FSFG First Savings Financial Group Inc

First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $2.3 million, or $0.34 per diluted share, for the quarter ended June 30, 2023 compared to net income of $2.6 million, or $0.37 per diluted share, for the quarter ended June 30, 2022.

During the June 2023 quarter, the Company repurchased $2.0 million of subordinated debt that was issued by the Company in March 2022 at a discount during the 2023 period, which resulted in a $660,000 gain. The Company used this gain as an opportunity to sell $78.5 million of available-for-sale securities during the quarter for a net loss of $540,000. The sale of these securities was a strategic initiative to improve the Company’s liquidity posture and remove an inefficient portion of the Company’s balance sheet in which the cost of funding was higher than the yield earned on the securities. The proceeds from the sale of the securities were used to reduce FHLB borrowings in the June 2023 quarter.

Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “This challenging environment for the banking industry will pass, but as it persists we’re active to realign the balance sheet, stabilize the margin, manage expenses and make select investments in opportunities that will be fruitful in future quarters and years. We continue to focus on core banking; asset quality; selective high-quality lending; lesser reliance on wholesale funding; improvement of liquidity, capital and interest rate sensitivity positions; and evaluation of options and opportunities to achieve such. We have acted to protect from persistently higher interest rates, which has adversely affected the current margin, while still remaining well-positioned to benefit from a potential rates-down environment. The underperformance of the mortgage banking and SBA lending segments are recognized but the macroeconomic environment for these businesses to perform well continues to improve. We are focused on managing through the remainder of this economic dislocation and positioning the company for enhanced shareholder value.”

Results of Operations for the Three Months Ended June 30, 2023 and 2022

Net interest income decreased $1.0 million, or 6.6%, to $14.9 million for the three months ended June 30, 2023 as compared to the same period 2022. The decrease in net interest income was due to a $9.4 million increase in interest expense, partially offset by an $8.3 million increase in interest income. Interest income increased due to an increase in the average balance of interest-earning assets of $372.9 million, from $1.74 billion for 2022 to $2.11 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.36% for 2022 to 5.20% for 2023. The increase in the average balance of interest-earning assets was primarily due to an increase in the average balance of total loans of $334.1 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $387.8 million, from $1.37 billion for 2022 to $1.76 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 0.75% for 2022 to 2.71% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates paid for FHLB borrowings, brokered deposits and money market deposit accounts primarily due to the increase in market interest rates.

The Company recognized a provision for loan losses of $441,000 for the three months ended June 30, 2023 due primarily to loan portfolio growth, compared to a provision for loan losses of $532,000 for the same period in 2022. The Company recognized net charge-offs of $61,000 for the three months ended June 30, 2023, compared to net charge-offs of $27,000 in 2022.

Noninterest income decreased $2.8 million for the three months ended June 30, 2023 as compared to the same period in 2022. The decrease was due primarily to a $2.4 million decrease in mortgage banking income in 2023 compared to the same period in 2022 and the aforementioned $540,000 net loss on sale of available-for-sale securities compared to a $476,000 gain recognized in 2022, partially offset by the aforementioned $660,000 gain on the repurchase of subordinated debt. The decrease in mortgage banking income was primarily due to lower origination and sales volume in 2023 compared to 2022. Mortgage loans originated for sale were $199.9 million in the three months ended June 30, 2023 as compared to $421.4 million for the same period in 2022.

Noninterest expense decreased $3.9 million for the three months ended June 30, 2023 as compared to the same period in 2022. The decrease was due primarily to a decrease in compensation and benefits of $4.1 million. The decrease in compensation and benefits expense was due primarily to a reduction in staff and incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking income.

The Company recognized income tax expense of $331,000 for the three months ended June 30, 2023 compared to income tax benefit of $61,000 for the same period in 2022. The effective tax rate for the 2023 period was 12.5%. The increase in the effective tax rate was primarily due to Company’s utilization of capital loss carryovers during the 2022 period with no corresponding utilization in the 2023 period.

