# EDGAR Filing Document

**Accession Number:** 0001435508
**File Stem:** 0001104659-23-011611
**Filing Date:** 2023-2
**Character Count:** 42207
**Document Hash:** adfb2de0d46331ed4858b4d2ad7091c4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-011611.hdr.sgml**: 20230207

**ACCESSION NUMBER**: 0001104659-23-011611

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230206

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230207

**DATE AS OF CHANGE**: 20230207

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** First Savings Financial Group, Inc.
- **CENTRAL INDEX KEY:** 0001435508
- **STANDARD INDUSTRIAL CLASSIFICATION:** SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
- **IRS NUMBER:** 371567871
- **STATE OF INCORPORATION:** IN
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34155
- **FILM NUMBER:** 23593694

**BUSINESS ADDRESS:**
- **STREET 1:** 702 NORTH SHORE DRIVE
- **STREET 2:** SUITE 300
- **CITY:** JEFFERSONVILLE
- **STATE:** IN
- **ZIP:** 47130
- **BUSINESS PHONE:** 812-283-0724

**MAIL ADDRESS:**
- **STREET 1:** 702 NORTH SHORE DRIVE
- **STREET 2:** SUITE 300
- **CITY:** JEFFERSONVILLE
- **STATE:** IN
- **ZIP:** 47130

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** First Savings Financial Group Inc
- **DATE OF NAME CHANGE:** 20080519

?xml version="1.0" encoding="utf-8"?

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 6, 2023

**<u>FIRST SAVINGS FINANCIAL GROUP, INC.</u>**

(Exact Name of Registrant as Specified in Charter)

<u>Indiana</u> <u>001-34155</u> <u>37-1567871</u> <br> (State or Other Jurisdiction of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.)

<u>702 North Shore Drive, Suite 300, Jeffersonville, Indiana</u> <u>47130</u> <br> (Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: <u>(812) 283-0724</u>

<u>Not Applicable</u>

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

---

| | |
|:---|:---|
| &nbsp;&nbsp;◻ | &nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| &nbsp;&nbsp;◻ | &nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| &nbsp;&nbsp;◻ | &nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| &nbsp;&nbsp;◻ | &nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |

---

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.01 per share | FSFG | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

---

| | |
|:---|:---|
| **Item 2.02.** | **<u>Results of Operations and Financial Condition</u>.** |

---

On February 6, 2023, First Savings Financial Group, Inc. announced its financial results for the three months ended December 31, 2022. The press release announcing the financial results for the three months ended December 31, 2022 is furnished as Exhibit 99.1 and incorporated herein by reference.

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| | |
|:---|:---|
| **Item 9.01.** | **<u>Financial Statements and Exhibits</u>.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

[99.1](tm235734d1_ex99-1.htm) [Press release dated February 6, 2023](tm235734d1_ex99-1.htm) <br>104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **FIRST SAVINGS FINANCIAL GROUP, INC.** | **FIRST SAVINGS FINANCIAL GROUP, INC.** |
| Date: February 6, 2023 | By: | /s/ Tony A. Schoen |
|  |  | Tony A. Schoen |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

FIRST SAVINGS FINANCIAL GROUP, INC. REPORTS FINANCIAL RESULTS FOR THE FIRST FISCAL QUARTER ENDED DECEMBER 31, 2022

Jeffersonville, Indiana — February 6, 2023. First Savings Financial Group, Inc. (NASDAQ: FSFG - news) (the "Company"), the holding company for First Savings Bank (the "Bank"), today reported net income of $2.9 million, or $0.41 per diluted share, for the quarter ended December 31, 2022 compared to net income of $4.3 million, or $0.60 per diluted share, for the quarter ended December 31, 2021.

