Integrated Financial Holdings, Inc. Second Quarter 2023 Financial Results

RALEIGH, N.C., July 27, 2023 (GLOBE NEWSWIRE) -- Integrated Financial Holdings, Inc. (OTCQX: IFHI) (the “Company” or “IFHI”), the financial holding company for West Town Bank & Trust (the “Bank”), released its financial results for the three and six months ended June 30, 2023. Highlights from the 2023 second quarter results include the following:

• Second quarter net income of $3.6 million, or $1.60 per diluted share compared to second quarter 2022 net income of $1.4 million, or $0.63 per diluted share. Year-to-date net income of $5.9 million or $2.63 per diluted share compared to $5.0 million in net income or $2.22 per diluted share in the prior year.
• Net interest income of $5.5 million for the second quarter of 2023, compared to $5.1 million for the same period in 2022.   For the year, net interest income was $11.2 million compared to $10.4 million for the same six-month period in 2022.
• Return on average assets of 3.05% and 2.57% for the three and six-month periods ending June 30, 2023, compared to 1.29% and 2.29% for the same period in 2022.
• Return on average tangible common equity (a non-GAAP financial measure) of 19.84% and 16.84% for the three and six-month periods ending June 30, 2023, compared to 7.91% and 14.08% for the same period in 2022.

The second quarter of 2023 showed positive results from a continued effort to improve efficiency as strategic decisions were made to wind down West Town Insurance Agency, Inc. and to sell a minority interest in West Town Payments, LLC (“WTP”). The efficiency ratio in the second quarter of 2023 was 61.4% compared to 80.8% for the same period in 2022. In addition, the sale of the Bank’s ownership interest in WTP resulted in a pretax gain of about $366,000, and an exit from the Bank’s hemp-related business line resulted in a pretax gain of about $464,000. The first six months of 2023 reflected a similar positive impact from those strategic decisions. Total noninterest expense was down $3.3 million or 17% from 2022 to 2023 resulting in an efficiency ratio of 65.2% for the six-months ended June 30, 2023, compared to 72.9% for the same period in 2022.

In reflecting on the second quarter of the year, Marc McConnell, President, and CEO of IFHI, stated: “The strong performance in the second quarter is a positive reflection of the resiliency of our organization. Growth across total assets, deposits, and total shareholders’ equity is even more significant in light of the market disruption caused by the failure of three large regional banks during the first half of this year.

Looking inwardly, this quarter realized the gains of our prior cost-containment and operating efficiency measures. Net income increased year over year as did net interest income. Additionally, the Bank’s strong capital position has enabled it to continue to grow its earning asset base, allowing it to realize the benefits of the higher interest rate environment on the asset side of the balance sheet. In right-sizing the Bank and streamlining operational focuses, we believe we are well-positioned to introduce new avenues for continued growth in alignment with our strategic plan. We will continue to leverage the successes of our government-guaranteed lending division to further reinforce our strengths while remaining steadfastly focused on enhancing shareholder value.”

BALANCE SHEET
On June 30, 2023, the Company’s total assets were $482.1 million, net loans held for investment were $319.6 million, loans held for sale (“HFS”) were $33.2 million, total deposits were $379.1 million and total shareholders’ equity attributable to IFHI was $94.4 million. Compared with December 31, 2022, total assets increased $34.2 million or 8%, net loans held for investment increased $24.9 million or 8%, HFS loans decreased $1.1 million or 3%, total deposits increased $66.0 million or 21%, and total shareholders’ equity attributable to IFHI increased $6.9 million or 7%. Cash and cash equivalents increased $8.9 million or 26% since the prior year-end as a result of growth in the deposit side of the Bank. The Bank has continued to see growth in loans held for investment primarily as a result of activity in the Government Guaranteed Lending (“GGL”) type loans.   Noninterest bearing deposits have decreased by $23.9 million or 23% since December 31, 2022, resulting largely from the Company’s decision to discontinue banking two industries the Company had previously targeted.   The increase in total shareholders’ equity since December 31, 2022, was primarily associated with earnings. The market value of the available-for-sale investment portfolio has remained roughly unchanged since year end with the accumulated other comprehensive loss component of equity related to the change in market pricing at $2.3 million at December 31, 2022 and June 30, 2023. The Company does not have any investments in its portfolio treated as held-to-maturity being carried at cost.

