Mid-Southern Bancorp, Inc. (the “Company”) (NASDAQ: MSVB), the
holding company for Mid-Southern Savings Bank, FSB (the “Bank”),
reported net income for the second quarter ended
June 30, 2023 of $400,000 or $0.14 per diluted share
compared to $526,000 or $0.19 per diluted share for the same period
in 2022. For the six months ended June 30, 2023, the
Company reported net income of $740,000 or $0.27 per diluted share
compared to $993,000 or $0.36 per diluted share for the same period
in 2022.
Income Statement Review
Net interest income after provision for credit
losses increased $3,000, or 0.2%, for the quarter ended
June 30, 2023 to $1.9 million as compared to the
quarter ended June 30, 2022. Total interest income
increased $451,000, or 20.9%, when comparing the two periods, due
to increases in the average balances and yields of interest-earning
assets. The average balance of interest-earning assets increased to
$266.8 million for the quarter ended June 30, 2023
from $262.1 million for the quarter ended
June 30, 2022, due primarily to increases in loans
receivable, partially offset by lower investment securities and
interest-bearing deposits with banks. The average yield on
interest-earning assets and tax-equivalent yield on
interest-earning assets(1) increased to 3.90% and 4.06%,
respectively, for the quarter ended June 30, 2023 from
3.29% and 3.46%, respectively, for the quarter ended
June 30, 2022, due primarily to higher yields from loans,
investment securities, and interest-bearing deposits with banks.
Total interest expense increased $514,000, or 297.1%, when
comparing the two periods due to an increase in the average balance
of interest-bearing liabilities and in the average cost of
interest-bearing liabilities. The average balance of
interest-bearing liabilities increased to $201.9 million for
the quarter ended June 30, 2023 from $196.7 million
for the same period in 2022, due primarily to increases in
borrowings, partially offset by decreases in deposit accounts. The
average cost of interest-bearing liabilities increased to 1.36% for
the quarter ended June 30, 2023 from 0.35% for the same
period in 2022. As a result of the changes in interest-earning
assets and interest-bearing liabilities, the net interest rate
spread and net interest rate spread on a tax-equivalent basis(1)
decreased to 2.54% and 2.70%, respectively for the quarter ended
June 30, 2023 from 2.94% and 3.11%, respectively, for the
quarter ended June 30, 2022. The net interest margin and
net interest margin on a tax-equivalent basis(1) decreased to 2.87%
and 3.03%, respectively, for the quarter ended
June 30, 2023 from 3.02% and 3.20% for the quarter ended
June 30, 2022.
Net interest income after provision for credit
losses increased $78,000, or 2.1%, for the six months ended
June 30, 2023 to $3.7 million as compared to the six
months ended June 30, 2022. Total interest income
increased $1.1 million, or 26.0%, when comparing the two
periods, due to increases in the average balances and yields of
interest-earning assets. The average balance of interest-earning
assets increased to $268.1 million for the six months ended
June 30, 2023 from $256.5 million for the six months
ended June 30, 2022, due primarily to increases in loans
receivable and investment securities, partially offset by lower
interest-bearing deposits with banks. The average yield on
interest-earning assets and tax-equivalent yield on
interest-earning assets(1) increased to 3.79% and 3.96%,
respectively, for the six months ended June 30, 2023 from
3.15% and 3.32%, respectively, for the six months ended
June 30, 2022, due primarily to higher yields from loans,
investment securities, and interest-bearing deposits with banks.
Total interest expense increased $987,000, or 305.6%, when
comparing the two periods due to an increase in the average balance
of interest-bearing liabilities and in the average cost of
interest-bearing liabilities. The average balance of
interest-bearing liabilities increased to $203.6 million for
the six months ended June 30, 2023 from
$190.8 million for the same period in 2022, due primarily
to increases in deposit accounts and borrowings. The average cost
of interest-bearing liabilities increased to 1.29% for the six
months ended June 30, 2023 from 0.34% for the same period
in 2022. As a result of the changes in interest-earning assets
and interest-bearing liabilities, the net interest rate spread and
net interest rate spread on a tax-equivalent basis(1) decreased to
2.50% and 2.67%, respectively for the six months ended
June 30, 2023 from 2.81% and 2.98%, respectively, for the
six months ended June 30, 2022. The net interest margin
and net interest margin on a tax-equivalent basis(1) decreased to
2.82% and 2.98%, respectively, for the six months ended
June 30, 2023 from 2.90% and 3.06% for the six months
ended June 30, 2022.
