Integrated Financial Holdings, Inc. Second Quarter 2023 Financial Results
RALEIGH, N.C., July 27, 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 and six months ended June 30, 2023. Highlights from the 2023 second quarter results include the following:· Second quarter net income of $3.6 million, or $1.60 per diluted share compared to second quarter 2022 net income of $1.4 million, or $0.63 per diluted share. Year-to-date net income of $5.9 million or $2.63 per diluted share compared to $5.0 million in net income or $2.22 per diluted share in the prior year.
· Net interest income of $5.5 million for the second quarter of 2023, compared to $5.1 million for the same period in 2022. For the year, net interest income was $11.2 million compared to $10.4 million for the same six-month period in 2022.
· Return on average assets of 3.05% and 2.57% for the three and six-month periods ending June 30, 2023, compared to 1.29% and 2.29% for the same period in 2022.
· Return on average tangible common equity (a non-GAAP financial measure) of 19.84% and 16.84% for the three and six-month periods ending June 30, 2023, compared to 7.91% and 14.08% for the same period in 2022.
The second quarter of 2023 showed positive results from a continued effort to improve efficiency as strategic decisions were made to wind down West Town Insurance Agency, Inc. and to sell a minority interest in West Town Payments, LLC (“WTP”). The efficiency ratio in the second quarter of 2023 was 61.4% compared to 80.8% for the same period in 2022. In addition, the sale of the Bank’s ownership interest in WTP resulted in a pretax gain of about $366,000, and an exit from the Bank’s hemp-related business line resulted in a pretax gain of about $464,000. The first six months of 2023 reflected a similar positive impact from those strategic decisions. Total noninterest expense was down $3.3 million or 17% from 2022 to 2023 resulting in an efficiency ratio of 65.2% for the six-months ended June 30, 2023, compared to 72.9% for the same period in 2022.
In reflecting on the second quarter of the year, Marc McConnell, President, and CEO of IFHI, stated: “The strong performance in the second quarter is a positive reflection of the resiliency of our organization. Growth across total assets, deposits, and total shareholders’ equity is even more significant in light of the market disruption caused by the failure of three large regional banks during the first half of this year.
Looking inwardly, this quarter realized the gains of our prior cost-containment and operating efficiency measures. Net income increased year over year as did net interest income. Additionally, the Bank’s strong capital position has enabled it to continue to grow its earning asset base, allowing it to realize the benefits of the higher interest rate environment on the asset side of the balance sheet. In right-sizing the Bank and streamlining operational focuses, we believe we are well-positioned to introduce new avenues for continued growth in alignment with our strategic plan. We will continue to leverage the successes of our government-guaranteed lending division to further reinforce our strengths while remaining steadfastly focused on enhancing shareholder value.”
*BALANCE SHEET*
On June 30, 2023, the Company’s total assets were $482.1 million, net loans held for investment were $319.6 million, loans held for sale (“HFS”) were $33.2 million, total deposits were $379.1 million and total shareholders’ equity attributable to IFHI was $94.4 million. Compared with December 31, 2022, total assets increased $34.2 million or 8%, net loans held for investment increased $24.9 million or 8%, HFS loans decreased $1.1 million or 3%, total deposits increased $66.0 million or 21%, and total shareholders’ equity attributable to IFHI increased $6.9 million or 7%. Cash and cash equivalents increased $8.9 million or 26% since the prior year-end as a result of growth in the deposit side of the Bank. 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. Noninterest bearing deposits have decreased by $23.9 million or 23% since December 31, 2022, resulting largely from the Company’s decision to discontinue banking two industries the Company had previously targeted. The increase in total shareholders’ equity since December 31, 2022, was primarily associated with earnings. The market value of the available-for-sale investment portfolio has remained roughly unchanged since year end with the accumulated other comprehensive loss component of equity related to the change in market pricing at $2.3 million at December 31, 2022 and June 30, 2023. The Company does not have any investments in its portfolio treated as held-to-maturity being carried at cost.