Results of Operations for the Nine Months Ended June 30, 2023 and 2022

The Company reported net income of $8.9 million, or $1.29 per diluted share, for the nine months ended June 30, 2023 compared to net income of $14.0 million, or $1.95 per diluted share, for the nine months ended June 30, 2022.

Net interest income increased $2.2 million, or 5.0%, to $46.0 million for the nine months ended June 30, 2023 as compared to the same period 2022. The increase in net interest income was due to a $25.1 million increase in interest income, partially offset by a $22.8 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $429.9 million, from $1.61 billion for 2022 to $2.04 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.25% for 2022 to 5.03% for 2023. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of total loans and investment securities of $324.7 million and $109.7 million, respectively. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $417.2 million, from $1.27 billion for 2022 to $1.68 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 0.65% for 2022 to 2.30% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates for FHLB borrowings, brokered deposits and money market deposit accounts as a result of increases in market interest rates.

The Company recognized a provision for loan losses of $1.8 million for the nine months ended June 30, 2023 due primarily to loan portfolio growth, compared to $1.0 million for the same period in 2022. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $851,000 from $10.9 million at September 30, 2022 to $11.7 million at June 30, 2023. The Company recognized net charge-offs of $319,000 for the nine months ended June 30, 2023, of which $264,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $349,000 in 2022, of which $218,000 was related to unguaranteed portions of SBA loans.

Noninterest income decreased $26.8 million for the nine months ended June 30, 2023 as compared to the same period in 2022. The decrease was due primarily to decreases in mortgage banking income and net gain on sale of SBA loans of $24.8 million and $1.3 million, respectively. The decrease in mortgage banking income was primarily due to lower origination and sales volume in the 2023 period compared to 2022. Mortgage loans originated for sale were $392.2 million in the nine months ended June 30, 2023 as compared to $1.42 billion in 2022. The decrease in net gain on sales of SBA loans was due primarily to decreased sales volume from the SBA lending segment and lower premiums in the secondary market.

Noninterest expense decreased $18.7 million for the nine months ended June 30, 2023 as compared to the same period in 2022. The decrease was due primarily to a decrease in compensation and benefits, advertising expense and professional fees of $17.8 million, $1.1 million and $1.0 million, respectively. The decrease in compensation and benefits expense was due primarily to a reduction in staff and incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking activity. The decreases in professional fees and advertising expense were related to the reduced activity and loan origination volume of the mortgage banking segment.

The Company recognized income tax expense of $747,000 for the nine months ended June 30, 2023 compared to tax expense of $2.4 million for the same period in 2022. The effective tax rate for the 2023 period was 7.7%, which was a decrease from the effective tax rate of 14.5% in 2022. The decrease was due to recognition of investment tax credits related to solar projects in 2023 and lower pre-tax income in 2023 as compared to 2022.

Comparison of Financial Condition at June 30, 2023 and September 30, 2022

Total assets increased $166.7 million, from $2.09 billion at September 30, 2022 to $2.26 billion at June 30, 2023. Net loans held for investment increased $216.7 million during the nine months ended June 30, 2023 due primarily to growth in residential mortgage loans and single-tenant net lease commercial real estate loans. Available-for-sale securities decreased $68.1 million during the nine months ended June 30, 2023 due primarily to the sale of $78.5 million of securities in June 2023

Total liabilities increased $153.2 million due primarily to increases in total deposits and FHLB borrowings of $143.9 million and $37.7 million, respectively, partially offset by a $39.8 million decrease in other borrowings primarily due to the reversal of secured borrowings recorded at September 30, 2022. The increase in total deposits was primarily due to a $121.9 million increase in brokered deposits, partially offset by a $24.6 million decrease in noninterest-bearing deposits. The increases in deposits and FHLB borrowings were primarily used to fund loan growth. As of June 30, 2023, deposits exceeding the FDIC insurance limit of $250,000 per insured account were estimated to be not greater than 19.6% of total deposits. The amount is believed to be less than 19.6% of total deposits due to certain accounts being structured to achieve a level of insurance above the FDIC limit, but is difficult to quantify.

