Integrated Financial Holdings, Inc. Fourth Quarter 2022 Financial Results

Integrated Financial Holdings, Inc.
Integrated Financial Holdings, Inc.

RALEIGH, N.C., Feb. 07, 2023 (GLOBE NEWSWIRE) -- Integrated Financial Holdings, Inc. (OTCQX: IFHI) (the “Company” or “IFHI”), the financial holding company for West Town Bank & Trust (the “Bank”), released its financial results for the three months and year ended December 31, 2022. Highlights from the 2022 fourth quarter and year-to-date results include the following:

  • Fourth quarter net income of $2.4 million or $1.04 per diluted share, compared to fourth quarter 2021 net income of $1.3 million or $0.57 per diluted share. Year-to-date net loss of $199,000 or $0.09 per diluted share compared to $12.7 million in net income or $5.71 per diluted share in the prior year.

  • Net interest income of $5.9 million for the fourth quarter of 2022, compared to $4.1 million for the same period in 2021. For the year, net interest income was $22.0 million compared to $16.3 million for the same twelve-month period in 2021.

  • Return on average assets of 2.15% and -0.05% for the three and twelve-month periods ending December 31, 2022 compared to 1.14% and 2.98%, respectively for the same periods in 2021.

  • Return on average tangible common equity (a non-GAAP financial measure) of 14.23% and -0.29% for the three and twelve-month periods ending December 31, 2022 compared to 7.57% and 20.14%, respectively for the same periods in 2021.

Marc McConnell, Chairman, President and CEO of the Company said, “We believe our positive fourth quarter performance indicates that we are well positioned to continue refining our strategic initiatives while preparing for the upcoming year.   Our earnings were strong, we are continuing to see net interest margin increase as a result of Fed rate increases, and credit quality ratios have improved across the board. With more than $500 million in renewable energy sector loans currently in the pipeline, we remain focused on maintaining our stronghold in government-guaranteed lending while also streamlining our organization in ways intended to reduce non-interest expense in our less profitable business lines.”

BALANCE SHEET
On December 31, 2022, the Company’s total assets were $447.9 million, net loans held for investment were $294.1 million, loans held for sale (“HFS”) were $34.3 million, total deposits were $313.1 million and total shareholders’ equity attributable to IFHI was $87.5 million. Compared with December 31, 2021, total assets decreased $5.1 million or 1%, net loans held for investment increased $40.0 million or 16%, HFS loans increased $6.4 million or 23%, total deposits decreased $35.0 million or 10%, and total shareholders’ equity attributable to IFHI decreased $1.0 million or 1%. Cash and cash equivalents increased slightly from the prior quarter but have decreased since the prior year end as the Company has redeployed over $46.3 million in cash into higher yielding loans. The Bank has continued to see growth in loans held for investment primarily as a result of activity in the Government Guaranteed Lending (“GGL”) type loans. At $34.3 million in volume, HFS loans at December 31, 2022 represents potential, significant future GGL revenues as those loans are sold in the market and the associated premiums are recognized. Noninterest bearing deposits remained approximately static from the prior quarter at $106.3 million but are down $8.1 million since the prior year-end, in part, as a result of some ongoing merger and acquisition activity in one of the targeted industries that the Company banks.   The decrease in total shareholders’ equity since year-end 2021 was primarily associated with a decline in the market value of the available for sale investment portfolio. The accumulated other comprehensive loss component (“AOCI”) of equity related to the change in market pricing for the available-for-sale investment portfolio increased from a loss of $99,000 at December 31, 2021 to a loss of $2.3 million at December 31, 2022 as a result of significant changes in market interest rates.

CAPITAL LEVELS
At December 31, 2022, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.

