.00 % 0.00 % average outstanding loans SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended ------------------------------------------------------------------------- Segmented Statements of Income December 31, September 30, June 30, March 31, December 31, Information (In thousands, except per share 2019 2019 2019 2019 2018 data) ------------- ------------- ------------- ------------- ------------- Net interest income - Core Banking $ 9,188 $ 9,178 $ 8,739 $ 8,817 $ 8,574 Net interest income - SBA Lending 1,217 1,237 1,066 934 908 (Q2) Net interest income - Mortgage 487 345 87 110 94 Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total net interest income $ 10,892 $ 10,760 $ 9,892 $ 9,861 $ 9,576 - --------- - - --------- - - --------- - - --------- - - --------- - Provision for loan losses - Core $ 520 $ 104 $ 162 $ (492 ) $ (16 ) Banking Provision for loan losses - SBA (15 ) 367 175 832 331 Lending (Q2) Provision for loan losses - Mortgage - - - - - Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total provision for loan losses $ 505 $ 471 $ 337 $ 340 $ 315 - --------- - - --------- - - --------- - - --------- - - --------- - Net interest income after provision $ 8,668 $ 9,074 $ 8,577 $ 9,309 $ 8,590 for loan losses - Core Banking Net interest income after provision 1,232 870 891 102 577 for loan losses - SBA Lending (Q2) Net interest income after provision 487 345 87 110 94 for loan losses - Mortgage Banking Total net interest income after $ 10,387 $ 10,289 $ 9,555 $ 9,521 $ 9,261 provision for loan losses - --------- - - --------- - - --------- - - --------- - - --------- - Noninterest income - Core Banking $ 1,391 $ 1,582 $ 1,351 $ 1,337 $ 1,380 Noninterest income - SBA Lending 929 1,715 1,658 673 1,137 (Q2) Noninterest income - Mortgage 15,806 15,043 9,635 5,079 3,264 Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total noninterest income $ 18,126 $ 18,340 $ 12,644 $ 7,089 $ 5,781 - --------- - - --------- - - --------- - - --------- - - --------- - Noninterest expense - Core Banking $ 7,545 $ 7,521 $ 7,576 $ 6,995 $ 6,586 Noninterest expense - SBA Lending 1,825 1,883 1,385 1,322 1,362 (Q2) Noninterest expense - Mortgage 14,902 12,202 7,527 4,563 3,468 Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total noninterest expense $ 24,272 $ 21,606 $ 16,488 $ 12,880 $ 11,416 - --------- - - --------- - - --------- - - --------- - - --------- - Income before income taxes - Core $ 2,514 $ 3,135 $ 2,352 $ 3,651 $ 3,384 Banking Income (loss) before income taxes - 336 702 1,164 (547 ) 352 SBA Lending (Q2) Income (loss) before income taxes - 1,391 3,186 2,195 626 (110 ) Mortgage Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total income before income taxes $ 4,241 $ 7,023 $ 5,711 $ 3,730 $ 3,626 - --------- - - --------- - - --------- - - --------- - - --------- - Income tax expense (benefit) - Core $ 247 472 51 379 505 Banking Income tax expense (benefit) - SBA 43 90 148 (70 ) 45 Lending (Q2) Income tax expense (benefit) - 348 797 549 157 (28 ) Mortgage Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total income tax expense $ 638 $ 1,359 $ 748 $ 466 $ 522 - --------- - - --------- - - --------- - - --------- - - --------- - Net income - Core Banking $ 2,267 $ 2,663 $ 2,301 $ 3,272 $ 2,879 Net income (loss) - SBA Lending (Q2) 293 612 1,016 (477 ) 307 Net income (loss) - Mortgage Banking 1,043 2,389 1,646 469 (82 ) - --------- - - --------- - - --------- - - --------- - - --------- - Total net income $ 3,603 $ 5,664 $ 4,963 $ 3,264 $ 3,104 - --------- - - --------- - - --------- - - --------- - - --------- - Net income attributable to the $ 2,267 $ 2,663 $ 2,301 $ 3,272 $ 2,879 Company - Core Banking Net income (loss) attributable to 129 269 445 (208 ) 134 the Company - SBA Lending (Q2) Net income (loss) attributable to 1,043 2,389 1,646 469 (82 ) the Company - Mortgage Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total net income attributable to the $ 3,439 $ 5,321 $ 4,392 $ 3,533 $ 2,931 Company - --------- - - --------- - - --------- - - --------- - - --------- - Net income per share, basic - Core $ 0.96 $ 1.14 $ 0.98 $ 1.42 $ 1.26 Banking Net income (loss) per