Commenting on the Company's performance, Larry W. Myers, President and CEO, stated "This first quarter of fiscal 2023 was challenging and included a number of generally nonrecurring items that adversely affected net income. The core banking segment recognized higher than normal provisions for loan losses due primarily to a $109 million increase in gross loans for the quarter. The SBA lending segment recognized a $351,000 impairment for the loan servicing asset due to the high-rate environment. And, due to restructuring during the quarter, the mortgage banking segment recognized approximately $1.8 million of expense that will not be recognized in future periods. This restructuring in mortgage banking included changes in leadership, elimination of surplus staffing positions, closure of nonperforming loan production offices ("LPOs"), and reduction in third-party and vendor related expenses. As part of the restructuring, the Bank has strategically focused on a predominately Midwest footprint for LPOs and a greater alignment of these with the core banking operations. While some expenses associated with the restructuring will be recognized in the quarter ending March 31, 2023, we are confident that this restructuring and realignment will result in the cessation of the significant losses recognized by the mortgage banking segment in recent quarters. The core banking segment continues to perform well and asset quality remains strong, but it's increasing facing margin compression as funding costs increase in this rate environment, particularly those associated with wholesale funding sources such as home loan bank advances and brokered deposits. We are encouraged by the strong performance of the core banking segment and are optimistic for enhanced performance of the SBA lending and mortgage banking segments in future periods. Lastly, the Company repurchased 73,392 of its common shares during the quarter, in addition to the 199,195 purchased in the third and fourth quarters of fiscal 2022, which together totaled more than 3.8% of outstanding shares."

**Results of Operations for the Three Months Ended December 31, 2022 and 2021**

Net interest income increased $2.4 million, or 17.0%, to $16.3 million for the three months ended December 31, 2022 as compared to the same period 2021. The increase in net interest income was due to a $7.7 million increase in interest income, partially offset by a $5.4 million increase in interest expense. Interest income increased due to an increase in the average balance of interest-earning assets of $449.5 million, from $1.53 billion for 2021 to $1.98 billion for 2022, and an increase in the weighted-average tax-equivalent yield, from 4.22% for 2021 to 4.87% for 2022. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of investment securities and total loans of $152.3 million and $310.2 million, respectively. When excluding the impact from PPP loan payoffs, the increase in the average balance of loans was $360.7 million when comparing the two periods. Interest expense increased due to an increase in the average balance of interest-bearing liabilities of $415.1 million, from $1.20 billion for 2021 to $1.61 billion for 2022, and an increase in the average cost of interest-bearing liabilities, from 0.62% for 2021 to 1.79% for 2022. The increase in the average cost of interest-bearing liabilities for 2022 was due primarily to higher rates paid for brokered deposits and money market deposit accounts during the period.

The Company recognized a provision for loan losses of $984,000 for the three months ended December 31, 2022 due primarily to loan portfolio growth, compared to a provision of $526,000 for the same period in 2021. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, increased $667,000 from $10.9 million at September 30, 2022 to $11.5 million at December 31, 2022. The Company recognized net charge-offs of $264,000 for the three months ended December 31, 2022, of which $247,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $47,000 in 2021.

Noninterest income decreased $11.4 million for the three months ended December 31, 2022 as compared to the same period in 2021. The decrease was due primarily to decreases in mortgage banking income and net gain on sale of SBA loans of $10.2 million and $861,000, respectively. The decrease in mortgage banking income was primarily due to a $3.9 million decrease in production revenue from lower originations for sale, a $4.4 million decrease in capitalized residential mortgage loan servicing rights, a $1.2 million decrease in realized and unrealized hedging gains in 2022 and a $1.2 million decrease in the fair value of the residential mortgage loan servicing rights portfolio in 2022 as compared to a $675,000 increase in fair value recognized in 2021, partially offset by a $1.3 million increase in the fair value of loans held for sale and interest rate lock commitments as compared to a $222,000 decrease in fair value recognized in 2021. Mortgage loans originated for sale were $77.6 million in the three months ended December 31, 2022 as compared to $541.1 million in 2021. The decrease in net gain on sales of SBA loans was due primarily to decreases in production and sales volume from the SBA lending segment, and lower premiums in the secondary market.

Noninterest expense decreased $7.3 million for the three months ended December 31, 2022 as compared to the same period in 2021. The decrease was due primarily to a decrease in compensation and benefits of $6.6 million. The decrease in compensation and benefits expense was due primarily to a reduction in staff and incentive compensation for the Company's mortgage banking segment as a result of decreased mortgage banking income.