Noninterest income decreased $56,000, or 15.4%,
for the quarter ended June 30, 2023 as compared to the
same period in 2022, due primarily to a reduction in brokered
loan fees of $39,000, partially offset by an increase of $15,000 in
ATM and debit card fee income and a $7,000 net gain on the disposal
of foreclosed real estate. A gain on life insurance of $36,000 was
recorded during the quarter ended June 30, 2022 whereas
no gain was recorded during the quarter ended
June 30, 2023.
Noninterest income decreased $97,000, or 14.9%,
for the six months ended June 30, 2023 as compared to the
same period in 2022, due primarily to a reduction in brokered
loan fees of $67,000 and a $27,000 net loss on the sale of
available-or-sale investment securities, partially offset by
increases of $18,000 in ATM and debit card fee income and $9,000 in
deposit account service charges and a $7,000 net gain on the
disposal of foreclosed real estate. A gain on life insurance of
$36,000 was recorded during the six months ended
June 30, 2022 whereas no gain was recorded during the six
months ended June 30, 2023.
Noninterest expense increased $88,000, or 5.0%,
for the quarter ended June 30, 2023 as compared to the
same period in 2022. The increase was due primarily to
increases in data processing expenses of $103,000, stockholders’
meeting expense of $61,000, occupancy and equipment expenses of
$15,000, deposit insurance premiums of $13,000 and other expenses
of $25,000, partially offset by lower compensation and benefits
expenses of $50,000, marketing and business development expenses of
$35,000 and professional fees of $29,000.
Noninterest expense increased $320,000, or 9.8%,
for the six months ended June 30, 2023 as compared to the
same period in 2022. The increase was due primarily to
increases in data processing expenses of $196,000, stockholders’
meeting expense of $61,000, occupancy and equipment expenses of
$38,000, deposit insurance premiums of $17,000 and other expenses
of $45,000, partially offset by lower marketing and business
development expenses of $31,000 and supervisory examination
expenses of $12,000.
The Company recorded an income tax expense of
$9,000 for the quarter ended June 30, 2023, compared to
an income tax expense of $24,000 for the same period in 2022.
For the six months ended June 30, 2023, the Company
recorded an income tax benefit of $28,000 compared to an income tax
expense of $58,000 for the six months ended
June 30, 2022. The income tax benefit is primarily due to
an increase in tax-exempt income in proportion to income before
income taxes.
__________________________________________(1)
Refer to “Non-GAAP Financial Measures” below and to “Reconciliation
of Non-GAAP Financial Measures” at the end of this Earnings Release
for more information and for a reconciliation of this non-GAAP
financial measure to the nearest GAAP financial measure.
Balance Sheet Review
Total assets as of June 30, 2023 were
$266.3 million compared to $269.2 million at
December 31, 2022. The decrease in total assets was
primarily due to decreases in investment securities of
$6.2 million, partially offset by an increase in net loans of
$3.2 million. Investment securities decreased due primarily to
the sale of $4.1 million of available-for-sale investment
securities, $2.8 million in scheduled principal payments, call
and maturities of available-for-sale investment securities,
partially offset by a $840,000 unrealized gain on
available-for-sale investment securities. The increase in net loans
was due primarily to increases of $3.3 million in commercial
real estate loans, $1.3 million in multi-family residential
loans and $942,000 in commercial real estate construction loans,
partially offset by a $666,000 decrease in commercial business
loans, a $483,000 decrease in residential construction loans and a
$458,000 decrease in one-to-four family residential loans. Total
liabilities, comprised mostly of deposits, decreased
$3.7 million to $232.2 million as of
June 30, 2023. The decrease was due primarily to a
$2.5 million decrease in noninterest-bearing deposits, a
$689,000 decrease in interest-bearing deposits, and a $800,000
decrease in borrowings.
