1895 BANCORP OF WISCONSIN, INC. ANNOUNCES BALANCE SHEET REPOSITIONING

Rhea-AI Summary

1895 Bancorp of Wisconsin, Inc. (BCOW) completes a second balance sheet repositioning strategy, selling $28.1 million in lower-yielding investment securities for a pre-tax loss of $2.7 million. The purchased securities are expected to generate an additional $1.0 million in pre-tax earnings annually, recouping the loss in approximately 2.76 years. The repositioning is projected to be accretive to earnings, net interest margin, and return on assets, providing greater balance sheet growth flexibility.

Positive

• Completion of a second balance sheet repositioning strategy
• Projected accretive impact on earnings, net interest margin, and return on assets
• Greater flexibility in managing balance sheet growth

Negative

• Pre-tax realized loss of approximately $2.7 million from the sale of lower-yielding investment securities

GREENFIELD, Wis., Dec. 8, 2023 /PRNewswire/ -- 1895 Bancorp of Wisconsin, Inc. (the "Company") (NASDAQ Capital Market: BCOW), the holding company for PyraMax Bank, FSB, announced today the completion of a second balance sheet repositioning strategy related to its investment securities portfolio.

The Company executed the sale of $28.1 million in book value of its lower-yielding investment securities for a pre-tax realized loss of approximately $2.7 million. These securities were classified as available-for-sale. Proceeds from the sale of these securities of $25.4 million were redeployed into approximately $28.7 million of U.S. government sponsored mortgage-backed securities, which were classified as available-for-sale upon purchase. The purchased securities have a positive spread differential of approximately 345 basis points over the securities that were sold, which is expected to result in $1.0 million in additional pre-tax earnings, on an annualized basis. The Company estimates that the loss on the sale of securities will be recouped within approximately 2.76 years. The effective duration of the securities sold was 3.6 years, while the effective duration of the securities purchased is 1.8 years.

The loss on the sale of securities has a neutral impact on shareholders' equity and the Company's book value per share. Upon execution of the repositioning strategy, PyraMax Bank's capital levels remain well in excess of those required to be categorized as well-capitalized. This repositioning is projected to be accretive to earnings, net interest margin and return on assets in future periods, and to provide the Company with greater flexibility in managing balance sheet growth.

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as "believes," "will," "expects," "project," "may," "could," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, and competition and the other risks described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company's actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under federal securities laws.

Contact: David R. Ball

Telephone: (414) 421-8200

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SOURCE PyraMax Bank / 1895 Bancorp of Wisconsin Inc.

FAQ

What is the latest announcement from 1895 Bancorp of Wisconsin, Inc. (BCOW)?

The latest announcement from 1895 Bancorp of Wisconsin, Inc. (BCOW) involves the completion of a second balance sheet repositioning strategy, focusing on investment securities portfolio.

What was the impact of the repositioning strategy on shareholders' equity and book value per share?

The loss on the sale of securities had a neutral impact on shareholders' equity and the Company's book value per share.

How is the repositioning expected to affect future earnings?

The repositioning is projected to be accretive to earnings, net interest margin, and return on assets in future periods.

What were the financial figures associated with the sale and purchase of securities?

The Company sold $28.1 million in lower-yielding investment securities for a pre-tax realized loss of approximately $2.7 million. The purchased securities of $25.4 million were redeployed into approximately $28.7 million of U.S. government sponsored mortgage-backed securities, with a positive spread differential of approximately 345 basis points over the sold securities.

How long is it expected to recoup the loss on the sale of securities?

The Company estimates that the loss on the sale of securities will be recouped within approximately 2.76 years.

What is the impact of the repositioning on PyraMax Bank's capital levels?

Upon execution of the repositioning strategy, PyraMax Bank's capital levels remain well in excess of those required to be categorized as well-capitalized.