☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland |
61-1993378 | |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
7001 West Edgerton Avenue Greenfield, Wisconsin |
53220 | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, par value $0.01 per share |
BCOW |
The NASDAQ Stock Market, LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Item 1. |
Financial Statements |
March 31, 2022 |
December 31, 2021 |
|||||||
(unaudited) |
||||||||
Assets |
| |||||||
Cash and due from banks |
$ | 46,093 | $ | 65,300 | ||||
Fed funds sold |
4,493 | 1,503 | ||||||
|
|
|
|
|||||
Cash and cash equivalents |
50,586 | 66,803 | ||||||
Marketable equity securities, stated at fair value |
3,366 | 3,544 | ||||||
Available for sale securities, stated at fair value |
132,722 | 112,440 | ||||||
Loans held for sale |
944 | 1,183 | ||||||
Loans, net |
323,686 | 323,789 | ||||||
Premises and equipment, net |
5,809 | 5,864 | ||||||
Mortgage servicing rights, net |
1,988 | 2,036 | ||||||
Federal Home Loan Bank (FHLB) stock, at cost |
3,032 | 3,032 | ||||||
Accrued interest receivable |
1,033 | 948 | ||||||
Cash value of life insurance |
13,996 | 13,892 | ||||||
Other assets |
9,123 | 6,108 | ||||||
|
|
|
|
|||||
TOTAL ASSETS |
$ | 546,285 | $ | 539,639 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
| |||||||
Deposits |
$ | 390,953 | $ | 384,501 | ||||
Advance payments by borrowers for taxes and insurance |
4,735 | 1,860 | ||||||
FHLB advances |
58,449 | 55,442 | ||||||
Accrued interest payable |
117 | 109 | ||||||
Other liabilities |
6,829 | 6,834 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES |
461,083 | 448,746 | ||||||
|
|
|
|
|||||
Common stock (par value $0.01 per share) |
||||||||
Authorized - 90,000,000 shares at March 31, 2022 and December 31, 2021 |
||||||||
Issued – 6,401,261 at March 31, 2022 and 6,402,571 at December 31, 2021 (includes 87,842 and 97,128 unvested shares, respectively) |
||||||||
Outstanding – 6,371,198 at March 31, 2022 and 6,372,508 at December 31, 2021 (includes 87,842 and 97,128 unvested shares, respectively) |
64 | 64 | ||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized at March 31, 2022 and December 31, 2021 |
— | — | ||||||
Additional paid-in capital |
52,852 | 52,805 | ||||||
Unallocated common stock of Employee Stock Ownership Plan (ESOP), 417,356 a nd 377,077 shares at March 31, 2022 and December 31, 2021, respectively |
(3,900 | ) | (3,432 | ) | ||||
Less treasury stock at cost, 30,063 at March 31, 2022 and December 31, 2021 |
(301 | ) | (301 | ) | ||||
Retained earnings |
41,560 | 41,615 | ||||||
Accumulated other comprehensive (loss) income, net of income taxes |
(5,073 | ) | 142 | |||||
|
|
|
|
|||||
Total stockholders’ equity |
85,202 | 90,893 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 546,285 | $ | 539,639 | ||||
|
|
|
|
Three months ended March 31 |
||||||||
2022 |
2021 |
|||||||
Interest and dividend income: |
||||||||
Loans, including fees |
$ | 3,290 | $ | 3,294 | ||||
Securities, taxable |
548 | 267 | ||||||
Other |
48 | 56 | ||||||
Total interest and dividend income |
3,886 | 3,617 | ||||||
Interest expense: |
||||||||
Interest-bearing deposits |
169 | 256 | ||||||
Borrowed funds |
172 | 200 | ||||||
Total interest expense |
341 | 456 | ||||||
Net interest income |
3,545 | 3,161 | ||||||
Provision for loan losses |
105 | — | ||||||
Net interest income after provision for loan losses |
3,440 | 3,161 | ||||||
Noninterest income: |
||||||||
Service charges and other fees |
236 | 222 | ||||||
Loan servicing, net |
177 | 574 | ||||||
Net gain on sale of loans |
78 | 567 | ||||||
Net gain on sale of securities |
— | 12 | ||||||
Increase in cash surrender value of insurance |
104 | 100 | ||||||
Unrealized (loss) gain on marketable equity securities |
(210 | ) | 131 | |||||
Other |
6 | 4 | ||||||
Total noninterest income |
391 | 1,610 | ||||||
Noninterest expense: |
||||||||
Salaries and employee benefits |
2,285 | 2,455 | ||||||
Advertising and promotions |
14 | 18 | ||||||
Data processing |
201 | 197 | ||||||
Occupancy and equipment |
354 | 373 | ||||||
FDIC assessment |
27 | 33 | ||||||
Other |
1,065 | 1,013 | ||||||
Total noninterest expense |
3,946 | 4,089 | ||||||
(Loss) income before income taxes |
(115 | ) | 682 | |||||
Income tax (benefit) expense |
(60 | ) | 161 | |||||
Net (loss) income |
$ | (55 | ) | $ | 521 | |||
(Loss) earnings per common share: |
||||||||
Basic (1) |
$ | (0.01 | ) | $ | 0.11 | |||
Diluted (1) |
$ | (0.01 | ) | $ | 0.11 | |||
Average common shares outstanding: |
||||||||
Basic (1) |
5,873,964 | 4,588,688 | ||||||
Diluted (1) |
5,873,964 | 4,697,342 |
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). Refer to Note 14 Earnings Per Share for retroactive recognition given to the exchange ratio applied in the Conversion for the three months ended March 31, 2021. |
Three months ended March 31 |
||||||||
2022 |
2021 |
|||||||
Net (loss) income |
$ | (55 | ) | $ | 521 | |||
|
|
|
|
|||||
Other comprehensive (loss) income: |
||||||||
Unrealized holding (losses) gains arising during the period |
(7,144 | ) | (801 | ) | ||||
Reclassification adjustment for gains realized in net income |
— | (12 | ) | |||||
|
|
|
|
|||||
Other comprehensive (loss) income before tax effect |
(7,144 | ) | (813 | ) | ||||
Tax effect of other comprehensive (loss) income items |
1,929 | 219 | ||||||
|
|
|
|
|||||
Other comprehensive (loss) income, net of tax |
(5,215 | ) | (594 | ) | ||||
|
|
|
|
|||||
Comprehensive (loss) income |
$ | (5,270 | ) | $ | (73 | ) | ||
|
|
|
|
|||||
|
|
|
|
Common stock |
Additional paid- in capital |
Treasury Stock |
Unallocated common stock of ESOP |
Retained earnings |
Accumulated other comprehensive income (loss) |