The Company recognized an income tax expense of $83,000 for the three months ended December 31, 2022 compared to tax expense of $811,000 for the same period in 2021. The effective tax rate for 2022 was 2.8%, which was a decrease from the effective tax rate of 15.9% in 2021. The decrease was due to recognition of solar tax credits in 2022 and reduction of pre-tax net income in 2022 as compared to 2021.

**Comparison of Financial Condition at December 31, 2022 and September 30, 2022**

Total assets increased $103.2 million, from $2.09 billion at September 30, 2022 to $2.20 billion at December 31, 2022. Net loans held for investment increased $108.4 million during the quarter ended December 31, 2022, due primarily to growth in single-tenant net lease commercial real estate loans and residential mortgage loans.

Total liabilities increased $94.6 million due primarily to increases in total deposits, FHLB borrowings and other borrowings of $22.0 million, $70.3 million and $7.3 million, respectively. The increase in FHLB borrowings was primarily used to fund loan growth. The increase in other borrowings represents commercial loan transfers that were accounted for as secured borrowings.

Common stockholders' equity increased $8.6 million, from $151.6 million at September 30, 2022 to $160.1 million at December 31, 2022, due primarily to increases in accumulated other comprehensive income and retained net income of $8.1 million and $2.0 million, respectively. The increase in accumulated other comprehensive income was primarily due to decreasing market interest rates during the three months ended December 31, 2022, which resulted in an increase in the fair value of the available-for-sale securities portfolio. At December 31, 2022 and September 30, 2022, the Bank was considered "well-capitalized" under applicable regulatory capital guidelines.

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

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

Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including the duration, extent and severity of the COVID-19 pandemic, including its effect on our customers, service providers and on the economy and financial markets in general; 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)

\* All share and per share amounts have been adjusted to reflect the three-for-one stock split effective September 15, 2021.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
| **OPERATING DATA:** | **December 31,** | **December 31,** |
| *(In thousands, except share and per share data)* | **2022** | **2021** |
| Total interest income | $23483 | $15762 |
| Total interest expense | 7222 | 1859 |
| Net interest income | 16261 | 13903 |
| Provision for loan losses | 984 | 526 |
| Net interest income after provision for loan losses | 15277 | 13377 |
| Total noninterest income | 5188 | 16591 |
| Total noninterest expense | 17511 | 24852 |
| Income before income taxes | 2954 | 5116 |
| Income tax expense | 83 | 811 |
| Net income | $2871 | $4305 |
| Net income per share, basic | $0.42 | $0.60 |
| Weighted average shares outstanding, basic | 6915909 | 7116790 |
| Net income per share, diluted | $0.41 | $0.60 |
| Weighted average shares outstanding, diluted | 6972055 | 7207210 |
| Performance ratios (three-month data annualized) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Return on average assets | 0.54% | 1.01% |
| &nbsp;&nbsp;&nbsp;&nbsp;Return on average equity | 7.50% | 9.45% |
| &nbsp;&nbsp;&nbsp;&nbsp;Return on average common stockholders' equity | 7.50% | 9.45% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest margin (tax equivalent basis) | 3.41% | 3.73% |
| &nbsp;&nbsp;&nbsp;&nbsp;Efficiency ratio | 81.64% | 81.50% |

