FineMark : Earnings Release 6-30-22

FineMark Holdings Reports Second Quarter 2022 Net Income of $7 Million, Earnings Per Diluted Share of $.59

FORT MYERS, JULY 19, 2022 - FineMark Holdings, Inc. (the "Holding Company"; OTCQX: FNBT), the parent company of FineMark National Bank & Trust (the "Bank"; collectively, "FineMark"), today reported net revenues of $27.3 million for the second quarter ended June 30, 2022, compared to $22.7 million in the second quarter of 2021. Net income was $7 million, or $.59 per diluted share, compared with net income of $5.4 million, or $.58 per diluted share, for the same period a year ago.

Joseph R. Catti, Chairman & Chief Executive Officer:

"FineMark again delivered strong results for the second quarter, despite the headwinds associated with the overall economy. High inflation; declines in the equity markets; the horrific Russian invasion of Ukraine; supply chain issues, and rising interest rates have shaken the overall economy. However, we continue to meet these challenges and achieve positive results by serving our clients at the highest level."

Financial Summary			%
($ in thousands, except per share data)	Q2 2022	Q2 2021	Change
Net Interest Income	$18,386	$15,640	18%
Provision for Loan Losses	$836	$540	55%
Trust Fees	$6,752	$6,628	2%
Other Non-Interest Income	$896	$606	48%
Salary & Benefits Expense	$11,386	$9,336	22%
Other Non-Interest Expense	$6,314	$5,742	10%
Pre-Gain/(Loss) Income	$7,498	$7,256	3%
Gains/(Losses)	$1,226	($157)	881%
Pre-Tax Income	$8,724	$7,099	23%
Net Income	$6,977	$5,396	29%
Net Loans	$2,115,137	$1,945,541	9%
Investments	$1,181,247	$737,991	60%
Total Assets	$3,527,841	$2,982,969	18%
Total Deposits	$2,958,228	$2,366,025	25%
Subordinated Debt	$40,961	$40,876	0%
FHLB Borrowings	$240,000	$284,144	-16%
Total Equity	$266,800	$271,005	-2%

Financial Highlights

Year-over-year highlights for the second quarter of 2022 include:

• Net income increased 29% to $7 million.
• Investment portfolio increased 60% to $1.2 billion.
• Loan production increased by 3%.
• Deposits increased 25% to $3 billion.
• Net interest income increased 18% to $18.4 million.
• Cost of funds decreased 3% to $3.7 million.
• FHLB borrowings decreased 16%, resulting in interest expense savings of $689,000.
• Gains of $1.2 million realized on the extinguishment of debt (repayment of FHLB Advances).
• Trust fees increased 2% to $6.75 million.

Trust Assets Under Administration	$5,464,847	$5,688,110	-4%
Net New Trust Business	$139,467	$140,623	-1%
Tier 1 Capital Ratio	9.16%	9.27%
Return on Average Equity	10.28%	9.89%
Diluted Earnings per Common Share	$0.59	$0.58	2%
Book Value Per Share	$22.73	$25.20	-10%

• Assets under management and administration decreased 4% to $5.5 billion (including $139 million from new and expanded relationships, a 1% decrease).
• Asset quality remains pristine with non- performing loans to total loans at 0.03% (down from an already negligible 0.10% ).

8695 College Parkway, Suite 100, Fort Myers, Florida 33919

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Net Interest Income & Margin

For the second quarter of 2022, FineMark's net		Net Interest Income and
interest income totaled $18.4 million, up 18%		Margin
from the year prior.
This increase was largely due to growth in the		($ in thousands)		Q2 2022	Q2 2021		% Change
Bank's investment portfolio (a 60% increase
year-over-year); continued loan growth, and the
	Investment Income			$3,956			$2,613			51%
repayment of $45 million in Federal Home Loan
	Loan Income			$18,145			$16,860			8%
Bank of Atlanta (FHLB) advances, which will
reduce the Bank's quarterly interest expense by		Total Interest Income			$22,101			$19,473			13%
$242 thousand going forward.
	Deposit Expense			$1,784			$1,023			74%
The investment portfolio grew by $443 million		FHLB Borrowing Expense			$1,389			$2,078			-33%
year-over-year, resulting in $1.3 million in		Subordinated Debt			$542			$732			-26%
additional interest income for the quarter. The		Total Interest Expense			$3,715			$3,833			-3%
investment portfolio now represents 33% of
	Net Interest Income			$18,386			$15,640			18%
total assets.
Interest rates continued to rise in the second		Net Interest Margin			2.22%			2.24%
quarter, however the Bank's interest expense		Loan Yield			3.51%			3.54%
declined due to the prepayment of both FHLB		Investment Yield			1.29%			1.41%
advances and subordinated debt. The latter		Cost of Funds			0.46%			0.57%

resulted in a savings of $190 thousand for the

quarter. The Bank's net interest margin increased to 2.22%, up from 2.14% in first quarter 2022, but down from 2.24% in second quarter 2021.

Non-Interest Income

As of June 30, 2022, assets under management and administration totaled $5.5 billion, down slightly from $5.7 billion in the second quarter of 2021.

The Bank's trust and investment earnings were impacted by the decline in the U.S. equity markets (the S&P 500 was down 16%), which resulted in a 1% decrease in recurring trust fees for the quarter.

Despite market volatility, $139.5 million was added from new and existing clients, which is a testament to the exceptional level of expertise and service provided by our associates.

Non-Interest Income

($ in thousands)	Q2 2022	Q2 2021	% Change
Trust Recurring Fees	$6,413	$6,509	-1%
Estate Settlement Fees	$339	$119	185%
Other Non-Interest Income	$896	$606	48%
Total Non-Interest Income	$7,648	$7,234	6%
Debt Extinguishment
Gains/(Losses)	$1,226	($400)	407%
Securities Gains/(Losses)	$0	$243	-100%
Total Gains/(Losses)	$1,226	($157)	881%

8695 College Parkway, Suite 100, Fort Myers, Florida 33919

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Investor Relations [e-mail]

Non-Interest Expense

Non-interest expense increased 17% for a total of $17.7 million in the second quarter of 2022, compared to $15.1 million in second quarter of 2021. This increase is primarily due to salary expense and costs associated with the opening of two new locations in the second quarter. As FineMark continued to grow, additional expenses were incurred to maintain high service levels, which included hiring 10 new associates in the second quarter. Despite these increasing operating expenses, FineMark was able to reduce its efficiency ratio to 64.9%, compared to 66.4% in the second quarter of last year.

Non-Interest Expense

($ in thousands)	Q2 2022	Q2 2021	% Change
Salary Expense	$9,882	$8,168	21%
Employee Benefits Expense	$1,504	$1,168	29%
Occupancy Expense	$1,991	$1,506	32%
Information Systems Expense	$1,574	$1,548	2%
Other Non-Interest Expense	$2,749	$2,688	2%
Total Non-Interest Expense	$17,700	$15,078	17%
Tax Expense	$1,747	$1,703	3%

Credit Quality

Asset quality remained pristine, and the Bank remains committed to maintaining its high credit standards through a relationship- centered approach to lending. Loan decisions are based on an in-depthunderstanding of each borrower's needs and unique financial situation. As a result, the Bank has experienced minimal loan defaults through various economic cycles.

As of June 30, 2022, non-performing loans totaled $706 thousand, or 0.03% of total loans, a decrease from $2 million or 0.10% in the second quarter of 2021. The current allowance for loan losses is $21.6 million (or 1.01% of gross loans).

Credit Quality

($ in thousands)	Q2 2022	Q2 2021	% Change
Gross Loans	$2,136,742	$1,967,177	9%
Allowance for Loan Losses	$21,605	$21,636	0%
Net Loans	$2,115,137	$1,945,541	9%
Net Recoveries/(Charge-Offs)	$24	$1	2300%
Non-Accrual Loans	$706	$2,001	-65%
Non-Accrual Loans/Gross
Loans	0.03%	0.10%
Past Due 30-89 Days	$1,400	$1,350	4%
Past Due Loans/Gross Loans	0.07%	0.07%

Balance Sheet Highlights

Despite rising interest rates, loan production continued to be strong in the second quarter, increasing by 3% to $268 million for the quarter, compared to $260 million last year. Additionally, deposits continued to grow from both existing and new clients, increasing 25% or $592 million compared to the second quarter of 2021. The investment portfolio increased to approximately $1.2 billion from $740 million a year ago, which is a 60% or $443 million increase over this time last year. Lastly, FHLB advances are down $44 million or 16%.