*CAPITAL AND LIQUIDITY STRENGTH*
At June 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% 13.35%
Tier 1 risk-based capital ratio 8.00% 8.50% 13.35%
Total risk-based capital ratio 10.00% 10.50% 14.60%
Tier 1 leverage ratio 5.00% 4.00% 11.90%
Primarily as a result of net income, the Company’s book value per common share increased from $38.69 as of December 31, 2022, to $41.90 at June 30, 2023. The Company’s tangible book value per common share (a non-GAAP financial measure) also increased from $30.36 as of December 31, 2022, to $33.68 at June 30, 2023, primarily as a result of net income.
Total deposits increased by $22.8 million in Q2 2023 and by $45.5 million over the past twelve months. The Bank funds its loan growth primarily with a blend of customer deposits and wholesale funding and has a wide variety of customers and industries in its portfolio. The Bank also offers services that provide FDIC coverage for its customers in excess of the $250,000 limit. As of June 30, 2023, the average deposit account size was $94,000, and uninsured deposits excluding those required for debt service were $26.9 million or roughly 7% of total deposits.
The Bank’s primary on-balance sheet liquidity consists of cash and cash equivalents along with unpledged available for sale investment securities, which totaled $60.9 million as of June 30, 2023. Additionally, the Bank maintains fully collateralized credit facilities with the Federal Home Loan Bank of Chicago (“FHLB”). As of June 30, 2023, the FHLB credit facility totaled $65.0 million with no outstanding balance and all of it available for borrowing. In aggregate, total primary on-balance sheet liquidity and total available borrowing capacity at the FHLB was 467% of the amount of uninsured deposits (excluding those required for debt service) as of June 30, 2023. Additionally, the Bank’s business model includes the origination and sales of GGL loans, a process which occurs each month and can be accelerated or slowed down based on the Bank’s current funding needs. At June 30, 2023, the Bank had $33.2 million in loans available for sale which could generate additional liquidity as needed.
*ASSET QUALITY *
The Company’s nonperforming assets to total assets ratio increased from 1.04% at December 31, 2022, to 1.22% at June 30, 2023. Nonaccrual loans at June 30, 2023 increased $1.0 million or 23% as compared to December 31, 2022. The Bank held $315,000 in foreclosed assets as of June 30, 2023, compared to $101,000 at December 31, 2022.
During the second quarters of 2023 and 2022, the Company recorded provisions for credit losses of $130,000 and $460,000, respectively. The Company recorded $86,000 in net charge-offs during the second quarter of 2023 compared to $279,000 in net recoveries for the same period in 2022. In addition, the Company added $70,000 towards a reserve for unfunded commitments. Set forth in the table below is certain asset quality information as of the dates indicated:
* (Dollars in thousands)* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22*
Nonaccrual loans $ 5,586 $ 4,485 $ 4,552 $ 4,612 $ 4,656
Foreclosed assets 315 315 101 - -
90 days past due and still accruing - - - - -
Total nonperforming assets $ 5,901 $ 4,800 $ 4,653 $ 4,612 $ 4,656
Net charge-offs (recoveries) $ 86 $ 376 $ (149 ) $ (29 ) $ (279 )
Annualized net charge-offs (recoveries) to total average portfolio loans 0.11 % 0.49 % -0.20 % -0.04 % -0.43 %
Ratio of total nonperforming assets to total assets 1.22 % 1.03 % 1.04 % 1.05 % 1.07 %
Ratio of total nonperforming loans to total loans, net of allowance 1.75 % 1.43 % 1.55 % 1.60 % 1.79 %
Ratio of total allowance for credit losses to total loans (1) 1.87 % 1.88 % 2.23 % 2.27 % 2.39 % (1) Does not include the Company's reserve for unfunded commitments
*NET INTEREST INCOME AND MARGIN*
Net interest income for the three months ended June 30, 2023, increased $389,000 or 8% in comparison to the second quarter of 2022 primarily as a result of an increase in average loans outstanding. Loan yields increased from 6.90% in the second quarter of 2022 to 8.43% for the same period in 2023. The increase in yield from the prior year reflected the impact of 475 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 0.64% in the second quarter of 2022 to 2.70% for the same period in 2023 as average retail certificate of deposit (“CD”) rates trended up, and new CDs were originated at higher market rates. Net interest margin decreased slightly from 5.51% during the three months ended June 30, 2022, to 5.48% for the same period in 2023.
