GREENFIELD, Wis., Nov. 8, 2022
/PRNewswire/ -- 1895 Bancorp of Wisconsin, Inc. (NASDAQ: BCOW) (the
"Company"), the holding company for PyraMax Bank, today announced
unaudited financial results for the quarter and nine months ended
September 30, 2022.
Financial Summary
Operating Results for the Three Months Ended September 30, 2022
Net Income (Loss). We recorded net income of
$124,000 for the three months ended
September 30, 2022, an increase of $239,000 from a net loss of $115,000 recorded for the three months ended
September 30, 2021. This increase was primarily due to a
$915,000 increase in net interest
income after provision for loan losses, which was partially offset
by a $449,000 increase in noninterest
expense, a $149,000 decrease in
noninterest income and a $78,000
increase in income tax expense.
Net Interest Income. Net interest income
increased $885,000, or 29.2%, to
$3.9 million for the three months
ended September 30, 2022, from $3.0
million for the three months ended September 30, 2021.
This increase was primarily due to a $624,000 increase in interest and fees on loans,
a $245,000 increase in interest
earned on taxable securities and a $65,000 increase in interest earned on other
interest-earning assets. The increase in interest and fees
earned on loans was primarily due to a $22.3
million increase in the average amount of loans outstanding,
from $330.4 million in the third
quarter of 2021 to $352.7 million in
the third quarter of 2022, and a 48 basis point increase in the
yield earned on loans, from 3.53% for the third quarter of 2021 to
4.01% in the third quarter of 2022. The increase in the yield
earned on loans during the third quarter of 2022 was due to an
increase in market rates as well as the collection of $212,000 in loan prepayment fees during the
quarter. The increase in loans was consistent with the
Company's strategy to grow the loan portfolio. The increase
in interest earned on taxable securities was primarily due to the
Company's strategy to deploy excess liquidity into securities,
which resulted in the average outstanding balance of securities
increasing $34.9 million, or 38.8%,
from $89.7 million for the third
quarter of 2021 to $124.6 million for
the third quarter of 2022. These increases were partially
offset by a $49,000 increase in
interest expense. Our net interest rate spread increased 78
basis points to 2.97% for the three months ended September 30,
2022, from 2.19% for the three months ended September 30,
2021. Our net interest margin also increased 78 basis points to
3.11% from 2.33% over the same period.
Provision for Loan Losses. The Company did
not make any provision for loan losses during the three months
ended September 30, 2022, compared to a $30,000 provision during the three months ended
September 30, 2021. The allowance for loan losses was
$3.2 million, or 0.89%, of total
loans at September 30, 2022, compared to $2.9 million, or 0.88% of total loans at
December 31, 2021. Nonaccrual loans constituted 0.21% of total
loans at September 30, 2022, compared to 0.31% of total loans
at December 31, 2021.
Non-interest Income. Non-interest
income decreased $149,000, or 23.7%,
to $479,000 for the three months
ended September 30, 2022, from $628,000 for the three months ended
September 30, 2021. The decrease was primarily the
result of a $365,000 decrease in net
gain on sale of loans, partially offset by a $218,000 increase in income associated with
changes in the market value of equity securities. The
decrease in the net gain on sale of loans was primarily due to the
decrease in the sale of mortgage loans held for sale, which
decreased $26.6 million, from
$32.2 million in the third quarter of
2021 to $5.6 million in the third
quarter of 2022. The increase in the market value of marketable
equity securities was due to an increase in the market value of
mutual funds held in our deferred compensation plan. We
record an offsetting amount for the change in the market of equity
securities in non-interest expense.
Non-interest Expense. Non-interest expense
increased $449,000, or 11.8%, to
$4.3 million for the three months
ended September 30, 2022 from $3.8
million for the three months ended September 30,
2021. This increase was primarily due to a $391,000 increase in salaries and employee
benefits expense. The increase in salaries and benefits was
due primarily to a $218,000 increase
in the market value of mutual funds held in our deferred
compensation plan. We record an offsetting amount for the
change in the market of equity securities in non-interest
income. The remaining increase in salaries and benefits
expenses was primarily the result of a $65,000 increase in wages, a $39,000 increase in ESOP expense and a
$21,000 increase in the accrual for
incentive bonuses.
