FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent
company of FinWise Bank (the “Bank”), today announced results for
the quarter ended June 30, 2022.
Second Quarter 2022 Highlights
- Loan originations were $2.1
billion, compared to $2.5 billion for the quarter ended March 31,
2022 and $1.4 billion in the prior year period
- Net interest income was $12.8
million, compared to $13.0 million for the quarter ended March 31,
2022 and $10.8 million in the prior year period
- Net Income was $5.5 million,
compared to $9.4 million for the quarter ended March 31, 2022 and
$7.7 million in the prior year period
- Diluted earnings per share (“EPS”)
were $0.41 for the quarter, compared to $0.70 for the quarter ended
March 31, 2022 and $0.84 for the prior year period
- Efficiency ratio was 52.0%,
compared to 36.7% for the quarter ended March 31, 2022 and 37.3%
for the prior year period
- Maintained industry-leading returns
with annualized return on average equity (ROAE) of 17.2%, compared
to 31.4% in the quarter ended March 31, 2022 and 55.0% in the prior
year period
- Asset quality remained strong with
a nonperforming loans to total loans ratio of 0.3%
“The FinWise team executed admirably during the
second quarter and our results further validate the Company’s
strong and differentiated business model,” said Kent Landvatter,
Chief Executive Officer and President of FinWise. “Amid an economic
environment that deteriorated rapidly, we delivered favorable
results, including solid originations, strong credit quality and
industry-leading returns. Despite challenging external macro
factors, we remain committed to managing the business for the long
term and will continue to focus on what we can control so that we
remain well positioned to take advantage of growth opportunities
when the environment improves.”
Results of Operations
The Company’s second quarter of 2022 was
highlighted by solid loan originations across its primary lines of
business and industry-leading returns.
Selected Financial Data
|
|
For the Three Months Ended |
($s in thousands, except per share amounts, annualized ratios) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Net Income |
|
$ |
5,482 |
|
|
$ |
9,434 |
|
|
$ |
7,739 |
|
Diluted EPS |
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
$ |
0.84 |
|
Return on average assets |
|
|
5.5 |
% |
|
|
9.4 |
% |
|
|
10.0 |
% |
Return on average equity |
|
|
17.2 |
% |
|
|
31.4 |
% |
|
|
55.0 |
% |
Yield on loans |
|
|
18.42 |
% |
|
|
17.74 |
% |
|
|
17.81 |
% |
Cost of deposits |
|
|
0.77 |
% |
|
|
0.79 |
% |
|
|
1.29 |
% |
Net interest margin |
|
|
13.69 |
% |
|
|
13.37 |
% |
|
|
20.29 |
% |
Efficiency Ratio (1) |
|
|
52.0 |
% |
|
|
36.7 |
% |
|
|
37.3 |
% |
Tangible book value per
share |
|
$ |
10.13 |
|
|
$ |
9.77 |
|
|
$ |
6.92 |
|
Tangible shareholders’ equity
to tangible assets (2) |
|
|
35.7 |
% |
|
|
29.4 |
% |
|
|
20.9 |
% |
Leverage Ratio (Bank under
CBLR) |
|
|
21.4 |
% |
|
|
19.1 |
% |
|
|
19.2 |
% |
|
|
|
|
|
|
|
(1) This measure is not a measure recognized
under United States generally accepted accounting principles, or
GAAP, and is therefore considered to be non-GAAP financial
measures. See “Reconciliation of Non-GAAP to GAAP Financial
Measures” for a reconciliation of this measure to its most
comparable GAAP measure. The efficiency ratio is defined as total
noninterest expense divided by the sum of net interest income and
noninterest income. We believe this measure is important as an
indicator of productivity because it shows the amount of revenue
generated for each dollar spent.
(2) This measure is not a measure recognized under
GAAP and is therefore considered to be non-GAAP financial measures.
See “Reconciliation of Non-GAAP to GAAP Financial Measures” for a
reconciliation of this measure to its most comparable GAAP measure.
Tangible shareholders’ equity is defined as total shareholders’
equity less goodwill and other intangible assets. The most directly
comparable GAAP financial measure is total shareholder’s equity. We
had no goodwill or other intangible assets as of any of the dates
indicated. We have not considered loan servicing rights as an
intangible asset for purposes of this calculation. As a result,
tangible shareholders’ equity is the same as total shareholders’
equity as of each of the dates indicated.
Net Income
Net income was $5.5 million for the second
quarter of 2022, compared to $9.4 million for the first quarter of
2022, and $7.7 million for the second quarter of 2021. The decline
from the previous quarter was primarily due to lower gain-on-sale
of loans and an impairment of the Company’s SBA servicing asset.
Compared to the prior year period, the decline was primarily driven
by an increase in non-interest expenses and a decrease in fair
value of the Company’s investment in Business Funding Group, LLC
(“BFG”), partially offset by increases in non-interest income and
net interest income.
Net Interest Income
Net interest income was $12.8 million for the
second quarter of 2022, compared to $13.0 million for the first
quarter of 2022, and $10.8 million for the second quarter of 2021.
The decline from the previous quarter was primarily due to lower
average loans held for sale balances. Growth over the prior year
period primarily reflected strong loan growth resulting in higher
average balances and an increase in the other interest earning
asset classes.
Loan originations totaled $2.1 billion for the
second quarter of 2022, down from $2.5 billion for the first
quarter of 2022, and up from $1.4 billion for the second quarter of
2021.
Net interest margin for the second quarter of
2022 increased to 13.69% compared to 13.37% for the first quarter
of 2022 and decreased compared to 20.29% for the second quarter of
2021. The increase from the previous quarter was primarily driven
by a loan mix shift away from loans carrying lower yields within
the strategic program held for sale portfolio. The net interest
margin decrease from the second quarter of 2021 was driven mainly
by the substantial increase in lower yielding cash and cash
equivalents raised in the Company’s initial public offering and a
loan mix shift toward loans carrying lower yields within the
strategic program held for sale portfolio.
