Savi Financial Corporation Reports Results for the Fourth Quarter and the Year 2023
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MOUNT VERNON, Wash., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Savi Financial Corporation, Inc. (OTC Pink: SVVB), the bank holding company for SaviBank, today announced that following a pre-tax
For the full year 2023, net income was
The Company’s fourth quarter 2023 operating results reflected the following changes from the third quarter of 2023: (1) a normalized provision for credit losses of
“Highlighting our operating results in 2023 was the double-digit loan and deposit growth year-over-year, as we continue to grow in our Western Washington markets,” said Michal D. Cann, Chairman and President of Savi Financial Corporation. “During the fourth quarter of 2023, we realized several one-time expenses associated with the Orca Bank formation. From an accounting perspective, we decided it was more prudent to realize these expenses now, rather than waiting to report formation expenses after the Orca Bank opening. We received regulatory approval from the Federal Deposit Insurance Corporation, and, while we are currently awaiting regulatory approval from the Federal Reserve Board, we anticipate opening Orca Bank sometime in 2024. While there will be some additional expenses following the opening later this year, we anticipate any additional future start-up expenses to be minimal. Further, we continue to maintain strong capital ratios and credit quality remains healthy. We added to our reserves during the quarter, and with no loan downgrades, we are feeling good about the health of our loan portfolio.”
“Loan production continues to be stable, remaining relatively unchanged from the prior quarter, and increasing
“Our NIM contracted during the current quarter, as the increase in loan yields was more than offset by higher funding costs,” said Rob Woods, Chief Financial Officer of SaviBank. “We anticipate that our NIM should flatten out over the next few quarters.”
The Company’s NIM was
“Non-interest income for the year 2023 was impacted by the high interest rate environment, which led to a slowing mortgage market and fewer SBA loan originations. The result was lower mortgage and SBA fee income compared to 2022,” said Hunter. “We anticipate that when rates start to stabilize, our mortgage lending and SBA lending businesses will pick up.”
“At year end, we posted a
Fourth Quarter and Full Year 2023 Highlights:
- Net income was
$48,000 for the year 2023, compared to$3.72 million in 2022. Net loss for the fourth quarter of 2023 was$1.54 million , compared to net income of$558,000 in the third quarter of 2023, and net income of$1.09 million in the fourth quarter of 2022. - Earnings per diluted share were
$0.01 in 2023, compared to$0.84 in 2022. Losses per diluted share were$0.35 in the fourth quarter of 2023, compared to earnings per diluted share of$0.13 in the preceding quarter, and$0.25 in the fourth quarter of 2022. - Net interest income increased
6% to$19.8 million in 2023, compared to$18.6 million in 2022. Net interest income was$4.78 million in the fourth quarter of 2023, compared to$5.03 million in the third quarter of 2023, and$5.34 million in the fourth quarter of 2022. - Total revenue, consisting of net interest income and non-interest income, was
$23.3 million for the year, compared to$25.2 million for 2022. Total revenue was$5.48 million in the fourth quarter of 2023, compared to$5.89 million in the preceding quarter and$6.37 million in the fourth quarter a year ago. - Non-interest expense totaled