 

"Well Capitalized" Minimum

Basel III Fully Phased-In

West Town Bank & Trust

Tier 1 common equity ratio

6.50%

7.00%

12.47%

Tier 1 risk-based capital ratio

8.00%

8.50%

12.47%

Total risk-based capital ratio

10.00%

10.50%

13.73%

Tier 1 leverage ratio

5.00%

4.00%

11.58%

 

 

 

 

Primarily as a result of the increased AOCI loss, the Company’s book value per common share decreased from $40.35 as of December 31, 2021, to $38.69 at December 31, 2022. The Company’s tangible book value per common share (a non-GAAP financial measure) also decreased from $31.44 as of December 31, 2021, to $30.36 at December 31, 2022, primarily as a result of the AOCI loss.

ASSET QUALITY
The Company’s nonperforming assets to total assets ratio decreased from 1.65% at December 31, 2021, to 1.04% at December 31, 2022, as management continued to aggressively work to reduce its special assets portfolio. Nonaccrual loans at December 31, 2022 decreased $2.3 million or 34% as compared to December 31, 2021. The Bank held $101,000 in foreclosed assets as of December 31, 2022.

The Company recorded a negative provision for loan losses of $150,000 in the fourth quarter of 2022 but had $810,000 in net provision for loan loss additions during the twelve-month period ending December 31, 2022 as compared to provisions of $775,000 and $1,974,000 for the same periods in 2021. The negative provision in the three months ended December 31, 2022 reflected the impact of continued credit improvements. The Company recorded $149,000 in net recoveries during the fourth quarter of 2022 compared to $1.0 million in net charge-offs for the same period in 2021. Management continues to believe it is making progress in improving overall asset quality. Set forth in the table below is certain asset quality information as of the dates indicated:

  (Dollars in thousands)

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

Nonaccrual loans

$

4,552

 

$

4,612

 

$

4,656

 

$

6,558

 

$

6,848

 

Foreclosed assets

 

101

 

 

-

 

 

-

 

 

-

 

 

618

 

90 days past due and still accruing

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonperforming assets

$

4,653

 

$

4,612

 

$

4,656

 

$

6,558

 

$

7,466

 

 

 

 

 

 

 

Net charge-offs

$

(149

)

$

(29

)

$

(279

)

$

105

 

$

1,038

 

Annualized net charge-offs (recoveries) to total

 

 

 

 

 

average portfolio loans

 

-0.20

%

 

-0.04

%

 

-0.43

%

 

0.16

%

 

1.65

%

 

 

 

 

 

 

Ratio of total nonperforming assets to total assets

 

1.04

%

 

1.05

%

 

1.07

%

 

1.52

%

 

1.65

%

Ratio of total nonperforming loans to total loans, net

 

 

 

 

 

of allowance

 

1.55

%

 

1.60

%

 

1.79

%

 

2.56

%

 

2.70

%

Ratio of total allowance for loan losses to total loans

 

2.23

%

 

2.27

%

 

2.39

%

 

2.14

%

 

2.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AND MARGIN
Net interest income for the three months ended December 31, 2022, increased $1.8 million or 43% in comparison to the fourth quarter of 2021 as loan yields increased year over year from 6.53% to 7.69%. The increase in yield from the prior year reflected the impact of 425 basis points of rate increases by the Federal Open Market Committee (“FOMC”) since the beginning of 2022 in response to current economic conditions as well as a change in loan mix. Overall cost of funds increased from 0.65% in the fourth quarter of 2021 to 0.98% for the same period in 2022, as average retail certificate of deposit (“CD”) rates trended up and new CDs were originated at a higher market rate. Net interest margin increased from 4.27% during the three months ended December 31, 2021, to 6.35% for the same period in 2022. The increase in margin was also driven by the increase in loan yield resulting from the FOMC actions.

Net interest income for the twelve months ended December 31, 2022, increased $5.6 million or 34% in comparison to the same period of 2021 as loan yields increased year over year from 6.53% to 7.47% primarily as a result of the FOMC rate increases during the period.