Total |
||||||||||||||||||||||
Balance as of January 1, 2021 |
$ | 49 | $ | 20,134 | $ | (1,228 | ) | $ | (1,615 | ) | $ | 41,530 | $ | 1,138 | $ | 60,008 | ||||||||||||
Net income |
— | — | — | — | 521 | — | 521 | |||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (594 | ) | (594 | ) | |||||||||||||||||||
Purchase of treasury stock |
— | — | (15 | ) | — | — | — | (15 | ) | |||||||||||||||||||
ESOP shares committed to be released (1,755 shares) (1) |
— | 3 | — | 18 | — | — | 21 | |||||||||||||||||||||
Issuance of treasury stock – stock compensation plan |
— | (15 | ) | 15 | — | — | — | — | ||||||||||||||||||||
Stock compensation expense |
— | 58 | — | — | — | — | 58 | |||||||||||||||||||||
Balance as of March 31, 2021 |
$ | 49 | $ | 20,180 | $ | (1,228 | ) | $ | (1,597 | ) | $ | 42,051 | $ | 544 | $ | 59,999 | ||||||||||||
Balance as of January 1, 2022 |
$ | 64 | $ | 52,805 | $ | (301 | ) | $ | (3,432 | ) | $ | 41,615 | $ | 142 | $ | 90,893 | ||||||||||||
Net loss |
— | — | — | — | (55 | ) | — | (55 | ) | |||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (5,215 | ) | (5,215 | ) | |||||||||||||||||||
Reimbursement of stock offering costs |
— | 1 | — | — | — | — | 1 | |||||||||||||||||||||
Purchase of ESOP shares |
— | — | — | (517 | ) | — | — | (517 | ) | |||||||||||||||||||
ESOP shares committed to be released (4,933 shares) |
— | 2 | — | 49 | — | — | 51 | |||||||||||||||||||||
Retirement of common stock |
— | (15 | ) | — | — | — | — | (15 | ) | |||||||||||||||||||
Stock compensation expense |
— | 59 | — | — | — | — | 59 | |||||||||||||||||||||
Balance as of March 31, 2022 |
$ | 64 | $ | 52,852 | $ | (301) | $ | (3,900 | ) | $ | 41,560 | $ | (5,073 | ) | $ | 85,202 | ||||||||||||
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
(unaudited) |
||||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ | (55 | ) | $ | 521 | |||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
Net amortization of investment securities |
43 | 49 | ||||||
Depreciation |
154 | 167 | ||||||
Provision for loan losses |
105 | — | ||||||
Net change in fair value of marketable equity securities |
210 | (131 | ) | |||||
Net gain on sale of available for sale securities |
— | (12 | ) | |||||
Stock compensation expense |
59 | 58 | ||||||
Adjustment to mortgage servicing rights valuation |
— | (369 | ) | |||||
(Benefit from) provision for deferred income tax |
(60 | ) | 161 | |||||
Originations of mortgage loans held for sale |
(6,504 | ) | (40,153 | ) | ||||
Proceeds from sales of mortgage loans held for sale |
6,821 | 40,376 | ||||||
Net gain on sale of mortgage loans held for sale |
(78 | ) | (567 | ) | ||||
ESOP compensation |
51 | 21 | ||||||
Net change in cash value of life insurance |
(104 | ) | (100 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Net change in mortgage servicing rights |
48 | 28 | ||||||
Accrued interest receivable and other assets |
(1,111 | ) | (818 | ) | ||||
Accrued interest payable and other liabilities |
(12 | ) | (316 | ) | ||||
Net cash used in operating activities |
(433 | ) | (1,085 | ) | ||||
Cash Flows From Investing Activities |
||||||||
Proceeds from sales of available for sale securities |
— | 1,018 | ||||||
Maturities, prepayments, and calls of available for sale securities |
3,693 | 2,052 | ||||||
Purchases of available for sale securities |
(31,162 | ) | (13,158 | ) | ||||
Net change in marketable equity securities |
(32 | ) | (23 | ) | ||||
Net (increase) decrease in loans |
(2 | ) | 1,508 | |||||
Net capital expenditures for premises and equipment |
(99 | ) | (26 | ) | ||||
Net cash used in investing activities |
(27,602 | ) | (8,629 | ) | ||||
Cash Flows From Financing Activities |
||||||||
Net increase (decrease) in deposits |
6,452 | (2,190 | ) | |||||
Net increase in advance payments by borrowers for taxes and insurance |
2,875 | 3,360 | ||||||
Proceeds from issuance of Federal Home Loan Bank advances |
10,000 | — | ||||||
Principal payments on Federal Home Loan Bank advances |
(6,993 | ) | (486 | ) | ||||
Reimbursement of stock offering costs |
1 | — | ||||||
Purchases of treasury stock |
— | (15 | ) | |||||
Purchase of ESOP shares |
(517 | ) | — | |||||
Net cash provided by financing activities |
11,818 | 669 | ||||||
Net decrease in cash and cash equivalents |
(16,217 | ) | (9,045 | ) | ||||
Cash and cash equivalents at beginning of period |
66,803 | 92,526 | ||||||
Cash and cash equivalents at end of period |
$ | 50,586 | $ | 83,481 | ||||
Supplemental cash flow information: |
||||||||
Cash paid during the year for interest |
$ | 333 | $ | 496 | ||||
Noncash activities: |
||||||||
Retirement of common stock |
$ | 15 | $ | — | ||||
Issuance of treasury stock – stock compensation plans |
— | 15 |
March 31, 2022 |
||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
(in thousands) |
||||||||||||||||
U.S. Treasury notes |
$ | 29,534 | $ | — | $ | (1,528 | ) | $ | 28,006 | |||||||
Obligations of states and political subdivisions |
22,000 | 31 | (1,435 | ) | 20,596 | |||||||||||
Government-sponsored mortgage-backed securities |
80,560 | 20 | (4,065 | ) | 76,515 | |||||||||||
Asset-backed securities |
6,119 | 4 | (2 | ) | 6,121 | |||||||||||
Certificates of deposit |
1,459 | 25 | — | 1,484 | ||||||||||||
Total |
$ | 139,672 | $ | 80 | $ | (7,030 | ) | $ | 132,722 | |||||||
December 31, 2021 |
||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
(in thousands) |
||||||||||||||||
U.S. Treasury notes |
$ | 19,501 | $ | 8 | $ | (25 | ) | $ | 19,484 | |||||||
Obligations of states and political subdivisions |
20,758 | 207 | (205 | ) | 20,760 | |||||||||||
Government-sponsored mortgage-backed securities |
64,049 | 563 | (463 | ) | 64,149 | |||||||||||
