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 $4.1 million, or $0.60 per diluted share, for the quarter ended June 30, 2024 compared to net income of $2.3 million, or $0.34 per diluted share, for the quarter ended June 30, 2023. Excluding nonrecurring items, the Company reported net income of $3.5 million (non-GAAP measure)(1) and net income per diluted share of $0.52 (non-GAAP measure)(1) for the quarter ended June 30, 2024 compared to $2.3 million, or $0.34 per diluted share for the quarter ended June 30, 2023. The core banking segment reported net income of $4.7 million, or $0.69 per diluted share for the quarter ended June 30, 2024 compared to $2.9 million, or $0.43 per diluted share for the quarter ended June 30, 2023. Excluding nonrecurring items, the core banking segment reported net income of $4.2 million, or $0.61 per diluted share for the quarter ended June 30, 2024 (non-GAAP measure)(1) compared to $2.9 million, or $0.43 per diluted share for the quarter ended June 30, 2023.

Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated, “We’re pleased to experience stabilization of the net interest margin along with a slowed pace of deposit migration into higher cost types and we’re very well positioned to benefit in a rates-down environment. Asset quality remains strong and we’re well prepared for any financial downturn that may occur. The results of the SBA Lending segment were disappointing, particularly with respect to loan sales. The SBA Lending pipeline is strong heading into the fourth fiscal quarter and we continue to evaluate strategies to improve financial performance. Additionally, we continue to evaluate and implement strategies to reduce balance sheet and operating inefficiencies. We continue to focus on strong asset quality; selective high-quality lending; deposit growth; and improvement of liquidity, capital and interest rate sensitivity positions. We’ve been successful in executing these strategies and we continue to move on the right trajectory, which we believe will deliver increasing financial results and shareholder value.”

(1) Non-GAAP net income and net income per diluted share exclude certain nonrecurring items. A reconciliation to GAAP and discussion of the use of non-GAAP measures is included in the table at the end of this release.

Results of Operations for the Three Months Ended June 30, 2024 and 2023

Net interest income decreased $331,000, or 2.2%, to $14.5 million for the three months ended June 30, 2024 as compared to the same period in 2023. The tax equivalent net interest margin was 2.67% for the three months ended June 30, 2024 as compared to 2.94% for the same period in 2023. The decrease in net interest income was due to a $4.6 million increase in interest expense, partially offset by a $4.3 million increase in interest income. An average balance table including average asset yields and average liability costs is included in the table at the end of this release.

The Company recognized a provision for credit losses for loans of $501,000, a provision for unfunded lending commitments of $158,000 and a provision for credit losses for securities of $84,000 for the three months ended June 30, 2024, compared to a provision for loan losses of $441,000 for the same period in 2023. The Company recognized net charge-offs of $105,000 for the three months ended June 30, 2024, of which $49,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $61,000 in 2023.

Noninterest income decreased $4.0 million for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease was due primarily to a $4.6 million decrease in mortgage banking income due to the cessation of national mortgage banking operations in the quarter ended December 31, 2023. In addition, the Company recorded the estimated fair market value on Visa Class C shares of $436,000, with no corresponding amount for the same period in 2023.

Noninterest expense decreased $6.5 million for the three months ended June 30, 2024 as compared to the same period in 2023. The decrease was due primarily to decreases in compensation and benefits expense of $3.7 million. The decrease in compensation and benefits expense was due primarily to a reduction in staffing related to the cessation of national mortgage banking operations in the quarter ended December 31, 2023. In addition, the Company recognized a reversal of a contingency accrual of $283,000 during the quarter ended June 30, 2024, with no corresponding amount during the same period in 2023.

The Company recognized income tax expense of $483,000 for the three months ended June 30, 2024 compared to $331,000 for the same period in 2023. The increase was primarily due to higher taxable income in the 2024 period. The effective tax rate for 2024 was 10.6%, which was a decrease from the effective tax rate of 12.5% in 2023. The decrease in the effective tax rate was due primarily to greater utilization of solar tax credits in 2024 as compared to 2023.