8695 College Parkway, Suite 100, Fort Myers, Florida 33919

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Capital

All capital ratios continue to exceed regulatory requirements for "well-capitalized" banks. On June 30, 2022, FineMark's Tier 1 leverage ratio on a consolidated basis was 9.16%, and the total risk-based capital ratio was 20.03%.

Rising interest rates during the quarter resulted in a $61 million net unrealized loss on the Bank's investment portfolio. This unrealized loss does not reflect bond credit quality; rather, it shows how rapidly interest rates have increased. These losses will likely remain unrealized since the Bank intends to hold these bonds to maturity.

Capital

($ in thousands)	Q2 2022	Q2 2021	% Change
Tier 1 Capital	$327,643	$269,351	22%
Net Unrealized
Gain/(Loss)	($60,843)	$1,654	-3779%
Total Capital	$266,800	$271,005	-2%
Tier 1 Leverage Ratio	9.16%	9.27%
Risk-Based Capital Ratio	20.03%	19.68%
ROAE	10.28%	9.89%

Return on average equity (ROAE) increased to 10.28% this quarter, compared to 9.89% for the second quarter of 2021.

Performance on the OTCQX Exchange

Shares of FineMark Holdings, Inc. (OTCQX:FNBT), the parent company of FineMark National Bank & Trust, are traded on the OTCQX exchange. Operated by the OTC Markets Group, the OTCQX allows investors to trade privately-held stock through their preferred broker. During the second quarter of 2022, FineMark's shares traded in a range between $28.90 and $33.25, and at an average volume of 268 shares trading per day. The shares closed the quarter trading at $29.05, a 12% decrease compared to the end of the second quarter of 2021, for a price-to-tangible book value multiple of 1.28.

Renovation & Expansion Updates

• In June 2022, FineMark opened two new Florida locations. The new offices in Jupiter and downtown Naples are fully operational and, combined, produced $11 million in new loans and $6.7 million in deposits in their first month.
• Two tenants now occupy space on the second floor of FineMark's Fort Myers office. The Bank will reserve the remaining space for continued growth.
• The Bank sold its former Fort Myers (Riverwalk) location in the second quarter, realizing a gain of $384,000 on the sale.

8695 College Parkway, Suite 100, Fort Myers, Florida 33919

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Investor Relations [e-mail]

Closing Remarks from Chairman & Chief Executive Officer, Joseph R. Catti

"The results shared today are a testament to our associates' unparalleled commitment to providing the highest level of personalized service to our clients, and the strength of our balance sheet.

Since our founding in 2007, our mission and vision has never wavered. In everything we do, we strive to make a positive impact on the families, individuals, and communities we serve while also being good stewards of FineMark's resources. We believe that this intentional focus will continue to create shareholder value through various economic environments and cycles."

Background

FineMark Holdings, Inc. is the parent company of FineMark National Bank & Trust. Founded in 2007, FineMark National Bank & Trust is a nationally chartered bank, headquartered in Florida. Through its offices located in Florida, Arizona and South Carolina, FineMark offers a full range of financial services including personal and business banking, lending services, trust, and investment services. The Corporation's common stock trades on the OTCQX under the symbol FNBT. Investor information is available on the Corporation's website at www.finemarkbank.com.

Forward-Looking Statements

This press release contains statements that are "forward-looking statements." You can identify forward- looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends, and which do not relate to historical matters. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, some of which are beyond our control. These risks, uncertainties, and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectability, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyber-attacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward- looking statements. You should carefully review all of these factors and you should be aware that there might be other factors that could cause these differences.

These forward-looking statements were based on information, plans and estimates at the date of this report. We assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

8695 College Parkway, Suite 100, Fort Myers, Florida 33919

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Investor Relations [e-mail]