First Savings Financial Group, Inc. Reports Financial Results for Fiscal Year Ended September 30, 2019
Wednesday, 20. November 2019 00:00
CLARKSVILLE, Ind., Nov. 19, 2019 (GLOBE NEWSWIRE) -- First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $16.2 million, or $6.82 per diluted share, for the year ended September 30, 2019 compared to net income of $10.9 million, or $4.60 per diluted share, for the year ended September 30, 2018, resulting in an increase of 48% on a per share basis.
Commenting on the Company’s quarterly performance, Larry W. Myers, President and CEO, stated: “We are very pleased with the Company’s performance for the quarter and the fiscal year, including record earnings for the year, exceptional asset growth, robust deposit growth, and strong contributions to earnings from the mortgage banking and U.S. Small Business Administration (“SBA”) lending segments. The core banking, mortgage banking and SBA lending segments continue to grow significantly and the lending pipelines for each are very healthy entering into our new fiscal year.”
Net interest income increased $4.3 million, or 11.9%, to $40.1 million for the year ended September 30, 2019 as compared to 2018. The increase in net interest income is due to an $8.8 million increase in interest income, which was partially offset by a $4.6 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $132.4 million, from $929.2 million for 2018 to $1.06 billion for 2019, and an increase in the weighted average tax-equivalent yield, from 4.67% for 2018 to 4.91% for 2019. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $106.3 million, from $743.3 million for 2018 to $849.6 million for 2019, and an increase in the average cost of interest-bearing liabilities, from 0.85% for 2018 to 1.28% for 2019. These increases for the 2019 fiscal year included an increase in subordinated debt interest expense of $1.2 million, including amortization of debt issuance costs, and an increase of $19.1 million in subordinated debt included in the average balance of interest-bearing liabilities, net of debt issuance costs. The increase in the average cost of interest-bearing liabilities for 2019 was due primarily to increasing market interest rates on deposits and short-term funding alternatives including FHLB advances and brokered deposits, and the subordinated debt’s average cost of 6.48%, including amortization of debt issuance costs. Additional details are included in the “Summarized Consolidated Average Balance Sheets” table at the end of this release.
The Company recognized $1.5 million in provision for loan losses for the year ended September 30, 2019, compared to $1.4 million 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 $907,000, from $4.3 million at September 30, 2018 to $5.2 million at September 30, 2019. The Company recognized net charge-offs of $746,000 for the year ended September 30, 2019 compared to $122,000 in 2018. The increase in net charge-offs is due primarily to charge-offs of the unguaranteed portions of SBA loans.
Noninterest income increased $30.6 million for the year ended September 30, 2019 as compared to 2018. The increase was due primarily to an increase in mortgage banking income of $30.7 million and a $589,000 increase in real estate lease income. These increases were partially offset by a decrease in the net gain on sale of loans guaranteed by the SBA of $924,000. 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 (in the case of net income) or added (in the case of net loss) 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 $29.4 million for the year ended September 30, 2019 as compared to 2018. The increase was due primarily to increases in compensation and benefits, occupancy and equipment, and other operating expense of $23.2 million, $2.5 million and $2.0 million, respectively. The increase in compensation and benefits expense is attributable to the addition of new employees to support the growth of the Company, including its mortgage banking and SBA lending activities, and normal salary and benefits adjustments. 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 $3.1 million for the year ended September 30, 2019, for an effective tax rate of 15.4%, as compared to income tax expense of $2.4 million, for an effective tax rate of 16.4%, for 2018.
Results of Operations for the Three Months Ended September 30, 2019 and 2018
The Company reported net income of $5.3 million, or $2.24 per diluted share, for the three months ended September 30, 2019 compared to net income of $2.7 million, or $1.15 per diluted share, for the three months ended September 30, 2018, resulting in an increase of 95% on a per share basis. Net income for the quarter ended September 30, 2018 was negatively impacted by a loss of $109,000, net of taxes, related to the new secondary-market mortgage lending division and decreased income from SBA lending activities.