Results of Operations for the Nine Months Ended June 30, 2024 and 2023

The Company reported net income of $9.9 million, or $1.45 per diluted share, for the nine months ended June 30, 2024 compared to net income of $8.9 million, or $1.29 per diluted share, for the nine months ended June 30, 2023. Excluding nonrecurring items, the Company reported net income of $9.4 million (non-GAAP measure)(1) and net income per diluted share of $1.37 (non-GAAP measure)(1) for the nine months ended June 30, 2024 compared to $8.9 million, or $1.29 per diluted share for the nine months ended June 30, 2023. The core banking segment reported net income of $13.3 million, or $1.94 per diluted share for the nine months ended June 30, 2024 compared to $12.3 million, or $1.79 for the nine months ended June 30, 2023. Excluding nonrecurring items, the core banking segment reported net income of $12.7 million (non-GAAP measure)(1), or $1.86 per diluted share for the nine months ended June 30, 2024 (non-GAAP measure)(1). Compared to $12.3 million, or $1.79 for the nine months ended June 30, 2023.

Net interest income decreased $3.1 million, or 6.6%, to $43.0 million for the nine months ended June 30, 2024 as compared to the same period 2023. The tax equivalent net interest margin for the nine months ended June 30, 2024 was 2.67% as compared to 3.13% for the same period in 2023. The decrease in net interest income was due to a $17.7 million increase in interest expense, partially offset by a $14.7 million increase in interest income. An average balance table including average asset yields and average liability costs is included in the table at the end of this release.

The Company recognized a provision for credit losses for loans of $1.7 million, a credit for unfunded lending commitments of $159,000 and a provision for credit losses for securities of $107,000 for the nine months ended June 30, 2024, compared to a provision for loan losses of $1.8 million for the same period in 2023. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $2.8 million from $13.9 million at September 30, 2023 to $16.8 million at June 30, 2024. The Company recognized net charge-offs of $224,000 for the nine months ended June 30, 2024, of which $15,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $320,000 in 2023, of which $264,000 was related to unguaranteed portions of SBA loans. Noninterest income decreased $10.2 million for the nine months ended June 30, 2024 as compared to the same period in 2023. The decrease was due primarily to a $11.1 million decrease in mortgage banking income due to the cessation of national mortgage banking operations in the quarter ended December 31, 2023.

Noninterest expense decreased $14.2 million for the nine months ended June 30, 2024 as compared to the same period in 2023. The decrease was due primarily to decreases in compensation and benefits expense of $7.5 million and other operating expense of $4.3 million. The decrease in compensation and benefits expense was due primarily to a reduction in staffing related to the cessation of national mortgage banking operations in the quarter ended December 31, 2023. The decrease in other operating expense was due primarily to a $916,000 decrease in net loss on captive insurance due to the dissolution of the captive insurance company in 2023, a decrease in loss contingency for SBA-guaranteed loans of $755,000 in 2024 compared to an increase of $490,000 in 2023, and a decrease in loss contingency for restitution to mortgage borrowers of $300,000 in 2024 compared to an increase of $609,000 in 2023.

The Company recognized income tax expense of $873,000 for the nine months ended June 30, 2024 compared to tax expense of $747,000 for the same period in 2023. The increase is primarily due to higher taxable income in the 2024 period. The effective tax rate for 2024 was 8.1%, which was an increase from the effective tax rate of 7.7% in 2023. The effective tax rate is well below the statutory tax rate primarily due to the utilization of solar tax credits in both the 2024 and 2023 periods.

Comparison of Financial Condition at June 30, 2024 and September 30, 2023

Total assets increased $104.6 million, from $2.29 billion at September 30, 2023 to $2.39 billion at June 30, 2024. Net loans held for investment increased $56.7 million during the nine months ended June 30, 2024 due primarily to growth in residential construction and commercial business loans. Loans held for sale increased by $80.0 million from $45.9 million at September 30, 2023 to $125.9 million, primarily due to the transfer of approximately $108.6 million of residential first lien home equity lines of credit that are intended for sale. Residential mortgage loan servicing rights decreased $59.8 million during the nine months ended June 30, 2024, due to the sale of the entire residential mortgage loan servicing rights portfolio during the period.