Credit Quality
Non-performing loans increased to $913,000 at
June 30, 2023 compared to $732,000 at
December 31, 2022, or 0.6% and 0.5% of total loans at
June 30, 2023 and December 31, 2022,
respectively. At June 30, 2023, $577,000 or 63.2% of
non-performing loans were current on their loan payments. There was
no foreclosed real estate owned at either June 30, 2023
or December 31, 2022. During the quarter and six months
ended June 30, 2023, the Company sold foreclosed real
estate with a book value of $16,000 and recorded a net gain
$7,000.
On January 1, 2023, the Company
implemented Accounting Standards Update (“ASU”) No. 2016-13,
Financial Instruments – Credit Losses (Topic 326) as amended
by ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU
2022-02 (collectively “ASC 326”), commonly referred to as the
current expected credit loss methodology (“CECL”). As a result, the
opening balances for the allowance for credit losses on loans
(“ACL”) and reserve for unfunded loan commitments increased by
$557,000 and $73,000, respectively, as of
January 1, 2023. The adoption entries reduced the
Company’s retained earnings on a tax-effected basis of $481,000,
with no impact on earnings.
Based on management’s analysis of the allowance
for credit losses, the Company recorded a net recapture on credit
losses of $16,000 for the quarter ended June 30, 2023
compared to a provision of $50,000 recorded for the same period
in 2022. The Company recognized net recoveries of $20,000 for
the quarter ended June 30, 2023 compared to net
charge-offs of $1,000 for the same period in 2022.
The Company recorded a provision for credit
losses of $36,000 for the six-month period ended
June 30, 2023 compared to a provision of $50,000 for the
same period in 2022. The allowance for credit losses on loans
totaled $2.3 million at June 30, 2023 and
$1.7 million at December 31, 2022, representing 1.6%
and 1.2% of total loans at June 30, 2023 and
December 31, 2022, respectively. The allowance for credit
losses on loans represented 255.1% of non-performing loans at
June 30, 2023, compared to 231.1% at
December 31, 2022.
Capital
The Bank elected to use the Community Bank
Leverage Ratio (“CBLR”) effective January 1, 2020.
Effective January 1, 2022, a bank or savings institution
electing to use the CBLR is generally considered to be
well-capitalized and to have met the risk-based and leverage
capital requirements of the capital regulations if it has a
leverage ratio greater than 9.0%. To be eligible to elect to use
the CBLR, the bank or savings institution also must have total
consolidated assets of less than $10 billion, off-balance
sheet exposures of 25.0% or less of its total consolidated assets,
and trading assets and trading liabilities of 5.0% or less of its
total consolidated assets, all as of the end of the most recent
quarter.
As permitted by the interim final rule issued on
March 27, 2020 by the federal banking regulatory
agencies, the Company elected the option to delay the impact on
regulatory capital related to the adoption of ASC 326, which
was implemented by the Company on January 1, 2023. The
initial impact of adoption of ASC 326 will be phased out of
the regulatory capital calculations over a three-year period, with
75% recognized in year one, 50% recognized in year two and 25%
recognized in year three.
At June 30, 2023, the Bank was
considered well-capitalized under applicable federal regulatory
capital guidelines with a CBLR of 15.6%.
The Company’s stockholders’ equity increased to
$34.1 million at June 30, 2023, from
$33.3 million at December 31, 2022. The increase was
due primarily to an increase in the accumulated other comprehensive
income of $630,000 related to unrealized losses on
available-for-sale securities and net income of $740,000, partially
offset by a $481,000 reduction related to the implementation of
ASC 326 and $328,000 in dividends. There were no share
repurchases during the quarter ended June 30, 2023, and a
total of 173,097 shares remain authorized for future purchases
under the current stock repurchase plan.
Non-GAAP Financial Measures
The Company’s accounting and reporting policies
conform to generally accepted accounting principles (“GAAP”) in the
United States and prevailing practices in the banking industry.
However, certain non-GAAP measures are used by management to
supplement the evaluation of the Company’s performance. Whenever a
non-GAAP financial measure is presented, the differences between
the non-GAAP financial measure and the most directly comparable
financial measure in accordance with GAAP are presented and
reconciled. The following non-GAAP financial measures presented are
defined below.
