FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), parent
company of FinWise Bank (the “Bank”), today announced results for
the quarter ended June 30, 2023.
Second Quarter
2023 Highlights
- Loan originations were $1.2
billion, compared to $0.9 billion for the quarter ended
March 31, 2023, and $2.1 billion for the second quarter of the
prior year
- Net interest income was $13.7
million, compared to $12.1 million for the quarter ended
March 31, 2023, and $12.8 million for the second quarter of
the prior year
- Net Income was $4.6 million,
compared to $3.9 million for the quarter ended March 31, 2023,
and $5.5 million for the second quarter of the prior year
- Diluted earnings per share (“EPS”)
were $0.35 for the quarter, compared to $0.29 for the quarter ended
March 31, 2023, and $0.41 for the second quarter of the prior
year
- Efficiency ratio rose to 52.7%,
compared to 52.5% for the quarter ended March 31, 2023, and
52.0% for the second quarter of the prior year (1)
- Annualized return on average equity
(ROAE) was 12.8%, compared to 11.1% in the quarter ended
March 31, 2023, and 17.2% in the second quarter of the prior
year
- Asset quality remained solid with a
non-performing loans to total loans ratio of 0.3%
- Entered into definitive agreement on July 25, 2023 to increase
ownership of Business Funding Group, LLC (“BFG”) to 20% through the
issuance of 372,132 shares of the Company’s common stock in
exchange for an additional 10% equity interest in BFG upon
closing
(1) See “Reconciliation of Non-GAAP to GAAP Financial Measures”
for a reconciliation of this non-GAAP measure.
“Our team delivered solid originations,
maintained strong credit quality, and effectively managed costs in
the second quarter, notwithstanding the challenging macro backdrop”
said Kent Landvatter, Chairman, Chief Executive Officer and
President of FinWise. “In addition, in-line with our long-term
strategic plans, we invested in our future as we increased our
ownership in BFG by seizing upon the market dislocation to add an
additional 10% membership interest at favorable relative pricing.”
Mr. Landvatter continued, “As we look forward, we remain highly
vigilant regarding the uncertainties that lie ahead and believe
that the industry-wide slowdown in loan originations may persist as
we move through 2023. We continue to effectively manage the areas
of our business that we can control as we maintain a prudent
underwriting, capital management and cost control stance, while
continuing to invest in our business. We remain well-positioned to
capitalize on future growth opportunities as the environment
stabilizes. We believe these thoughtful actions will result in
improved efficiency, profitability and long-term shareholder value
creation.”
| |
|
|
|
|
|
|
| Selected Financial
Data |
|
|
|
|
|
|
| |
|
For the Three Months Ended |
| ($s in thousands, except per
share amounts) |
|
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| |
|
|
|
|
|
|
|
Net Income |
|
$ |
4,639 |
|
|
$ |
3,861 |
|
|
$ |
5,482 |
|
| Diluted EPS |
|
$ |
0.35 |
|
|
$ |
0.29 |
|
|
$ |
0.41 |
|
| Return on average assets |
|
|
3.9 |
% |
|
|
3.8 |
% |
|
|
5.5 |
% |
| Return on average equity |
|
|
12.8 |
% |
|
|
11.1 |
% |
|
|
17.2 |
% |
| Yield on loans |
|
|
17.77 |
% |
|
|
17.24 |
% |
|
|
18.42 |
% |
| Cost of deposits |
|
|
4.02 |
% |
|
|
3.18 |
% |
|
|
0.77 |
% |
| Net interest margin |
|
|
12.14 |
% |
|
|
12.51 |
% |
|
|
13.69 |
% |
| Efficiency ratio(1) |
|
|
52.7 |
% |
|
|
52.5 |
% |
|
|
52.0 |
% |
| Tangible book value per
share(2) |
|
$ |
11.59 |
|
|
$ |
11.26 |
|
|
$ |
10.13 |
|
| Tangible shareholders’ equity
to tangible assets(2) |
|
|
29.7 |
% |
|
|
32.6 |
% |
|
|
35.7 |
% |
| Leverage Ratio (Bank under
CBLR) |
|
|
22.4 |
% |
|
|
24.0 |
% |
|
|
21.4 |
% |
(1) This measure is not a measure recognized
under United States generally accepted accounting principles, or
GAAP, and is therefore considered to be a non-GAAP financial
measure. 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. The Company believes 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 a
non-GAAP financial measure. 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. The Company had no goodwill
or other intangible assets as of any of the dates indicated. The
Company has not considered loan servicing rights or loan trailing
fee asset as intangible assets 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 IncomeNet income was $4.6 million for the
second quarter of 2023, compared to $3.9 million for the first
quarter of 2023, and $5.5 million for the second quarter of 2022.
The improvement from the prior quarter was primarily due to an
increase in net interest income driven by growth in loans held for
investment portfolio. The decrease from the prior year period was
primarily due to lower strategic program fees, higher interest
expense on deposits, and lower gain on sale, partially offset by
higher interest income and a reduction in non-interest expense.
Net Interest IncomeNet interest income was $13.7
million for the second quarter of 2023, compared to $12.1 million
for the first quarter of 2023, and $12.8 million for the second
quarter of 2022. The improvement from the prior quarter and prior
year period was primarily due to increases in the Bank’s average
balances on the loans held for investment portfolio, coupled with
increasing yields on variable rate interest earning assets due to
the rising rate environment, partially offset by increases in the
interest rates being paid and average interest-bearing liability
balances over the same periods.