Common stockholders’ equity increased $13.5 million, from $151.6 million at September 30, 2022 to $165.1 million at June 30, 2023, due primarily to a decrease in accumulated other comprehensive loss and increase in retained net income of $9.5 million and $6.1 million, respectively. The decrease in accumulated other comprehensive loss was primarily due to decreasing long term market interest rates during the nine months ended June 30, 2023, which resulted in an increase in the fair value of the available-for-sale securities portfolio. At June 30, 2023 and September 30, 2022, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

First Savings Bank is an entrepreneurial community bank headquartered in Jeffersonville, Indiana, which is directly across the Ohio River from Louisville, Kentucky, and operates fifteen depository branches within Southern Indiana. The Bank also has three national lending programs, including single-tenant net lease commercial real estate, SBA lending and residential mortgage banking, with offices located throughout the United States. The Bank is a recognized leader, both in its local communities and nationally for its lending programs. The employees of First Savings Bank strive daily to achieve the organization’s vision, We Expect To Be The BEST community BANK, which fuels our success. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “FSFG.”

This release may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions.

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions; changes in market interest rates; changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission.

Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf. Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

Contact: Tony A. Schoen, CPA Chief Financial Officer 812-283-0724

FIRST SAVINGS FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
	Three Months Ended								Nine Months Ended
OPERATING DATA:	June 30,								June 30,
(In thousands, except share and per share data)		2023				2022				2023				2022
Total interest income	$	26,798			$	18,479			$	75,092			$	50,042
Total interest expense		11,933				2,568				29,054				6,215
Net interest income		14,865				15,911				46,038				43,827
Provision for loan losses		441				532				1,797				1,028
Net interest income after provision for loan losses		14,424				15,379				44,241				42,799
Total noninterest income		7,196				10,033				19,900				46,696
Total noninterest expense		18,965				22,835				54,475				73,148
Income before income taxes		2,655				2,577				9,666				16,347
Income tax expense (benefit)		331				(61	)			747				2,369
Net income	$	2,324			$	2,638			$	8,919			$	13,978
Net income per share, basic	$	0.34			$	0.37			$	1.30			$	1.97
Weighted average shares outstanding, basic		6,816,608				7,073,204				6,858,739				7,082,034
Net income per share, diluted	$	0.34			$	0.37			$	1.29			$	1.95
Weighted average shares outstanding, diluted		6,819,748				7,145,288				6,893,766				7,166,632
Performance ratios (annualized)
Return on average assets		0.41	%			0.55	%			0.54	%			1.04	%
Return on average equity		5.60	%			6.06	%			7.41	%			10.33	%
Return on average common stockholders' equity		5.60	%			6.06	%			7.41	%			10.33	%
Net interest margin (tax equivalent basis)		2.94	%			3.77	%			3.13	%			3.73	%
Efficiency ratio		85.97	%			88.02	%			82.62	%			80.81	%
									QTD								FYTD
FINANCIAL CONDITION DATA:	June 30,				March 31,				Increase				September 30,				Increase
(In thousands, except per share data)		2023				2023			(Decrease)					2022			(Decrease)
Total assets	$	2,260,421			$	2,239,606			$	20,815			$	2,093,725			$	166,696
Cash and cash equivalents		42,475				41,810				665				41,665				810