Provision for Loan Losses
The Company’s provision for loan losses was $2.9
million for the second quarter of 2022, compared to $2.9 million
for the first quarter of 2022 and $1.5 million for the second
quarter of 2021. Compared to the previous quarter, the provision
for the second quarter of 2022 reflected growth of unguaranteed
loans held for investment and lower net charge-offs compared to the
first quarter of 2022. The increase in the Company’s provision for
loan losses for the second quarter of 2022 compared to the second
quarter of 2021 was primarily due to substantial non-PPP loan
growth and an increase in net charge-offs.
Non-interest Income
|
|
For the Three Months Ended |
($s in thousands) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Non-interest income: |
|
|
|
|
|
|
Strategic program fees |
|
$ |
6,221 |
|
|
$ |
6,623 |
|
|
$ |
3,942 |
|
Gain on sale of loans |
|
|
2,412 |
|
|
|
5,052 |
|
|
|
2,397 |
|
SBA loan servicing fees |
|
|
342 |
|
|
|
387 |
|
|
|
311 |
|
Change in fair value on investment in BFG |
|
|
(575 |
) |
|
|
(398 |
) |
|
|
1,501 |
|
Other miscellaneous income |
|
|
31 |
|
|
|
18 |
|
|
|
10 |
|
Total non-interest income |
|
$ |
8,431 |
|
|
$ |
11,682 |
|
|
$ |
8,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income was $8.4 million for the
second quarter of 2022, compared to $11.7 million for the first
quarter of 2022 and $8.2 million for the second quarter of 2021.
The decline from the previous quarter was driven primarily by lower
gain on sale of loans due to a decrease in the number of SBA 7(a)
loans sold. Compared to the prior year period, the increase was
primarily due to an increase in strategic program fees due to
significant loan origination volume growth, partially offset by a
decrease in fair value of the Company’s investment in BFG.
Non-interest Expense
|
|
For the Three Months Ended |
($s in thousands) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Non-interest expense: |
|
|
|
|
|
|
Salaries and employee benefits |
|
$ |
7,182 |
|
|
$ |
7,092 |
|
|
$ |
5,488 |
|
Occupancy and equipment expenses |
|
|
419 |
|
|
|
302 |
|
|
|
203 |
|
(Recovery) impairment of SBA servicing asset |
|
|
1,135 |
|
|
|
(59 |
) |
|
|
- |
|
Other operating expenses |
|
|
2,283 |
|
|
|
1,713 |
|
|
|
1,388 |
|
Total non-interest
expense |
|
$ |
11,019 |
|
|
$ |
9,048 |
|
|
$ |
7,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense was $11.0 million for the
second quarter of 2022, compared to $9.0 million for the first
quarter of 2022 and $7.1 million for the second quarter of 2021.
The increase over the previous quarter was primarily due to an
impairment of the Company’s SBA servicing asset in the second
quarter of 2022 due to rising market interest rates and market-wide
increasing prepayment speeds on SBA loans. The increase compared to
the second quarter of 2021 was primarily due to increased expenses
from higher employee head count related to an increase in strategic
program loan volume and an impairment of the Company’s SBA
servicing asset.
The Company’s efficiency ratio was 52.0% for the
second quarter of 2022 as compared to 36.7% for the first quarter
of 2022 and 37.3% for the second quarter of 2021.
Tax Rate
The Company’s effective tax rate was
approximately 24.6% for the second quarter of 2022, compared to
25.4% for the first quarter of 2022 and 25.2% for the second
quarter of 2021.
Balance Sheet
The Company’s total assets were $366.0 million
at June 30, 2022, a decrease from $424.5 million at March 31, 2022
and an increase from $288.2 million at June 30, 2021. The decrease
over the prior period was mainly due to a decline in deposits
required to fund the Company’s Strategic Program loan portfolio.
The increase in total assets compared to June 30, 2021 was mainly
due to an increase in cash from the Company’s public stock
offering, growth in deposits to fund the Company’s Strategic
Program loan portfolio and an increase in deposits to fund SBA 7(a)
loans offset by a decrease in borrowings under the PPP Liquidity
Facility due to a decline in PPP loans outstanding.
The following table shows the loan portfolio as
of the dates indicated:
|
|
As of |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
($s in thousands) |
|
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
SBA |
|
$ |
124,477 |
|
|
53.6 |
% |
|
$ |
127,778 |
|
|
46.9 |
% |
|
$ |
128,841 |
|
|
55.2 |
% |
Commercial, non real estate |
|
|
7,847 |
|
|
3.4 |
% |
|
|
3,285 |
|
|
1.2 |
% |
|
|
3,627 |
|
|
1.6 |
% |
Residential real estate |
|
|
30,965 |
|
|
13.3 |
% |
|
|
30,772 |
|
|
11.3 |
% |
|
|
22,410 |
|
|
9.6 |
% |
Strategic Program loans |
|
|
59,066 |
|
|
25.5 |
% |
|
|
101,819 |
|
|
37.4 |
% |
|
|
71,235 |
|
|
30.6 |
% |
Commercial real estate |
|
|
4,722 |
|
|
2.0 |
% |
|
|
4,187 |
|
|
1.5 |
% |
|
|
2,316 |
|
|
1.0 |
% |
Consumer |
|
|
5,062 |
|
|
2.2 |
% |
|
|
4,711 |
|
|
1.7 |
% |
|
|
4,624 |
|
|
2.0 |
% |
Total period end loans |
|
$ |
232,139 |
|
|
100.0 |
% |
|
$ |
272,552 |
|
|
100.0 |
% |
|
$ |
233,053 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: SBA loans as of June 30, 2022, March 31,
2022 and June 30, 2021 include $0.7 million, $1.0 million and $17.3
million in PPP loans, respectively. SBA loans as of June 30, 2022,
March 31, 2022 and June 30, 2021 include $46.0 million, $53.2
million and $54.4 million, respectively, of SBA 7(a) loan balances
that are guaranteed by the SBA. The held for investment balance on
Strategic Programs with annual interest rates below 36% as of June
30, 2022, March 31, 2022 and June 30, 2021 was $12.0 million, $13.8
million and $0.0 million, respectively.
