Fourth Quarter 2022 Net Income of $4.3
million and Earnings per Share of $0.31 Reflecting Acquisition
Related Expenses
Professional Holding Corp. (the “Company”) (NASDAQ:PFHD), the
parent company of Professional Bank (the “Bank”), today reported
net income of $4.3 million, or $0.31 per share, for the fourth
quarter of 2022, compared to net income of $8.5 million, or $0.63
per share, for the third quarter of 2022, and net income of $4.0
million, or $0.30 per share, for the fourth quarter of 2021. Chief
Financial Officer Mary Usategui noted that the Company continued to
perform at a high level while incurring additional expenses related
to its previously announced merger with Seacoast Banking
Corporation of Florida (“Seacoast”), expected to close on January
31, 2023.
Results of Operations for the Three Months Ended December 31,
2022
- Net income decreased by $4.2 million, or 49.7%, to $4.3 million
compared to $8.5 million in the third quarter, due to a decrease in
net interest income of $2.2 million and an increase in noninterest
expense of $2.7 million, partially offset by a decrease in
provision expense of $0.5 million and an increase in noninterest
income of $0.1 million. The increase in noninterest expense was due
to expenses associated with one-time equity award accelerations in
anticipation of the Seacoast merger and other related acquisition
expenses.
- Net interest income decreased by $2.2 million, or 9.0%, to
$22.6 million compared to $24.8 million in the third quarter,
primarily due to an increase in the cost of funding, partially
offset by an increase in the rate received on interest bearing
assets. The Company’s yield on average interest earning assets
increased by 42 basis points while cost of funds increased by 84
basis points compared to the prior quarter.
- Provision for loan losses expense decreased by $0.5 million, or
36.6%, to $0.9 million compared to $1.3 million in the third
quarter, due to a decrease in specific reserves on two impaired
loans.
- Noninterest income of $1.3 million remained relatively
unchanged compared to the prior quarter.
- Noninterest expense increased by $2.7 million, or 19.8%, to
$16.6 million compared to $13.9 million in the prior quarter. The
increase was primarily due to expenses of $3.6 million in one-time
equity award accelerations, partially offset by lower acquisition
expenses of $0.5 million compared to the prior quarter in
connection with the pending merger with Seacoast and the prior
quarter charitable contribution to the AAA scholarship
foundation.
Results of Operations for the Year Ended December 31,
2022
- Net income increased by $0.8 million, or 3.7%, to $22.1 million
compared to $21.4 million for the prior year, due to an increase in
net interest income of $16.0 million, partially offset by an
increase in provision expense of $0.5 million, a decrease in
noninterest income of $0.6 million, an increase in noninterest
expense of $12.3 million, and an increase in income tax provision
of $1.8 million.
- Net interest income increased by $16.0 million, or 22.1%, to
$88.3 million compared to $72.3 million in the prior year,
primarily due to the impact of the Federal Reserve’s target Federal
Funds Rate increases in 2022 on the Company’s asset sensitive
balance sheet, in addition to an increase in average loans from
$1.7 billion in 2021 to $1.9 billion in 2022. Interest income also
benefited from increased average balances and higher yields in our
investment portfolio.
- Provision for loan losses increased by $0.5 million, or 11.5%,
to $5.3 million compared to $4.7 million in the prior year
primarily due to loan growth. The ratio of charge-offs to average
loans was 0.03% during the year ended December 31, 2022, compared
to 0.49% in the prior year.
- Noninterest income decreased by $0.6 million, or 9.1% to $5.6
million compared to the prior year. The decrease primarily
reflected lower loan held for sale income of $0.4 million, lower
service charges of $0.5 million on deposit accounts, and lower swap
fee income of $0.6 million. These decreases were partially offset
by an increase of $0.3 million in bank owned life insurance income
and $0.7 million in other noninterest income. The increase in other
noninterest income was comprised of $0.5 million of insurance
proceeds on a previously recognized contingency and a $0.2 million
loss on fixed asset disposals recorded in 2021.
- Noninterest expense increased by $12.3 million, or 26.0%, to
$59.5 million compared to $47.3 million in the prior year primarily
due to higher salaries and employee benefits of $5.7 million,
higher other noninterest expense of $4.7 million, higher
acquisition expenses of $0.8 million, and higher professional fees
of $0.8 million. The increase in salaries and benefits were
comprised of severance and benefit payments related to the
departure of the Company’s former Chief Executive Officer, higher
employee compensation costs from one-time restricted share award
accelerations, increased headcount, and higher sales incentives.
