• First Western Reports Third Quarter 2022 Financial Results

    ソース: Nasdaq GlobeNewswire / 20 10 2022 15:15:01   America/Chicago

    Third Quarter 2022 Summary

    • Net income available to common shareholders of $6.2 million in Q3 2022, compared to $4.5 million in Q2 2022 and $6.4 million in Q3 2021
    • Diluted EPS of $0.64 in Q3 2022, compared to $0.46 in Q2 2022 and $0.78 in Q3 2021
    • Pre-tax, pre-provision net income(1) of $10.0 million in Q3 2022, compared to $6.5 million in Q2 2022 and $8.9 million in Q3 2021
    • Total income before non-interest expense of $27.5 million in Q3 2022, compared to $26.6 million in Q2 2022 and $24.9 million in Q3 2021
    • Total loans held for investment increased at annualized rate of 38.1% in Q3 2022
    • Book value per common share increased to $24.74, or 2.8%, from $24.06 as of Q2 2022, and was up 13.1% from $21.88 as of Q3 2021

    DENVER, Oct. 20, 2022 (GLOBE NEWSWIRE) -- First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the third quarter ended September 30, 2022.

    Net income available to common shareholders was $6.2 million, or $0.64 per diluted share, for the third quarter of 2022. This compares to $4.5 million, or $0.46 per diluted share, for the second quarter of 2022, and $6.4 million, or $0.78 per diluted share, for the third quarter of 2021.

    Scott C. Wylie, CEO of First Western, commented, “We continue to see healthy economic conditions and loan demand throughout our markets, resulting in another quarter of strong, well balanced loan growth. We had increases in most of our major portfolios and total annualized loan growth of 38% in the quarter. With the strong growth we are generating in net interest income through the increase in our loan portfolio and the higher net interest margin we are now producing, we delivered a significant increase in earnings and our level of returns compared to the prior quarter, as well as further growth in book value and tangible book value per share.

    “Although we have not yet seen a material slowdown in economic activity in our markets, given our conservative approach, we are making adjustments in our underwriting and loan pricing to reflect the potential for weakening economic conditions. As a result, it is likely that our loan growth moderates from the high level we experienced through the first nine months of the year. Even with this more cautious approach, we believe we are well positioned to still generate significant loan growth and continue delivering strong financial results for our shareholders, while maintaining exceptional asset quality and high levels of capital,” said Mr. Wylie.

    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

     For the Three Months Ended
     September 30, June 30, September 30,
    (Dollars in thousands, except per share data)2022 2022 2021
    Earnings Summary           
    Net interest income$22,797  $20,138  $14,846 
    Provision for loan losses 1,756   519   406 
    Total non-interest income 6,454   6,940   10,492 
    Total non-interest expense 19,260   20,583   16,466 
    Income before income taxes 8,235   5,976   8,466 
    Income tax expense 2,014   1,494   2,049 
    Net income available to common shareholders 6,221   4,482   6,417 
    Adjusted net income available to common shareholders(1) 6,337   4,742   6,669 
    Basic earnings per common share 0.66   0.47   0.80 
    Adjusted basic earnings per common share(1) 0.67   0.50   0.84 
    Diluted earnings per common share 0.64   0.46   0.78 
    Adjusted diluted earnings per common share(1) 0.66   0.49   0.81 
                
    Return on average assets (annualized) 0.97%  0.71%  1.27%
    Adjusted return on average assets (annualized)(1) 0.99   0.75   1.32 
    Return on average shareholders' equity (annualized) 10.70   7.89   14.88 
    Adjusted return on average shareholders' equity (annualized)(1) 10.90   8.35   15.46 
    Return on tangible common equity (annualized)(1) 12.28   9.16   17.01 
    Adjusted return on tangible common equity (annualized)(1) 12.51   9.69   17.68 
    Net interest margin 3.75   3.35   3.14 
    Efficiency ratio(1) 64.94   74.85   63.65 
                

    _______________
    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

    Operating Results for the Third Quarter 2022

    Revenue

    Gross revenue (1) was $29.3 million for the third quarter of 2022, an increase of 8.8% from $26.9 million for the second quarter of 2022, primarily driven by an increase in average loan balances and an increase in net interest margin. Relative to the third quarter of 2021, gross revenue increased 15.6% from $25.3 million for the third quarter of 2021, primarily driven by growth in interest-earning assets and an increase in net interest margin.