Total loans receivable at June 30, 2022
decreased to $232.1 million from $272.6 million at March 31, 2022
and decreased from $233.1 million at June 30, 2021. The decrease in
loans receivable over the prior period was due primarily to
decreases in strategic program held for sale loans and SBA 7(a)
loan balances that are guaranteed by the SBA, partially offset by
increases in commercial non real estate loans and SBA 7(a) loans
that are not guaranteed by the SBA. The decrease in loans
receivable compared to June 30, 2021 was due primarily to decreases
in strategic program held for sale loans and PPP loans,
substantially offset by increases in SBA 7(a) loans that are not
guaranteed by the SBA, strategic program held for investment loans,
residential real estate, and commercial non real estate loans.
Decreases in strategic program held for sale loans over both prior
periods were primarily due to a more challenging economic
environment.
The following table shows the Company’s deposit composition as
of the dates indicated:
|
|
As of |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
($s in thousands) |
|
Total |
|
Percent |
|
Total |
|
Percent |
|
Total |
|
Percent |
Noninterest-bearing demand deposits |
|
$ |
83,490 |
|
|
38.1 |
% |
|
$ |
127,330 |
|
|
45.9 |
% |
|
$ |
105,134 |
|
|
53.0 |
% |
Interest-bearing
deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
|
11,360 |
|
|
5.1 |
% |
|
|
7,919 |
|
|
2.8 |
% |
|
|
5,058 |
|
|
2.5 |
% |
Savings |
|
|
7,462 |
|
|
3.4 |
% |
|
|
7,089 |
|
|
2.6 |
% |
|
|
8,724 |
|
|
4.4 |
% |
Money markets |
|
|
48,273 |
|
|
22.0 |
% |
|
|
53,434 |
|
|
19.3 |
% |
|
|
20,129 |
|
|
10.1 |
% |
Time certificates of deposit |
|
|
68,774 |
|
|
31.4 |
% |
|
|
81,688 |
|
|
29.4 |
% |
|
|
59,551 |
|
|
30.0 |
% |
Total period end deposits |
|
$ |
219,359 |
|
|
100.0 |
% |
|
$ |
277,460 |
|
|
100.0 |
% |
|
$ |
198,596 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits at June 30, 2022 decreased to
$219.4 million from $277.5 million at March 31, 2022, and increased
from $198.6 million at June 30, 2021. The decrease from the first
quarter of 2022 was driven primarily by a decrease in
noninterest-bearing demand, time certificates of deposits, and
money market. The increase from the second quarter of 2021 was
driven by increases in money market, time certificates of deposit,
and interest-bearing demand deposits, partially offset by a
decrease in noninterest-bearing demand deposits.
Total shareholders’ equity at June 30, 2022
increased $5.5 million, to $130.5 million from $125.0 million at
March 31, 2022. Compared to June 30, 2021, total shareholders’
equity at June 30, 2022 increased $70.2 million, or more than
doubled from $60.3 million. The increase in shareholders’ equity
over the prior quarter was mainly driven by net income for the
second quarter of 2022. The increase over the prior year period was
primarily due to the Company’s initial public offering and net
income.
Bank Regulatory Capital Ratios
The following table presents the leverage ratios for the Bank as
of the dates indicated:
|
|
As of |
|
2022 |
|
2021 |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
|
Well-Capitalized Requirement |
|
Well-Capitalized Requirement |
Leverage Ratio (Bank under CBLR) |
|
21.4 |
% |
|
19.1 |
% |
|
19.2 |
% |
|
9.0 |
% |
|
8.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Bank’s capital levels remain significantly above
well-capitalized guidelines as of the end of the second quarter of
2022.
Asset Quality
Nonperforming loans were $0.6 million or 0.3% of
total loans receivable at June 30, 2022, compared to $0.7 million
or 0.2% of total loans receivable at March 31, 2022 and $0.8
million or 0.3% of total loans receivable at June 30, 2021. As
noted above, the provision for loan losses was $2.9 million for the
second quarter of 2022, compared to $2.9 million for the first
quarter of 2022 and $1.5 million for the second quarter of 2021.
The Company’s allowance for loan losses to total loans (less PPP
loans) was 4.6% at June 30, 2022 compared to 3.7% at March 31, 2022
and 3.4% at June 30, 2021.
For the second quarter of 2022, the Company’s
net charge-offs were $2.3 million, compared to $2.8 million for the
first quarter of 2022 and $0.5 million for the second quarter of
2021. The decrease in net charge-offs for the second quarter of
2022 compared to the first quarter of 2022 was primarily driven by
lower gross charge-offs and increased recoveries related to
strategic programs. The increase in net charge-offs during the
second quarter of 2022 compared to the second quarter of 2021 was
mainly driven by growth in the Company’s held for investment
balances and some normalization of credit losses to pre-pandemic
market conditions.
The following table presents a summary of changes in the
allowance for loan losses and asset quality ratios for the periods
indicated:
|
|
For the Three Months Ended |
($s in thousands) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Allowance for Loan &
Lease Losses: |
|
|
|
|
|
|
Beginning Balance |
|
$ |
9,987 |
|
|
$ |
9,855 |
|
|
$ |
6,184 |
|
Provision |
|
|
2,913 |
|
|
|
2,947 |
|
|
|
1,536 |
|
Charge
offs |
|
|
|
|
|
|
SBA |
|
|
(102 |
) |
|
|
(31 |
) |
|
|
(47 |
) |
Commercial, non real estate |
|
|
- |
|
|
|
- |
|
|
|
(22 |
) |
Residential real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Strategic Program loans |
|
|
(2,560 |
) |
|
|
(2,878 |
) |
|
|
(541 |
) |
Commercial real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
Recoveries |
|
|
|
|
|
|
SBA |
|
|
48 |
|
|
|
- |
|
|
|
- |
|
Commercial, non real estate |
|
|
1 |
|
|
|
1 |
|
|
|
81 |
|
Residential real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Strategic Program loans |
|
|
315 |
|
|
|
93 |
|
|
|
48 |
|
Commercial real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
Ending Balance |
|
$ |
10,602 |
|
|
$ |
9,987 |
|
|
$ |
7,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
As of and For the Three Months Ended |
($s in thousands, annualized
ratios) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Nonperforming loans |
|
$ |
633 |
|
|
$ |
658 |
|
|
$ |
786 |
|
Nonperforming loans to total
loans |
|
|
0.3 |
% |
|
|
0.2 |
% |
|
|
0.3 |
% |
Net charge offs to average
loans |
|
|
3.3 |
% |
|
|
3.8 |
% |
|
|
0.8 |
% |
Allowance for loan losses to
loans held for investment |
|
|
5.3 |
% |
|
|
5.0 |
% |
|
|
4.2 |
% |
Allowance for loan losses to
total loans |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
3.1 |
% |
Allowance for loan losses to
total loans (less PPP loans) (1) |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
3.4 |
% |
Net charge-offs |
|
$ |
2,298 |
|
|
$ |
2,815 |
|
|
$ |
482 |
|
|
|
|
|
|
|
|
(1) This measure is not a measure recognized under GAAP and is
therefore considered to be non-GAAP financial measures. See
“Reconciliation of Non-GAAP to GAAP Financial Measures” for a
reconciliation of this measure to its most comparable GAAP measure.
