Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Year Ended December 31, 2023
WAUWATOSA, Wis., Jan. 30, 2024 (GLOBE NEWSWIRE) — Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported a net loss of $40,000, or less than $0.01 per diluted share, for the quarter ended December 31, 2023, compared to net income of $935,000, or $0.04 per diluted share for the quarter ended December 31, 2022. Net income per diluted share was $0.46 for the twelve months ended December 31, 2023, compared to net income per diluted share of $0.89 for the twelve months ended December 31, 2022.
“The current market dynamics continue to present challenges for both our Community Banking and Mortgage Banking segments,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “The rapid rise in short-term interest rates and an inverted yield curve continue to create downward pressure on the net interest margin of the Community Banking segment. In addition, the housing market continues to be adversely impacted by elevated interest rates, which have resulted in low levels of inventory and a decrease in housing affordability. As is the case for the overall mortgage banking industry, the results of operations within our Mortgage Banking segment have been negatively impacted by declining mortgage origination volumes and compressed margins. Despite these challenges, our strong asset quality and robust level of capital allowed us to continue to provide strong shareholder returns throughout 2023. During the year ended December 31, 2023, we declared dividends of $0.70 per share and repurchased 1.9 million shares of our stock at an average price well below our current book value per share.”
Highlights of the Quarter Ended December 31, 2023
Waterstone Financial, Inc. (Consolidated)
- Consolidated net loss of Waterstone Financial, Inc. totaled $40,000 for the quarter ended December 31, 2023, compared to net income of $935,000 for the quarter ended December 31, 2022.
- Consolidated return on average assets was (0.01)% for the quarter ended December 31, 2023, compared to 0.19% for the quarter ended December 31, 2022.
- Consolidated return on average equity was (0.05)% for the quarter ended December 31, 2023, and 0.99% for the quarter ended December 31, 2022
- Dividends declared during the quarter ended December 31, 2023, totaled $0.15 per common share.
- During the quarter ended December 31, 2023, we repurchased approximately 545,000 shares at a cost (including the federal excise tax) of $6.2 million, or $11.36 per share. This share repurchase activity was accretive to book value per share in the amount of $0.14 during the quarter ended December 31, 2023.
- During the year ended December 31, 2023, we repurchased approximately 1.9 million shares at a cost (including the federal excise tax) of $26.0 million, or $13.38 per share. This share repurchase activity was accretive to book value per share in the $0.32 during the year ended December 31, 2023.
- Nonperforming assets as percentage of total assets was 0.23% at December 31, 2023, 0.20% at September 30, 2023, and 0.22% at December 31, 2022.
- Past due loans as a percentage of total loans was 0.68% at December 31, 2023, 0.53% at September 30, 2023, and 0.41% at December 31, 2022.
- Book value per share was $16.94 at December 31, 2023, and $16.71 at December 31, 2022.
Community Banking Segment
- Pre-tax income totaled $5.3 million for the quarter ended December 31, 2023, which represents a $1.7 million, or 24.3%, decrease compared to $7.0 million for the quarter ended December 31, 2022.
- Past due loans at the community banking segment totaled $7.9 million at December 31, 2023, $6.7 million at September 30, 2023, and $4.8 million at December 31, 2022.
- Net interest income totaled $12.1 million for the quarter ended December 31, 2023, which represents a $3.7 million, or 23.4%, decrease compared to $15.7 million for the quarter ended December 31, 2022.
- Average loans held for investment totaled $1.66 billion during the quarter ended December 31, 2023, which represents an increase of $247.2 million, or 17.5%, compared to $1.41 billion for the quarter ended December 31, 2022. The increase was primarily due to increases in the single-family, multi-family, and commercial real estate mortgages. Average loans held for investment increased $33.1 million compared to $1.63 billion for the quarter ended September 30, 2023. The increase was primarily due to an increase in single-family and commercial real estate mortgages.
- Net interest margin decreased 104 basis points to 2.25% for the quarter ended December 31, 2023, compared to 3.29% for the quarter ended December 31, 2022, which was a result of an increase in weighted average cost of deposits and borrowings as the federal funds rate increases resulted in increased funding rates. Net interest margin decreased one basis point compared to 2.26% for the quarter ended September 30, 2023, driven by an increase in weighted average cost of deposits and borrowings as the federal funds rate increases resulted in increased funding rates.
