Integrated Financial Holdings, Inc. Second Quarter Financial Results

Rhea-AI Summary

Integrated Financial Holdings, Inc. (OTCQX: IFHI) reported Q2 2024 financial results with net income of $605,000, or $0.26 per diluted share, compared to $3.6 million, or $1.60 per diluted share in Q2 2023. Key highlights include:

- Net interest income of $5.9 million, up from $5.5 million in Q2 2023
- Noninterest expense of $8.2 million, unchanged from Q2 2023
- Return on average assets of 0.47%, down from 3.05% in Q2 2023
- Return on average tangible common equity of 2.89%, down from 19.84% in Q2 2023

Results were impacted by merger-related expenses of $681,000 and a decrease in government guaranteed lending revenue of $2.3 million. The company recorded a provision for credit losses of $1.6 million, up from $130,000 in Q2 2023.

Positive

• Net interest income increased to $5.9 million, up 6% from Q2 2023
• Average earning assets increased by $53.6 million year-over-year
• Windsor subsidiary's loan processing and servicing revenue increased 29% to $3.4 million
• Total assets increased 2% to $558.5 million since December 31, 2023
• Net loans held for investment increased 10% to $388.4 million since December 31, 2023

Negative

• Net income decreased to $605,000 from $3.6 million in Q2 2023
• Return on average assets declined to 0.47% from 3.05% in Q2 2023
• Return on average tangible common equity fell to 2.89% from 19.84% in Q2 2023
• Government guaranteed lending revenue decreased by $2.3 million or 66% year-over-year
• Provision for credit losses increased to $1.6 million from $130,000 in Q2 2023
• Net charge-offs increased to $1.0 million from $86,000 in Q2 2023
• Nonperforming assets to total assets ratio increased to 3.10% from 3.00% at year-end 2023

RALEIGH, N.C., July 29, 2024 (GLOBE NEWSWIRE) -- Integrated Financial Holdings, Inc. (OTCQX: IFHI) (the “Company” or “IFHI”), the financial holding company for West Town Bank & Trust (the “Bank”) and Windsor Advantage, LLC (“Windsor”), released its financial results for the three and six months ended June 30, 2024. Highlights from the 2024 second quarter results include the following:

• Second quarter 2024 net income of $605,000, or $0.26 per diluted share compared to second quarter 2023 net income of $3.6 million, or $1.60 per diluted share.
• Net interest income of $5.9 million for the second quarter of 2024 compared to $5.5 million for the same period in 2023.
• Noninterest expense of $8.2 million for the second quarters of 2024 and 2023.
• Return on average assets of 0.47% for the three-month period ending June 30, 2024, compared to 3.05% for the same period in 2023.
• Return on average tangible common equity (a non-GAAP financial measure) of 2.89% for the three-month period ending June 30, 2024 compared to 19.84% for the same period in 2023.
  

Quarter-over-quarter results between the second quarter of 2024 and the same period in 2023 were somewhat skewed by several unusual items positively impacting the second quarter of 2023 and merger-related expenses associated with the proposed merger with Capital Bancorp, Inc. (“CBNK”) negatively impacting the second quarter of 2024. During the second quarter of 2023, the sale of the Bank’s ownership interest in West Town Payments, LLC (“WTP”) resulted in a pretax gain of about $366,000, and an exit from the Bank’s hemp-related business line resulted in a pretax gain of about $464,000. Conversely, the Company recorded $681,000 in pre-tax, merger-related expenses in the second quarter of 2024 as compared to $61,000 during the 2023 second quarter. In addition, due to the uneven nature of large USDA closings, government guaranteed lending revenue decreased by $2.3 million in the 2024 second quarter compared to the 2023 second quarter. The anticipated closing volume for the back half of 2024 remains strong. On a linked-quarter basis, government guaranteed lending revenue was $1.2 million for the second quarter of 2024 compared to $514,000 for the first quarter of 2024. Finally, charge-offs associated with two specific loans and considerable growth in the loan portfolio year over year drove an increase in the provision for credit losses from $130,000 in the second quarter of 2023 to $1.6 million in the second quarter of 2024.

