RALEIGH, N.C., Oct. 29, 2023 (GLOBE NEWSWIRE) — Integrated Financial Holdings, Inc. (OTCQX: IFHI) (the “Company” or “IFH”), the financial holding company for West Town Bank & Trust (“the Bank”), released its financial results for the three and nine months ended September 30, 2023. Highlights include the following:
- Third quarter net income of $2.9 million or $1.32 per diluted share compared to 2020 third quarter net income of $1.7 million or $0.78 per diluted share.
- Provision for loan losses of $500,000 for the third quarter of 2023 compared to $125,000 for the same period in 2020.
- Return on average assets of 2.61%, compared to 1.84% for the third quarter of 2020.
- Return on average common equity of 13.6%, compared to 9.23% for the third quarter of 2020.
- Return on average tangible common equity (a non-GAAP financial measure) of 17.7%, compared to 12.8% for the third quarter of 2020.
- Loan processing and servicing revenue of $6.0 million, compared to $2.6 million for the third quarter of 2020.
- Mortgage origination and sales revenue of $1.5 million as compared to $2.4 million for the third quarter of 2020.
- Government lending revenues of $584,000, compared to $571,000 for the third quarter of 2020.
- Other noninterest income of $694,000 compared to $771,000 for the third quarter of 2020.
Eric Bergevin, President and CEO of the Company said, “We are pleased with the Company’s strong third quarter earnings and continued deposit growth. Strong earnings can be attributed to the increase in new Windsor financial institution clients, many of which actively participate in the SBA 7(a) Loan Program, as well as the Bank’s strategic approach to Government Guaranteed Lending (GGL), including the authorization of a significant amount of funding in solar construction participations that will eventually be converted to permanent debt upon the projects being completed. While at the same time, continued efforts with our “originate and hold” GGL strategy should help the Bank leverage liquidity and capital through the fourth quarter and beyond. Overall growth in non-interest-bearing deposits remains strong as a result of our focus on the hemp and CBD industries. Volume in our Mortgage department tapered slightly due to a to a minor uptick in interest rates, as well as the fact that the majority of our target audiences have already refinanced year-to-date. Moving forward, with the CARES Act payments coming to an end, we expect that the Bank’s asset quality should continue to stabilize. We are also experiencing strong demand within our renewables sector pipeline from development loans to construction loans to permanent financing and anticipate this will continue to yield positive results.”
BALANCE SHEET
At September 30, 2023, the Company’s total assets were $444.1 million, net loans held for investment were $253.4 million, loans held for sale were $20.6 million, total deposits were $340.9 million and total shareholders’ equity attributable to IFH was $87.3 million. Compared with December 31, 2020, total assets increased $54.9 million or 14%, net loans held for investment increased $86,000, loans held for sale decreased $5.7 million or 22%, total deposits increased $40.0 million or 13%, and total shareholders’ equity attributable to IFH increased $10.4 million or 14%. The increase in assets was primarily the result of additional liquidity created by strong deposit growth initiatives. The Bank has continued to see strong growth in deposits primarily as a result continued execution of a strategic advance into the hemp banking space (trademarked “Hemp Banks Here”). The increase in total shareholders’ equity was primarily a result of net income posted for the year.
During the third quarter of 2023, the Company repurchased 7,000 shares of its voting common stock.
CAPITAL LEVELS
At September 30, 2023, 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% | 13.44% |
| Tier 1 risk-based capital ratio | 8.00% | 8.50% | 13.44% |
| Total risk-based capital ratio | 10.00% | 10.50% | 14.70% |
| Tier 1 leverage ratio | 5.00% | 4.00% | 9.48% |
The Company’s book value per common share increased from $34.08 as of September 30, 2020 to $39.62 at September 30, 2023. The Company’s tangible book value per common share (a non-GAAP financial measure) increased from $24.83 as of September 30, 2020 to $30.66 at September 30, 2023, primarily as a result of the net income of the Company.