    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

    Net Interest Income

    Net interest income for the third quarter of 2022 was $22.8 million, an increase of 13.2% from $20.1 million in the second quarter of 2022. The increase was due to higher average loan balances and an increase in net interest margin.

    Relative to the third quarter of 2021, net interest income increased 53.6% from $14.8 million. The year-over-year increase in net interest income was due to an increase in net interest margin attributable to the higher rate environment and increased average interest-earning assets. The increase in average interest-earning assets was driven by growth in average loans of $648.5 million compared to September 30, 2021, resulting from organic loan growth and the Teton Financial Services, Inc. (“Teton”) acquisition.

    Net Interest Margin

    Net interest margin for the third quarter of 2022 increased 40 bps to 3.75% from 3.35% reported in the second quarter of 2022, primarily due to higher yields on interest-earning assets and a more favorable mix of earning assets.

    The yield on interest-earning assets increased to 4.37% in the third quarter of 2022 from 3.60% in the second quarter of 2022 and the cost of interest-bearing deposits increased to 0.73% in the third quarter of 2022, from 0.29% in the second quarter of 2022.

    Relative to the third quarter of 2021, net interest margin increased from 3.14%, primarily due to increased yields attributable to the rising rate environment and higher average loan balances, as a result of strong organic loan growth and the Teton acquisition.

    Non-interest Income

    Non-interest income for the third quarter of 2022 was $6.5 million, a decrease of 7.0% from $6.9 million in the second quarter of 2022. This was primarily due to a $0.3 million decrease in net gain on mortgage loans due to a reduction in the amount of mortgage loans originated for sale, a $0.2 million decrease in unrealized gain recognized on equity securities, and a $0.1 million decrease in trust and investment management fees, which were negatively impacted by lower equity and fixed income market valuations.

    Relative to the third quarter of 2021, non-interest income decreased 38.5% from $10.5 million. The decrease was primarily due to lower mortgage segment activity as higher interest rates drove declines in both refinance and purchase volume.

    Non-interest Expense

    Non-interest expense for the third quarter of 2022 was $19.3 million, a decrease of 6.4% from $20.6 million in the second quarter of 2022. The decrease was primarily due to a decline in salaries and employment benefits driven by higher deferred loan costs, lower incentive compensation, and a decline in health insurance and payroll taxes.

    Relative to the third quarter of 2021, non-interest expense increased 17.0% from $16.5 million. The increase is primarily due to the addition of Teton’s operations at the end of 2021 which increased salary and benefits as well as occupancy expenses.

    The impact of the mergers and acquisition activity is as follows (in thousands):

     As of or for the Three Months Ended
     September 30,  June 30,  September 30, 
     2022 2022 2021
    Adjusted Net Income Available to Common Shareholders(1)         
    Net income available to common shareholders$6,221  $4,482  $6,417 
    Plus: acquisition related expenses         
    Salaries and employee benefits 98   152    
    Professional services 90   274   332 
    Data processing(2) (96)  (93)   
    Technology and information systems 1   4    
    Marketing 7   5    
    Other 54   5    
    Less: income tax impact 38   87   80 
    Adjusted net income available to shareholders(1)$6,337  $4,742  $6,669 
              
    Adjusted Diluted Earnings Per Share(1)         
    Diluted earnings per share$0.64  $0.46  $0.78 
    Plus: acquisition related expenses net of income tax impact 0.02   0.03   0.03 
    Adjusted diluted earnings per share(1)$0.66  $0.49  $0.81 
                

    _______________
    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
    (2) Represents reduced contract termination fees from the system conversion.

    The Company’s efficiency ratio(1) was 64.9% in the third quarter of 2022, compared with 74.9% in the second quarter of 2022 and 63.7% in the third quarter of 2021.

    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

    Income Taxes

    The Company recorded income tax expense of $2.0 million for the third quarter of 2022, representing an effective tax rate of 24.5%, compared to 25.0% for the second quarter of 2022.