$23.6 million for the year, compared to$20.2 million for 2022. Non-interest expense was$7.17 million in the fourth quarter of 2023, compared to$5.56 million in the preceding quarter, and$4.68 million in the fourth quarter a year ago. - Average fourth quarter 2023 total loans increased
3% to$488.7 million , compared to$473.6 million in the third quarter of 2023, and increased16% from$420.9 million in the fourth quarter of 2022. Total loans at December 31, 2023, were$488.7 million from$487.2 million at September 30, 2023 and increased13% compared to$434.4 million at December 31, 2022. - SBA and USDA loan production for the twelve months ended December 31, 2023, totaled 20 loans for
$9.61 million , compared to production of 24 loans for$33.8 million in the year-ago period. - Average fourth quarter 2023 total deposits grew
2% to$482.7 million , from$474.1 million in the preceding quarter, and increased9% from$444.6 million in the fourth quarter of a year ago. Total deposits increased modestly to$483.8 million , at December 31, 2023, compared to$481.5 million at September 30, 2023, and increased12% compared to$430.7 million at December 31, 2022. The cost of deposits was1.83% for the fourth quarter of 2023. - The Company recorded a
$287,000 provision for credit losses in the fourth quarter of 2023. This compared to a$350,000 credit to its reserves in the third quarter of 2023, and a$335,000 provision for credit losses in the fourth quarter of 2022. - Allowance for loan losses, as a percentage of total loans, was
1.18% at December 31, 2023, compared to1.16% at September 30, 2023, and1.34% at December 31, 2022. - Nonperforming loans, as a percentage of total loans, was
0.06% at December 31, 2023. This compared to0.09% at September 30, 2023, and0.11% at December 31, 2022. - Nonperforming assets, as a percentage of total assets, was
0.16% at December 31, 2023, compared to0.19% at September 30, 2023, and0.21% a year ago. - Net charge-offs were
$128,000 in the fourth quarter of 2023, compared to$77,000 in the third quarter of 2023, and let loan recoveries of$39,000 in the fourth quarter a year ago. - SaviBank capital levels remained above the threshold for well-capitalized institutions with a tier-1 leverage ratio of
8.11% at December 31, 2023.
On August 22, 2023, the Company announced that it had received regulatory approval from the Federal Deposit Insurance Corporation (“FDIC”) for its previously announced plan to form a new state-chartered commercial bank headquartered in Bellingham, Washington. The transaction involves the formation of Orca Bank by applying for a de novo bank charter, with Savi Financial acquiring Orca Bank as a wholly owned subsidiary. Additionally, Orca Bank will acquire SaviBank’s Bellingham branch, located at 1910 Broadway, Bellingham, WA 98225. Formation, capitalization and acquisitions will occur simultaneously after issuance of the Orca Bank Charter upon approval by regulators and closing of the reorganization.
Michal D. Cann will be Chairman and CEO of Orca Bank and Drew Wilkens will be President of Orca Bank.
About Northwest Washington
SaviBank currently operates six branches in Skagit County, two branches in Island County, one branch in Whatcom County, one branch in San Juan County and a loan production office in Thurston County. The Skagit, Whatcom, Island and San Juan counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border.
