“We are proud to report a
2024 First Quarter Highlights
- Net income was
$8.4 million for the first quarter of 2024, compared to$9.8 million in the previous quarter, and$8.2 million for the comparable quarter one year ago; - As an investment strategy to mitigate realized investment losses noted below, during the first quarter of 2024, the Company sold a portion of its mortgage servicing rights (“MSRs”) resulting in a pre-tax gain of
$8.2 million . The MSRs related to mortgages with Fannie Mae and Freddie Mac serviced loans with an aggregate principal balance of approximately$1.29 billion ; - Offsetting the gain noted above, the Company sold longer duration investment securities with amortized cost of
$52.0 million in the first quarter of 2024, resulting in an$8.0 million pre-tax loss. The proceeds were utilized to purchase securities and other liquid assets; - Net interest margin (“NIM”) expanded to 4.26% for the first quarter of 2024, compared to 4.24% in the previous quarter, and compressed from 4.70% for the comparable quarter one year ago;
- Loans receivable, net increased
$13.9 million , or 0.6%, to$2.42 billion atMarch 31, 2024 , compared to$2.40 billion atDecember 31, 2023 , and increased$115.7 million , or 5.0%, from$2.30 billion atMarch 31, 2023 ; - Consumer loans, of which 88.0% are home improvement loans, were relatively static in the first quarter of 2024 with a total of
$646.1 million atMarch 31, 2024 , compared to$646.8 million in the previous quarter, and increased$39.5 million , or 6.5%, from$606.7 million in the comparable quarter one year ago. Yields on consumer loans improved 0.17% to 7.22% from 7.05% at the end of the fourth quarter 2023. During the three months endedMarch 31, 2024 , consumer loan originations included 74.1% of home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720 and 86.4% of home improvement loans with a UCC-2 security filing; - The allowance for credit losses on loans (“ACLL”) was
$31.5 million , or 1.29% of gross loans receivable atMarch 31, 2024 , compared to$31.5 million , or 1.30% atDecember 31, 2023 , and$29.9 million , or 1.29% atMarch 31, 2023 ; - Total deposits decreased
$57.0 million , or 2.3%, to$2.47 billion atMarch 31, 2024 compared to$2.52 billion atDecember 31, 2023 and increased$22.0 million , or 0.9%, from$2.44 billion atMarch 31, 2023 . Noninterest-bearing deposits were$646.9 million atMarch 31, 2024 ,$670.8 million atDecember 31, 2023 , and$746.9 million atMarch 31, 2023 ; - Total deposits, excluding brokered deposits, increased
$35.2 million for the three months endedMarch 31, 2024 , compared to$9.8 million of growth in the prior quarter, and$8.2 million of growth in the first quarter of 2023 (less acquired deposits from the acquisition of seven bank branches fromColumbia State Bank in the first quarter of 2023). See “Non-GAAP Financial Measures;” - Segment reporting in the first quarter of 2024 reflected net income of
$8.2 million for the Commercial and Consumer Banking segment and$246,000 for the Home Lending segment, compared to net income of$10.0 million and a net loss of$254,000 in the prior quarter, and net income of$7.3 million and$873,000 in the first quarter of 2023, respectively. The gain on sale of MSRs and offsetting loss on sale of investment securities were allocated to the Commercial and Consumer Banking segment; - The percentage of available unencumbered cash and secured borrowing capacity at the
Federal Home Loan Bank (“FHLB”) and theFederal Reserve Bank to uninsured deposits was 223% atMarch 31, 2024 , compared to 224% in the prior quarter. The average deposit size perFDIC -insured account at the Bank was$33,000 for bothMarch 31, 2024 andDecember 31, 2023 ; - Regulatory capital ratios at the Bank were 13.7% for total risk-based capital and 10.6% for Tier 1 leverage capital at
March 31, 2024 , compared to 13.4% for total risk-based capital and 10.4% for Tier 1 leverage capital atDecember 31, 2023 ; and - Tangible book value per share increased
$1.83 to$33.47 atMarch 31, 2024 , compared to$31.64 atDecember 31, 2023 , and increased$4.92 from$28.55 atMarch 31, 2023 . See, “Non-GAAP Financial Measures.”
Segment Reporting
The Company reports two segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.
