First Savings Financial Group, Inc. Reports Financial Results For The Fiscal Year Ended September 30, 2023

JEFFERSONVILLE, Ind., Oct. 31, 2023 (GLOBE NEWSWIRE) -- First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $8.2 million, or $1.19 per diluted share, for the year ended September 30, 2023 compared to net income of $15.4 million, or $2.15 per diluted share, for the year ended September 30, 2022. Excluding nonrecurring items, the Company reported net income of $12.7 million (non-GAAP measure)⁽¹⁾ and net income per diluted share of $1.85 (non-GAAP measure)⁽¹⁾ for the year ended September 30, 2023; compared to net income of $17.1 million (non-GAAP measure)⁽¹⁾ and net income per diluted share of $2.40 (non-GAAP measure)⁽¹⁾ for the year ended September 30, 2022.

Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “As we navigated the challenging environment for the banking industry during fiscal 2023, we focused on reducing balance sheet and operating inefficiencies, risks that could result in earnings volatility, and complexity of the organization, particularly in the fourth fiscal quarter. Many of these measures are highlighted below and quantified in the included table reconciling GAAP and non-GAAP financial measures. In addition to these repositioning measures, we focused on core banking; asset quality; selective high-quality lending; deposit growth; building the SBA lending pipeline; and improvement of liquidity, capital and interest rate sensitivity positions. We believe the measures taken will deliver shareholder value and we’ll continue to evaluate options that will further position the Company for future success.”

Recent Actions to Reduce Inefficiencies and Potential Earnings Volatility

• In the June 2023 quarter ended, utilized gain on repurchase of subordinated debt as an opportunity to sell $78.5 million of available for sale securities that were yielding less than the marginal cost of funding.
• In August 2023, converted the Bank’s data processing system to FIS Horizon.
• In September 2023, entered into a letter of intent to sell the Bank’s residential mortgage servicing rights portfolio with a close anticipated for November 30, 2023.
• In September 2023, dissolved First Savings Insurance Risk Management, Inc., the Company’s captive insurance subsidiary.
• In October 2023, announced that the Bank will cease national originate-to-sell mortgage banking operations during the quarter ending December 31, 2023.

(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 Fiscal Years Ended September 30, 2023 and 2022

Net interest income increased $922,000, or 1.5%, to $61.6 million for the year ended September 30, 2023 as compared to the prior year. The increase in net interest income was due to a $32.0 million increase in interest income, partially offset by a $31.1 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $385.8 million, from $1.67 billion for 2022 to $2.05 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.35% for 2022 to 5.13% for 2023. The increase in the average balance of interest-earning assets was primarily due to an increase in the average balance of loans of $322.9 million and an increase in the average balance of investment securities of $67.2 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $390.6 million, from $1.32 billion for 2022 to $1.71 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 0.78% for 2022 to 2.44% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates paid for FHLB borrowings, brokered deposits, and money market deposit accounts primarily as a result of increased market interest rates and a $91.4 million migration of deposit balances from noninterest-bearing to interest-bearing.

The Company recognized a provision for loan losses of $2.6 million for the year ended September 30, 2023 due primarily to loan portfolio growth, compared to a provision for loan losses of $1.9 million for the prior year. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $3.1 million from $10.9 million at September 30, 2022 to $13.9 million at September 30, 2023. The Company recognized net charge-offs of $1.1 million for the year ended September 30, 2023, of which $873,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $849,000 in 2022, of which $733,000 was related to unguaranteed portions of SBA loans.

Noninterest income decreased $25.9 million for the year ended September 30, 2023 as compared to the prior year. The decrease was due primarily to a $24.0 million decrease in mortgage banking income in 2023 compared to the same period in 2022. The decrease in mortgage banking income was primarily due to lower origination and sales volume in 2023 compared to 2022. Mortgage loans originated for sale were $587.7 million in the year ended September 30, 2023 as compared to $1.61 billion for the prior year.

Noninterest expense decreased $16.5 million for the year ended September 30, 2023 as compared to the prior year. The decrease was due primarily to a decrease in compensation and benefits and professional fees of $17.3 million and $3.7 million, respectively, partially offset by a $2.2 million increase in data processing expense. The decrease in compensation and benefits expense was due primarily to a reduction in staff and incentive compensation for the Company’s mortgage banking segment as a result of decreased mortgage banking volume. The decrease in professional fees was due primarily to a $2.0 million consulting fee incurred in 2022 in connection with negotiating a new core processing contract. The increase in data processing expense is primarily due to one-time charges totaling $1.4 million in connection with the conversion of the Bank’s data processing system.