Net interest income (tax-equivalent basis),
yield on interest-earning assets (tax-equivalent basis), net
interest rate spread (tax-equivalent basis) and net interest margin
(tax-equivalent basis). These measures include the effects of
taxable-equivalent adjustments using a federal income tax rate
effective during the relevant year to increase tax-exempt interest
income to a tax-equivalent basis. Interest income earned on certain
assets is completely or partially exempt from federal income tax.
As such, these tax-exempt instruments typically yield lower returns
than taxable investments. Net interest income (tax-equivalent
basis) is a non-GAAP measure that adjusts for the tax-favored
status of net interest income from certain loans and investments
and is not permitted under GAAP in the consolidated statements of
income. We believe this measure to be the preferred industry
measurement of net interest income, and that it enhances
comparability of net interest income arising from taxable and
tax-exempt sources. The most directly comparable financial measure
calculated in accordance with GAAP is net interest income. Yield on
interest-earning assets (tax-equivalent basis) is the ratio of
interest income earned from interest-earning assets, adjusted on a
tax-equivalent basis, and average interest-earning assets. The
yield for investment securities is based on amortized cost and does
not give effect to changes in fair value that are reflected in
Accumulated Other Comprehensive Income / Loss (“AOCI”). The most
directly comparable financial measure in accordance with GAAP is
yield on interest-earning assets. Net interest rate spread
(tax-equivalent basis) is the difference in the average yield on
average earning assets on a tax-equivalent basis and the average
rate paid on average interest-bearing liabilities. The most
directly comparable financial measure calculated in accordance with
GAAP is net interest rate spread. Net interest margin
(tax-equivalent basis) is the ratio of net interest income
(tax-equivalent basis) to average earning assets. The most directly
comparable financial measure in accordance with GAAP is net
interest margin.
Book value per share excluding Accumulated Other
Comprehensive Income / Loss. We calculate book value per share
excluding AOCI as total stockholders’ equity at the end of the
relevant period, less AOCI, divided by the outstanding number of
our common shares at the end of each period. The most directly
comparable GAAP financial measure is book value per share. We
provide the book value per share excluding AOCI in addition to
those defined by banking regulators because we believe it is
important to evaluate the balance sheet both before and after the
effects of unrealized amounts associated with mark-to-market
adjustments on available-for-sale investment securities.
Tangible book value per share. Tangible book
value per share is a non-GAAP financial measure. We calculate
tangible book value per share as total stockholders’ equity at the
end of the relevant period, less goodwill and other intangible
assets, divided by the outstanding number of our common shares at
the end of each period. The most directly comparable GAAP financial
measure is book value per share. We had no goodwill or other
intangible assets as of any of the dates indicated. As a result,
tangible book value per share is the same as book value per share
as of each of the dates indicated. We provide the tangible book
value per share in addition to those defined by banking regulators
because of its widespread use by investors as a means to evaluate
capital adequacy.
These non-GAAP financial measures should not be
considered alternatives to GAAP-basis financial statements, and
other bank holding companies may define these non-GAAP measures or
similar measures differently.
Refer to “Reconciliation of Non-GAAP Financial
Measures” below.
About Mid-Southern Bancorp, Inc.
Mid-Southern Savings Bank, FSB is a federally
chartered savings bank headquartered in Salem, Indiana,
approximately 40 miles northwest of Louisville, Kentucky. The
Bank conducts business from its main office in Salem and through
its branch offices located in Mitchell and Orleans, Indiana and
loan production offices located in New Albany, Indiana and
Louisville, Kentucky.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains certain
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking
statements may be identified by reference to a future period or
periods, or by the use of forward-looking terminology, such as
“estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,”
“seek,” “expect,” “will,” “may,” “continue,” or similar terms or
variations on those terms, or the negative of those terms.
Forward-looking statements, by their nature, are subject to risks
and uncertainties. Certain factors that could cause actual results
to differ materially from expected results include the effect of
the COVID-19 pandemic; changes to the real estate and economic
environment, particularly in the market areas in which the Bank
operates; increased competitive pressures; changes in the interest
rate environment; general economic conditions or conditions within
the securities markets; and legislative and regulatory changes
affecting financial institutions, including regulatory compliance
costs and capital requirements that could adversely affect the
business in which the Company and the Bank are engaged; and other
factors described in the Company’s latest Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q and other
filings with the Securities and Exchange Commission that are
available on our website at mid-southern.com and on the SEC’s
website at www.sec.gov.