    Loans

    Total loans held for investment were $2.35 billion as of September 30, 2022, an increase of 9.5% from $2.15 billion as of June 30, 2022, and an increase of 46.9% from $1.60 billion as of September 30, 2021. The increase in total loans held for investment from June 30, 2022 was attributable to loan growth distributed amongst our residential mortgage, construction and development, commercial and industrial, and commercial real estate portfolios. The increase in total loans held for investment from September 30, 2021 was attributable to loan growth distributed amongst our residential mortgage, construction and development, commercial and industrial, and commercial real estate portfolios and loans added through the Teton acquisition.

    Deposits

    Total deposits remained flat for the third quarter of 2022, at $2.17 billion, compared to June 30, 2022. Relative to the third quarter of 2021, total deposits increased 21.6% from $1.78 billion as of September 30, 2021, driven primarily by deposits added through the Teton acquisition.

    Borrowings

    Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $273.2 million as of September 30, 2022, an increase of $186.0 million from $87.2 million as of June 30, 2022, and an increase of $214.7 million from $58.6 million as of September 30, 2021. The increase from both prior periods was primarily driven by additional FHLB borrowings to support the strong loan growth in the third quarter of 2022.

    Assets Under Management

    Total assets under management (“AUM”) decreased by $359.2 million during the third quarter to $5.92 billion as of September 30, 2022, compared to $6.28 billion as of June 30, 2022. This decrease was primarily attributable to unfavorable market conditions resulting in a decrease in the value of AUM balances. Total AUM decreased by $987.5 million compared to September 30, 2021 from $6.91 billion, which was primarily attributable to unfavorable market conditions throughout 2022 resulting in a decrease in the value of AUM balances.

    Credit Quality

    Non-performing assets totaled $3.9 million, or 0.14% of total assets, as of September 30, 2022, compared to $4.3 million, or 0.17% of total assets, as of June 30, 2022 and $4.4 million, or 0.21% of total assets, as of September 30, 2021. The reduction in non-performing assets from the end of the prior quarter is due to the sale of an other real estate owned property of $0.2 million and a net reduction in impaired loans of $0.2 million.

    The Company recorded a provision of $1.8 million in the third quarter of 2022, compared to a provision of $0.5 million in the second quarter of 2022 and $0.4 million in the third quarter of 2021. The provision recorded in the third quarter of 2022 represented general provisioning consistent with growth of the bank originated loan portfolio, and changes in the portfolio mix.

    Capital

    As of September 30, 2022, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. As of September 30, 2022, the Bank was classified as “well capitalized,” as summarized in the following table:

     September 30,  
     2022 
    Consolidated Capital   
    Tier 1 capital to risk-weighted assets9.54%
    Common Equity Tier 1 ("CET1") to risk-weighted assets9.54 
    Total capital to risk-weighted assets11.84 
    Tier 1 capital to average assets8.18 
       
    Bank Capital  
    Tier 1 capital to risk-weighted assets10.32 
    CET1 to risk-weighted assets10.32 
    Total capital to risk-weighted assets11.09 
    Tier 1 capital to average assets8.84 
       

    Book value per common share increased 2.8% from $24.06 as of June 30, 2022 to $24.74 as of September 30, 2022, and was up 13.1% from $21.88 as of September 30, 2021.

    Tangible book value per common share (1) increased 3.4% from $20.65 as of June 30, 2022 to $21.35 as of September 30, 2022, and was up 13.3% from $18.85 as of September 30, 2021.

    (1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

    Conference Call, Webcast and Slide Presentation

    The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00 p.m. ET on Friday, October 21, 2022. Telephone access: https://register.vevent.com/register/BI8dd29036914947f9a28fcabff9f4af72

    A slide presentation relating to the third quarter 2022 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://myfw.gcs-web.com.

    About First Western

    First Western is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming, California, and Montana. First Western and its subsidiaries provide a fully integrated suite of wealth management services on a private trust bank platform, which includes a comprehensive selection of deposit, loan, trust, wealth planning and investment management products and services. First Western’s common stock is traded on the Nasdaq Global Select Market under the symbol “MYFW.” For more information, please visit www.myfw.com.