The Company reflected the sale of servicing rights as a gain to the
The tables below provide a summary of segment reporting at or for the three months ended
At or For the Three Months Ended | ||||||||||||
Condensed income statement: | Commercial and Consumer Banking | Home Lending | Total | |||||||||
Net interest income (1) | $ | 28,086 | $ | 2,260 | $ | 30,346 | ||||||
Provision for credit losses | (1,251 | ) | (148 | ) | (1,399 | ) | ||||||
Noninterest income (2) | 2,393 | 2,718 | 5,111 | |||||||||
Noninterest expense (3) | (19,008 | ) | (4,521 | ) | (23,529 | ) | ||||||
Income before provision for income taxes | 10,220 | 309 | 10,529 | |||||||||
Provision for income taxes | (2,069 | ) | (63 | ) | (2,132 | ) | ||||||
Net income | $ | 8,151 | $ | 246 | $ | 8,397 | ||||||
Total average assets for period ended | $ | 2,401,864 | $ | 556,683 | $ | 2,958,547 | ||||||
Full-time employees ("FTEs") | 440 | 130 | 570 | |||||||||
At or For the Three Months Ended | ||||||||||||
Condensed income statement: | Commercial and Consumer Banking | Home Lending | Total | |||||||||
Net interest income (1) | $ | 27,500 | $ | 3,162 | $ | 30,662 | ||||||
(Provision) recovery for credit losses | (2,122 | ) | 14 | (2,108 | ) | |||||||
Noninterest income (2) | 2,380 | 2,839 | 5,219 | |||||||||
Noninterest expense (3) | (18,610 | ) | (4,914 | ) | (23,524 | ) | ||||||
Income before provision for income taxes | 9,148 | 1,101 | 10,249 | |||||||||
Provision for income taxes | (1,809 | ) | (228 | ) | (2,037 | ) | ||||||
Net income | $ | 7,339 | $ | 873 | $ | 8,212 | ||||||
Total average assets for period ended | $ | 2,250,052 | $ | 491,974 | $ | 2,742,026 | ||||||
FTEs | 445 | 141 | 586 |
_______________
(1) | Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets. | |
(2) | Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three months ended | |
(3) | Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three months ended |
Asset Summary
Total assets were
LOAN PORTFOLIO | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||
REAL ESTATE LOANS | ||||||||||||||||||||||||
Commercial | $ | 359,055 | 14.7 | % | $ | 366,328 | 15.1 | % | $ | 339,794 | 14.6 | % | ||||||||||||
Construction and development | 301,346 | 12.3 | 303,054 | 12.5 | 337,452 | 14.5 | ||||||||||||||||||
Home equity | 73,323 | 3.0 | 69,488 | 2.9 | 60,625 | 2.6 | ||||||||||||||||||
One-to-four-family (excludes HFS) | 580,050 | 23.7 | 567,742 | 23.3 | 501,100 | 21.5 | ||||||||||||||||||
Multi-family | 222,410 | 9.1 | 223,769 | 9.2 | 232,201 | 10.0 | ||||||||||||||||||
Total real estate loans | 1,536,184 | 62.8 | 1,530,381 | 63.0 | 1,471,172 | 63.2 | ||||||||||||||||||
CONSUMER LOANS | ||||||||||||||||||||||||
Indirect home improvement | 568,802 | 23.2 | 569,903 | 23.4 | 531,632 | 22.8 | ||||||||||||||||||
Marine | 73,921 | 3.0 | 73,310 | 3.0 | 70,994 | 3.0 | ||||||||||||||||||
Other consumer | 3,409 | 0.1 | 3,540 | 0.1 | 4,042 | 0.2 | ||||||||||||||||||
Total consumer loans | 646,132 | 26.3 | 646,753 | 26.5 | 606,668 | 26.0 | ||||||||||||||||||
COMMERCIAL BUSINESS LOANS | ||||||||||||||||||||||||
Commercial and industrial ("C&I") | 256,429 | 10.6 | 238,301 | 9.8 | 223,702 | 9.6 | ||||||||||||||||||
Warehouse lending | 8,113 | 0.3 | 17,580 | 0.7 | 28,044 | 1.2 | ||||||||||||||||||
Total commercial business loans | 264,542 | 10.9 | 255,881 | 10.5 | 251,746 | 10.8 | ||||||||||||||||||
Total loans receivable, gross | 2,446,858 | 100.0 | % | 2,433,015 | 100.0 | % | 2,329,586 | 100.0 | % | |||||||||||||||
Allowance for credit losses on loans | (31,479 | ) | (31,534 | ) | (29,937 | ) | ||||||||||||||||||
Total loans receivable, net | $ | 2,415,379 | $ | 2,401,481 | $ | 2,299,649 | ||||||||||||||||||
Loans receivable, net increased
A breakdown of CRE loans at the dates indicated were as follows:
(Dollars in thousands) | ||||||||||||
CRE by Type: | Amount | Amount | Amount | |||||||||
Agriculture | $ | 3,744 | $ | 3,799 | $ | 3,983 | ||||||
CRE Non-owner occupied: | ||||||||||||
Office | 41,625 | 42,739 | 45,864 | |||||||||
Retail | 38,712 | 38,691 | 38,483 | |||||||||