Asset-backed securities |
6,479 | 45 | (1 | ) | 6,523 | |||||||||||
Certificates of deposit |
1,459 | 65 | — | 1,524 | ||||||||||||
Total |
$ | 112,246 | $ | 888 | $ | (694 | ) | $ | 112,440 | |||||||
March 31, 2022 |
||||||||
Amortized Cost |
Fair Value |
|||||||
(in thousands) |
||||||||
Debt and other securities: |
||||||||
Due in one year or less |
$ | 1,350 | $ | 1,354 | ||||
Due after one through 5 years |
18,686 | 17,993 | ||||||
Due after 5 through 10 years |
21,859 | 20,563 | ||||||
Due after 10 years |
11,098 | 10,176 | ||||||
Total debt and other securities |
52,993 | 50,086 | ||||||
Mortgage-related securities |
80,560 | 76,515 | ||||||
Asset-backed securities |
6,119 | 6,121 | ||||||
Total |
$ | 139,672 | $ | 132,722 | ||||
March 31, 2022 |
||||||||||||||||||||||||
Less than 12 months |
12 months or longer |
Total |
||||||||||||||||||||||
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
U.S. Treasury notes |
$ | 28,006 | $ | (1,528 | ) | $ | — | $ | — | $ | 28,006 | $ | (1,528 | ) | ||||||||||
Obligations of states and political subdivisions |
13,706 | (902 | ) | 3,691 | (533 | ) | 17,397 | (1,435 | ) | |||||||||||||||
Government-sponsored mortgage-backed securities |
62,610 | (3,544 | ) | 7,979 | (521 | ) | 70,589 | (4,065 | ) | |||||||||||||||
Asset-backed securities |
570 | (2 | ) | — | — | 570 | (2 | ) | ||||||||||||||||
Total |
$ | 104,892 | $ | (5,976 | ) | $ | 11,670 | $ | (1,054 | ) | $ | 116,562 | $ | (7,030 | ) | |||||||||
December 31, 2021 |
||||||||||||||||||||||||
Less than 12 months |
12 months or longer |
Total |
||||||||||||||||||||||
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
U.S. Treasury notes |
$ | 12,971 | $ | (25 | ) | $ | — | $ | — | $ | 12,971 | $ | (25 | ) | ||||||||||
Obligations of states and political subdivisions |
5,414 | (82 | ) | 4,105 | (123 | ) | 9,519 | (205 | ) | |||||||||||||||
Government-sponsored mortgage-backed securities |
39,392 | (463 | ) | — | — | 39,392 | (463 | ) | ||||||||||||||||
Asset-backed securities |
808 | (1 | ) | — | — | 808 | (1 | ) | ||||||||||||||||
Total |
$ | 58,585 | $ | (571 | ) | $ | 4,105 | $ | (123 | ) | $ | 62,690 | $ | (694 | ) | |||||||||
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Proceeds from sales of securities available-for-sale |
$ | — | $ | 1,018 | ||||
Gross realized gains |
— | 12 | ||||||
Gross realized losses |
— | — |
March 31, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Commercial: |
||||||||
Real estate |
$ | 188,256 | $ | 185,223 | ||||
Land development |
1,366 | 1,400 | ||||||
Other |
37,447 | 38,160 | ||||||
Residential real estate: |
||||||||
First mortgage |
79,767 | 80,661 | ||||||
Construction |
3,258 | 3,388 | ||||||
Consumer: |
||||||||
Home equity and lines of credit |
15,654 | 17,032 | ||||||
Other |
104 | 128 | ||||||
Subtotal |
325,852 | 325,992 | ||||||
Net deferred loan costs |
851 | 655 | ||||||
Allowance for loan losses |
(3,017 | ) | (2,858 | ) | ||||
Loans, net |
$ | 323,686 | $ | 323,789 | ||||
March 31, 2022 |
||||||||||||||||||||
30-89 Days Past Due |
90 Days or More Past Due |
Total Past Due |
Current Loans |
Total Loans |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | — | $ | — | $ | — | $ | 188,256 | $ | 188,256 | ||||||||||
Land development |
— | — | — | 1,366 | 1,366 | |||||||||||||||
Other |
— | — | — | 37,447 | 37,447 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
264 | — | 264 | 79,503 | 79,767 | |||||||||||||||
Construction |
— | — | — | 3,258 | 3,258 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— | — | — | 15,654 | 15,654 | |||||||||||||||
Other |
— | — | — | 104 | 104 | |||||||||||||||
Total |
$ | 264 | $ | — | $ | 264 | $ | 325,588 | $ | 325,852 | ||||||||||
December 31, 2021 |
||||||||||||||||||||
30-89 Days Past Due |
90 Days or More Past Due |
Total Past Due |
Current |
Total Loans |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | — | $ | — | $ | — | $ | 185,223 | $ | 185,223 | ||||||||||
Land development |
— | — | — | 1,400 | 1,400 | |||||||||||||||
Other |
33 | — | 33 | 38,127 | 38,160 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
342 | — | 342 | 80,319 | 80,661 | |||||||||||||||
Construction |
— | — | — | 3,388 | 3,388 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— | — | — | 17,032 | 17,032 | |||||||||||||||
Other |
— | — | — | 128 | 128 | |||||||||||||||
Total |
$ | 375 | $ | — | $ | 375 | $ | 325,617 | $ | 325,992 | ||||||||||
Commercial |
Residential |
Consumer |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Three months ended March 31, 2022 |
||||||||||||||||
Allowance for loan losses |
||||||||||||||||
Beginning balance |
$ | 1,657 | $ | 745 | $ | 456 | $ | 2,858 | ||||||||
Provision (credit) for loan losses |
105 | — | — | 105 | ||||||||||||
Loans charged-off |
— | — | (3 | ) | (3 | ) | ||||||||||
Recoveries |
52 | — | 5 | 57 | ||||||||||||
Ending balance |
$ | 1,814 | $ | 745 | $ | 458 | $ | 3,017 | ||||||||
Three months ended March 31, 2021 |
||||||||||||||||
Allowance for loan losses |
||||||||||||||||
Beginning balance |
$ | 1,609 | $ | 745 | $ | 349 | $ | 2,703 | ||||||||
Provision for loan losses |
— | — | — | — | ||||||||||||
Loans charged-off |
— | — | (16 | ) | (16 | ) | ||||||||||
Recoveries |
5 | — | 7 | 12 | ||||||||||||
Ending balance |
$ | 1,614 | $ | 745 | $ | 340 | $ | 2,699 | ||||||||
March 31, 2022 |
||||||||||||||||
Commercial |
Residential |
Consumer |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Loans: |
||||||||||||||||
Individually evaluated for impairment |
$ | 4,082 | $ | 1,336 | $ | 36 | $ | 5,454 | ||||||||
Collectively evaluated for impairment |
222,987 | 81,689 | 15,722 | 320,398 | ||||||||||||
Total loans |
$ | 227,069 | $ | 83,025 | $ | 15,758 | $ | 325,852 | ||||||||