In reflecting on the second quarter of 2024, Marc McConnell, Chairman, President, and CEO of IFHI, stated: “This quarter we remained focused on our main objective: priming the organization for strategic long-term growth as we continue preparing for our upcoming planned merger with Capital Bancorp, Inc. Though income this quarter was skewed by unusual items, we believe we are well positioned for net interest income growth in upcoming quarters. As a result of strong loan growth, our average earning assets have increased $54 million year over year. Our team will continue to execute our strategic plan as we maintain our foothold in the industry as a leader in GGL lending, relying on our sustainable growth trajectory and strong leadership to guide us into this next quarter.”

BALANCE SHEET
At June 30, 2024, the Company’s total assets were $558.5 million, net loans held for investment were $388.4 million, loans held for sale (“HFS”) were $44.1 million, total deposits were $400.8 million and total shareholders’ equity was $102.8 million. Compared with December 31, 2023, total assets increased $10.9 million or 2%, net loans held for investment increased $35.6 million or 10%, HFS loans increased $3.6 million or 9%, total deposits decreased $34.9 million or 8%, and total shareholders’ equity increased $2.4 million or 2%. Cash and cash equivalents decreased $27.7 million or 43% since the prior year-end. In the first quarter of 2023, the Bank discontinued banking two industries it had previously targeted resulting in a large outflow of non-maturity deposits over the first half of 2023. The Bank replaced those funds with a highly successful CD campaign. Most of those time deposits matured in the first quarter of 2024 and management made the decision to allow a large block of those higher cost funds to leave the Bank.

The increase in total shareholders’ equity since December 31, 2023, was primarily associated with earnings. The accumulated other comprehensive loss component of equity for the available-for-sale investment portfolio had a $113,000 negative impact during the six-month period ended June 30, 2024 as a result of changing rate expectations. The accumulated other comprehensive loss component of equity was $2.2 million at June 30, 2024 compared to $2.2 million at December 31, 2023. The Company does not have any investments in its portfolio treated as held-to-maturity being carried at cost.

CAPITAL AND LIQUIDITY STRENGTH
At June 30, 2024, the regulatory capital ratios of the Bank exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.

	“Well Capitalized” Minimum	Basel III Fully Phased-In	West Town Bank & Trust
Tier 1 common equity ratio	6.50%	7.00%	13.54%
Tier 1 risk-based capital ratio	8.00%	8.50%	13.54%
Total risk-based capital ratio	10.00%	10.50%	14.79%
Tier 1 leverage ratio	5.00%	4.00%	12.11%

The Company’s book value per common share increased from $43.72 as of December 31, 2023, to $43.85 at June 30, 2024 as the impact of earnings was slightly offset by an increase of about 50,000 shares outstanding as a result of an annual grant for long-term incentive and the exercising of several blocks of stock options in the first quarter. The Company’s tangible book value per common share (a non-GAAP financial measure) also increased from $35.80 as of December 31, 2023, to $36.23 at June 30, 2024, for the same reason.

The Bank funds its loan growth primarily with a blend of customer deposits and wholesale funding and has a wide variety of customers and industries in its portfolio. The Bank also offers services that provide FDIC coverage for its customers in excess of the $250,000 per depositor limit. As of June 30, 2024, the average deposit account size was $98,600, and uninsured deposits excluding those required for debt service were $38.8 million or roughly 9.7% of total deposits.

The Bank’s primary on-balance sheet liquidity consists of cash and cash equivalents along with unencumbered available-for-sale investment securities, which totaled $57.8 million as of June 30, 2024. Additionally, the Bank maintains fully collateralized credit facilities with the Federal Home Loan Bank of Chicago (“FHLB”) and the Federal Reserve. As of June 30, 2024, the FHLB credit facility had a borrowing line of $87.0 million with $45.0 million in outstanding advances and available credit of $42.0 million. The Federal Reserve had an available borrowing capacity of $39,000 with no outstanding balance. In addition, the Bank had $18.5 million in additional borrowing capacity with other financial institutions. In aggregate, total primary on-balance sheet liquidity and total available borrowing capacity was 377% of the amount of uninsured deposits (excluding those required for debt service) as of June 30, 2024.  