Operating Results for the Nine Months Ended September 30, 2022
Net (Loss) Income. We recorded a net loss of
$172,000 for the nine months ended
September 30, 2022, compared to net income of $354,000 recorded for the nine months ended
September 30, 2021. This decrease was primarily due to a
$2.4 million decrease in non-interest
income, which was partially offset by a $1.3
million increase in net interest income after provision for
loan losses, a $372,000 decrease in
noninterest expense and a $217,000
decrease in income tax expense.
Net Interest Income. Net interest income
increased $1.5 million, or 15.6%, to
$10.8 million for the nine months
ended September 30, 2022 from $9.3
million for the nine months ended September 30, 2021.
Interest and dividend income increased $1.4
million, or 12.9%, to $11.9
million for the nine months ended September 30, 2022,
from $10.5 million for the nine
months ended September 30, 2021. The increase was due
primarily to an increase in interest earned on taxable securities
and an increase in interest earned on loans. Interest income
on taxable securities increased $756,000, or 77.9% from $971,000 in the first nine months of 2021 to
$1.7 million in the first nine months
of 2022. This increase was primarily due to the Company's
strategy to deploy excess liquidity into securities, which resulted
in the average outstanding balance of securities increasing
$52.4 million, or 68.5%, from
$76.5 million for the first nine
months of 2021 to $128.9 million for
the same period of 2022. The increase in interest income on
loans was primarily the result of a 12 basis point increase in the
yield earned on loans from 3.75% for the first nine months of 2021
to 3.87% for the same period in 2022 and a $7.4 million increase in average loans
outstanding for the same period. Interest expense decreased
$91,000, or 7.6%, to $1.1 million for the nine months ended
September 30, 2022, from $1.2
million for the nine months ended September 30, 2021.
Our net interest rate spread increased 36 basis points to 2.73% for
the nine months ended September 30, 2022, from 2.37% for the
nine months ended September 30, 2021, while our net interest
margin also increased 35 basis points to 2.86% from 2.51% over the
same period.
Provision for Loan Losses. Provision for
loan losses for the nine months ended September 30, 2022 was
$210,000 compared to $30,000 for the nine months ended
September 30, 2021. The increase in provision was
primarily due to the increase in loans outstanding.
Non-interest Income. Non-interest
income decreased $2.4 million, or
70.8%, to $986,000 for the nine
months ended September 30, 2022 from $3.4 million for the nine months ended
September 30, 2021. This decrease was due primarily to a
$1.1 million decrease in net gains on
the sale of loans, an $887,000
decline in income associated with changes in the market value of
marketable equity securities and a $456,000 decrease in loan servicing fees.
The decrease in the net gain on sale of loans was primarily due to
the decrease in the sale of mortgage loans held for sale, which
decreased $81.8 million, from
$102.2 million in the first nine
months of 2021 to $20.4 million in
the same period of 2022. The decrease in the market value of
marketable equity securities was due to a decrease in the market
value of mutual funds held in our deferred compensation plan.
The decrease in loan servicing fees was primarily due to the
reversal of a $369,000 impairment
previously recorded against the value of mortgage servicing rights
in the first nine months of 2021. The value of mortgage servicing
rights increased as a result of an increase in market interest
rates.
Non-interest Expense. Non-interest expense
decreased $372,000, or 3.0%, to
$11.9 million for the nine months
ended September 30, 2022 from $12.3
million for the nine months ended September 30, 2021.
This decrease was primarily due to a $444,000 decrease in salaries and employee
benefits. The decrease in salaries and employee benefits primarily
resulted from a $887,000 decline in
the market value of marketable equity securities held in our
deferred compensation plan. This decrease was partially
offset by a $443,000 increase in
other salaries and benefits expenses, which was primarily the
result of a $134,000 increase in
wages, a $91,000 increase in ESOP
expense and a $156,000 increase in
the accrual for incentive bonuses.