The increase in other noninterest expense was primarily comprised
of $3.6 million in one-time SAR award accelerations, and a $0.7
million loss related to a previously recognized contingency from
the first quarter.
Financial Condition
At December 31, 2022:
- Total assets increased by $114.4 million, or 4.6% to $2.6
billion, compared to September 30, 2022, primarily as a result of
an increase in loans, partially offset by a decrease in cash and
cash equivalents and a decrease in our securities portfolio.
- Total loans increased by $128.5 million, or 25.4%, annualized,
compared to September 30, 2022. We experienced loan originations of
approximately $228.8 million, of which $156.5 million funded,
partially offset by paydowns and prepayments.
- Total deposits decreased by $15.1 million, or 2.7% annualized,
compared to September 30, 2022, primarily due to decreases in
noninterest bearing deposits and time deposits, partially offset by
increases in money market and interest bearing deposit categories.
Cost of deposits increased 79 basis points to 1.18% for the three
months ended December 31, 2022, from 0.39% for the three months
ended September 30, 2022.
- Federal Home Loan Bank advances increased $120.0 million,
compared to September 30, 2022, for the use of funding loan growth
and maintaining liquidity.
- As of December 31, 2022, nonperforming assets decreased $0.3
million to $1.5 million compared to $1.8 million at September 30,
2022, as a result of an impaired loan that was brought to good
standing during the three months ended December 31, 2022.
Capital and Liquidity
The Company continues to remain well capitalized per regulatory
requirements. As of December 31, 2022, the Company had a total
risk-based capital ratio of 13.1% and a leverage capital ratio of
9.5%. The Company maintains a strong liquidity position. At
December 31, 2022, in addition to its balance sheet liquidity, the
Company had the ability to generate approximately $329.5 million in
liquidity through available resources. Additionally, the Company
retained $9.6 million in cash at the holding company.
Net Interest Income and Net Interest Margin Analysis
Net interest income was $22.6 million for the three months ended
December 31, 2022. The following table shows the average
outstanding balance of each principal category of the Company’s
assets, liabilities, and shareholders’ equity, together with the
average yields on assets and the average costs of liabilities for
the periods indicated. Such yields and costs are calculated by
dividing the annualized income or expense by the average daily
balances of the corresponding assets or liabilities for the
respective periods. For the three months ended December 31, 2022,
the Company’s cost of funds was 1.26%.
(Dollars in thousands)
For the Three Months
Ended
December 31, 2022
September 30, 2022
December 31, 2021
Average
Outstanding
Balance
Interest
Income/
Expense(4)
Average
Yield/Rate
Average
Outstanding
Balance
Interest
Income/
Expense(4)
Average
Yield/Rate
Average
Outstanding
Balance
Interest
Income/
Expense(4)
Average
Yield/Rate
Assets
Interest earning assets
Interest-earning deposits
$
93,576
$
906
3.84
%
$
137,355
$
747
2.16
%
$
700,741
$
263
0.15
%
Federal funds sold
15,550
145
3.70
%
21,895
124
2.25
%
21,969
13
0.23
%
Federal Reserve Bank stock, FHLB stock and
other corporate stock
9,316
139
5.92
%
7,384
108
5.80
%
7,760
106
5.42
%
Investment securities - taxable
153,657
879
2.27
%
168,662
736
1.73
%
129,602
290
0.89
%
Investment securities - tax exempt
24,795
207
3.31
%
27,572
228
3.28
%
18,694
166
3.52
%
Loans(1)
2,048,170
27,423
5.31
%
1,979,132
25,222
5.06
%
1,705,563
19,159
4.46
%
Total interest earning assets
2,345,064
29,699
5.02
%
2,342,000
27,165
4.60
%
2,584,329
19,997
3.07
%
Loans held for sale
—
31
802
Noninterest earning assets
152,349
156,584
136,892
Total assets
$
2,497,413
$
2,498,615
$
2,722,023
Liabilities and stockholders’
equity
Interest-bearing liabilities
Interest-bearing deposits
1,461,797
6,414
1.74
%
1,453,653
2,170
0.59
%
1,619,355
1,634
0.40
%
Borrowed funds
71,988
732
4.03
%
24,447
198
3.21
%
39,796
240
2.39
%
Total interest-bearing liabilities
1,533,785
7,146
1.85
%
1,478,100
2,368
0.64
%
1,659,151
1,874
0.45
%
Noninterest-bearing liabilities
Noninterest-bearing deposits
698,274
758,135
814,767
Other noninterest-bearing liabilities
24,727
24,492
18,514
Stockholders’ equity
240,627
237,888
229,591
Total liabilities and stockholders’
equity
$
2,497,413
$
2,498,615
$
2,722,023
Net interest income
$
22,553
$
24,797
$
18,123
Net interest spread(2)
3.17
%
3.96
%
2.62
%
Net interest margin(3)
3.82
%
4.20
%
2.78
%
________________________________________
(1)
Includes nonaccrual loans.