The Company recognized income tax expense of $10,000 for the year ended September 30, 2023 compared to income tax expense of $1.9 million for the prior year. The effective tax rate for the 2023 period was 0.1% as compared to 11.1% for 2022. The decrease in the effective tax rate in 2023 was primarily due to the recognition of investment tax credits related to solar projects in 2023 and lower pre-tax income in 2023 as compared to 2022. The lower pre-tax income for 2023 is due primarily to losses incurred for mortgage banking operations, professional fees related to mortgage banking loss contingencies, and expenses related to the conversion of the Bank’s data processing system.

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

The Company reported a net loss of $747,000, or $0.11 per diluted share, for the three months ended September 30, 2023 compared to net income of $1.4 million, or $0.20 per diluted share, for the three months ended September 30, 2022. Excluding nonrecurring items, the Company reported net income of $2.8 million (non-GAAP measure)⁽¹⁾ and net income per diluted share of $0.41 (non-GAAP measure)⁽¹⁾ for the three months ended September 30, 2023; compared to net income of $3.1 million (non-GAAP measure)⁽¹⁾ and net income per diluted share of $0.44 (non-GAAP measure)⁽¹⁾ for the three months ended September 30, 2022.

Net interest income decreased $1.3 million, or 7.7%, to $15.5 million for the three months ended September 30, 2023 as compared to the same period 2022. The decrease in net interest income was due to an $8.3 million increase in interest expense, partially offset by a $7.0 million increase in interest income. Interest income increased due to an increase in the average balance of interest-earning assets of $257.0 million, from $1.85 billion for 2022 to $2.11 billion for 2023, and an increase in the weighted-average tax-equivalent yield, from 4.64% for 2022 to 5.42% for 2023. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of loans $317.6 million, partially offset by a decrease in the average balance of investment securities of $58.9 million. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $311.5 million, from $1.48 billion for 2022 to $1.79 billion for 2023, and an increase in the average cost of interest-bearing liabilities, from 1.12% for 2022 to 2.82% for 2023. The increase in the average cost of interest-bearing liabilities for 2023 was due primarily to higher rates for FHLB borrowings, brokered deposits, and money market deposit accounts as a result of increased market interest rates.

The Company recognized a provision for loan losses of $815,000 for the three months ended September 30, 2023, compared to $880,000 for the same period in 2022. The Company recognized net charge-offs of $753,000 for the three months ended September 30, 2023, of which $609,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $500,000 in 2022, of which $404,000 was related to unguaranteed portions of SBA loans.

Noninterest income increased $911,000 for the three months ended September 30, 2023 as compared to the same period in 2022. The increase was due primarily to an increases in mortgage banking income of $772,000. The increase in mortgage banking income was primarily due to higher origination, sales volume, and gain on sale margins in the 2023 period compared to 2022. Mortgage loans originated for sale were $195.5 million in the three months ended September 30, 2023 as compared to $186.0 million in the same period in 2022.

Noninterest expense increased $2.1 million for the three months ended September 30, 2023 as compared to the same period in 2022. The increase was due primarily to increases in other operating expense and data processing of $2.7 million and $1.4 million, respectively, partially offset by a decrease of $2.6 million in professional fees. The increase in other operating expense was primarily due to SBA-guaranteed loan contingencies and mortgage banking loss contingencies, including related professional fees, of $1.0 million and $1.6 million, respectively, during the three months ended September 30, 2023. The increase in data processing expense is primarily due to one-time charges totaling $1.3 million in connection with the conversion of the Bank’s data processing system. The decrease in professional fees was primarily due to a $2.0 million consulting fee incurred in the 2022 period in connection with negotiating the new data processing contract.

The Company recognized income tax benefit of $737,000 for the three months ended September 30, 2023 compared to tax benefit of $446,000 for the same period in 2022. The increase in the income tax benefit was primarily due to the recognition of investment tax credits related to solar projects in 2023 and a pre-tax loss in 2023 compared to pre-tax income in 2022.

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

Total assets increased $195.1 million, from $2.09 billion at September 30, 2022 to $2.29 billion at September 30, 2023. Net loans held for investment increased $295.7 million during the year ended September 30, 2023 due primarily to growth in residential mortgage and single-tenant net lease commercial real estate loans. Available-for-sale securities decreased $88.8 million during the year ended September 30, 2023 due primarily to the sale of $78.5 million of securities in June 2023 and scheduled amortization and maturities. The proceeds from which were used to repay brokered deposits and FHLB borrowings.