Loan originations totaled $1.2 billion for the
second quarter of 2023, compared to $0.9 billion for the prior
quarter and $2.1 billion for the prior year period.
Net interest margin for the second quarter of
2023 was 12.14%, compared to 12.51% for the prior quarter and
13.69% for the prior year period. The decrease from the prior
quarter was mainly due to an increase in interest bearing
liabilities primarily associated with a rise in certificates of
deposit balances and rates. The decrease from the prior year period
was primarily due to a reduction in average balances in the
Company’s loans held for sale portfolio along with a shift in the
Company’s deposit portfolio mix from lower to higher costing
deposits, partially offset by an increase in average balances in
the Company’s loans held for investment portfolio.
Provision for Credit LossesThe Company’s
provision for credit losses was $2.7 million, compared to $2.9
million for the prior year period. Compared to the first quarter of
2023, the Company’s provision for credit losses in the second
quarter of 2023 was substantially flat. The stability in the
provision between the first and second quarters of 2023 despite the
net growth in loans receivable reflects the reduction in strategic
program loan balances held for investment as well as a reduction in
net charge-offs quarter over quarter. The increase in the provision
compared to the second quarter of 2022 was primarily due to a
reduction in strategic program loans held for investment, although
the provision for the prior year period was calculated under the
incurred loss model rather than the current expected credit loss
methodology as required under ASU 2016-13 and is not necessarily
comparable to the provisions charged in 2023.
Non-interest Income
| |
For the Three Months Ended |
| ($ in thousands) |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Noninterest income: |
|
|
|
|
|
|
Strategic Program fees |
$ |
4,054 |
|
$ |
3,685 |
|
|
$ |
6,221 |
|
|
Gain on sale of loans |
|
700 |
|
|
187 |
|
|
|
2,412 |
|
|
SBA loan servicing fees |
|
226 |
|
|
591 |
|
|
|
342 |
|
|
Change in fair value on investment in BFG |
|
120 |
|
|
(85 |
) |
|
|
(575 |
) |
|
Other miscellaneous income |
|
188 |
|
|
149 |
|
|
|
31 |
|
| Total noninterest income |
$ |
5,288 |
|
$ |
4,527 |
|
|
$ |
8,431 |
|
Non-interest income was $5.3 million for the
second quarter of 2023, compared to $4.5 million for the prior
quarter and $8.4 million for the prior year period. The increase
from the prior quarter was primarily due to an increase in the
number of SBA 7(a) loans sold. The decrease from the prior year
period was primarily due to lower originations of Strategic Program
loans and the associated Strategic Program fees, a reduction in
gain on sale of loans primarily attributable to the Company’s
increased retention of the guaranteed portion of SBA loans the
Company originates to increase interest income which resulted in a
corresponding decrease in gain on sale income, partially offset by
an increase in the fair value of the Company’s investment in
BFG.
Non-interest Expense
| |
For the Three Months Ended |
| ($ in thousands) |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Non-interest expense |
|
|
|
|
|
|
Salaries and employee benefits |
$ |
6,681 |
|
|
$ |
5,257 |
|
|
$ |
6,594 |
|
Professional services |
|
1,305 |
|
|
|
1,474 |
|
|
|
1,511 |
|
Occupancy and equipment expenses |
|
718 |
|
|
|
712 |
|
|
|
469 |
|
(Recovery) impairment of SBA servicing asset |
|
(339 |
) |
|
|
(253 |
) |
|
|
1,135 |
|
Other operating expenses |
|
1,634 |
|
|
|
1,547 |
|
|
|
1,310 |
| Total noninterest expense |
$ |
9,999 |
|
|
$ |
8,737 |
|
|
$ |
11,019 |
Non-interest expense was $10.0 million for
the second quarter of 2023, compared to $8.7 million for the prior
quarter and $11.0 million for the prior year period. The
increase from the prior quarter was primarily due to an increase in
salaries and employee benefits related to higher accruals for
performance bonuses based on higher Company profitability. The
decrease from the prior year period was primarily due to a recovery
on the Company’s SBA servicing asset in the second quarter of 2023
which did not occur in the prior year period.
The Company’s efficiency ratio was 52.7% for the
second quarter of 2023, compared to 52.5% for the prior quarter and
52.0% for the prior year period.
Tax RateThe Company’s effective tax rate was 26.1% for the
second and first quarter of 2023, compared to 24.6% for the prior
year period.
Balance SheetThe Company’s total assets were
$495.6 million as of June 30, 2023, an increase from $442.3
million as of March 31, 2023 and $366.0 million as of
June 30, 2022. The increase from March 31, 2023 was
primarily due to increases in loans receivable due to continued
growth in the SBA and commercial non real estate loan portfolios,
Strategic Program loans held-for-sale, interest-bearing deposits as
well as an increase in income tax receivables. The increase in
total assets compared to June 30, 2022 was primarily due to
increases in loans receivable due to continued growth in the SBA,
commercial non real estate and commercial real estate loan
portfolios, Strategic Program loans held-for-sale, and
interest-bearing deposits.