(2)
Net interest spread is the difference
between interest earned on interest earning assets and interest
paid on interest bearing liabilities.
(3)
Net interest margin is a ratio of net
interest income to average interest earning assets for the same
period.
(4)
Interest income on loans includes loan
fees of $0.8 million, $0.9 million and $1.7 million for the three
months ended December 31, 2022, September 30, 2022 and December 31,
2021, respectively.
Net interest income was $88.3 million and the Company’s cost of
funds was 0.56% for the year ended December 31, 2022.
For the Years Ended
December 31, 2022
December 31, 2021
(Dollars in thousands)
Average
Outstanding
Balance
Interest
Income/
Expense(4)
Average
Yield/Rate
Average
Outstanding
Balance
Interest
Income/
Expense(4)
Average
Yield/Rate
Assets
Interest earning assets
Interest earning deposits
$
318,736
$
2,892
0.91
%
$
506,993
$
698
0.14
%
Federal funds sold
24,274
354
1.46
%
42,921
63
0.15
%
Federal Reserve Bank stock, FHLB stock and
other corporate stock
7,907
448
5.67
%
7,658
397
5.18
%
Investment securities - taxable
171,568
2,957
1.72
%
93,955
816
0.87
%
Investment securities - tax-exempt
26,672
880
3.30
%
19,967
735
3.68
%
Loans (1)
1,914,499
94,025
4.91
%
1,692,800
76,912
4.54
%
Total interest earning assets
2,463,656
101,556
4.12
%
2,364,294
79,621
3.37
%
Loans held for sale
338
1,566
Noninterest earning assets
149,398
125,967
Total assets
$
2,613,392
$
2,491,827
Liabilities and shareholders’
equity
Interest-bearing liabilities
Interest-bearing deposits
1,561,864
11,661
0.75
%
1,418,487
5,857
0.41
%
Borrowed funds
43,173
1,589
3.68
%
71,534
1,456
2.04
%
Total interest-bearing liabilities
1,605,037
13,250
0.83
%
1,490,021
7,313
0.49
%
Noninterest-bearing liabilities
Noninterest-bearing deposits
751,192
760,738
Other noninterest-bearing liabilities
21,776
17,956
Shareholders’ equity
235,387
223,112
Total liabilities and shareholders’
equity
$
2,613,392
$
2,491,827
Net interest income
$
88,306
$
72,308
Net interest spread (2)
3.29
%
2.88
%
Net interest margin (3)
3.58
%
3.06
%
________________________________________
(1)
Includes nonaccrual loans.
(2)
Net interest spread is the difference
between interest earned on interest earning assets and interest
paid on interest bearing liabilities.
(3)
Net interest margin is a ratio of net
interest income to average interest earning assets for the same
period.
(4)
Interest income on loans includes loan
fees of $4.6 million and $8.6 million for the year ended December
31, 2022, and 2021, respectively.
Provision for Loan Losses
Provision for loan losses decreased by $0.5 million, or 36.6%,
in the three months ended December 31, 2022, to $0.9 million
compared to $1.3 million in the three months ended September 30,
2022, as a result of updated collateral valuations on two impaired
loans, reducing the specific reserve requirement. There were no net
charge-offs during the three months ended December 31, 2022, and
September 30, 2022.
Investment Securities
In the three months ended December 31, 2022, the Company’s
investment portfolio decreased $10.8 million, or 5.9%, to $172.9
million compared to the prior quarter. The decrease was primarily
due to $10.7 million in investment calls, redemptions and paydowns
coupled with an increase in unrealized losses of $0.2 million
during the fourth quarter. To supplement interest income earned on
the Company’s loan portfolio, the Company invests in high quality
mortgage-backed securities, government agency bonds, corporate
bonds, community development district bonds, and equity securities
(including mutual funds).