Total liabilities increased $195.7 million due primarily to increases in total deposits and FHLB borrowings of $172.5 million and $55.9 million, respectively, partially offset by a $39.8 million decrease in other borrowings primarily due to the reversal of secured borrowings recorded at September 30, 2022. The increase in total deposits was due primarily increases in brokered deposits, money market deposit accounts, retail time deposits, and interest-bearing checking of $145.8 million, $85.5 million, $41.1 million and $21.6 million, respective, partially offset by decreases in noninterest-bearing deposits and savings accounts of $91.4 million and $30.1 million, respectively. The increases in deposits and FHLB borrowings were primarily used to fund loan growth. As of September 30, 2023, deposits exceeding the FDIC insurance limit of $250,000 per insured account were 27.5% of total deposits and excluding public funds insured by the Indiana Public Deposit Insurance Fund, uninsured deposits totaled 12.8% of total deposits.

Common stockholders’ equity decreased $584,000, from $151.6 million at September 30, 2022 to $151.0 million at September 30, 2023, due primarily to a $2.6 million increase in treasury stock and an increase in accumulated other comprehensive loss of $2.5 million, partially offset by an increase in retained net income of $4.4 million. The increase in treasury stock was due to the repurchase of 124,710 of Company common shares during the year ended September 30, 2023. The increase in accumulated other comprehensive loss was primarily due to increasing long term market interest rates during the year ended September 30, 2023, which resulted in a decrease in the fair value of the available-for-sale securities portfolio. At September 30, 2023 and September 30, 2022, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