Allowance for loan losses: |
||||||||||||||||
Individually evaluated for impairment |
$ | — | $ | — | $ | — | $ | — | ||||||||
Collectively evaluated for impairment |
1,814 | 745 | 458 | 3,017 | ||||||||||||
Total allowance for loan losses |
$ | 1,814 | $ | 745 | $ | 458 | $ | 3,017 | ||||||||
December 31, 2021 |
||||||||||||||||
Commercial |
Residential |
Consumer |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Loans: |
||||||||||||||||
Individually evaluated for impairment |
$ | 4,833 | $ | 1,357 | $ | 37 | $ | 6,227 | ||||||||
Collectively evaluated for impairment |
219,950 | 82,692 | 17,123 | 319,765 | ||||||||||||
Total loans |
$ | 224,783 | $ | 84,049 | $ | 17,160 | $ | 325,992 | ||||||||
Allowance for loan losses: |
||||||||||||||||
Individually evaluated for impairment |
$ | — | $ | — | $ | — | $ | — | ||||||||
Collectively evaluated for impairment |
1,657 | 745 | 456 | 2,858 | ||||||||||||
Total allowance for loan losses |
$ | 1,657 | $ | 745 | $ | 456 | $ | 2,858 | ||||||||
March 31, 2022 |
||||||||||||||||
Pass |
Watch and Special Mention |
Substandard |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Commercial: |
||||||||||||||||
Real estate |
$ | 180,938 | $ | 3,721 | $ | 3,597 | $ | 188,256 | ||||||||
Land development |
1,366 | — | — | 1,366 | ||||||||||||
Other |
36,962 | — | 485 | 37,447 | ||||||||||||
Total |
$ | 219,266 | $ | 3,721 | $ | 4,082 | $ | 227,069 | ||||||||
December 31, 2021 |
||||||||||||||||
Pass |
Watch and Special Mention |
Substandard |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Commercial: |
||||||||||||||||
Real estate |
$ | 172,172 | $ | 8,963 | $ | 4,088 | $ | 185,223 | ||||||||
Land development |
1,400 | — | — | 1,400 | ||||||||||||
Other |
37,414 | 1 | 745 | 38,160 | ||||||||||||
Total |
$ | 210,986 | $ | 8,964 | $ | 4,833 | $ | 224,783 | ||||||||
March 31, 2022 |
||||||||||||
Performing |
Non Performing |
Total |
||||||||||
(in thousands) |
||||||||||||
Residential real estate: |
||||||||||||
First mortgage |
$ | 78,844 | $ | 923 | $ | 79,767 | ||||||
Construction |
3,258 | — | 3,258 | |||||||||
Consumer: |
||||||||||||
Home equity and lines of credit |
15,618 | 36 | 15,654 | |||||||||
Other |
104 | — | 104 | |||||||||
Total |
$ | 97,824 | $ | 959 | $ | 98,783 | ||||||
December 31, 2021 |
||||||||||||
Performing |
Non Performing |
Total |
||||||||||
(in thousands) |
||||||||||||
Residential real estate: |
||||||||||||
First mortgage |
$ | 79,722 | $ | 939 | $ | 80,661 | ||||||
Construction |
3,388 | — | 3,388 | |||||||||
Consumer: |
||||||||||||
Home equity and lines of credit |
16,954 | 78 | 17,032 | |||||||||
Other |
128 | — | 128 | |||||||||
Total |
$ | 100,192 | $ | 1,017 | $ | 101,209 | ||||||
As of and for the Three Months ended March 31, 2022 |
||||||||||||||||||||
Recorded Investment |
Unpaid Principal |
Reserve |
Average Investment |
Interest Recognized |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Impaired loans with reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Land development |
— | — | — | — | — | |||||||||||||||
Other |
— | — | — | — | — | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
— | — | — | — | — | |||||||||||||||
Construction |
— | — | — | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— | — | — | — | — | |||||||||||||||
Other |
— | — | — | — | — | |||||||||||||||
Total impaired loans with reserve |
— | — | — | — | — | |||||||||||||||
Impaired loans with no reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
3,597 | 3,597 | NA | 3,923 | 37 | |||||||||||||||
Land development |
— | — | NA | — | — | |||||||||||||||
Other |
485 | 485 | NA | 558 | 56 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
1,336 | 1,557 | NA | 1,344 | 15 | |||||||||||||||
Construction |
— | — | NA | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
36 | 41 | NA | 36 | — | |||||||||||||||
Other |
— | — | NA | — | — | |||||||||||||||
Total impaired loans with no reserve |
5,454 | 5,680 | NA | 5,861 | 108 | |||||||||||||||
Total impaired loans |
$ | 5,454 | $ | 5,680 | $ | — | $ | 5,861 | $ | 108 | ||||||||||
As of and for the Year Ended December 31, 2021 |
||||||||||||||||||||
Recorded Investment |
Unpaid Principal |
Reserve |
Average Investment |
Interest Recognized |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Impaired loans with reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Land development |
— | — | — | — | — | |||||||||||||||
Other |
— | — | — | — | — | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
— | — | — | — | — | |||||||||||||||
Construction |
— | — | — | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
— | — | — | — | — | |||||||||||||||
Other |
— | — | — | — | — | |||||||||||||||
Total impaired loans with reserve |
— | — | — | — | — | |||||||||||||||
Impaired loans with no reserve: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Real estate |
4,088 | 4,089 | NA | 5,615 | 213 | |||||||||||||||
Land development |
— | — | NA | 734 | 33 | |||||||||||||||
Other |
745 | 796 | NA | 1,478 | 35 | |||||||||||||||
Residential real estate: |
||||||||||||||||||||
First mortgage |
1,357 | 1,572 | NA | 914 | 34 | |||||||||||||||
Construction |
— | — | NA | — | — | |||||||||||||||
Consumer: |
||||||||||||||||||||
Home equity and lines of credit |
37 | 41 | NA | 17 | 22 | |||||||||||||||
Other |
— | — | NA | — | — | |||||||||||||||
Total impaired loans with no reserve |
6,227 | 6,498 | NA | 8,758 | 337 | |||||||||||||||
Total impaired loans |
$ | 6,227 | $ | 6,498 | $ | — | $ | 8,758 | $ | 337 | ||||||||||
March 31, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Nonaccrual loans, other than troubled debt restructurings |
$ | 770 | $ | 826 | ||||
Nonaccrual loans, troubled debt restructurings |