Total liabilities increased $87.6 million due primarily to increases in FHLB borrowings of $61.8 million and increases in total deposits of $30.4 million. As of June 30, 2024, deposits exceeding the FDIC insurance limit of $250,000 per insured account were 30.3% of total deposits and 12.7% of total deposits when excluding public funds insured by the Indiana Public Deposit Insurance Fund.

Common stockholders’ equity increased $17.0 million, from $151.0 million at September 30, 2023 to $168.0 million at June 30, 2024, due primarily to a $12.2 million decrease in accumulated other comprehensive loss and an increase in retained net income of $4.4 million. The decrease in accumulated other comprehensive loss was due primarily to decreasing long term market interest rates during the nine months ended June 30, 2024, which resulted in an increase in the fair value of securities available for sale. At June 30, 2024 and September 30, 2023, 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 two national lending programs, including single-tenant net lease commercial real estate and SBA lending, with offices located predominately in the Midwest. 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)		2024				2023				2024				2023
Total interest income	$	31,094			$	26,798			$	89,765			$	75,092
Total interest expense		16,560				11,933				46,780				29,054
Net interest income		14,534				14,865				42,985				46,038
Provision for credit losses - loans		501				441				1,684				1,797
Provision (credit) for unfunded lending commitments		158				-				(159	)			-
Provision for credit losses - securities		84				-				107				-
Net interest income after provision for credit losses		13,791				14,424				41,353				44,241
Total noninterest income		3,196				7,196				9,688				19,900
Total noninterest expense		12,431				18,965				40,248				54,475
Income before income taxes		4,556				2,655				10,793				9,666
Income tax expense		483				331				873				747
Net income	$	4,073			$	2,324			$	9,920			$	8,919
Net income per share, basic	$	0.60			$	0.34			$	1.45			$	1.30
Weighted average shares outstanding, basic		6,832,452				6,816,608				6,829,490				6,858,739
Net income per share, diluted	$	0.60			$	0.34			$	1.45			$	1.29
Weighted average shares outstanding, diluted		6,842,336				6,819,748				6,851,145				6,893,766
Performance ratios (annualized)
Return on average assets		0.69	%			0.29	%			0.57	%			0.50	%
Return on average equity		9.86	%			4.01	%			8.23	%			6.86	%
Return on average common stockholders' equity		9.86	%			4.01	%			8.23	%			6.86	%
Net interest margin (tax equivalent basis)		2.67	%			2.94	%			2.67	%			3.13	%
Efficiency ratio		70.11	%			88.62	%			76.41	%			83.45	%
									QTD								FYTD
FINANCIAL CONDITION DATA:	June 30,				March 31,				Increase				September 30,				Increase
(In thousands, except per share data)		2024				2024			(Decrease)					2023			(Decrease)
Total assets	$	2,393,491			$	2,364,983			$	28,508			$	2,288,854			$	104,637
Cash and cash equivalents		42,423				62,969				(20,546	)			30,845				11,578
Investment securities		238,785				240,142				(1,357	)			229,039				9,746
Loans held for sale		125,859				19,108				106,751				45,855				80,004
Gross loans		1,846,769				1,901,850				(55,081	)			1,787,143				59,626
Allowance for credit losses (1)		19,789				19,392				397				16,900				2,889
Interest earning assets		2,239,109				2,214,039				25,070				2,083,397				155,712
Goodwill		9,848				9,848				-				9,848				-
Core deposit intangibles		438				479				(41	)			561				(123	)
Loan servicing rights		2,860				3,028				(168	)			62,819				(59,959	)
Noninterest-bearing deposits		201,854				196,239				5,615				242,237				(40,383	)
Interest-bearing deposits (customer)		1,111,143				1,043,032				68,111				1,001,238				109,905
Interest-bearing deposits (brokered)		399,151				548,175				(149,024	)			438,319				(39,168	)