- The segment had a negative provision for credit losses related to funded loans of $17,000 for the quarter ended December 31, 2023, compared to a provision for credit losses related to funded loans of $290,000 for the quarter ended December 31, 2022. The current quarter decrease was primarily due to historical loss rates continuing to decrease. The negative provision for credit losses related to unfunded loan commitments was $533,000 for the quarter ended December 31, 2023, compared to a provision for credit losses related to unfunded loan commitments of $334,000 for the quarter ended December 31, 2022. The decrease for the quarter ended December 31, 2023, was due primarily to a decrease of loans in the loan commitment pipeline as loan activity decreased during the quarter and loans from the prior quarter pipeline funded.
- The efficiency ratio, a non-GAAP ratio, was 63.26% for the quarter ended December 31, 2023, compared to 54.49% for the quarter ended December 31, 2022.
- Average deposits (excluding escrow accounts) totaled $1.21 billion during the quarter ended December 31, 2023, a decrease of $1.7 million, or 0.1%, compared to $1.21 billion during the quarter ended December 31, 2022. Average deposits increased $10.4 million, or 3.5% annualized, compared to the $1.20 billion for the quarter ended September 30, 2023.
- Other noninterest expense decreased $1.8 million to $628,000 during the quarter ended December 31, 2023, compared to $2.5 million during the quarter ended December 31, 2022. The decrease was driven by fees paid to the mortgage banking segment for the purchase of single-family adjustable-rate mortgage loans. These fees totaled $44,000 during the quarter ended December 31, 2023, compared to $2.0 million during the quarter ended December 31, 2022.
Mortgage Banking Segment
- Pre-tax loss totaled $6.0 million for the quarter ended December 31, 2023, compared to $6.5 million of pre-tax loss for the quarter ended December 31, 2022.
- Loan originations decreased $88.3 million, or 16.1%, to $458.4 million during the quarter ended December 31, 2023, compared to $546.6 million during the quarter ended December 31, 2022. Origination volume relative to purchase activity accounted for 95.7% of originations for the quarter ended December 31, 2023, compared to 95.6% of total originations for the quarter ended December 31, 2022.
- Mortgage banking non-interest income decreased $2.0 million, or 11.3%, to $16.0 million for the quarter ended December 31, 2023, compared to $18.1 million for the quarter ended December 31, 2022.
- Gross margin on loans sold totaled 3.51% for the quarter ended December 31, 2023, compared to 3.41% for the quarter ended December 31, 2022.
- Total compensation, payroll taxes and other employee benefits decreased $2.5 million, or 14.5%, to $14.9 million during the quarter ended December 31, 2023, compared to $17.4 million during the quarter ended December 31, 2022. The decrease primarily related to decreased commission expense and salary expense driven by decreased loan origination volume and reduced employee headcount.
About Waterstone Financial, Inc.
Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.
Forward-Looking Statements
This press release contains statements or information that may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as “may,” “expects,” “anticipates,” “estimates” or “believes.” Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors referenced in Item 1A. Risk Factors in Waterstone’s most recent Annual Report on Form 10-K and as may be described from time to time in Waterstone’s subsequent SEC filings, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone’s belief as of the date of this press release.
Non-GAAP Financial Measures
Management uses non-GAAP financial information in its analysis of the Company’s performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhance comparability of results of operations with prior periods. The Company’s management believes that investors may use this non-GAAP measure to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently.