189 | 191 | ||||||
Total nonperforming loans (NPLs) |
$ | 959 | $ | 1,017 | ||||
Troubled debt restructurings, accruing |
$ | 414 | $ | 418 | ||||
March 31, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Commercial: |
||||||||
Real estate |
$ | — | $ | — | ||||
Land development |
— | — | ||||||
Other |
— | — | ||||||
Residential real estate: |
||||||||
First mortgage |
923 | 939 | ||||||
Construction |
— | — | ||||||
Consumer: |
||||||||
Home equity and lines of credit |
36 | 78 | ||||||
Other |
— | — | ||||||
Total non-accrual loans |
$ | 959 | $ | 1,017 | ||||
Total non-accrual loans to total loans |
0.29 | % | 0.31 | % | ||||
Total non-accrual loans to total assets |
0.18 | % | 0.19 | % |
Three Months Ended March 31, 2022 |
Three Months Ended March 31, 2021 |
|||||||
(in thousands) |
||||||||
Mortgage servicing rights beginning balance |
$ | 2,036 | $ | 1,806 | ||||
Additions |
27 | 203 | ||||||
Amortization |
(75 | ) | (231 | ) | ||||
Decrease in valuation allowance |
— | 369 | ||||||
Mortgage servicing rights ending balance |
$ | 1,988 | $ | 2,147 | ||||
Fair value at beginning of period |
$ | 2,477 | $ | 1,806 | ||||
Fair value at end of period |
$ | 2,811 | $ | 2,153 |
(in thousands) |
||||
Estimated future amortization as of March 31, 2022: |
||||
2022 |
$ | 235 | ||
2023 |
265 | |||
2024 |
221 | |||
2025 |
189 | |||
2026 |
163 | |||
Thereafter |
915 | |||
Total |
$ | 1,988 | ||
March 31, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Non-interest bearing checking |
$ | 108,096 | $ | 106,664 | ||||
Interest bearing checking |
37,215 | 37,467 | ||||||
Money market |
96,725 | 94,823 | ||||||
Statement savings |
67,985 | 64,954 | ||||||
Certificates of deposit |
80,932 | 80,593 | ||||||
Total |
$ | 390,953 | $ | 384,501 | ||||
(in thousands) |
||||
2022 |
$ | 61,677 | ||
2023 |
17,124 | |||
2024 |
1,030 | |||
2025 |
580 | |||
2026 |
346 | |||
Thereafter |
175 | |||
Total |
$ | 80,932 | ||
March 31, 2022 |
December 31, 2021 |
|||||||||||||||
Rate |
Amount |
Rate |
Amount |
|||||||||||||
(dollars in thousands) |
||||||||||||||||
Fixed rate, fixed term advance, maturing Feb 2022 |
N/A | $ | — | 1.62 | % | $ | 6,500 | |||||||||
Fixed rate, fixed term advance, maturing Feb 2023 |
1.62 | % | 6,500 | 1.62 | % | 6,500 | ||||||||||
Putable advance, maturing Oct 2029 first put option date Nov 2020 |
1.03 | % | 10,000 | 1.03 | % | 10,000 | ||||||||||
Putable advance, maturing Feb 2030 first put option date Feb 2023 |
0.98 | % | 5,000 | 0.98 | % | 5,000 | ||||||||||
Putable advance, maturing Mar 2030 first put option date Mar 2025 |
0.89 | % | 10,000 | 0.89 | % | 10,000 | ||||||||||
Putable advance, maturing Mar 2032 first put option date Mar 2027 |
1.74 | % | 10,000 | — | — | |||||||||||
Advance structured note, payments due monthly, maturing Feb 2030 |
7.47 | % | 531 | 7.47 | % | 542 | ||||||||||
Advance structured note, payments due monthly, maturing April 2030 |
1.05 | % | 8,164 | 1.05 | % | 8,405 | ||||||||||
Advance structured note, payments due monthly, maturing May 2030 |
1.19 | % | 8,254 | 1.19 | % | 8,495 | ||||||||||
Total |
$ | 58,449 | $ | 55,442 | ||||||||||||
March 31, 2022 |
||||||||
Weighted Average Rate |
Amount |
|||||||
(dollars in thousands) |
||||||||
2022 |
1.27 | % | $ | 1,488 | ||||
2023 |
1.54 | % | 8,506 | |||||
2024 |
1.28 | % | 2,032 | |||||
2025 |
1.30 | % | 2,059 | |||||
2026 |
1.31 | % | 2,086 | |||||
Thereafter |
1.22 | % | 42,278 | |||||
Total |
$ | 58,449 | ||||||
March 31, 2022 |
||||||||||||
Fixed Rate |
Variable Rate |
Total |
||||||||||
(in thousands) |
||||||||||||
Commitments to extend credit |
$ | 19,062 | $ | 66,506 | $ | 85,568 | ||||||
Standby letters of credit |
— | 175 | 175 | |||||||||
Credit enhancement under the FHLB of Chicago Mortgage Partnership Finance Program |
1,245 | — | 1,245 | |||||||||
Commitments to sell loans |
5,364 | — | 5,364 | |||||||||
Overdraft protection program commitments |
3,948 | — | 3,948 |
December 31, 2021 |
||||||||||||
Fixed Rate |
Variable Rate |
Total |
||||||||||
(in thousands) |
||||||||||||
Commitments to extend credit |
$ | 21,586 | $ | 56,921 | $ | 78,507 | ||||||
Standby letters of credit |
— | 175 | 175 | |||||||||
Credit enhancement under the FHLB of Chicago Mortgage Partnership Finance Program |
1,214 | — | 1,214 | |||||||||
Commitments to sell loans |
5,410 | — | 5,410 | |||||||||
Overdraft protection program commitments |
3,993 | — | 3,993 |
March 31, 2022 |
December 31, 2021 |
|||||||
(dollars in thousands) |
||||||||
Shares committed to be released |
4,933 | 22,401 | ||||||
Total allocated shares |
37,640 | 15,239 | ||||||
Total unallocated shares |
417,356 | 377,077 | ||||||
Total ESOP shares |
459,929 | 414,717 | ||||||
Fair value of unallocated shares (based on $10.85 and $10.99 share price as of March 31, 2022 and December 31, 2021, respectively) |
$ | 4,528 | $ | 4,144 | ||||
March 31, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Beginning balance |
$ | 932 | $ | 1,034 | ||||
Adjustments due to changes in directors, executive officers, and/or principal stockholders |
— | 202 | ||||||
New loans |
4 | 53 | ||||||
Repayments |
(41 | ) | (357 | ) | ||||
Ending balance |
$ | 895 | $ | 932 | ||||
Recurring Fair Value Measurements Using |
||||||||||||||||
March 31, 2022 |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Marketable equity securities |
$ | 3,366 | $ | 3,366 | $ | — | $ | — | ||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. Treasury notes |
28,006 | — | 28,006 | — | ||||||||||||
Obligations of states and political subdivisions |
20,596 | — | 20,596 | — | ||||||||||||
Government-sponsored mortgage-backed securities |
76,515 | — | 76,515 | — | ||||||||||||