The following table shows the loan portfolio as of the dates
indicated:
| |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| ($s in thousands) |
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
Amount |
|
% of total loans |
|
SBA |
$ |
189,028 |
|
65.0 |
% |
|
$ |
178,663 |
|
65.6 |
% |
|
$ |
124,477 |
|
62.1 |
% |
|
Commercial, non-real estate |
|
24,851 |
|
8.6 |
% |
|
|
17,890 |
|
6.6 |
% |
|
|
7,847 |
|
3.9 |
% |
|
Residential real estate |
|
30,378 |
|
10.5 |
% |
|
|
30,994 |
|
11.4 |
% |
|
|
30,965 |
|
15.4 |
% |
|
Strategic Program loans held for investment |
|
20,732 |
|
7.1 |
% |
|
|
21,393 |
|
7.9 |
% |
|
|
27,467 |
|
13.7 |
% |
|
Commercial real estate |
|
18,677 |
|
6.4 |
% |
|
|
17,022 |
|
6.2 |
% |
|
|
4,722 |
|
2.4 |
% |
|
Consumer |
|
6,993 |
|
2.4 |
% |
|
|
6,351 |
|
2.3 |
% |
|
|
5,062 |
|
2.5 |
% |
| Total period end loans |
$ |
290,659 |
|
100.0 |
% |
|
$ |
272,313 |
|
100.0 |
% |
|
$ |
200,540 |
|
100.0 |
% |
Note: SBA loans as of June 30, 2023, March 31, 2023
and June 30, 2022 include $0.5 million, $0.6 million and $0.7
million in PPP loans, respectively. SBA loans as of June 30,
2023, March 31, 2023 and June 30, 2022 include $85.5
million, $75.9 million and $46.0 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, 2023, March 31, 2023 and
June 30, 2022 was $5.5 million, $6.9 million and $12.0
million, respectively.
Total loans receivable as of June 30, 2023
were $290.7 million, an increase from $272.3 million and $200.5
million as of March 31, 2023 and June 30, 2022,
respectively. The improvement compared to March 31, 2023 and
June 30, 2022 was primarily due to increases in SBA 7(a) loan
balances, commercial loan balances and commercial real estate loan
balances.
The following table shows the Company’s deposit composition as
of the dates indicated:
| |
As of |
|
|
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| ($s in thousands) |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Noninterest-bearing demand deposits |
$ |
93,347 |
|
28.1 |
% |
|
$ |
79,930 |
|
28.3 |
% |
|
$ |
83,490 |
|
38.1 |
% |
| Interest-bearing
deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
46,335 |
|
13.9 |
% |
|
|
42,030 |
|
14.8 |
% |
|
|
11,360 |
|
5.1 |
% |
|
Savings |
|
9,484 |
|
2.9 |
% |
|
|
7,963 |
|
2.8 |
% |
|
|
7,462 |
|
3.4 |
% |
|
Money market |
|
14,473 |
|
4.3 |
% |
|
|
12,993 |
|
4.6 |
% |
|
|
48,273 |
|
22.0 |
% |
|
Time certificates of deposit |
|
168,891 |
|
50.8 |
% |
|
|
140,276 |
|
49.5 |
% |
|
|
68,774 |
|
31.4 |
% |
| Total period end deposits |
$ |
332,530 |
|
100.0 |
% |
|
$ |
283,192 |
|
100.0 |
% |
|
$ |
219,359 |
|
100.0 |
% |
Total deposits as of June 30, 2023
increased to $332.5 million from $283.2 million and $219.4 million
as of March 31, 2023 and June 30, 2022, respectively. The
increase over both prior periods was primarily due to growth in
brokered CDs which were generally utilized for short term funding
needs. The increase in noninterest-bearing demand deposits of
June 30, 2023 compared to both prior periods was primarily due
to increases in deposit reserve account balances related to the
Company’s outstanding strategic program loans held for sale. The
increase in interest-bearing demand deposits as of June 30,
2023 compared to June 30, 2022 was primarily due to HSA
deposits from Lively, Inc., a technology-focused Health Savings
Account provider. The decrease in money markets as of June 30, 2023
compared to June 30, 2022 was primarily due to a decrease in
brokered money market deposits and a reduction in reserve account
balances related to the Company’s strategic programs. As of June
30, 2023, 36.3% of deposits at the Bank level were uninsured,
compared to 36.1% as of March 31, 2023. As of June 30, 2023, 8.1%
of total bank deposits were required under our Strategic Program
agreements and an additional 13.2% were associated with other
accounts owned by the Company or the Bank.
Total shareholders’ equity as of June 30,
2023 increased $3.1 million to $147.4 million from $144.4 million
at March 31, 2023. Compared to June 30, 2022, total
shareholders’ equity as of June 30, 2023 increased $16.9
million from $130.5 million. The increase from March 31, 2023
and June 30, 2022 was primarily due to the Company’s net
income, partially offset by the repurchase of common stock under
the Company’s share repurchase program.
Bank Regulatory Capital
RatiosThe following table presents the leverage ratios for
the Bank as of the dates indicated as determined under the
Community Bank Leverage Ratio Framework of the Federal Deposit
Insurance Corporation:
|
|
As of |
|
|
|
Capital Ratios |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
|
Well-Capitalized Requirement |
| Leverage Ratio |
22.4% |
|
24.0% |
|
21.4% |
|
9.0% |
The Bank’s capital levels remain significantly above
well-capitalized guidelines as of June 30, 2023.