Hospitality/restaurant | 24,751 | 28,007 | 29,756 | |||||||||
Self storage | 21,383 | 21,381 | 17,287 | |||||||||
Mixed use | 19,186 | 19,331 | 16,547 | |||||||||
Industrial | 17,475 | 16,978 | 14,418 | |||||||||
Senior housing/assisted living | 8,446 | 8,505 | 8,626 | |||||||||
Other (1) | 6,785 | 8,365 | 5,765 | |||||||||
Land | 3,151 | 3,936 | 3,465 | |||||||||
Education/worship | 2,595 | 2,620 | 2,692 | |||||||||
Total CRE non-owner occupied | 184,109 | 190,553 | 182,903 | |||||||||
CRE owner occupied: | ||||||||||||
Industrial | 63,683 | 66,048 | 57,187 | |||||||||
Office | 41,652 | 41,495 | 30,446 | |||||||||
Retail | 21,836 | 22,020 | 23,548 | |||||||||
Hospitality/restaurant | 10,933 | 11,065 | 14,457 | |||||||||
Other (2) | 8,438 | 8,522 | 6,770 | |||||||||
Car wash | 7,713 | 7,767 | 7,908 | |||||||||
Automobile related | 7,479 | 7,530 | 8,298 | |||||||||
Education/worship | 4,604 | 4,606 | 1,300 | |||||||||
Mixed use | 4,864 | 2,923 | 2,994 | |||||||||
Total CRE owner occupied | 171,202 | 171,976 | 152,908 | |||||||||
Total | $ | 359,055 | $ | 366,328 | $ | 339,794 |
__________________________________
(1) | Primarily includes loans secured by mobile home parks totaling $789,000, | |
(2) | Primarily includes loans secured by gas stations totaling $1.7 million, |
The following tables includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:
(Dollars in thousands) | For the Quarter Ended | |||||||||||||||||||||||||||||
CRE by type: | 2024 | 2024 | 2024 | 2025 | 2025 | 2025 | 2025 | 2026 | Total | Current Weighted Average Rate | ||||||||||||||||||||
Agriculture | $ | 810 | $ | 52 | $ | 192 | $ | — | $ | — | $ | — | $ | 325 | $ | 181 | $ | 1,560 | 6.89 | % | ||||||||||
Apartment | 950 | 5,956 | 29,913 | 1,763 | 4,775 | 401 | 10,158 | 3,029 | 56,945 | 4.45 | % | |||||||||||||||||||
Auto related | — | — | — | — | 2,122 | — | — | — | 2,122 | 4.18 | % | |||||||||||||||||||
Hotel / hospitality | — | 141 | — | 591 | 1,230 | 1,357 | — | 121 | 3,440 | 4.22 | % | |||||||||||||||||||
Industrial | 405 | — | — | 909 | 593 | — | 10,592 | 2,209 | 14,708 | 4.41 | % | |||||||||||||||||||
Mixed use | — | 950 | 807 | 1,772 | 3,509 | 256 | 322 | — | 7,616 | 4.93 | % | |||||||||||||||||||
Office | — | 938 | 4,779 | 1,048 | — | 4,295 | 1,010 | 536 | 12,606 | 3.96 | % | |||||||||||||||||||
Other | 126 | — | 1,213 | — | 118 | 1,283 | 250 | 3,510 | 6,500 | 4.91 | % | |||||||||||||||||||
Retail | 1,023 | 1,149 | 1,291 | 2,040 | — | 693 | — | 493 | 6,689 | 4.62 | % | |||||||||||||||||||
Senior housing and assisted living | — | — | — | — | — | — | — | 2,213 | 2,213 | 4.75 | % | |||||||||||||||||||
Total | $ | 3,314 | $ | 9,186 | $ | 38,195 | $ | 8,123 | $ | 12,347 | $ | 8,285 | $ | 22,657 | $ | 12,292 | $ | 114,399 | 4.49 | % | ||||||||||
A breakdown of construction loans at the dates indicated were as follows:
(Dollars in thousands) | ||||||||||||||||
Construction Types: | Amount | Percent | Amount | Percent | ||||||||||||
Commercial construction - retail | $ | 8,290 | 2.8 | % | $ | 7,445 | 2.5 | % | ||||||||
Commercial construction - office | 4,737 | 1.6 | 4,699 | 1.5 | ||||||||||||
Commercial construction - self storage | 10,000 | 3.3 | 10,000 | 3.3 | ||||||||||||
Commercial construction - car wash | 7,807 | 2.6 | 7,742 | 2.6 | ||||||||||||
Multi-family | 53,288 | 17.7 | 56,065 | 18.5 | ||||||||||||
Custom construction - single family residential and single family manufactured residential | 50,674 | 16.8 | 47,230 | 15.6 | ||||||||||||
Custom construction - land, lot and acquisition and development | 6,455 | 2.1 | 6,377 | 2.1 | ||||||||||||
Speculative residential construction - vertical | 134,047 | 44.5 | 131,336 | 43.3 | ||||||||||||
Speculative residential construction - land, lot and acquisition and development | 26,048 | 8.6 | 32,160 | 10.6 | ||||||||||||
Total | $ | 301,346 | 100.0 | % | $ | 303,054 | 100.0 | % |
(Dollars in thousands) | ||||||||||||||||
Construction Types: | Amount | Percent | Amount | Percent | ||||||||||||
Commercial construction - retail | $ | 8,290 | 2.8 | % | $ | 6,296 | 1.9 | % | ||||||||
Commercial construction - office | 4,737 | 1.6 | 3,097 | 0.9 | ||||||||||||
