Bank of Idaho Holding Company Reports Second Quarter 2022 Financial Results - Seite 2

• Second quarter net interest income of $7.7 million was $879,000 (12.9%) higher than the first quarter and $2.4 million higher than Q2 2021. The increase was driven by growing loan and securities balances, increasing asset yields, and stable funding costs.

• Noninterest income decreased $305,000 (18.4%) from the prior quarter to $1.4 million due to a continuing decline in mortgage banking revenue. The sharp increase in mortgage rates this year has reduced volume, particularly when compared to the significant activity experienced in 2020 and 2021. Year-to-date non-interest income of $3.0 million through June 30, 2022 was down $3.3 million (52.6%) from prior year, of which $3.1 million was due to the slowdown in mortgage banking. The first two quarters of 2021 also included $122,000 of combined gains on sales of securities and other real estate owned.

• Noninterest expense for the quarter increased $1.4 million (22.6%) over Q1 2022 to $7.5 million, as the Bank began to incur a variety of one-time IT, professional, and marketing expenses related to the branch acquisition, as well as increased staffing and occupancy expense related to the two new branches. The acquisition related expenses will continue into the third quarter when the transaction closes. Year-to-date noninterest expense through June 30, 2022 of $13.7 million was $942,000 (7.4%) above prior year-to-date.

• The Bank's Tier 1 Leverage Ratio was 9.67% as compared with the March 31, 2022 level of 10.25%. The Bank's Total Capital Ratio decreased to 13.77% from the prior quarter ratio of 14.90%. The Bank's capital ratios are expected to increase in the third quarter when the holding company will downstream proceeds from the recent equity raise to the Bank to support the balance sheet growth from the acquisition and branch expansion. On June 30, 2022 the holding company held $61.8 million of cash.

• Nonaccrual loans declined $586,000 during the second quarter to $1.3 million, down from $4.1 million at June 30, 2021. The Bank had no other real estate owned at quarter-end. The Bank's allowance for loan and lease losses as a percent of loans held for investment was 1.40% and no provision for loan loss was taken in Q2 2022, as the Bank had net loan recoveries of $188,000 year-to-date and credit quality indicators remained strong.