Financial Condition at September 30,
2022
Total Assets. Total assets decreased
$10.3 million, or 1.9%, to
$529.3 million at September 30,
2022 from $539.6 million at
December 31, 2021. This decrease was primarily due to a
$51.1 million decrease in cash and
cash equivalents, partially offset by a $31.0 million increase in loans held for
investment, a $6.0 million increase
in available-for-sale investment securities and a $5.3 million increase in other assets.
Cash and Cash Equivalents. Cash and cash
equivalents decreased $51.1 million,
or 76.5%, to $15.7 million at
September 30, 2022 from $66.8
million at December 31, 2021. This decrease was
primarily due to the purchase of $37.1
million in available-for-sale securities, $31.5 million of net loan growth, $19.0 million in originations of loans held for
sale, $8.5 million in principal
payments on FHLB advances and a $5.2
million decrease in deposits. These decreases were
partially offset by $10.0 million
from the issuance of additional FHLB advances, $20.4 million from the sale of mortgage loans
held for sale, $14.6 million from
maturities, prepayments and calls of available-for-sale securities
and an $8.4 million net increase in
advance payments by borrowers for taxes and insurance.
Available-for-Sale Securities.
Available-for-sale securities increased $6.0
million, or 5.3%, to $118.4
million at September 30, 2022, from $112.4 million at December 31, 2021. The
increase was primarily due to purchases of securities totaling
$37.1 million during the nine months
ended September 30, 2022, partially offset by maturities,
prepayments and calls of securities totaling $14.6 million and a reduction in the unrealized
gain held within the portfolio of $16.5
million, resulting in a net unrealized loss of $16.3 million at September 30, 2022.
The increase in securities purchases was the result of management's
strategy, implemented in the fourth quarter of 2021, to invest a
significant portion of the Company's liquidity that was held in
cash and cash equivalents into securities with higher yields to
increase future earnings, while maintaining a high degree of
liquidity.
Loans Held for Sale. Loans held for sale
decreased $818,000, or 69.1%, to
$365,000 at September 30, 2022,
from $1.2 million at
December 31, 2021. This decrease was due primarily to a
decrease in the volume of first mortgage residential real estate
loan originations sold into the secondary market as a result of the
changing interest rate environment. Mortgage loan
originations and sales were $19.0
million and $20.4 million,
respectively, during the first nine months of 2022 compared to
$90.9 million and $102.2 million, respectively, for the same period
in 2021.
Net Loans. Net loans held for investment
increased $30.9 million, or 9.6%, to
$354.7 million at September 30,
2022, from $323.8 million at
December 31, 2021. The majority of this growth was in
commercial real estate loans which increased $22.5 million during this period to $207.7 million. Also contributing to this
growth was an increase in non-real estate commercial loans which
grew $6.9 million during this period
to $45.1 million. The growth in
these types of loans is consistent with the Company's long-term
loan strategy to increase the level of commercial and commercial
real estate loans within our portfolio.
Other Assets. Other assets increased
$5.3 million, or 86.7%, from
$6.1 million at December 31,
2021 to $11.4 million at
September 30, 2022. This increase was primarily due to a
$4.6 million increase in deferred tax
assets, which was primarily the result of the increase in
unrealized losses on available-for-sale securities. Other
assets also increased as a result of a $471,000 increase in right of use lease assets as
a result of the adoption of ASU 2016-02 in the first quarter of
2022, and a $189,000 increase in
prepaid expenses, which was primarily due to the payment of annual
insurance premiums in the first quarter of 2022.
Deposits. Deposits decreased $5.2 million, or 1.4%, to $379.3 million at September 30, 2022, from
$384.5 million at December 31,
2021. This decrease was primarily due to a $6.7 million decrease in money market accounts, a
$2.4 million decrease in certificates
of deposit and a $2.0 million
decrease in interest bearing checking accounts. These decreases
were partially offset by a $3.3
million increase in statement savings accounts and a
$2.6 million increase in noninterest
bearing checking accounts.