Commercial construction - self storage | 10,000 | 3.3 | 16,027 | 4.7 | ||||||||||||
Commercial construction - car wash | 7,807 | 2.6 | 4,737 | 1.4 | ||||||||||||
Multi-family | 53,288 | 17.7 | 62,384 | 18.5 | ||||||||||||
Custom construction - single family residential and single family manufactured residential | 50,674 | 16.8 | 39,700 | 11.8 | ||||||||||||
Custom construction - land, lot and acquisition and development | 6,455 | 2.1 | 5,502 | 1.6 | ||||||||||||
Speculative residential construction - vertical | 134,047 | 44.5 | 162,955 | 48.3 | ||||||||||||
Speculative residential construction - land, lot and acquisition and development | 26,048 | 8.6 | 36,754 | 10.9 | ||||||||||||
Total | $ | 301,346 | 100.0 | % | $ | 337,452 | 100.0 | % | ||||||||
Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:
(Dollars in thousands) | For the Three Months Ended | For the Three Months Ended | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | $ Change | % Change | |||||||||||||||||||
Purchase | $ | 135,577 | 88.1 | % | $ | 110,458 | 90.7 | % | $ | 25,119 | 22.7 | % | ||||||||||||
Refinance | 18,371 | 11.9 | 11,290 | 9.3 | 7,081 | 62.7 | ||||||||||||||||||
Total | $ | 153,948 | 100.0 | % | $ | 121,748 | 100.0 | % | $ | 32,200 | 26.4 | % |
(Dollars in thousands) | For the Three Months Ended | |||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||
Amount | Percent | Amount | Percent | $ Change | % Change | |||||||||||||||||||
Purchase | $ | 135,577 | 88.1 | % | $ | 102,489 | 92.3 | % | $ | 33,088 | 32.3 | % | ||||||||||||
Refinance | 18,371 | 11.9 | 8,535 | 7.7 | 9,836 | 115.2 | ||||||||||||||||||
Total | $ | 153,948 | 100.0 | % | $ | 111,024 | 100.0 | % | $ | 42,924 | 38.7 | % | ||||||||||||
During the quarter ended
Liabilities and Equity Summary
Changes in deposits at the dates indicated were as follows:
(Dollars in thousands) | ||||||||||||||||||||||||
Transactional deposits: | Amount | Percent | Amount | Percent | $ Change | % Change | ||||||||||||||||||
Noninterest-bearing checking | $ | 618,526 | 25.1 | % | $ | 654,048 | 25.9 | % | $ | (35,522 | ) | (5.4 | )% | |||||||||||
Interest-bearing checking (1) | 188,050 | 7.6 | 244,028 | 9.7 | (55,978 | ) | (22.9 | ) | ||||||||||||||||
Escrow accounts related to mortgages serviced (2) | 28,373 | 1.2 | 16,783 | 0.7 | 11,590 | 69.1 | ||||||||||||||||||
Subtotal | 834,949 | 33.9 | 914,859 | 36.3 | (79,910 | ) | (8.7 | ) | ||||||||||||||||
Savings | 153,025 | 6.2 | 151,630 | 6.0 | 1,395 | 0.9 | ||||||||||||||||||
Money market (3) | 364,944 | 14.8 | 359,063 | 14.2 | 5,881 | 1.6 | ||||||||||||||||||
Subtotal | 517,969 | 21.0 | 510,693 | 20.2 | 7,276 | 1.4 | ||||||||||||||||||
Certificates of deposit less than | 579,153 | 23.5 | 587,858 | 23.3 | (8,705 | ) | (1.5 | ) | ||||||||||||||||
Certificates of deposit of | 424,463 | 17.2 | 429,373 | 17.0 | (4,910 | ) | (1.1 | ) | ||||||||||||||||
Certificates of deposit greater than | 108,763 | 4.4 | 79,540 | 3.2 | 29,223 | 36.7 | ||||||||||||||||||
Subtotal | 1,112,379 | 45.1 | 1,096,771 | 43.5 | 15,608 | 1.4 | ||||||||||||||||||
Total | $ | 2,465,297 | 100.0 | % | $ | 2,522,323 | 100.0 | % | $ | (57,026 | ) | (2.3 | )% | |||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Transactional deposits: | Amount | Percent | Amount | Percent | $ Change | % Change | ||||||||||||||||||
Noninterest-bearing checking | $ | 618,526 | 25.1 | % | $ | 719,856 | 29.5 | % | $ | (101,330 | ) | (14.1 | )% | |||||||||||
Interest-bearing checking (1) | 188,050 | 7.6 | 183,888 | 7.5 | 4,162 | 2.3 | ||||||||||||||||||
Escrow accounts related to mortgages serviced (2) | 28,373 | 1.2 | 27,066 | 1.1 | 1,307 | 4.8 | ||||||||||||||||||
Subtotal | 834,949 | 33.9 | 930,810 | 38.1 | (95,861 | ) | (10.3 | ) | ||||||||||||||||
Savings | 153,025 | 6.2 | 188,510 | 7.7 | (35,485 | ) | (18.8 | ) | ||||||||||||||||
Money market (3) | 364,944 | 14.8 | 549,542 | 22.5 | (184,598 | ) | (33.6 | ) | ||||||||||||||||
Subtotal | 517,969 | 21.0 | 738,052 | 30.2 | (220,083 | ) | (29.8 | ) | ||||||||||||||||