The factors listed above could materially affect
the Company’s financial performance and could cause the Company’s
actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in
any current statements.
Except as required by applicable law, the
Company does not undertake and specifically declines any obligation
to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events. When considering
forward-looking statements, you should keep in mind these risks and
uncertainties. You should not place undue reliance on any
forward-looking statement, which speaks only as of the date
made.
|
|
|
|
|
MID-SOUTHERN BANCORP, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
|
(Dollars in thousands, except per share information) |
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, |
|
June 30, |
| OPERATING
DATA |
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
$ |
2,604 |
|
|
$ |
2,153 |
|
$ |
5,087 |
|
|
$ |
4,036 |
|
Total interest expense |
|
|
687 |
|
|
|
173 |
|
|
1,310 |
|
|
|
323 |
|
Net interest income |
|
|
1,917 |
|
|
|
1,980 |
|
|
3,777 |
|
|
|
3,713 |
|
Provision for (recapture of) credit losses |
|
|
(16 |
) |
|
|
50 |
|
|
36 |
|
|
|
50 |
|
Net interest income after provision for credit losses |
|
|
1,933 |
|
|
|
1,930 |
|
|
3,741 |
|
|
|
3,663 |
|
Total non-interest income |
|
|
308 |
|
|
|
364 |
|
|
552 |
|
|
|
649 |
|
Total non-interest expense |
|
|
1,832 |
|
|
|
1,744 |
|
|
3,581 |
|
|
|
3,261 |
|
Income before income taxes |
|
|
409 |
|
|
|
550 |
|
|
712 |
|
|
|
1,051 |
|
Income tax (benefit) expense |
|
|
9 |
|
|
|
24 |
|
|
(28 |
) |
|
|
58 |
|
Net income |
|
$ |
400 |
|
|
$ |
526 |
|
$ |
740 |
|
|
$ |
993 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.14 |
|
|
$ |
0.19 |
|
$ |
0.27 |
|
|
$ |
0.36 |
|
Diluted |
|
$ |
0.14 |
|
|
$ |
0.19 |
|
$ |
0.27 |
|
|
$ |
0.36 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
2,703,389 |
|
|
|
2,722,365 |
|
|
2,702,066 |
|
|
|
2,766,818 |
|
Diluted |
|
|
2,704,744 |
|
|
|
2,725,889 |
|
|
2,702,984 |
|
|
|
2,769,750 |
|
|
|
|
|
|
|
|
| |
|
June 30, |
|
December 31, |
| BALANCE SHEET
INFORMATION |
|
2023 |
|
2022 |
| |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,868 |
|
$ |
5,684 |
|
Investment securities |
|
|
99,153 |
|
|
105,368 |
|
Loans, net |
|
|
147,555 |
|
|
144,379 |
|
Interest-earning assets |
|
|
255,459 |
|
|
257,922 |
|
Total assets |
|
|
266,266 |
|
|
269,218 |
|
Deposits |
|
|
202,918 |
|
|
206,064 |
|
Borrowings |
|
|
28,200 |
|
|
29,000 |
|
Stockholders' equity |
|
|
34,079 |
|
|
33,322 |
|
|
|
|
|
|
|
|
|
Common stock shares outstanding |
|
|
2,885,039 |
|
|
2,885,039 |
|
|
|
|
|
|
|
|
|
Book value per share (1) |
|
|
11.81 |
|
|
11.55 |
|
Book value per share excluding AOCI (2) |
|
|
15.35 |
|
|
15.30 |
|
Tangible book value per share (3) |
|
|
11.81 |
|
|
11.55 |
|
Non-performing assets: |
|
|
|
|
|
|
|
Nonaccrual loans |
|
|
913 |
|
|
732 |
|
Accruing loans past due 90 days or more |
|
|
— |
|
|
— |
|
Foreclosed real estate |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
| |
|
June 30, |
|
June 30, |
|
| Performance
ratios: |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share |
|
$ |
0.06 |
|
$ |
0.04 |
|
$ |
0.12 |
|
$ |
0.08 |
|
|
Return on average assets (annualized) |
|
|
0.60 |
% |
|
0.80 |
% |
|
0.56 |
% |
|
0.76 |
% |
|
Return on average stockholders' equity (annualized) |
|
|
4.64 |
% |
|
5.64 |
% |
|
4.34 |
% |
|
4.81 |
% |
|
Net interest margin (tax-equivalent basis) (4) |
|
|
3.03 |
% |
|
3.20 |
% |
|
2.98 |
% |
|
3.06 |
% |
|
Net interest rate spread (tax-equivalent basis) (4) |
|
|
2.70 |
% |
|
3.11 |
% |
|
2.67 |
% |
|
2.98 |
% |
|
Efficiency ratio |
|
|
82.3 |
% |
|
74.4 |
% |
|
82.7 |
% |
|
74.8 |
% |
|
Average interest-earning assets to average interest-bearing
liabilities |
|
|
132.1 |
% |
|
133.2 |
% |
|
131.7 |
% |
|
134.4 |
% |
|
Average stockholders' equity to average assets |
|
|
13.0 |
% |
|
14.2 |
% |
|
12.8 |
% |
|
15.8 |
% |
|