Allowance for loan losses to total loans (less PPP loans) is
defined as the allowance for loan losses divided by total loans
minus PPP loans. The most directly comparable GAAP financial
measure is allowance for loan losses to total loans.
Webcast and
Conference
Call
Information
FinWise will host a conference call today at
5:30 PM ET to discuss its financial results for the second quarter
of 2022. A simultaneous audio webcast of the conference call will
be available on the Company’s investor relations section of the
website at
https://finwisebank.gcs-web.com/events/event-details/finwise-bancorp-second-quarter-2022-earnings-conference-call.
The dial-in number for the conference call is (877) 423-9813
(toll-free) or (201) 689-8573 (international). Please dial the
number 10 minutes prior to the scheduled start time.
A webcast replay of the call will be available
on the Company’s website at
https://finwisebank.gcs-web.com for six months following the
call.
Website InformationThe Company
intends to use its website, www.finwisebancorp.com, as a means of
disclosing material non-public information and for complying with
its disclosure obligations under Regulation FD. Such disclosures
will be included in the Company’s website’s Investor Relations
section. Accordingly, investors should monitor the Investor
Relations portion of the Company’s website, in addition to
following its press releases, SEC filings, public conference calls,
and webcasts. To subscribe to the Company’s e-mail alert service,
please click the “Email Alerts” link in the Investor Relations
section of its website and submit your email address. The
information contained in, or that may be accessed through, the
Company’s website is not incorporated by reference into or a part
of this document or any other report or document it files with or
furnishes to the SEC, and any references to the Company’s website
are intended to be inactive textual references only.
About FinWise Bancorp
FinWise Bancorp is a Utah bank holding company
headquartered in Murray, Utah. FinWise operates through its
wholly-owned subsidiary, FinWise Bank, a Utah state-chartered
non-member bank. FinWise currently operates one full-service
banking location in Sandy, Utah and a loan production office in
Rockville Centre, New York. FinWise is a nationwide lender to and
takes deposits from consumers and small businesses. Learn more at
www.finwisebancorp.com.
Contacts
investors@finwisebank.commedia@finwisebank.com
"Safe Harbor" Statement Under the Private Securities
Litigation Reform Act of 1995
This release contains forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect the
Company’s current views with respect to, among other things, future
events and its financial performance. These statements are often,
but not always, made through the use of words or phrases such as
“may,” “might,” “should,” “could,” “predict,” “potential,”
“believe,” “will likely result,” “expect,” “continue,” “will,”
“anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,”
“projection,” “forecast,” “budget,” “goal,” “target,” “would,”
“aim” and “outlook,” or the negative version of those words or
other comparable words or phrases of a future or forward-looking
nature. These forward-looking statements are not historical facts,
and are based on current expectations, estimates and projections
about the Company’s industry and management’s beliefs and certain
assumptions made by management, many of which, by their nature, are
inherently uncertain and beyond the Company’s control. The
inclusion of these forward-looking statements should not be
regarded as a representation by the Company or any other person
that such expectations, estimates and projections will be achieved.
Accordingly, the Company cautions you that any such forward-looking
statements are not guarantees of future performance and are subject
to risks, assumptions and uncertainties that are difficult to
predict. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable as of
the date made, actual results may prove to be materially different
from the results expressed or implied by the forward-looking
statements.
There are or will be important factors that
could cause the Company’s actual results to differ materially from
those indicated in these forward-looking statements, including, but
not limited to, the following: (a) conditions relating to the
Covid-19 pandemic, including the severity and duration of the
associated economic slowdown either nationally or in the Company’s
market areas, and the response of governmental authorities to the
Covid-19 pandemic and the Company’s participation in
Covid-19-related government programs such as the PPP; (b) system
failure or cybersecurity breaches of the Company’s network
security; (c) the success of the financial technology industry, the
development and acceptance of which is subject to a high degree of
uncertainty, as well as the continued evolution of the regulation
of this industry; (d) the Company’s ability to keep pace with rapid
technological changes in the industry or implement new technology
effectively; (e) the Company’s reliance on third-party service
providers for core systems support, informational website hosting,
internet services, online account opening and other processing
services; (f) general economic conditions, either nationally or in
the Company’s market areas (including interest rate environment,
government economic and monetary policies, the strength of global
financial markets and inflation and deflation), that impact the
financial services industry and/or the Company’s business; (g)