For the six-months ended June 30, net interest income increased from $10.4 million in 2022 to $11.2 million in 2023. The increase of $821,000 or 8% was due to a combination of increased average loan volume and a slight increase in net interest margin. Average loans increased from $306.8 million for the six-months ended June 30 2022 to $351.5 million for the same period in 2023. Net interest margin during those same periods increased from 5.60% in 2022 to 5.66% in 2023.
* (Dollars in thousands)* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* *6/30/23* *6/30/22*
*Average balances:*
Loans $ 357,272 $ 345,651 $ 331,508 $ 312,475 $ 319,115 $ 351,461 $ 306,809
Available-for-sale securities 18,208 17,691 17,446 19,096 21,879 17,949 21,484
Other interest-bearing balances 29,445 28,998 20,367 30,378 33,328 29,222 44,844
Total interest-earning assets 404,925 392,340 369,321 361,949 374,322 398,632 373,137
Total assets 472,169 460,412 436,695 428,983 438,732 466,291 438,067
Noninterest-bearing deposits 78,676 98,555 113,851 94,013 85,042 88,615 91,794
Interest-bearing liabilities:
Interest-bearing deposits 288,972 251,281 212,069 233,464 244,363 270,126 239,727
Borrowings 4,505 10,222 8,913 2,174 8,626 7,364 7,466
Total interest-bearing liabilities 293,477 261,503 220,982 235,638 252,989 277,490 247,193
Common shareholders' equity 91,281 88,574 84,831 88,043 90,721 89,928 90,581
Tangible common equity (1) 72,661 69,788 65,879 68,924 71,437 71,225 71,188
*Interest income/expense:*
Loans $ 7,511 $ 6,997 $ 6,422 $ 5,943 $ 5,491 $ 14,508 $ 11,114
Available-for-sale securities 133 120 64 105 104 253 193
Interest-bearing balances and other 392 319 257 169 89 711 131
Total interest income 8,036 7,436 6,743 6,217 5,684 15,472 11,438
Deposits 2,445 1,696 735 532 523 4,141 1,045
Borrowings 56 85 93 13 15 141 24
Total interest expense 2,501 1,781 828 545 538 4,282 1,069
Net interest income $ 5,535 $ 5,655 $ 5,915 $ 5,672 $ 5,146 $ 11,190 $ 10,369
(1) See reconciliation of non-GAAP financial measures.
*Three Months Ended* *Year-To-Date* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* *6/30/23* *6/30/22*
*Average yields and costs:*
Loans 8.43 % 8.21 % 7.69 % 7.55 % 6.90 % 8.32 % 7.30 %
Available-for-sale securities 2.92 % 2.71 % 1.47 % 2.20 % 1.90 % 2.82 % 1.80 %
Interest-bearing balances and other 5.34 % 4.46 % 5.01 % 2.21 % 1.07 % 4.91 % 0.59 %
Total interest-earning assets 7.96 % 7.69 % 7.24 % 6.81 % 6.09 % 7.83 % 6.18 %
Interest-bearing deposits 3.39 % 2.74 % 1.38 % 0.90 % 0.86 % 3.09 % 0.88 %
Borrowings 4.99 % 3.37 % 4.14 % 2.37 % 0.70 % 3.86 % 0.65 %
Total interest-bearing liabilities 3.42 % 2.76 % 1.49 % 0.92 % 0.85 % 3.11 % 0.87 %
Cost of funds 2.70 % 2.01 % 0.98 % 0.66 % 0.64 % 2.36 % 0.64 %
Net interest margin 5.48 % 5.85 % 6.35 % 6.22 % 5.51 % 5.66 % 5.60 %
*NONINTEREST INCOME*
Noninterest income for the three months ended June 30, 2023, was $7.8 million compared $6.8 million for the same period in 2022. The increase is primarily attributable to an increase in other noninterest income which increased $1.1 million. The primary drivers of this increase were the sale of the Bank’s interest in WTP as previously mentioned, which resulted in a pretax gain of about $366,000, and an exit from the hemp-related business line resulted in a pretax gain of about $464,000. In addition, increases in the income of Windsor Advantage, LLC (“Windsor”), a subsidiary of the Company, and government lending revenues helped to offset the loss of mortgage revenues, which decreased from $1.1 million in the second quarter of 2022 to none in 2023, as the Company discontinued its mortgage operations in the fourth quarter of 2022.