Loan Portfolio
The Company’s primary source of income is derived from interest
earned on loans. The Company’s loan portfolio consists of loans
secured by real estate, as well as commercial business loans,
construction and development loans, and other consumer loans. The
Company’s loan clients primarily consist of small-to medium-sized
businesses, the owners and operators of those businesses, and other
professionals, entrepreneurs and high net worth individuals. The
Company’s owner-occupied and investment commercial real estate
loans, residential construction loans, and commercial business
loans provide higher risk-adjusted returns, shorter maturities, and
more sensitivity to interest rate fluctuations and are complemented
by the relatively lower risk residential real estate loans to
individuals. The Company’s lending activities are principally
directed to the Miami-Dade MSA. The following table summarizes and
provides additional information about certain segments of the
Company’s loan portfolio as of December 31, 2022, September 30,
2022, and December 31, 2021:
(Dollars in thousands)
December 31, 2022
September 30, 2022
December 31, 2021
Amount
Percent
Amount
Percent
Amount
Percent
Loans held for investment:
Commercial real estate
$
1,059,754
49.7
%
$
997,478
49.8
%
$
902,654
50.8
%
Residential real estate
500,269
23.5
%
452,521
22.6
%
377,511
21.2
%
Commercial (non-PPP) (1)
405,824
19.0
%
397,725
19.8
%
325,415
18.3
%
Commercial (PPP)
1,902
0.1
%
2,618
0.1
%
58,615
3.3
%
Construction and land development
133,093
6.2
%
128,570
6.4
%
91,520
5.1
%
Consumer and other
32,517
1.5
%
25,983
1.3
%
21,449
1.2
%
Total loans held for investment, gross
2,133,359
100.0
%
2,004,895
100.0
%
1,777,164
100.0
%
Allowance for loan losses
(17,336
)
(16,485
)
(12,704
)
Loans held for investment, net
$
2,116,023
$
1,988,410
$
1,764,460
Loans held for sale:
Loans held for sale
$
—
—
%
$
—
—
%
$
165
100.0
%
Total loans held for sale
$
—
$
—
$
165
________________________________________
(1)
Includes search fund lending of $100.1
million, $99.2 million, and $84.0 million for December 31, 2022,
September 30, 2022, and December 31, 2021, respectively.
Nonperforming Assets
As of December 31, 2022, the Company had nonperforming assets of
$1.5 million, or 0.06% of total assets, compared to nonperforming
assets of $1.8 million, or 0.07% of total assets, at September 30,
2022.
Allowance for Loan and Lease Loss (“ALLL”)
The Company’s allowance for loan losses increased $0.9 million,
or 5.2%, to $17.3 million at December 31, 2022, compared to
September 30, 2022, primarily due to loan production. The Company’s
allowance for loan losses as a percentage of total loans held for
investment was 0.81% at December 31, 2022, compared to 0.82% at
September 30, 2022. There were minimal changes to qualitative loss
factors and historical loss factors for the current period, with
the principal driver for the increased allowance being loan
growth.