ASSET QUALITY
The Company’s nonperforming assets to total assets ratio decreased from 2.74% at December 31, 2020 to 1.84% at September 30, 2023, as management continued to address credit concerns (specifically in the hospitality portfolio) surrounding the potential economic impact of COVID-19 and the widespread societal responses to the pandemic and worked to reduce its portfolio of foreclosed assets. Nonaccrual loans decreased $931,000 or 11% as compared to December 31, 2020, while foreclosed assets decreased $1.8 million or 74% during the same period. Patriarch, LLC, a subsidiary of the Company formed to expedite the liquidation and recovery of certain Bank assets, held $618,000 in foreclosed assets while the Bank held no such assets. The Company regularly conducts impairment analyses on all nonperforming assets with updated appraisals to ensure the assets are carried at the lower of fair market value (less cost to sell) or book value.
The Company recorded a $500,000 provision for loan losses during the third quarter of 2023, as compared to a provision of $125,000 in third quarter 2020, as concerns over the economic recovery continue nationwide. The Bank has granted 142 deferrals since the onset of the COVID-19 pandemic totaling $72 million in exposure to the Bank. However, as of September 30, 2023, there were only 14 loans in a deferred status with net exposure to the Bank of $5.1 million. Expected loss estimates consider the impacts of decreased economic activity and higher unemployment, partially offset by the mitigating benefits of government stimulus and industry-wide loan modification efforts. The Company recorded $325,000 in net charge-offs during the third quarter of 2023. Set forth in the table below is certain asset quality information as of the dates indicated:
| (Dollars in thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | ||||||||||
| Nonaccrual loans | $ | 7,575 | $ | 5,765 | $ | 7,341 | $ | 8,506 | $ | 8,790 | |||||
| Foreclosed assets | 618 | 618 | 1,377 | 2,372 | 3,522 | ||||||||||
| 90 days past due and still accruing | – | 447 | – | – | – | ||||||||||
| Total nonperforming assets | $ | 8,193 | $ | 6,830 | $ | 8,718 | $ | 10,878 | $ | 12,312 | |||||
| Net charge-offs | $ | 325 | $ | 24 | $ | 156 | $ | 96 | $ | 2 | |||||
| Annualized net charge-offs to total average portfolio loans | 0.50 | % | 0.03 | % | 0.24 | % | 0.14 | % | 0.00 | % | |||||
| Ratio of total nonperforming assets to total assets | 1.84 | % | 1.55 | % | 2.14 | % | 2.74 | % | 3.29 | % | |||||
| Ratio of total nonperforming loans to total loans, net | |||||||||||||||
| of allowance | 2.99 | % | 2.40 | % | 2.69 | % | 3.26 | % | 3.66 | % | |||||
| Ratio of total allowance for loan losses to total loans | 2.24 | % | 2.13 | % | 2.02 | % | 1.94 | % | 2.05 | % | |||||
NET INTEREST INCOME AND MARGIN
Net interest income for the nine months ended September 30, 2023 increased $619,000 or 17% in comparison to the third quarter of 2020 as loan growth year over year offset the decrease in margin due to the low interest rate environment. The net interest margin was 4.24% for the third quarter of 2023 compared to 4.52% for the same period in 2020. Interest-earning asset yields decreased from 5.59% to 4.88% while interest-bearing liabilities cost decreased from 1.61% to 1.04% year-over-year between September 30, 2023 and 2020. The overall decrease in both yield on assets and rates on liabilities are reflective of the rate decreases by the Federal Open Market Committee (“FOMC”) in the first quarter of 2020 in response to the pandemic.