Investment securities		249,788				336,317				(86,529	)			318,075				(68,287	)
Loans held for sale		63,142				48,783				14,359				60,462				2,680
Gross loans		1,708,127				1,614,898				93,229				1,489,904				218,223
Allowance for loan losses		16,838				16,458				380				15,360				1,478
Interest earning assets		2,048,891				2,032,610				16,281				1,898,051				150,840
Goodwill		9,848				9,848				-				9,848				-
Core deposit intangibles		614				668				(54	)			775				(161	)
Loan servicing rights		64,139				65,045				(906	)			67,194				(3,055	)
Noninterest-bearing deposits		315,602				318,869				(3,267	)			340,172				(24,570	)
Interest-bearing deposits (1)		1,344,163				1,224,013				120,150				1,175,662				168,501
Federal Home Loan Bank borrowings		345,000				437,795				(92,795	)			307,303				37,697
Subordinated debt and other borrowings, net of issuance costs		48,387				50,330				(1,943	)			88,206				(39,819	)
Total liabilities		2,095,353				2,072,708				22,645				1,942,160				153,193
Accumulated other comprehensive income (loss)		(17,565	)			(14,199	)			(3,366	)			(27,079	)			9,514
Stockholders' equity, net of noncontrolling interests		165,068				166,898				(1,830	)			151,565				13,503
Book value per share	$	24.04			$	24.31			$	(0.27	)		$	21.74			$	2.30
Tangible book value per share (2)		22.52				22.78				(0.26	)			20.22				2.30
Non-performing assets:
Nonaccrual loans - SBA guaranteed	$	5,753			$	5,456			$	297			$	5,474			$	279
Nonaccrual loans - unguaranteed		5,954				6,993				(1,039	)			5,382				572
Total nonaccrual loans	$	11,707			$	12,449			$	(742	)		$	10,856			$	851
Accruing loans past due 90 days		-				-				-				-				-
Total non-performing loans		11,707				12,449				(742	)			10,856				851
Foreclosed real estate		30				-				30				-				30
Troubled debt restructurings classified as performing loans		2,373				2,446				(73	)			2,714				(341	)
Total non-performing assets	$	14,110			$	14,895			$	(785	)		$	13,570			$	540
Asset quality ratios:
Allowance for loan losses as a percent of total gross loans		0.99	%			1.02	%			(0.03	%)			1.03	%			(0.04	%)
Allowance for loan losses as a percent of nonperforming loans		143.83	%			132.20	%			11.63	%			141.49	%			2.34	%
Nonperforming loans as a percent of total gross loans		0.69	%			0.77	%			(0.09	%)			0.73	%			(0.04	%)
Nonperforming assets as a percent of total assets		0.62	%			0.67	%			(0.04	%)			0.65	%			(0.03	%)
(1) Includes $414.2 million, $337.0 million and $292.5 million of brokered certificates of deposit at June 30, 2023, March 31, 2023 and September 30, 2022, respectively.
(2) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company's
performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to
evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the
Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.
									QTD								FYTD
Tangible Book Value Per Share	June 30,				March 31,				Increase				September 30,				Increase
(In thousands, except share and per share data)		2023				2023			(Decrease)					2023			(Decrease)
Stockholders' equity, net of noncontrolling interests (GAAP)	$	165,068			$	166,898			$	(1,830	)		$	151,565			$	13,503
Less: goodwill and core deposit intangibles		(10,462	)			(10,516	)			54				(10,623	)			161
Tangible equity (non-GAAP)	$	154,606			$	156,382				(1,776	)		$	140,942				13,664
Outstanding common shares		6,865,921				6,865,921				-				6,970,631				(104,710	)
Tangible book value per share (non-GAAP)	$	22.52			$	22.78			$	(0.26	)		$	20.22			$	2.30
Book value per share (GAAP)	$	24.04			$	24.31			$	(0.27	)		$	21.74			$	2.30
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):	As of