share, basic - 0.06 0.12 0.19 (0.09 ) 0.06 SBA Lending (Q2) Net income (loss) per share, basic - 0.45 1.02 0.71 0.20 (0.04 ) Mortgage Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total net income per share, basic $ 1.47 $ 2.28 $ 1.88 $ 1.53 $ 1.28 - --------- - - --------- - - --------- - - --------- - - --------- - Net income per share, diluted - Core $ 0.95 $ 1.13 $ 0.97 $ 1.39 $ 1.21 Banking Net income (loss) per share, diluted 0.05 0.11 0.19 (0.09 ) 0.06 - SBA Lending (Q2) Net income (loss) per share, diluted 0.44 1.00 0.69 0.20 (0.03 ) - Mortgage Banking - --------- - - --------- - - --------- - - --------- - - --------- - Total net income per share, diluted $ 1.44 $ 2.24 $ 1.85 $ 1.50 $ 1.24 ------------------------------------ - --------- - - --------- - - --------- - - --------- - - --------- - As previously discussed, financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated. Three Months Ended ------------------------------------------------------------------------- December 31, September 30, June 30, March 31, December 31, 2019 2019 2019 2019 2018 ------------- ------------- ------------- ------------- ------------- Noninterest Expense Detail by Segment Compensation - Core Banking $ 4,451 $ 4,427 $ 4,694 $ 3,957 $ 3,735 Occupancy - Core Banking 1,200 1,140 1,105 988 941 Advertising - Core Banking 147 183 151 166 151 Other - Core Banking 1,747 1,771 1,626 1,884 1,759 - --------- - - --------- - - --------- - - --------- - - --------- - Total Noninterest Expense - Core $ 7,545 $ 7,521 $ 7,576 $ 6,995 $ 6,586 Banking - --------- - - --------- - - --------- - - --------- - - --------- - Compensation - SBA Lending (Q2) $ 1,469 $ 1,403 $ 1,045 $ 985 $ 1,069 Occupancy - SBA Lending (Q2) 89 88 80 88 76 Advertising - SBA Lending (Q2) 5 8 10 4 6 Other - SBA Lending (Q2) 262 384 250 245 211 - --------- - - --------- - - --------- - - --------- - - --------- - Total Noninterest Expense - SBA $ 1,825 $ 1,883 $ 1,385 $ 1,322 $ 1,362 Lending (Q2) - --------- - - --------- - - --------- - - --------- - - --------- - Compensation - Mortgage Banking $ 11,900 $ 9,866 $ 5,966 $ 3,298 $ 2,453 Occupancy - Mortgage Banking 633 549 387 344 308 Advertising - Mortgage Banking 1,314 871 566 397 239 Other - Mortgage Banking 1,055 916 608 524 468 - --------- - - --------- - - --------- - - --------- - - --------- - Total Noninterest Expense - Mortgage $ 14,902 $ 12,202 $ 7,527 $ 4,563 $ 3,468 Banking - --------- - - --------- - - --------- - - --------- - - --------- - Three Months Ended ------------------------------------------------------------------------- December 31, September 30, June 30, March 31, December 31, Mortgage Banking Noninterest Expense 2019 2019 2019 2019 2018 Fixed vs. Variable ------------- ------------- ------------- ------------- ------------- Noninterest Expense - Fixed Expenses $ 5,466 $ 4,603 $ 3,589 $ 2,833 $ 2,440 Noninterest Expense - Variable 9,436 7,599 3,938 1,730 1,028 Expenses (2) - --------- - - --------- - - --------- - - --------- - - --------- - Total Noninterest Expense $ 14,902 $ 12,202 $ 7,527 $ 4,563 $ 3,468 - --------- - - --------- - - --------- - - --------- - - --------- - Three Months Ended ------------------------------------------------------------------------- SBA Lending (Q2) Data December 31, September 30, June 30, March 31, December 31, (In thousands, except percentage 2019 2019 2019 2019 2018 data) ------------- ------------- ------------- ------------- ------------- Final funded loans guaranteed $ 10,830 $ 19,471 $ 22,310 $ 9,133 $ 12,943 portion sold, SBA Gross gain on sales of loans, SBA $ 1,066 $ 2,138 $ 2,085 $ 977 $ 1,203 Weighted average gross gain on sales 9.84 % 10.98 % 9.35 % 10.70 % 9.29 % of loans, SBA Net gain on sales of loans, SBA (3) $ 761 $ 1,569 $ 1,515 $ 521 $ 964 Weighted average net gain on sales 7.03 % 8.06 % 6.79 % 5.70 % 7.45 % of loans, SBA Three Months Ended ------------------------------------------------------------------------- Mortgage Banking Data December 31, September 30, June 30, March 31, December 31, (In thousands, except percentage 2019 2019 2019 2019 2018 data) ------------- ------------- ------------- ------------- ------------- Mortgage