    Non-GAAP Financial Measures

    Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include “Tangible Common Equity,” “Tangible Common Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency Ratio,” “Gross Revenue,” “Allowance for Loan Losses to Bank Originated Loans Excluding PPP,” “Adjusted Net Income Available to Common Shareholders,” “Adjusted Basic Earnings Per Share,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common Equity”. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliation of non-GAAP financial measures, to GAAP financial measures are provided at the end of this press release.

    Forward-Looking Statements

    Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “position,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “opportunity,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, without limitation, the COVID-19 pandemic and its effects; integration risks and projected cost savings in connection with acquisitions; the risk of geographic concentration in Colorado, Arizona, Wyoming, California, and Montana; the risk of changes in the economy affecting real estate values and liquidity; the risk in our ability to continue to originate residential real estate loans and sell such loans; risks specific to commercial loans and borrowers; the risk of claims and litigation pertaining to our fiduciary responsibilities; the risk of competition for investment managers and professionals; the risk of fluctuation in the value of our investment securities; the risk of changes in interest rates; and the risk of the adequacy of our allowance for loan losses and the risk in our ability to maintain a strong core deposit base or other low-cost funding sources. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2022 (“Form 10-K”), and other documents we file with the SEC from time to time. We urge readers of this news release to review the “Risk Factors” section our Form 10-K and any updates to those risk factors set forth in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today’s date, or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

    Contacts:
    Financial Profiles, Inc.
    Tony Rossi
    310-622-8221
    MYFW@finprofiles.com
    IR@myfw.com

    First Western Financial, Inc.
    Consolidated Financial Summary (unaudited)

     Three Months Ended
     September 30,  June 30,  September 30, 
    (Dollars in thousands, except per share amounts)2022 2022 2021
    Interest and dividend income:        
    Loans, including fees$24,831  $20,318  $15,861 
    Loans accounted for under the fair value option 513   346    
    Investment securities 653   418   180 
    Interest-bearing deposits in other financial institutions 533   549   105 
    Total interest and dividend income 26,530   21,631   16,146 
             
    Interest expense:        
    Deposits 2,706   1,103   829 
    Other borrowed funds 1,027   390   471 
    Total interest expense 3,733   1,493   1,300 
    Net interest income 22,797   20,138   14,846 
    Less: provision for loan losses 1,756   519   406 
    Net interest income, after provision for loan losses 21,041   19,619   14,440 
             
    Non-interest income:        
    Trust and investment management fees 4,664   4,784   5,167 
    Net gain on mortgage loans 885   1,152   4,480 
    Bank fees 670   601   458 
    Risk management and insurance fees 115   83   301 
    Income on company-owned life insurance 88   87   89 
    Net (loss)/gain on loans accounted for under the fair value option (134)  (155)   
    Unrealized gain/(loss) recognized on equity securities 75   299   (3)
    Net gain/(loss) on equity interests 6       
    Other 85   89    
    Total non-interest income 6,454   6,940   10,492 
    Total income before non-interest expense 27,495   26,559   24,932 
             
    Non-interest expense:        
    Salaries and employee benefits 11,566   12,945   10,229 
    Occupancy and equipment 1,836   1,892   1,550 
    Professional services 2,316   2,027   1,660 
    Technology and information systems 1,172   1,076   945 
    Data processing 888   987   912 
    Marketing 403   428   397 
    Amortization of other intangible assets 77   77   5 
    Net (gain)/loss on assets held for sale (1)  (2)   
    Net (gain)/loss on sale of other real estate owned (41)      
    Other 1,044   1,153   768 
    Total non-interest expense 19,260   20,583   16,466 
    Income before income taxes 8,235   5,976   8,466 
    Income tax expense 2,014   1,494   2,049 
    Net income available to common shareholders$6,221  $4,482  $6,417 
    Earnings per common share:        
    Basic$0.66  $0.47  $0.80 
    Diluted 0.64   0.46   0.78 
                


     September 30,  June 30,  September 30, 
    (Dollars in thousands)2022 2022 2021
    Assets        
    Cash and cash equivalents:        
    Cash and due from banks$8,308  $11,790  $2,829 
    Federal funds sold    385    
    Interest-bearing deposits in other financial institutions 156,940   159,431   307,406 
    Total cash and cash equivalents 165,248   171,606   310,235 
             