Net interest income increased $1.2 million, or 12.9%, to $10.8 million for the three months ended September 30, 2019 as compared to the same period in 2018. The increase in net interest income is due to a $2.4 million increase in interest income, which was partially offset by a $1.2 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $151.8 million, from $976.6 million for 2018 to $1.13 billion for 2019, and an increase in the weighted-average tax-equivalent yield, from 4.79% for 2018 to 5.00% for 2019. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $143.2 million, from $765.5 million for 2018 to $908.7 million for 2019, and an increase in the average cost of interest-bearing liabilities, from 0.96% for 2018 to 1.35% for 2019. These increases for the three months ended September 30, 2019, included an increase in subordinated debt interest expense of $285,000, including amortization of debt issuance costs, and an increase of $17.4 million in subordinated debt included in the average balance of interest-bearing liabilities, net of debt issuance costs. The increase in the average cost of interest-bearing liabilities for the three months ended September 30, 2019 was due primarily to increasing market interest rates on deposits and short-term funding alternatives including FHLB advances and brokered deposits and the subordinated debt’s average cost of 6.45%, including amortization of debt issuance costs. Additional details are included in the “Summarized Consolidated Average Balance Sheets” table at the end of this release.
The Company recognized $471,000 in provision for loan losses for the three months ended September 30, 2019, compared to $254,000 in provision for loan losses recognized in the same period in 2018. The Company recognized net charge-offs of $47,000 for the three months ended September 30, 2019 compared to net recoveries of $43,000 for the same period in 2018.
Noninterest income increased $13.8 million for the three months ended September 30, 2019 as compared to the same period in 2018. The increase was due primarily to an increase in mortgage banking income of $13.0 million and an increase in gain the sale of SBA loans of $661,000 when compared to the same period in 2018. The increase in mortgage banking income is due to production from the secondary-market residential mortgage lending segment that commenced operations in April 2018. 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 $11.5 million for the three months ended September 30, 2019 as compared to the same period in 2018. The increase was due primarily to increases in compensation and benefits, advertising, and occupancy and equipment expenses of $9.5 million, $711,000 and $707,000, respectively. The increase in compensation and benefits expense is attributable to the addition of new employees to support the growth of the Company, including its mortgage banking and SBA lending activities, and normal salary and benefits adjustments. The increase in advertising is primarily due to the new 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 new mortgage banking segment.
The Company recognized income tax expense of $1.4 million for the three months ended September 30, 2019, for an effective tax rate of 19.4%, as compared to income tax expense of $766,000, for an effective tax rate of 20.6%, for the same period in 2018.
Comparison of Financial Condition at September 30, 2019 and September 30, 2018
Total assets increased $188.2 million, from $1.03 billion at September 30, 2018 to $1.22 billion at September 30, 2019. Net loans increased $106.4 million during the year ended September 30, 2019, due primarily to continued growth in the commercial real estate and SBA loan portfolios. Residential mortgage loans held for sale also increased by $70.0 million during the year ended September 30, 2019 due to increased production from the mortgage banking segment. Total liabilities increased $167.2 million primarily due to a $132.5 million increase in Federal Home Loan Bank borrowings and a $23.3 million increase in total deposits.