Additionally, the Bank’s business model includes the origination and sale of GGL loans, a process that occurs each month and can be accelerated or slowed down based on the Bank’s current funding needs. At June 30, 2024, the Bank had $44.0 million in loans available for sale, which could generate additional liquidity as needed.

ASSET QUALITY
The Company’s nonperforming assets to total assets ratio increased from 3.00% at December 31, 2023, to 3.10% at June 30, 2024. Nonaccrual loans at June 30, 2024 increased $991,000 or 6% as compared to December 31, 2023. One relationship for $7.7 million makes up approximately 44% of all of the nonaccrual loans as of June 30, 2024. That relationship is secured by a property with an estimated value of approximately $12.0 million. We believe there is strong secondary support of the guarantors. The Bank held $101,000 in foreclosed assets as of December 31, 2023 but had none as of June 30, 2024.

During the second quarters of 2024 and 2023, the Company recorded provisions for credit losses of $1.6 million and $130,000, respectively. The Company recorded $1.0 million in net charge-offs during the second quarter of 2024 compared to $86,000 in net charge-offs for the same period in 2023. Set forth in the table below is certain asset quality information as of the dates indicated:

(Dollars in thousands)	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23
Nonaccrual loans	$	17,294		$	17,353		$	16,303		$	13,887		$	5,586
Foreclosed assets		-			-			101			101			315
90 days past due and still accruing		-			-			-			320			476
Total nonperforming assets	$	17,294		$	17,353		$	16,404		$	14,308		$	6,377
Net charge-offs (recoveries)	$	1,046		$	25		$	(306	)	$	(43	)	$	86
Annualized net charge-offs (recoveries) to total
average portfolio loans		1.12	%		0.03	%		-0.34	%		-0.05	%		0.11	%
Ratio of total nonperforming assets to total assets		3.10	%		3.35	%		3.00	%		2.87	%		1.32	%
Ratio of total nonperforming loans to total loans, net
of allowance		4.45	%		4.89	%		4.62	%		4.17	%		1.90	%
Ratio of total allowance for credit losses to total loans (1)		2.00	%		2.02	%		1.93	%		1.77	%		1.87	%
(1) Does not include the Company's reserve for unfunded commitments

NET INTEREST INCOME AND MARGIN
Net interest income for the three months ended June 30, 2024, increased $318,000 or 6% in comparison to the second quarter of 2023. Loan yields increased from 8.43% in the second quarter of 2023 to 8.73% for the same period in 2024. The increase in yield from the prior year reflected the impact of 50bps of rate increases by the Federal Open Market Committee (“FOMC”) during that 12-month period in response to economic conditions, as well as a change in loan mix. Overall cost of funds increased from 2.70% in the second quarter of 2023 to 3.66% for the same period in 2024 as average retail and brokered certificate of deposit (“CD”) rates trended up and new CDs were originated at higher market rates. Net interest margin declined from 5.48% during the three months ended June 30, 2023, to 5.12% for the same period in 2024; however, the impact of that decrease was lessened by a period-over-period increase in average earning assets of $53.6 million.  

For the six months ended June 30, 2024 net interest income increased from $11.2 million in 2023 to $11.7 million in 2024. The increase of $508,000 or 5% was due to an increase in average loan volume offset by a decrease in net interest margin. Average loans increased from $351.5 million for the six months ended June 30, 2023 to $413.0 million for the same period in 2024. Net interest margin during those same periods decreased from 5.66% in 2023 to 5.10% in 2024.