Certificates of deposit less than | 579,153 | 23.5 | 409,236 | 16.8 | 169,917 | 41.5 | ||||||||||||||||||
Certificates of deposit of | 424,463 | 17.2 | 270,476 | 11.0 | 153,987 | 56.9 | ||||||||||||||||||
Certificates of deposit greater than | 108,763 | 4.4 | 94,699 | 3.9 | 14,064 | 14.9 | ||||||||||||||||||
Subtotal | 1,112,379 | 45.1 | 774,411 | 31.7 | 337,968 | 43.6 | ||||||||||||||||||
Total | $ | 2,465,297 | 100.0 | % | $ | 2,443,273 | 100.0 | % | $ | 22,024 | 0.9 | % |
_______________
(1) | Includes | |
(2) | Noninterest-bearing accounts. | |
(3) | Includes | |
(4) | Includes | |
At
At
At
Total stockholders’ equity increased
The Bank is considered well capitalized under the capital requirements established by the
The Company exceeded all regulatory capital requirements with a total risk-based capital ratio of 14.1%, a Tier 1 leverage capital ratio of 9.2%, and a CET1 ratio of 10.9% at
Credit Quality
The ACLL was
Nonperforming loans increased $1.2 million to
Operating Results
Net interest income decreased
NIM decreased 44 basis points to 4.26% for the three months ended
The average total cost of funds, including noninterest-bearing checking, increased 89 basis points to 2.21% for the three months ended
For the three months ended
During the three months ended
Noninterest income decreased
Noninterest expense was
About
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the
CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) (Unaudited) | ||||||||||||||||||||
Linked | Year | |||||||||||||||||||
Quarter | Over Year | |||||||||||||||||||
2024 | 2023 | 2023 | % Change | % Change | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 17,149 | $ | 17,083 | $ | 21,481 | — | (20 | ) | |||||||||||
Interest-bearing deposits at other financial institutions | 28,257 | 48,608 | 36,700 | (42 | ) | (23 | ) | |||||||||||||
Total cash and cash equivalents | 45,406 | 65,691 | 58,181 | (31 | ) | (22 | ) | |||||||||||||
Certificates of deposit at other financial institutions | 23,222 | 24,167 | 4,712 | (4 | ) | 393 | ||||||||||||||
Securities available-for-sale, at fair value | 279,643 | 292,933 | 232,373 | (5 | ) | 20 | ||||||||||||||
Securities held-to-maturity, net | 8,455 | 8,455 | 8,469 | — | — | |||||||||||||||
Loans held for sale, at fair value | 49,957 | 25,668 | 23,310 | 95 | 114 | |||||||||||||||
Loans receivable, net | 2,415,379 | 2,401,481 | 2,299,649 | 1 | 5 | |||||||||||||||
Accrued interest receivable | 14,455 | 14,005 | 12,336 | 3 | 17 | |||||||||||||||
Premises and equipment, net | 30,326 | 30,578 | 31,781 | (1 | ) | (5 | ) | |||||||||||||
Operating lease right-of-use | 6,202 | 6,627 | 7,414 | (6 | ) | (16 | ) | |||||||||||||
2,909 | 2,114 | 3,863 | 38 | (25 | ) | |||||||||||||||
Other real estate owned | — | — | 570 | NM | (100 | ) | ||||||||||||||
Deferred tax asset, net | 4,832 | 6,725 | 5,860 | (28 | ) | (18 | ) | |||||||||||||
Bank owned life insurance (“BOLI”), net | 37,958 | 37,719 | 37,020 | 1 | 3 | |||||||||||||||
MSRs, held at the lower of cost or fair value | 9,009 | 9,090 | 17,599 | (1 | ) | (49 | ) | |||||||||||||
MSRs, held for sale, held at the lower of cost or fair value | — | 8,086 | — | (100 | ) | NM | ||||||||||||||
3,592 | 3,592 | 3,592 | — | — | ||||||||||||||||
Core deposit intangible, net | 16,402 | 17,343 | 20,348 | (5 | ) | (19 | ) | |||||||||||||
Other assets | 21,958 | 18,395 | 15,731 | 19 | 40 | |||||||||||||||
TOTAL ASSETS | $ | 2,969,705 | $ | 2,972,669 | $ | 2,782,808 | — | 7 | ||||||||||||
LIABILITIES | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing accounts | $ | 646,899 | $ | 670,831 | $ | 746,922 | (4 | ) | (13 | ) | ||||||||||
Interest-bearing accounts | 1,818,398 | 1,851,492 | 1,696,351 | (2 | ) | 7 | ||||||||||||||
Total deposits | 2,465,297 | 2,522,323 | 2,443,273 | (2 | ) | 1 | ||||||||||||||
Borrowings | 129,940 | 93,746 | 7,528 | 39 | 1626 | |||||||||||||||
Subordinated notes: | ||||||||||||||||||||
Principal amount | 50,000 | 50,000 | 50,000 | — | — | |||||||||||||||
Unamortized debt issuance costs | (456 | ) | (473 | ) | (523 | ) | (4 | ) | (13 | ) | ||||||||||