Share Repurchase ProgramAs of
June 30, 2023, the Company has repurchased a total of 413,263
shares for $3.5 million under the Company’s share repurchase
program announced in August 2022.
Asset QualityNonperforming
loans were $0.9 million, or 0.3% of total loans receivable, as of
June 30, 2023, compared to $0.7 million or 0.3% of total loans
receivable, as of March 31, 2023 and $0.6 million, or
0.3% of total loans receivable, as of June 30, 2022. The
Company’s allowance for credit losses to total loans held for
investment was 4.2% as of June 30, 2023 compared to the
Company’s allowance for credit losses to total loans held for
investment of 4.4% as of March 31, 2023 and 5.3% as of
June 30, 2022.
For the second quarter of 2023, the Company’s
net charge-offs were $2.4 million, compared to $2.9 million for the
prior quarter and $2.3 million for the prior year period. The
decrease in net charge-offs compared to the prior quarter was
primarily due to lower net charge-offs related to retained
strategic programs. The increase in net charge-offs compared to the
second quarter of 2022 was primarily due to higher net charge-offs
related to SBA loans.
The following table presents a summary of changes in the
allowance for credit losses and asset quality ratios for the
periods indicated:
|
|
For the Three Months Ended |
| ($s in thousands) |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Allowance for Credit
Losses: |
|
|
|
|
|
|
Beginning Balance |
$ |
12,034 |
|
|
$ |
11,985 |
|
|
$ |
9,987 |
|
| Impact of ASU 2016-13
Adoption |
|
— |
|
|
|
257 |
|
|
|
— |
|
| Adjusted Beginning
Balance |
|
12,034 |
|
|
|
12,242 |
|
|
|
9,987 |
|
| Provision for Credit
Losses |
|
2,674 |
|
|
|
2,668 |
|
|
|
2,913 |
|
| Charge
offs* |
|
|
|
|
|
|
Construction and land development |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Residential real estate |
|
(121 |
) |
|
|
— |
|
|
|
(102 |
) |
|
Residential real estate multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Commercial real estate |
|
— |
|
|
|
(122 |
) |
|
|
— |
|
|
Commercial and industrial |
|
(66 |
) |
|
|
(18 |
) |
|
|
— |
|
|
Consumer |
|
(19 |
) |
|
|
— |
|
|
|
— |
|
|
Lease financing receivables |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Strategic Program loans |
|
(2,516 |
) |
|
|
(3,025 |
) |
|
|
(2,560 |
) |
|
Recoveries* |
|
|
|
|
|
|
Construction and land development |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Residential real estate |
|
81 |
|
|
|
3 |
|
|
|
1 |
|
|
Residential real estate multifamily |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Commercial real estate |
|
— |
|
|
|
— |
|
|
|
47 |
|
|
Commercial and industrial |
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
Consumer |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Lease financing receivables |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Strategic Program loans |
|
252 |
|
|
|
284 |
|
|
|
315 |
|
|
Ending Balance |
$ |
12,320 |
|
|
$ |
12,034 |
|
|
$ |
10,602 |
|
|
|
|
|
|
|
|
| Asset Quality
Ratios |
As of and For the Three Months Ended |
| ($s in thousands, annualized
ratios) |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Nonperforming loans |
$ |
858 |
|
|
$ |
740 |
|
|
$ |
633 |
|
| Nonperforming loans to total
loans held for investment |
|
0.3 |
% |
|
|
0.3 |
% |
|
|
0.3 |
% |
| Net charge offs to average
loans held for investment |
|
3.4 |
% |
|
|
4.5 |
% |
|
|
4.5 |
% |
| Allowance for credit losses to
loans held for investment |
|
4.2 |
% |
|
|
4.4 |
% |
|
|
5.3 |
% |
|
Net charge offs |
$ |
2,388 |
|
|
$ |
2,876 |
|
|
$ |
2,298 |
|
*Charge offs and recoveries for the three months ended June 30,
2022 have been reclassified in accordance with the credit loss
model adopted by the Company on January 1, 2023.
Subsequent EventsOn July 25, 2023, the Company
entered into a definitive agreement with BFG and four members of
BFG to acquire an additional 10% of its membership interests in
exchange for 372,132 shares of the Company’s stock, subject to
regulatory approval and other customary closing conditions. Upon
closing, the Company’s total equity ownership of BFG will increase
to 20%. The transaction is expected to close by September 30,
2023.
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 2023. A
simultaneous audio webcast of the conference call will be available
on the Company’s investor relations section of the website at
https://viavid.webcasts.com/starthere.jsp?ei=1617288&tp_key=1595442015.
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
at investors.finwisebancorp.com for six months following the
call.
Website Information
The 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,
filings with the Securities and Exchange Commission (“SEC”), 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 bank.