PROFESSIONAL HOLDING
CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
(Dollar amounts in thousands,
except share data)
December 31,
2022
September 30,
2022
December 31,
2021
ASSETS
Cash and due from banks
$
12,495
43,863
$
38,469
Interest earning deposits
142,614
113,641
545,521
Federal funds sold
9,996
15,762
13,477
Cash and cash equivalents
165,105
173,266
597,467
Securities available for sale, at fair
value - taxable
144,422
150,517
175,536
Securities available for sale, at fair
value - tax exempt
22,197
26,863
18,765
Securities held to maturity (fair value
December 31, 2022 – $170, September 30, 2022 – $178, December 31,
2021 – $242)
183
194
236
Equity securities
6,119
6,182
6,638
Loans, net of allowance of $17,336,
$16,485, and $12,704 as of December 31, 2022, September 30, 2022,
and December 31, 2021, respectively
2,116,023
1,988,410
1,764,460
Loans held for sale
—
—
165
Premises and equipment, net
7,399
7,867
9,020
Bank owned life insurance
54,935
54,534
38,485
Goodwill and intangibles
25,519
25,579
25,766
Other assets
47,411
41,465
27,573
Total assets
$
2,589,313
$
2,474,877
$
2,664,111
LIABILITIES AND STOCKHOLDERS’
EQUITY
Deposits
Demand – noninterest bearing
$
684,822
$
758,042
$
674,003
Demand – interest bearing
306,817
$
308,167
310,362
Money market and savings
1,051,947
$
976,766
1,121,330
Time deposits
129,594
$
145,316
265,693
Total deposits
2,173,180
2,188,291
2,371,388
Federal Home Loan Bank advances
120,000
—
35,000
Official Checks
7,241
5,350
4,125
Other borrowings
—
—
10,000
Subordinated debt
24,498
24,467
—
Accrued interest and other liabilities
19,017
18,905
12,074
Total liabilities
2,343,936
2,237,013
2,432,587
Stockholders’ equity
Preferred stock, 10,000,000 shares
authorized, none issued
—
—
—
Class A Voting Common stock, $0.01 par
value; authorized 50,000,000 shares. Issued 15,147,950 and
outstanding 14,101,414 shares as of December 31, 2022, issued
14,769,354 and outstanding 13,811,084 shares at September 30, 2022,
issued 14,393,750 and outstanding 13,446,400 shares at December 31,
2021
151
148
144
Class B Non-Voting Common stock, $0.01 par
value; 10,000,000 shares authorized, none issued and outstanding on
December 31, 2022, September 30, 2022, and December 31, 2021
—
—
—
Treasury stock, at cost
(18,642
)
(16,214
)
(16,003
)
Additional paid in capital
222,451
216,703
212,012
Retained earnings
58,268
54,006
36,120
Accumulated other comprehensive loss
(16,851
)
(16,779
)
(749
)
Total stockholders’ equity
245,377
237,864
231,524
Total liabilities and stockholders'
equity
$
2,589,313
$
2,474,877
$
2,664,111
PROFESSIONAL HOLDING
CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Dollar amounts in thousands,
except share data)
Three Months Ended
Years Ended
December 31,
2022
September 30,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Interest income
Loans, including fees
$
27,423
$
25,222
$
19,159
$
94,025
$
76,912
Investment securities - taxable
879
736
290
2,957
816
Investment securities - tax-exempt
207
228
166
880
735
Dividend income on restricted stock
138
108
107
448
397
Other
1,052
871
275
3,246
761
Total interest income
29,699
27,165
19,997
101,556
79,621
Interest expense
Deposits
6,414
2,170
1,634
11,661
5,857
Federal Home Loan Bank advances
489
—
183
626
751
Subordinated debt
243
198
43
939
378
Other borrowings
—
—
14
24
327
Total interest expense
7,146
2,368
1,874
13,250
7,313
Net interest income
22,553
24,797
18,123
88,306
72,308
Provision for loan losses
851
1,343
1,880
5,285
4,740
Net interest income after provision for
loan losses
21,702
23,454
16,243
83,021
67,568
Noninterest income
Service charges on deposit accounts
558
542
504
2,194
2,741
Income from bank owned life insurance
401
400
281
1,450
1,125
SBA origination fees
25
90
94
163
260
Swap fee income
215
—
128
327
909
Loans held for sale income
—
6
89
122
551
Gain on sale and call of securities
91
—
16
104
39
Other
54
185
178
1,261
562
Total noninterest income
1,344
1,223
1,290
5,621
6,187
Noninterest expense
Salaries and employee benefits
8,300
8,003
8,044
34,996
29,277
Occupancy and equipment
1,005
1,001
987
4,018
3,929
Data processing
476
257
313
1,351
1,182
Marketing
(78
)
565
(103
)
808
635
Professional fees
1,043
830
743
3,678
2,830
Acquisition expenses
504
957
—
1,461
684
Regulatory assessments
255
254
433
1,531
1,681
Other
5,091
1,986
2,483
11,705
7,048
Total noninterest expense
16,596
13,853
12,900
59,548
47,266
Income before income taxes
6,449
10,824
4,633
29,093
26,489
Income tax provision
2,187
2,351
673
6,945
5,125
Net income
$
4,262
$
8,473
$
3,960
$
22,148
$
21,364
Earnings per share:
Basic
$
0.31
$
0.63
$
0.30
$
1.64
$
1.61
Diluted
$
0.29
$
0.60
$
0.29
$
1.56
$
1.54
Other comprehensive income:
Unrealized holding loss on securities
available for sale
$
(96
)
$
(7,176
)
$
(1,080
)
$
(21,581
)
$
(2,161
)
Tax effect
24
1,819
265
5,479
530
Other comprehensive loss, net of tax
(72
)
(5,357
)
(815
)
(16,102
)
(1,631
)
Comprehensive income
$
4,190
$
3,116
$
3,145
$
6,046
$
19,733
PROFESSIONAL HOLDING
CORP.