CAPITAL AND LIQUIDITY STRENGTH
At June 30, 2023, the regulatory capital ratios of West Town Bank & Trust exceeded the minimum thresholds established for well-capitalized banks under applicable banking regulations.

	"Well Capitalized" Minimum	Basel III Fully Phased-In	West Town Bank & Trust
Tier 1 common equity ratio	6.50%	7.00%	13.35%
Tier 1 risk-based capital ratio	8.00%	8.50%	13.35%
Total risk-based capital ratio	10.00%	10.50%	14.60%
Tier 1 leverage ratio	5.00%	4.00%	11.90%

Primarily as a result of net income, the Company’s book value per common share increased from $38.69 as of December 31, 2022, to $41.90 at June 30, 2023. The Company’s tangible book value per common share (a non-GAAP financial measure) also increased from $30.36 as of December 31, 2022, to $33.68 at June 30, 2023, primarily as a result of net income.

Total deposits increased by $22.8 million in Q2 2023 and by $45.5 million over the past twelve months. The Bank funds its loan growth primarily with a blend of customer deposits and wholesale funding and has a wide variety of customers and industries in its portfolio. The Bank also offers services that provide FDIC coverage for its customers in excess of the $250,000 limit. As of June 30, 2023, the average deposit account size was $94,000, and uninsured deposits excluding those required for debt service were $26.9 million or roughly 7% of total deposits.

The Bank’s primary on-balance sheet liquidity consists of cash and cash equivalents along with unpledged available for sale investment securities, which totaled $60.9 million as of June 30, 2023.   Additionally, the Bank maintains fully collateralized credit facilities with the Federal Home Loan Bank of Chicago (“FHLB”). As of June 30, 2023, the FHLB credit facility totaled $65.0 million with no outstanding balance and all of it available for borrowing. In aggregate, total primary on-balance sheet liquidity and total available borrowing capacity at the FHLB was 467% of the amount of uninsured deposits (excluding those required for debt service) as of June 30, 2023.   Additionally, the Bank’s business model includes the origination and sales of GGL loans, a process which occurs each month and can be accelerated or slowed down based on the Bank’s current funding needs. At June 30, 2023, the Bank had $33.2 million in loans available for sale which could generate additional liquidity as needed.

ASSET QUALITY
The Company’s nonperforming assets to total assets ratio increased from 1.04% at December 31, 2022, to 1.22% at June 30, 2023. Nonaccrual loans at June 30, 2023 increased $1.0 million or 23% as compared to December 31, 2022. The Bank held $315,000 in foreclosed assets as of June 30, 2023, compared to $101,000 at December 31, 2022.  

During the second quarters of 2023 and 2022, the Company recorded provisions for credit losses of $130,000 and $460,000, respectively. The Company recorded $86,000 in net charge-offs during the second quarter of 2023 compared to $279,000 in net recoveries for the same period in 2022. In addition, the Company added $70,000 towards a reserve for unfunded commitments. Set forth in the table below is certain asset quality information as of the dates indicated:

(Dollars in thousands)	6/30/23			3/31/23			12/31/22			9/30/22			6/30/22
Nonaccrual loans	$	5,586		$	4,485		$	4,552		$	4,612		$	4,656
Foreclosed assets		315			315			101			-			-
90 days past due and still accruing		-			-			-			-			-
Total nonperforming assets	$	5,901		$	4,800		$	4,653		$	4,612		$	4,656
Net charge-offs (recoveries)	$	86		$	376		$	(149	)	$	(29	)	$	(279	)
Annualized net charge-offs (recoveries) to total
average portfolio loans		0.11	%		0.49	%		-0.20	%		-0.04	%		-0.43	%
Ratio of total nonperforming assets to total assets		1.22	%		1.03	%		1.04	%		1.05	%		1.07	%
Ratio of total nonperforming loans to total loans, net
of allowance		1.75	%		1.43	%		1.55	%		1.60	%		1.79	%
Ratio of total allowance for credit losses to total loans (1)		1.87	%		1.88	%		2.23	%		2.27	%		2.39	%
(1) Does not include the Company's reserve for unfunded commitments