Asset-backed securities |
6,121 | — | 6,121 | — | ||||||||||||
Certificates of deposit |
1,484 | — | 1,484 | — | ||||||||||||
Total |
$ | 136,088 | $ | 3,366 | $ | 132,722 | $ | — | ||||||||
Recurring Fair Value Measurements Using |
||||||||||||||||
December 31, 2021 |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Marketable equity securities |
$ | 3,544 | $ | 3,544 | $ | — | $ | — | ||||||||
Securities available-for-sale: |
||||||||||||||||
U.S. Treasury notes |
19,484 | — | 19,484 | — | ||||||||||||
Obligations of states and political subdivisions |
20,760 | — | 20,760 | — | ||||||||||||
Government-sponsored mortgage-backed securities |
64,149 | — | 64,149 | — | ||||||||||||
Asset-backed securities |
6,523 | — | 6,523 | — | ||||||||||||
Certificates of deposit |
1,524 | — | 1,524 | — | ||||||||||||
Total |
$ | 115,984 | $ | 3,544 | $ | 112,440 | $ | — | ||||||||
March 31, 2022 |
||||||||||||||||
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Financial assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 50,586 | $ | 50,586 | $ | — | $ | — | ||||||||
Available for sale securities |
132,722 | — | 132,722 | — | ||||||||||||
Marketable equity securities |
3,366 | 3,366 | — | — | ||||||||||||
Loans held for sale |
944 | — | 944 | — | ||||||||||||
Loans |
323,686 | — | — | 315,013 | ||||||||||||
Rate lock commitments |
19 | — | — | 19 | ||||||||||||
Accrued interest receivable |
1,033 | 1,033 | — | — | ||||||||||||
Federal Home Loan Bank stock |
3,032 | — | — | 3,032 | ||||||||||||
Cash value of life insurance |
13,996 | — | — | 13,996 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Deposits |
390,953 | 310,021 | — | 80,322 | ||||||||||||
Advance payments by borrowers for taxes and insurance |
4,735 | 4,735 | — | — | ||||||||||||
Federal Home Loan Bank advances |
58,449 | — | — | 56,535 | ||||||||||||
Accrued interest payable |
117 | 117 | — | — |
December 31, 2021 |
||||||||||||||||
Carrying Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
(in thousands) |
||||||||||||||||
Financial assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 66,803 | $ | 66,803 | $ | — | $ | — | ||||||||
Available for sale securities |
112,440 | — | 112,440 | — | ||||||||||||
Marketable equity securities |
3,544 | 3,544 | — | — | ||||||||||||
Loans held for sale |
1,183 | — | 1,183 | — | ||||||||||||
Loans |
323,789 | — | — | 323,182 | ||||||||||||
Rate lock commitments |
30 | — | — | 30 | ||||||||||||
Accrued interest receivable |
948 | 948 | — | — | ||||||||||||
Federal Home Loan Bank Stock |
3,032 | — | — | 3,032 | ||||||||||||
Cash value of life insurance |
13,892 | — | — | 13,892 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Deposits |
384,501 | 303,908 | — | 80,473 | ||||||||||||
Advance payments by borrowers for taxes and insurance |
1,860 | 1,860 | — | — | ||||||||||||
Federal Home Loan Bank advances |
55,442 | — | — | 55,981 | ||||||||||||
Accrued interest payable |
109 | 109 | — | — |
March 31, 2022 |
||||||||||||||||||||||||
Actual |
For Capital Adequacy Purposes |
To Be Well Capitalized Under Prompt Corrective Action Provisions |
||||||||||||||||||||||
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||||
PyraMax Bank |
||||||||||||||||||||||||
Leverage (Tier 1) |
$ | 65,031 | 12.1 | % | $ | 21,540 | 4.0 | % | $ | 26,925 | 5.0 | % | ||||||||||||
Risk-based: |
||||||||||||||||||||||||
Common Equity Tier 1 |
65,031 | 18.3 | % | 15,980 | 4.5 | % | 23,082 | 6.5 | % | |||||||||||||||
Tier 1 |
65,031 | 18.3 | % | 21,307 | 6.0 | % | 28,409 | 8.0 | % | |||||||||||||||
Total |
68,048 | 19.2 | % | 28,409 | 8.0 | % | 35,511 | 10.0 | % |
December 31, 2021 |
||||||||||||||||||||||||
Actual |
For Capital Adequacy Purposes |
To Be Well Capitalized Under Prompt Corrective Action Provisions |
||||||||||||||||||||||
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||||
PyraMax Bank |
||||||||||||||||||||||||
Leverage (Tier 1) |
$ | 65,179 | 11.9 | % | $ | 21,838 | 4.0 | % | $ | 27,298 | 5.0 | % | ||||||||||||
Risk-based: |
||||||||||||||||||||||||
Common Equity Tier 1 |
65,179 | 19.4 | % | 15,124 | 4.5 | % | 21,846 | 6.5 | % | |||||||||||||||
Tier 1 |
65,179 | 19.4 | % | 20,166 | 6.0 | % | 26,888 | 8.0 | % | |||||||||||||||
Total |
68,037 | 20.2 | % | 26,888 | 8.0 | % | 33,610 | 10.0 | % |
Three months ended March 31, |
||||||||||||
2022 |
2021 (1) |
2021 (2) |
||||||||||
(dollars in thousands, except per share amounts) |
||||||||||||
Net income |
$ | (55 | ) | $ | 521 | $ | 521 | |||||
Weighted shares outstanding for basic EPS |
||||||||||||
Weighted average shares outstanding |
6,275,850 | 4,749,287 | 6,251,486 | |||||||||
Less: Weighted average unallocated ESOP shares |
401,886 | 160,599 | 211,396 | |||||||||
Weighted average shares outstanding for basic EPS |
5,873,964 | 4,588,688 | 6,040,090 | |||||||||
Additional dilutive shares |
— |
108,654 | 143,021 | |||||||||
Weighted average shares outstanding for dilutive EPS |
5,873,964 | 4,697,342 | 6,183,111 | |||||||||
Basic income per share |
$ | (0.01 | ) | $ | 0.11 | $ | 0.09 | |||||
Diluted income per share |
$ | (0.01 | ) | $ | 0.11 | $ | 0.08 | |||||
(1) |
Amounts related to periods prior to the date of Conversion (July 2021) have not been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1). |
(2) |
Amounts related to periods prior to the date of Conversion (July 2021) have been restated to give the retroactive recognition to the exchange ratio applied in the Conversion (1.3163) (See Note 1) |
For the Three Months Ended |
||||||||
March 31, 2022 (1) |
March 31, 2021 |
|||||||
Dividend yield |
0.00 | % | ||||||
Risk-free interest rate |
0.96 | % | ||||||
Expected volatility |
24.64 | % | ||||||
Weighted average expected life |
6.5 | |||||||
