Bank of Idaho : 2Q 2022 Earnings Release

FOR IMMEDIATE RELEASE

CONTACT:

Jeff Newgard

President and CEO - Bank of Idaho 208.528.3035, [e-mail]

Bank of Idaho Holding Company Reports Second Quarter 2022 Financial Results

IDAHO FALLS, ID - (08/04/2022) - Bank of Idaho Holding Company (OTCQX: BOID), the holding company for Bank of Idaho, today announced results (unaudited) for the second quarter ended June 30, 2022.

Jeff Newgard, President and CEO of Bank of Idaho commented "The second quarter of 2022 was a significant chapter in the Bank of Idaho growth story. The Bank announced its expansion into Eastern Washington state with the opening of a branch in Pasco and the acquisition of five HomeStreet Bank branches in Spokane, Yakima, Dayton, Kennewick, and Sunnyside. Additionally, the Bank opened a its fourth branch in the Boise, Idaho metropolitan area. To support this expansion, the Bank of Idaho Holding Company successfully raised over $52 million in new equity capital during the quarter, although the downstream of capital to the Bank did not occur until the legal close of the branch acquisition in late July." Mr. Newgard also noted that the Bank continued to see robust core loan demand throughout the second quarter, while mortgage banking activity slowed with the increase in interest rates.

The Company's consolidated net income for the second quarter was $1,106,000 or $0.30 per diluted share, compared to $1,665,000 or $0.64 per diluted share in the previous quarter. For the three months ended June 2021, net income was $1,953,000 or $0.76 per diluted share. Assets ended the second quarter at $821.8 million, up $54.7 million (7.1%) from the prior quarter and $160.7 million (24.3%) from the prior year.

Financial Highlights:

• Total loans held for investment were $538.0 million as of June 30, 2022, an increase of $41.1 million (8.3%) for the quarter and $122.3 million (29.4%) year-over-year. Approximately 47% of the year-over-year loan growth has been from the Bank's Boise- area locations, with another 20% coming from the growing SBA department. Excluding PPP loans, total loans held for investment increased $156.6 million (41.1%) from the same period last year. PPP loans were $467,000 at quarter-end.
• Total deposits were up $2.2 million (0.3%) in the quarter and were up $96.8 million (16.6%) from a year ago to end the quarter at $679.8 million. Noninterest-bearing deposits represented 41% of total deposits on June 30, 2022 and were up $36.6 million from a year ago. The Bank has seen some slowing of deposit growth from the extraordinary increases experienced during 2021, although the pending acquisition will result in a significant increase in deposits in the third quarter.
• Second quarter net interest income of $7.7 million was $879,000 (12.9%) higher than the first quarter and $2.4 million higher than Q2 2021. The increase was driven by growing loan and securities balances, increasing asset yields, and stable funding costs.
• Noninterest income decreased $305,000 (18.4%) from the prior quarter to $1.4 million due to a continuing decline in mortgage banking revenue. The sharp increase in mortgage rates this year has reduced volume, particularly when compared to the significant activity experienced in 2020 and 2021. Year-to-datenon-interest income of $3.0 million through June 30, 2022 was down $3.3 million (52.6%) from prior year, of which $3.1 million was due to the slowdown in mortgage banking. The first two quarters of 2021 also included $122,000 of combined gains on sales of securities and other real estate owned.
• Noninterest expense for the quarter increased $1.4 million (22.6%) over Q1 2022 to $7.5 million, as the Bank began to incur a variety of one-time IT, professional, and marketing expenses related to the branch acquisition, as well as increased staffing and occupancy expense related to the two new branches. The acquisition related expenses will continue into the third quarter when the transaction closes. Year-to-date noninterest expense through June 30, 2022 of $13.7 million was $942,000 (7.4%) above prior year-to-date.
• The Bank's Tier 1 Leverage Ratio was 9.67% as compared with the March 31, 2022 level of 10.25%. The Bank's Total Capital Ratio decreased to 13.77% from the prior quarter ratio of 14.90%. The Bank's capital ratios are expected to increase in the third quarter when the holding company will downstream proceeds from the recent equity raise to the Bank to support the balance sheet growth from the acquisition and branch expansion. On June 30, 2022 the holding company held $61.8 million of cash.

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• Nonaccrual loans declined $586,000 during the second quarter to $1.3 million, down from $4.1 million at June 30, 2021. The Bank had no other real estate owned at quarter-end. The Bank's allowance for loan and lease losses as a percent of loans held for investment was 1.40% and no provision for loan loss was taken in Q2 2022, as the Bank had net loan recoveries of $188,000 year-to-date and credit quality indicators remained strong.
• The Company's period-end book value per share was $24.31. Book value per share was up from the prior quarter-end value of $22.18 and the prior year value of $23.30 due to the Q2 2022 capital raise and accreted earnings offsetting further increases in the unrealized losses on securities, net of tax, which have arisen due to increase in interest rates. The unrealized losses on securities, net of tax, increased to $7.9 million at June 30, 2022 from $5.1 million at March 31, 2022 due to the continued increase in market rates.