First Savings Bank is an entrepreneurial community bank headquartered in Jeffersonville, Indiana, which is directly across the Ohio River from Louisville, Kentucky, and operates fifteen depository branches within Southern Indiana. The Bank also has 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
YEARS ENDED SEPTEMBER 30, 2023 AND 2022
	Three Months Ended								Years Ended
OPERATING DATA:	September 30,								September 30,
(In thousands, except share and per share data)		2023				2022				2023				2022
Total interest income	$	28,137			$	21,152			$	103,229			$	71,194
Total interest expense		12,601				4,327				41,655				10,542
Net interest income		15,536				16,825				61,574				60,652
Provision for loan losses		815				880				2,612				1,908
Net interest income after provision for loan losses		14,721				15,945				58,962				58,744
Total noninterest income		5,442				4,531				25,342				51,227
Total noninterest expense		21,647				19,514				76,122				92,662
Income (loss) before income taxes		(1,484	)			962				8,182				17,309
Income tax expense (benefit)		(737	)			(446	)			10				1,923
Net income (loss)	$	(747	)		$	1,408			$	8,172			$	15,386
Net income (loss) per share, basic	$	(0.11	)		$	0.20			$	1.19			$	2.18
Weighted average shares outstanding, basic		6,817,365				6,988,873				6,848,311				7,058,550
Net income (loss) per share, diluted	$	(0.11	)		$	0.20			$	1.19			$	2.15
Weighted average shares outstanding, diluted		6,837,919				7,056,138				6,880,072				7,141,846
Performance ratios (annualized)
Return on average assets		(0.13	%)			0.28	%			0.37	%			0.83	%
Return on average equity		(1.82	%)			3.30	%			5.04	%			8.65	%
Return on average common stockholders' equity		(1.82	%)			3.30	%			5.04	%			8.65	%
Net interest margin (tax equivalent basis)		3.03	%			3.75	%			3.10	%			3.72	%
Efficiency ratio		103.19	%			91.37	%			87.58	%			82.82	%
									QTD								FYTD
FINANCIAL CONDITION DATA:	September 30,				June 30,				Increase				September 30,				Increase
(In thousands, except per share data)		2023				2023			(Decrease)					2022			(Decrease)
Total assets	$	2,288,854			$	2,260,421			$	28,433			$	2,093,725			$	195,129
Cash and cash equivalents		30,845				42,475				(11,630	)			41,665				(10,820	)
Investment securities		229,039				249,788				(20,749	)			318,075				(89,036	)
Loans held for sale		45,855				63,142				(17,287	)			60,462				(14,607	)
Gross loans		1,787,143				1,708,127				79,016				1,489,904				297,239
Allowance for loan losses		16,900				16,838				62				15,360				1,540
Interest earning assets		2,083,397				2,048,891				34,506				1,898,051				185,346
Goodwill		9,848				9,848				-				9,848				-
Core deposit intangibles		561				614				(53	)			775				(214	)
Loan servicing rights		62,819				64,139				(1,320	)			67,194				(4,375	)
Noninterest-bearing deposits		248,759				315,602				(66,843	)			340,172				(91,413	)
Interest-bearing deposits (1)		1,439,557				1,344,163				95,394				1,175,662				263,895
Federal Home Loan Bank borrowings		363,183				345,000				18,183				307,303				55,880
Subordinated debt and other borrowings		48,444				48,387				57				88,206				(39,762	)
Total liabilities		2,137,873				2,095,353				42,520				1,942,160				195,713
Accumulated other comprehensive loss		(29,587	)			(17,565	)			(12,022	)			(27,079	)			(2,508	)
Stockholders' equity		150,981				165,068				(14,087	)			151,565				(584	)
Book value per share	$	21.99			$	24.04			$	(2.06	)		$	21.74			$	0.25
Tangible book value per share (2)		20.47				22.52				(2.05	)			20.22				0.25
Non-performing assets:
Nonaccrual loans - SBA guaranteed	$	5,091			$	5,753			$	(662	)		$	5,474			$	(383	)
Nonaccrual loans		8,857				5,954				2,903				5,382				3,475
Total nonaccrual loans	$	13,948			$	11,707			$	2,241			$	10,856			$	3,092
Accruing loans past due 90 days		-				-				-				-				-
Total non-performing loans		13,948				11,707				2,241				10,856				3,092
Foreclosed real estate		474				30				444				-				474
Troubled debt restructurings classified as performing loans		1,266				2,373				(1,107	)			2,714				(1,448	)
Total non-performing assets	$	15,688			$	14,110			$	1,578			$	13,570			$	2,118
Asset quality ratios:
Allowance for loan losses as a percent of total gross loans		0.95	%			0.99	%			(0.04	%)			1.03	%			(0.08	%)
Allowance for loan losses as a percent of nonperforming loans		121.16	%			143.83	%			(22.66	%)			141.49	%			(20.32	%)
Nonperforming loans as a percent of total gross loans		0.78	%			0.69	%			0.10	%			0.73	%			0.05	%
Nonperforming assets as a percent of total assets		0.69	%			0.62	%			0.06	%			0.65	%			0.04	%
(1) Includes $438.3, $414.2 million and $292.5 million of brokered certificates of deposit at September 30, 2023, June 30, 2023 and September 30, 2022, respectively.
(2) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):