Weighted average per share value of options |
$ | $ | 2.76 |
(1) |
There were no stock options granted during the three months ended March 31, 2022 |
Stock Options |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining in Contractual Term (Years) |
Aggregate Intrinsic Value |
||||||||||||
Outstanding December 31, 2021 |
300,720 | $ | 6.19 | 8.40 | 1,443,067 | |||||||||||
Granted |
— | — | — | — | ||||||||||||
Exercised |
— | — | — | — | ||||||||||||
Forfeited |
— | — | — | — | ||||||||||||
Outstanding March 31, 2022 |
300,720 | 6.19 | 8.16 | 1,403,629 | ||||||||||||
Options exercisable at March 31, 2022 |
75,835 | 6.15 | 8.12 | 356,984 | ||||||||||||
Stock Options |
Shares |
Weighted Average Grant Date Fair Value |
||||||
Nonvested at December 31, 2021 |
248,043 | $ | 1.58 | |||||
Granted |
— | — | ||||||
Vested (1) |
(23,158 | ) | 1.61 | |||||
Forfeited |
— | — | ||||||
Nonvested at March 31, 2022 |
224,885 | $ | 1.58 | |||||
(1) |
Includes 2,105 shares vested under a nonqualified stock option inducement award to the Company’s President and Chief Operating Officer. |
Restricted Stock |
Shares |
Weighted Average Grant Date Fair Value |
||||||
Nonvested at December 31, 2021 |
97,128 | $ | 6.25 | |||||
Granted |
— | — | ||||||
Vested (1)(2) |
(9,286 | ) | 6.56 | |||||
Forfeited |
— | — | ||||||
Nonvested at March 31, 2022 |
87,842 | $ | 6.21 | |||||
(1) |
Includes 263 shares vested under a restricted stock inducement award to the Company’s President and Chief Operating Officer. |
(2) |
Includes 1,310 shares surrendered by employees to cover payroll tax costs related to the vested shares. |
(in thousands) |
||||
2022 |
$ | 64 | ||
2023 |
87 | |||
2024 |
89 | |||
2025 |
91 | |||
2026 |
94 | |||
Thereafter |
112 | |||
Amounts representing interest |
(27 | ) | ||
Total |
$ | 510 | ||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | statements of our goals, intentions and expectations; |
• | statements regarding our business plans, prospects, growth and operating strategies; |
• | statements regarding the quality of our loan and investment portfolios; and |
• | estimates of our risks and future costs and benefits. |
• | general economic conditions, either nationally or in our market areas, that are worse than expected; |
• | changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; |
• | our ability to access cost-effective funding; |
• | fluctuations in real estate values and both residential and commercial real estate market conditions; |
• | demand for loans and deposits in our market area; |
• | our ability to implement and change our business strategies; |
• | competition among depository and other financial institutions; |
• | inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make; |
• | adverse changes in the securities or secondary mortgage markets; |
• | changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III; |
• | the impact of the Dodd-Frank Act and the implementing regulations; |
• | changes in the quality or composition of our loan or investment portfolios; |
• | technological changes that may be more difficult or expensive than expected; |
• | the inability of third-party providers to perform as expected; |
• | our ability to manage market risk, credit risk and operational risk in the current economic environment; |
• | our ability to enter new markets successfully and capitalize on growth opportunities; |
• | our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto; |
• | changes in consumer spending, borrowing and savings habits; |
• | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; |
• | our ability to retain key employees; |
• | our compensation expense associated with equity allocated or awarded to our employees; and |
• | changes in the financial condition, results of operations or future prospects of issuers of securities that we own. |
Three Months Ended March 31, |
||||||||||||||||||||||||
2022 |
2021 |
|||||||||||||||||||||||
Average Outstanding Balance |
Interest and Dividends |
Yield/Cost Rate |
Average Outstanding Balance |
Interest and Dividends |
Yield/Cost Rate |
|||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans (1) |
$ | 329,775 | $ | 3,290 | 4.05 | % | $ | 332,726 | $ | 3,294 | 4.01 | % | ||||||||||||
Securities available-for-sale |
133,975 | 548 | 1.66 | % | 60,283 | 267 | 1.80 | % | ||||||||||||||||
Other interest-earning assets |
40,690 | 48 | 0.48 | % | 87,006 | 56 | 0.26 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-earning assets |
504,440 | 3,886 | 3.12 | % | 480,015 | 3,617 | 3.06 | % | ||||||||||||||||
Non-interest-earning assets |
33,622 | 32,419 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 538,062 | $ | 512,434 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest-earning liabilities: |
||||||||||||||||||||||||
NOW accounts |
$ | 36,494 | $ | 8 | 0.08 | % | $ | 31,843 | $ | 8 | 0.11 | % | ||||||||||||
Money market accounts |
96,711 | 71 | 0.30 | % | 102,056 | 79 | 0.31 | % | ||||||||||||||||
Savings accounts |
66,407 | 8 | 0.05 | % | 62,022 | 10 | 0.06 | % | ||||||||||||||||
Certificates of deposit |
80,986 | 82 | 0.41 | % | 84,289 | 159 | 0.76 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing deposits |
280,598 | 169 | 0.24 | % | 280,210 | 256 | 0.37 | % | ||||||||||||||||
Federal Home Loan Bank advances |
54,784 | 170 | 1.25 | % | 68,079 | 200 | 1.19 | % | ||||||||||||||||
Other interest-bearing liabilities |
3,705 | 2 | 0.25 | % | 5,227 | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing liabilities |
339,087 | 341 | 0.41 | % | 353,516 | 456 | 0.52 | % | ||||||||||||||||
Non-interest-bearing deposits |
105,970 | 94,763 | ||||||||||||||||||||||
Other non-interest-bearing liabilities |