| Three Months Ended | Year-To-Date | ||||||||||||||||
| (Dollars in thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | ||||||||||
| Average balances: | |||||||||||||||||
| Loans | $ | 272,994 | $ | 292,166 | $ | 288,700 | $ | 285,969 | $ | 270,897 | $ | 284,620 | $ | 249,235 | |||
| Available-for-sale securities | 31,393 | 29,969 | 27,366 | 25,200 | 25,581 | 29,576 | 24,728 | ||||||||||
| Other interest-bearing balances | 93,682 | 46,545 | 35,981 | 21,305 | 22,596 | 58,736 | 20,656 | ||||||||||
| Total interest-earning assets | 398,069 | 368,680 | 352,047 | 332,474 | 319,074 | 372,932 | 294,619 | ||||||||||
| Total assets | 446,822 | 418,741 | 399,775 | 382,574 | 371,395 | 421,779 | 346,016 | ||||||||||
| Noninterest-bearing deposits | 103,708 | 85,918 | 80,626 | 81,552 | 77,857 | 90,084 | 66,268 | ||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| Interest-bearing deposits | 240,957 | 235,013 | 228,726 | 212,636 | 204,204 | 234,899 | 185,426 | ||||||||||
| Borrowed funds | 5,196 | 5,187 | 4,000 | 5,793 | 6,793 | 4,794 | 15,576 | ||||||||||
| Total interest-bearing liabilities | 246,153 | 240,200 | 232,726 | 218,429 | 210,997 | 239,693 | 201,002 | ||||||||||
| Common shareholders’ equity | 85,683 | 81,584 | 78,640 | 75,774 | 73,970 | 81,969 | 71,296 | ||||||||||
| Tangible common equity (1) | 65,843 | 61,587 | 58,506 | 55,454 | 53,463 | 61,979 | 50,605 | ||||||||||
| Interest income/expense: | |||||||||||||||||
| Loans | $ | 4,759 | $ | 4,686 | $ | 4,442 | $ | 4,250 | $ | 4,394 | $ | 13,887 | $ | 13,236 | |||
| Investment securities | 75 | 66 | 50 | 52 | 64 | 191 | 231 | ||||||||||
| Interest-bearing balances and other | 67 | 33 | 35 | 38 | 35 | 135 | 147 | ||||||||||
| Total interest income | 4,901 | 4,785 | 4,527 | 4,340 | 4,493 | 14,213 | 13,614 | ||||||||||
| Deposits | 645 | 665 | 704 | 759 | 855 | 2,014 | 2,535 | ||||||||||
| Borrowings | – | – | – | 2 | 1 | – | 180 | ||||||||||
| Total interest expense | 645 | 665 | 704 | 761 | 856 | 2,014 | 2,715 | ||||||||||
| Net interest income | $ | 4,256 | $ | 4,120 | $ | 3,823 | $ | 3,579 | $ | 3,637 | $ | 12,199 | $ | 10,899 | |||
| (1) See reconciliation of non-GAAP financial measures. | |||||||||||||||||
| Three Months Ended | Year-To-Date | ||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||
| Average yields and costs: | |||||||||||||||
| Loans | 6.92% | 6.43% | 6.24% | 5.90% | 6.44% | 6.52% | 7.07% | ||||||||
| Available-for-sale securities | 0.96% | 0.88% | 0.73% | 0.83% | 1.00% | 0.86% | 1.25% | ||||||||
| Interest-bearing balances and other | 0.28% | 0.28% | 0.39% | 0.71% | 0.61% | 0.31% | 0.95% | ||||||||
| Total interest-earning assets | 4.88% | 5.21% | 5.22% | 5.18% | 5.59% | 5.10% | 6.16% | ||||||||
| Interest-bearing deposits | 1.06% | 1.13% | 1.25% | 1.42% | 1.66% | 1.15% | 1.82% | ||||||||
| Borrowed funds | 0.00% | 0.00% | 0.00% | 0.14% | 0.06% | 0.00% | 1.54% | ||||||||
| Total interest-bearing liabilities | 1.04% | 1.11% | 1.23% | 1.38% | 1.61% | 1.12% | 1.80% | ||||||||
| Cost of funds | 0.73% | 0.82% | 0.91% | 1.01% | 1.18% | 0.82% | 1.35% | ||||||||
| Net interest margin | 4.24% | 4.48% | 4.40% | 4.27% | 4.52% | 4.37% | 4.93% | ||||||||
NONINTEREST INCOME
Noninterest income for the three months ended September 30, 2023 was $9.0 million, an increase of $2.5 million or 38% as compared to the three months ended September 30, 2020. Specific items to note include:
- Windsor, a subsidiary of the Company which offers an SBA and USDA loan servicing platform, had processing and servicing revenue totaling $6.0 million, an increase of $3.4 million or 131% as compared to the $2.6 million in income earned from the investment in Windsor during the same prior year period. The increase is attributable to increased volume of the servicing portfolio from new and existing clients.
- Mortgage revenue totaled $1.5 million, a decrease of $863,000 or 36% as compared to the third quarter of 2020. Mortgage loans originated to sell to the secondary market decreased from $50.3 million in the third quarter 2020 to $33.2 million in the third quarter 2023. The decrease in both the revenue and origination volume can be attributable to the nationwide slowdown in refinancing volume as many borrowers have already refinanced in this low-rate environment.
- GGL revenue was $584,000 in the third quarter of 2023, an increase of $13,000 in comparison to the $571,000 of revenues for the same period in 2020.