FinWise currently operates one full-service banking location in
Sandy, Utah. 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) 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; (b) 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; (c) the Company’s ability to maintain and grow its
relationships with its Strategic Program service providers; (d)
changes in the laws, rules, regulations, interpretations or
policies relating to financial institutions, accounting, tax,
trade, monetary and fiscal matters, including the application of
interest rate caps or maximums; (e) the Company’s ability to keep
pace with rapid technological changes in the industry or implement
new technology effectively; (f) adverse developments in the banking
industry associated with high-profile bank failures and the
potential impact of such developments on customer confidence,
liquidity, and regulatory responses; (g) system failure or
cybersecurity breaches of the Company’s network security; (h) 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; (i) 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; (j) increased competition
in the financial services industry, particularly from regional and
national institutions and other companies that offer banking
services; (k) 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; (l) the adequacy of the Company’s risk management framework;
(m) the adequacy of the Company’s allowance for credit losses
(“ACL”); (n) the financial soundness of other financial
institutions; (o) new lines of business or new products and
services; (p) changes in Small Business Administration (“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;
(q) changes in the value of collateral securing the Company’s
loans; (r) possible increases in the Company’s levels of
nonperforming assets; (s) potential losses from loan defaults and
nonperformance on loans; (t) the Company’s ability to protect its
intellectual property and the risks it faces with respect to claims
and litigation initiated against the Company; (u) the inability of
small- and medium-sized businesses to whom the Company lends to
weather adverse business conditions and repay loans; (v) the
Company’s ability to implement aspects of its growth strategy and
to sustain its historic rate of growth; (w) the Company’s ability
to continue to originate, sell and retain loans, including through
its Strategic Programs; (x) the concentration of the Company’s
lending and depositor relationships through Strategic Programs in
the financial technology industry generally; (y) the Company’s
ability to attract additional merchants and retain and grow its
existing merchant relationships; (z) 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; (aa)
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; (bb) 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; (cc) the Company’s
dependence on its management team and changes in management
composition; (dd) 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; (ee)
compliance with laws and regulations, supervisory actions, the
Dodd-Frank Act, capital requirements, the Bank Secrecy Act,
anti-money laundering laws, predatory lending laws, and other
statutes and regulations; (ff) the Company’s ability to maintain a
strong core deposit base or other low-cost funding sources; (gg)
results of examinations of the Company by its regulators, including
the possibility that its regulators may, among other things,
require the Company to increase its ACL or to write-down assets;
(hh) the Company’s involvement from time to time in legal
proceedings, examinations and remedial actions by regulators; (ii)
further government intervention in the U.S. financial system; (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; (ll) the
possibility that the proposed acquisition of BFG equity interests
does not close when expected or at all because required regulatory
approvals are not received or other conditions to closing are not
satisfied on a timely basis or at all; (mm) that the Company may be
required to modify the terms and conditions of the proposed
acquisition to obtain regulatory approval; (nn) that the
anticipated benefits of the proposed acquisition are not realized
within the expected time frame or at all as a result of such things
as the strength or weakness of the economy and competitive factors
in the areas where the Company and BFG do business; and (oo) 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,