Contact: Mark R. Gerke
Chief Financial Officer
414-459-4012
markgerke@wsbonline.com
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| For The Three Months Ended December 31, | For The Twelve Months Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (In Thousands, except per share amounts) | ||||||||||||||||
| Interest income: | ||||||||||||||||
| Loans | $ | 24,288 | $ | 18,654 | $ | 90,148 | $ | 62,935 | ||||||||
| Mortgage-related securities | 1,081 | 915 | 4,053 | 3,241 | ||||||||||||
| Debt securities, federal funds sold and short-term investments | 1,325 | 1,105 | 5,007 | 4,069 | ||||||||||||
| Total interest income | 26,694 | 20,674 | 99,208 | 70,245 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 8,253 | 2,352 | 25,738 | 4,863 | ||||||||||||
| Borrowings | 6,685 | 2,711 | 23,255 | 8,428 | ||||||||||||
| Total interest expense | 14,938 | 5,063 | 48,993 | 13,291 | ||||||||||||
| Net interest income | 11,756 | 15,611 | 50,215 | 56,954 | ||||||||||||
| Provision (credit) for credit losses | (435 | ) | 664 | 656 | 968 | |||||||||||
| Net interest income after provision (credit) for loan losses | 12,191 | 14,947 | 49,559 | 55,986 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Service charges on loans and deposits | 328 | 497 | 1,819 | 2,202 | ||||||||||||
| Increase in cash surrender value of life insurance | 337 | 344 | 1,710 | 1,738 | ||||||||||||
| Mortgage banking income | 15,830 | 15,811 | 75,686 | 99,560 | ||||||||||||
| Other | 381 | 443 | 1,970 | 2,055 | ||||||||||||
| Total noninterest income | 16,876 | 17,095 | 81,185 | 105,555 | ||||||||||||
| Noninterest expenses: | ||||||||||||||||
| Compensation, payroll taxes, and other employee benefits | 20,061 | 22,063 | 84,096 | 99,565 | ||||||||||||
| Occupancy, office furniture, and equipment | 2,021 | 2,166 | 8,323 | 8,706 | ||||||||||||
| Advertising | 1,030 | 972 | 3,779 | 3,976 | ||||||||||||
| Data processing | 1,212 | 1,040 | 4,653 | 4,470 | ||||||||||||
| Communications | 269 | 289 | 988 | 1,189 | ||||||||||||
| Professional fees | 907 | 612 | 2,686 | 1,815 | ||||||||||||
| Real estate owned | 1 | 13 | 4 | 19 | ||||||||||||
| Loan processing expense | 756 | 1,059 | 3,428 | 4,744 | ||||||||||||
| Other | 3,405 | 3,170 | 11,755 | 12,578 | ||||||||||||
| Total noninterest expenses | 29,662 | 31,384 | 119,712 | 137,062 | ||||||||||||
| (Loss) income before income taxes | (595 | ) | 658 | 11,032 | 24,479 | |||||||||||
| Income tax (benefit) expense | (555 | ) | (277 | ) | 1,657 | 4,992 | ||||||||||
| Net (loss) income | $ | (40 | ) | $ | 935 | $ | 9,375 | $ | 19,487 | |||||||
| (Loss) income per share: | ||||||||||||||||
| Basic | $ | (0.00 | ) | $ | 0.04 | $ | 0.47 | $ | 0.89 | |||||||
| Diluted | $ | (0.00 | ) | $ | 0.04 | $ | 0.46 | $ | 0.89 | |||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 19,380 | 20,966 | 20,158 | 21,884 | ||||||||||||
| Diluted | 19,398 | 21,069 | 20,196 | 22,010 | ||||||||||||
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| Assets | (In Thousands, except per share amounts) | |||||||
| Cash | $ | 30,667 | $ | 33,700 | ||||
| Federal funds sold | 5,493 | 10,683 | ||||||
| Interest-earning deposits in other financial institutions and other short-term investments | 261 | 2,259 | ||||||
| Cash and cash equivalents | 36,421 | 46,642 | ||||||
| Securities available for sale (at fair value) | 204,907 | 196,588 | ||||||
| Loans held for sale (at fair value) | 164,993 | 131,188 | ||||||
| Loans receivable | 1,664,215 | 1,510,178 | ||||||
| Less: Allowance for credit losses (“ACL”) – loans | 18,549 | 17,757 | ||||||
| Loans receivable, net | 1,645,666 | 1,492,421 | ||||||