    Available-for-sale securities, at fair value       32,233 
    Held-to-maturity securities, at amortized cost (fair value of $78,624 and $84,742 as of September 30, 2022 and June 30, 2022, respectively) 84,257   87,029    
    Correspondent bank stock, at cost 12,783   4,352   1,772 
    Mortgage loans held for sale 12,743   26,202   51,309 
    Loans (includes $22,871, $21,477, and $0 measured at fair value, respectively) 2,351,322   2,146,394   1,603,050 
    Allowance for loan losses (16,081)  (14,357)  (12,964)
    Loans, net 2,335,241   2,132,037   1,590,086 
    Premises and equipment, net 24,668   24,236   6,344 
    Accrued interest receivable 8,451   7,884   6,306 
    Accounts receivable 5,947   5,192   5,500 
    Other receivables 2,868   4,575   1,553 
    Other real estate owned, net 187   378    
    Goodwill and other intangible assets, net 32,181   32,258   24,246 
    Deferred tax assets, net 6,849   7,662   5,926 
    Company-owned life insurance 16,064   15,976   15,715 
    Other assets 21,212   21,960   25,047 
    Assets held for sale    146    
    Total assets$2,728,699  $2,541,493  $2,076,272 
             
    Liabilities        
    Deposits:        
    Noninterest-bearing$662,055  $668,342  $596,635 
    Interest-bearing 1,505,392   1,501,656   1,185,664 
    Total deposits 2,167,447   2,169,998   1,782,299 
    Borrowings:        
    FHLB and Federal Reserve borrowings 273,225   87,223   58,564 
    Subordinated notes 32,584   32,553   39,010 
    Accrued interest payable 664   304   357 
    Other liabilities 19,917   23,391   20,913 
    Total liabilities 2,493,837   2,313,469   1,901,143 
             
    Shareholders' Equity        
    Total shareholders’ equity 234,862   228,024   175,129 
    Total liabilities and shareholders’ equity$2,728,699  $2,541,493  $2,076,272 
                


     September 30,  June 30,  September 30, 
    (Dollars in thousands)2022 2022 2021
    Loan Portfolio        
    Cash, Securities, and Other(1)$154,748  $180,738  $257,594 
    Consumer and Other(2) 50,429   47,855   36,243 
    Construction and Development 228,060   162,426   132,141 
    1-4 Family Residential 822,796   732,725   502,439 
    Non-Owner Occupied CRE 527,836   489,111   358,369 
    Owner Occupied CRE 220,075   224,597   167,638 
    Commercial and Industrial 350,954   312,696   148,959 
    Total loans held for investment 2,354,898   2,150,148   1,603,383 
    Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net(3) (3,576)  (3,754)  (333)
    Gross loans$2,351,322  $2,146,394  $1,603,050 
    Mortgage loans held for sale$12,743  $26,202  $51,309 
             
    Deposit Portfolio        
    Money market deposit accounts$1,010,846  $1,033,739  $905,196 
    Time deposits 186,680   147,623   137,015 
    Negotiable order of withdrawal accounts 277,225   287,195   137,833 
    Savings accounts 30,641   33,099   5,620 
    Total interest-bearing deposits 1,505,392   1,501,656   1,185,664 
    Noninterest-bearing accounts 662,055   668,342   596,635 
    Total deposits$2,167,447  $2,169,998  $1,782,299 
                

    _______________
    (1) Includes PPP loans of $7.7 million as of September 30, 2022, $10.7 million as of June 30, 2022, and $61.9 million as of September 30, 2021.
    (2) Includes loans held for investment accounted for under fair value option of $22.6 million and $21.1 million as of September 30, 2022 and June 30, 2022, respectively.
    (3) Includes fair value adjustments on loans held for investment accounted for under the fair value option.