The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company's
performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to
evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the
Company's consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.
	Three Months Ended								Year Ended
Net Income	September 30,								September 30,
(In thousands)		2023				2022				2023				2022
Net income (loss) attributable to the Company (non-GAAP)	$	2,824			$	3,137			$	12,731			$	17,115
Plus: Gain from repurchase of subordinated debt, net of tax effect		-				-				513				-
Less: Net loss on sales of available for sale securities and time deposits, net of tax effect		-				-				(429	)			-
Less: Data processing contract consulting, net of tax effect		-				(1,575	)			-				(1,575	)
Less: Data processing system conversion, net of tax effect		(979	)			-				(1,119	)			-
Less: MSR valuation allowance for intended sale, net of tax effect		(598	)			-				(598	)			-
Less: SBA-guaranteed loan contingency, net of tax effect		(779	)			(154	)			(1,160	)			(154	)
Less: Mortgage banking loss contingencies, net of tax effect		(296	)			-				(847	)			-
Less: Professional fees related to mortgage banking loss contingencies, net of tax effect		(919	)			-				(919	)			-
Net income (loss) attributable to the Company (GAAP)	$	(747	)		$	1,408			$	8,172			$	15,386
	Three Months Ended								Year Ended
Net Income per Share, Diluted	September 30,								September 30,
		2023				2022				2023				2022
Net income (loss) per share, diluted (non-GAAP)	$	0.41			$	0.44			$	1.85			$	2.40
Plus: Gain from repurchase of subordinated debt, net of tax effect		-				-				0.07				-
Less: Net loss on sales of available for sale securities and time deposits, net of tax effect		-				-				(0.06	)			-
Less: Data processing contract consulting, net of tax effect		-				(0.22	)			-				(0.22	)
Less: Data processing system conversion, net of tax effect		(0.14	)			-				(0.16	)			-
Less: MSR valuation allowance for intended sale, net of tax effect		(0.09	)			-				(0.09	)			-
Less: SBA-guaranteed loan contingency, net of tax effect		(0.11	)			(0.02	)			(0.17	)			(0.02	)
Less: Mortgage banking loss contingencies, net of tax effect		(0.05	)			-				(0.12	)			-
Less: Professional fees related to mortgage banking loss contingencies, net of tax effect		(0.13	)			-				(0.13	)			-
Net income (loss) per share, diluted (GAAP)	$	(0.11	)		$	0.20			$	1.19			$	2.16
	Three Months Ended								Year Ended
Efficiency Ratio	September 30,								September 30,
(In thousands)		2023				2022				2023				2022
Net interest income (GAAP)	$	15,536			$	16,825			$	61,574			$	60,652
Noninterest income (GAAP)		5,442				4,531				25,342				51,227
Noninterest expense (GAAP)		21,647				19,514				76,122				92,662
Efficiency ratio (GAAP)		103.19	%			91.37	%			87.58	%			82.82	%
Net interest income (GAAP)	$	15,536			$	16,825			$	61,574			$	60,652
Noninterest income (GAAP)		5,442				4,531				25,342				51,227
Plus: Gain from repurchase of subordinated debt		-				-				660				-
Less: Net loss on sales of available for sale securities and time deposits		-				-				(551	)			-
Noninterest income (Non-GAAP)		5,442				4,531				25,451				51,227
Noninterest expense (GAAP)		21,647				19,514				76,122				92,662
Less: Data processing contract consulting		-				(2,017	)			-				(2,017	)
Less: Data processing system conversion		(1,259	)			-				(1,439	)			-
Less: MSR valuation allowance for intended sale		(769	)			-				(769	)			-
Less: SBA-guaranteed loan contingency		(1,001	)			(197	)			(1,491	)			(197	)
Less: Mortgage banking loss contingencies		(380	)			-				(1,089	)			-
Less: Professional fees related to mortgage banking loss contingencies		(1,181	)			-				(1,181	)			-
Noninterest expense (non-GAAP)	$	17,057			$	17,300			$	70,153			$	90,448
Efficiency ratio (excluding nonrecurring items) (non-GAAP)		81.31	%			81.01	%			80.61	%			80.84	%
									QTD								FYTD
Tangible Book Value Per Share	September 30,				June 30,				Increase				September 30,				Increase
(In thousands, except share and per share data)		2023				2023			(Decrease)					2022			(Decrease)
Stockholders' equity, net of noncontrolling interests (GAAP)	$	150,981			$	165,068			$	(14,087	)		$	151,565			$	(584	)
Less: goodwill and core deposit intangibles		(10,409	)			(10,462	)			53				(10,623	)			214
Tangible equity (non-GAAP)	$	140,572			$	154,606				(14,034	)		$	140,942				(370	)
Outstanding common shares		6,867,121				6,865,921				1,200				6,970,631				(103,510	)
Tangible book value per share (non-GAAP)	$	20.47			$	22.52			$	(2.05	)		$	20.22			$	0.25
Book value per share (GAAP)	$	21.99			$	24.04			$	(2.06	)		$	21.74			$	0.25
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):	As of