NET INTEREST INCOME AND MARGIN
Net interest income for the three months ended June 30, 2023, increased $389,000 or 8% in comparison to the second quarter of 2022 primarily as a result of an increase in average loans outstanding. Loan yields increased from 6.90% in the second quarter of 2022 to 8.43% for the same period in 2023. The increase in yield from the prior year reflected the impact of 475 basis points of rate increases by the Federal Open Market Committee (“FOMC”) since the beginning of 2022 in response to current economic conditions, as well as a change in loan mix. Overall cost of funds increased from 0.64% in the second quarter of 2022 to 2.70% for the same period in 2023 as average retail certificate of deposit (“CD”) rates trended up, and new CDs were originated at higher market rates. Net interest margin decreased slightly from 5.51% during the three months ended June 30, 2022, to 5.48% for the same period in 2023.  

For the six-months ended June 30, net interest income increased from $10.4 million in 2022 to $11.2 million in 2023. The increase of $821,000 or 8% was due to a combination of increased average loan volume and a slight increase in net interest margin. Average loans increased from $306.8 million for the six-months ended June 30 2022 to $351.5 million for the same period in 2023. Net interest margin during those same periods increased from 5.60% in 2022 to 5.66% in 2023.

(Dollars in thousands)	6/30/23		3/31/23		12/31/22		9/30/22		6/30/22			6/30/23		6/30/22
Average balances:
Loans	$	357,272	$	345,651	$	331,508	$	312,475	$	319,115		$	351,461	$	306,809
Available-for-sale securities		18,208		17,691		17,446		19,096		21,879			17,949		21,484
Other interest-bearing balances		29,445		28,998		20,367		30,378		33,328			29,222		44,844
Total interest-earning assets		404,925		392,340		369,321		361,949		374,322			398,632		373,137
Total assets		472,169		460,412		436,695		428,983		438,732			466,291		438,067
Noninterest-bearing deposits		78,676		98,555		113,851		94,013		85,042			88,615		91,794
Interest-bearing liabilities:
Interest-bearing deposits		288,972		251,281		212,069		233,464		244,363			270,126		239,727
Borrowings		4,505		10,222		8,913		2,174		8,626			7,364		7,466
Total interest-bearing liabilities		293,477		261,503		220,982		235,638		252,989			277,490		247,193
Common shareholders' equity		91,281		88,574		84,831		88,043		90,721			89,928		90,581
Tangible common equity (1)		72,661		69,788		65,879		68,924		71,437			71,225		71,188
Interest income/expense:
Loans	$	7,511	$	6,997	$	6,422	$	5,943	$	5,491		$	14,508	$	11,114
Available-for-sale securities		133		120		64		105		104			253		193
Interest-bearing balances and other		392		319		257		169		89			711		131
Total interest income		8,036		7,436		6,743		6,217		5,684			15,472		11,438
Deposits		2,445		1,696		735		532		523			4,141		1,045
Borrowings		56		85		93		13		15			141		24
Total interest expense		2,501		1,781		828		545		538			4,282		1,069
Net interest income	$	5,535	$	5,655	$	5,915	$	5,672	$	5,146		$	11,190	$	10,369
(1) See reconciliation of non-GAAP financial measures.

	Three Months Ended											Year-To-Date
	6/30/23		3/31/23		12/31/22		9/30/22		6/30/22			6/30/23		6/30/22
Average yields and costs:
Loans	8.43	%	8.21	%	7.69	%	7.55	%	6.90	%		8.32	%	7.30	%
Available-for-sale securities	2.92	%	2.71	%	1.47	%	2.20	%	1.90	%		2.82	%	1.80	%
Interest-bearing balances and other	5.34	%	4.46	%	5.01	%	2.21	%	1.07	%		4.91	%	0.59	%
Total interest-earning assets	7.96	%	7.69	%	7.24	%	6.81	%	6.09	%		7.83	%	6.18	%
Interest-bearing deposits	3.39	%	2.74	%	1.38	%	0.90	%	0.86	%		3.09	%	0.88	%
Borrowings	4.99	%	3.37	%	4.14	%	2.37	%	0.70	%		3.86	%	0.65	%
Total interest-bearing liabilities	3.42	%	2.76	%	1.49	%	0.92	%	0.85	%		3.11	%	0.87	%
Cost of funds	2.70	%	2.01	%	0.98	%	0.66	%	0.64	%		2.36	%	0.64	%
Net interest margin	5.48	%	5.85	%	6.35	%	6.22	%	5.51	%		5.66	%	5.60	%

NONINTEREST INCOME
Noninterest income for the three months ended June 30, 2023, was $7.8 million compared $6.8 million for the same period in 2022. The increase is primarily attributable to an increase in other noninterest income which increased $1.1 million. The primary drivers of this increase were the sale of the Bank’s interest in WTP as previously mentioned, which resulted in a pretax gain of about $366,000, and an exit from the hemp-related business line resulted in a pretax gain of about $464,000. In addition, increases in the income of Windsor Advantage, LLC (“Windsor”), a subsidiary of the Company, and government lending revenues helped to offset the loss of mortgage revenues, which decreased from $1.1 million in the second quarter of 2022 to none in 2023, as the Company discontinued its mortgage operations in the fourth quarter of 2022.

Specific items to note with respect to the most recently completed quarter include:

• Windsor, which offers an SBA and USDA loan servicing platform, had processing and servicing revenue totaling $2.7 million, an increase of $287,000 or 12% as compared to the $2.4 million in income earned during the same prior-year period.
• Mortgage revenue totaled $1.1 million for the second quarter of 2022 compared to $0 in 2023. Due to the nationwide slowdown in refinancing volume and the impact of a doubling of long-term mortgage rates year-over-year, the Company phased out its mortgage operations by the fourth quarter of 2022.
• Government Guaranteed Lending revenue was $3.6 million in the second quarter of 2023, an increase of $809,000 or 29% in comparison to the $2.8 million of revenues for the same period in 2022.  
  

On a year-to-date basis, noninterest income has decreased $2.7 million or 16%. The decrease is primarily the result of the difference in each period’s mark-to-market income adjustment on the Company’s equity investment in Dogwood State Bank due to successful capital raises for Dogwood in the first quarter of both years. The capital raises helped to establish new market values. The prior year’s first quarter had a positive mark-to-market of $6.0 million compared to $2.0 million for the current year.

NONINTEREST EXPENSE
Noninterest expense for the second quarter of 2023 was $8.2 million, a decrease of $1.5 or 15%, from $9.6 million for the second quarter of 2022. This change was primarily due to a decrease of $892,000 or 14% in compensation expense going from $6.3 million in the second quarter of 2022 down to $5.4 million for the same period in 2023 as the Company continues its efforts to decrease its overhead in light of the changing economic environment. Compensation expense has decreased three straight quarters.

Loan-related expenses, which tend to fluctuate unexpectedly, also decreased by $145,000 or 30% from $491,000 in the second quarter of 2022 to $346,000 for the same period in 2023. Every expense category was down from the second quarter of 2022 to the second quarter of 2023 except occupancy and equipment and merger related expenses, both of which had immaterial increases. The result was significant improvement in the efficiency ratio, which decreased from 80.8% during the second quarter of 2022 to 61.4% for the same period in 2023.  

On a year-to-date basis, noninterest expenses decreased from $20.0 million for the first six months of 2022 to $16.7 million for the same period in 2023, a decrease of $3.3 million or 17%. Compensation expense was the biggest driver in the overall decrease, declining to $11.0 million in the first six-months of 2023 from $13.3 million in the same period in 2022, a decrease of $2.4 million or 18%.

ABOUT INTEGRATED FINANCIAL HOLDINGS, INC.
Integrated Financial Holdings, Inc. is a financial holding company based in Raleigh, North Carolina. The Company is the holding company for West Town Bank & Trust, an Illinois state-chartered bank. West Town Bank & Trust provides banking services through its full-service office located in the greater Chicago area. The Company is also the parent company of Windsor Advantage, LLC, a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. The Company is registered with and supervised by the Federal Reserve. West Town Bank & Trust’s primary regulators are the Illinois Department of Financial and Professional Regulation and the FDIC.

For more information, visit https://ifhinc.com/. 

Important Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of the Company and on the information available to management at the time this release was prepared. These statements can be identified by the use of words such as "expect," "anticipate," "estimate," "believe," variations of these words, and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand, and asset quality, including real estate and other collateral values; changes in Small Business Administration rules, regulations, or loan products, including the section 7(a) program; changes in other government guaranteed loan programs or our ability to participate in such programs; changes in tax law, including the impact of such changes on our tax assets and liabilities; future governmental shutdowns that may impact revenues associated with our lending and other operations that are dependent on government guaranteed loan programs; changes in banking regulations and accounting principles, policies, or guidelines; the failure of our strategic investments or acquisitions to perform as anticipated and the impact of any impairments to our intangible assets, such as goodwill; the impact of our strategic initiatives on our ability to retain key employees; recent adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, our strategic initiatives, and regulatory response to these developments; adverse results (including judgments, costs, fines, reputational harm, financial settlements and/or other negative effects) from current or future litigation, regulatory proceedings, investigations, or similar matters, or developments related thereto; and the impact of competition from traditional or new sources, including non-bank financial service providers, such as Fintechs. These, and other factors that may emerge, could cause decisions and actual results to differ materially from current expectations. The Company assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.   

Contact: Steve Crouse, 919-861-8018

     

Consolidated Balance Sheets
				Ending Balance
(In thousands, unaudited)				6/30/23			3/31/23			12/31/22			9/30/22			6/30/22
Assets
Cash and due from banks				$	3,582		$	6,986		$	7,553		$	6,272		$	4,700
Interest-bearing deposits					39,258			21,224			26,430			25,011			21,981
	Total cash and cash equivalents				42,840			28,210			33,983			31,283			26,681
Interest-bearing time deposits					750			999			999			1,249			1,499
Available-for-sale securities					18,977			17,504			17,712			17,460			19,038
Marketable equity securities					19,980			19,980			17,982			17,982			17,982
Loans held for sale					33,232			39,088			34,302			28,399			59,592
Loans held for investment					325,673			319,465			300,764			295,416			266,259
	Allowance for credit losses				(6,086	)		(6,011	)		(6,709	)		(6,710	)		(6,361	)
		Loans held for investment, net			319,587			313,454			294,055			288,706			259,898
Premises and equipment, net					3,960			4,041			4,098			4,264			4,238
Foreclosed assets					315			315			101			-			-
Loan servicing assets					3,717			3,604			3,715			3,979			4,178
Bank-owned life insurance					5,087			5,053			5,357			5,330			5,304
Accrued interest receivable					3,280			3,090			2,997			2,485			2,139
Goodwill					13,161			13,161			13,161			13,161			13,161
Other intangible assets, net					5,350			5,517			5,682			5,848			6,014
Other assets					11,872			13,243			13,719			17,293			15,764
			Total assets	$	482,108		$	467,259		$	447,863		$	437,439		$	435,488
Liabilities and Shareholders' Equity
Liabilities
Deposits:
	Noninterest-bearing			$	82,272		$	76,554		$	106,255		$	106,272		$	83,544
	Interest-bearing				296,805			279,735			206,872			218,835			250,026
		Total deposits			379,077			356,289			313,127			325,107			333,570
Borrowings					-			10,000			30,000			5,000			-
Accrued interest payable					1,014			806			379			370			308
Other liabilities					7,655			10,101			17,600			23,557			9,939
	Total liabilities				387,746			377,196			361,106			354,034			343,817
Shareholders' equity:
Common stock, voting					2,231			2,231			2,239			2,239			2,227
Common stock, non-voting					22			22			22			22			22
Additional paid in capital					25,860			25,744			24,916			24,674			24,498
Retained earnings					68,558			64,963			62,611			60,248			67,781
Accumulated other comprehensive loss					(2,309	)		(2,198	)		(2,301	)		(2,866	)		(1,985	)
	Total IFH, Inc. shareholders' equity				94,362			90,762			87,487			84,317			92,543
Noncontrolling interest					-			(699	)		(730	)		(912	)		(872	)
	Total shareholders' equity				94,362			90,063			86,757			83,405			91,671
			Total liabilities and shareholders' equity	$	482,108		$	467,259		$	447,863		$	437,439		$	435,488