---

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| | | | |
|:---|:---|:---|:---|
| **FINANCIAL CONDITION DATA:** | **December 31,** | **September 30,** | **Increase** |
| *(In thousands, except per share data)* | **2022** | **2022** | **(Decrease)** |
|  |  | **(As Restated)** |  |
| Total assets | $2196919 | $2093725 | $103194 |
| Cash and cash equivalents | 38278 | 41665 | (3387) |
| Investment securities | 330683 | 318075 | 12608 |
| Loans held for sale | 44281 | 60462 | (16181) |
| Gross loans (1) | 1599020 | 1489904 | 109116 |
| Allowance for loan losses | 16080 | 15360 | 720 |
| Interest earning assets | 1994374 | 1898051 | 96323 |
| Goodwill | 9848 | 9848 |  |
| Core deposit intangibles | 721 | 775 | (54) |
| Loan servicing rights | 65598 | 67194 | (1596) |
| Noninterest-bearing deposits | 315390 | 340172 | (24782) |
| Interest-bearing deposits (2) | 1222451 | 1175662 | 46789 |
| Federal Home Loan Bank borrowings | 377643 | 307303 | 70340 |
| Subordinated debt and other borrowings, net of issuance costs | 95458 | 88206 | 7252 |
| Total liabilities | 2036775 | 1942160 | 94615 |
| Accumulated other comprehensive income (loss) | (19000) | (27079) | 8079 |
| Stockholders' equity, net of noncontrolling interests | 160144 | 151565 | 8579 |
| Book value per share | $23.15 | $21.74 | $1.41 |
| Tangible book value per share (3) | 21.62 | 20.22 | 1.40 |
| Non-performing assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonaccrual loans - SBA guaranteed | $5465 | $5474 | $(9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonaccrual loans - unguaranteed | 6058 | 5382 | 676 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total nonaccrual loans | $11523 | $10856 | $667 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accruing loans past due 90 days | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-performing loans | 11523 | 10856 | 667 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreclosed real estate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Troubled debt restructurings classified as performing loans | 2580 | 2714 | (134) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-performing assets | $14103 | $13570 | $533 |
| Asset quality ratios: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses as a percent of total gross loans | 1.01% | 1.03% | (0.02%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses as a percent of total gross loans, excluding PPP loans (4) | 1.01% | 1.03% | (0.02%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses as a percent of nonperforming loans | 139.55% | 141.49% | (1.94%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonperforming loans as a percent of total gross loans | 0.72% | 0.73% | (0.01%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonperforming assets as a percent of total assets | 0.64% | 0.65% | (0.01%) |

---

(1) Includes
 $591,000 and $862,000 of PPP loans at December 31, 2022 and September 30, 2022, respectively.

(2) Includes
 $326.2 million and $292.5 million of brokered certificates of deposit at December 31, 2022
 and September 30, 2022, respectively.

(3) See
 reconciliation of GAAP and non-GAAP financial measures for additional information relating
 to calculation of this item.

(4) Denominator
 excludes PPP loans, which are fully guaranteed by the SBA. This ratio is non-GAAP,
 but is believed by management to be meaningful because it provides a comparable ratio after
 eliminating PPP loans.