2022 and subsequent reports on Form 10-Q and Form 8-K.
The timing and amount of purchases under the
Company’s share repurchase program will be determined by management
based upon market conditions and other factors. Purchases may be
made pursuant to a program adopted under Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended. The program does not
require the Company to purchase any specific number or amount of
shares and may be suspended or reinstated at any time in the
Company’s discretion and without notice.
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 CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION($s in thousands;
Unaudited) |
|
|
As of |
| |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
Cash and due from banks |
$ |
369 |
|
$ |
384 |
|
$ |
397 |
|
Interest-bearing deposits |
|
118,674 |
|
|
105,225 |
|
|
96,131 |
|
Total cash and cash equivalents |
|
119,043 |
|
|
105,609 |
|
|
96,528 |
|
Investment securities held-to-maturity, at cost |
|
14,403 |
|
|
13,880 |
|
|
12,463 |
|
Investment in Federal Home Loan Bank (FHLB) stock, at cost |
|
476 |
|
|
449 |
|
|
449 |
|
Strategic Program loans held-for-sale, at lower of cost or fair
value |
|
42,362 |
|
|
25,413 |
|
|
31,599 |
|
Loans receivable, net |
|
277,663 |
|
|
260,221 |
|
|
189,670 |
|
Premises and equipment, net |
|
13,154 |
|
|
9,198 |
|
|
5,834 |
|
Accrued interest receivable |
|
2,316 |
|
|
2,174 |
|
|
1,422 |
|
Deferred taxes, net |
|
— |
|
|
1,319 |
|
|
2,018 |
|
SBA servicing asset, net |
|
5,233 |
|
|
5,284 |
|
|
4,586 |
|
Investment in Business Funding Group (BFG), at fair value |
|
4,500 |
|
|
4,500 |
|
|
4,600 |
|
Operating lease right-of-use (“ROU”) assets |
|
4,668 |
|
|
4,855 |
|
|
6,935 |
|
Income tax receivable, net |
|
2,355 |
|
|
— |
|
|
1,843 |
|
Other assets |
|
9,452 |
|
|
9,397 |
|
|
8,040 |
| Total
assets |
$ |
495,625 |
|
$ |
442,299 |
|
$ |
365,987 |
| |
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
Noninterest-bearing |
$ |
93,347 |
|
$ |
79,930 |
|
$ |
83,490 |
|
Interest-bearing |
|
239,183 |
|
|
203,262 |
|
|
135,869 |
|
Total deposits |
|
332,530 |
|
|
283,192 |
|
|
219,359 |
|
Accrued interest payable |
|
466 |
|
|
117 |
|
|
34 |
|
Income taxes payable, net |
|
— |
|
|
2,511 |
|
|
— |
|
Deferred taxes, net |
|
140 |
|
|
— |
|
|
— |
|
PPP Liquidity Facility |
|
252 |
|
|
283 |
|
|
376 |
|
Operating lease liabilities |
|
6,792 |
|
|
6,781 |
|
|
7,393 |
|
Other liabilities |
|
7,997 |
|
|
5,062 |
|
|
8,288 |
| Total
liabilities |
|
348,177 |
|
|
297,946 |
|
|
235,450 |
| |
|
|
|
|
|
| Shareholders’
equity |
|
|
|
|
|
|
Common Stock |
|
13 |
|
|
13 |
|
|
13 |
|
Additional paid-in-capital |
|
52,625 |
|
|
54,827 |
|
|
55,015 |
|
Retained earnings |
|
94,810 |
|
|
89,513 |
|
|
75,509 |
| Total shareholders’
equity |
|
147,448 |
|
|
144,353 |
|
|
130,537 |
| Total liabilities and
shareholders’ equity |
$ |
495,625 |
|
$ |
442,299 |
|
$ |
365,987 |
| |
| FINWISE
BANCORPCONSOLIDATED STATEMENTS OF INCOME
($s in thousands, except per share amounts;
Unaudited) |
| |
| |
For the Three Months Ended |
| |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Interest
income |
|
|
|
|
|
|
Interest and fees on loans |
$ |
14,355 |
|
|
$ |
12,342 |
|
|
$ |
12,864 |
|
|
Interest on securities |
|
77 |
|
|
|
72 |
|
|
|
44 |
|
|
Other interest income |
|
1,437 |
|
|
|
987 |
|
|
|
105 |
|
| Total interest income |
|
15,869 |
|
|
|
13,401 |
|
|
|
13,013 |
|
| |
|
|
|
|
|
| Interest
expense |
|
|
|
|
|
|
Interest on deposits |
|
2,194 |
|
|
|
1,295 |
|
|
|
244 |
|
|
Interest on PPP Liquidity Facility |
|
— |
|
|
|
— |
|
|
|
— |
|
| Total interest expense |
|
2,194 |
|
|
|
1,295 |
|
|
|
244 |
|
| Net interest
income |
|
13,675 |
|
|
|
12,106 |
|
|
|
12,769 |
|
| |
|
|
|
|
|
| Provision for credit
losses(1) |
|
2,688 |
|
|
|
2,671 |
|
|
|
2,913 |
|
| Net interest income after
provision for credit losses |
|
10,987 |
|
|
|
9,435 |
|
|
|
9,856 |
|
| |
|
|
|
|
|
| Non-interest
income |
|
|
|
|
|
|
Strategic Program fees |
|
4,054 |
|
|
|
3,685 |
|
|
|
6,221 |
|
|
Gain on sale of loans, net |
|
700 |
|
|
|
187 |
|
|
|
2,412 |
|
|
SBA loan servicing fees |
|
226 |
|
|
|
591 |
|
|
|
342 |
|
|
Change in fair value on investment in BFG |
|
120 |
|
|
|
(85 |
) |
|
|
(575 |
) |
|
Other miscellaneous income |
|
188 |
|
|
|
149 |
|
|
|
31 |
|
| Total non-interest income |
|
5,288 |
|
|
|
4,527 |
|
|
|
8,431 |
|
| |
|
|
|
|
|
| Non-interest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
6,681 |
|
|
|
5,257 |
|
|
|
6,594 |
|
|