Consolidated Statements of Income
(In thousands except per	Three Months Ended															Year-To-Date
share data; unaudited)	6/30/23			3/31/23		12/31/22			9/30/22			6/30/22				6/30/23		6/30/22
Interest income
Loans	$	7,511		$	6,997	$	6,422		$	5,943		$	5,491			$	14,508	$	11,114
Available-for-sale securities and other		525			439		321			274			193				964		324
Total interest income		8,036			7,436		6,743			6,217			5,684				15,472		11,438
Interest expense
Interest on deposits		2,445			1,696		735			532			523				4,141		1,045
Interest on borrowings		56			85		93			13			15				141		24
Total interest expense		2,501			1,781		828			545			538				4,282		1,069
Net interest income		5,535			5,655		5,915			5,672			5,146				11,190		10,369
Provision for credit losses		130			565		(150	)		320			460				695		640
Noninterest income
Loan processing and servicing
revenue		2,660			2,439		2,849			2,163			2,373				5,099		4,580
Mortgage		-			-		99			477			1,066				-		1,239
Government guaranteed lending		3,576			904		2,095			2,213			2,767				4,480		3,891
SBA documentation preparation fees		-			-		2			78			128				-		272
Service charges on deposits		52			133		240			182			118				185		222
Bank-owned life insurance		34			555		26			27			33				589		58
Change in fair value of marketable
equity securities		-			1,998		-			-			-				1,998		5,994
Other noninterest income		1,434			566		549			222			290				2,000		805
Total noninterest income		7,756			6,595		5,860			5,362			6,775				14,351		17,061
Noninterest expense
Compensation		5,379			5,581		6,168			6,880			6,271				10,960		13,332
Occupancy and equipment		318			344		303			402			254				662		598
Loan and special asset expenses		346			293		57			969			491				639		1,129
Professional services		446			448		676			207			491				894		1,042
Data processing		247			265		272			263			271				512		520
Software		469			469		467			460			426				938		851
Communications		68			78		83			86			97				146		180
Advertising		174			248		211			252			321				422		535
Amortization of intangibles		166			166		169			170			170				332		340
Merger related expenses		61			116		192			561			-				177		-
Other operating expenses		486			489		1,236			10,683			846				975		1,477
Total noninterest expense		8,160			8,497		9,834			20,933			9,638				16,657		20,004
Income (loss) before income taxes		5,001			3,188		2,091			(10,219	)		1,823				8,189		6,786
Income tax expense (benefit)		1,416			778		(454	)		(2,646	)		492				2,194		1,895
Net income (loss)		3,585			2,410		2,545			(7,573	)		1,331				5,995		4,891
Noncontrolling interest		(10	)		58		182			(40	)		(78	)			48		(80	)
Net income (loss) attributable
to IFH, Inc.	$	3,595		$	2,352	$	2,363		$	(7,533	)	$	1,409			$	5,947	$	4,971
Basic earnings (loss) per common share	$	1.62		$	1.06	$	1.08		$	(3.45	)	$	0.65			$	2.68	$	2.29
Diluted earnings (loss) per common share	$	1.60		$	1.04	$	1.04		$	(3.45	)	$	0.63			$	2.63	$	2.22
Weighted average common shares
outstanding		2,220			2,211		2,194			2,185			2,175				2,216		2,167
Diluted average common shares
outstanding		2,252			2,265		2,267			2,185			2,244				2,258		2,243