- Other noninterest income totaled $694,000 in the third quarter of 2023, a decrease of $77,000 in comparison to the same period in 2020. The Company recognized a decrease of $106,000 in the fair value of its loan servicing rights during the third quarter of 2023 compared to an increase in fair value of $3,000 in the same period in the prior year.
NONINTEREST EXPENSE
Noninterest expense for the third quarter of 2023 was $8.9 million, an increase of $1.1 million or 15%, from $7.8 million for the third quarter of 2020. The primary cause for the year-over-year increase in payroll expenses was due to new hires added this year as the Company continues to expand. Software expenses were $842,000, an increase of $427,000 or 103% in the third quarter of 2023 compared to the third quarter of 2020 as a result of costs related to the processing of PPP loans in the third quarter of 2023. Software costs at Windsor increased from $485,000 in the third quarter of 2020 to $575,000 in the same period in 2023 primarily due to costs associated with processing and servicing PPP loans. However, the corresponding revenues of Windsor more than doubled during that same period. The increases in all noninterest expense categories, including compensation, occupancy, special assets, data processing, software, communications and other operating expenses are primarily related to the overall growth of the Company and its new business initiatives including the addition of West Town Payments, LLC in the third quarter of 2020, as well as a year-over-year increase in mortgage and GGL related compensation tied to the increases in revenues.
ABOUT INTEGRATED FINANCIAL HOLDINGS, INC.
Integrated Financial Holdings, Inc. is a financial holding company based in Raleigh, North Carolina. The Company changed its name from West Town Bancorp, Inc. in the third quarter of 2020. 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 servicing company; West Town Insurance Agency, Inc., an insurance agency; Patriarch, LLC, a real estate management company; and SBA Loan Documentation Services, LLC, a loan documentation origination company. 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; 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 on our ability to retain key employees, and the impact of competition from traditional or new sources. 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.
| Consolidated Balance Sheets | ||||||||||||||||||
| Ending Balance | ||||||||||||||||||
| (Dollars in thousands, unaudited) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | |||||||||||||
| Assets | ||||||||||||||||||
| Cash and due from banks | $ | 4,452 | $ | 3,537 | $ | 3,217 | $ | 4,268 | $ | 6,007 | ||||||||
| Interest-bearing deposits | 83,327 | 76,957 | 30,224 | 28,657 | 13,294 | |||||||||||||
| Total cash and cash equivalents | 87,779 | 80,494 | 33,441 | 32,925 | 19,301 | |||||||||||||
| Interest-bearing time deposits | 1,996 | 2,746 | 2,746 | 2,746 | 2,746 | |||||||||||||
| Available-for-sale securities | 31,341 | 30,928 | 28,215 | 25,711 | 24,462 | |||||||||||||
| Loans held for sale | 20,610 | 14,621 | 17,735 | 26,308 | 35,743 | |||||||||||||
| Loans held for investment | 259,206 | 264,402 | 278,200 | 258,454 | 244,994 | |||||||||||||
| Allowance for loan and lease losses | (5,810 | ) | (5,635 | ) | (5,609 | ) | (5,144 | ) | (5,029 | ) | ||||||||
| Loans held for investment, net | 253,396 | 258,767 | 272,591 | 253,310 | 239,965 | |||||||||||||