Federal Home Loan Bank borrowings		425,000				315,000				110,000				363,183				61,817
Subordinated debt and other borrowings		48,563				48,523				40				48,444				119
Total liabilities		2,225,491				2,199,927				25,564				2,137,873				87,618
Accumulated other comprehensive loss		(17,415	)			(17,144	)			(271	)			(29,587	)			12,172
Stockholders' equity		168,000				165,056				2,944				150,981				17,019
Book value per share	$	24.41			$	23.98				0.43			$	21.99			$	2.42
Tangible book value per share - Non-GAAP (2)		22.91				22.48				0.43				20.47				2.44
Non-performing assets:
Nonaccrual loans - SBA guaranteed	$	5,049			$	5,053			$	(4	)		$	5,091			$	(42	)
Nonaccrual loans		11,705				10,585				1,120				8,857				2,848
Total nonaccrual loans	$	16,754			$	15,638			$	1,116			$	13,948			$	2,806
Accruing loans past due 90 days		-				-				-				-				-
Total non-performing loans		16,754				15,638				1,116				13,948				2,806
Foreclosed real estate		444				444				-				474				(30	)
Troubled debt restructurings classified as performing loans		-				-				-				1,266				(1,266	)
Total non-performing assets	$	17,198			$	16,082			$	1,116			$	15,688			$	1,510
Asset quality ratios:
Allowance for credit losses as a percent of total gross loans		1.07	%			1.02	%			0.05	%			0.95	%			0.13	%
Allowance for credit losses as a percent of nonperforming loans		118.12	%			124.01	%			(5.89	%)			121.16	%			(3.05	%)
Nonperforming loans as a percent of total gross loans		0.91	%			0.82	%			0.08	%			0.78	%			0.13	%
Nonperforming assets as a percent of total assets		0.72	%			0.68	%			0.04	%			0.69	%			0.03	%
(1) The Company adopted ASU 2016-13 Topic 326 on October 1, 2023. Allowance was determined using expected loss methodology (CECL) as of June 30, 2024, March 31, 2024 and December 31, 2024.
Allowance was determined using the previous incurred loss methodology as of September 30, 2023.
(2) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of these figures.
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.
	Three Months Ended								Fiscal Year Ended
	June 30,								June 30,
		2024				2023				2024				2023
Net Income(In thousands)
Net income attributable to the Company (non-GAAP)	$	3,534			$	2,324			$	9,381			$	8,919
Plus: Reversal of contingent liability, net of tax		212				-				212				-
Plus: Record Visa Class C shares, net of tax		327				-				327				-
Net income attributable to the Company (GAAP)	$	4,073			$	2,324			$	9,920			$	8,919
Net Income per Share, Diluted
Net income per share, diluted (non-GAAP)	$	0.52			$	0.34			$	1.37			$	1.29
Plus: Reversal of contingent liability, net of tax		0.03				-				0.03				-
Plus: Record Visa Class C shares, net of tax		0.05				-				0.05				-
Net income per share, diluted (GAAP)	$	0.60			$	0.34			$	1.45			$	1.29
Core Banking Net Income(In thousands)
Net income attributable to the Core Bank (non-GAAP)	$	4,176			$	2,921			$	12,735			$	12,304
Plus: Reversal of contingent liability, net of tax		212				-				212				-
Plus: Record Visa Class C shares, net of tax		327				-				327				-
Net income (loss) attributable to the Core Bank (GAAP)	$	4,715			$	2,921			$	13,274			$	12,304
Core Bank Net Income per Share, Diluted
Core Bank Net income per share, diluted (non-GAAP)	$	0.61			$	0.43			$	1.86			$	1.79
Plus: Reversal of contingent liability, net of tax		0.03				-				0.03				-
Plus: Record Visa Class C shares, net of tax		0.05				-				0.05				-
Core Bank Net income per share, diluted (GAAP)	$	0.69			$	0.43			$	1.94			$	1.79
Efficiency Ratio(In thousands)
Net interest income (GAAP)	$	14,534			$	14,865			$	42,985			$	46,038
Noninterest income (GAAP)		3,196				7,196				9,688				19,900
Noninterest expense (GAAP)		12,431				18,965				40,248				54,475
Efficiency ratio (GAAP)		70.11	%			85.97	%			76.41	%			82.62	%
Noninterest income (GAAP)	$	3,196			$	7,196			$	9,688			$	19,900