Professional services |
|
1,305 |
|
|
|
1,474 |
|
|
|
1,511 |
|
|
Occupancy and equipment expenses |
|
718 |
|
|
|
712 |
|
|
|
469 |
|
|
(Recovery) impairment of SBA servicing asset |
|
(339 |
) |
|
|
(253 |
) |
|
|
1,135 |
|
|
Other operating expenses |
|
1,634 |
|
|
|
1,547 |
|
|
|
1,310 |
|
| Total non-interest
expense |
|
9,999 |
|
|
|
8,737 |
|
|
|
11,019 |
|
| Income before income
tax expense |
|
6,276 |
|
|
|
5,225 |
|
|
|
7,268 |
|
| |
|
|
|
|
|
| Provision for income
taxes |
|
1,638 |
|
|
|
1,364 |
|
|
|
1,786 |
|
| Net
income |
$ |
4,638 |
|
|
$ |
3,861 |
|
|
$ |
5,482 |
|
| |
|
|
|
|
|
| Earnings per share, basic |
$ |
0.36 |
|
|
$ |
0.30 |
|
|
$ |
0.43 |
|
| Earnings per share,
diluted |
$ |
0.35 |
|
|
$ |
0.29 |
|
|
$ |
0.41 |
|
| |
|
|
|
|
|
| Weighted average shares
outstanding, basic |
|
12,603,463 |
|
|
|
12,708,326 |
|
|
|
12,716,010 |
|
| Weighted average shares
outstanding, diluted |
|
12,989,530 |
|
|
|
13,172,288 |
|
|
|
13,417,390 |
|
| Shares outstanding at end of
period |
|
12,723,703 |
|
|
|
12,824,572 |
|
|
|
12,884,821 |
|
| |
|
|
|
|
|
| (1) The Company
adopted ASU 2016-13 as of January 1, 2023. The 2022 amounts
presented are calculated under the prior accounting standard. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FINWISE
BANCORPAVERAGE BALANCES, YIELDS, AND
RATES ($s in thousands; Unaudited) |
|
|
|
|
For the Three Months Ended |
|
|
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
|
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
|
Average Balance |
|
Interest |
|
Average Yield/Rate |
| Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits |
$ |
113,721 |
|
$ |
1,437 |
|
5.07 |
% |
|
$ |
88,038 |
|
$ |
987 |
|
4.55 |
% |
|
$ |
82,046 |
|
$ |
105 |
|
0.51 |
% |
|
Investment securities |
|
14,137 |
|
|
77 |
|
2.19 |
% |
|
|
14,142 |
|
|
72 |
|
2.07 |
% |
|
|
11,837 |
|
|
44 |
|
1.49 |
% |
|
Loans held for sale |
|
41,390 |
|
|
3,860 |
|
37.41 |
% |
|
|
31,041 |
|
|
3,061 |
|
39.99 |
% |
|
|
74,800 |
|
|
5,949 |
|
31.81 |
% |
|
Loans held for investment |
|
282,686 |
|
|
10,495 |
|
14.89 |
% |
|
|
259,383 |
|
|
9,281 |
|
14.51 |
% |
|
|
204,501 |
|
|
6,915 |
|
13.53 |
% |
|
Total interest earning assets |
|
451,934 |
|
|
15,869 |
|
14.08 |
% |
|
|
392,604 |
|
|
13,401 |
|
13.84 |
% |
|
|
373,184 |
|
|
13,013 |
|
13.95 |
% |
| Non-interest earning
assets |
|
21,825 |
|
|
|
|
|
|
|
|
22,813 |
|
|
|
|
|
|
|
|
22,133 |
|
|
|
|
|
|
| Total assets |
$ |
473,759 |
|
|
|
|
|
|
|
$ |
415,417 |
|
|
|
|
|
|
|
$ |
395,317 |
|
|
|
|
|
|
| Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
44,097 |
|
$ |
426 |
|
3.88 |
% |
|
$ |
41,532 |
|
$ |
385 |
|
3.76 |
% |
|
$ |
7,587 |
|
$ |
27 |
|
1.42 |
% |
|
Savings |
|
7,334 |
|
|
10 |
|
0.56 |
% |
|
|
8,313 |
|
|
10 |
|
0.50 |
% |
|
|
7,430 |
|
|
1 |
|
0.05 |
% |
|
Money market accounts |
|
13,982 |
|
|
109 |
|
3.12 |
% |
|
|
12,089 |
|
|
58 |
|
1.96 |
% |
|
|
29,318 |
|
|
21 |
|
0.29 |
% |
|
Certificates of deposit |
|
153,662 |
|
|
1,649 |
|
4.30 |
% |
|
|
103,225 |
|
|
842 |
|
3.31 |
% |
|
|
82,870 |
|
|
195 |
|
0.94 |
% |
|
Total deposits |
|
219,075 |
|
|
2,194 |
|
4.02 |
% |
|
|
165,159 |
|
|
1,295 |
|
3.18 |
% |
|
|
127,205 |
|
|
244 |
|
0.77 |
% |
|
Other borrowings |
|
267 |
|
|
— |
|
0.35 |
% |
|
|
297 |
|
|
— |
|
0.35 |
% |
|
|
601 |
|
|
— |
|
0.35 |
% |
|
Total interest bearing liabilities |
|
219,342 |
|
|
2,194 |
|
4.01 |
% |
|
|
165,456 |
|
|
1,295 |
|
3.18 |
% |
|
|
127,806 |
|
|
244 |
|
0.76 |
% |
| Non-interest bearing
deposits |
|
95,257 |
|
|
|
|
|
|
|
|
91,701 |
|
|
|
|
|
|
|
|
120,359 |
|
|
|
|
|
|
| Non-interest bearing
liabilities |
|
14,206 |
|
|
|
|
|
|
|
|
16,602 |
|
|
|
|
|
|
|
|
19,429 |
|
|
|
|
|
|
| Shareholders’ equity |
|
144,954 |
|
|
|
|
|
|
|
|
141,658 |
|
|
|
|
|
|
|
|
127,723 |
|
|
|
|
|
|
| Total liabilities and
shareholders’ equity |
$ |
473,759 |
|
|
|
|
|
|
|
$ |
415,417 |
|
|
|
|
|
|
|
$ |
395,317 |
|
|
|
|
|
|
| Net interest income and
interest rate spread |
|
|
|
$ |
13,675 |
|
10.07 |
% |
|
|
|
|
$ |
12,106 |
|
10.67 |
% |
|
|
|
|
$ |
12,769 |
|
13.18 |
% |
| Net interest margin |
|
|
|
|
|
|
12.14 |
% |
|
|
|
|
|
|
|
12.51 |
% |
|
|
|
|
|
|
|
13.69 |
% |
| Ratio of average
interest-earning assets to average interest- bearing
liabilities |
|
|
|
|
|
|
206.04 |
% |
|
|
|
|
|
|
|
237.29 |
% |
|
|
|
|
|
|
|
291.99 |
% |
Note: Average PPP loans for the three months ended June 30,
2023, March 31, 2023, and June 30, 2022 were $0.5 million,
$0.6 million and $0.9 million, respectively.