Summarized Consolidated Balance Sheets	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except per share data)		2023				2023				2022				2022				2022
Total cash and cash equivalents	$	42,475			$	41,810			$	38,278			$	41,665			$	37,468
Total investment securities		249,788				336,317				330,683				318,075				309,027
Total loans held for sale		63,142				48,783				44,281				60,462				188,031
Total loans, net of allowance for loan losses		1,691,289				1,598,440				1,582,940				1,474,544				1,267,816
Loan servicing rights		64,139				65,045				65,598				67,194				69,039
Total assets		2,260,421				2,239,606				2,196,919				2,093,725				2,006,666
Retail deposits	$	1,245,534			$	1,206,154			$	1,211,677			$	1,223,330			$	1,186,582
Brokered deposits		414,231				336,728				326,164				292,504				159,125
Total deposits		1,659,765				1,542,882				1,537,841				1,515,834				1,345,707
Federal Home Loan Bank borrowings		345,000				437,795				377,643				307,303				404,098
Common stock and additional paid-in capital	$	27,518			$	27,443			$	27,425			$	26,848			$	27,236
Retained earnings - substantially restricted		168,015				166,652				163,890				161,927				161,438
Accumulated other comprehensive income (loss)		(17,565	)			(14,199	)			(19,000	)			(27,079	)			(12,560	)
Unearned stock compensation		(1,113	)			(1,211	)			(1,361	)			(969	)			(1,075	)
Less treasury stock, at cost		(11,787	)			(11,787	)			(10,810	)			(9,162	)			(5,826	)
Total stockholders' equity		165,068				166,898				160,144				151,565				169,213
Outstanding common shares		6,865,921				6,865,921				6,917,921				6,970,631				7,110,706
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Summarized Consolidated Statements of Income	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except per share data)		2023				2023				2022				2022				2022
Total interest income	$	26,798			$	24,811			$	23,483			$	21,152			$	18,479
Total interest expense		11,933				9,899				7,222				4,327				2,568
Net interest income		14,865				14,912				16,261				16,825				15,911
Provision for loan losses		441				372				984				880				532
Net interest income after provision for loan losses		14,424				14,540				15,277				15,945				15,379
Total noninterest income		7,196				7,516				5,188				4,531				10,033
Total noninterest expense		18,965				17,999				17,511				19,514				22,835
Income before income taxes		2,655				4,057				2,954				962				2,577
Income tax expense (benefit)		331				333				83				(446	)			(61	)
Net income	$	2,324			$	3,724			$	2,871			$	1,408			$	2,638
Net income per share, basic	$	0.34			$	0.54			$	0.42			$	0.20			$	0.37
Weighted average shares outstanding, basic		6,816,608				6,842,897				6,915,909				6,988,873				7,073,204
Net income per share, diluted	$	0.34			$	0.54			$	0.41			$	0.20			$	0.37
Weighted average shares outstanding, diluted		6,819,748				6,881,496				6,972,055				7,056,138				7,145,288
	Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
Consolidated Performance Ratios (annualized)		2023				2023				2022				2022				2022
Return on average assets		0.41	%			0.68	%			0.54	%			0.28	%			0.55	%
Return on average equity		5.60	%			9.15	%			7.50	%			3.30	%			6.06	%
Return on average common stockholders' equity		5.60	%			9.15	%			7.50	%			3.30	%			6.06	%
Net interest margin (tax equivalent basis)		2.94	%			3.06	%			3.41	%			3.75	%			3.77	%
Efficiency ratio		85.97	%			80.25	%			81.64	%			91.37	%			88.02	%
	As of or for the Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
Consolidated Asset Quality Ratios		2023				2023				2022				2022				2022
Nonperforming loans as a percentage of total loans		0.69	%			0.77	%			0.72	%			0.73	%			0.77	%