Stockholders' equity to total assets at end of period |
|
|
|
|
|
|
|
|
12.8 |
% |
|
12.9 |
% |
|
|
|
|
|
|
|
| |
|
June 30, |
|
December 31, |
|
| Capital
ratios: (5) |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
Community Bank Leverage Ratio |
|
15.6 |
% |
15.4 |
% |
|
|
|
|
|
|
|
| |
|
June 30, |
|
December 31, |
|
| Asset quality
ratios: |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
Allowance for credit losses on loans as a percent of total
loans |
|
1.6 |
% |
1.2 |
% |
|
Allowance for credit losses on loans as percent of non-performing
loans |
|
255.1 |
% |
231.1 |
% |
|
Net charge-offs (recoveries) to average outstanding loans during
the period (annualized) |
|
0.0 |
% |
0.0 |
% |
|
Non-performing loans as a percent of total loans |
|
0.6 |
% |
0.5 |
% |
|
Non-performing assets as a percent of total assets |
|
0.3 |
% |
0.3 |
% |
__________________________________(1) - We calculate book value
per share as total stockholders’ equity at the end of the relevant
period divided by the outstanding number of our common shares at
the end of each period.
(2) - Book value per share excluding Accumulated
Other Comprehensive Income / Loss (“AOCI”) is a non-GAAP financial
measure. We calculate book value per share excluding AOCI as total
stockholders’ equity at the end of the relevant period, less AOCI,
divided by the outstanding number of our common shares at the end
of each period. The most directly comparable GAAP financial measure
is book value per share. We provide the book value per share
excluding AOCI in addition to those defined by banking regulators
because we believe it is important to evaluate the balance sheet
both before and after the effects of unrealized amounts associated
with mark-to-market adjustments on available-for-sale investment
securities. Refer to “Reconciliation of Non-GAAP Financial
Measures” below.
(3) - Tangible book value per share is a
non-GAAP financial measure. We calculate tangible book value per
share as total stockholders’ equity at the end of the relevant
period, less goodwill and other intangible assets, divided by the
outstanding number of our common shares at the end of each period.
The most directly comparable GAAP financial measure is book value
per share. We had no goodwill or other intangible assets as of any
of the dates indicated. As a result, tangible book value per share
is the same as book value per share as of each of the dates
indicated. We provide the tangible book value per share in addition
to those defined by banking regulators because of its widespread
use by investors as a means to evaluate capital adequacy.
(4) - Net interest margin on a tax-equivalent
basis and net interest rate spread on a tax-equivalent basis are
non-GAAP financial measures. We calculate these measures on a
tax-equivalent basis to adjust for the tax-favored status of
interest income from loans and investments and believe these
measures are the preferred industry measurement and enhance
comparability of interest income arising from taxable and
tax-exempt sources. Net interest margin on a tax-equivalent basis
is net interest income on a tax-equivalent basis divided by average
interest-earning assets. The most directly comparable financial
measure calculated in accordance with GAAP is net interest margin.
Net interest rate spread on a tax-equivalent basis is the
difference in the yield on average interest-earning assets on a
tax-equivalent basis and the average rate paid on average
interest-bearing liabilities. The yield for investment securities
is based on amortized cost and does not give effect to changes in
fair value that are reflected in AOCI. The most directly comparable
financial measure calculated in accordance with GAAP is net
interest rate spread. The most directly comparable financial
measures calculated in accordance with GAAP is net interest margin
and net interest rate spread. Refer to “Reconciliation of Non-GAAP
Financial Measures” below.