Specific items to note with respect to the most recently completed quarter include:
· Windsor, which offers an SBA and USDA loan servicing platform, had processing and servicing revenue totaling $2.7 million, an increase of $287,000 or 12% as compared to the $2.4 million in income earned during the same prior-year period.
· Mortgage revenue totaled $1.1 million for the second quarter of 2022 compared to $0 in 2023. Due to the nationwide slowdown in refinancing volume and the impact of a doubling of long-term mortgage rates year-over-year, the Company phased out its mortgage operations by the fourth quarter of 2022.
· Government Guaranteed Lending revenue was $3.6 million in the second quarter of 2023, an increase of $809,000 or 29% in comparison to the $2.8 million of revenues for the same period in 2022. On a year-to-date basis, noninterest income has decreased $2.7 million or 16%. The decrease is primarily the result of the difference in each period’s mark-to-market income adjustment on the Company’s equity investment in Dogwood State Bank due to successful capital raises for Dogwood in the first quarter of both years. The capital raises helped to establish new market values. The prior year’s first quarter had a positive mark-to-market of $6.0 million compared to $2.0 million for the current year.
*NONINTEREST EXPENSE*
Noninterest expense for the second quarter of 2023 was $8.2 million, a decrease of $1.5 or 15%, from $9.6 million for the second quarter of 2022. This change was primarily due to a decrease of $892,000 or 14% in compensation expense going from $6.3 million in the second quarter of 2022 down to $5.4 million for the same period in 2023 as the Company continues its efforts to decrease its overhead in light of the changing economic environment. Compensation expense has decreased three straight quarters.
Loan-related expenses, which tend to fluctuate unexpectedly, also decreased by $145,000 or 30% from $491,000 in the second quarter of 2022 to $346,000 for the same period in 2023. Every expense category was down from the second quarter of 2022 to the second quarter of 2023 except occupancy and equipment and merger related expenses, both of which had immaterial increases. The result was significant improvement in the efficiency ratio, which decreased from 80.8% during the second quarter of 2022 to 61.4% for the same period in 2023.
On a year-to-date basis, noninterest expenses decreased from $20.0 million for the first six months of 2022 to $16.7 million for the same period in 2023, a decrease of $3.3 million or 17%. Compensation expense was the biggest driver in the overall decrease, declining to $11.0 million in the first six-months of 2023 from $13.3 million in the same period in 2022, a decrease of $2.4 million or 18%.
*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 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; recent adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, our strategic initiatives, and regulatory response to these developments; 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)* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22*
*Assets*
Cash and due from banks $ 3,582 $ 6,986 $ 7,553 $ 6,272 $ 4,700
Interest-bearing deposits 39,258 21,224 26,430 25,011 21,981 Total cash and cash equivalents 42,840 28,210 33,983 31,283 26,681
Interest-bearing time deposits 750 999 999 1,249 1,499
Available-for-sale securities 18,977 17,504 17,712 17,460 19,038
Marketable equity securities 19,980 19,980 17,982 17,982 17,982
Loans held for sale 33,232 39,088 34,302 28,399 59,592