 

Three Months Ended

 

 

 

Year-To-Date

(Dollars in thousands)

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

12/31/22

12/31/21

Average balances:

 

 

 

 

 

 

 

 

Loans

$

331,508

$

312,475

$

319,115

$

294,502

$

277,510

 

$

321,033

$

282,843

Available-for-sale securities

 

17,446

 

19,096

 

21,879

 

21,088

 

20,367

 

 

19,473

 

30,274

Other interest-bearing balances

 

20,367

 

30,378

 

33,328

 

56,359

 

86,261

 

 

27,813

 

65,617

Total interest-earning assets

 

369,321

 

361,949

 

374,322

 

371,949

 

384,138

 

 

368,319

 

378,734

Total assets

 

436,695

 

428,983

 

438,732

 

437,402

 

442,139

 

 

434,803

 

426,869

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

113,851

 

94,013

 

85,042

 

98,546

 

104,472

 

 

97,635

 

93,681

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

212,069

 

233,464

 

244,363

 

235,092

 

237,847

 

 

229,965

 

235,636

Borrowings

 

8,913

 

2,174

 

8,626

 

6,306

 

5,272

 

 

6,571

 

4,914

Total interest-bearing liabilities

 

220,982

 

235,638

 

252,989

 

241,398

 

243,119

 

 

236,536

 

240,550

Common shareholders' equity

 

84,831

 

88,043

 

90,721

 

90,441

 

86,549

 

 

87,865

 

83,114

Tangible common equity (1)

 

65,879

 

68,924

 

71,437

 

70,939

 

66,877

 

 

68,747

 

63,203

 

 

 

 

 

 

 

 

 

Interest income/expense:

 

 

 

 

 

 

 

 

Loans

$

6,422

$

5,943

$

5,491

$

5,623

$

4,571

 

$

23,479

$

18,458

Available-for-sale securities

 

64

 

105

 

104

 

89

 

77

 

 

362

 

268

Interest-bearing balances and other

 

257

 

169

 

89

 

42

 

53

 

 

557

 

188

Total interest income

 

6,743

 

6,217

 

5,684

 

5,754

 

4,701

 

 

24,398

 

18,914

Deposits

 

735

 

532

 

523

 

522

 

566

 

 

2,312

 

2,580

Borrowings

 

93

 

13

 

15

 

9

 

1

 

 

130

 

1

Total interest expense

 

828

 

545

 

538

 

531

 

567

 

 

2,442

 

2,581

Net interest income

$

5,915

$

5,672

$

5,146

$

5,223

$

4,134

 

$

21,956

$

16,333

 

 

 

 

 

 

 

 

 

(1) See reconciliation of non-GAAP financial measures.

 

 

 

 


 

Three Months Ended

 

Year-To-Date

 

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

12/31/22

12/31/21

Average yields and costs:

 

 

 

 

 

 

 

 

Loans

7.69

%

7.55

%

6.90

%

7.74

%

6.53

%

 

7.47

%

6.53

%

Available-for-sale securities

1.47

%

2.20

%

1.90

%

1.69

%

1.51

%

 

1.82

%

0.89

%

Interest-bearing balances and other

5.01

%

2.21

%

1.07

%

0.30

%

0.24

%

 

1.59

%

0.29

%

Total interest-earning assets

7.24

%

6.81

%

6.09

%

6.27

%

4.86

%

 

6.61

%

4.99

%

Interest-bearing deposits

1.38

%

0.90

%

0.86

%

0.90

%

0.94

%

 

1.00

%

1.09

%

Borrowings

4.14

%

2.37

%

0.70

%

0.58

%

0.08

%

 

2.00

%

0.02

%

Total interest-bearing liabilities

1.49

%

0.92

%

0.85

%

0.89

%

0.93

%

 

1.03

%

1.07

%

Cost of funds

0.98

%

0.66

%

0.64

%

0.63

%

0.65

%

 

0.73

%

0.77

%

Net interest margin

6.35

%

6.22

%

5.51

%

5.69

%

4.27

%

 

5.94

%

4.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME
Noninterest income for the three months ended December 31, 2022, was $5.9 million, an increase of $887,000 or 18% as compared to the three months ended December 31, 2021. Specific items to note include:

  • Windsor Advantage, LLC (“Windsor”), a subsidiary of the Company which offers an SBA and USDA loan servicing platform, had processing and servicing revenue totaling $2.8 million, a decrease of $14,000 or less than 1% as compared to the $2.9 million in income earned during the same prior-year period.