(5) - Effective January 1, 2020, the
Bank elected to use the CBLR, as provided by the Economic Growth,
Regulatory Relief, and Consumer Protection Act (the “Act”). The Act
contains a number of provisions extending regulatory relief to
banks and savings institutions and their holding companies. A bank
or savings institution that elects to use the CBLR will generally
be considered well-capitalized and to have met the risk-based and
leverage capital requirements of the capital regulations if it has
a leverage ratio greater than 9.0%.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
| |
|
|
|
|
|
|
| |
|
June 30, |
|
December 31, |
| Book value per share
excluding AOCI: |
|
2023 |
|
2022 |
| |
|
|
|
|
|
|
|
Stockholders' equity |
|
$ |
34,079 |
|
|
$ |
33,322 |
|
|
Adjustments: |
|
|
|
|
|
|
|
Accumulated other comprehensive income (loss) |
|
|
(10,201 |
) |
|
|
(10,831 |
) |
|
Stockholders' equity excluding AOCI |
|
$ |
44,280 |
|
|
$ |
44,153 |
|
|
|
|
|
|
|
|
|
|
Common stock shares outstanding |
|
|
2,885,039 |
|
|
|
2,885,039 |
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
11.81 |
|
|
$ |
11.55 |
|
|
Less: effect of accumulated other comprehensive income (loss) |
|
|
(3.54 |
) |
|
|
(3.75 |
) |
|
Book value per share excluding AOCI |
|
$ |
15.35 |
|
|
$ |
15.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
| |
|
June 30, |
|
June 30, |
|
| Net interest income,
yield on interest-earning assets, net interest rate spread, net
interest margin (tax-equivalent basis): |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (GAAP) |
|
$ |
1,917 |
|
$ |
1,980 |
|
$ |
3,777 |
|
$ |
3,713 |
|
|
Tax-equivalent adjustments: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
|
2 |
|
|
1 |
|
|
6 |
|
|
2 |
|
|
Tax-exempt investment securities |
|
|
105 |
|
|
114 |
|
|
214 |
|
|
216 |
|
|
Net interest income (tax-equivalent basis) |
|
$ |
2,024 |
|
$ |
2,095 |
|
$ |
3,997 |
|
$ |
3,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-earning assets (2) |
|
$ |
266,819 |
|
$ |
262,072 |
|
$ |
268,144 |
|
$ |
256,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets (2) |
|
|
3.90 |
% |
|
3.29 |
% |
|
3.79 |
% |
|
3.15 |
% |
|
Yield on interest-earning assets (tax-equivalent basis) (2) |
|
|
4.06 |
% |
|
3.46 |
% |
|
3.96 |
% |
|
3.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread (2) |
|
|
2.54 |
% |
|
2.94 |
% |
|
2.50 |
% |
|
2.81 |
% |
|
Net interest rate spread (tax-equivalent basis) (2) |
|
|
2.70 |
% |
|
3.11 |
% |
|
2.67 |
% |
|
2.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (2) |
|
|
2.87 |
% |
|
3.02 |
% |
|
2.82 |
% |
|
2.90 |
% |
|
Net interest margin (tax-equivalent basis) (2) |
|
|
3.03 |
% |
|
3.20 |
% |
|
2.98 |
% |
|
3.06 |
% |
_____________________________________(1) -
Tax-exempt income has been adjusted to a tax-equivalent basis using
the federal marginal tax rate of 21% for 2023
and 2022.
(2) - Investment securities are based on
amortized cost and do not give effect to changes in fair value that
are reflected in AOCI.
Contact:Alexander G. Babey, President
and Chief Executive OfficerRobert W. DeRossett,
Chief Financial OfficerMid-Southern
Bancorp, Inc.812-883-2639
Mid Southern Bancorp (NASDAQ:MSVB)
Historical Stock Chart
Von Jan 2025 bis Feb 2025
Mid Southern Bancorp (NASDAQ:MSVB)
Historical Stock Chart
Von Feb 2024 bis Feb 2025