Summarized Consolidated Balance Sheets	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands, except per share data)		2023				2023				2023				2022				2022
Total cash and cash equivalents	$	30,845			$	42,475			$	41,810			$	38,278			$	41,665
Total investment securities		229,039				249,788				336,317				330,683				318,075
Total loans held for sale		45,855				63,142				48,783				44,281				60,462
Total loans, net of allowance for loan losses		1,770,243				1,691,289				1,598,440				1,582,940				1,474,544
Loan servicing rights		62,819				64,139				65,045				65,598				67,194
Total assets		2,288,854				2,260,421				2,239,606				2,196,919				2,093,725
Retail deposits	$	1,249,997			$	1,245,534			$	1,206,154			$	1,211,677			$	1,223,330
Brokered deposits		438,319				414,231				336,728				326,164				292,504
Total deposits		1,688,316				1,659,765				1,542,882				1,537,841				1,515,834
Federal Home Loan Bank borrowings		363,183				345,000				437,795				377,643				307,303
Common stock and additional paid-in capital	$	27,064			$	27,518			$	27,443			$	27,425			$	26,848
Retained earnings - substantially restricted		166,306				168,015				166,652				163,890				161,927
Accumulated other comprehensive income (loss)		(29,587	)			(17,565	)			(14,199	)			(19,000	)			(27,079	)
Unearned stock compensation		(1,015	)			(1,113	)			(1,211	)			(1,361	)			(969	)
Less treasury stock, at cost		(11,787	)			(11,787	)			(11,787	)			(10,810	)			(9,162	)
Total stockholders' equity		150,981				165,068				166,898				160,144				151,565
Outstanding common shares		6,867,121				6,865,921				6,865,921				6,917,921				6,970,631
	Three Months Ended
Summarized Consolidated Statements of Income	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands, except per share data)		2023				2023				2023				2022				2022
Total interest income	$	28,137			$	26,798			$	24,811			$	23,483			$	21,152
Total interest expense		12,601				11,933				9,899				7,222				4,327
Net interest income		15,536				14,865				14,912				16,261				16,825
Provision for loan losses		815				441				372				984				880
Net interest income after provision for loan losses		14,721				14,424				14,540				15,277				15,945
Total noninterest income		5,442				7,196				7,516				5,188				4,531
Total noninterest expense		21,647				18,965				17,999				17,511				19,514
Income (loss) before income taxes		(1,484	)			2,655				4,057				2,954				962
Income tax expense (benefit)		(737	)			331				333				83				(446	)
Net income (loss)	$	(747	)		$	2,324			$	3,724			$	2,871			$	1,408
Net income (loss) per share, basic	$	(0.11	)		$	0.34			$	0.54			$	0.42			$	0.20
Weighted average shares outstanding, basic		6,817,365				6,816,608				6,842,897				6,915,909				6,988,873
Net income (loss) per share, diluted	$	(0.11	)		$	0.34			$	0.54			$	0.41			$	0.20
Weighted average shares outstanding, diluted		6,837,919				6,819,748				6,881,496				6,972,055				7,056,138
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,
Consolidated Performance Ratios (Annualized)		2023				2023				2023				2022				2022
Return on average assets		(0.13	%)			0.41	%			0.68	%			0.54	%			0.28	%
Return on average equity		(1.82	%)			5.60	%			9.15	%			7.50	%			3.30	%
Return on average common stockholders' equity		(1.82	%)			5.60	%			9.15	%			7.50	%			3.30	%
Net interest margin (tax equivalent basis)		3.03	%			2.94	%			3.06	%			3.41	%			3.75	%
Efficiency ratio		103.19	%			85.97	%			80.25	%			81.64	%			91.37	%
	As of or for the Three Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,
Consolidated Asset Quality Ratios		2023				2023				2023				2022				2022
Nonperforming loans as a percentage of total loans		0.78	%			0.69	%			0.77	%			0.72	%			0.73	%
Nonperforming assets as a percentage of total assets		0.69	%			0.62	%			0.67	%			0.64	%			0.65	%
Allowance for loan losses as a percentage of total loans		0.95	%			0.99	%			1.02	%			1.01	%			1.03	%
Allowance for loan losses as a percentage of nonperforming loans		121.16	%			143.83	%			132.20	%			139.55	%			141.49	%
Net charge-offs to average outstanding loans		0.04	%			0.00	%			-0.00	%			0.02	%			0.03	%
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Segmented Statements of Income Information	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands, except per share data)		2023				2023				2023				2022				2022
Core Banking Segment:
Net interest income	$	14,167			$	13,407			$	13,632			$	15,008			$	14,994
Provision for loan losses		1,266				880				422				701				769
Net interest income after provision for loan losses		12,901				12,527				13,210				14,307				14,225
Noninterest income		2,136				1,965				1,733				1,928				1,808
Noninterest expense		13,559				11,010				10,651				9,797				10,499
Income before income taxes		1,478				3,482				4,292				6,438				5,534
Income tax expense		3				561				401				946				735