6,795 | 5,176 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities |
451,852 | 453,455 | ||||||||||||||||||||||
Total stockholders’ equity |
86,210 | 58,979 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and stockholders’ equity |
$ | 538,062 | $ | 512,434 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest income |
$ | 3,545 | $ | 3,161 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest-earning assets |
$ | 165,353 | $ | 126,499 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest rate spread (2) |
2.71 | % | 2.53 | % | ||||||||||||||||||||
Net interest margin (3) |
2.85 | % | 2.67 | % | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities |
148.76 | % | 135.78 | % |
(1) |
Includes loan fees of $105,000 for 2022 and $146,000 for 2021. |
(2) |
Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. |
(3) |
Net interest margin represents net interest income divided by average total interest-earning assets. |
Three Months Ended March 31, 2022 vs. 2021 |
||||||||||||
Increase (Decrease) Due to |
Total Increase (Decrease) |
|||||||||||
Volume |
Rate |
|||||||||||
(Dollars in thousands) |
||||||||||||
Interest-earning assets: |
||||||||||||
Loans |
$ | (31 | ) | 27 | (4 | ) | ||||||
Securities |
300 | (19 | ) | 281 | ||||||||
Other |
15 | (23 | ) | (8 | ) | |||||||
|
|
|
|
|
|
|||||||
Total interest-earning assets |
284 | (15 | ) | 269 | ||||||||
|
|
|
|
|
|
|||||||
Interest-bearing liabilities: |
||||||||||||
NOW |
(3 | ) | 3 | — | ||||||||
Money market deposits |
4 | 4 | 8 | |||||||||
Savings |
— | 2 | 2 | |||||||||
Certificates of deposit |
6 | 71 | 77 | |||||||||
|
|
|
|
|
|
|||||||
Total interest-bearing deposits |
7 | 80 | 87 | |||||||||
Borrowings |
41 | (11 | ) | 30 | ||||||||
Other |
— | (2 | ) | (2 | ) | |||||||
|
|
|
|
|
|
|||||||
Total interest-bearing liabilities |
48 | 67 | 115 | |||||||||
|
|
|
|
|
|
|||||||
Change in net interest income |
$ | 332 | 52 | 384 | ||||||||
|
|
|
|
|
|
• | originating commercial real estate and commercial loans, which tend to have shorter terms and higher interest rates than owner occupied one- to four-family residential real estate loans, and which generate customer relationships that can result in larger non-interest-bearing checking accounts; |
• | selling substantially all of our conforming and eligible jumbo, longer-term, fixed-rate one- to four-family residential real estate loans and retaining the non-conforming and shorter-term, fixed-rate and adjustable-rate one- to four-family residential real estate loans that we originate, subject to market conditions and periodic review of our asset/liability management needs; and |
• | reducing our dependence on jumbo and brokered certificates of deposit to support lending and investment activities and increasing our reliance on core deposits, including checking accounts and savings accounts, which are less interest rate sensitive than certificates of deposit. |
Change in Interest Rates (basis points) (1) |
Net Interest Income Year 1 Forecast |
Year 1 Change from Level |
||||||
(Dollars in thousands) |
||||||||
+400 |
$ | 13,734 | 10.06 | % | ||||
+300 |
13,391 | 7.31 | % | |||||
+200 |
13,064 | 4.69 | % | |||||
+100 |
12,763 | 2.28 | % | |||||
Level |
12,479 | — | % | |||||
-100 |
12,197 | (2.26 | )% |
(1) | Assumes an immediate uniform change in interest rates at all maturities. |
Estimated Increase (Decrease) in EVE |
||||||||||||
Basis Point (“bp”) Change in Interest Rates (1) |
Estimated EVE (2) |
Amount |
Percent |
|||||||||
(Dollars in thousands) |
||||||||||||
+400 |
$ | 61,766 | $ | (6,739 | ) | (9.84 | %) | |||||
+300 |
63,259 | (5,246 | ) | (7.66 | %) | |||||||
+200 |
64,741 | (3,764 | ) | (5.49 | %) | |||||||
+100 |
67,100 | (1,405 | ) | (2.05 | %) | |||||||
Level |
68,505 | — | — | % | ||||||||
-100 |
65,387 | (3,118 | ) | (4.55 | %) |
(1) | Assumes an instantaneous uniform change in interest rates at all maturities. |
(2) | EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits |
* | Furnished, not filed. |
1895 BANCORP OF WISCONSIN, INC. | ||
Date: May 13, 2022 | /s/ Richard B. Hurd | |
Richard B. Hurd | ||
Chief Executive Officer | ||
Date: May 13, 2022 | /s/ Steven T. Klitzing | |
Steven T. Klitzing | ||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 31.1
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 312 of the Sarbanes-Oxley Act of 2002
I, Richard B. Hurd, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of 1895 Bancorp of Wisconsin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 13, 2022 | /s/ Richard B. Hurd | |
Richard B. Hurd | ||
Chief Executive Officer |
Exhibit 31.2
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 312 of the Sarbanes-Oxley Act of 2002
I, Steven T. Klitzing, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of 1895 Bancorp of Wisconsin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 13, 2022 | /s/ Steven T. Klitzing | |
Steven T. Klitzing | ||
Senior Vice President and Chief Financial Officer |
Exhibit 32.1
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Richard B. Hurd, Chief Executive Officer of 1895 Bancorp of Wisconsin, Inc. (the Company), and Steven T. Klitzing, Senior Vice President and Chief Financial Officer of the Company, each certifies in his capacity as an executive officer of the Company that he has reviewed the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (the Report) and that, to the best of his knowledge:
1. | The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 13, 2022 | /s/ Richard B. Hurd | |
Richard B. Hurd | ||
Chief Executive Officer | ||
Date: May 13, 2022 | /s/ Steven T. Klitzing | |
Steven T. Klitzing | ||
Senior Vice President and Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.