**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.

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **September 30,** | **Increase** |
| **Tangible Book Value Per Share** | **2022** | **2022** | **(Decrease)** |
| *(In thousands, except share and per share data)* |  | **(As Restated)** |  |
| Stockholders' equity, net of noncontrolling interests (GAAP) | $160144 | $151565 | $8579 |
| Less: goodwill and core deposit intangibles | (10569) | (10623) | 54 |
| Tangible equity (non-GAAP) | $149575 | $140942 | 8633 |
| Outstanding common shares | 6917921 | 6970631 | (52710) |
| Tangible book value per share (non-GAAP) | $21.62 | $20.22 | $1.40 |
| Book value per share (GAAP) | $23.15 | $21.74 | $1.41 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):** | **As of** | **As of** | **As of** | **As of** | **As of** |
| **Summarized Consolidated Balance Sheets** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except per share data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| Total cash and cash equivalents | $38278 | $41665 | $37468 | $31105 | $40592 |
| Total investment securities | 330683 | 318075 | 309027 | 284674 | 220926 |
| Total loans held for sale | 44281 | 60462 | 188031 | 152652 | 161218 |
| Total loans, net of allowance for loan losses | 1582940 | 1474544 | 1267816 | 1126818 | 1142655 |
| PPP loans | 591 | 862 | 1766 | 13415 | 46020 |
| Loan servicing rights | 65598 | 67194 | 69039 | 68267 | 59187 |
| Total assets | 2196919 | 2093725 | 2006666 | 1801944 | 1764589 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retail deposits | $1211677 | $1223330 | $1186582 | $1151437 | $1146454 |
| &nbsp;&nbsp;&nbsp;&nbsp;Brokered deposits | 326164 | 292504 | 159125 | 69752 | 120581 |
| Total deposits | 1537841 | 1515834 | 1345707 | 1221189 | 1267035 |
| Federal Home Loan Bank borrowings | 377643 | 307303 | 404098 | 296592 | 258377 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock and additional paid-in capital | $27425 | $26848 | $27236 | $27154 | $27073 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings - substantially restricted | 163890 | 161927 | 161438 | 159732 | 153630 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (19000) | (27079) | (12560) | (1336) | 9219 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unearned stock compensation | (1361) | (969) | (1075) | (1180) | (1285) |
| &nbsp;&nbsp;&nbsp;&nbsp;Less treasury stock, at cost | (10810) | (9162) | (5826) | (4417) | (4417) |
| Total stockholders' equity | 160144 | 151565 | 169213 | 179953 | 184220 |
| Outstanding common shares | 6917921 | 6970631 | 7110706 | 7169826 | 7169826 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Summarized Consolidated Statements of Income** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except per share data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| Total interest income | $23483 | $21152 | $18479 | $15801 | $15762 |
| Total interest expense | 7222 | 4327 | 2568 | 1788 | 1859 |
| Net interest income | 16261 | 16825 | 15911 | 14013 | 13903 |
| Provision (credit) for loan losses | 984 | 880 | 532 | (30) | 526 |
| Net interest income after provision (credit) for loan losses | 15277 | 15945 | 15379 | 14043 | 13377 |
| Total noninterest income | 5188 | 4531 | 10033 | 20072 | 16591 |
| Total noninterest expense | 17511 | 19514 | 22835 | 25461 | 24852 |
| Income before income taxes | 2954 | 962 | 2577 | 8654 | 5116 |
| Income tax expense (benefit) | 83 | (446) | (61) | 1619 | 811 |
| Net income | $2871 | $1408 | $2638 | $7035 | $4305 |
| Net income per share, basic | $0.42 | $0.20 | $0.37 | $0.99 | $0.60 |
| Weighted average shares outstanding, basic | 6915909 | 6988873 | 7073204 | 7076355 | 7116790 |
| Net income per share, diluted | $0.41 | $0.20 | $0.37 | $0.98 | $0.60 |
| Weighted average shares outstanding, diluted | 6972055 | 7056138 | 7145288 | 7156229 | 7207210 |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| **Consolidated Performance Ratios (Annualized)** | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| Return on average assets | 0.54% | 0.28% | 0.55% | 1.61% | 1.01% |