| Office properties and equipment, net | 19,995 | 21,105 | ||||||
| Federal Home Loan Bank stock (at cost) | 20,880 | 17,357 | ||||||
| Cash surrender value of life insurance | 67,859 | 66,443 | ||||||
| Real estate owned, net | 254 | 145 | ||||||
| Prepaid expenses and other assets | 52,414 | 59,783 | ||||||
| Total assets | $ | 2,213,389 | $ | 2,031,672 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Demand deposits | $ | 187,107 | $ | 230,596 | ||||
| Money market and savings deposits | 273,233 | 326,145 | ||||||
| Time deposits | 730,284 | 642,271 | ||||||
| Total deposits | 1,190,624 | 1,199,012 | ||||||
| Borrowings | 611,054 | 386,784 | ||||||
| Advance payments by borrowers for taxes | 6,607 | 5,334 | ||||||
| Other liabilities | 61,048 | 70,056 | ||||||
| Total liabilities | 1,869,333 | 1,661,186 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock | – | – | ||||||
| Common stock | 203 | 222 | ||||||
| Additional paid-in capital | 103,908 | 128,550 | ||||||
| Retained earnings | 269,606 | 274,246 | ||||||
| Unearned ESOP shares | (11,869 | ) | (13,056 | ) | ||||
| Accumulated other comprehensive loss, net of taxes | (17,792 | ) | (19,476 | ) | ||||
| Total shareholders’ equity | 344,056 | 370,486 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,213,389 | $ | 2,031,672 | ||||
| Share Information | ||||||||
| Shares outstanding | 20,315 | 22,174 | ||||||
| Book value per share | $ | 16.94 | $ | 16.71 | ||||
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
| At or For the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| (Dollars in Thousands, except per share amounts) | ||||||||||||||||||||
| Condensed Results of Operations: | ||||||||||||||||||||
| Net interest income | $ | 11,756 | $ | 11,989 | $ | 12,675 | $ | 13,795 | $ | 15,611 | ||||||||||
| Provision (credit) for credit losses | (435 | ) | 445 | 186 | 460 | 664 | ||||||||||||||
| Total noninterest income | 16,876 | 22,230 | 23,525 | 18,554 | 17,095 | |||||||||||||||
| Total noninterest expense | 29,662 | 30,021 | 30,922 | 29,107 | 31,384 | |||||||||||||||
| Income before income taxes | (595 | ) | 3,753 | 5,092 | 2,782 | 658 | ||||||||||||||
| Income tax (benefit) expense | (555 | ) | 500 | 1,085 | 627 | (277 | ) | |||||||||||||
| Net (loss) income | $ | (40 | ) | $ | 3,253 | $ | 4,007 | $ | 2,155 | $ | 935 | |||||||||
| (Loss) income per share – basic | $ | (0.00 | ) | $ | 0.16 | $ | 0.20 | $ | 0.10 | $ | 0.04 | |||||||||
| (Loss) income per share – diluted | $ | (0.00 | ) | $ | 0.16 | $ | 0.20 | $ | 0.10 | $ | 0.04 | |||||||||
| Dividends declared per common share | $ | 0.15 | $ | 0.15 | $ | 0.20 | $ | 0.20 | $ | 0.20 | ||||||||||
| Performance Ratios (annualized): | ||||||||||||||||||||
| Return on average assets – QTD | (0.01 | )% | 0.58 | % | 0.74 | % | 0.43 | % | 0.19 | % | ||||||||||
| Return on average equity – QTD | (0.05 | )% | 3.63 | % | 4.41 | % | 2.35 | % | 0.99 | % | ||||||||||
| Net interest margin – QTD | 2.25 | % | 2.26 | % | 2.47 | % | 2.88 | % | 3.29 | % | ||||||||||
| Return on average assets – YTD | 0.44 | % | 0.59 | % | 0.59 | % | 0.43 | % | 0.96 | % | ||||||||||
| Return on average equity – YTD | 2.62 | % | 3.46 | % | 3.37 | % | 2.35 | % | 4.91 | % | ||||||||||
| Net interest margin – YTD | 2.46 | % | 2.53 | % | 2.67 | % | 2.88 | % | 3.00 | % | ||||||||||
| Asset Quality Ratios: | ||||||||||||||||||||
| Past due loans to total loans | 0.68 | % | 0.53 | % | 0.50 | % | 0.64 | % | 0.41 | % | ||||||||||
| Nonaccrual loans to total loans | 0.29 | % | 0.25 | % | 0.26 | % | 0.29 | % | 0.29 | % | ||||||||||
| Nonperforming assets to total assets | 0.23 | % | 0.20 | % | 0.19 | % | 0.22 | % | 0.22 | % | ||||||||||