Total subordinated notes less unamortized debt issuance costs | 49,544 | 49,527 | 49,477 | — | — | |||||||||||||||
Operating lease liability | 6,410 | 6,848 | 7,651 | (6 | ) | (16 | ) | |||||||||||||
Other liabilities | 40,582 | 35,737 | 33,045 | 14 | 23 | |||||||||||||||
Total liabilities | 2,691,773 | 2,708,181 | 2,540,974 | (1 | ) | 6 | ||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Preferred stock, | — | — | — | — | — | |||||||||||||||
Common stock, | 78 | 78 | 77 | — | 1 | |||||||||||||||
Additional paid-in capital | 57,552 | 57,362 | 56,138 | — | 3 | |||||||||||||||
Retained earnings | 236,720 | 230,354 | 208,342 | 3 | 14 | |||||||||||||||
Accumulated other comprehensive loss, net of tax | (16,418 | ) | (23,306 | ) | (22,723 | ) | (30 | ) | (28 | ) | ||||||||||
Total stockholders’ equity | 277,932 | 264,488 | 241,834 | 5 | 15 | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,969,705 | $ | 2,972,669 | $ | 2,782,808 | — | 7 | ||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Prior | |||||||||||||||||||
Linked Qtr. | Year Qtr. | |||||||||||||||||||
2024 | 2023 | 2023 | % Change | % Change | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Loans receivable, including fees | $ | 40,997 | $ | 40,863 | $ | 35,992 | — | 14 | ||||||||||||
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions | 3,883 | 3,580 | 2,620 | 8 | 48 | |||||||||||||||
Total interest and dividend income | 44,880 | 44,443 | 38,612 | 1 | 16 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Deposits | 12,882 | 12,055 | 6,624 | 7 | 94 | |||||||||||||||
Borrowings | 1,167 | 1,447 | 841 | (19 | ) | 39 | ||||||||||||||
Subordinated notes | 485 | 486 | 485 | — | — | |||||||||||||||
Total interest expense | 14,534 | 13,988 | 7,950 | 4 | 83 | |||||||||||||||
NET INTEREST INCOME | 30,346 | 30,455 | 30,662 | — | (1 | ) | ||||||||||||||
PROVISION FOR CREDIT LOSSES | 1,399 | 1,402 | 2,108 | — | (34 | ) | ||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 28,947 | 29,053 | 28,554 | — | 1 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges and fee income | 2,552 | 2,786 | 2,608 | (8 | ) | (2 | ) | |||||||||||||
Gain on sale of loans | 1,838 | 1,413 | 1,476 | 30 | 25 | |||||||||||||||
Gain on sale of MSRs | 8,215 | — | — | NM | NM | |||||||||||||||
Loss on sale of investment securities | (7,998 | ) | — | — | NM | NM | ||||||||||||||
Earnings on cash surrender value of BOLI | 240 | 239 | 221 | — | 9 | |||||||||||||||
Other noninterest income | 264 | 1,018 | 914 | (74 | ) | (71 | ) | |||||||||||||
Total noninterest income | 5,111 | 5,456 | 5,219 | (6 | ) | (2 | ) | |||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and benefits | 13,557 | 12,742 | 13,864 | 6 | (2 | ) | ||||||||||||||
Operations | 3,008 | 3,326 | 2,692 | (10 | ) | 12 | ||||||||||||||
Occupancy | 1,705 | 1,708 | 1,520 | — | 12 | |||||||||||||||
Data processing | 1,958 | 1,760 | 1,568 | 11 | 25 | |||||||||||||||
Gain on sale of OREO | — | (148 | ) | — | (100 | ) | NM | |||||||||||||
Loan costs | 585 | 497 | 470 | 18 | 24 | |||||||||||||||
Professional and board fees | 923 | 583 | 678 | 58 | 36 | |||||||||||||||
532 | 660 | 580 | (19 | ) | (8 | ) | ||||||||||||||
Marketing and advertising | 227 | 277 | 190 | (18 | ) | 19 | ||||||||||||||
Acquisition costs | — | — | 1,501 | NM | (100 | ) | ||||||||||||||
Amortization of core deposit intangible | 941 | 980 | 459 | (4 | ) | 105 | ||||||||||||||
Impairment of servicing rights | 93 | 48 | 2 | 94 | 4,550 | |||||||||||||||
Total noninterest expense | 23,529 | 22,433 | 23,524 | 5 | — | |||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 10,529 | 12,076 | 10,249 | (13 | ) | 3 | ||||||||||||||
PROVISION FOR INCOME TAXES | 2,132 | 2,304 | 2,037 | (7 | ) | 5 | ||||||||||||||
NET INCOME | $ | 8,397 | $ | 9,772 | $ | 8,212 | (14 | ) | 2 | |||||||||||
Basic earnings per share | $ | 1.07 | $ | 1.25 | $ | 1.06 | (14 | ) | 1 | |||||||||||
Diluted earnings per share | $ | 1.06 | $ | 1.23 | $ | 1.04 | (14 | ) | 2 | |||||||||||
KEY FINANCIAL RATIOS AND DATA (Unaudited)
For the Three Months Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
PERFORMANCE RATIOS: | ||||||||||||