| Return on average equity | 7.50% | 3.30% | 6.06% | 15.24% | 9.45% |
| Return on average common stockholders' equity | 7.50% | 3.30% | 6.06% | 15.24% | 9.45% |
| Net interest margin (tax equivalent basis) | 3.41% | 3.75% | 3.77% | 3.68% | 3.73% |
| Efficiency ratio | 81.64% | 91.37% | 88.02% | 74.70% | 81.50% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| **Consolidated Asset Quality Ratios** | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| Nonperforming loans as a percentage of total loans | 0.72% | 0.73% | 0.77% | 0.88% | 1.10% |
| Nonperforming assets as a percentage of total assets | 0.64% | 0.65% | 0.63% | 0.73% | 0.82% |
| Allowance for loan losses as a percentage of total loans | 1.01% | 1.03% | 1.17% | 1.27% | 1.28% |
| Allowance for loan losses as a percentage of nonperforming loans | 139.55% | 141.49% | 151.59% | 143.94% | 116.12% |
| Net charge-offs to average outstanding loans | 0.02% | 0.03% | 0.00% | 0.02% | 0.00% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Segmented Statements of Income Information** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except per share data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| **Core Banking Segment:** |  |  |  |  |  |
| Net interest income | $15008 | $14994 | $13848 | $11847 | $11495 |
| Provision (credit) for loan losses | 701 | 769 | 910 | (240) | (144) |
| Net interest income after provision (credit) for loan losses | 14307 | 14225 | 12938 | 12087 | 11639 |
| Noninterest income | 1928 | 1808 | 2379 | 2163 | 1942 |
| Noninterest expense | 9797 | 10499 | 10187 | 9811 | 9482 |
| Income before income taxes | 6438 | 5534 | 5130 | 4439 | 4099 |
| Income tax expense | 946 | 735 | 568 | 330 | 500 |
| Net income | $5492 | $4799 | $4562 | $4109 | $3599 |
| **SBA Lending Segment (Q2):** |  |  |  |  |  |
| Net interest income (5) | $995 | $1182 | $1449 | $1602 | $1875 |
| Provision (credit) for loan losses | 283 | 111 | (378) | 210 | 670 |
| Net interest income after provision (credit) for loan losses | 712 | 1071 | 1827 | 1392 | 1205 |
| Noninterest income | 754 | 480 | 584 | 1658 | 1901 |
| Noninterest expense | 1924 | 1891 | 2341 | 2253 | 2236 |
| Income (loss) before income taxes | (458) | (340) | 70 | 797 | 870 |
| Income tax expense (benefit) | (107) | (123) | 26 | 240 | 265 |
| Net income (loss) (6) | $(351) | $(217) | $44 | $557 | $605 |
| **Mortgage Banking Segment:** |  |  |  |  |  |
| Net interest income | $258 | $649 | $614 | $564 | $533 |
| Provision for loan losses | - | - | - | - | - |
| Net interest income after provision for loan losses | 258 | 649 | 614 | 564 | 533 |
| Noninterest income | 2506 | 2243 | 7070 | 16251 | 12748 |
| Noninterest expense | 5790 | 7124 | 10307 | 13397 | 13134 |
| Income (loss) before income taxes | (3026) | (4232) | (2623) | 3418 | 147 |
| Income tax expense (benefit) | (756) | (1058) | (655) | 1049 | 46 |
| Net income (loss) | $(2270) | $(3174) | $(1968) | $2369 | $101 |
| (5) Includes net interest income derived from PPP loans of: | $1 | $16 | $173 | $239 | $550 |
| (6) Includes net income attributable to the Company derived from PPP loans (tax effected) of: | $1 | $12 | $130 | $179 | $413 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Segmented Statements of Income Information** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except per share data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| **Net Income (Loss) Per Share by Segment** |  |  |  |  |  |
| Net income per share, basic - Core Banking | $0.80 | $0.68 | $0.64 | $0.58 | $0.50 |
| Net income (loss) per share, basic - SBA Lending (Q2) (7) | (0.05) | (0.03) | 0.01 | 0.08 | 0.09 |
| Net income (loss) per share, basic - Mortgage Banking | (0.33) | (0.45) | (0.28) | 0.33 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net income per share, basic (8) | $0.42 | $0.20 | $0.37 | $0.99 | $0.60 |
| **Net Income (Loss) Per Diluted Share by Segment** |  |  |  |  |  |
| Net income per share, diluted - Core Banking | $0.79 | $0.68 | $0.64 | $0.57 | $0.50 |
| Net income (loss) per share, diluted - SBA Lending (Q2) (8) | (0.05) | (0.03) | 0.01 | 0.08 | 0.09 |
| Net income (loss) per share, diluted - Mortgage Banking | (0.33) | (0.45) | (0.28) | 0.33 | 0.01 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net income per share, diluted (8) | $0.41 | $0.20 | $0.37 | $0.98 | $0.60 |
| **Return on Average Assets by Segment (three-month data annualized)** |  |  |  |  |  |
| Core Banking | 1.17% | 1.08% | 1.12% | 1.14% | 1.05% |
| SBA Lending | (1.38%) | (0.85%) | 0.17% | 1.80% | 1.55% |
| Mortgage Banking | (9.31%) | (9.44%) | (4.50%) | 5.38% | 0.23% |
| **Efficiency Ratio by Segment (three-month data annualized)** |  |  |  |  |  |
| Core Banking | 57.85% | 62.49% | 62.78% | 70.03% | 70.57% |
| SBA Lending | 110.01% | 113.78% | 115.15% | 69.11% | 59.22% |
| Mortgage Banking | 209.48% | 246.33% | 134.14% | 79.67% | 98.89% |
| (7) Includes basic net income per share derived from PPP loans (tax effected) of: | $0.00 | $0.00 | $0.02 | $0.03 | $0.06 |
| (8) Includes diluted net income per share derived from PPP loans (tax effected) of: | $0.00 | $0.00 | $0.02 | $0.03 | $0.06 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Noninterest Expense Detail by Segment** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
|  |  | **(As Restated)** |  |  |  |
| **Core Banking Segment:** |  |  |  |  |  |
| Compensation (9) | $5275 | $4444 | $5995 | $5207 | $5776 |
| Occupancy | 1443 | 1374 | 1412 | 1393 | 1357 |
| Advertising | 213 | 272 | 284 | 297 | 232 |
| Other | 2866 | 4409 | 2496 | 2914 | 2117 |
| Total Noninterest Expense | $9797 | $10499 | $10187 | $9811 | $9482 |
| **SBA Lending Segment (Q2):** |  |  |  |  |  |
| Compensation | $1622 | $1690 | $1619 | $1724 | $1685 |
| Occupancy | 54 | 41 | 60 | 64 | 78 |
| Advertising | 2 | 8 | 3 | 9 | 9 |
| Other | 246 | 152 | 659 | 456 | 464 |
| Total Noninterest Expense | $1924 | $1891 | $2341 | $2253 | $2236 |
| **Mortgage Banking Segment:** |  |  |  |  |  |
| Compensation (9) | $3788 | $5091 | $7601 | $10292 | $9867 |
| Occupancy | 363 | 491 | 597 | 622 | 678 |
| Advertising | 203 | 319 | 519 | 696 | 551 |
| Other | 1436 | 1223 | 1590 | 1787 | 2038 |
| Total Noninterest Expense | $5790 | $7124 | $10307 | $13397 | $13134 |
| (9) 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: | $1192 | $945 | $1164 | $869 | $975 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Mortgage Banking Noninterest Expense Fixed vs. Variable** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| ***(In thousands)*** | **2022** | **2022** | **2022** | **2022** | **2021** |
| Noninterest Expense - Fixed Expenses | $4561 | $5724 | $6989 | $7936 | $7752 |
| Noninterest Expense - Variable Expenses (10) | 1229 | 1400 | 3318 | 5461 | 5382 |
| Total Noninterest Expense | $5790 | $7124 | $10307 | $13397 | $13134 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **SBA Lending (Q2) Data** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except percentage data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| Final funded loans guaranteed portion sold, SBA | $11293 | $3772 | $5364 | $14355 | $14131 |
| Gross gain on sales of loans, SBA | $936 | $393 | $592 | $1670 | $1841 |
| Weighted average gross gain on sales of loans, SBA | 8.29% | 10.42% | 11.04% | 11.63% | 13.03% |
| Net gain on sales of loans, SBA (11) | $775 | $249 | $486 | $1327 | $1636 |
| Weighted average net gain on sales of loans, SBA | 6.86% | 6.60% | 9.06% | 9.24% | 11.58% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Mortgage Banking Data** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands, except percentage data)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| Mortgage originations for sale in the secondary market | $77605 | $185981 | $421426 | $459434 | $541074 |
| Mortgage sales | $96177 | $241804 | $426200 | $478816 | $587928 |
| Gross gain on sales of loans, mortgage banking (12) | $1217 | $2630 | $7419 | $10988 | $11082 |
| Weighted average gross gain on sales of loans, mortgage banking | 1.27% | 1.09% | 1.74% | 2.29% | 1.88% |
| Mortgage banking income (13) | $2496 | $2246 | $7093 | $16254 | $12744 |