increased competition in the financial services industry,
particularly from regional and national institutions and other
companies that offer banking services; (h) the Company’s ability to
measure and manage its credit risk effectively and the potential
deterioration of the business and economic conditions in the
Company’s primary market areas; (i) the adequacy of the Company’s
risk management framework; (j) the adequacy of the Company’s
allowance for loan losses; (k) the financial soundness of other
financial institutions; (l) new lines of business or new products
and services; (m) changes in SBA rules, regulations and loan
products, including specifically the Section 7(a) program, changes
in SBA standard operating procedures or changes to the status of
the Bank as an SBA Preferred Lender; (n) changes in the value of
collateral securing the Company’s loans; (o) possible increases in
the Company’s levels of nonperforming assets; (p) potential losses
from loan defaults and nonperformance on loans; (q) the Company’s
ability to protect its intellectual property and the risks it faces
with respect to claims and litigation initiated against the
Company; (r) the inability of small- and medium-sized businesses to
whom the Company lends to weather adverse business conditions and
repay loans; (s) the Company’s ability to implement aspects of its
growth strategy and to sustain its historic rate of growth; (t) the
Company’s ability to continue to originate, sell and retain loans,
including through its Strategic Programs; (u) the concentration of
the Company’s lending and depositor relationships through Strategic
Programs in the financial technology industry generally; (v) the
Company’s ability to attract additional merchants and retain and
grow its existing merchant relationships; (w) interest rate risk
associated with the Company’s business, including sensitivity of
its interest earning assets and interest-bearing liabilities to
interest rates, and the impact to its earnings from changes in
interest rates; (x) the effectiveness of the Company’s internal
control over financial reporting and its ability to remediate any
future material weakness in its internal control over financial
reporting; (y) potential exposure to fraud, negligence, computer
theft and cyber-crime and other disruptions in the Company’s
computer systems relating to its development and use of new
technology platforms; (z) the Company’s dependence on its
management team and changes in management composition; (aa) the
sufficiency of the Company’s capital, including sources of capital
and the extent to which it may be required to raise additional
capital to meet its goals; (bb) compliance with laws and
regulations, supervisory actions, the Dodd-Frank Act, the
Regulatory Relief Act, capital requirements, the Bank Secrecy Act,
anti-money laundering laws, predatory lending laws, and other
statutes and regulations; (cc) changes in the laws, rules,
regulations, interpretations or policies relating to financial
institutions, accounting, tax, trade, monetary and fiscal matters;
(dd) the Company’s ability to maintain a strong core deposit base
or other low-cost funding sources; (ee) results of examinations of
the Company by the Company’s regulators, including the possibility
that its regulators may, among other things, require the Company to
increase its allowance for loan losses or to write-down assets;
(ff) the Company’s involvement from time to time in legal
proceedings, examinations and remedial actions by regulators; (gg)
further government intervention in the U.S. financial system; (hh)
the ability of the Company’s Strategic Program service providers to
comply with regulatory regimes, including laws and regulations
applicable to consumer credit transactions, and the Company’s
ability to adequately oversee and monitor its Strategic Program
service providers; (ii) the Company’s ability to maintain and grow
its relationships with its Strategic Program service providers;
(jj) natural disasters and adverse weather, acts of terrorism,
pandemics, an outbreak of hostilities or other international or
domestic calamities, and other matters beyond the Company’s
control; (kk) future equity and debt issuances; and (ll) other
factors listed from time to time in the Company’s filings with the
Securities and Exchange Commission, including, without limitation,
its Annual Report on Form 10-K for the year ended December 31, 2021
and subsequent reports on Form 10-Q and Form 8-K.
The foregoing factors should not be construed as
exhaustive. If one or more events related to these or other risks
or uncertainties materialize, or if the Company’s underlying
assumptions prove to be incorrect, actual results may differ
materially from its forward-looking statements. Accordingly, you
should not place undue reliance on any such forward-looking
statements. Any forward-looking statement speaks only as of the
date of this release, and the Company does not undertake any
obligation to publicly update or review any forward-looking
statement, whether because of new information, future developments
or otherwise, except as required by law. New risks and
uncertainties may emerge from time to time, and it is not possible
for the Company to predict their occurrence. In addition, the
Company cannot assess the impact of each risk and uncertainty on
its business or the extent to which any risk or uncertainty, or
combination of risks and uncertainties, may cause actual results to
differ materially from those contained in any forward-looking
statements.