	Three Months Ended																Year-To-Date
(Dollars in thousands)	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23				6/30/24			6/30/23
Average balances:
Loans	$	419,029		$	406,982		$	400,502		$	373,847		$	357,272			$	413,006		$	351,461
Available-for-sale securities		21,656			22,233			19,709			18,609			18,208				21,944			17,949
Other interest-bearing balances		17,866			31,622			25,821			26,670			29,445				24,744			29,222
Total interest-earning assets		458,551			460,837			446,032			419,126			404,925				459,694			398,632
Total assets		521,782			525,202			510,760			484,190			472,169				523,492			466,291
Noninterest-bearing deposits		69,087			75,236			79,986			80,390			78,676				72,162			88,615
Interest-bearing liabilities:
Interest-bearing deposits		327,579			334,165			314,726			300,109			288,972				330,872			270,126
Borrowings		15,989			5,714			5,326			761			4,505				10,852			7,364
Total interest-bearing liabilities		343,568			339,879			320,052			300,870			293,477				341,724			277,490
Common shareholders' equity		101,868			101,172			97,314			95,362			91,281				101,520			89,928
Tangible common equity (1)		83,912			83,050			79,026			76,907			72,661				83,481			71,225
Interest income/expense:
Loans	$	9,124		$	8,977		$	8,623		$	7,877		$	7,511			$	18,101		$	14,508
Available-for-sale securities		201			203			115			146			133				404			253
Interest-bearing balances and other		295			330			526			345			392				625			711
Total interest income		9,620			9,510			9,264			8,368			8,036				19,130			15,472
Deposits		3,553			3,586			3,243			2,743			2,445				7,139			4,141
Borrowings		214			79			110			10			56				293			141
Total interest expense		3,767			3,665			3,353			2,753			2,501				7,432			4,282
Net interest income	$	5,853		$	5,845		$	5,911		$	5,615		$	5,535			$	11,698		$	11,190
(1) See reconciliation of non-GAAP financial measures.

	Three Months Ended											Year-To-Date
	6/30/24		3/31/24		12/31/23		9/30/23		6/30/23			6/30/24		6/30/23
Average yields and costs:
Loans	8.73	%	8.85	%	8.54	%	8.36	%	8.43	%		8.79	%	8.32	%
Available-for-sale securities	3.71	%	3.65	%	2.33	%	3.14	%	2.92	%		3.68	%	2.82	%
Interest-bearing balances and other	6.62	%	4.19	%	8.08	%	5.13	%	5.34	%		5.07	%	4.91	%
Total interest-earning assets	8.41	%	8.28	%	8.24	%	7.92	%	7.96	%		8.35	%	7.83	%
Interest-bearing deposits	4.35	%	4.30	%	4.09	%	3.63	%	3.39	%		4.33	%	3.09	%
Borrowings	5.37	%	5.55	%	8.19	%	5.21	%	4.99	%		5.41	%	3.86	%
Total interest-bearing liabilities	4.40	%	4.33	%	4.16	%	3.63	%	3.42	%		4.36	%	3.11	%
Cost of funds	3.66	%	3.54	%	3.33	%	2.86	%	2.70	%		3.60	%	2.36	%
Net interest margin	5.12	%	5.09	%	5.26	%	5.32	%	5.48	%		5.10	%	5.66	%

NONINTEREST INCOME
Noninterest income for the three months ended June 30, 2024, was $4.9 million compared to $7.8 million for the same period in 2023. The decrease is primarily attributable to the nonrecurring items in the second quarter of 2023, which included, among other things, the previously discussed sale of the ownership interest in WTP and the gain on the exit in hemp-related deposits. In addition, there was a decrease in government guaranteed lending revenue quarter-over-quarter as a result of delayed deal flow. Those declines were partially offset by an increase in the income of Windsor, a subsidiary of the Company. Specifically:

• Windsor, which offers an SBA and USDA loan servicing platform, had loan processing and servicing revenue totaling $3.4 million, an increase of $762,000 or 29% as compared to the $2.7 million in income earned during the prior second quarter.
• Government Guaranteed Lending (“GGL”) revenue was $1.2 million in the second quarter of 2024, a decrease of $2.3 million or 66% in comparison to the $3.6 million of revenues for the same period in 2023.  

NONINTEREST EXPENSE
Noninterest expense for the second quarter of 2024 and 2023 was $8.2 million. Declines in recurring expenses were offset by an increase in nonrecurring expenses for a net year-over-year increase of $13,000 or 0%. Most notably, compensation expense decreased $1.0 million or 19% going from $5.4 million in the second quarter of 2023 down to $4.4 million for the same period in 2024. This was offset by $681,000 in merger-related expenses associated with the Company’s previously announced proposed merger with Capital Bancorp, Inc. Other notable expense categories were:  

• Loan and special asset related expenses, which tend to fluctuate unexpectedly, increased by $257,000 or 74% from $346,000 in the first quarter of 2023 to $603,000 for the same period in 2024.
• Other operating expenses increased $183,000 or 38% from $486,000 in the second quarter of 2023 to $669,000 for the same period in 2024.