originations for sale in 542,568 447,616 258,743 110,680 66,046 the secondary market Mortgage sales 529,344 447,819 204,565 102,022 60,409 Gross gain on sales of loans, 13,411 14,244 7,335 3,715 2,071 mortgage banking Weighted average gross gain on sales 2.53 % 3.18 % 3.59 % 3.64 % 3.43 % of loans, mortgage banking Net mortgage banking income (4) 15,817 15,033 9,611 5,074 3,289 ------------------------------------ (2) Variable expenses include incentive compensation and advertising expenses (3) Net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment, and inclusive of gains on servicing assets (4) Net of lender credits and other investor expenses, and inclusive of loan fees, fair value adjustments and gains (losses) on derivative instruments As previously discussed, financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated. SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended ------------------------------------------------------------------------- Summarized Consolidated Average December 31, September 30, June 30, March 31, December 31, Balance Sheets (In thousands) 2019 2019 2019 2019 2018 ------------- ------------- ------------- ------------- ------------- Interest-earning assets Average balances: Interest-bearing deposits with banks $ 46,296 $ 52,736 $ 38,332 $ 36,317 $ 30,271 Loans 935,211 891,477 859,525 802,652 763,637 Investment securities 157,093 156,070 163,185 161,170 156,570 Agency mortgage-backed securities 13,057 15,178 21,993 24,682 29,133 FRB and FHLB stock 14,149 13,020 12,505 10,196 10,171 Total interest-earning assets $ 1,165,806 $ 1,128,481 $ 1,095,540 $ 1,035,017 $ 989,782 - --------- - - --------- - - --------- - - --------- - - --------- - Interest income (tax equlivalent basis): Interest-bearing deposits with banks $ 205 $ 277 $ 205 $ 221 $ 153 Loans 11,830 11,788 10,924 10,227 9,828 Investment securities 1,780 1,762 1,877 1,819 1,783 Agency mortgage-backed securities 83 105 152 179 193 FRB and FHLB stock 154 184 196 142 121 Total interest income (tax $ 14,052 $ 14,116 $ 13,354 $ 12,588 $ 12,078 equivalent basis) - --------- - - --------- - - --------- - - --------- - - --------- - Weighted average yield (tax equlivalent basis, annualized): Interest-bearing deposits with banks 1.77 % 2.10 % 2.14 % 2.43 % 2.02 % Loans 5.06 % 5.29 % 5.08 % 5.10 % 5.15 % Investment securities 4.53 % 4.52 % 4.60 % 4.51 % 4.56 % Agency mortgage-backed securities 2.54 % 2.77 % 2.76 % 2.90 % 2.65 % FRB and FHLB stock 4.35 % 5.65 % 6.27 % 5.57 % 4.76 % Total interest-earning assets 4.82 % 5.00 % 4.88 % 4.86 % 4.88 % Interest-bearing liabilities Average balances: Interest-bearing deposits $ 707,518 $ 712,692 $ 684,736 $ 693,127 $ 651,060 Repurchase agreements - 250 1,354 1,353 1,352 Fed funds purchased - 130 - - - Borrowings from Federal Home Loan 207,851 175,912 178,707 114,044 104,999 Bank Other borrowings 19,735 19,718 19,701 19,684 19,667 Total interest-bearing liabilities $ 935,104 $ 908,702 $ 884,498 $ 828,208 $ 777,078 - --------- - - --------- - - --------- - - --------- - - --------- - Interest expense: Interest-bearing deposits $ 1,749 $ 1,965 $ 1,948 $ 1,607 $ 1,424 Repurchase agreements - - 1 1 1 Fed funds purchased - 1 - - - Borrowings from Federal Home Loan 808 785 898 520 478 Bank Other borrowings 318 318 319 318 322 Total interest expense $ 2,875 $ 3,069 $ 3,166 $ 2,446 $ 2,225 - --------- - - --------- - - --------- - - --------- - - --------- - Weighted average cost (annualized): Interest-bearing deposits 0.99 % 1.10 % 1.14 % 0.93 % 0.87 % Repurchase agreements 0.00 % 0.00 % 0.30 % 0.30 % 0.30 % Fed funds purchased 0.00 % 3.08 % 0.00 % 0.00 % 0.00 % Borrowings from Federal Home Loan 1.55 % 1.78 % 2.01 % 1.82 % 1.82 % Bank Other borrowings 6.45 % 6.45 % 6.48 % 6.46 % 6.55 % Total interest-bearing liabilities 1.23 % 1.35 % 1.43 % 1.18 % 1.15 % Interest rate spread (tax 3.59 % 3.65 % 3.45 % 3.68 % 3.73 % equlivalent basis, annualized) Net interest margin (tax equlivalent 3.83 % 3.92 % 3.72 % 3.92 % 3.98 % basis, annualized) ------------------------------------ As previously discussed, financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated.