Foresight Financial : Announces Third Quarter 2023 Operating Results

NEWS RELEASE

FORESIGHT FINANCIAL GROUP, INC.

809 Cannell Puri Court

Winnebago, IL 61088

FOR IMMEDIATE RELEASE:	October 20, 2023
FOR INFORMATION CONTACT:
Peter Morrison	Jennifer Blumer
President & CEO	Chief Financial Officer
[phone]	[phone]

FORESIGHT REPORTS THIRD QUARTER 2023 RESULTS

Foresight Financial Group, Inc., a Winnebago, IL based multi-bank holding company with fourteen banking offices in Stephenson, Winnebago and Kankakee counties, reported that for the third quarter of 2023, net income decreased by 44.0% to $2,547,000 from $4,552,000 reported in the third quarter of 2022. This reduction is reflective of an improvement in net interest margin of $129,000 and an increase in non-interest income of $435,000 offset by increased provision expense of $2,920,000 and increased overhead expense of $386,000. Net income for the first nine months of 2023 of $7,815,000 is down 31.8% from $11,464,000 reported in the first nine months of 2022 reflecting an improvement in net interest margin that is offset by a decrease in non-interest income and increases in provision expense and overhead expenses. Year to date 2023 earnings per common share decreased to $2.19 from $3.21 in 2022, return on average assets was 0.69%, and return on stockholders' equity was 8.05%. Third quarter earnings per common share of $0.71 is a decline of 23.7% from the $0.93 earnings per share in Q2 2023.

Foresight's balance sheet in the past year saw continued growth in total assets, which were up 5.2% to $1.519 billion. Encompassed in the reported asset level is a loan volume level reflecting an increase of 11.0% to $1.041 billion. Funding the asset growth was an increase in deposits of 4.0% to a level of $1.362 billion. The Foresight Group continues to hold the largest market share of deposits among financial institutions operating in Stephenson County.

Non-performing assets of the Company as of September 30, 2023 totaled $16.7 million and were concentrated in four credit relationships. The level of non-performing assets reported as of September 30, 2023 is a 144.9% increase from that reported as of December 31, 2022. The Company recognized provision expense of $4.5 million through the first nine months of 2023. Loans past due 30 to 89 days remain low at 0.25% of total loans.

CEO Peter Morrison stated: "Although overall asset quality continues to remain generally strong in all sectors of the portfolio, we have seen some softening in select credits that have migrated into risk categories requiring additional monitoring which resulted in increased loan loss reserves this quarter, not inconsistent with industry trends relative to reserve levels. We continue to remain cautiously optimistic that we will be able to recapture a significant portion of Q1 2023 Provision Expense in fiscal 2023 as noted in our First Quarter results announcement. We view ongoing Net Interest Margin compression as a challenge to core earnings and expect that will continue into 2024 with potential additional Fed rate increases projected in 2023 and a prolonged elevated rate environment well into 2024. Industry trends relative to liquidity have seen some stabilization from the first part of 2023 but will continue to be a driver of Net Interest Margin and overall earnings trends as cost of funds elevate. We are closely monitoring credit concentrations in addition to potential softening in the Commercial Real Estate market in particular and the general portfolio overall."

Foresight's community banks include Northwest Bank of Rockford, State Bank, Freeport, State Bank of Davis, German-American State Bank, German Valley, Lena State Bank and State Bank of Herscher. Foresight's common stock is listed on "OTCQX" Market under the trading symbol FGFH. Closing price for the common stock was $22.81 per share at the close of business October 17, 2023. Book value of the company's common stock was $47.20 as of September 30, 2023. Tangible Book value per share (adjusting for Accumulated Other Comprehensive Income and Goodwill) as of September 30, 2023 was $34.97.