ABOUT INTEGRATED FINANCIAL HOLDINGS, INC.
Integrated Financial Holdings, Inc. is a financial holding company based in Raleigh, North Carolina. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its full-service office located in the greater Chicago area. The Company is also the parent company of Windsor Advantage, LLC, a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. The Company is registered with and supervised by the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.

For more information, visit https://ifhinc.com/.

Important Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as "expect," "anticipate," "estimate," "believe," variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; that the value realized upon the sale of any foreclosed assets may be less than anticipated, whether due to change in collateral value, inaccurate valuation assumptions or otherwise; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; that loan closing volume in future periods may not meet current expectations; changes in banking regulations and accounting principles, policies, or guidelines; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees; the ability to complete, or any delays in completing, the pending merger between the Company and Capital Bancorp, Inc.; any failure to realize the anticipated benefits of the pending merger transaction when expected or at all; certain restrictions during the pendency of the transaction that may impact the Company's ability to pursue certain business opportunities or strategic transactions; the possibility that the pending merger transaction may be more expensive to complete than anticipated, including as a result of conditions imposed by regulators, unexpected conditions, factors or events; recent adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, our strategic initiatives, and regulatory response to these developments; adverse results (including judgments, costs, fines, reputational harm, financial settlements and/or other negative effects) from current or future litigation, regulatory proceedings, investigations, or similar matters, or developments related thereto; and the impact of competition from traditional or new sources, including non-bank financial service providers, such as Fintechs. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Consolidated Balance Sheets
	Ending Balance
(In thousands, unaudited)	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23
Assets
Cash and due from banks	$	3,097		$	3,890		$	3,541		$	5,019		$	3,582
Interest-bearing deposits		32,901			26,467			60,166			28,746			39,258
Total cash and cash equivalents		35,998			30,357			63,707			33,765			42,840
Interest-bearing time deposits		-			-			-			-			750
Available-for-sale securities		21,820			22,028			22,668			17,827			18,977
Marketable equity securities		21,557			21,557			19,597			19,980			19,980
Loans held for sale		44,069			43,415			40,424			37,857			33,232
Loans held for investment		396,300			361,942			359,729			346,842			325,673
Allowance for credit losses		(7,915	)		(7,310	)		(6,936	)		(6,128	)		(6,086	)
Loans held for investment, net		388,385			354,632			352,793			340,714			319,587
Premises and equipment, net		3,677			3,707			3,756			3,910			3,960
Foreclosed assets		-			-			101			101			315
Loan servicing assets		4,081			3,922			3,966			3,813			3,717
Bank-owned life insurance		4,749			4,720			4,688			4,663			5,087
Accrued interest receivable		4,416			3,895			3,754			3,664			3,280
Goodwill		13,161			13,161			13,161			13,161			13,161
Other intangible assets, net		4,686			4,852			5,018			5,184			5,350
Other assets		11,868			11,991			13,930			14,570			11,872
Total assets	$	558,467		$	518,237		$	547,563		$	499,209		$	482,108
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	71,172		$	73,523		$	90,194		$	84,901		$	82,272
Interest-bearing		329,621			325,036			345,483			307,467			296,805
Total deposits		400,793			398,559			435,677			392,368			379,077
Borrowings		45,000			10,000			-			-			-
Accrued interest payable		936			1,008			1,346			1,042			1,014
Other liabilities		8,965			6,782			10,209			9,409			7,655
Total liabilities		455,694			416,349			447,232			402,819			387,746
Shareholders’ equity:
Common stock, voting		2,323			2,324			2,273			2,275			2,231
Common stock, non-voting		22			22			22			22			22
Additional paid in capital		26,438			26,258			25,809			25,503			25,253
Retained earnings		76,223			75,618			74,347			71,565			69,165
Accumulated other comprehensive loss		(2,233	)		(2,334	)		(2,120	)		(2,975	)		(2,309	)
Total shareholders’ equity		102,773			101,888			100,331			96,390			94,362
Total liabilities and shareholders’ equity	$	558,467		$	518,237		$	547,563		$	499,209		$	482,108