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BANK OF IDAHO HOLDING COMPANY

CONSOLIDATED BALANCE SHEET (unaudited)

($000's)		6/30/2022		3/31/2022		6/30/2021
ASSETS
Cash and due from banks	$	14,716	$	14,393	$	13,683
Interest bearing deposits with Federal Reserve and other banks		83,541		78,451		88,625
Federal funds sold and securities purchased under agreements to resell		-		-		-
Cash and cash equivalents		98,257		92,844		102,308
Time deposits at other banks		783		783		289
Held-to-maturity securities, at cost		30,613		31,074		-
Available-for-sale securities, at fair value		137,604		124,200		122,024
Equity securities, at fair value		38		44		37
Federal Home Loan Bank stock		885		885		690
Mortgage loans held for sale, at fair value		3,957		9,753		12,038
Loans held for investment		537,984		496,855		415,640
Allowance for loan losses		(7,507)		(7,471)		(6,830)
Loans, net of allowance		530,477		489,384		408,810
Accrued interest and dividends receivable		2,776		2,362		2,168
Premises and equipment, net		10,287		10,375		9,623
Other real estate owned		-		-		-
Intangible assets		-		-		-
Deferred tax asset, net		4,671		3,839		2,092
Other assets		1,434		1,517		1,016
TOTAL ASSETS	$	821,782	$	767,060	$	661,095
LIABILITIES
Noninterest bearing deposits	$	278,805	$	271,862	$	242,170
Interest bearing deposits		401,036		405,734		340,873
Total deposits		679,841		677,596		583,043
Federal funds purchased and securities sold under agreements to repurchase		-		-		-
Accrued expenses and other liabilities		5,544		2,921		4,480
Operating lease liabilities		3,914		4,084		3,229
Finance lease borrowings		420		430		441
FHLB advances and other borrowings		-		-		-
Subordinated notes & debentures		24,516		24,503		9,851
Total Liabilities		714,235		709,534		601,044
SHAREHOLDERS' EQUITY
Common stock and additional paid-in capital; no par; authorized - 6,000,000 shares;
issued and outstanding - 4,423,436, 2,593,186, and 2,557,373 shares		80,000		28,242		27,586
Retained earnings		35,481		34,375		30,755
Accumulated other comprehensive income (loss)		(7,934)		(5,091)		1,710
Total Shareholders' Equity		107,547		57,526		60,051
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	821,782	$	767,060	$	661,095
Book Value per Share	$	24.31	$	22.18	$	23.30
Tangible Book Value per Share	$	24.31	$	22.18	$	23.30
Nonaccrual loans / loans held for investment		0.24%		0.38%		1.00%
Allowance for loan losses / loans held for investment		1.40%		1.50%		1.64%
Tier 1 Leverage ratio - Bank of Idaho		9.67%		10.25%		9.55%
Tier 1 Capital ratio - Bank of Idaho		12.52%		13.64%		14.29%
Total Capital ratio - Bank of Idaho		13.77%		14.90%		15.54%

BANK OF IDAHO HOLDING COMPANY

CONSOLIDATED INCOME STATEMENT (unaudited)

		Three Months Ended				Year-to-Date
($000's)	6/30/2022	3/31/2022	6/30/2021	6/30/2022	6/30/2021
Interest and dividend income
Interest and fees on loans	$	6,913	$	6,310	$	5,299	$	13,223	$	11,272
Interest on securities		933		816		631		1,749		1,289
FHLB and other stock dividends		5		6		4		11		15
Other interest income		204		41		27		245		34
Total interest and dividend income		8,055		7,173		5,961		15,228		12,610
Interest expense
Interest expense on deposits		81		77		81		158		158
FHLB advances and other borrowings		-		-		-		-		1
Subordinated notes & debentures		284		284		148		568		302
Other interest expense		2		3		19		5		45
Total interest expense		367		364		248		731		506
Net interest income		7,688		6,809		5,713		14,497		12,104
Provision for loan loss		-		-		-		-		220
Net interest income after provision for loan loss		7,688		6,809		5,713		14,497		11,884
Noninterest income
Service charges on deposit accounts		126		110		84		236		172
Trust department revenue		483		499		577		982		1,009
Net gains (losses) on sales of loans & leases		544		820		2,452		1,364		4,473
Net gains (losses) on sales of other real estate owned		-		-		14		-		53
Net gains (losses) on sale of securities		-		-		-		-		69
Other noninterest income		198		227		323		425		569
Total noninterest income		1,351		1,656		3,450		3,007		6,345
Noninterest expense
Compensation and benefits		4,152		3,880		4,325		8,031		8,701
Occupancy and equipment		708		657		413		1,365		1,036
Marketing and business development		554		283		342		837		549
Data processing, IT and telephone		941		634		596		1,575		1,118
Audit, FDIC, and supervisory		168		165		123		333		304
Legal, accounting and consulting		267		91		68		357		155
Intangible expense		-		-		-		-		-
Other noninterest expense		729		425		622		1,154		847
Total noninterest expense		7,519		6,134		6,490		13,653		12,710
Income before income taxes		1,520		2,331		2,674		3,852		5,518
Provision for income taxes		414		666		720		1,080		1,467
Net income	$	1,106	$	1,665	$	1,953	$	2,772	$	4,051
Basic earnings per share	$	0.30	$	0.65	$	0.76	$	0.89	$	1.58
Diluted earnings per share	$	0.30	$	0.64	$	0.76	$	0.89	$	1.58
			Quarter-to-Date				Year-to-Date
	6/30/2022	3/31/2022	6/30/2021	6/30/2022	6/30/2021
Return on average assets		0.55%		0.88%		1.19%		0.71%		1.28%
Return on average equity		4.88%		11.41%		13.22%		7.43%		13.91%