FINWISE BANCORP CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION($s in thousands;
unaudited)
|
As of |
($s in thousands) |
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Cash and due from banks |
$ |
397 |
|
|
$ |
414 |
|
|
$ |
380 |
|
Interest bearing deposits |
|
96,131 |
|
|
|
116,232 |
|
|
|
39,486 |
|
Total cash and cash equivalents |
|
96,528 |
|
|
|
116,646 |
|
|
|
39,866 |
|
Investment securities held-to-maturity, at cost |
|
12,463 |
|
|
|
10,986 |
|
|
|
1,533 |
|
Investment in Federal Home Loan Bank (FHLB) stock, at cost |
|
449 |
|
|
|
449 |
|
|
|
377 |
|
Loans receivable, net |
|
189,670 |
|
|
|
189,549 |
|
|
|
167,838 |
|
Strategic Program loans held-for-sale, at lower of cost or fair
value |
|
31,599 |
|
|
|
73,805 |
|
|
|
58,776 |
|
Premises and equipment, net |
|
5,834 |
|
|
|
4,531 |
|
|
|
1,534 |
|
Accrued interest receivable |
|
1,422 |
|
|
|
1,347 |
|
|
|
1,212 |
|
Deferred taxes, net |
|
2,018 |
|
|
|
1,788 |
|
|
|
1,008 |
|
SBA servicing asset, net |
|
4,586 |
|
|
|
5,225 |
|
|
|
3,725 |
|
Investment in Business Funding Group (BFG), at fair value |
|
4,600 |
|
|
|
5,400 |
|
|
|
5,200 |
|
Investment in Finwise Investments, LLC |
|
80 |
|
|
|
80 |
|
|
|
- |
|
Operating lease right-of-use ("ROU") assets |
|
6,935 |
|
|
|
7,178 |
|
|
|
- |
|
Income taxes receivable, net |
|
1,843 |
|
|
|
- |
|
|
|
- |
|
Other assets |
|
7,960 |
|
|
|
7,500 |
|
|
|
7,085 |
|
Total
assets |
$ |
365,987 |
|
|
$ |
424,484 |
|
|
$ |
288,154 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Noninterest bearing |
$ |
83,490 |
|
|
$ |
127,330 |
|
|
$ |
105,134 |
|
Interest bearing |
|
135,869 |
|
|
|
150,130 |
|
|
|
93,462 |
|
Total deposits |
|
219,359 |
|
|
|
277,460 |
|
|
|
198,596 |
|
Accrued interest payable |
|
34 |
|
|
|
39 |
|
|
|
84 |
|
Income taxes payable, net |
|
- |
|
|
|
3,411 |
|
|
|
416 |
|
PPP Liquidity Facility |
|
376 |
|
|
|
952 |
|
|
|
17,526 |
|
Operating lease liabilities |
|
7,393 |
|
|
|
7,386 |
|
|
|
- |
|
Other liabilities |
|
8,288 |
|
|
|
10,281 |
|
|
|
11,209 |
|
Total
liabilities |
|
235,450 |
|
|
|
299,529 |
|
|
|
227,831 |
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
|
|
|
Common stock |
|
13 |
|
|
|
13 |
|
|
|
9 |
|
Additional paid-in-capital |
|
55,015 |
|
|
|
54,915 |
|
|
|
18,274 |
|
Retained earnings |
|
75,509 |
|
|
|
70,027 |
|
|
|
42,040 |
|
Total shareholders'
equity |
|
130,537 |
|
|
|
124,955 |
|
|
|
60,323 |
|
Total liabilities
and shareholders' equity |
$ |
365,987 |
|
|
$ |
424,484 |
|
|
$ |
288,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FINWISE BANCORPCONDENSED CONSOLIDATED
STATEMENTS OF INCOME ($s in thousands, except per
share amounts; unaudited)
|
|
For the Three Months Ended |
($s in thousands, except per
share amounts) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Interest
income |
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
12,864 |
|
|
$ |
13,156 |
|
|
$ |
11,119 |
|
Interest on securities |
|
|
44 |
|
|
|
39 |
|
|
|
6 |
|
Other interest income |
|
|
105 |
|
|
|
28 |
|
|
|
10 |
|
Total interest income |
|
|
13,013 |
|
|
|
13,223 |
|
|
|
11,135 |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
Interest on deposits |
|
|
244 |
|
|
|
261 |
|
|
|
291 |
|
Interest on PPP Liquidity Facility |
|
|
- |
|
|
|
1 |
|
|
|
42 |
|
Total interest expense |
|
|
244 |
|
|
|
262 |
|
|
|
333 |
|
Net interest
income |
|
|
12,769 |
|
|
|
12,961 |
|
|
|
10,802 |
|
|
|
|
|
|
|
|
Provision for loan losses |
|
|
2,913 |
|
|
|
2,947 |
|
|
|
1,536 |
|
Net interest income after
provision for loan losses |
|
|
9,856 |
|
|
|
10,014 |
|
|
|
9,266 |
|
|
|
|
|
|
|
|
Non-interest
income |
|
|
|
|
|
|
Strategic Program fees |
|
|
6,221 |
|
|
|
6,623 |
|
|
|
3,942 |
|
Gain on sale of loans |
|
|
2,412 |
|
|
|
5,052 |
|
|
|
2,397 |
|
SBA loan servicing fees |
|
|
342 |
|
|
|
387 |
|
|
|
311 |
|
Change in fair value on investment in BFG |
|
|
(575 |
) |
|
|
(398 |
) |
|
|
1,501 |
|
Other miscellaneous income |
|
|
31 |
|
|
|
18 |
|
|
|
10 |
|
Total non-interest income |
|
|
8,431 |
|
|
|
11,682 |
|
|
|
8,161 |
|
|
|
|
|
|
|
|
Non-interest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
|
7,182 |
|
|
|
7,092 |
|
|
|
5,488 |
|
Occupancy and equipment expenses |
|
|
419 |
|
|
|
302 |
|
|
|
203 |
|
(Recovery) impairment of SBA servicing asset |
|
|
1,135 |
|
|
|
(59 |
) |
|
|
- |
|
Other operating expenses |
|
|
2,283 |
|
|
|
1,713 |
|
|
|
1,388 |
|
Total non-interest
expense |
|
|
11,019 |
|
|
|
9,048 |
|
|
|
7,079 |
|
Income before income
tax expense |
|
|
7,268 |
|
|
|
12,648 |
|
|
|
10,348 |
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
1,786 |
|
|
|
3,214 |
|
|
|
2,609 |
|
Net
income |
|
$ |
5,482 |
|
|
$ |
9,434 |
|
|
$ |
7,739 |
|
|
|
|
|
|
|
|
Earnings per share, basic |
|
$ |
0.43 |
|
|
$ |
0.74 |
|
|
$ |
0.89 |
|
Earnings per share,
diluted |
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
$ |
0.84 |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, basic |
|
|
12,716,010 |
|
|
|
12,777,237 |
|
|
|
8,183,774 |
|
Weighted average shares
outstanding, diluted |
|
|
13,417,390 |
|
|
|
13,567,311 |
|
|
|
8,650,956 |
|
Shares outstanding at end of
period |
|
|
12,884,821 |
|
|
|
12,788,810 |
|
|
|
8,716,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINWISE BANCORPAVERAGE BALANCES,
YIELDS, AND RATES - QUARTERLY($s in thousands;
unaudited)
|
|
For the Three Months Ended |
|
For the Three Months Ended |
|
For the Three Months Ended |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
($s in thousands, annualized
ratios) |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with the Federal Reserve, non-U.S.