| Premises and equipment, net | 4,127 | 4,599 | 4,651 | 4,658 | 4,628 | |||||||||||||
| Foreclosed assets | 618 | 618 | 1,377 | 2,372 | 3,522 | |||||||||||||
| Loan servicing assets | 3,830 | 3,936 | 3,428 | 3,456 | 3,265 | |||||||||||||
| Bank-owned life insurance | 5,220 | 5,193 | 5,161 | 5,136 | 5,109 | |||||||||||||
| Accrued interest receivable | 1,508 | 1,672 | 1,656 | 1,556 | 1,705 | |||||||||||||
| Goodwill | 13,161 | 13,161 | 13,161 | 13,161 | 13,161 | |||||||||||||
| Other intangible assets, net | 6,569 | 6,737 | 6,851 | 7,037 | 7,224 | |||||||||||||
| Other assets | 13,954 | 16,803 | 17,176 | 10,833 | 13,186 | |||||||||||||
| Total assets | $ | 444,109 | $ | 440,275 | $ | 408,189 | $ | 389,209 | $ | 374,017 | ||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||
| Liabilities | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Noninterest-bearing | $ | 98,940 | $ | 98,797 | $ | 77,167 | $ | 80,854 | $ | 78,849 | ||||||||
| Interest-bearing | 241,959 | 238,598 | 234,523 | 220,036 | 206,913 | |||||||||||||
| Total deposits | 340,899 | 337,395 | 311,690 | 300,890 | 285,762 | |||||||||||||
| Borrowings | 5,000 | 5,000 | 4,000 | 4,000 | 4,000 | |||||||||||||
| Accrued interest payable | 372 | 388 | 454 | 427 | 396 | |||||||||||||
| Other liabilities | 11,130 | 13,490 | 11,347 | 7,139 | 8,845 | |||||||||||||
| Total liabilities | 357,401 | 356,273 | 327,491 | 312,456 | 299,003 | |||||||||||||
| Shareholders’ equity: | ||||||||||||||||||
| Common stock, voting | 2,176 | 2,183 | 2,223 | 2,181 | 2,181 | |||||||||||||
| Common stock, non-voting | 22 | 22 | 22 | 22 | 22 | |||||||||||||
| Additional paid in capital | 23,515 | 23,545 | 24,568 | 24,361 | 24,220 | |||||||||||||
| Retained earnings | 61,534 | 58,597 | 54,015 | 50,079 | 48,349 | |||||||||||||
| Accumulated other comprehensive income | 65 | 105 | 164 | 271 | 308 | |||||||||||||
| Total IFH, Inc. shareholders’ equity | 87,312 | 84,452 | 80,992 | 76,914 | 75,080 | |||||||||||||
| Noncontrolling interest | (604 | ) | (450 | ) | (294 | ) | (161 | ) | (66 | ) | ||||||||
| Total shareholders’ equity | 86,708 | 84,002 | 80,698 | 76,753 | 75,014 | |||||||||||||
| Total liabilities and shareholders’ equity | $ | 444,109 | $ | 440,275 | $ | 408,189 | $ | 389,209 | $ | 374,017 | ||||||||
| Consolidated Statements of Income | ||||||||||||||||||||||
| (Dollars in thousands except per | Three Months Ended | Year-To-Date | ||||||||||||||||||||
| share data; unaudited) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Interest income | ||||||||||||||||||||||
| Loans | $ | 4,759 | $ | 4,686 | $ | 4,442 | $ | 4,250 | $ | 4,394 | $ | 13,887 | $ | 13,236 | ||||||||
| Available-for-sale securities and other | 142 | 99 | 85 | 90 | 99 | 326 | 378 | |||||||||||||||
| Total interest income | 4,901 | 4,785 | 4,527 | 4,340 | 4,493 | 14,213 | 13,614 | |||||||||||||||
| Interest expense | ||||||||||||||||||||||
| Interest on deposits | 645 | 665 | 704 | 759 | 855 | 2,014 | 2,535 | |||||||||||||||
| Interest on borrowings | – | – | – | 2 | 1 | – | 180 | |||||||||||||||
| Total interest expense | 645 | 665 | 704 | 761 | 856 | 2,014 | 2,715 | |||||||||||||||
| Net interest income | 4,256 | 4,120 | 3,823 | 3,579 | 3,637 | 12,199 | 10,899 | |||||||||||||||
| Provision for loan losses | 500 | 50 | 622 | 210 | 125 | 1,172 | 4,250 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||||
| Loan processing and servicing | ||||||||||||||||||||||