Nonperforming assets as a percentage of total assets		0.62	%			0.67	%			0.64	%			0.65	%			0.63	%
Allowance for loan losses as a percentage of total loans		0.99	%			1.02	%			1.01	%			1.03	%			1.17	%
Allowance for loan losses as a percentage of nonperforming loans		143.83	%			132.20	%			139.55	%			141.49	%			151.59	%
Net charge-offs to average outstanding loans		0.00	%			-0.00	%			0.02	%			0.03	%			0.00	%
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Segmented Statements of Income Information	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except per share data)		2023				2023				2022				2022				2022
Core Banking Segment:
Net interest income	$	13,407			$	13,632			$	15,008			$	14,994			$	13,848
Provision for loan losses		880				422				701				769				910
Net interest income after provision for loan losses		12,527				13,210				14,307				14,225				12,938
Noninterest income		1,965				1,733				1,928				1,808				2,379
Noninterest expense		11,010				10,651				9,797				10,499				10,187
Income before income taxes		3,482				4,292				6,438				5,534				5,130
Income tax expense		561				401				946				735				568
Net income	$	2,921			$	3,891			$	5,492			$	4,799			$	4,562
SBA Lending Segment (Q2):
Net interest income	$	1,098			$	1,093			$	995			$	1,182			$	1,449
Provision (credit) for loan losses		(439	)			(50	)			283				111				(378	)
Net interest income after provision (credit) for loan losses		1,537				1,143				712				1,071				1,827
Noninterest income		580				1,636				754				480				584
Noninterest expense		2,107				2,662				1,924				1,891				2,341
Income (loss) before income taxes		10				117				(458	)			(340	)			70
Income tax expense (benefit)		(21	)			20				(107	)			(123	)			26
Net income (loss)	$	31			$	97			$	(351	)		$	(217	)		$	44
Mortgage Banking Segment:
Net interest income		360			$	187			$	258			$	649			$	614
Provision for loan losses		-				-				-				-				-
Net interest income after provision for loan losses		360				187				258				649				614
Noninterest income		4,651				4,147				2,506				2,243				7,070
Noninterest expense		5,848				4,686				5,790				7,124				10,307
Loss before income taxes		(837	)			(352	)			(3,026	)			(4,232	)			(2,623	)
Income tax benefit		(209	)			(88	)			(756	)			(1,058	)			(655	)
Net loss	$	(628	)		$	(264	)		$	(2,270	)		$	(3,174	)		$	(1,968	)
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Segmented Statements of Income Information	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except per share data)		2023				2023				2022				2022				2022
Net Income (Loss) Per Share by Segment
Net income per share, basic - Core Banking	$	0.43			$	0.57			$	0.80			$	0.68			$	0.64
Net income (loss) per share, basic - SBA Lending (Q2)		-				0.01				(0.05	)			(0.03	)			0.01
Net loss per share, basic - Mortgage Banking		(0.09	)			(0.04	)			(0.33	)			(0.45	)			(0.28	)
Total net income per share, basic	$	0.34			$	0.54			$	0.42			$	0.20			$	0.37
Net Income (Loss) Per Diluted Share by Segment
Net income per share, diluted - Core Banking	$	0.43			$	0.57			$	0.79			$	0.68			$	0.64
Net income (loss) per share, diluted - SBA Lending (Q2)		-				0.01				(0.05	)			(0.03	)			0.01
Net loss per share, diluted - Mortgage Banking		(0.09	)			(0.04	)			(0.33	)			(0.45	)			(0.28	)
Total net income per share, diluted	$	0.34			$	0.54			$	0.41			$	0.20			$	0.37
Return on Average Assets by Segment (annualized)
Core Banking		0.61	%			0.85	%			1.17	%			1.08	%			1.12	%
SBA Lending		0.15	%			0.42	%			(1.38	%)			(0.85	%)			0.17	%
Mortgage Banking		(2.24	%)			(1.14	%)			(9.31	%)			(9.44	%)			(4.50	%)
Efficiency Ratio by Segment (annualized)
Core Banking		71.62	%			69.32	%			57.85	%			62.49	%			62.78	%
SBA Lending		125.57	%			97.54	%			110.01	%			113.78	%			115.15	%