Advance Payments by Borrowers for Taxes and
Insurance. Advance payments by borrowers for taxes
and insurance increased $8.3 million
to $10.2 million at
September 30, 2022 from $1.9
million at December 31, 2021. The increase was due to
normal seasonal activity.
Borrowings. Borrowings, consisting entirely
of FHLB advances, increased $1.5
million, or 2.7%, to $56.9
million at September 30, 2022, from $55.4 million at December 31, 2021.
Total Stockholders' Equity. Total
stockholders' equity decreased $15.0
million to $75.9 million at
September 30, 2022, from $90.9
million at December 31, 2021. The decrease was
primarily due to a $16.5 million
increase in net unrealized losses on available-for-sale securities,
which net of taxes, resulted in a $12.0
million decrease in stockholders' equity. The increase in
net unrealized losses on available-for-sale securities resulted
primarily from changes in market interest rates. The decrease
in stockholders' equity was also partially due to the repurchase
and retirement of the Company's common stock during the third
quarter of 2022 and an increase in unallocated common stock held by
the ESOP. During the third quarter of 2022, the Company
repurchased 184,270 shares of its common stock, pursuant to the
stock repurchase program that was adopted by the Board of Directors
on July 29, 2022. The
repurchase of these shares resulted in a $2.0 million decrease in stockholders'
equity. See "Note 13 - Equity and Regulatory Matters" for
additional information regarding the Company's stock repurchase
program. The increase in unallocated common shares held by
the ESOP, was the result of additional shares purchased by the ESOP
during the nine months ended September 30,
2022, which resulted in a $1.1
million decrease in stockholders' equity.
About 1895 Bancorp of Wisconsin, Inc.
1895 Bancorp of Wisconsin, Inc.
is the savings and loan holding company for PyraMax Bank. The
Company's stock trades on the NASDAQ Capital Market under the
symbol "BCOW". PyraMax Bank was established in 1895 as South
Milwaukee Savings and Loan Association and has operated in the
Milwaukee, Wisconsin market since
that time. PyraMax Bank is a full-service stock savings bank
with its corporate office in Greenfield,
Wisconsin, servicing customers in Milwaukee, Waukesha and Ozaukee counties through our six banking
offices.
Forward-Looking Statements
This release may contain certain "forward-looking statements"
that represent 1895 Bancorp of Wisconsin, Inc.'s current expectations or
beliefs concerning future events. Forward-looking statements
can be identified by the use of words such as "estimate,"
"project," "believe," "intend," "anticipate," "assume," "plan,"
"seek," "expect," "will," "may," "should," "indicate," "would,"
"believe," "contemplate," "continue," "target" and words of similar
meaning. Forward-looking statements are subject to numerous
risks and uncertainties, as described in the "Risk Factors"
disclosures included in our most recent Annual Report on Form 10-K,
filed with the U.S. Securities and Exchange Commission (the "SEC")
on March 29, 2022, as supplemented by
our subsequent Quarterly Reports on Form 10-Q and other reports
that we file with the SEC. Our SEC filings are available free
of charge at www.sec.gov. 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 news
release or made elsewhere from time to time by 1895 Bancorp of
Wisconsin, Inc. or on its
behalf. 1895 Bancorp of Wisconsin, Inc. disclaims any obligation to
update such forward-looking statements.
Contact: David R.