     As of or for the Three Months Ended
     September 30,  June 30,  September 30, 
    (Dollars in thousands)2022 2022 2021
    Average Balance Sheets        
    Assets        
    Interest-earning assets:        
    Interest-bearing deposits in other financial institutions$101,564  $320,656  $266,614 
    Federal funds sold 260   1,017    
    Investment securities 87,340   69,320   29,130 
    Loans 2,241,343   2,010,024   1,592,800 
    Interest-earning assets 2,430,507   2,401,017   1,888,544 
    Mortgage loans held for sale 11,535   19,452   54,717 
    Total interest-earning assets, plus mortgage loans held for sale 2,442,042   2,420,469   1,943,261 
    Allowance for loan losses (14,981)  (13,257)  (12,740)
    Noninterest-earning assets 131,381   119,857   92,901 
    Total assets$2,558,442  $2,527,069  $2,023,422 
             
    Liabilities and Shareholders’ Equity        
    Interest-bearing liabilities:        
    Interest-bearing deposits$1,480,288  $1,547,901  $1,160,433 
    FHLB and Federal Reserve borrowings 119,025   20,815   81,307 
    Subordinated notes 32,564   32,533   29,236 
    Total interest-bearing liabilities 1,631,877   1,601,249   1,270,976 
    Noninterest-bearing liabilities:        
    Noninterest-bearing deposits 673,949   679,531   562,569 
    Other liabilities 20,103   19,194   17,359 
    Total noninterest-bearing liabilities 694,052   698,725   579,928 
    Total shareholders’ equity 232,513   227,095   172,518 
    Total liabilities and shareholders’ equity$2,558,442  $2,527,069  $2,023,422 
             
    Yields/Cost of funds (annualized)        
    Interest-bearing deposits in other financial institutions 2.08%  0.68%  0.16%
    Investment securities 2.99   2.41   2.47 
    Loans 4.52   4.11   3.98 
    Interest-earning assets 4.37   3.60   3.42 
    Mortgage loans held for sale 5.44   4.71   2.97 
    Total interest-earning assets, plus mortgage loans held for sale 4.37   3.61   3.41 
    Interest-bearing deposits 0.73   0.29   0.29 
    FHLB and Federal Reserve borrowings 2.23   0.54   0.40 
    Subordinated notes 4.45   4.45   5.32 
    Total interest-bearing liabilities 0.92   0.37   0.41 
    Net interest margin 3.75   3.35   3.14 
    Net interest rate spread 3.45   3.23   3.01 
                


     As of or for the Three Months Ended
     September 30,  June 30,  September 30, 
    (Dollars in thousands, except share and per share amounts)2022 2022 2021
    Asset Quality          
    Non-performing loans$3,744  $3,931  $4,358 
    Non-performing assets 3,931   4,309   4,358 
    Net charge-offs/(recoveries) 32   47   (6)
    Non-performing loans to total loans 0.16%  0.18%  0.27%
    Non-performing assets to total assets 0.14   0.17   0.21 
    Allowance for loan losses to non-performing loans 429.51   365.23   297.48 
    Allowance for loan losses to total loans 0.68   0.67   0.81 
    Allowance for loan losses to bank originated loans excluding PPP(1) 0.77   0.78   0.91 
    Net charge-offs to average loans(2) 0.00   0.00   0.00 
               
    Assets Under Management$5,918,403  $6,277,588  $6,905,935 
               
    Market Data          
    Book value per share at period end 24.74   24.06   21.88 
    Tangible book value per common share(1) 21.35   20.65   18.85 
    Weighted average outstanding shares, basic 9,481,311   9,450,987   7,979,869 
    Weighted average outstanding shares, diluted 9,673,078   9,717,667   8,246,353 
    Shares outstanding at period end 9,492,006   9,478,710   8,002,874 
               
    Consolidated Capital          
    Tier 1 capital to risk-weighted assets 9.54%  10.15%  10.66%
    CET1 to risk-weighted assets 9.54   10.15   10.66 
    Total capital to risk-weighted assets 11.84   12.58   14.37 
    Tier 1 capital to average assets 8.18   8.00   7.86 
               
    Bank Capital          
    Tier 1 capital to risk-weighted assets 10.32   10.99   11.02 
    CET1 to risk-weighted assets 10.32   10.99   11.02 
    Total capital to risk-weighted assets 11.09   11.75   11.96 
    Tier 1 capital to average assets 8.84   8.65   8.11 
                

    _______________
    (1) Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
    (2) Value results in an immaterial amount.