central banks and other banks |
|
$ |
82,046 |
|
|
105 |
|
0.51 |
% |
|
$ |
79,855 |
|
|
|
28 |
|
0.14 |
% |
|
$ |
49,682 |
|
|
|
10 |
|
0.08 |
% |
Investment securities |
|
|
11,837 |
|
|
44 |
|
1.49 |
% |
|
|
11,263 |
|
|
|
39 |
|
1.39 |
% |
|
|
1,622 |
|
|
|
6 |
|
1.48 |
% |
Loans held for sale |
|
|
74,800 |
|
|
5,949 |
|
31.81 |
% |
|
|
94,610 |
|
|
|
6,765 |
|
28.60 |
% |
|
|
49,684 |
|
|
|
5,049 |
|
40.65 |
% |
Loans held for investment |
|
|
204,501 |
|
|
6,915 |
|
13.53 |
% |
|
|
202,052 |
|
|
|
6,391 |
|
12.65 |
% |
|
|
200,062 |
|
|
|
6,070 |
|
12.14 |
% |
Total interest earning
assets |
|
|
373,184 |
|
|
13,013 |
|
13.95 |
% |
|
|
387,780 |
|
|
|
13,223 |
|
13.64 |
% |
|
|
301,050 |
|
|
|
11,135 |
|
14.79 |
% |
Less: allowance for loan
losses |
|
|
(10,425 |
) |
|
|
|
|
|
|
(10,366 |
) |
|
|
|
|
|
|
(6,334 |
) |
|
|
|
|
Non-interest earning
assets |
|
|
32,558 |
|
|
|
|
|
|
|
24,160 |
|
|
|
|
|
|
|
13,214 |
|
|
|
|
|
Total assets |
|
$ |
395,317 |
|
|
|
|
|
|
$ |
401,574 |
|
|
|
|
|
|
$ |
307,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
$ |
7,587 |
|
|
27 |
|
1.42 |
% |
|
$ |
6,344 |
|
|
$ |
14 |
|
0.88 |
% |
|
$ |
5,533 |
|
|
|
13 |
|
0.94 |
% |
Savings |
|
|
7,430 |
|
|
1 |
|
0.05 |
% |
|
|
6,678 |
|
|
|
1 |
|
0.06 |
% |
|
|
8,328 |
|
|
|
3 |
|
0.14 |
% |
Money market accounts |
|
|
29,318 |
|
|
21 |
|
0.29 |
% |
|
|
31,889 |
|
|
|
22 |
|
0.28 |
% |
|
|
18,872 |
|
|
|
18 |
|
0.38 |
% |
Certificates of deposit |
|
|
82,870 |
|
|
195 |
|
0.94 |
% |
|
|
87,626 |
|
|
|
224 |
|
1.02 |
% |
|
|
57,468 |
|
|
|
257 |
|
1.79 |
% |
Total deposits |
|
|
127,205 |
|
|
244 |
|
0.77 |
% |
|
|
132,537 |
|
|
|
261 |
|
0.79 |
% |
|
|
90,201 |
|
|
|
291 |
|
1.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other borrowings |
|
|
601 |
|
|
- |
|
0.35 |
% |
|
|
985 |
|
|
|
1 |
|
0.41 |
% |
|
|
48,621 |
|
|
|
42 |
|
0.35 |
% |
Total interest bearing liabilities |
|
|
127,806 |
|
|
244 |
|
0.76 |
% |
|
|
133,522 |
|
|
|
262 |
|
0.79 |
% |
|
|
138,822 |
|
|
|
333 |
|
0.96 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
deposits |
|
|
120,359 |
|
|
|
|
|
|
|
137,750 |
|
|
|
|
|
|
|
105,459 |
|
|
|
|
|
Non-interest bearing
liabilities |
|
|
19,429 |
|
|
|
|
|
|
|
11,553 |
|
|
|
|
|
|
|
9,464 |
|
|
|
|
|
Shareholders’ equity |
|
|
127,723 |
|
|
|
|
|
|
|
118,749 |
|
|
|
|
|
|
|
54,185 |
|
|
|
|
|
Total liabilities and
shareholders’ equity |
|
$ |
395,317 |
|
|
|
|
|
|
$ |
401,574 |
|
|
|
|
|
|
$ |
307,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and
interest rate spread |
|
|
|
12,769 |
|
13.18 |
% |
|
|
|
$ |
12,961 |
|
12.85 |
% |
|
|
|
$ |
15,272 |
|
13.84 |
% |
Net interest margin |
|
|
|
|
|
13.69 |
% |
|
|
|
|
|
13.37 |
% |
|
|
|
|
|
20.29 |
% |
Ratio of average
interest-earning assets to average interest- bearing
liabilities |
|
|
|
|
|
291.99 |
% |
|
|
|
|
|
290.42 |
% |
|
|
|
|
|
216.86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Average PPP loans for the three months ended June 30,
2022, March 31, 2022 and June 30, 2021 were $0.9 million, $1.0
million and $46.2 million, respectively.
FINWISE BANCORPSELECTED HISTORICAL
CONSOLIDATED FINANCIAL AND OTHER DATA ($s in
thousands, except per share amounts; unaudited)
|
|
As of and for the Three Months Ended |
($s in thousands, except for per share data, annualized
ratios) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Selected Loan
Metrics |
|
|
|
|
|
|
Amount of loans originated |
|
$ |
2,088,843 |
|
|
$ |
2,511,306 |
|
|
$ |
1,424,261 |
|
Selected Income
Statement Data |
|
|
|
|
|
|
Interest income |
|
$ |
13,013 |
|
|
$ |
13,223 |
|
|
$ |
11,135 |
|
Interest expense |
|
|
244 |
|
|
|
262 |
|
|
|
333 |
|
Net interest income |
|
|
12,769 |
|
|
|
12,961 |
|
|
|
10,802 |
|
Provision for loan losses |
|
|
2,913 |
|
|
|
2,947 |
|
|
|
1,536 |
|
Net interest income after
provision for loan losses |
|
|
9,856 |
|
|
|
10,014 |
|
|
|
9,266 |
|
Non-interest income |
|
|
8,431 |
|
|
|
11,682 |
|
|
|
8,161 |
|
Non-interest expense |
|
|
11,019 |
|
|
|
9,048 |
|
|
|
7,079 |
|
Provision for income
taxes |
|
|
1,786 |
|
|
|
3,214 |
|
|
|
2,609 |
|
Net income |
|
|
5,482 |
|
|
|
9,434 |
|
|
|
7,739 |
|
Selected Balance Sheet
Data |
|
|
|
|
|
|
Total Assets |
|
$ |
365,987 |
|
|
$ |
424,484 |
|
|
$ |
288,154 |
|
Cash and cash equivalents |
|
|
96,528 |
|
|
|
116,646 |
|
|
|
39,866 |
|
Investment securities
held-to-maturity, at cost |
|
|
12,463 |
|
|
|
10,986 |
|
|
|
1,533 |
|
Loans receivable, net |
|
|
189,670 |
|
|
|
189,549 |
|
|
|
167,838 |
|
Strategic Program loans
held-for-sale, at lower of cost or fair value |
|
|
31,599 |
|
|
|
73,805 |
|
|
|
58,776 |
|
SBA servicing asset, net |
|
|
4,586 |
|
|
|
5,225 |
|
|
|
3,725 |
|
Investment in Business Funding
Group, at fair value |
|
|
4,600 |
|
|
|
5,400 |
|
|
|
5,200 |
|
Deposits |
|
|
219,359 |
|
|
|
277,460 |
|
|
|
198,596 |
|
PPP Liquidity Facility |