Ball
Telephone: (414) 235-5344
1895 Bancorp of
Wisconsin, Inc.
|
|
|
Condensed
Consolidated Balance Sheets -Unaudited
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2022
|
|
6/30/2022
|
|
3/31/2022
|
|
12/31/2021
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
15,702
|
|
$
20,221
|
|
$
50,586
|
|
$
66,803
|
Available for sale
securities, stated at fair value
|
|
118,414
|
|
126,676
|
|
132,722
|
|
112,440
|
Loans, held for
sale
|
|
|
|
365
|
|
262
|
|
944
|
|
1,183
|
Loans
|
|
|
|
|
|
357,920
|
|
352,751
|
|
326,703
|
|
326,647
|
Allowance for loan
losses
|
|
|
|
3,180
|
|
3,132
|
|
3,017
|
|
2,858
|
Net loans
|
|
|
|
|
354,740
|
|
349,619
|
|
323,686
|
|
323,789
|
Other assets
|
|
|
|
|
40,096
|
|
38,848
|
|
38,347
|
|
35,424
|
TOTAL
ASSETS
|
|
|
|
|
$
529,317
|
|
$ 535,626
|
|
$ 546,285
|
|
$ 539,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
$
379,298
|
|
$ 383,062
|
|
$ 390,953
|
|
$ 384,501
|
FHLB
advances
|
|
|
|
|
56,951
|
|
57,435
|
|
58,449
|
|
55,442
|
Other
liabilities
|
|
|
|
|
17,165
|
|
14,163
|
|
11,681
|
|
8,803
|
Total
Liabilities
|
|
|
|
|
453,414
|
|
454,660
|
|
461,083
|
|
448,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
75,903
|
|
80,966
|
|
85,202
|
|
90,893
|
Total Liabilities
and Stockholders' Equity
|
|
$
529,317
|
|
$ 535,626
|
|
$ 546,285
|
|
$ 539,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Asset
Quality Data:
|
|
|
|
|
|
|
|
|
|
Nonaccrual to total
loans
|
|
|
|
0.21 %
|
|
0.23 %
|
|
0.29 %
|
|
0.31 %
|
ALLL to total loans
(Excluding Loans held for sale)
|
0.89 %
|
|
0.89 %
|
|
0.93 %
|
|
0.88 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1895 Bancorp of
Wisconsin, Inc.
|
Condensed
Consolidated Statements of Operations-Unaudited
|
(In thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
|
|
9/30/2022
|
|
9/30/2021
|
|
9/30/2022
|
|
9/30/2021
|
Total interest and
dividend income
|
|
|
$
4,315
|
|
$
3,381
|
|
$
11,868
|
|
$
10,509
|
Total interest
expense
|
|
|
|
398
|
|
349
|
|
1,108
|
|
1,199
|
Net interest
income
|
|
|
|
3,917
|
|
3,032
|
|
10,760
|
|
9,310
|
Provision for loan
losses
|
|
|
|
0
|
|
30
|
|
210
|
|
30
|
Net interest income
after provision for loan losses
|
3,917
|
|
3,002
|
|
10,550
|
|
9,280
|
Noninterest
income
|
|
|
|
479
|
|
628
|
|
986
|
|
3,371
|
Noninterest
expense
|
|
|
|
4,251
|
|
3,802
|
|
11,880
|
|
12,252
|
Income (loss) before
income taxes
|
|
|
145
|
|
(172)
|
|
(344)
|
|
399
|
Income tax
expense
|
|
|
|
21
|
|
(57)
|
|
(172)
|
|
45
|
Net income
(loss)
|
|
|
|
|
$
124
|
|
$
(115)
|
|
$
(172)
|
|
$
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
$
0.02
|
|
$
(0.02)
|
|
$
(0.03)
|
|
$
0.06
|
Diluted
|
|
|
|
|
|
$
0.02
|
|
$
(0.02)
|
|
$
(0.03)
|
|
$
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
5,810,185
|
|
6,011,247
|
|
5,842,184
|
|
6,035,289
|
Diluted
|
|
|
|
|
|
5,983,241
|
|
6,011,247
|
|
5,842,184
|
|
6,262,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
spread
|
|
|
|
2.97 %
|
|
2.19 %
|
|
2.73 %
|
|
2.37 %
|
Net interest
margin
|
|
|
|
|
3.11 %
|
|
2.33 %
|
|
2.86 %
|
|
2.51 %
|
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SOURCE PyraMax Bank / 1895 Bancorp of Wisconsin, Inc.