Mortgage Banking		116.70	%			108.12	%			209.48	%			246.33	%			134.14	%
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Noninterest Expense Detail by Segment	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands)		2023				2023				2022				2022				2022
Core Banking Segment:
Compensation (3)	$	4,978			$	5,578			$	5,275			$	4,444			$	5,995			$	1,017
Occupancy		1,738				1,401				1,443				1,374				1,412			-$	326
Advertising		334				298				213				272				284			-$	50
Other		3,960				3,374				2,866				4,409				2,496			-$	1,464
Total Noninterest Expense	$	11,010			$	10,651			$	9,797			$	10,499			$	10,187
SBA Lending Segment (Q2):
Compensation	$	1,803			$	1,800			$	1,622			$	1,690			$	1,619			-$	184
Occupancy		70				70				54				41				60			-$	10
Advertising		11				8				2				8				3			-$	8
Other		223				784				246				152				659			$	436
Total Noninterest Expense	$	2,107			$	2,662			$	1,924			$	1,891			$	2,341
Mortgage Banking Segment:
Compensation (3)	$	4,357			$	3,029			$	3,788			$	5,091			$	7,601			$	3,244
Occupancy		469				449				363				491				597			$	128
Advertising		191				213				203				319				519			$	328
Other		831				995				1,436				1,223				1,590			$	759
Total Noninterest Expense	$	5,848			$	4,686			$	5,790			$	7,124			$	10,307
(3) Compensation includes increases for Core Banking and corresponding decreases for Mortgage																					$	4,077
Banking segment that represent intersegment allocations for loans originated by the																					-$	208
Mortgage Banking segment to be held for investment in the Core Banking loan portfolio of:	$	1,440			$	1,328			$	1,192			$	945			$	1,164			$	270
																					-$	269
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
Mortgage Banking Noninterest Expense Fixed vs. Variable		2023				2023				2022				2022				2022
(In thousands)
Noninterest Expense - Fixed Expenses	$	3,715			$	3,513			$	4,561			$	5,724			$	6,989
Noninterest Expense - Variable Expenses (4)		2,133				1,173				1,229				1,400				3,318
Total Noninterest Expense	$	5,848		12,202	$	4,686		12,202	$	5,790		12,202	$	7,124		12,202	$	10,307
	Three Months Ended
SBA Lending (Q2) Data	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except percentage data)		2023				2023				2022				2022				2022
Final funded loans guaranteed portion sold, SBA	$	7,721			$	15,337			$	11,293			$	3,772			$	5,364
Gross gain on sales of loans, SBA	$	780			$	1,293			$	936			$	393			$	592
Weighted average gross gain on sales of loans, SBA		10.10	%			8.43	%			8.29	%			10.42	%			11.04	%
Net gain on sales of loans, SBA (5)	$	497			$	907			$	775			$	249			$	486
Weighted average net gain on sales of loans, SBA		6.44	%			5.91	%			6.86	%			6.60	%			9.06	%
	Three Months Ended
Mortgage Banking Data	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except percentage data)		2023				2023				2022				2022				2022
Mortgage originations for sale in the secondary market	$	199,601			$	115,011			$	77,605			$	185,981			$	421,426
Mortgage sales	$	185,557			$	99,711			$	96,177			$	241,804			$	426,200
Gross gain on sales of loans, mortgage banking (6)	$	3,570			$	2,308			$	1,217			$	2,630			$	7,419
Weighted average gross gain on sales of loans, mortgage banking		1.92	%			2.31	%			1.27	%			1.09	%			1.74	%
Mortgage banking income (7)	$	4,668			$	4,149			$	2,496			$	2,246			$	7,093
(4) Variable expenses include incentive compensation and advertising expenses.
(5) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.
(6) Inclusive of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees, and net of lender credits and other investor expenses.