| Allowance for credit losses – loans to loans receivable | 1.11 | % | 1.12 | % | 1.14 | % | 1.14 | % | 1.18 | % | ||||||||||
WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES
SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS
(Unaudited)
| At or For the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| Average balances | (Dollars in Thousands) | |||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||||
| Loans receivable and held for sale | $ | 1,797,988 | $ | 1,797,233 | $ | 1,759,001 | $ | 1,654,942 | $ | 1,578,790 | ||||||||||
| Mortgage related securities | 172,863 | 174,202 | 171,938 | 170,218 | 170,209 | |||||||||||||||
| Debt securities, federal funds sold and short-term investments | 106,504 | 132,935 | 123,195 | 115,962 | 130,973 | |||||||||||||||
| Total interest-earning assets | 2,077,355 | 2,104,370 | 2,054,134 | 1,941,122 | 1,879,972 | |||||||||||||||
| Noninterest-earning assets | 105,073 | 105,714 | 108,320 | 107,009 | 122,643 | |||||||||||||||
| Total assets | $ | 2,182,428 | $ | 2,210,084 | $ | 2,162,454 | $ | 2,048,131 | $ | 2,002,615 | ||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||
| Demand accounts | $ | 91,868 | $ | 90,623 | $ | 69,147 | $ | 68,564 | $ | 75,449 | ||||||||||
| Money market, savings, and escrow accounts | 302,121 | 306,806 | 305,576 | 322,220 | 349,820 | |||||||||||||||
| Certificates of deposit | 735,418 | 719,708 | 695,310 | 648,531 | 628,375 | |||||||||||||||
| Total interest-bearing deposits | 1,129,407 | 1,117,137 | 1,070,033 | 1,039,315 | 1,053,644 | |||||||||||||||
| Borrowings | 549,210 | 584,764 | 551,545 | 441,716 | 333,249 | |||||||||||||||
| Total interest-bearing liabilities | 1,678,617 | 1,701,901 | 1,621,578 | 1,481,031 | 1,386,893 | |||||||||||||||
| Noninterest-bearing demand deposits | 102,261 | 106,042 | 130,291 | 143,296 | 177,217 | |||||||||||||||
| Noninterest-bearing liabilities | 56,859 | 46,805 | 46,446 | 51,840 | 63,866 | |||||||||||||||
| Total liabilities | 1,837,737 | 1,854,748 | 1,798,315 | 1,676,167 | 1,627,976 | |||||||||||||||
| Equity | 344,691 | 355,336 | 364,139 | 371,964 | 374,639 | |||||||||||||||
| Total liabilities and equity | $ | 2,182,428 | $ | 2,210,084 | $ | 2,162,454 | $ | 2,048,131 | $ | 2,002,615 | ||||||||||
| Average Yield/Costs (annualized) | ||||||||||||||||||||
| Loans receivable and held for sale | 5.36 | % | 5.26 | % | 5.05 | % | 4.87 | % | 4.69 | % | ||||||||||
| Mortgage related securities | 2.48 | % | 2.41 | % | 2.26 | % | 2.25 | % | 2.13 | % | ||||||||||
| Debt securities, federal funds sold and short-term investments | 4.94 | % | 4.45 | % | 3.67 | % | 3.71 | % | 3.35 | % | ||||||||||
| Total interest-earning assets | 5.10 | % | 4.97 | % | 4.73 | % | 4.57 | % | 4.36 | % | ||||||||||
| Demand accounts | 0.11 | % | 0.11 | % | 0.09 | % | 0.08 | % | 0.08 | % | ||||||||||
| Money market and savings accounts | 1.64 | % | 1.54 | % | 1.42 | % | 1.26 | % | 0.67 | % | ||||||||||
| Certificates of deposit | 3.76 | % | 3.43 | % | 2.80 | % | 1.92 | % | 1.10 | % | ||||||||||
| Total interest-bearing deposits | 2.90 | % | 2.64 | % | 2.23 | % | 1.60 | % | 0.89 | % | ||||||||||
| Borrowings | 4.83 | % | 4.71 | % | 4.08 | % | 3.68 | % | 3.23 | % | ||||||||||
| Total interest-bearing liabilities | 3.53 | % | 3.35 | % | 2.86 | % | 2.22 | % | 1.45 | % | ||||||||||
COMMUNITY BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
| At or For the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Condensed Results of Operations: | ||||||||||||||||||||
| Net interest income | $ | 12,056 | $ | 12,431 | $ | 13,238 | $ | 14,008 | $ | 15,737 | ||||||||||