| |
| FINWISE
BANCORPSELECTED HISTORICAL CONSOLIDATED FINANCIAL
AND OTHER DATA ($s in thousands, except per share
amounts; Unaudited) |
| |
| |
As of and for the Three Months Ended |
| |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| Selected Loan
Metrics |
|
|
|
|
|
|
Amount of loans originated |
$ |
1,156,141 |
|
|
$ |
908,190 |
|
|
$ |
2,088,843 |
|
| Selected Income
Statement Data |
|
|
|
|
|
| Interest income |
$ |
15,869 |
|
|
$ |
13,401 |
|
|
$ |
13,013 |
|
| Interest expense |
|
2,194 |
|
|
|
1,295 |
|
|
|
244 |
|
| Net interest income |
|
13,675 |
|
|
|
12,106 |
|
|
|
12,769 |
|
| Provision for credit
losses |
|
2,688 |
|
|
|
2,671 |
|
|
|
2,913 |
|
| Net interest income after
provision for credit losses |
|
10,987 |
|
|
|
9,435 |
|
|
|
9,856 |
|
| Non-interest income |
|
5,288 |
|
|
|
4,527 |
|
|
|
8,431 |
|
| Non-interest expense |
|
9,999 |
|
|
|
8,737 |
|
|
|
11,019 |
|
| Provision for income
taxes |
|
1,638 |
|
|
|
1,364 |
|
|
|
1,786 |
|
| Net income |
|
4,639 |
|
|
|
3,861 |
|
|
|
5,482 |
|
| Selected Balance Sheet
Data |
|
|
|
|
|
| Total Assets |
$ |
495,625 |
|
|
$ |
442,299 |
|
|
$ |
365,987 |
|
| Cash and cash equivalents |
|
119,043 |
|
|
|
105,609 |
|
|
|
96,528 |
|
| Investment securities
held-to-maturity, at cost |
|
14,403 |
|
|
|
13,880 |
|
|
|
12,463 |
|
| Loans receivable, net |
|
277,663 |
|
|
|
260,221 |
|
|
|
189,670 |
|
| Strategic Program loans
held-for-sale, at lower of cost or fair value |
|
42,362 |
|
|
|
25,413 |
|
|
|
31,599 |
|
| SBA servicing asset, net |
|
5,233 |
|
|
|
5,284 |
|
|
|
4,586 |
|
| Investment in Business Funding
Group, at fair value |
|
4,500 |
|
|
|
4,500 |
|
|
|
4,600 |
|
| Deposits |
|
332,530 |
|
|
|
283,192 |
|
|
|
219,359 |
|
| PPP Liquidity Facility |
|
252 |
|
|
|
283 |
|
|
|
376 |
|
| Total shareholders'
equity |
|
147,448 |
|
|
|
144,353 |
|
|
|
130,537 |
|
| Tangible shareholders’ equity
(1) |
|
147,448 |
|
|
|
144,353 |
|
|
|
130,537 |
|
| Share and Per Share
Data |
|
|
|
|
|
| Earnings per share -
basic |
$ |
0.36 |
|
|
$ |
0.30 |
|
|
$ |
0.43 |
|
| Earnings per share -
diluted |
$ |
0.35 |
|
|
$ |
0.29 |
|
|
$ |
0.41 |
|
| Book value per share |
$ |
11.59 |
|
|
$ |
11.26 |
|
|
$ |
10.13 |
|
| Tangible book value per share
(1) |
$ |
11.59 |
|
|
$ |
11.26 |
|
|
$ |
10.13 |
|
| Weighted avg outstanding
shares - basic |
|
12,603,463 |
|
|
|
12,708,326 |
|
|
|
12,716,010 |
|
| Weighted avg outstanding
shares - diluted |
|
12,989,530 |
|
|
|
13,172,288 |
|
|
|
13,417,390 |
|
| Shares outstanding at end of
period |
|
12,723,703 |
|
|
|
12,824,572 |
|
|
|
12,884,821 |
|
| Capital
Ratios |
|
|
|
|
|
| Total shareholders' equity to
total assets |
|
29.7 |
% |
|
|
32.6 |
% |
|
|
35.7 |
% |
| Tangible shareholders’ equity
to tangible assets (1) |
|
29.7 |
% |
|
|
32.6 |
% |
|
|
35.7 |
% |
| Leverage Ratio (Bank under
CBLR) |
|
22.4 |
% |
|
|
24.0 |
% |
|
|
21.4 |
% |
(1) This measure is not a measure recognized under United States
generally accepted accounting principles, or GAAP, and is therefore
considered to be a non-GAAP financial measure. 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 or loan
trailing fee asset as intangible assets 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.
| |
|
Reconciliation of Non-GAAP to GAAP Financial
Measures |
| |
| Efficiency
ratio |
Three Months Ended |
| |
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
| ($s in thousands) |
|
|
|
|
|
|
Non-interest expense |
$ |
9,999 |
|
|
$ |
8,737 |
|
|
$ |
11,019 |
|
| Net interest income |
|
13,675 |
|
|
|
12,106 |
|
|
|
12,769 |
|
| Total non-interest income |
|
5,288 |
|
|
|
4,527 |
|
|
|
8,431 |
|
|
Adjusted operating revenue |
$ |
18,963 |
|
|
$ |
16,633 |
|
|
$ |
21,200 |
|
| Efficiency ratio |
|
52.7 |
% |
|
|
52.5 |
% |
|
|
52.0 |
% |
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