The housing market in Skagit, Island, Whatcom and San Juan counties remains healthy, although it has fallen off the record high levels from a year ago. According to the Northwest Multiple Listing Service, the average home in Skagit County sold for
Skagit’s population is projected to grow
Sources:
https://www.nwmls.com/real-estate-news/monthly-market-snapshot/
https://www.capitaliq.spglobal.com/
About Savi Financial Corporation Inc. and SaviBank –
Savi Financial Corporation is the bank holding company which owns SaviBank. The Bank began operations April 11, 2005, and has 10 branch locations in Anacortes, Burlington, Bellingham, Concrete, Mount Vernon (2), Oak Harbor, Freeland, Sedro-Woolley, and Friday Harbor, Washington, and a Mortgage Loan Production Office in Olympia. The Bank provides loan and deposit services to customers who are predominantly small and middle-market businesses and individuals in and around Skagit, Island, Whatcom and San Juan counties. As a locally-owned community bank, we believe that when everyone becomes Savi about their finances, our entire community benefits. For additional information about SaviBank, visit: www.SaviBank.com
Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||
(In thousands of dollars, except for ratios and per share amounts) | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | Var % | September 30, 2023 | Var % | December 31, 2023 | December 31, 2022 | Var % | |||||||||||||||||||||
SUMMARY OF OPERATIONS | ||||||||||||||||||||||||||||
Interest income | $ | 7,549 | $ | 5,889 | 28 | % | $ | 7,573 | ( | )% | $ | 28,641 | $ | 20,216 | 42 | % | ||||||||||||
Interest expense | (2,773 | ) | (554 | ) | 401 | (2,539 | ) | 9 | (8,865 | ) | (1,644 | ) | 439 | |||||||||||||||
Net interest income | 4,776 | 5,335 | (10 | ) | 5,034 | (5 | ) | 19,776 | 18,572 | 6 | ||||||||||||||||||
Provision for loan losses | (287 | ) | (335 | ) | (14 | ) | 350 | (182 | ) | 252 | (414 | ) | (161 | ) | ||||||||||||||
NII after loss provision | 4,489 | 5,000 | (10 | ) | 5,384 | (17 | ) | 20,028 | 18,158 | 10 | ||||||||||||||||||
Non-interest income | 708 | 1,032 | (31 | ) | 852 | (17 | ) | 3,504 | 6,655 | (47 | ) | |||||||||||||||||
Non-interest expense | (7,173 | ) | (4,681 | ) | 53 | (5,559 | ) | 29 | (23,588 | ) | (20,220 | ) | 17 | |||||||||||||||
Income before tax | (1,976 | ) | 1,351 | (246 | ) | 677 | (392 | ) | (56 | ) | 4,593 | (101 | ) | |||||||||||||||
Federal income tax expense | (437 | ) | 259 | (269 | ) | 119 | (467 | ) | (104 | ) | 870 | (112 | ) | |||||||||||||||
Net income | $ | (1,539 | ) | $ | 1,092 | (241 | )% | $ | 558 | (376 | )% | $ | 48 | $ | 3,723 | (99 | )% | |||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||||||||||
Number of shares outstanding (000s) | 3,460 | 3,442 | 1 | % | 3,460 | — | % | 3,460 | 3,442 | 0.52 | % | |||||||||||||||||
Earnings per share, basic | $ | (0.44 | ) | $ | 0.32 | (239 | ) | $ | 0.16 | (376 | ) | $ | 0.01 | $ | 1.08 | (99 | ) | |||||||||||
Earnings per share, diluted | $ | (0.35 | ) | $ | 0.25 | (239 | ) | $ | 0.13 | (376 | ) | $ | 0.01 | $ | 0.84 | (99 | ) | |||||||||||
Market value | 7.01 | 8.40 | (17 | ) | 6.86 | 2 | 7.01 | 8.40 | (17 | ) | ||||||||||||||||||
Book value | 10.75 | 10.54 | 2 | 10.95 | (2 | ) | 10.75 | 10.54 | 2 | |||||||||||||||||||
Market value to book value | 65.22 | % | 79.70 | % | (18 | ) | 62.65 | % | 4 | 65.22 | % | 79.70 | % | (18 | ) | |||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||||||||||