(7) Inclusive of loan fees, servicing income, gains or losses on mortgage servicing rights, fair value adjustments and gains or losses on derivative instruments, and net of lender credits and other investor expenses.
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Summarized Consolidated Average Balance Sheets	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands)		2023				2023				2022				2022				2022
Interest-earning assets
Average balances:
Interest-bearing deposits with banks	$	20,661			$	27,649			$	19,379			$	28,318			$	25,068
Loans, excluding PPP loans		1,719,733				1,621,147				1,583,182				1,479,167				1,385,637
Investment securities - taxable		109,319				110,373				111,936				94,836				103,536
Investment securities - nontaxable		234,118				242,530				241,504				230,312				202,534
FRB and FHLB stock		24,509				23,289				20,063				19,890				18,691
Total interest-earning assets	$	2,108,340			$	2,024,988			$	1,976,064			$	1,852,523			$	1,735,466
Interest income (tax equivalent basis):
Interest-bearing deposits with banks	$	267			$	192			$	144			$	97			$	37
Loans		23,279				21,339				20,222				18,029				15,965
Investment securities - taxable		984				957				955				740				769
Investment securities - nontaxable		2,456				2,533				2,505				2,352				1,987
FRB and FHLB stock		423				364				220				265				169
Total interest income (tax equivalent basis)	$	27,409			$	25,385			$	24,046			$	21,483			$	18,927
Weighted average yield (tax equivalent basis, annualized):
Interest-bearing deposits with banks		5.17	%			2.78	%			2.97	%			1.37	%			0.59	%
Loans		5.41	%			5.27	%			5.11	%			4.88	%			4.61	%
Investment securities - taxable		3.60	%			3.47	%			3.41	%			3.12	%			2.97	%
Investment securities - nontaxable		4.20	%			4.18	%			4.15	%			4.08	%			3.92	%
FRB and FHLB stock		6.90	%			6.25	%			4.39	%			5.33	%			3.62	%
Total interest-earning assets		5.20	%			5.01	%			4.87	%			4.64	%			4.36	%
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Summarized Consolidated Average Balance Sheets	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands)		2023				2023				2022				2022				2022
Interest-bearing liabilities
Average balances:
Interest-bearing deposits	$	1,278,776			$	1,251,080			$	1,213,419			$	1,125,659			$	998,868
Fed funds purchased		11				-				-				-				-
Federal Home Loan Bank borrowings		434,182				374,593				311,146				301,027				325,460
Subordinated debt and other borrowings		49,339				50,293				88,304				50,179				50,152
Total interest-bearing liabilities	$	1,762,308			$	1,675,966			$	1,612,869			$	1,476,865			$	1,374,480
Interest expense:
Interest-bearing deposits	$	7,791			$	6,265			$	4,158			$	2,306			$	1,047
Fed funds purchased		-				-				-				-				-
Federal Home Loan Bank borrowings		3,446				2,915				1,919				1,111				811
Subordinated debt and other borrowings		696				719				1,145				714				710
Total interest expense	$	11,933			$	9,899			$	7,222			$	4,131			$	2,568
Weighted average cost (annualized):
Interest-bearing deposits		2.44	%			2.00	%			1.37	%			0.82	%			0.42	%
Federal Home Loan Bank borrowings		3.17	%			3.11	%			2.47	%			1.48	%			1.00	%
Subordinated debt and other borrowings		5.64	%			5.72	%			5.19	%			5.69	%			5.66	%
Total interest-bearing liabilities		2.71	%			2.36	%			1.79	%			1.12	%			0.75	%
Net interest income (taxable equivalent basis)		15,476				15,486				16,824				17,352				16,359
Less: taxable equivalent adjustment		(611	)			(574	)			(563	)			(527	)			(448	)
Net interest income		14,865				14,912				16,261				16,825				15,911
Interest rate spread (tax equivalent basis, annualized)		2.49	%			2.65	%			3.08	%			3.52	%			3.61	%
Net interest margin (tax equivalent basis, annualized)		2.94	%			3.06	%			3.41	%			3.75	%			3.77	%