Less: Record Visa Class C shares		(436	)			-				(436	)			-
Noninterest income (Non-GAAP)		2,760				7,196				9,252				19,900
Noninterest expense (GAAP)	$	12,431			$	18,965			$	40,248			$	54,475
Plus: Reversal of contingent liability		283				-				283				-
Noninterest expense (Non-GAAP)		12,714				18,965				40,531				54,475
Efficiency ratio (excluding nonrecurring items) (non-GAAP)		73.52	%			85.97	%			77.59	%			82.62	%
Tangible Book Value Per Share	June 30,				March 31,				Increase				September 30,				Increase
(In thousands, except share and per share data)		2024				2024			(Decrease)					2023			(Decrease)
Stockholders' equity, net of noncontrolling interests (GAAP)	$	168,000			$	165,056			$	2,944			$	150,981			$	17,019
Less: goodwill and core deposit intangibles		(10,286	)			(10,327	)			41				(10,409	)			123
Tangible equity (non-GAAP)	$	157,714			$	154,729			$	2,985			$	140,572				17,142
Outstanding common shares		6,883,656				6,883,160			$	496				6,867,121				16,535
Tangible book value per share (non-GAAP)	$	22.91			$	22.48			$	0.43			$	20.47			$	2.44
Book value per share (GAAP)	$	24.41			$	23.98			$	0.43			$	21.99			$	2.42
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)		2024				2024				2023				2023				2023
Total cash and cash equivalents	$	42,423			$	62,969			$	33,366			$	30,845			$	42,475
Total investment securities		238,785				240,142				246,801				229,039				249,788
Total loans held for sale		125,859				19,108				22,866				45,855				63,142
Total loans, net of allowance for credit losses		1,826,980				1,882,458				1,841,953				1,770,243				1,691,289
Loan servicing rights		2,860				3,028				3,711				62,819				64,139
Total assets		2,393,491				2,364,983				2,308,092				2,288,854				2,260,421
Customer deposits	$	1,312,997			$	1,239,271			$	1,180,951			$	1,243,475			$	1,245,534
Brokered deposits		399,151				548,175				502,895				438,319				414,231
Total deposits		1,712,148				1,787,446				1,683,846				1,681,794				1,659,765
Federal Home Loan Bank borrowings		425,000				315,000				356,699				363,183				345,000
Common stock and additional paid-in capital	$	27,592			$	27,475			$	27,397			$	27,064			$	27,518
Retained earnings - substantially restricted		170,688				167,648				163,753				166,306				168,015
Accumulated other comprehensive income (loss)		(17,415	)			(17,144	)			(13,606	)			(29,587	)			(17,565	)
Unearned stock compensation		(999	)			(1,096	)			(1,194	)			(1,015	)			(1,113	)
Less treasury stock, at cost		(11,866	)			(11,827	)			(11,827	)			(11,787	)			(11,787	)
Total stockholders' equity		168,000				165,056				164,523				150,981				165,068
Outstanding common shares		6,883,656				6,883,160				6,883,160				6,867,121				6,865,921
	Three Months Ended
Summarized Consolidated Statements of Income	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except per share data)		2024				2024				2023				2023				2023
Total interest income	$	31,094			$	30,016			$	28,655			$	28,137			$	26,798
Total interest expense		16,560				15,678				14,542				12,601				11,933
Net interest income		14,534				14,338				14,113				15,536				14,865
Provision for credit losses - loans		501				713				412				815				441
Provision (credit) for unfunded lending commitments		158				(259	)			-				-				-
Provision for credit losses - securities		84				23				-				-				-
Net interest income after provision for credit losses		13,791				13,861				13,701				14,721				14,424
Total noninterest income		3,196				3,710				2,782				5,442				7,196
Total noninterest expense		12,431				11,778				16,039				21,647				18,965
Income (loss) before income taxes		4,556				5,793				444				(1,484	)			2,655
Income tax expense (benefit)		483				866				(476	)			(737	)			331
Net income (loss)	$	4,073			$	4,927			$	920			$	(747	)		$	2,324
Net income (loss) per share, basic	$	0.60			$	0.72			$	0.13			$	(0.11	)		$	0.34