Loans held for investment 325,673 319,465 300,764 295,416 266,259 Allowance for credit losses (6,086 ) (6,011 ) (6,709 ) (6,710 ) (6,361 ) Loans held for investment, net 319,587 313,454 294,055 288,706 259,898
Premises and equipment, net 3,960 4,041 4,098 4,264 4,238
Foreclosed assets 315 315 101 - -
Loan servicing assets 3,717 3,604 3,715 3,979 4,178
Bank-owned life insurance 5,087 5,053 5,357 5,330 5,304
Accrued interest receivable 3,280 3,090 2,997 2,485 2,139
Goodwill 13,161 13,161 13,161 13,161 13,161
Other intangible assets, net 5,350 5,517 5,682 5,848 6,014
Other assets 11,872 13,243 13,719 17,293 15,764 Total assets $ 482,108 $ 467,259 $ 447,863 $ 437,439 $ 435,488
*Liabilities and Shareholders' Equity*
*Liabilities*
Deposits: Noninterest-bearing $ 82,272 $ 76,554 $ 106,255 $ 106,272 $ 83,544 Interest-bearing 296,805 279,735 206,872 218,835 250,026 Total deposits 379,077 356,289 313,127 325,107 333,570
Borrowings - 10,000 30,000 5,000 -
Accrued interest payable 1,014 806 379 370 308
Other liabilities 7,655 10,101 17,600 23,557 9,939 Total liabilities 387,746 377,196 361,106 354,034 343,817
*Shareholders' equity:*
Common stock, voting 2,231 2,231 2,239 2,239 2,227
Common stock, non-voting 22 22 22 22 22
Additional paid in capital 25,860 25,744 24,916 24,674 24,498
Retained earnings 68,558 64,963 62,611 60,248 67,781
Accumulated other comprehensive loss (2,309 ) (2,198 ) (2,301 ) (2,866 ) (1,985 ) Total IFH, Inc. shareholders' equity 94,362 90,762 87,487 84,317 92,543
Noncontrolling interest - (699 ) (730 ) (912 ) (872 ) Total shareholders' equity 94,362 90,063 86,757 83,405 91,671 Total liabilities and shareholders' equity $ 482,108 $ 467,259 $ 447,863 $ 437,439 $ 435,488
*Consolidated Statements of Income*
* (In thousands except per* *Three Months Ended* *Year-To-Date*
* share data; unaudited)* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* *6/30/23* *6/30/22*
*Interest income*
Loans $ 7,511 $ 6,997 $ 6,422 $ 5,943 $ 5,491 $ 14,508 $ 11,114
Available-for-sale securities and other 525 439 321 274 193 964 324
*Total interest income* 8,036 7,436 6,743 6,217 5,684 15,472 11,438
*Interest expense*
Interest on deposits 2,445 1,696 735 532 523 4,141 1,045
Interest on borrowings 56 85 93 13 15 141 24
*Total interest expense* 2,501 1,781 828 545 538 4,282 1,069
*Net interest income* 5,535 5,655 5,915 5,672 5,146 11,190 10,369
*Provision for credit losses* 130 565 (150 ) 320 460 695 640
*Noninterest income*
Loan processing and servicing
revenue 2,660 2,439 2,849 2,163 2,373 5,099 4,580
Mortgage - - 99 477 1,066 - 1,239
Government guaranteed lending 3,576 904 2,095 2,213 2,767 4,480 3,891
SBA documentation preparation fees - - 2 78 128 - 272
Service charges on deposits 52 133 240 182 118 185 222
Bank-owned life insurance 34 555 26 27 33 589 58
Change in fair value of marketable
equity securities - 1,998 - - - 1,998 5,994
Other noninterest income 1,434 566 549 222 290 2,000 805
*Total noninterest income* 7,756 6,595 5,860 5,362 6,775 14,351 17,061
*Noninterest expense*
Compensation 5,379 5,581 6,168 6,880 6,271 10,960 13,332
Occupancy and equipment 318 344 303 402 254 662 598
Loan and special asset expenses 346 293 57 969 491 639 1,129
Professional services 446 448 676 207 491 894 1,042
Data processing 247 265 272 263 271 512 520
Software 469 469 467 460 426 938 851
Communications 68 78 83 86 97 146 180
Advertising 174 248 211 252 321 422 535
Amortization of intangibles 166 166 169 170 170 332 340
Merger related expenses 61 116 192 561 - 177 -
Other operating expenses 486 489 1,236 10,683 846 975 1,477
*Total noninterest expense* 8,160 8,497 9,834 20,933 9,638 16,657 20,004
*Income (loss) before income taxes* 5,001 3,188 2,091 (10,219 ) 1,823 8,189 6,786