Net income	$	1,475			$	2,921			$	3,891			$	5,492			$	4,799
SBA Lending Segment (Q2):
Net interest income	$	990			$	1,098			$	1,093			$	995			$	1,182
Provision (credit) for loan losses		(451	)			(439	)			(50	)			283				111
Net interest income after provision (credit) for loan losses		1,441				1,537				1,143				712				1,071
Noninterest income		367				580				1,636				754				480
Noninterest expense		2,907				2,107				2,662				1,924				1,891
Income (loss) before income taxes		(1,099	)			10				117				(458	)			(340	)
Income tax expense (benefit)		(273	)			(21	)			20				(107	)			(123	)
Net income (loss)	$	(826	)		$	31			$	97			$	(351	)		$	(217	)
Mortgage Banking Segment:
Net interest income	$	379			$	360			$	187			$	258			$	649
Provision for loan losses		-				-				-				-				-
Net interest income after provision for loan losses		379				360				187				258				649
Noninterest income		2,939				4,651				4,147				2,506				2,243
Noninterest expense		5,181				5,848				4,686				5,790				7,124
Loss before income taxes		(1,863	)			(837	)			(352	)			(3,026	)			(4,232	)
Income tax benefit		(467	)			(209	)			(88	)			(756	)			(1,058	)
Net loss	$	(1,396	)		$	(628	)		$	(264	)		$	(2,270	)		$	(3,174	)
Net Income (Loss) Per Share by Segment
Net income per share, basic - Core Banking	$	0.22			$	0.43			$	0.57			$	0.80			$	0.68
Net income (loss) per share, basic - SBA Lending (Q2)		(0.12	)			-				0.01				(0.05	)			(0.03	)
Net income (loss) per share, basic - Mortgage Banking		(0.21	)			(0.09	)			(0.04	)			(0.33	)			(0.45	)
Total net income (loss) per share, basic	$	(0.11	)		$	0.34			$	0.54			$	0.42			$	0.20
Net Income (Loss) Per Diluted Share by Segment
Net income per share, diluted - Core Banking	$	0.22			$	0.43			$	0.57			$	0.79			$	0.68
Net income (loss) per share, diluted - SBA Lending (Q2)		(0.12	)			-				0.01				(0.05	)			(0.03	)
Net income (loss) per share, diluted - Mortgage Banking		(0.21	)			(0.09	)			(0.04	)			(0.33	)			(0.45	)
Total net income (loss) per share, diluted	$	(0.11	)		$	0.34			$	0.54			$	0.41			$	0.20
Return on Average Assets by Segment (annualized)
Core Banking		0.28	%			0.61	%			0.85	%			1.17	%			1.08	%
SBA Lending		(3.81	%)			0.15	%			0.42	%			(1.38	%)			(0.85	%)
Mortgage Banking		(6.31	%)			(2.24	%)			(1.14	%)			(9.31	%)			(9.44	%)
Efficiency Ratio by Segment (annualized)
Core Banking		83.17	%			71.62	%			69.32	%			57.85	%			62.49	%
SBA Lending		214.22	%			125.57	%			97.54	%			110.01	%			113.78	%
Mortgage Banking		156.15	%			116.70	%			108.12	%			209.48	%			246.33	%
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Noninterest Expense Detail by Segment	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands)		2023				2023				2023				2022				2022
Core Banking Segment:
Compensation (3)	$	6,528			$	4,978			$	5,578			$	5,275			$	4,444
Occupancy		1,418				1,738				1,401				1,443				1,374
Advertising		404				334				298				213				272
Other		5,209				3,960				3,374				2,866				4,409
Total Noninterest Expense	$	13,559			$	11,010			$	10,651			$	9,797			$	10,499
SBA Lending Segment (Q2):
Compensation	$	1,533			$	1,803			$	1,800			$	1,622			$	1,690
Occupancy		68				70				70				54				41
Advertising		10				11				8				2				8
Other		1,296				223				784				246				152
Total Noninterest Expense	$	2,907			$	2,107			$	2,662			$	1,924			$	1,891
Mortgage Banking Segment:
Compensation (3)	$	3,647			$	4,357			$	3,029			$	3,788			$	5,091
Occupancy		395				469				449				363				491
Advertising		129				191				213				203				319
Other		1,010				831				995				1,436				1,223
Total Noninterest Expense	$	5,181			$	5,848			$	4,686			$	5,790			$	7,124
(3) Compensation includes increases for Core Banking and corresponding decreases for Mortgage
Banking segment that represent intersegment allocations for loans originated by the
Mortgage Banking segment to be held for investment in the Core Banking loan portfolio of:	$	1,516			$	1,440			$	1,328			$	1,192			$	945
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Mortgage Banking Noninterest Expense Fixed vs. Variable	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands)		2023				2023				2023				2022				2022
Noninterest Expense - Fixed Expenses	$	3,467			$	3,715			$	3,513			$	4,561			$	5,724
Noninterest Expense - Variable Expenses (4)		1,714				2,133				1,173				1,229				1,400
Total Noninterest Expense	$	5,181			$	5,848			$	4,686			$	5,790			$	7,124
	Three Months Ended
SBA Lending (Q2) Data	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands, except percentage data)		2023				2023				2023				2022				2022
Final funded loans guaranteed portion sold, SBA	$	8,431			$	7,721			$	15,337			$	11,293			$	3,772
Gross gain on sales of loans, SBA	$	809			$	780			$	1,293			$	936			$	393
Weighted average gross gain on sales of loans, SBA		9.60	%			10.10	%			8.43	%			8.29	%			10.42	%