Performance Ratios
		Three Months Ended																Year-To-Date
		6/30/23			3/31/23			12/31/22			9/30/22			6/30/22				6/30/23			6/30/22
PER COMMON SHARE
	Basic earnings (loss) per common share	$	1.62		$	1.06		$	1.08		$	(3.45	)	$	0.65			$	2.68		$	2.29
	Diluted earnings (loss) per common share		1.60			1.04			1.04			(3.45	)		0.63				2.63			2.22
	Book value per common share		41.90			40.28			38.69			37.29			41.15				41.90			41.15
	Tangible book value per common share (2)		33.68			31.99			30.36			28.88			32.62				33.68			32.62
FINANCIAL RATIOS (ANNUALIZED)
	Return on average assets		3.05	%		2.07	%		2.15	%		-6.97	%		1.29	%			2.57	%		2.29	%
	Return on average common shareholders'
	equity		15.80	%		10.77	%		11.05	%		-33.95	%		6.23	%			13.34	%		11.07	%
	Return on average tangible common
	equity (2)		19.84	%		13.67	%		14.23	%		-43.36	%		7.91	%			16.84	%		14.08	%
	Net interest margin		5.48	%		5.85	%		6.35	%		6.22	%		5.51	%			5.66	%		5.60	%
	Efficiency ratio (1)		61.4	%		69.4	%		83.5	%		189.7	%		80.8	%			65.2	%		72.9	%
	(1) Efficiency ratio is calculated by dividing noninterest expense less transaction-related costs by the sum of net interest income and noninterest income, less gains or losses on sale of securities.
	(2) See reconciliation of non-GAAP measures

Loan Concentrations

The top ten commercial loan concentrations as of June 30, 2023, were as follows:

			% of
			Commercial
(Dollars in millions)	Amount		Loans
Solar electric power generation	$	77.6	27	%
Power and communication line and related structures construction		59.9	21	%
Lessors of nonresidential buildings (except miniwarehouses)		15.1	5	%
Other activities related to real estate		10.3	4	%
Lessors of other real estate property		7.9	3	%
Hotels (except casino hotels) and motels		6.8	2	%
Concrete Block and Brick Manufacturing		6.4	2	%
Lessors of residential buildings and dwellings		6.2	2	%
Biomass Electric Power Generation		6.0	2	%
Postharvest Crop Activities		5.0	2	%
	$	201.2	70	%

Reconciliation of Non-GAAP Measures

	6/30/23			3/31/23			12/31/22			9/30/22			6/30/22
	(Dollars in thousands except book value per share)
Tangible book value per common share
Total IFH, Inc. shareholders' equity	$	94,362		$	90,762		$	87,487		$	84,317		$	92,543
Less: Goodwill		13,161			13,161			13,161			13,161			13,161
Less Other intangible assets, net		5,350			5,517			5,682			5,848			6,014
Total tangible common equity	$	75,851		$	72,084		$	68,644		$	65,308		$	73,368
Ending common shares outstanding		2,252			2,253			2,261			2,261			2,249
Tangible book value per common share	$	33.68		$	31.99		$	30.36		$	28.88		$	32.62
	Three Months Ended																Year-To-Date
(Dollars in thousands)	6/30/23			3/31/23			12/31/22			9/30/22			6/30/22				6/30/23			6/30/22
Return on average tangible common equity
Average IFH, Inc. shareholders' equity	$	91,281		$	88,574		$	84,831		$	88,043		$	90,721			$	89,928		$	90,581
Less: Average goodwill		13,161			13,161			13,161			13,161			13,161				13,161			13,161
Less Average other intangible assets, net		5,459			5,625			5,791			5,958			6,123				5,542			6,232
Average tangible common equity	$	72,661		$	69,788		$	65,879		$	68,924		$	71,437			$	71,225		$	71,188
Net income (loss) attributable to IFH, Inc.	$	3,595		$	2,352		$	2,363		$	(7,533	)	$	1,409			$	5,947		$	4,971
Return on average tangible common equity		19.84	%		13.67	%		14.23	%		-43.36	%		7.91	%			16.84	%		14.08	%