Income tax expense (benefit) 1,416 778 (454 ) (2,646 ) 492 2,194 1,895
*Net income (loss)* 3,585 2,410 2,545 (7,573 ) 1,331 5,995 4,891
Noncontrolling interest (10 ) 58 182 (40 ) (78 ) 48 (80 )
*Net income (loss) attributable*
* to IFH, Inc.* *$* * 3,595* *$* * 2,352* *$* * 2,363* *$* * (7,533* *)* *$* * 1,409* *$* * 5,947* *$* * 4,971*
Basic earnings (loss) per common share $ 1.62 $ 1.06 $ 1.08 $ (3.45 ) $ 0.65 $ 2.68 $ 2.29
Diluted earnings (loss) per common share $ 1.60 $ 1.04 $ 1.04 $ (3.45 ) $ 0.63 $ 2.63 $ 2.22
Weighted average common shares
outstanding 2,220 2,211 2,194 2,185 2,175 2,216 2,167
Diluted average common shares
outstanding 2,252 2,265 2,267 2,185 2,244 2,258 2,243
*Performance Ratios* *Three Months Ended* *Year-To-Date* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* *6/30/23* *6/30/22*
*PER COMMON SHARE* Basic earnings (loss) per common share $ 1.62 $ 1.06 $ 1.08 $ (3.45 ) $ 0.65 $ 2.68 $ 2.29 Diluted earnings (loss) per common share 1.60 1.04 1.04 (3.45 ) 0.63 2.63 2.22 Book value per common share 41.90 40.28 38.69 37.29 41.15 41.90 41.15 Tangible book value per common share (2) 33.68 31.99 30.36 28.88 32.62 33.68 32.62
*FINANCIAL RATIOS (ANNUALIZED)* Return on average assets 3.05 % 2.07 % 2.15 % -6.97 % 1.29 % 2.57 % 2.29 % Return on average common shareholders' equity 15.80 % 10.77 % 11.05 % -33.95 % 6.23 % 13.34 % 11.07 % Return on average tangible common equity (2) 19.84 % 13.67 % 14.23 % -43.36 % 7.91 % 16.84 % 14.08 % Net interest margin 5.48 % 5.85 % 6.35 % 6.22 % 5.51 % 5.66 % 5.60 % Efficiency ratio (1) 61.4 % 69.4 % 83.5 % 189.7 % 80.8 % 65.2 % 72.9 % (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 June 30, 2023, were as follows:
*% of* *Commercial*
(Dollars in millions) *Amount* *Loans*
Solar electric power generation $ 77.6 27 %
Power and communication line and related structures construction 59.9 21 %
Lessors of nonresidential buildings (except miniwarehouses) 15.1 5 %
Other activities related to real estate 10.3 4 %
Lessors of other real estate property 7.9 3 %
Hotels (except casino hotels) and motels 6.8 2 %
Concrete Block and Brick Manufacturing 6.4 2 %
Lessors of residential buildings and dwellings 6.2 2 %
Biomass Electric Power Generation 6.0 2 %
Postharvest Crop Activities 5.0 2 % $ 201.2 70 %
*Reconciliation of Non-GAAP Measures*
*6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* * (Dollars in thousands except book value per share)*
*Tangible book value per common share*
Total IFH, Inc. shareholders' equity $ 94,362 $ 90,762 $ 87,487 $ 84,317 $ 92,543
Less: Goodwill 13,161 13,161 13,161 13,161 13,161
Less Other intangible assets, net 5,350 5,517 5,682 5,848 6,014 Total tangible common equity $ 75,851 $ 72,084 $ 68,644 $ 65,308 $ 73,368
Ending common shares outstanding 2,252 2,253 2,261 2,261 2,249
Tangible book value per common share $ 33.68 $ 31.99 $ 30.36 $ 28.88 $ 32.62 *Three Months Ended* *Year-To-Date*
* (Dollars in thousands)* *6/30/23* *3/31/23* *12/31/22* *9/30/22* *6/30/22* *6/30/23* *6/30/22*
*Return on average tangible common equity*
Average IFH, Inc. shareholders' equity $ 91,281 $ 88,574 $ 84,831 $ 88,043 $ 90,721 $ 89,928 $ 90,581
Less: Average goodwill 13,161 13,161 13,161 13,161 13,161 13,161 13,161
Less Average other intangible assets, net 5,459 5,625 5,791 5,958 6,123 5,542 6,232 Average tangible common equity $ 72,661 $ 69,788 $ 65,879 $ 68,924 $ 71,437 $ 71,225 $ 71,188
Net income (loss) attributable to IFH, Inc. $ 3,595 $ 2,352 $ 2,363 $ (7,533 ) $ 1,409 $ 5,947 $ 4,971
Return on average tangible common equity 19.84 % 13.67 % 14.23 % -43.36 % 7.91 % 16.84 % 14.08 %