Weighted average shares outstanding, basic		6,832,452				6,832,130				6,823,948				6,817,365				6,816,608
Net income (loss) per share, diluted	$	0.60			$	0.72			$	0.13			$	(0.11	)		$	0.34
Weighted average shares outstanding, diluted		6,842,336				6,859,611				6,839,704				6,837,919				6,819,748
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Noninterest Income Detail	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands)		2024				2024				2023				2023				2023
Service charges on deposit accounts	$	538			$	387			$	473			$	479			$	509
ATM and interchange fees		593				585				449				816				615
Net loss on sales of available for sale securities		-				-				-				(11	)			(540	)
Net unrealized gain on equity securities		419				6				38				11				11
Net gain on sales of loans, Small Business Administration		581				951				834				538				497
Mortgage banking income		49				53				89				3,018				4,668
Increase in cash surrender value of life insurance		353				333				329				311				279
Commission income		220				220				222				182				247
Real estate lease income		154				115				115				116				119
Net gain on premises and equipment		-				120				-				20				-
Gain from repurchase of subordinated debt		-				-				-				-				660
Other income		289				940				233				(38	)			131
Total noninterest income	$	3,196			$	3,710			$	2,782			$	5,442			$	7,196
	Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
Consolidated Performance Ratios (Annualized)		2024				2024				2023				2023				2023
Return on average assets		0.69	%			0.92	%			0.16	%			(0.13	%)			0.41	%
Return on average equity		9.86	%			13.06	%			2.42	%			(1.82	%)			5.60	%
Return on average common stockholders' equity		9.86	%			13.06	%			2.42	%			(1.82	%)			5.60	%
Net interest margin (tax equivalent basis)		2.67	%			2.66	%			2.69	%			3.03	%			2.94	%
Efficiency ratio		70.11	%			65.26	%			94.93	%			103.19	%			85.97	%
	As of or for the Three Months Ended
	June 30,				March 31,				December 31,				September 30,				June 30,
Consolidated Asset Quality Ratios		2024				2024				2023				2023				2023
Nonperforming loans as a percentage of total loans		0.91	%			0.82	%			0.83	%			0.78	%			0.69	%
Nonperforming assets as a percentage of total assets		0.72	%			0.68	%			0.69	%			0.69	%			0.62	%
Allowance for credit losses as a percentage of total loans		1.07	%			1.02	%			1.01	%			0.95	%			0.99	%
Allowance for credit losses as a percentage of nonperforming loans		118.12	%			124.01	%			121.16	%			121.16	%			143.83	%
Net charge-offs to average outstanding loans		0.01	%			0.01	%			0.00	%			0.04	%			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)		2024				2024				2023				2023				2023
Core Banking Segment:
Net interest income	$	13,590			$	13,469			$	13,113			$	14,167			$	13,407
Provision (credit) for credit losses - loans		320				909				(49	)			1,266				880
Provision for unfunded lending commitments		64				(259	)			-				-				-
Provision for credit losses - securities		84				23				-				-				-
Net interest income after provision for credit losses		13,122				12,796				13,162				12,901				12,527
Noninterest income		2,474				2,537				1,679				2,136				1,965
Noninterest expense		10,192				10,093				10,252				13,559				11,010
Income before income taxes		5,404				5,240				4,589				1,478				3,482
Income tax expense		689				729				541				3				561
Net income	$	4,715			$	4,511			$	4,048			$	1,475			$	2,921
SBA Lending Segment (Q2 Business Capital, LLC):
Net interest income	$	944			$	869			$	1,003			$	990			$	1,098
Provision (credit) for credit losses - loans		181				(196	)			461				(451	)			(439	)
Provision for unfunded lending commitments		94				-				-				-				-
Provision for credit losses - securities		-				-				-				-				-
Net interest income after provision for credit losses		669				1,065				542				1,441				1,537