Return on assets (ratio of net income to average total assets) (1) | 1.14 | % | 1.32 | % | 1.23 | % | ||||||
Return on equity (ratio of net income to average equity) (1) | 12.29 | 15.01 | 13.85 | |||||||||
Yield on average interest-earning assets (1) | 6.30 | 6.19 | 5.91 | |||||||||
Average total cost of funds (1) | 2.21 | 2.10 | 1.32 | |||||||||
Interest rate spread information – average during period | 4.09 | 4.09 | 4.59 | |||||||||
Net interest margin (1) | 4.26 | 4.24 | 4.70 | |||||||||
Operating expense to average total assets (1) | 3.20 | 3.02 | 3.52 | |||||||||
Average interest-earning assets to average interest-bearing liabilities (1) | 144.51 | 143.45 | 145.72 | |||||||||
Efficiency ratio (2) | 66.36 | 62.47 | 65.56 | |||||||||
Common equity ratio (ratio of stockholders' equity to total assets) | 9.36 | 8.90 | 8.69 | |||||||||
Tangible common equity ratio (3) | 8.74 | 8.25 | 8.87 | |||||||||
2024 | 2023 | 2023 | ||||||||||
ASSET QUALITY RATIOS AND DATA: | ||||||||||||
Nonperforming assets to total assets at end of period (4) | 0.41 | % | 0.37 | % | 0.33 | % | ||||||
Nonperforming loans to total gross loans (excluding loans held for sale) (5) | 0.49 | 0.45 | 0.37 | |||||||||
Allowance for credit losses – loans to nonperforming loans (5) | 260.24 | 288.11 | 323.26 | |||||||||
Allowance for credit losses – loans to total gross loans (excluding loans held for sale) | 1.29 | 1.30 | 1.29 | |||||||||
At or For the Three Months Ended | ||||||||||||
2024 | 2023 | 2023 | ||||||||||
PER COMMON SHARE DATA: | ||||||||||||
Basic earnings per share | $ | 1.07 | $ | 1.25 | $ | 1.06 | ||||||
Diluted earnings per share | $ | 1.06 | $ | 1.23 | $ | 1.04 | ||||||
Weighted average basic shares outstanding | 7,703,789 | 7,696,429 | 7,623,580 | |||||||||
Weighted average diluted shares outstanding | 7,824,460 | 7,795,383 | 7,778,418 | |||||||||
Common shares outstanding at end of period | 7,707,651 | (6) | 7,698,401 | (7) | 7,631,018 | (8) | ||||||
Book value per share using common shares outstanding | $ | 36.06 | $ | 34.36 | $ | 31.69 | ||||||
Tangible book value per share using common shares outstanding (3) | $ | 33.47 | $ | 31.64 | $ | 28.55 |
_______________
(1) | Annualized. | |
(2) | Total noninterest expense as a percentage of net interest income and total noninterest income. | |
(3) | Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below. | |
(4) | Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets. | |
(5) | Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. | |
(6) | Common shares were calculated using shares outstanding of 7,805,795 at | |
(7) | Common shares were calculated using shares outstanding of 7,800,545 at | |
(8) | Common shares were calculated using shares outstanding of 7,743,283 at | |
(Dollars in thousands) | For the Three Months Ended | Qtr. Over Qtr. | ||||||||||
Average Balances | 2024 | 2023 | $ Change | |||||||||
Assets | ||||||||||||
Loans receivable, net (1) | $ | 2,464,602 | $ | 2,292,364 | $ | 172,238 | ||||||
Securities available-for-sale, at amortized cost | 331,413 | 270,676 | 60,737 | |||||||||
Securities held-to-maturity | 8,500 | 8,500 | - | |||||||||
Interest-bearing deposits and certificates of deposit at other financial institutions | 59,514 | 69,664 | (10,150 | ) | ||||||||
FHLB stock, at cost | 2,174 | 6,335 | (4,161 | ) | ||||||||
Total interest-earning assets | 2,866,203 | 2,647,539 | 218,664 | |||||||||
Noninterest-earning assets | 92,344 | 94,486 | (6,366 | ) | ||||||||
Total assets | $ | 2,958,547 | $ | 2,742,025 | $ | 216,522 | ||||||
Liabilities | ||||||||||||
Interest-bearing accounts | $ | 1,832,767 | $ | 1,688,037 | $ | 144,730 | ||||||
Borrowings | 101,150 | 79,339 | 21,811 | |||||||||
Subordinated notes | 49,533 | 49,467 | 66 | |||||||||
Total interest-bearing liabilities | 1,983,450 | 1,816,843 | 166,607 | |||||||||
Noninterest-bearing accounts | 657,083 | 620,071 | 37,012 | |||||||||
Other noninterest-bearing liabilities | 43,246 | 34,434 | 8,812 | |||||||||
Total liabilities | $ | 2,683,779 | $ | 2,471,348 | $ | 212,431 |
_______________
(1) Includes loans HFS.