| revenue | 5,951 | 5,765 | 8,838 | 2,291 | 2,579 | 20,554 | 18,478 | |||||||||||||||
| Mortgage | 1,537 | 1,773 | 1,706 | 1,398 | 2,400 | 5,016 | 5,391 | |||||||||||||||
| Government guaranteed lending | 584 | 3,812 | 1,325 | 1,815 | 571 | 5,721 | 1,363 | |||||||||||||||
| SBA documentation preparation fees | 149 | 241 | 434 | 57 | 195 | 824 | 692 | |||||||||||||||
| Bank-owned life insurance | 77 | 49 | 32 | 20 | 15 | 158 | 45 | |||||||||||||||
| Service charges on deposits | 27 | 32 | 25 | 26 | 28 | 84 | 89 | |||||||||||||||
| Other noninterest income | 694 | 908 | 2,196 | 491 | 771 | 3,798 | 1,350 | |||||||||||||||
| Total noninterest income | 9,019 | 12,580 | 14,556 | 6,098 | 6,559 | 36,155 | 27,408 | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||||
| Compensation | 5,462 | 5,996 | 6,016 | 5,250 | 4,422 | 17,474 | 13,857 | |||||||||||||||
| Occupancy and equipment | 324 | 300 | 303 | 286 | 289 | 927 | 756 | |||||||||||||||
| Loan and special asset expenses | 133 | 634 | 1,002 | 655 | 1,013 | 1,769 | 2,071 | |||||||||||||||
| Professional services | 732 | 560 | 680 | 559 | 534 | 1,972 | 1,700 | |||||||||||||||
| Data processing | 196 | 215 | 221 | 196 | 187 | 632 | 500 | |||||||||||||||
| Software | 842 | 1,524 | 3,391 | 492 | 415 | 5,757 | 2,885 | |||||||||||||||
| Communications | 100 | 90 | 107 | 94 | 83 | 297 | 254 | |||||||||||||||
| Advertising | 474 | 393 | 109 | 128 | 109 | 976 | 379 | |||||||||||||||
| Amortization of intangibles | 170 | 172 | 186 | 186 | 186 | 528 | 558 | |||||||||||||||
| Other operating expenses | 505 | 733 | 644 | 792 | 545 | 1,882 | 1,700 | |||||||||||||||
| Total noninterest expense | 8,938 | 10,617 | 12,659 | 8,638 | 7,783 | 32,214 | 24,660 | |||||||||||||||
| Income before income taxes | 3,837 | 6,033 | 5,098 | 829 | 2,288 | 14,968 | 9,397 | |||||||||||||||
| Income tax expense (benefit) | 1,055 | 1,606 | 1,296 | (805 | ) | 634 | 3,957 | 2,317 | ||||||||||||||
| Net income | 2,782 | 4,427 | 3,802 | 1,634 | 1,654 | 11,011 | 7,080 | |||||||||||||||
| Noncontrolling interest | (155 | ) | (155 | ) | (134 | ) | (96 | ) | (66 | ) | (444 | ) | (66 | ) | ||||||||
| Net income attributable | ||||||||||||||||||||||
| to IFH, Inc. | $ | 2,937 | $ | 4,582 | $ | 3,936 | $ | 1,730 | $ | 1,720 | $ | 11,455 | $ | 7,146 | ||||||||
| Basic earnings per common share | $ | 1.37 | $ | 2.14 | $ | 1.80 | $ | 0.80 | $ | 0.79 | $ | 5.31 | $ | 3.27 | ||||||||
| Diluted earnings per common share | $ | 1.32 | $ | 2.07 | $ | 1.76 | $ | 0.78 | $ | 0.78 | $ | 5.15 | $ | 3.23 | ||||||||
| Weighted average common shares | ||||||||||||||||||||||
| outstanding | 2,144 | 2,147 | 2,185 | 2,169 | 2,176 | 2,158 | 2,182 | |||||||||||||||
| Diluted average common shares | ||||||||||||||||||||||
| outstanding | 2,219 | 2,219 | 2,240 | 2,212 | 2,206 | 2,226 | 2,215 | |||||||||||||||
| Performance Ratios | |||||||||||||||||||||||
| Three Months Ended | Year-To-Date | ||||||||||||||||||||||
| 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||||
| PER COMMON SHARE | |||||||||||||||||||||||
| Basic earnings per common share | $ | 1.37 | $ | 2.14 | $ | 1.80 | $ | 0.80 | $ | 0.79 | $ | 5.31 | $ | 3.27 | |||||||||
| Diluted earnings per common share | 1.32 | 2.07 | 1.76 | 0.78 | 0.78 | 5.15 | 3.23 | ||||||||||||||||
| Book value per common share | 39.62 | 38.32 | 36.08 | 34.91 | 34.08 | 39.62 | 34.08 | ||||||||||||||||
| Tangible book value per common share (2) | 30.66 | 29.29 | 27.16 | 25.74 | 24.83 | 30.66 | 24.83 | ||||||||||||||||