Consolidated Statements of Income
(In thousands except per	Three Months Ended																Year-To-Date
share data; unaudited)	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23				6/30/24			6/30/23
Interest income
Loans	$	9,124		$	8,977		$	8,623		$	7,877		$	7,511			$	18,101		$	14,508
Available-for-sale securities and other		496			533			641			491			525				1,029			964
Total interest income		9,620			9,510			9,264			8,368			8,036				19,130			15,472
Interest expense
Interest on deposits		3,553			3,586			3,243			2,743			2,445				7,139			4,141
Interest on borrowings		214			79			110			10			56				293			141
Total interest expense		3,767			3,665			3,353			2,753			2,501				7,432			4,282
Net interest income		5,853			5,845			5,911			5,615			5,535				11,698			11,190
Provision for credit losses		1,650			400			500			50			130				2,050			695
Noninterest income
Loan processing and servicing
revenue		3,422			2,942			3,180			2,779			2,660				6,364			5,099
Government guaranteed lending		1,230			514			1,313			1,953			3,576				1,744			4,480
Service charges on deposits		17			26			35			41			52				43			185
Bank-owned life insurance		28			33			25			128			34				61			589
Change in fair value of marketable
equity securities		-			-			578			-			-				-			1,998
Other noninterest income		247			2			231			152			1,434				249			2,000
Total noninterest income		4,944			3,517			5,362			5,053			7,756				8,461			14,351
Noninterest expense
Compensation		4,366			4,517			4,583			4,403			5,379				8,883			10,960
Occupancy and equipment		299			280			355			314			318				579			662
Loan and special asset expenses		603			477			627			664			346				1,080			639
Professional services		430			306			(161	)		433			446				736			894
Data processing		243			246			252			233			247				489			512
Software		526			465			492			446			469				991			938
Communications		64			60			50			65			68				124			146
Advertising		126			62			99			108			174				188			422
Amortization of intangibles		166			166			166			166			166				332			332
Merger related expenses		681			-			-			-			61				681			177
Other operating expenses		669			682			720			591			486				1,351			975
Total noninterest expense		8,173			7,261			7,183			7,423			8,160				15,434			16,657
Income before income taxes		974			1,701			3,590			3,195			5,001				2,675			8,189
Income tax expense		369			430			808			795			1,416				799			2,194
Net income		605			1,271			2,782			2,400			3,585				1,876			5,995
Noncontrolling interest		-			-			-			-			(10	)			-			48
Net income attributable
to IFH, Inc.	$	605		$	1,271		$	2,782		$	2,400		$	3,595			$	1,876		$	5,947
Basic earnings per common share	$	0.27		$	0.56		$	1.24		$	1.08		$	1.62			$	0.82		$	2.68
Diluted earnings per common share	$	0.26		$	0.55		$	1.22		$	1.06		$	1.60			$	0.81		$	2.63
Weighted average common shares
outstanding		2,284			2,271			2,244			2,224			2,220				2,282			2,216
Diluted average common shares
outstanding		2,317			2,304			2,284			2,265			2,252				2,315			2,258