Noninterest income		722				1,173				1,003				367				580
Noninterest expense		2,239				1,685				2,146				2,907				2,107
Income (loss) before income taxes		(848	)			553				(601	)			(1,099	)			10
Income tax expense (benefit)		(206	)			137				(131	)			(273	)			(21	)
Net income (loss)	$	(642	)		$	416			$	(470	)		$	(826	)		$	31
Mortgage Banking Segment: (3)
Net interest income (loss)	$	-			$	-			$	(3	)		$	379			$	360
Provision for credit losses - loans		-				-				-				-				-
Provision for unfunded lending commitments		-				-				-				-				-
Provision for credit losses - securities		-				-				-				-				-
Net interest income (loss) after provision for credit losses		-				-				(3	)			379				360
Noninterest income		-				-				100				2,939				4,651
Noninterest expense		-				-				3,641				5,181				5,848
Loss before income taxes		-				-				(3,544	)			(1,863	)			(837	)
Income tax benefit		-				-				(886	)			(467	)			(209	)
Net loss	$	-			$	-			$	(2,658	)		$	(1,396	)		$	(628	)
(3) National mortgage banking operations were ceased in the quarter ended December 31, 2023 and subsequent immaterial mortgage lending activity is reported within the Core Banking segment.
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 percentage data)		2024				2024				2023				2023				2023
Net Income (Loss) Per Share by Segment
Net income per share, basic - Core Banking	$	0.69			$	0.66			$	0.59			$	0.22			$	0.43
Net income (loss) per share, basic - SBA Lending (Q2 Business Capital, LLC)		(0.09	)			0.06				(0.07	)			(0.12	)			-
Net income (loss) per share, basic - Mortgage Banking		0.00				0.00				(0.40	)			(0.21	)			(0.09	)
Total net income (loss) per share, basic	$	0.60			$	0.72			$	0.12			$	(0.11	)		$	0.34
Net Income (Loss) Per Diluted Share by Segment
Net income per share, diluted - Core Banking	$	0.69			$	0.66			$	0.59			$	0.22			$	0.43
Net income (loss) per share, diluted - SBA Lending (Q2 Business Capital, LLC)		(0.09	)			0.06				(0.07	)			(0.12	)			-
Net loss per share, diluted - Mortgage Banking		0.00				0.00				(0.40	)			(0.21	)			(0.09	)
Total net income (loss) per share, diluted	$	0.60			$	0.72			$	0.12			$	(0.11	)		$	0.34
Return on Average Assets by Segment (annualized) (4)
Core Banking		0.83	%			0.80	%			0.73	%			0.28	%			0.61	%
SBA Lending		(2.91	%)			1.81	%			(2.11	%)			(3.81	%)			0.15	%
Efficiency Ratio by Segment (annualized) (4)
Core Banking		63.45	%			63.06	%			69.31	%			83.17	%			71.62	%
SBA Lending		134.39	%			82.52	%			106.98	%			214.22	%			125.57	%
	Three Months Ended
Noninterest Expense Detail by Segment	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands)		2024				2024				2023				2023				2023
Core Banking Segment:
Compensation	$	5,587			$	5,656			$	5,691			$	6,528			$	4,978
Occupancy		1,573				1,615				1,481				1,418				1,738
Advertising		253				205				189				404				334
Other		2,779				2,617				2,891				5,209				3,960
Total Noninterest Expense	$	10,192			$	10,093			$	10,252			$	13,559			$	11,010
SBA Lending Segment (Q2 Business Capital, LLC):
Compensation	$	1,893			$	1,933			$	1,826			$	1,533			$	1,803
Occupancy		51				58				91				68				70
Advertising		12				7				10				10				11
Other		283				(313	)			219				1,296				223
Total Noninterest Expense	$	2,239			$	1,685			$	2,146			$	2,907			$	2,107
Mortgage Banking Segment: (4)
Compensation	$	-			$	-			$	2,146			$	3,647			$	4,357
Occupancy		-				-				469				395				469
Advertising		-				-				119				129				191
Other		-				-				907				1,010				831
Total Noninterest Expense	$	-			$	-			$	3,641			$	5,181			$	5,848
(4) Ratios for Mortgage Banking Segment are not considered meaningful due to cessation of national mortgage banking operations in the quarter ended December 31, 2023.
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):
	Three Months Ended
SBA Lending (Q2 Business Capital, LLC) Data	June 30,				March 31,				December 31,				September 30,				June 30,