|
|
376 |
|
|
|
952 |
|
|
|
17,526 |
|
Total shareholders'
equity |
|
|
130,537 |
|
|
|
124,955 |
|
|
|
60,323 |
|
Tangible shareholders’ equity
(1) |
|
|
130,537 |
|
|
|
124,955 |
|
|
|
60,323 |
|
Share and Per Share
Data |
|
|
|
|
|
|
Earnings per share -
basic |
|
$ |
0.43 |
|
|
$ |
0.74 |
|
|
$ |
0.89 |
|
Earnings per share -
diluted |
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
$ |
0.84 |
|
Book value per share |
|
$ |
10.13 |
|
|
$ |
9.77 |
|
|
$ |
6.92 |
|
Tangible book value per
share |
|
$ |
10.13 |
|
|
$ |
9.77 |
|
|
$ |
6.92 |
|
Weighted avg outstanding
shares - basic |
|
|
12,716,010 |
|
|
|
12,777,237 |
|
|
|
8,183,774 |
|
Weighted avg outstanding
shares - diluted |
|
|
13,417,390 |
|
|
|
13,567,311 |
|
|
|
8,650,956 |
|
Shares outstanding at end of
period |
|
|
12,884,821 |
|
|
|
12,788,810 |
|
|
|
8,716,110 |
|
Asset Quality
Ratios |
|
|
|
|
|
|
Nonperforming loans to total
loans |
|
|
0.3 |
% |
|
|
0.2 |
% |
|
|
0.3 |
% |
Net charge offs to average
loans |
|
|
3.3 |
% |
|
|
3.8 |
% |
|
|
0.8 |
% |
Allowance for loan losses to
loans held for investment |
|
|
5.3 |
% |
|
|
5.0 |
% |
|
|
4.2 |
% |
Allowance for loan losses to
total loans |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
3.1 |
% |
Allowance for loan losses to
total loans (less PPP loans) (2) |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
3.4 |
% |
Capital
Ratios |
|
|
|
|
|
|
Total shareholders' equity to
total assets |
|
|
35.7 |
% |
|
|
29.4 |
% |
|
|
20.9 |
% |
Tangible shareholders’ equity
to tangible assets (1) |
|
|
35.7 |
% |
|
|
29.4 |
% |
|
|
20.9 |
% |
Leverage Ratio (Bank under
CBLR) |
|
|
21.4 |
% |
|
|
19.1 |
% |
|
|
19.2 |
% |
|
|
|
|
|
|
|
(1) This measure is not a measure recognized under United States
generally accepted accounting principles, or GAAP, and is therefore
considered to be non-GAAP financial measures. See “Reconciliation
of Non-GAAP to GAAP Financial Measures” for a reconciliation of
this measure to its most comparable GAAP measure. Tangible
shareholders’ equity is defined as total shareholders’ equity less
goodwill and other intangible assets. The most directly comparable
GAAP financial measure is total shareholder’s equity. We had no
goodwill or other intangible assets as of any of the dates
indicated. We have not considered loan servicing rights as an
intangible asset for purposes of this calculation. As a result,
tangible shareholders’ equity is the same as total shareholders’
equity as of each of the dates indicated.
(2) This measure is not a measure recognized under
GAAP and is therefore considered to be non-GAAP financial measures.
See “Reconciliation of Non-GAAP to GAAP Financial Measures” for a
reconciliation of this measure to its most comparable GAAP measure.
Allowance for loan losses to total loans (less PPP loans) is
defined as the allowance for loan losses divided by total loans
minus PPP loans. The most directly comparable GAAP financial
measure is allowance for loan losses to total loans.
Reconciliation of Non-GAAP to GAAP Financial
Measures
Efficiency
ratio |
|
|
|
|
|
|
|
|
For Three Months Ended |
($s in thousands, annualized
ratios) |
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
Non-interest expense |
|
$ |
11,019 |
|
|
$ |
9,048 |
|
|
$ |
7,079 |
|
Net interest income |
|
|
12,769 |
|
|
|
12,961 |
|
|
|
10,802 |
|
Total non-interest income |
|
|
8,431 |
|
|
|
11,682 |
|
|
|
8,161 |
|
Adjusted operating revenue |
|
$ |
21,200 |
|
|
$ |
24,643 |
|
|
$ |
18,963 |
|
Efficiency ratio |
|
|
52.0 |
% |
|
|
36.7 |
% |
|
|
37.3 |
% |
|
|
|
|
|
|
|
Allowance for loan
losses to total loans (less PPP Loans) |
|
|
|
|
|
|
|
|
As of |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
($s in thousands) |
|
|
|
|
|
|
Allowance for loan losses |
|
$ |
10,602 |
|
|
$ |
9,987 |
|
|
$ |
7,239 |
|
Total Loans |
|
|
232,139 |
|
|
|
272,552 |
|
|
|
233,053 |
|
PPP Loans |
|
|
734 |
|
|
|
991 |
|
|
|
17,314 |
|
Total Loans less PPP
Loans |
|
$ |
231,405 |
|
|
$ |
271,561 |
|
|
$ |
215,739 |
|
Allowance for loan losses to
total loans (less PPP Loans) |
|
|
4.6 |
% |
|
|
3.7 |
% |
|
|
3.4 |
% |
|
|
|
|
|
|
|
Total
nonperforming assets and troubled debt restructurings to total
assets (less PPP loans) |
|
|
|
|
As of |
|
|
6/30/2022 |
|
3/31/2022 |
|
6/30/2021 |
($s in thousands) |
|
|
|
|
|
|
Total Assets |
|
$ |
365,987 |
|
|
$ |
424,484 |
|
|
$ |
288,154 |
|
PPP Loans |
|
|
734 |
|
|
|
991 |
|
|
|
17,314 |
|
Total Assets less PPP
Loans |
|
$ |
365,253 |
|
|
$ |
423,493 |
|
|
$ |
270,840 |
|
Total nonperforming assets and
troubled debt restructurings |
|
$ |
728 |
|
|
$ |
754 |
|
|
$ |
918 |
|
Total nonperforming assets and
troubled debt restructurings to total assets (less PPP loans) |
|
|
0.2 |
% |
|
|
0.2 |
% |
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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