Performance Ratios
	Three Months Ended																Year-To-Date
	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23				6/30/24			6/30/23
PER COMMON SHARE
Basic earnings per common share	$	0.27		$	0.56		$	1.24		$	1.08		$	1.62			$	0.82		$	2.68
Diluted earnings per common share		0.26			0.55			1.22			1.06			1.60				0.81			2.63
Book value per common share		43.85			43.45			43.72			41.98			41.90				43.85			41.90
Tangible book value per common share (2)		36.23			35.77			35.80			33.99			33.68				36.23			33.68
FINANCIAL RATIOS (ANNUALIZED)
Return on average assets		0.47	%		0.97	%		2.16	%		1.97	%		3.05	%			0.72	%		2.57	%
Return on average common shareholders'
equity		2.38	%		5.04	%		11.34	%		9.98	%		15.80	%			3.71	%		13.34	%
Return on average tangible common
equity (2)		2.89	%		6.14	%		13.97	%		12.38	%		19.84	%			4.51	%		16.84	%
Net interest margin		5.12	%		5.09	%		5.26	%		5.32	%		5.48	%			5.10	%		5.66	%
Efficiency ratio (1)		75.7	%		77.6	%		63.7	%		69.6	%		61.4	%			76.6	%		65.2	%
(1) Efficiency ratio is calculated by dividing noninterest expense less transaction-related costs by the sum of net interest income and noninterest income, less gains or losses on sale of securities.
(2) See reconciliation of non-GAAP measures

Loan Concentrations

The top ten commercial loan concentrations as of June 30, 2024, were as follows:

				% of
				Commercial
(Dollars in millions)	Amount			Loans
Solar electric power generation	$	82.5		25	%
Power and communication line and related structures construction		74.2		22	%
Lessors of nonresidential buildings (except miniwarehouses)		14.9		4	%
Other activities related to real estate		12.0		4	%
Electric bulk power transmission and control		10.9		3	%
Biomass electric power generation		10.6		3	%
Colleges, universities and professional schools		9.5		3	%
Postharvest crop activities		8.5		3	%
Lessors of other real estate property		7.0		2	%
Natural gas distribution		7.0		2	%
	$	237.1		71	%

Reconciliation of Non-GAAP Measures

	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23
	(Dollars in thousands except book value per share)
Tangible book value per common share
Total IFH, Inc. shareholders’ equity	$	102,773		$	101,888		$	100,331		$	96,390		$	94,362
Less: Goodwill		13,161			13,161			13,161			13,161			13,161
Less Other intangible assets, net		4,686			4,852			5,018			5,184			5,350
Total tangible common equity	$	84,926		$	83,875		$	82,152		$	78,045		$	75,851
Ending common shares outstanding		2,344			2,345			2,295			2,296			2,252
Tangible book value per common share	$	36.23		$	35.77		$	35.80		$	33.99		$	33.68
	Three Months Ended																Year-To-Date
(Dollars in thousands)	6/30/24			3/31/24			12/31/23			9/30/23			6/30/23				6/30/24			6/30/23
Return on average tangible common equity
Average IFH, Inc. shareholders’ equity	$	101,868		$	101,172		$	97,314		$	95,362		$	91,281			$	101,520		$	89,928
Less: Average goodwill		13,161			13,161			13,161			13,161			13,161				13,161			13,161
Less Average other intangible assets, net		4,795			4,961			5,127			5,294			5,459				4,878			5,542
Average tangible common equity	$	83,912		$	83,050		$	79,026		$	76,907		$	72,661			$	83,481		$	71,225
Net income attributable to IFH, Inc.	$	605		$	1,271		$	2,782		$	2,400		$	3,595			$	1,876		$	5,947
Return on average tangible common equity		2.89	%		6.14	%		13.97	%		12.38	%		19.84	%			4.51	%		16.84	%

Contact: Steve Crouse, 919-861-8018

FAQ

What was IFHI's net income for Q2 2024?

IFHI reported net income of $605,000, or $0.26 per diluted share, for Q2 2024.

How did IFHI's Q2 2024 net income compare to Q2 2023?

IFHI's Q2 2024 net income of $605,000 was lower compared to $3.6 million in Q2 2023.

What factors impacted IFHI's Q2 2024 financial results?

IFHI's Q2 2024 results were impacted by merger-related expenses of $681,000, a $2.3 million decrease in government guaranteed lending revenue, and increased provision for credit losses of $1.6 million.

How did IFHI's net interest income change in Q2 2024 compared to Q2 2023?

IFHI's net interest income increased to $5.9 million in Q2 2024, up from $5.5 million in Q2 2023, representing a 6% increase.

What was IFHI's return on average assets for Q2 2024?

IFHI's return on average assets for Q2 2024 was 0.47%, down from 3.05% in Q2 2023.