Crossroads Impact Corp 2022 Fiscal Second Quarter Report

Rhea-AI Summary

Crossroads Impact Corp (OTCQX: CRSS) reported significant changes in its fiscal second quarter results for the period ending April 30, 2022. Total revenue fell to $16.6 million, down from $476.5 million year-over-year, primarily due to a reduction in PPP fee income of approximately $461.5 million. Net operating income before taxes also declined to $5.1 million from $150.3 million. The company added $20 million in impact loans, totaling $70 million year-to-date. Despite challenges, they maintain a positive outlook on supporting minority and women-owned businesses.

Positive

• Addition of $20 million in impact loans for Q2, bringing the total to $70 million year-to-date.
• Impact loans generated $1.5 million of income for the quarter.
• No delinquencies reported in the impact loan portfolio.

Negative

• Revenue decreased significantly from $476.5 million to $16.6 million due to reduced PPP fee income.
• Net operating income before taxes dropped from $150.3 million to $5.1 million.
• Earnings per share fell from $25.14 to $0.83.

DALLAS, June 14, 2022 /PRNewswire/ -- Crossroads Impact Corp (OTCQX: CRSS) ("Crossroads" or the "Company"), a holding company focused on investing in businesses that promote economic vitality and community development, reported financial results for its fiscal second quarter ended April 30, 2022.  

Following a transformational year for the company in 2021, a blossoming partnership with Enhanced Capital Group, the unwinding of PPP at Capital Plus Financial, and growing Rise Line Business Credit acquisition, 2022's second fiscal quarter was quite eventful. Total revenue from operations was $16.6 million for the quarter ended April 30, 2022, compared to $476.5 million for the prior fiscal year's quarter ended April 30, 2021. This decrease can be attributed to the reduction in the one-time PPP fee income earned of approximately $461.5 million. 

Net operating income before taxes and non-controlling interest for 2022 fiscal second quarter was $5.1 million, compared to $150.3 million the prior year. Net earnings per share from operations before taxes and after non-controlling interest for the quarter was $0.83 and was $25.14 for the same period of 2021. 

Management Commentary 

At a time of economic uncertainty and surging inflation, now is not the time to forget our obligation to minority and women-owned businesses. At Crossroads, we know these businesses will lead us forward as small businesses always have. It is our privilege to support the businesses at the engine of our economy this quarter and beyond. 

During the second quarter of 2022, we further extended our impact loan portfolio, adding $20M during the quarter and bringing the year-to-date total to $70M, with no delinquencies to date. We continue to see the significance these loans have on recipients' impact within their communities and beyond. Among our proudest impact loans are bridge loans with Vertical Harvest and 64 Centre Avenue in New Rochelle, New York. In partnership with Enhanced Capital, Crossroads provided Vertical Harvest a bridge loan as the company's Series A neared its closing. A woman-owned and managed, Wyoming-based business, Vertical Harvest grows local produce in urban areas to address food insecurity and climate change through vertical hydroponic greenhouses. In addition to making an impact on environmental sustainability, Vertical Harvest also employs historically underrepresented populations – namely those with physical and or intellectual disabilities. Crossroads also provided an $8.9 million bridge loan for the environmental remediation of sites located at 64 Center Avenue and 8 Westchester Place in New Rochelle, New York. This project will eliminate environmental contamination in soil and water at the site. The project includes a 16-story tower with 144 apartments of affordable rental housing in a middle-income area with 73.6% minority residents and a 19.5% poverty rate.  

We applaud the modernization of CRA. Between our Texas based CDFI and the national environmental and social lending program at Crossroads, we are well situated to deliver meaningful partnerships to banks to solve their CRA, ESG and community development initiatives while delivering transformative impact to underserved communities.  

Though rising interest rates have cooled the housing market from an inferno to a steady blaze, inventory has not recovered to match demand. As home sale revenue dipped below that of 2021, our mortgage portfolio remained at $133M with a steady performance of 90-day delinquency of 0.94%.  

Our PPP loan portfolio is currently at approximately $1.5B. We continue processing loan forgiveness, which currently sits at 76%. We are confident the remaining loans will also be forgiven. The portfolio generates a net interest margin on 65 BPS and saw a net contribution of $2M for Q2, and $3.8M year-to-date. The outstanding loans will start coming due during June 2022. 

2022 Fiscal Second Quarter Key Performance Indicators (KPIs) 

Highlights for the quarter: 

• PPP loan balance reduced to approximately $1.5B, with 76% of loans forgiven
• Addition of $20M in impact loans on the quarter ($70M year-to-date)
• Impact loans generated $1.5M of income for the quarter ($2.2M for the year)
• Book value per share is $8.69 as currently reported, $11.15 upon the recognition of deferred PPP income

About Crossroads Impact Corp. 

Crossroads Impact Corp (OTCQX: CRSS) Crossroads Impact Corp's mission is to promote economic vitality through community development and equitable access to capital; harnessing the power for good to tackle systemic issues within underserved communities. Building on our history of serving minority individuals and small businesses through environmental and responsible social lending, we look to be the leader in providing innovative and sustainable lending solutions. 

Important Cautions Regarding Forward-Looking Statements

 This press release includes forward-looking statements that relate to the business and expected future events or future performance of Crossroads Impact Corp and Capital Plus Financial involves known and unknown risks, uncertainties, and other factors that may cause its actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," and similar expressions or phrases identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about Crossroads Impact's and Capital Plus Financial's ability to implement their business strategy, and their ability to achieve or maintain profitability. The future performance of Crossroads Impact and Capital Plus Financial may be adversely affected by the following risks and uncertainties: economic changes affecting homeownership in the geographies where Capital Plus Financial conducts business, developments in lending markets that may not align with Capital Plus Financial's expectations and that may affect Capital Plus Financial's plans to grow its portfolio, variations in quarterly results, developments in litigation to which we may be a party, technological change in the industry, future capital requirements, regulatory actions or delays and other factors that may cause actual results to be materially different from those described or anticipated by these forward-looking statements. For a more detailed discussion of these factors and risks, investors should review Crossroads Impact's annual and quarterly reports. Forward-looking statements in this press release are based on management's beliefs and opinions at the time the statements are made. All forward-looking statements are qualified in their entirety by this cautionary statement and Crossroads Impact undertakes no duty to update this information to reflect future events, information, or circumstances. 

©2022 Crossroads Impact Corp.

Investor Relations & Media Contact: 
dovetail solutions 
Andy Boian 
aboian@dovetailsolutions.com
(415) 404-2539 

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SOURCE Crossroads Impact Corp

FAQ

What were Crossroads Impact Corp's total revenues for Q2 2022?

Crossroads Impact Corp reported total revenues of $16.6 million for the fiscal second quarter ended April 30, 2022.

How did Crossroads Impact Corp's earnings per share change in Q2 2022?

The earnings per share decreased to $0.83 in Q2 2022 from $25.14 in the same quarter of 2021.

What is Crossroads Impact Corp's support for minority and women-owned businesses?

Crossroads Impact Corp emphasizes its commitment to supporting minority and women-owned businesses, contributing positively to community development.

What is the status of Crossroads Impact Corp's PPP loan balance?

As of Q2 2022, Crossroads Impact Corp's PPP loan balance is approximately $1.5 billion, with 76% of loans forgiven.