  • Mortgage revenue totaled $99,000, a decrease of $991,000 or 91% as compared to the fourth quarter of 2021. Due to the nationwide slowdown in refinancing volume and the impact of a doubling of long-term mortgage rates year-over-year, the Company has begun to deemphasize its mortgage operations in the fourth quarter of 2022.

  • Government Guaranteed Lending revenue was $2.1 million in the fourth quarter of 2022, a decrease of $121,000 or 5% in comparison to the $2.2 million of revenues for the same period in 2021.

  • Other noninterest income was $549,000 in the fourth quarter of 2022 compared to loss of $1.5 million in the same period in 2021. The fourth quarter of 2021 reflected the impact of a $2.1 million pre-tax loss associated with a tax credit taken during that period. The tax benefit of the losses plus the tax credit itself netted a total after-tax positive impact to the Company of about $1.2 million. In addition, income associated with the Company’s minority investment, West Town Payments (“WTP”) increased from $79,000 in the fourth quarter of 2021 to $1.2 million for the same period in 2022.

Noninterest income for the twelve months ended December 31, 2022, was $28.3 million compared to $41.1 million for the same period in 2021, a decrease of $12.8 million or 31%. The decrease is primarily due to a decrease of $13.8 million in loan processing and servicing revenue driven by the decrease in revenue during the period related to the Paycheck Protection Program (“PPP”). Mortgage revenues during the period decreased $4.3 million due to a general slowdown in the refinancing market as a result of the current rate environment. These two declines were partially offset by an increase in other noninterest income of $5.2 million primarily associated with a gain in the market value of marketable equity securities.

NONINTEREST EXPENSE
Noninterest expense for the fourth quarter of 2022 was $9.8 million, a decrease of $499,000 or 5%, from $10.3 million for the fourth quarter of 2021. This change was primarily due to decreased loan-related expenses, which tend to fluctuate unexpectedly, but was also affected by a $92,000 recovery of expenses reimbursed by the SBA.   Also contributing to the year-over-year decrease in noninterest expense was a decrease in software expense, which decreased from $830,000 in the fourth quarter of 2021 to $467,000 during the same period in 2022. This $363,000 decrease was primarily due to a decline in software expenses associated with processing and servicing PPP loans at Windsor in the fourth quarter of 2021. Software costs at Windsor decreased from $413,000 in the fourth quarter of 2021 to $164,000 in the same period in 2022. Additionally, advertising costs dropped from $453,000 in the fourth quarter of 2021 to $211,000 in the same period of 2022, primarily tied to a decline in fee generation costs at Windsor.   These increases were partially offset by merger-related expenses of $192,000 associated with the Company’s proposed merger with MVB Financial Corp. (“MVB”) announced during the third quarter of 2022, as well as a $479,000 increase in other operating expenses caused in part by commissions paid to outside parties for fee generation for WTP resulting in the related $1.2 million increase in revenues.

Noninterest expense for the twelve months ended December 31, 2022, was $50.8 million compared to $42.5 million for the same period in 2021, an increase of $8.2 million or 19%. The primary difference period over period was the $10.0 million litigation expense recognized in the third quarter of 2022.

ABOUT INTEGRATED FINANCIAL HOLDINGS, INC.
Integrated Financial Holdings, Inc. is a financial holding company based in Raleigh, North Carolina. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its full-service office located in the greater Chicago area. The Company is also the parent company of Windsor Advantage, LLC, a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. The Company is registered with and supervised by the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.

For more information, visit https://ifhinc.com/.