Common stockholders’ equity increased $22.3 million, from $98.8 million at September 30, 2018 to $121.1 million at September 30, 2019, due primarily to retained net income of $14.7 million and net unrealized gains of $6.9 million on the available-for-sale securities portfolio. At September 30, 2019 and September 30, 2018, 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 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. 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, CPA Chief Financial Officer 812-283-0724
FIRST SAVINGS FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
YEARS ENDED SEPTEMBER 30, 2019 AND 2018
Three Months Ended
Years Ended
September 30,
September 30,
OPERATING DATA:
2019
2018
2019
2018
(In thousands, except share and per share data)
Total interest income
$
13,829
$
11,381
$
50,995
$
42,159
Total interest expense
3,069
1,842
10,906
6,337
Net interest income
10,760
9,539
40,089
35,822
Provision for loan losses
471
254
1,463
1,353
Net interest income after provision for loan losses
10,289
9,285
38,626
34,469
Total noninterest income
18,340
4,568
43,854
13,295
Total noninterest expense
21,606
10,143
62,390
33,006
Income before income taxes
7,023
3,710
20,090
14,758
Income tax expense
1,359
766
3,095
2,422
Net income
5,664
2,944
16,995
12,336
Less: Net income attributable to noncontrolling interests
343
200
818
1,434
Net income attributable to the Company
$
5,321
$
2,744
$
16,177
$
10,902
Net income per share, basic
$
2.28
$
1.20
$
6.99
$
4.83
Weighted average shares outstanding, basic
2,337,472
2,277,709
2,315,697
2,258,020
Net income per share, diluted
$
2.24
$
1.15
$
6.82
$
4.60
Weighted average shares outstanding, diluted
2,378,221
2,379,520
2,372,084
2,372,554
Performance rates (three-month data annualized)
Return on average assets
1.75
%
1.06
%
1.42
%
1.11
%
Return on average common stockholders' equity
18.12
%
11.16
%
15.00
%
11.37
%
Interest rate spread
3.65
%
3.83
%
3.63
%
3.82
%
Net interest margin
3.92
%
4.04
%
3.88
%
3.99
%
Efficiency ratio (1)
74.79
%
73.01
%
74.51
%
63.96
%
September 30,
September 30,
Increase
FINANCIAL CONDITION DATA:
2019
2018
(Decrease)
(In thousands, except per share data)
Total assets
$
1,222,579
$
1,034,406
$
188,173
Cash and cash equivalents
41,432
42,274
(842
)
Investment securities
179,638
186,980
(7,342
)
Loans held for sale
96,070
32,125
63,945
Gross loans
820,698
713,594
107,104
Allowance for loan losses
10,040
9,323
717
Interest earning assets
1,130,095
963,581
166,514
Goodwill
9,848
9,848
-
Core deposit intangibles
1,416
1,727
(311
)
Noninterest-bearing deposits
173,072
167,705
5,367
Interest-bearing deposits
661,312
643,407
17,905
FHLB borrowings
222,544
90,000
132,544
Total liabilities
1,101,322
934,161
167,161
Stockholders' equity, net of noncontrolling interests
121,053
98,813
22,240
Book value per share
$
51.51
$
43.11
$
8.40
Tangible book value per share (1)
46.71
38.06
8.65
Non-performing assets:
Nonaccrual loans
$
5,168
$
4,182
$
986
Accruing loans past due 90 days
12
91
(79
)
Total non-performing loans
5,180
4,273
907
Foreclosed real estate
55
103
(48
)
Troubled debt restructurings classified as performing loans
7,265
9,145
(1,880
)
Total non-performing assets
$
12,500
$
13,521
$
(1,021
)
Asset quality ratios:
Allowance for loan losses as a percent of total gross loans
1.22
%
1.31
%
-0.08
%
Allowance for loan losses as a percent of nonperforming loans
193.82
%
218.18
%
-24.36
%
Nonperforming loans as a percent of total gross loans
0.63
%
0.60
%
0.03
%
Nonperforming assets as a percent of total assets
1.02
%
1.31
%
-0.28
%
_______________ (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.
Three Months Ended
Years Ended
September 30,
September 30,
Net Income
2019
2018
2019
2018
(In thousands)
Net income attributable to the Company (non-GAAP)
$
5,321
$
2,767
$
16,177