| FINANCIAL RATIOS (ANNUALIZED) | |||||||||||||||||||||||
| Return on average assets | 2.61 | % | 4.39 | % | 3.99 | % | 1.79 | % | 1.84 | % | 3.63 | % | 2.75 | % | |||||||||
| Return on average common shareholders’ | |||||||||||||||||||||||
| equity | 13.60 | % | 22.53 | % | 20.30 | % | 9.06 | % | 9.23 | % | 18.68 | % | 13.35 | % | |||||||||
| Return on average tangible common | |||||||||||||||||||||||
| equity (2) | 17.70 | % | 29.84 | % | 27.28 | % | 12.38 | % | 12.76 | % | 24.71 | % | 18.81 | % | |||||||||
| Net interest margin | 4.24 | % | 4.48 | % | 4.40 | % | 4.27 | % | 4.52 | % | 4.37 | % | 4.93 | % | |||||||||
| Efficiency ratio (1) | 67.3 | % | 63.6 | % | 68.9 | % | 89.3 | % | 76.3 | % | 66.6 | % | 64.4 | % | |||||||||
| (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 September 30, 2023 were as follows:
| % of | ||||
| Commercial | ||||
| (in millions) | Amount | Loans | ||
| Solar electric power generation | $ | 45.3 | 24 | % |
| Power and communication line and related structures construction | 26.5 | 14 | % | |
| Lessors of nonresidential buildings (except miniwarehouses) | 19.9 | 10 | % | |
| Lessors of other real estate property | 12.6 | 7 | % | |
| Hotels (except casino hotels) and motels | 10.7 | 6 | % | |
| Lessors of residential buildings and dwellings | 8.2 | 4 | % | |
| Other activities related to real estate | 8.0 | 4 | % | |
| General freight trucking, local | 5.0 | 3 | % | |
| Other heavy and civil engineering construction | 4.5 | 2 | % | |
| Colleges, Universities and Professional Schools | 3.5 | 2 | % | |
| $ | 144.2 | 76 | % | |
Reconciliation of Non-GAAP Measures
| (In thousands except book value per share) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | |||||||||||||||||
| Tangible book value per common share | ||||||||||||||||||||||
| Total IFH, Inc. shareholders’ equity | $ | 87,312 | $ | 84,452 | $ | 80,992 | $ | 76,914 | $ | 75,080 | ||||||||||||
| Less: Goodwill | 13,161 | 13,161 | 13,161 | 13,161 | 13,161 | |||||||||||||||||
| Less Other intangible assets, net | 6,569 | 6,737 | 6,851 | 7,037 | 7,224 | |||||||||||||||||
| Total tangible common equity | $ | 67,582 | $ | 64,554 | $ | 60,980 | $ | 56,716 | $ | 54,695 | ||||||||||||
| Ending common shares outstanding | 2,204 | 2,204 | 2,245 | 2,203 | 2,203 | |||||||||||||||||
| Tangible book value per common share | $ | 30.66 | $ | 29.29 | $ | 27.16 | $ | 25.74 | $ | 24.83 | ||||||||||||
| Three Months Ended | Year-To-Date | |||||||||||||||||||||
| (Dollars in thousands) | 9/30/21 | 6/30/21 | 3/31/21 | 12/31/20 | 9/30/20 | 9/30/21 | 9/30/20 | |||||||||||||||
| Return on average tangible common equity | ||||||||||||||||||||||
| Average IFH, Inc. shareholders’ equity | $ | 85,683 | $ | 81,584 | $ | 78,640 | $ | 75,774 | $ | 73,970 | $ | 81,969 | $ | 71,296 | ||||||||
| Less: Average goodwill | 13,161 | 13,161 | 13,161 | 13,161 | 13,161 | 13,161 | 13,159 | |||||||||||||||
| Less Average other intangible assets, net | 6,679 | 6,836 | 6,973 | 7,159 | 7,346 | 6,829 | 7,532 | |||||||||||||||
| Average tangible common equity | $ | 65,843 | $ | 61,587 | $ | 58,506 | $ | 55,454 | $ | 53,463 | $ | 61,979 | $ | 50,605 | ||||||||
| Net income attributable to IFH, Inc. | $ | 2,937 | $ | 4,582 | $ | 3,936 | $ | 1,730 | $ | 1,720 | $ | 11,455 | $ | 7,146 | ||||||||
| Return on average tangible common equity | 17.70 | % | 29.84 | % | 27.28 | % | 12.38 | % | 12.76 | % | 24.71 | % | 18.81 | % | ||||||||