Non-GAAP Financial Measures:
In addition to financial results presented in accordance with generally accepted accounting principles utilized in
These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Reconciliation of the GAAP deposits and the non-GAAP organic deposits with changes between the periods is presented below:
Linked | Prior | Prior Year | ||||||||||||||||||||||||||||||
2024 | 2023 | 2023 | 2023 | 2022 | Qtr. Change | Qtr. Change | Qtr. Change | |||||||||||||||||||||||||
Total Deposits | $ | 2,465,297 | $ | 2,522,323 | $ | 2,454,444 | $ | 2,443,273 | $ | 2,127,741 | $ | (57,026 | ) | $ | 67,879 | $ | 315,532 | |||||||||||||||
Brokered CDs Deposits | (331,311 | ) | (361,289 | ) | (323,338 | ) | (266,114 | ) | (331,933 | ) | 29,978 | (37,951 | ) | 65,819 | ||||||||||||||||||
Brokered Checking | — | (70,240 | ) | (50,085 | ) | (2,648 | ) | (2,258 | ) | 70,240 | (20,155 | ) | (390 | ) | ||||||||||||||||||
Brokered Money Market | (8,011 | ) | (1 | ) | (51 | ) | (50,311 | ) | (59,668 | ) | (8,010 | ) | 50 | 9,357 | ||||||||||||||||||
— | — | — | (382,120 | ) | — | — | — | (382,120 | ) | |||||||||||||||||||||||
Total Organic Deposits | $ | 2,125,975 | $ | 2,090,793 | $ | 2,080,970 | $ | 1,742,080 | $ | 1,733,882 | $ | 35,182 | $ | 9,823 | $ | 8,198 | ||||||||||||||||
Reconciliation of the GAAP book value per share and common equity ratio and the non-GAAP tangible book value per share and tangible common equity ratio is presented below.
(Dollars in thousands, except share and per share amounts) | ||||||||||||
Tangible Book Value Per Share: | 2024 | 2023 | 2023 | |||||||||
Stockholders' equity (GAAP) | $ | 277,932 | $ | 264,488 | $ | 241,834 | ||||||
Less: goodwill and core deposit intangible, net | (19,994 | ) | (20,935 | ) | (23,940 | ) | ||||||
Tangible common stockholders' equity (non-GAAP) | $ | 257,938 | $ | 243,553 | $ | 217,894 | ||||||
Common shares outstanding at end of period | 7,707,651 | 7,698,401 | 7,631,018 | |||||||||
Book value per share (GAAP) | $ | 36.06 | $ | 34.36 | $ | 31.69 | ||||||
Tangible book value per share (non-GAAP) | $ | 33.47 | $ | 31.64 | $ | 28.55 | ||||||
Tangible Common Equity Ratio: | ||||||||||||
Total assets (GAAP) | $ | 2,969,705 | $ | 2,972,669 | $ | 2,782,808 | ||||||
Less: goodwill and core deposit intangible assets | (19,994 | ) | (20,935 | ) | (23,940 | ) | ||||||
Tangible assets (non-GAAP) | $ | 2,949,711 | $ | 2,951,734 | $ | 2,758,868 | ||||||
Common equity ratio (GAAP) | 9.36 | % | 8.90 | % | 8.69 | % | ||||||
Tangible common equity ratio (non-GAAP) | 8.74 | 8.25 | 7.90 | |||||||||
Contacts:
Chief Executive Officer
Chief Financial Officer
(425) 771-5299
www.FSBWA.com
Source:
2024 GlobeNewswire, Inc., source