$
12,240
Less: Merger-related expenses, net of tax effect
-
(23
)
-
(979
)
Less: Secondary-market residential mortgage lending division initial operating expenses, net of tax effect
-
-
-
(481
)
Less: Effect of adjustment to deferred taxes due to tax law change
-
-
-
122
Net income attributable to the Company (GAAP)
$
5,321
$
2,744
$
16,177
$
10,902
Three Months Ended
Years Ended
September 30,
September 30,
Net Income per Share, Diluted
2019
2018
2019
2018
Net income per share, diluted (non-GAAP)
$
2.24
$
1.16
$
6.82
$
5.16
Less: Merger-related expenses, net of tax effect
-
(0.01
)
-
(0.41
)
Less: Secondary-market residential mortgage lending division initial operating expenses, net of tax effect
-
-
-
(0.20
)
Less: Effect of adjustment to deferred taxes due to tax law change
-
-
-
0.05
Net income per share, diluted (GAAP)
$
2.24
$
1.15
$
6.82
$
4.60
Three Months Ended
Years Ended
September 30,
September 30,
Efficiency Ratio
2019
2018
2019
2018
(In thousands)
Noninterest expense (GAAP)
$
21,606
$
10,143
$
62,390
$
33,006
Net interest income (GAAP)
10,760
9,539
40,089
35,822
Noninterest income (GAAP)
18,340
4,568
43,854
13,295
Efficiency ratio (GAAP)
74.25
%
71.90
%
74.32
%
67.20
%
Noninterest expense (GAAP)
$
21,606
$
10,143
$
62,390
$
33,006
Less: Merger-related expenses
-
(23
)
-
(1,303
)
Less: Secondary-market residential mortgage lending division net initial operating expenses
-
-
-
(661
)
Noninterest expense (non-GAAP)
21,606
10,120
62,390
31,042
Net interest income (GAAP)
10,760
9,539
40,089
35,822
Noninterest income (GAAP)
18,340
4,568
43,854
13,295
Less: Income on tax credit investment
(210
)
(245
)
(210
)
(585
)
Noninterest income (Non-GAAP)
$
18,130
$
4,323
$
43,644
$
12,710
Efficiency ratio (excluding nonrecurring items) (non-GAAP)
74.79
%
73.01
%
74.51
%
63.96
%
September 30,
September 30,
Tangible Book Value Per Share
2019
2018
(In thousands, except share and per share data)
Stockholders' equity, net of noncontrolling interests (GAAP)
$
121,053
$
98,813
Less: goodwill and core deposit intangibles
(11,264
)
(11,575
)
Tangible equity (non-GAAP)
$
109,789
$
87,238
Outstanding common shares
2,350,229
2,292,021
Tangible book value per share (non-GAAP)
$
46.71
$
38.06
Book value per share (GAAP)
$
51.51
$
43.11
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):
As of
Summarized Consolidated Balance Sheets
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands, except per share data)
2019
2019
2019
2018
2018
Total cash and cash equivalents
$
41,432
$
65,105
$
40,442
$
36,344
$
42,274
Total investment securities
179,638
182,421
193,547
188,830
186,980
Total loans, net of allowance for loan losses
810,658
796,994
762,661
734,061
704,271
Total assets
1,222,579
1,228,953
1,129,722
1,073,989
1,034,406
Total deposits
834,384
888,145
824,770
832,073
811,112
Total borrowings from the Federal Home Loan Bank
222,544
189,255
160,938
107,019
90,000
Stockholders' equity, net of noncontrolling interests
121,053
114,971
108,688
102,968
98,813
Noncontrolling interests in subsidiary
204
176
1,241
1,593
1,432
Total equity
121,257
115,147
109,929
104,561
100,245
Outstanding common shares
2,350,229
2,350,229
2,344,836
2,304,310
2,292,021
Three Months Ended
Summarized Consolidated Statements of Income
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands, except per share data)
2019
2019
2019
2018
2018
Total interest income
$
13,829
$
13,058
$
12,307
$
11,801
$
11,381
Total interest expense
3,069
3,166
2,446
2,225
1,842
Net interest income
10,760
9,892
9,861
9,576
9,539
Provision for loan losses
471
337
340
315
254
Net interest income after provision for loan losses
10,289
9,555
9,521
9,261
9,285
Total noninterest income
18,340
12,644
7,089
5,781
4,568
Total noninterest expense
21,606
16,488
12,880
11,416
10,143
Income before income taxes
7,023
5,711
3,730
3,626
3,710
Income tax expense
1,359
748
466
522
766
Net income
5,664
4,963
3,264
3,104
2,944