EARNINGS PER COMMON SHARE
(Unaudited)
(Dollar amounts in thousands,
except share data)
Basic earnings per common share is computed by dividing net
income available to common shareholders by the weighted average
number of shares of common stock outstanding during the year.
Diluted earnings per common share is computed by dividing net
income available to common shareholders by the weighted average
number of shares of common stock outstanding plus the effect of
employee stock awards during the year.
Three Months Ended
Years Ended
December 31,
2022
September 30,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Basic earnings per share:
Net income
$
4,262
$
8,473
$
3,960
$
22,148
$
21,364
Total weighted average common stock
outstanding
13,567,280
13,498,007
13,202,477
13,465,286
13,308,682
Basic earnings per common share
$
0.31
$
0.63
$
0.30
$
1.64
$
1.61
Diluted earnings per share:
Net income
$
4,262
$
8,473
$
3,960
$
22,148
$
21,364
Total weighted average common stock
outstanding
13,567,280
13,498,007
13,202,477
13,465,286
13,308,682
Add: dilutive effect of employee
restricted stock and options
784,800
742,008
666,908
708,693
592,168
Total weighted average diluted stock
outstanding
14,352,080
14,240,015
13,869,385
14,173,979
13,900,850
Dilutive earnings per common share
$
0.30
$
0.60
$
0.29
$
1.56
$
1.54
Anti-dilutive restricted stock and
options
167,784
16,874
4,380
196,160
285,487
Explanation of Certain Unaudited Non-GAAP Financial
Measures
This press release contains financial information determined by
methods other than U.S. Generally Accepted Accounting Principles
(“GAAP”), which we refer to as “non-GAAP financial measures.” The
table below provides a reconciliation between these non-GAAP
measures and net income and net income per share, which are the
most comparable GAAP measures.
Management uses these non-GAAP financial measures in its
analysis of the Company’s performance and believes these measures
are useful supplemental information that can enhance investors’
understanding of the Company’s business and performance without
considering taxes or provisions for loan losses and can be useful
when comparing performance with other financial institutions.
However, these non-GAAP financial measures should not be considered
in isolation or as a substitute for the comparable GAAP
measures.
Reconciliation of non-GAAP Financial Measures
(Dollar amounts in thousands, except per
share data)
Three Months Ended
Years Ended
December 31,
2022
September 30,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Net interest income (GAAP)
$
22,553
$
24,797
$
18,123
$
88,306
$
72,308
Total noninterest income
1,344
1,223
1,290
5,621
6,187
Total noninterest expense
16,596
13,853
12,900
59,548
47,266
Pre-tax pre-provision earnings
(non-GAAP)
$
7,301
$
12,167
$
6,513
$
34,379
$
31,229
Total adjustments to noninterest expense
(1)
(5,042
)
(957
)
—
(8,914
)
(684
)
Adjusted pre-tax pre-provision
earnings
(non-GAAP)
$
12,343
$
13,124
$
6,513
$
43,293
$
31,913
Return on average assets (GAAP)
0.68
%
1.35
%
0.58
%
0.85
%
0.86
%
Annualized pre-tax pre-provision ROAA
(non-GAAP)
1.16
%
1.93
%
0.95
%
1.32
%
1.25
%
Adjusted annualized pre-tax pre-provision
ROAA (non-GAAP)
1.96
%
2.08
%
0.95
%
1.66
%
1.28
%
(1)
Adjustments to noninterest expense for the
three months ended December 31, 2022, were comprised of $4.5
million in one-time equity award accelerations, and $0.5 million in
acquisition expenses. Adjustments for the year ended December 31,
2022, were comprised of $4.5 million in one-time equity award
accelerations, $1.5 million in acquisition expenses and $2.9
million in severance and accelerated vesting expense related to the
departure of the former Chief Executive Officer. Adjustments to
noninterest expense for the three months ended September 30, 2022,
were related to acquisition expenses. Adjustments to noninterest
expense for the year ended December 31, 2021, were related to
change in control payments to two former Marquis employees.