Important Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as "expect," "anticipate," "estimate," "believe," variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with the Company’s acquisition and divesture activities or the Company’s planned merger with MVB; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives, including our planned merger with MVB, on our ability to retain key employees; the possibility that the proposed merger with MVB will not close when expected or at all because required regulatory approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all; the possibility that the anticipated benefits of the proposed merger with MVB will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company and MVB do business; adverse results (including judgments, costs, fines, reputational harm, financial settlements and/or other negative effects) from current or future litigation, regulatory proceedings, investigations, or similar matters, or developments related thereto; and the impact of competition from traditional or new sources, including non-bank financial service providers, such as Fintechs. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Contact: Steve Crouse, 919-861-8018

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

  (In thousands, unaudited)

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

Assets

 

 

 

 

 

 

Cash and due from banks

$

7,553

 

$

6,272

 

$

4,700

 

$

3,900

 

$

3,803

 

Interest-bearing deposits

 

26,430

 

 

25,011

 

 

21,981

 

 

28,876

 

 

79,910

 

 

Total cash and cash equivalents

 

33,983

 

 

31,283

 

 

26,681

 

 

32,776

 

 

83,713

 

Interest-bearing time deposits

 

999

 

 

1,249

 

 

1,499

 

 

1,746

 

 

1,746

 

Available-for-sale securities

 

17,712

 

 

17,460

 

 

19,038

 

 

20,386

 

 

20,659

 

Marketable equity securities

 

17,982

 

 

17,982

 

 

17,982

 

 

18,000

 

 

12,000

 

Loans held for sale

 

34,302

 

 

28,399

 

 

59,592

 

 

51,095

 

 

27,880

 

Loans held for investment

 

300,764

 

 

295,416

 

 

266,259

 

 

262,281

 

 

259,625

 

 

Allowance for loan and lease losses

 

(6,709

)

 

(6,710

)

 

(6,361

)

 

(5,622

)

 

(5,547

)

 

 

Loans held for investment, net

 

294,055

 

 

288,706

 

 

259,898

 

 

256,659

 

 

254,078

 

Premises and equipment, net

 

4,098

 

 

4,264

 

 

4,238

 

 

4,235

 

 

4,106

 

Foreclosed assets

 

101

 

 

-

 

 

-

 

 

-

 

 

618

 

Loan servicing assets

 

3,715

 

 

3,979

 

 

4,178

 

 

4,014

 

 

3,993

 

Bank-owned life insurance

 

5,357

 

 

5,330

 

 

5,304

 

 

5,271

 

 

5,246

 

Accrued interest receivable

 

2,997

 

 

2,485

 

 

2,139

 

 

1,886

 

 

1,373

 

Goodwill

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

Other intangible assets, net

 

5,682

 

 

5,848

 

 

6,014

 

 

6,180

 

 

6,400

 

Other assets

 

13,719

 

 

17,293

 

 

15,764

 

 

15,218

 

 

18,001

 

 

 

 

Total assets

$

447,863

 

$

437,439

 

$

435,488

 

$

430,627

 

$

452,974

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

Liabilities

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing

$

106,255

 

$

106,272

 

$

83,544

 

$

92,499

 

$

114,313

 

 

Interest-bearing

 

206,872

 

 

218,835

 

 

250,026

 

 

233,953

 

 

233,842

 

 

 

Total deposits

 

313,127

 

 

325,107

 

 

333,570

 

 

326,452

 

 

348,155

 

Borrowings

 

30,000

 

 

5,000

 

 

-

 

 

5,000

 

 

7,500

 

Accrued interest payable

 

379

 

 

370

 

 

308

 

 

325

 

 

326

 

Other liabilities

 

17,600

 

 

23,557

 

 

9,939

 

 

8,320

 

 

9,212

 

 

Total liabilities

 

361,106

 

 

354,034

 

 

343,817

 

 

340,097

 

 

365,193

 

Shareholders' equity:

 

 

 

 

 

Common stock, voting

 

2,239

 

 

2,239

 

 

2,227

 

 

2,213

 

 

2,176

 

Common stock, non-voting

 

22

 

 

22

 

 

22

 

 

22

 

 

22

 

Additional paid in capital

 

24,916

 

 

24,674

 

 

24,498

 

 

24,013

 

 

23,664

 

Retained earnings

 

62,611

 

 

60,248

 

 

67,781

 

 

66,372

 