Less: net income (loss) attributable to noncontrolling interests
343
571
(269
)
173
200
Net income attributable to the Company
$
5,321
$
4,392
$
3,533
$
2,931
$
2,744
Net income per share, basic
$
2.28
$
1.88
$
1.53
$
1.28
$
1.20
Weighted average shares outstanding, basic
2,337,472
2,333,502
2,307,155
2,284,665
2,277,709
Net income per share, diluted
$
2.24
$
1.85
$
1.50
$
1.24
$
1.15
Weighted average shares outstanding, diluted
2,378,221
2,373,578
2,360,004
2,371,480
2,379,520
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Consolidated Performance Ratios (Annualized)
2019
2019
2019
2018
2018
Return on average assets
1.75
%
1.50
%
1.28
%
1.11
%
1.06
%
Return on average equity
19.28
%
17.95
%
12.34
%
12.35
%
11.83
%
Return on average common stockholders' equity
18.12
%
15.90
%
13.55
%
11.82
%
11.16
%
Net interest margin (tax equivalent basis)
3.92
%
3.72
%
3.92
%
3.98
%
4.04
%
Efficiency ratio (excluding nonrecurring items) (non-GAAP)
74.79
%
73.16
%
75.99
%
74.34
%
73.01
%
As of or for the Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
Consolidated Asset Quality Ratios
2019
2019
2019
2018
2018
Nonperforming loans as a percentage of total loans
0.63
%
0.63
%
0.70
%
0.62
%
0.60
%
Nonperforming assets as a percentage of total assets
1.02
%
1.09
%
1.23
%
1.28
%
1.31
%
Allowance for loan losses as a percentage of total loans
1.22
%
1.19
%
1.29
%
1.29
%
1.31
%
Allowance for loan losses as a percentage of nonperforming loans
193.82
%
188.29
%
184.96
%
208.77
%
218.18
%
Net charge-offs (recoveries) to average outstanding loans
0.01
%
0.08
%
0.00
%
0.00
%
-0.01
%
_______________ 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
Segmented Statements of Income Information
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands, except per share data)
2019
2019
2019
2018
2018
Net interest income - Core Banking
$
9,178
$
8,739
$
8,817
$
8,574
$
8,537
Net interest income - SBA Lending (Q2)
1,237
1,066
934
908
933
Net interest income - Mortgage Banking
345
87
110
94
69
Total net interest income
$
10,760
$
9,892
$
9,861
$
9,576
$
9,539
Provision for loan losses - Core Banking
$
104
$
162
$
(492
)
$
(16
)
$
17
Provision for loan losses - SBA Lending (Q2)
367
175
832
331
237
Provision for loan losses - Mortgage Banking
-
-
-
-
-
Total provision for loan losses
$
471
$
337
$
340
$
315
$
254
Net interest income after provision for loan losses - Core Banking
$
9,074
$
8,577
$
9,309
$
8,590
$
8,520
Net interest income after provision for loan losses - SBA Lending (Q2)
870
891
102
577
696
Net interest income after provision for loan losses - Mortgage Banking
345
87
110
94
69
Total net interest income after provision for loan losses
$
10,289
$
9,555
$
9,521
$
9,261
$
9,285
Noninterest income - Core Banking
$
1,582
$
1,351
$
1,337
$
1,380
$
1,735
Noninterest income - SBA Lending (Q2)
1,715
1,658
673
1,137
875
Noninterest income - Mortgage Banking
15,043
9,635
5,079
3,264
1,958
Total noninterest income
$
18,340
$
12,644
$
7,089
$
5,781
$
4,568
Noninterest expense - Core Banking
$
7,521
$
7,576
$
6,995
$
6,586
$
6,771
Noninterest expense - SBA Lending (Q2)
1,883
1,385
1,322
1,362
1,162
Noninterest expense - Mortgage Banking
12,202
7,527
4,563
3,468
2,210
Total noninterest expense
$
21,606
$
16,488
$
12,880
$
11,416
$
10,143
Income before income taxes - Core Banking
$
3,135
$
2,352
$
3,651
$
3,384
$
3,484
Income (loss) before income taxes - SBA Lending (Q2)
702
1,164
(547
)
352
409
Income (loss) before income taxes - Mortgage Banking
3,186
2,195
626
(110
)
(183
)
Total income before income taxes
$
7,023
$
5,711
$
3,730
$
3,626
$
3,710
Income tax expense (benefit) - Core Banking
$
472
51
379
505
760
Income tax expense (benefit) - SBA Lending (Q2)
90
148
(70
)
45
52
Income tax expense (benefit) - Mortgage Banking
797
549
157
(28
)
(46
)
Total income tax expense
$
1,359
$
748
$
466
$
522
$
766
Net income - Core Banking
$
2,663
$
2,301
$
3,272
$
2,879
$
2,724
Net income (loss) - SBA Lending (Q2)
612
1,016
(477
)
307