    Reconciliations of Non-GAAP Financial Measures

     As of or for the Three Months Ended
     September 30,  June 30,  September 30, 
    (Dollars in thousands, except share and per share amounts)2022 2022 2021
    Tangible Common        
    Total shareholders' equity$234,862  $228,024  $175,129 
    Less: goodwill and other intangibles, net 32,181   32,258   24,246 
    Tangible common equity$202,681  $195,766  $150,883 
             
    Common shares outstanding, end of period 9,492,006   9,478,710   8,002,874 
    Tangible common book value per share$21.35  $20.65  $18.85 
    Net income available to common shareholders 6,221   4,482   6,417 
    Return on tangible common equity (annualized) 12.28%  9.16%  17.01%
             
    Efficiency        
    Non-interest expense$19,260  $20,583  $16,466 
    Less: amortization 77   77   5 
    Less: acquisition related expenses 154   347   332 
    Adjusted non-interest expense$19,029  $20,159  $16,129 
             
    Total income before non-interest expense$27,495  $26,559  $24,932 
    Less: unrealized gain/(loss) recognized on equity securities 75   299   (3)
    Less: net gain/(loss) on loans accounted for under the fair value option (134)  (155)   
    Less: net gain/(loss) on equity interests 6       
    Plus: provision for loan losses 1,756   519   406 
    Gross revenue$29,304  $26,934  $25,341 
    Efficiency ratio 64.94%  74.85%  63.65%
             
    Allowance to Bank Originated Loans Excluding PPP        
    Total loans held for investment$2,354,898  $2,150,148  $1,603,383 
    Less: loans acquired 248,573   287,623   117,465 
    Less: bank originated PPP loans 6,905   9,053   61,838 
    Less: loans accounted for under fair value 22,648   21,149    
    Bank originated loans excluding PPP$2,076,772  $1,832,323  $1,424,080 
             
    Allowance for loan losses$16,081  $14,357  $12,964 
    Allowance for loan losses to bank originated loans excluding PPP 0.77%  0.78%  0.91%
                


     As of or for the Three Months Ended
     September 30,  June 30,  September 30,  
    (Dollars in thousands, except share and per share data)2022 2022 2021 
    Adjusted Net Income Available to Common Shareholders           
    Net income available to common shareholders$6,221  $4,482  $6,417 
    Plus: acquisition related expenses 154   347   332 
    Less: income tax impact 38   87   80 
    Adjusted net income available to shareholders$6,337  $4,742  $6,669 
                
    Pre-Tax, Pre-Provision Net Income           
    Income before income taxes$8,235  $5,976  $8,466 
    Plus: provision for loan losses 1,756   519   406 
    Pre-tax, pre-provision net income$9,991  $6,495  $8,872 
                
    Adjusted Basic Earnings Per Share           
    Basic earnings per share$0.66  $0.47  $0.80 
    Plus: acquisition related expenses net of income tax impact 0.01   0.03   0.04 
    Adjusted basic earnings per share$0.67  $0.50  $0.84 
                
    Adjusted Diluted Earnings Per Share           
    Diluted earnings per share$0.64  $0.46  $0.78 
    Plus: acquisition related expenses net of income tax impact 0.02   0.03   0.03 
    Adjusted diluted earnings per share$0.66  $0.49  $0.81 
                
    Adjusted Return on Average Assets (annualized)           
    Return on average assets 0.97%  0.71%  1.27%
    Plus: acquisition related expenses net of income tax impact 0.02   0.04   0.05 
    Adjusted return on average assets 0.99%  0.75%  1.32%
                
    Adjusted Return on Average Shareholders' Equity (annualized)           
    Return on average shareholders' equity 10.70%  7.89%  14.88%
    Plus: acquisition related expenses net of income tax impact 0.20   0.46   0.58 
    Adjusted return on average shareholders' equity 10.90%  8.35%  15.46%
                
    Adjusted Return on Tangible Common Equity (annualized)           
    Return on tangible common equity 12.28%  9.16%  17.01%
    Plus: acquisition related expenses net of income tax impact 0.23   0.53   0.67 
    Adjusted return on tangible common equity 12.51%  9.69%  17.68%
                

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