(Dollar amounts in thousands, except
per share data)
December 31, 2022
September 30, 2022
December 31, 2021
Total loans held for investment, net
(GAAP)
$
2,116,023
$
1,988,410
$
1,764,460
Add allowance for loan loss
17,336
16,485
12,704
Total gross loans held for investment
2,133,359
2,004,895
1,777,164
Less Professional Bank net PPP loans
1,902
2,618
58,615
Total gross LHFI excluding net PPP loans
(non-GAAP)
2,131,457
2,002,277
1,718,549
Add purchase accounting loan marks
8,047
8,480
13,003
Total gross LHFI excluding net PPP loans
(non-GAAP) + PA marks
$
2,139,504
$
2,010,757
$
1,731,552
ALLL as a % of LHFI (GAAP)
0.81
%
0.82
%
0.71
%
ALLL as a % of total LHFI excluding net
PPP loans (non-GAAP)
0.81
%
0.82
%
0.74
%
PA marks + ALLL / LHFI excluding net PPP
loans (non-GAAP)
1.19
%
1.24
%
1.48
%
(Dollar amounts in thousands)
Three Months Ended
Years Ended
December 31, 2022
September 30, 2022
December 31, 2021
December 31, 2022
December 31, 2021
Net interest income (GAAP)
$
22,553
$
24,797
$
18,123
$
88,306
$
72,308
Less: PPP net interest income
recognized
(32
)
(200
)
(1,269
)
(2,110
)
(8,246
)
Net interest income excluding PPP
(non-GAAP)
22,521
24,597
16,854
86,196
64,062
Less: PA premium/discounts
(442
)
(1,504
)
(1,442
)
(5,255
)
(6,024
)
Net interest income excluding PPP and PA
(non-GAAP)
$
22,079
$
23,093
$
15,412
$
80,941
$
58,038
Average interest earning assets (GAAP)
2,345,064
2,342,000
2,584,329
2,463,656
2,364,294
Less: average PPP loans
(2,147
)
(4,796
)
(72,728
)
(17,662
)
(141,511
)
Average interest earning assets, excluding
PPP (non-GAAP)
2,342,917
2,337,204
2,511,601
2,445,994
2,222,783
Add: average PA marks
8,286
9,178
14,051
10,040
16,124
Average interest earning assets, excluding
PPP and PA (non-GAAP)
$
2,351,203
$
2,346,382
$
2,525,652
$
2,456,034
$
2,238,907
Net interest margin (GAAP)
3.82
%
4.20
%
2.78
%
3.58
%
3.06
%
Net interest margin excluding PPP
(non-GAAP)
3.81
%
4.18
%
2.66
%
3.52
%
2.88
%
Net interest margin excluding PPP and PA
(non-GAAP)
3.73
%
3.90
%
2.42
%
3.30
%
2.59
%
Certain Performance Metrics
The following table shows the return on average assets (computed
as annualized net income divided by average total assets), return
on average equity (computed as annualized net income divided by
average equity) and average equity to average assets ratios for the
periods presented below.
Three Months Ended
December 31, 2022
Three Months Ended
September 30, 2022
Three Months Ended
December 31, 2021
Years Ended December 31,
2022
Years Ended December 31,
2021
Return on average assets
0.68
%
1.35
%
0.58
%
0.85
%
0.86
%
Return on average equity
7.03
%
14.13
%
6.84
%
9.41
%
9.58
%
Average equity to average assets
9.64
%
9.52
%
8.43
%
9.01
%
8.95
%
About Professional Bank and Professional Holding
Corp.:
Professional Holding Corp. (NASDAQ:PFHD) is the financial
holding company for Professional Bank, a Florida state-chartered
bank established in 2008 and based in Coral Gables, Florida.
Professional Bank focuses on providing creative,
relationship-driven commercial banking products and services
designed to meet the needs of small to medium-sized businesses, the
owners and operators of these businesses, professionals and
entrepreneurs. On August 8, 2022, the Company and Seacoast
announced that they have signed a definitive agreement under which
Seacoast will acquire the Company. The transaction has been
approved by the shareholders and regulatory authorities. The
transaction is expected to be completed on January 31, 2023. For
more information, visit www.myprobank.com. Member FDIC. Equal
Housing Lender.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230127005038/en/
Investor Relations: Mike Sontag General Counsel (561)-868-9040
ir@proholdco.com
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