Assets | $ | 593,481 | $ | 523,516 | 13 | % | $ | 591,370 | 0 | % | $ | 593,481 | $ | 523,516 | 13 | % | ||||||||||||
Investments securities | 35,451 | 38,103 | (7 | ) | 35,140 | 1 | 35,451 | 38,103 | (7 | ) | ||||||||||||||||||
Total loans | 488,747 | 434,419 | 13 | 487,184 | 0 | 488,747 | 434,419 | 13 | ||||||||||||||||||||
Total deposits | 483,833 | 430,709 | 12 | 481,476 | 0 | 483,833 | 430,709 | 12 | ||||||||||||||||||||
Borrowings | 52,500 | 37,500 | 40 | 52,500 | - | 52,500 | 37,500 | 40 | ||||||||||||||||||||
Sub Debt - Savi Financial Only | 17,000 | 17,000 | - | 17,000 | - | 17,000 | 17,000 | - | ||||||||||||||||||||
Shareholders’ equity | 37,187 | 36,277 | 3 | 37,887 | (2 | ) | 37,187 | 36,277 | 3 | |||||||||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||||||||||
Average assets | $ | 592,442 | $ | 522,150 | 13 | % | $ | 583,931 | 1 | % | $ | 558,499 | $ | 501,353 | 11 | % | ||||||||||||
Average total loans | 488,740 | 420,947 | 16 | 473,590 | 3 | 467,068 | 390,476 | 20 | ||||||||||||||||||||
Average total deposits | 482,655 | 444,632 | 9 | 474,076 | 2 | 457,271 | 431,567 | 6 | ||||||||||||||||||||
Average shareholders' equity | 37,537 | 35,828 | 5 | 37,812 | (1 | ) | 36,732 | 36,930 | (1 | ) | ||||||||||||||||||
ASSET QUALITY RATIOS | ||||||||||||||||||||||||||||
Net (charge-offs) recoveries | $ | (128 | ) | $ | 39 | N/M | $ | (77 | ) | N/M | $ | (394 | ) | $ | (185 | ) | N/M | |||||||||||
Net (charge-offs) recoveries to average loans | (0.10 | )% | 0.04 | % | N/M | (0.07 | )% | N/M | (0.08 | )% | (0.05 | )% | N/M | |||||||||||||||
Non-performing loans as a % of loans | 0.06 | 0.11 | (43 | ) | 0.09 | (30 | ) | 0.06 | 0.11 | (43 | ) | |||||||||||||||||
Non-performing assets as a % of assets | 0.16 | 0.21 | (23 | ) | 0.19 | (15 | ) | 0.16 | 0.21 | (23 | ) | |||||||||||||||||
Allowance for loan losses as a % of total loans | 1.18 | 1.34 | (12 | ) | 1.16 | 2 | 1.18 | 1.34 | (12 | ) | ||||||||||||||||||
Allowance for loan losses as a % of non-performing loans | 1,866.34 | 1,258.96 | 48 | 1,223.59 | 53 | 1,866.34 | 1,258.96 | 48 | ||||||||||||||||||||
FINANCIAL RATIOS\STATISTICS | ||||||||||||||||||||||||||||
Return on average equity | (16.40 | )% | 12.19 | % | (235 | )% | 5.90 | % | (378 | )% | 0.13 | % | 10.08 | % | (99 | )% | ||||||||||||
Return on average assets | (1.04 | ) | 0.84 | (224 | ) | 0.38 | (372 | ) | 0.01 | 0.74 | (99 | ) | ||||||||||||||||
Net interest margin | 3.54 | 4.57 | (23 | ) | 3.66 | (3 | ) | 3.80 | 4.13 | (8 | ) | |||||||||||||||||
Efficiency ratio | 108.48 | 69.77 | 55 | 92.23 | 18 | 91.08 | 76.23 | 19 | ||||||||||||||||||||
Average number of employees (FTE) | 147 | 148 | (1 | ) | 145 | 1 | 139 | 139 | - | |||||||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||||||||||
Tier 1 leverage ratio -- Bank | 8.11 | 8.72 | (7 | )% | 8.24 | (2 | )% | 8.11 | 8.72 | (7 | )% | |||||||||||||||||
Common equity tier 1 ratio -- Bank | 8.95 | 9.13 | (2 | )% | 9.08 | (1 | )% | 8.95 | 9.13 | (2 | )% | |||||||||||||||||
Tier 1 risk-based capital ratio -- Bank | 8.95 | 9.13 | (2 | )% | 9.08 | (1 | )% | 8.95 | 9.13 | (2 | )% | |||||||||||||||||
Total risk-based capital ratio --Bank | 10.12 | 10.38 | (3 | )% | 10.22 | (1 | )% | 10.12 | 10.38 | (3 | )% |
Contact: | Michal D. Cann |
Chairman & President | |
Savi Financial Corporation | |
(360) 707-2272 |
FAQ
What was Savi Financial Corporation's net loss for the fourth quarter of 2023?
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