 

62,810

 

Accumulated other comprehensive loss

 

(2,301

)

 

(2,866

)

 

(1,985

)

 

(1,296

)

 

(99

)

 

Total IFH, Inc. shareholders' equity

 

87,487

 

 

84,317

 

 

92,543

 

 

91,324

 

 

88,573

 

Noncontrolling interest

 

(730

)

 

(912

)

 

(872

)

 

(794

)

 

(792

)

 

Total shareholders' equity

 

86,757

 

 

83,405

 

 

91,671

 

 

90,530

 

 

87,781

 

 

 

 

Total liabilities and shareholders' equity

$

447,863

 

$

437,439

 

$

435,488

 

$

430,627

 

$

452,974

 

 

 

 

 

 

 

 

 

 


Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (In thousands except per

Three Months Ended

 

Year-To-Date

  share data; unaudited)

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

12/31/22

12/31/21

Interest income

 

 

 

 

 

 

 

 

Loans

$

6,422

 

$

5,943

 

$

5,491

 

$

5,623

 

$

4,571

 

 

$

23,479

 

$

18,458

 

Available-for-sale securities and other

 

321

 

 

274

 

 

193

 

 

131

 

 

130

 

 

 

919

 

 

456

 

Total interest income

 

6,743

 

 

6,217

 

 

5,684

 

 

5,754

 

 

4,701

 

 

 

24,398

 

 

18,914

 

Interest expense

 

 

 

 

 

 

 

 

Interest on deposits

 

735

 

 

532

 

 

523

 

 

522

 

 

566

 

 

 

2,312

 

 

2,580

 

Interest on borrowings

 

93

 

 

13

 

 

15

 

 

9

 

 

1

 

 

 

130

 

 

1

 

Total interest expense

 

828

 

 

545

 

 

538

 

 

531

 

 

567

 

 

 

2,442

 

 

2,581

 

Net interest income

 

5,915

 

 

5,672

 

 

5,146

 

 

5,223

 

 

4,134

 

 

 

21,956

 

 

16,333

 

Provision for loan losses

 

(150

)

 

320

 

 

460

 

 

180

 

 

775

 

 

 

810

 

 

1,947

 

Noninterest income

 

 

 

 

 

 

 

 

Loan processing and servicing

 

 

 

 

 

 

 

 

revenue

 

2,849

 

 

2,163

 

 

2,373

 

 

2,207

 

 

2,863

 

 

 

9,592

 

 

23,417

 

Mortgage

 

99

 

 

477

 

 

1,066

 

 

173

 

 

1,090

 

 

 

1,815

 

 

6,106

 

Government guaranteed lending

 

2,095

 

 

2,213

 

 

2,767

 

 

1,124

 

 

2,216

 

 

 

8,199

 

 

7,937

 

SBA documentation preparation fees

 

2

 

 

78

 

 

128

 

 

144

 

 

167

 

 

 

352

 

 

991

 

Service charges on deposits

 

240

 

 

182

 

 

118

 

 

104

 

 

85

 

 

 

644

 

 

243

 

Bank-owned life insurance

 

26

 

 

27

 

 

33

 

 

25

 

 

25

 

 

 

111

 

 

109

 

Other noninterest income (loss)

 

549

 

 

222

 

 

290

 

 

6,509

 

 

(1,473

)

 

 

7,570

 

 

2,325

 

Total noninterest income

 

5,860

 

 

5,362

 

 

6,775

 

 

10,286

 

 

4,973

 

 

 

28,283

 

 

41,128

 

Noninterest expense

 

 

 

 

 

 

 

 

Compensation

 

6,168

 

 

6,880

 

 

6,271

 

 

7,061

 

 

6,178

 

 

 

26,380

 

 

23,652

 

Occupancy and equipment

 

303

 

 

402

 

 

254

 

 

344

 

 

254

 

 

 

1,303

 

 

1,181

 

Loan and special asset expenses

 

57

 

 

969

 

 

491

 

 

638

 

 

483

 

 

 

2,155

 

 

2,252

 

Professional services

 

676

 

 

207

 

 

491

 

 

551

 

 

845

 

 

 

1,925

 

 

2,817

 

Data processing

 

272

 

 

263

 

 

271

 

 

249

 

 

267

 

 

 

1,055

 

 

899

 

Software

 

467

 

 

460

 

 

426

 

 

425

 

 

830

 

 

 

1,778

 

 

6,587

 

Communications

 

83

 

 

86

 

 

97

 

 

83

 

 

99

 

 

 

349

 

 

396

 

Advertising

 

211

 

 

252

 

 

321

 

 

214

 

 

453

 

 

 

998

 

 

1,429

 

Amortization of intangibles

 

169

 

 

170

 

 

170

 

 

170

 

 

170

 

 

 

679

 

 

698

 

Merger related expenses

 

192

 

 

561

 

 

-

 

 

-

 

 

-

 

 

 

753

 

 

-

 

Other operating expenses

 

1,236

 

 

10,683

 

 

846

 

 

631

 

 

754

 

 

 

13,396

 

 

2,636

 

Total noninterest expense

 

9,834

 

 

20,933

 

 

9,638

 

 

10,366

 

 

10,333

 

 

 

50,771

 

 

42,547

 

Income (loss) before income taxes

 

2,091

 

 

(10,219

)

 

1,823

 

 

4,963

 

 

(2,001

)

 

 

(1,342

)

 

12,967

 

Income tax expense (benefit)

 

(454

)

 

(2,646

)

 

492

 

 

1,403

 

 

(3,090

)

 

 

(1,205

)

 

867

 

Net income (loss)

 

2,545

 

 

(7,573

)

 

1,331

 

 

3,560

 

 

1,089

 

 

 

(137

)

 

12,100

 

Noncontrolling interest

 

182

 

 

(40

)

 

(78

)

 

(2

)

 

(187

)

 

 

62

 

 

(631

)

Net income (loss) attributable

 

 

 

 

 

 

 

 

    to IFH, Inc.

$

2,363

 

$

(7,533

)

$

1,409

 

$

3,562

 

$

1,276

 

 

$

(199

)

$

12,731

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

1.08

 

$

(3.45

)

$

0.65

 

$

1.65

 

$

0.60

 

 

$

(0.09

)

$

5.91

 

Diluted earnings (loss) per common share

$

1.04

 

$

(3.45

)

$

0.63

 

$

1.59

 

$

0.57

 

 

$

(0.09

)

$

5.71

 

Weighted average common shares

 

 

 

 

 

 

 

 

outstanding

 

2,194

 

 

2,185

 

 

2,175

 

 

2,159

 

 

2,140

 

 

 

2,178

 

 

2,154

 

Diluted average common shares

 

 

 

 

 

 

 

 

outstanding

 

2,267

 

 

2,185

 

 

2,244

 

 

2,242

 

 

2,234

 

 

 

2,178

 

 

2,229

 

 

 

 

 

 

 

 

 

 


Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year-To-Date

 

 

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

12/31/22

12/31/21

PER COMMON SHARE

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

1.08

 

$

(3.45

)

$

0.65

 

$

1.65

 

$

0.60

 

 

$

(0.09

)

$

5.91

 

 

Diluted earnings (loss) per common share

 

1.04

 

 

(3.45

)

 

0.63

 

 

1.59

 

 

0.57

 

 

 

(0.09

)

 

5.71

 

 

Book value per common share

 

38.69

 

 

37.29

 

 

41.15

 

 

40.86

 

 

40.35

 

 

 

38.69

 

 

40.35

 

 

Tangible book value per common share (2)

 

30.36

 

 

28.88

 

 

32.62

 

 

32.21

 

 

31.44

 

 

 

30.36

 

 

31.44

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL RATIOS (ANNUALIZED)

 

 

 

 

 

 

 

 

 

Return on average assets

 

2.15

%

 

-6.97

%

 

1.29

%

 

3.30

%

 

1.14

%

 

 

-0.05

%

 

2.98

%

 

Return on average common shareholders'

 

 

 

 

 

 

 

 

 

equity

 

11.05

%

 

-33.95

%

 

6.23

%

 

15.97

%

 

5.85

%

 

 

-0.22

%

 

15.32

%

 

Return on average tangible common

 

 

 

 

 

 

 

 

 

equity (2)

 

14.23

%

 

-43.36

%

 

7.91

%

 

20.36

%

 

7.57

%

 

 

-0.29

%

 

20.14

%

 

Net interest margin

 

6.35

%

 

6.22

%

 

5.51

%

 

5.69

%

 

4.27

%

 

 

5.94

%

 

4.31

%

 

Efficiency ratio (1)

 

83.5

%

 

189.7

%

 

80.8

%

 

66.8

%

 

113.5

%

 

 

101.1

%

 

74.0

%

 

 

 

 

 

 

 

 

 

 

 

(1) Efficiency ratio is calculated by dividing noninterest expense less transaction-related costs by the sum of net interest

 

income and noninterest income, less gains or losses on sale of securities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) See reconciliation of non-GAAP measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Concentrations

The top ten commercial loan concentrations as of December 31, 2022, were as follows:

 

 

% of

 

 

Commercial

(Dollars in millions)

Amount

Loans

Solar electric power generation

$

72.5

34

%

Power and communication line and related structures construction

 

48.2

23

%

Lessors of nonresidential buildings (except miniwarehouses)

 

16.6

8

%

Other activities related to real estate

 

10.5

5

%

Hotels (except casino hotels) and motels

 

7.4

4

%

Lessors of residential buildings and dwellings

 

6.0

3

%

Lessors of other real estate property

 

5.9

3

%

Other heavy and civil engineering construction

 

4.3

2

%

All other amusement and recreation industries

 

3.2

2

%

Marinas

 

2.8

1

%

 

$

177.4

85

%

 

 

 

Reconciliation of Non-GAAP Measures

 

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

 

 

 

  (Dollars in thousands except book value per share)

 

 

 

Tangible book value per common share

 

 

 

 

 

 

 

 

Total IFH, Inc. shareholders' equity

$

87,487

 

$

84,317

 

$

92,543

 

$

91,324

 

$

88,573

 

 

 

 

Less: Goodwill

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

 

 

 

Less Other intangible assets, net

 

5,682

 

 

5,848

 

 

6,014

 

 

6,180

 

 

6,400

 

 

 

 

Total tangible common equity

$

68,644

 

$

65,308

 

$

73,368

 

$

71,983

 

$

69,012

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending common shares outstanding

 

2,261

 

 

2,261

 

 

2,249

 

 

2,235

 

 

2,198

 

 

 

 

Tangible book value per common share

$

30.36

 

$

28.88

 

$

32.62

 

$

32.21

 

$

31.44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year-To-Date

  (Dollars in thousands)

12/31/22

9/30/22

6/30/22

3/31/22

12/31/21

 

12/31/22

12/31/21

Return on average tangible common equity

 

 

 

 

 

 

 

 

Average IFH, Inc. shareholders' equity

$

84,831

 

$

88,043

 

$

90,721

 

$

90,441

 

$

86,549

 

 

$

88,509

 

$

83,114

 

Less: Average goodwill

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

 

13,161

 

 

 

13,161

 

 

13,161

 

Less Average other intangible assets, net

 

5,791

 

 

5,958

 

 

6,123

 

 

6,341

 

 

6,511

 

 

 

6,053

 

 

6,750

 

Average tangible common equity

$

65,879

 

$

68,924

 

$

71,437

 

$

70,939

 

$

66,877

 

 

$

69,295

 

$

63,203

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to IFH, Inc.

$

2,363

 

$

(7,533

)

$

1,409

 

$

3,562

 

$

1,276

 

 

$

(199

)

$

12,731

 

Return on average tangible common equity

 

14.23

%

 

-43.36

%

 

7.91

%

 

20.36

%

 

7.57

%

 

 

-0.29

%

 

20.14

%