357
Net income (loss) - Mortgage Banking
2,389
1,646
469
(82
)
(137
)
Total net income
$
5,664
$
4,963
$
3,264
$
3,104
$
2,944
Net income attributable to the Company - Core Banking
$
2,663
$
2,301
$
3,272
$
2,879
$
2,724
Net income (loss) attributable to the Company - SBA Lending (Q2)
269
445
(208
)
134
157
Net income (loss) attributable to the Company - Mortgage Banking
2,389
1,646
469
(82
)
(137
)
Total net income attributable to the Company
$
5,321
$
4,392
$
3,533
$
2,931
$
2,744
Net income per share, basic - Core Banking
$
1.14
$
0.98
$
1.42
$
1.26
$
1.19
Net income (loss) per share, basic - SBA Lending (Q2)
0.12
0.19
(0.09
)
0.06
0.07
Net income (loss) per share, basic - Mortgage Banking
1.02
0.71
0.20
(0.04
)
(0.06
)
Total net income per share, basic
$
2.28
$
1.88
$
1.53
$
1.28
$
1.20
Net income per share, diluted - Core Banking
$
1.13
$
0.97
$
1.39
$
1.21
$
1.14
Net income (loss) per share, diluted - SBA Lending (Q2)
0.11
0.19
(0.09
)
0.06
0.07
Net income (loss) per share, diluted - Mortgage Banking
1.00
0.69
0.20
(0.03
)
(0.06
)
Total net income per share, diluted
$
2.24
$
1.85
$
1.50
$
1.24
$
1.15
Three Months Ended
SBA Lending (Q2) Data
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands, except percentage data)
2019
2019
2019
2018
2018
Final funded loans guaranteed portion sold, SBA
$
19,471
$
22,310
$
9,133
$
12,943
$
12,109
Gross gain on sales of loans, SBA
$
2,138
$
2,085
$
977
$
1,203
$
1,246
Weighted average gross gain on sales of loans, SBA
10.98
%
9.35
%
10.70
%
9.29
%
10.29
%
Net gain on sales of loans, SBA (1)
$
1,569
$
1,515
$
521
$
964
$
907
Weighted average net gain on sales of loans, SBA
8.06
%
6.79
%
5.70
%
7.45
%
7.49
%
_______________ (1) Net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment, and inclusive of gains on servicing assets
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
Mortgage Banking Data
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands, except percentage data)
2019
2019
2019
2018
2018
Mortgage originations for sale in the secondary market
447,616
258,743
110,680
66,046
38,976
Mortgage sales
447,819
204,565
102,022
60,409
31,768
Gross gain on sales of loans, mortgage banking
14,244
7,335
3,715
2,071
1,067
Weighted average gross gain on sales of loans, mortgage banking
3.18
%
3.59
%
3.64
%
3.43
%
3.36
%
Net mortgage banking income (2)
15,033
9,611
5,074
3,289
2,059
_______________ (2) Net of lender credits and other investor expenses, and inclusive of loan fees, fair value adjustments and gains (losses) on derivative instruments
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):
Three Months Ended
Summarized Consolidated Average Balance Sheets
September 30,
June 30,
March 31,
December 31,
September 30,
(In thousands)
2019
2019
2019
2018
2018
Interest-earning assets
Average balances:
Interest-bearing deposits with banks
$
52,736
$
38,332
$
36,317
$
30,271
$
26,716
Loans
891,477
859,525
802,652
763,637
745,078
Investment securities
156,070
163,185
161,170
156,570
157,834
Agency mortgage-backed securities
15,178
21,993
24,682
29,133
37,393
FRB and FHLB stock
13,020
12,505
10,196
10,171
9,621
Total interest-earning assets
$
1,128,481
$
1,095,540
$
1,035,017
$
989,782
$
976,642
Interest income (tax equivalent basis):
Interest-bearing deposits with banks
$
277
$
205
$
221
$
153
$
138
Loans
11,788
10,924
10,227
9,828
9,349
Investment securities
1,762
1,877
1,819
1,783
1,822
Agency mortgage-backed securities
105
152
179
193
274
FRB and FHLB stock
184
196
142
121
119
Total interest income (tax equivalent basis)
$
14,116
$
13,354
$
12,588
$
12,078
$
11,702
Weighted average yield (tax equivalent basis, annualized):
Net interest margin (tax equivalent basis, annualized)
3.92
%
3.72
%
3.92
%
3.98
%
4.04
%
_______________ As previously discussed, financial information at June 30, 2019 and for periods then ended contained in this earnings release have been restated.
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