| Provision (credit) for credit losses | (550 | ) | 445 | 158 | 388 | 624 | ||||||||||||||
| Total noninterest income | 894 | 966 | 1,540 | 987 | 1,033 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Compensation, payroll taxes, and other employee benefits | 5,397 | 4,618 | 4,683 | 5,168 | 4,781 | |||||||||||||||
| Occupancy, office furniture and equipment | 916 | 852 | 873 | 1,031 | 877 | |||||||||||||||
| Advertising | 363 | 200 | 230 | 184 | 203 | |||||||||||||||
| Data processing | 626 | 672 | 602 | 601 | 551 | |||||||||||||||
| Communications | 75 | 70 | 72 | 78 | 92 | |||||||||||||||
| Professional fees | 186 | 176 | 146 | 218 | 153 | |||||||||||||||
| Real estate owned | 1 | 1 | 1 | 1 | 13 | |||||||||||||||
| Loan processing expense | – | – | – | – | – | |||||||||||||||
| Other | 628 | 703 | 1,641 | 896 | 2,468 | |||||||||||||||
| Total noninterest expense | 8,192 | 7,292 | 8,248 | 8,177 | 9,138 | |||||||||||||||
| Income before income taxes | 5,308 | 5,660 | 6,372 | 6,430 | 7,008 | |||||||||||||||
| Income tax expense | 1,234 | 1,121 | 1,182 | 1,600 | 1,308 | |||||||||||||||
| Net income | $ | 4,074 | $ | 4,539 | $ | 5,190 | $ | 4,830 | $ | 5,700 | ||||||||||
| Efficiency ratio – QTD (non-GAAP) | 63.26 | % | 54.43 | % | 55.81 | % | 54.53 | % | 54.49 | % | ||||||||||
| Efficiency ratio – YTD (non-GAAP) | 56.86 | % | 54.94 | % | 55.17 | % | 54.53 | % | 52.10 | % | ||||||||||
MORTGAGE BANKING SEGMENT
SUMMARY OF KEY QUARTERLY FINANCIAL DATA
(Unaudited)
| At or For the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Condensed Results of Operations: | ||||||||||||||||||||
| Net interest loss | $ | (367 | ) | $ | (550 | ) | $ | (622 | ) | $ | (282 | ) | $ | (241 | ) | |||||
| Provision for credit losses | 115 | – | 28 | 72 | 40 | |||||||||||||||
| Total noninterest income | 16,028 | 21,452 | 23,041 | 17,951 | 18,066 | |||||||||||||||
| Noninterest expenses: | ||||||||||||||||||||
| Compensation, payroll taxes, and other employee benefits | 14,881 | 17,186 | 17,929 | 15,099 | 17,397 | |||||||||||||||
| Occupancy, office furniture and equipment | 1,105 | 1,141 | 1,173 | 1,232 | 1,289 | |||||||||||||||
| Advertising | 667 | 716 | 714 | 705 | 769 | |||||||||||||||
| Data processing | 583 | 551 | 480 | 516 | 490 | |||||||||||||||
| Communications | 194 | 173 | 153 | 173 | 197 | |||||||||||||||
| Professional fees | 704 | 564 | 466 | 188 | 453 | |||||||||||||||
| Real estate owned | – | – | – | – | – | |||||||||||||||
| Loan processing expense | 756 | 722 | 932 | 1,018 | 1,059 | |||||||||||||||
| Other | 2,701 | 1,935 | 1,914 | 2,403 | 2,584 | |||||||||||||||
| Total noninterest expense | 21,591 | 22,988 | 23,761 | 21,334 | 24,238 | |||||||||||||||
| Loss before income taxes | (6,045 | ) | (2,086 | ) | (1,370 | ) | (3,737 | ) | (6,453 | ) | ||||||||||
| Income tax benefit | (1,827 | ) | (657 | ) | (126 | ) | (1,002 | ) | (1,602 | ) | ||||||||||
| Net loss | $ | (4,218 | ) | $ | (1,429 | ) | $ | (1,244 | ) | $ | (2,735 | ) | $ | (4,851 | ) | |||||
| Efficiency ratio – QTD (non-GAAP) | 137.86 | % | 109.98 | % | 105.99 | % | 120.74 | % | 135.98 | % | ||||||||||
| Efficiency ratio – YTD (non-GAAP) | 116.99 | % | 111.63 | % | 112.49 | % | 120.74 | % | 104.02 | % | ||||||||||
| Loan originations | $ | 458,363 | $ | 597,562 | $ | 623,342 | $ | 442,710 | $ | 546,628 | ||||||||||
| Purchase | 95.7 | % | 95.4 | % | 96.4 | % | 96.5 | % | 95.6 | % | ||||||||||
| Refinance | 4.3 | % | 4.6 | % | 3.6 | % | 3.5 | % | 4.4 | % | ||||||||||
| Gross margin on loans sold(1) | 3.51 | % | 3.62 | % | 3.73 | % | 3.78 | % | 3.41 | % | ||||||||||
(1) Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations
