BURLINGTON, wash., July 28, 2021 (GLOBE NEWSWIRE) -- Savi Financial Corporation, Inc. (OTC Pink: SVVB), the bank holding company for SaviBank, today reported second quarter 2021 earnings increased 133% to $1.24 million, or $0.28 per diluted share, compared to $533,000, or $0.12 per diluted share, in the second quarter of 2020. Second quarter 2021 results were driven by higher revenue from both SBA loan sales and Paycheck Protection Program (“PPP”) origination fees earned on PPP loans. In the first six months of 2021, net income increased 257% to $2.23 million, compared to $624,000 in the first six months of 2020.
“Savi delivered record earnings for the second consecutive quarter and for the first six months of 2021, supported by meaningful growth in net interest income, primarily generated from PPP loan forgiveness,” said Michal D. Cann, Chairman and President of Savi Financial Corporation. “Loan growth was somewhat slower than expected during the quarter, as loan production was more than offset by PPP loan forgiveness and loan payoffs. Loan accommodations continued to decline during the quarter as our clients experienced steady recoveries and local markets increased activity. With COVID-19 restrictions lifted in Washington State, and vaccine levels increasing, we are optimistic for growth during the second half of the year.”
“Earlier this year, after exploring opportunities to enter the mortgage lending market, we brought in a team of seasoned, qualified bankers to establish a mortgage lending division, led by Drew Wilkens, Senior Vice President and Mortgage Department Manager,” continued Cann. “While the mortgage lending division is still in its very early stages, we originated a strong loan pipeline as of quarter end, and anticipate the mortgage lending division contributing to revenue in future quarters.”
“Over the past 15 months we have been strong participants in the SBA’s PPP lending programs, helping our business customers, as well as new customers in our community, with over $94.4 million in PPP loan originations to approximately 1003 customers over the course of the program,” said Andrew Hunter, President and CEO of SaviBank. “We added many new customer relationships with strong future growth opportunities, generating receivables of approximately $4.2 million in total PPP loan fees. As of June 30, 2021, we had received payments from the SBA for 640 borrowers totaling $58.9 million. Approximately $820,000 of the income recorded during the second quarter of 2021 was related to recognizing origination fees for PPP loan payoffs, compared to $446,000 during the first quarter of 2021.”
“Our success with PPP lending is having an impact on new SBA opportunities as well,” continued Hunter. “We had good growth in the SBA pipeline during the second quarter, largely due to the SBA recovery program, which carries a 90% guarantee on SBA 7(a) loans originated through September 30, 2021.”
“The increase in PPP loan origination fees, resulting from PPP loan forgiveness during the quarter, helped to keep our net interest margin (NIM) above industry averages,” said Rob Woods, Chief Financial Officer of SaviBank. The Company’s NIM was 4.01% in the second quarter of 2021, compared to 4.09% in the preceding quarter, and 3.79% in the second quarter a year ago. The NIM remains higher than their peer average of 3.32% posted by the 404 banks that comprised the SNL Microcap U.S. Bank Index at March 31, 2021. In the first six months of 2021, the NIM was 4.08% compared to 3.93% in the first six months of 2020.
Second Quarter 2021 Highlights:
- Net income increased 133% to $1.24 million in the second quarter of 2021, compared to $533,000 in the second quarter of 2020, and increased 26% compared to $986,000 in the first quarter of 2021.
- Earnings per diluted share were $0.28 in the second quarter, compared to $0.12 in the second quarter a year ago and $0.23 in the preceding quarter.
- Net interest income increased 28% to $4.31 million in the second quarter of 2021, compared to $3.37 million in the second quarter a year ago, and increased 7% from $4.05 million in the first quarter of 2021.
- Total revenue, consisting of net interest income and non-interest income, increased 46% to $5.58 million in the second quarter of 2021, compared to $3.82 million in the second quarter a year ago and increased 13% compared to $4.92 million in the preceding quarter.
- Average second quarter 2021 total loans increased 12%, to $352.1 million, compared to $315.0 million in the second quarter a year ago, and decreased modestly from $356.3 million in the first quarter of 2021. Total loans at June 30, 2021, increased modestly to $337.0 million from $333.4 million a year ago and decreased 9% from $368.5 million at March 31, 2021. The loan contraction compared to the prior quarter was in part due to $31.0 million in PPP loan forgiveness during the second quarter of 2021.
- SBA and USDA loan production for the twelve months ended June 30, 2021, totaled 19 loans for $25.2 million, compared to production of 15 loans for $15.4 million in the year-ago period.
- Average second quarter 2021 total deposits grew 28% to $381.2 million from $297.8 million, in the second quarter a year ago, and increased 8% from $353.9 million in the first quarter of 2021. Total deposits grew 27% to $403.5 million, at June 30, 2021, from $317.1 million a year ago, and increased 5% from $385.8 million at March 31, 2021.
- The provision for loan losses was $38,000 in the second quarter of 2021, compared to $300,000 in the second quarter of 2020, and $140,000 in the first quarter of 2021. In the first six months of 2021, the provision for loan losses was $178,000, compared to $662,000 in the first six months of 2020.
- Allowance for loan losses, as a percentage of total loans, increased to 1.13% at June 30, 2021, compared to 0.96% at June 30, 2020, and 1.03% at March 31, 2021. The allowance for loan losses, excluding PPP loans that are 100% secured by the SBA, was 1.27% of total loans, as of June 30, 2021.
- Nonperforming loans, as a percentage of total loans, was 0.82% at June 30, 2021, compared to 0.32% at June 30, 2020, and 0.75% at March 31, 2021. The increase year-over-year was primarily due to one lending relationship added during the prior quarter and not indicative of issues in the total loan portfolio.
- Nonperforming assets, as a percentage of total assets, was 0.66% at June 30, 2021, compared to 0.39% a year ago and 0.71% three months earlier.
- Net recoveries were $22,000 in the second quarter of 2021, compared to net charge-offs of $112,000 in the second quarter of 2020, and net recoveries of $37,000 in the first quarter of 2021.
- The Company offered loan accommodation options to support its clients affected by the economic impacts of COVID-19. As of June 30, 2021, total deferred loans represented 0.5% of total loans.
- SaviBank capital levels remained above the threshold for well-capitalized institutions with a tier-1 leverage ratio of 7.93% at June 30, 2021.
“During the second quarter we closed on the purchase of the Freeland branch from Coastal Community Bank, a banking subsidiary of Coastal Financial Corporation (NASDAQ: CCB), and relocated from our existing Freeland branch to the new location,” said Hunter. “This new branch is in a better location, and will help us expand our footprint in Freeland and throughout Whidbey Island.” Included in the transaction was approximately $24.0 million in inherited deposits.
About Northwest Washington
SaviBank currently operates six branches in Skagit County, two branches in Island County, and one branch in Whatcom County. The Skagit, Whatcom and Island counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border. Northwest Washington continues to be one of the most vibrant regions in the country, with a solid employment base, moderate climate and a strong housing market.
The housing market in Skagit, Island and Whatcom Counties remains healthy. According to the Northwest Multiple Listing Service, the average home in Skagit County sold for $517,000, up 28.39% in June 2021, compared to a year ago, and there was a 0.71 month supply of homes on the market. For Island County, the average house sold for $527,500, up 31.99% from a year ago and supply totaled 0.61 months. For Whatcom County, the average home sold for $510,000, up 27.50% from a year ago and supply totaled 0.77 months.
Skagit County’s economy is dominated by manufacturing, which accounts for 33.4% of GDP with food, machinery and oil and petroleum products the leading contributors. Skagit’s population is projected to grow 5.86% from 2021 through 2026, and median household income is projected to increase by 15.16% during the same time frame.
Whatcom County is home to Western Washington University and is the nation’s largest producer of raspberries. Whatcom County’s population is projected to grow 6.49% from 2021 through 2026, and median household income is projected to increase by 6.92%.
Island County is home to Naval Air Station Whidbey Island. Whidbey Island’s population is 86,704, with approximately 23,578 in Oak Harbor. Island County’s population is projected to grow 5.32% from 2021 through 2026 and median household income is projected to increase by 13.68%.
Sources:
http://www.northwestmls.com/library/CorporateContent/statistics/Recaps.pdf
www.SNL.com
About Savi Financial Corporation Inc. and SaviBank –
Savi Financial Corporation is the bank holding company which owns SaviBank. The Bank began operations April 11, 2005, and has 9 branch locations in Anacortes, Burlington, Bellingham, Concrete, Mount Vernon (2), Oak Harbor, Freeland and Sedro-Woolley, Washington. The Bank provides loan and deposit services to customers who are predominantly small and middle-market businesses and individuals in and around Skagit, Island, and Whatcom counties. As a locally-owned community bank, we believe that when everyone becomes Savi about their finances, our entire community benefits. Call us or stop by one of our branches and we’ll show you how to bank Savi. For additional information about SaviBank, visit; www.SaviBank.com.
Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.
| SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||
| (In thousands of dollars, except for ratios and per share amounts) | ||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
| June 30, 2021 | June 30, 2020 | Var % | March 31, 2021 | Var % | June 30, 2021 | June 30, 2020 | Var % | |||||||||||||||||||||
| SUMMARY OF OPERATIONS | ||||||||||||||||||||||||||||
| Interest income | $ | 4,722 | $ | 4,057 | 16 | % | $ | 4,536 | 4 | % | $ | 9,258 | $ | 7,935 | 17 | % | ||||||||||||
| Interest expense | (411 | ) | (695 | ) | (41 | ) | (490 | ) | (16 | ) | (901 | ) | (1,494 | ) | (40 | ) | ||||||||||||
| Net interest income | 4,311 | 3,362 | 28 | 4,046 | 7 | 8,357 | 6,441 | 30 | ||||||||||||||||||||
| Provision for loan losses | (38 | ) | (300 | ) | (87 | ) | (140 | ) | (73 | ) | (178 | ) | (662 | ) | (73 | ) | ||||||||||||
| NII after loss provision | 4,273 | 3,062 | 40 | 3,906 | 9 | 8,179 | 5,779 | 42 | ||||||||||||||||||||
| Non-interest income | 1,266 | 458 | 176 | 870 | 46 | 2,136 | 847 | 152 | ||||||||||||||||||||
| Non-interest expense | (3,966 | ) | (2,844 | ) | 39 | (3,530 | ) | 12 | (7,496 | ) | (5,834 | ) | 28 | |||||||||||||||
| Income before tax | 1,573 | 676 | 133 | 1,246 | 26 | 2,819 | 792 | 256 | ||||||||||||||||||||
| Federal income tax expense | 330 | 143 | 131 | 260 | 27 | 590 | 168 | 251 | ||||||||||||||||||||
| Net income | $ | 1,243 | $ | 533 | 133 | % | $ | 986 | 26 | % | $ | 2,229 | $ | 624 | 257 | % | ||||||||||||
| PER COMMON SHARE DATA | ||||||||||||||||||||||||||||
| Number of shares outstanding (000s) | 3,438 | 3,433 | 0 | % | 3,434 | 0.12 | % | 3,438 | 3,433 | 0.15 | % | |||||||||||||||||
| Earnings per share, diluted | $ | 0.28 | $ | 0.12 | 137 | $ | 0.23 | 25 | $ | 0.51 | $ | 0.14 | 254 | |||||||||||||||
| Market value | 11.10 | 7.62 | 46 | 11.00 | 1 | 11.10 | 7.62 | 46 | ||||||||||||||||||||
| Book value | 10.63 | 9.75 | 9 | 10.25 | 4 | 10.63 | 9.75 | 9 | ||||||||||||||||||||
| Market value to book value | 104.42 | % | 78.14 | % | 34 | 107.36 | % | (3 | ) | 104.42 | % | 78.14 | % | 34 | ||||||||||||||
| BALANCE SHEET DATA | ||||||||||||||||||||||||||||
| Assets | $ | 469,036 | $ | 396,736 | 18 | % | $ | 449,740 | 4 | % | $ | 469,036 | $ | 396,736 | 18 | % | ||||||||||||
| Investments securities | 14,614 | 9,222 | 58 | 11,066 | 32 | 14,614 | 9,222 | 58 | ||||||||||||||||||||
| Total loans | 337,045 | 333,351 | 1 | 368,501 | (9 | ) | 337,045 | 333,351 | 1 | |||||||||||||||||||
| Total deposits | 403,518 | 317,113 | 27 | 385,807 | 5 | 403,518 | 317,113 | 27 | ||||||||||||||||||||
| Borrowings | 27,500 | 45,000 | (39 | ) | 27,500 | - | 27,500 | 45,000 | (39 | ) | ||||||||||||||||||
| Shareholders’ equity | 36,547 | 33,479 | 9 | 35,183 | 4 | 36,547 | 33,479 | 9 | ||||||||||||||||||||
| AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||||||||||
| Average assets | $ | 459,388 | $ | 365,661 | 26 | % | $ | 429,560 | 7 | % | $ | 439,208 | $ | 354,630 | 24 | % | ||||||||||||
| Average total loans | 352,096 | 315,045 | 12 | 356,300 | (1 | ) | 353,266 | 293,650 | 20 | |||||||||||||||||||
| Average total deposits | 381,163 | 297,804 | 28 | 353,867 | 8 | 376,222 | 282,871 | 33 | ||||||||||||||||||||
| Average shareholders' equity | 35,865 | 33,189 | 8 | 34,708 | 3 | 35,390 | 33,133 | 7 | ||||||||||||||||||||
| ASSET QUALITY RATIOS | ||||||||||||||||||||||||||||
| Net (charge-offs) recoveries | $ | 22 | $ | (112 | ) | N/M | $ | 37 | N/M | $ | 59 | $ | (120 | ) | N/M | |||||||||||||
| Net (charge-offs) recoveries to average loans | 0.02 | % | (0.14 | )% | N/M | 0.04 | % | N/M | 0.03 | % | (0.08 | )% | N/M | |||||||||||||||
| Non-performing loans as a % of loans | 0.82 | 0.32 | 157 | 0.75 | 10 | 0.82 | 0.32 | 157 | ||||||||||||||||||||
| Non-performing assets as a % of assets | 0.66 | 0.39 | 69 | 0.71 | (7 | ) | 0.66 | 0.39 | 69 | |||||||||||||||||||
| Allowance for loan losses as a % of total loans | 1.13 | 0.96 | 18 | 1.03 | 10 | 1.13 | 0.96 | 18 | ||||||||||||||||||||
| Allowance for loan losses as a % of non-performing loans | 137.67 | 301.61 | (54 | ) | 137.08 | 0 | 137.67 | 301.61 | (54 | ) | ||||||||||||||||||
| FINANCIAL RATIOS\STATISTICS | ||||||||||||||||||||||||||||
| Return on average equity | 13.86 | % | 6.42 | % | 116 | % | 11.36 | % | 22 | % | 12.60 | % | 3.77 | % | 234 | % | ||||||||||||
| Return on average assets | 1.08 | 0.58 | 86 | 0.92 | 18 | 1.02 | 0.35 | 190 | ||||||||||||||||||||
| Net interest margin | 4.01 | 3.79 | 6 | 4.09 | (2 | ) | 4.08 | 3.93 | 4 | |||||||||||||||||||
| Efficiency ratio | 69.00 | 73.29 | (6 | ) | 70.25 | (2 | ) | 69.58 | 79.04 | (12 | ) | |||||||||||||||||
| Average number of employees (FTE) | 115 | 92 | 25 | 110 | 5 | 112 | 92 | 22 | ||||||||||||||||||||
| CAPITAL RATIOS | ||||||||||||||||||||||||||||
| Tier 1 leverage ratio -- Bank | 7.93 | 8.32 | (5 | )% | 8.47 | (6 | )% | 7.93 | 8.32 | (5 | )% | |||||||||||||||||
| Common equity tier 1 ratio -- Bank | 10.59 | 9.00 | 18 | 11.09 | (5 | ) | 10.59 | 9.00 | 18 | |||||||||||||||||||
| Tier 1 risk-based capital ratio -- Bank | 10.59 | 9.00 | 18 | 11.09 | (5 | ) | 10.59 | 9.00 | 18 | |||||||||||||||||||
| Total risk-based capital ratio --Bank | 11.73 | 9.94 | 18 | 12.30 | (5 | ) | 11.73 | 9.94 | 18 | |||||||||||||||||||
| Contact: | Michal D. Cann |
| Chairman & President | |
| Savi Financial Corporation | |
| (360) 707-2272 |