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(10) Variable
 expenses include incentive compensation and advertising expenses.

(11) Inclusive
 of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts
 on unguaranteed portions held-for-investment.

(12) Inclusive
 of gains on capitalized mortgage servicing rights, realized hedging gains and loan fees,
 and net of lender credits and other investor expenses.

(13) 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** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Summarized Consolidated Average Balance Sheets** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| **Interest-earning assets** |  | **(As Restated)** |  |  |  |
| Average balances: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits with banks | $19379 | $28318 | $25068 | $36029 | $33065 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, excluding PPP loans | 1582538 | 1477857 | 1381366 | 1268983 | 1221879 |
| &nbsp;&nbsp;&nbsp;&nbsp;PPP loans | 644 | 1310 | 4271 | 22066 | 51178 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - taxable | 111936 | 94836 | 103536 | 50165 | 47717 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - nontaxable | 241504 | 230312 | 202534 | 163472 | 153452 |
| &nbsp;&nbsp;&nbsp;&nbsp;FRB and FHLB stock | 20063 | 19890 | 18691 | 19021 | 19258 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | $1976064 | $1852523 | $1735466 | $1559736 | $1526549 |
| Interest income (tax equivalent basis): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits with banks | $144 | $97 | $37 | $13 | $14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, excluding PPP loans | 20219 | 18012 | 15788 | 13745 | 13424 |
| &nbsp;&nbsp;&nbsp;&nbsp;PPP loans | 3 | 17 | 177 | 258 | 595 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - taxable | 955 | 740 | 769 | 420 | 405 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - nontaxable | 2505 | 2352 | 1987 | 1571 | 1509 |
| &nbsp;&nbsp;&nbsp;&nbsp;FRB and FHLB stock | 220 | 265 | 169 | 146 | 149 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income (tax equivalent basis) | $24046 | $21483 | $18927 | $16153 | $16096 |
| Weighted average yield (tax equivalent basis, annualized): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits with banks | 2.97% | 1.37% | 0.59% | 0.14% | 0.17% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, excluding PPP loans | 5.11% | 4.88% | 4.57% | 4.33% | 4.39% |
| &nbsp;&nbsp;&nbsp;&nbsp;PPP loans | 1.86% | 5.19% | 16.58% | 4.68% | 4.65% |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - taxable | 3.41% | 3.12% | 2.97% | 3.35% | 3.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment securities - nontaxable | 4.15% | 4.08% | 3.92% | 3.84% | 3.93% |
| &nbsp;&nbsp;&nbsp;&nbsp;FRB and FHLB stock | 4.39% | 5.33% | 3.62% | 3.07% | 3.09% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-earning assets | 4.87% | 4.64% | 4.36% | 4.14% | 4.22% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **Summarized Consolidated Average Balance Sheets** | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
| *(In thousands)* | **2022** | **2022** | **2022** | **2022** | **2021** |
| **Interest-bearing liabilities** |  | **(As Restated)** |  |  |  |
| Average balances: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits | $1213419 | $1125659 | $998868 | $922137 | $913297 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank borrowings | 311146 | 301027 | 325460 | 280190 | 264617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt and other borrowings | 88304 | 50179 | 50152 | 24592 | 19870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | $1612869 | $1476865 | $1374480 | $1226919 | $1197784 |
| Interest expense: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits | $4158 | $2306 | $1047 | $738 | $811 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank borrowings | 1919 | 1111 | 811 | 681 | 730 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt and other borrowings | 1145 | 714 | 710 | 369 | 318 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | $7222 | $4131 | $2568 | $1788 | $1859 |
| Weighted average cost (annualized): |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits | 1.37% | 0.82% | 0.42% | 0.32% | 0.36% |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank borrowings | 2.47% | 1.48% | 1.00% | 0.97% | 1.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt and other borrowings | 5.19% | 5.69% | 5.66% | 6.00% | 6.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 1.79% | 1.12% | 0.75% | 0.58% | 0.62% |
| Interest rate spread (tax equivalent basis, annualized) | 3.08% | 3.52% | 3.61% | 3.56% | 3.60% |
| Net interest margin (tax equivalent basis, annualized) | 3.41% | 3.75% | 3.77% | 3.68% | 3.73% |
| Net interest margin, excluding PPP loans and PPPLF borrowings (non-GAAP), (tax equivalent basis, annualized) | 3.41% | 3.75% | 3.74% | 3.67% | 3.70% |

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