(In thousands, except percentage data)		2024				2024				2023				2023				2023
Final funded loans guaranteed portion sold, SBA	$	7,515			$	15,144			$	14,098			$	8,431			$	7,721
Gross gain on sales of loans, SBA	$	811			$	1,443			$	1,303			$	809			$	780
Weighted average gross gain on sales of loans, SBA		10.79	%			9.53	%			9.24	%			9.60	%			10.10	%
Net gain on sales of loans, SBA (5)	$	581			$	951			$	834			$	538			$	497
Weighted average net gain on sales of loans, SBA		7.73	%			6.28	%			5.92	%			6.38	%			6.44	%
(5) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.
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)		2024				2024				2023				2023				2023
Interest-earning assets
Average balances:
Interest-bearing deposits with banks	$	26,100			$	24,587			$	20,350			$	21,631			$	20,661
Loans		1,943,716				1,914,609				1,857,654				1,796,749				1,719,733
Investment securities - taxable		101,350				102,699				103,728				105,393				109,319
Investment securities - nontaxable		157,991				157,960				159,907				160,829				234,118
FRB and FHLB stock		24,986				24,986				24,968				24,939				24,509
Total interest-earning assets	$	2,254,143			$	2,224,841			$	2,166,607			$	2,109,541			$	2,108,340
Interest income (tax equivalent basis):
Interest-bearing deposits with banks	$	324			$	261			$	249			$	266			$	267
Loans		28,155				27,133				26,155				25,214				23,279
Investment securities - taxable		918				923				942				969				984
Investment securities - nontaxable		1,665				1,662				1,687				1,695				2,456
FRB and FHLB stock		519				499				74				428				423
Total interest income (tax equivalent basis)	$	31,581			$	30,478			$	29,107			$	28,572			$	27,409
Weighted average yield (tax equivalent basis, annualized):
Interest-bearing deposits with banks		4.97	%			4.25	%			4.89	%			4.92	%			5.17	%
Loans		5.79	%			5.67	%			5.63	%			5.61	%			5.41	%
Investment securities - taxable		3.62	%			3.59	%			3.63	%			3.68	%			3.60	%
Investment securities - nontaxable		4.22	%			4.21	%			4.22	%			4.22	%			4.20	%
FRB and FHLB stock		8.31	%			7.99	%			1.19	%			6.86	%			6.90	%
Total interest-earning assets		5.60	%			5.48	%			5.37	%			5.42	%			5.20	%
Interest-bearing liabilities
Interest-bearing deposits	$	1,572,871			$	1,549,012			$	1,389,384			$	1,385,994			$	1,278,776
Fed funds purchased		-				-				-				76				11
Federal Home Loan Bank borrowings		351,227				333,275				440,786				353,890				434,182
Subordinated debt and other borrowings		48,537				48,497				48,458				48,406				49,339
Total interest-bearing liabilities	$	1,972,635			$	1,930,784			$	1,878,628			$	1,788,366			$	1,762,308
Interest expense:
Interest-bearing deposits	$	12,740			$	12,546			$	9,989			$	9,457			$	7,791
Fed funds purchased		-				-				-				1				-
Federal Home Loan Bank borrowings		3,021				2,298				3,769				2,459				3,446
Subordinated debt and other borrowings		799				833				784				684				696
Total interest expense	$	16,560			$	15,677			$	14,542			$	12,601			$	11,933
Weighted average cost (annualized):
Interest-bearing deposits		3.24	%			3.24	%			2.88	%			2.73	%			2.44	%
Fed funds purchased		0.00	%			0.00	%			0.00	%			5.26	%			0.00	%
Federal Home Loan Bank borrowings		3.44	%			2.76	%			3.42	%			2.78	%			3.17	%
Subordinated debt and other borrowings		6.58	%			6.87	%			6.47	%			5.65	%			5.64	%
Total interest-bearing liabilities		3.36	%			3.25	%			3.10	%			2.82	%			2.71	%
Net interest income (taxable equivalent basis)	$	15,021			$	14,801			$	14,565			$	15,971			$	15,476
Less: taxable equivalent adjustment		(487	)			(463	)			(452	)			(435	)			(611	)
Net interest income	$	14,534			$	14,338			$	14,113			$	15,536			$	14,865
Interest rate spread (tax equivalent basis, annualized)		2.24	%			2.23	%			2.27	%			2.60	%			2.49	%
Net interest margin (tax equivalent basis, annualized)		2.67	%			2.66	%			2.69	%			3.03	%			2.94	%