Net gain on sales of loans, SBA (5)	$	538			$	497			$	907			$	775			$	249
Weighted average net gain on sales of loans, SBA		6.38	%			6.44	%			5.91	%			6.86	%			6.60	%
	Three Months Ended
Mortgage Banking Data	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands, except percentage data)		2023				2023				2023				2022				2022
Mortgage originations for sale in the secondary market	$	195,469			$	199,601			$	115,011			$	77,605			$	185,981
Mortgage sales	$	220,609			$	185,557			$	99,711			$	96,177			$	241,804
Gross gain on sales of loans, mortgage banking (6)	$	3,304			$	3,570			$	2,308			$	1,217			$	2,630
Weighted average gross gain on sales of loans, mortgage banking		1.50	%			1.92	%			2.31	%			1.27	%			1.09	%
Mortgage banking income (7)	$	3,018			$	4,668			$	4,149			$	2,496			$	2,246
(4) Variable expenses include incentive compensation and advertising expenses.
(5) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.
(6) Inclusive of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees, and net of lender credits and other investor expenses.
(7) Inclusive of loan fees, servicing income, gains or losses on mortgage servicing rights, fair value adjustments and gains or losses on derivative instruments, and net of lender credits and other investor expenses.
SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):	Three Months Ended
Summarized Consolidated Average Balance Sheets	September 30,				June 30,				March 31,				December 31,				September 30,
(In thousands)		2023				2023				2023				2022				2022
Interest-earning assets
Average balances:
Interest-bearing deposits with banks	$	21,631			$	20,661			$	27,649			$	19,379			$	28,318
Loans		1,796,749				1,719,733				1,621,147				1,583,182				1,479,167
Investment securities - taxable		105,393				109,319				110,373				111,936				94,836
Investment securities - nontaxable		160,829				234,118				242,530				241,504				230,312
FRB and FHLB stock		24,939				24,509				23,289				20,063				19,890
Total interest-earning assets	$	2,109,541			$	2,108,340			$	2,024,988			$	1,976,064			$	1,852,523
Interest income (tax equivalent basis):
Interest-bearing deposits with banks	$	266			$	267			$	192			$	144			$	97
Loans		25,214				23,279				21,339				20,222				18,029
Investment securities - taxable		969				984				957				955				740
Investment securities - nontaxable		1,695				2,456				2,533				2,505				2,352
FRB and FHLB stock		428				423				364				220				265
Total interest income (tax equivalent basis)	$	28,572			$	27,409			$	25,385			$	24,046			$	21,483
Weighted average yield (tax equivalent basis, annualized):
Interest-bearing deposits with banks		4.92	%			5.17	%			2.78	%			2.97	%			1.37	%
Loans		5.61	%			5.41	%			5.27	%			5.11	%			4.88	%
Investment securities - taxable		3.68	%			3.60	%			3.47	%			3.41	%			3.12	%
Investment securities - nontaxable		4.22	%			4.20	%			4.18	%			4.15	%			4.08	%
FRB and FHLB stock		6.86	%			6.90	%			6.25	%			4.39	%			5.33	%
Total interest-earning assets		5.42	%			5.20	%			5.01	%			4.87	%			4.64	%
Interest-bearing liabilities
Interest-bearing deposits	$	1,385,994			$	1,278,776			$	1,251,080			$	1,213,419			$	1,125,659
Fed funds purchased		76				11				-				-				-
Federal Home Loan Bank borrowings		353,890				434,182				374,593				311,146				301,027
Subordinated debt and other borrowings		48,406				49,339				50,293				88,304				50,179
Total interest-bearing liabilities	$	1,788,366			$	1,762,308			$	1,675,966			$	1,612,869			$	1,476,865
Interest expense:
Interest-bearing deposits	$	9,457			$	7,791			$	6,265			$	4,158			$	2,306
Repurchase agreements		-				-				-				-				-
Fed funds purchased		1				-				-				-				-
Federal Home Loan Bank borrowings		2,459				3,446				2,915				1,919				1,111
Subordinated debt and other borrowings		684				696				719				1,145				714
Total interest expense	$	12,601			$	11,933			$	9,899			$	7,222			$	4,131
Weighted average cost (annualized):
Interest-bearing deposits		2.73	%			2.44	%			2.00	%			1.37	%			0.82	%
Fed funds purchased		5.26	%			0.00	%			0.00	%			0.00	%			0.00	%
Federal Home Loan Bank borrowings		2.78	%			3.17	%			3.11	%			2.47	%			1.48	%
Subordinated debt and other borrowings		5.65	%			5.64	%			5.72	%			5.19	%			5.69	%
Total interest-bearing liabilities		2.82	%			2.71	%			2.36	%			1.79	%			1.12	%
Net interest income (taxable equivalent basis)	$	15,971			$	15,476			$	15,486			$	16,824			$	17,352
Less: taxable equivalent adjustment		(435	)			(611	)			(574	)			(563	)			(527	)
Net interest income	$	15,536			$	14,865			$	14,912			$	16,261			$	16,825
Interest rate spread (tax equivalent basis, annualized)		2.60	%			2.49	%			2.65	%			3.08	%			3.52	%
Net interest margin (tax equivalent basis, annualized)		3.03	%			2.94	%			3.06	%			3.41	%			3.75	%