Newsdesk, Author at Market Newsdesk

July 20, 2022 5:19 pm

Docebo to Host Second Quarter Fiscal 2022 Conference Call

Docebo to Host Second Quarter Fiscal 2022 Conference Call

TORONTO–(BUSINESS WIRE)–Docebo Inc. (Nasdaq:DCBO; TSX:DCBO) (“Docebo” or the “Company“), a leading artificial intelligence(AI)-powered learning suite provider, announced today that it will hold a conference call to discuss its second quarter fiscal year 2022 results on Thursday, August 11, 2022 at 8:00 a.m. (ET). The call will be hosted by Claudio Erba, Chief Executive Officer, Alessio Artuffo, President and Chief Revenue Officer, and Sukaran Mehta, Chief Financial Officer, followed by a question and answer period. Docebo will report its financial results in the morning prior to the call.

Second Quarter Fiscal Year 2022 Conference Call Details:

Date:		Thursday, August 11, 2022
Time:		8:00 a.m. (ET)
Dial-in number:		416-764-8688 or 1-888-390-0546 Italy: 800797692 UK: 0800 652 2435
Live webcast:		https://app.webinar.net/6JRlmqMmDoB Webcast will be archived for 90 days and available at http://investors.docebo.com
Replay:		416-764-8677 or 1-888-390-0541 Available until August 18, 2022
Replay passcode:		785172

About Docebo

Docebo is redefining the way enterprises leverage technology to create and manage content, deliver training, and understand the business impact of their learning experiences. With Docebo’s multi-product learning suite, enterprises around the world are equipped to tackle any learning challenge and create a true learning culture within their organization.

Learn why enterprises love Docebo by visiting our customer stories page.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220718005774/en/

Mike McCarthy

Investor Relations

[email protected]

KEYWORDS: North America Canada

INDUSTRY KEYWORDS: Software Technology Artificial Intelligence

MEDIA:

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July 20, 2022 5:18 pm

Shift4 Appoints Samantha Weeks, PhD as Chief Transformation Officer

Shift4 Appoints Samantha Weeks, PhD as Chief Transformation Officer

ALLENTOWN, Pa.–(BUSINESS WIRE)–
Shift4 (NYSE: FOUR), a global leader in commerce technology, announced the appointment of Samantha Weeks, PhD, to the position of Chief Transformation Officer (CTRO).

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220720005009/en/

Samantha Weeks, PhD (Photo: Business Wire)

Weeks previously served as the company’s Vice President of Transformation. As CTRO, she will be responsible for driving transformation initiatives across all aspects of the company, including program management for Shift4’s various strategic initiatives. This comes at a critical time for the company as they continue to enter numerous new business verticals and expand internationally. She will also be responsible for overseeing Shift4’s fast growing Human Capital and Learning and Development departments.

Prior to joining Shift4, Weeks had a successful career in the United States Air Force where she rose to the rank of Colonel and the position of Wing Commander. As CTRO, she will leverage this experience building organizational excellence focused on program management, process architecture, and reliability while delivering customer-centric execution across sales, delivery, and continuous support.

“Samantha has already proven to be a great asset to Shift4 and we couldn’t be more excited to welcome her into this expanded role,” said Jared Isaacman, CEO. “Prior to her time at Shift4 I had the privilege of working with her in her capacity as the Air Force’s Adversary Tactics Group Commander during my time building Draken International and couldn’t think of a more qualified leader to help drive our never-ending pursuit of excellence at Shift4.”

About Shift4

Shift4 (NYSE: FOUR) is boldly redefining commerce by simplifying complex payments ecosystems across the world. As the leader in commerce-enabling technology, Shift4 powers billions of transactions annually for hundreds of thousands of businesses in virtually every industry. For more information, visit shift4.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005009/en/

Nate Hirshberg

VP, Marketing

Shift4

[email protected]

KEYWORDS: United States North America Pennsylvania

INDUSTRY KEYWORDS: Technology Payments Electronic Commerce Business Professional Services Software Retail Data Management Online Retail

MEDIA:

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Samantha Weeks, PhD (Photo: Business Wire)

July 20, 2022 5:18 pm

Lithium Americas Celebrates Inauguration of Lithium Technical Development Center in Nevada and Provides Thacker Pass Update

VANCOUVER, British Columbia, July 20, 2022 (GLOBE NEWSWIRE) — Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) (“Lithium Americas” or the “Company”) celebrated the inauguration of its Lithium Technical Development Center (“LiTDC”) in Reno, Nevada, USA, with a formal ribbon-cutting ceremony today. Lithium Americas’ President and CEO, Jonathan Evans, was joined by Nevada Governor, Steve Sisolak; and University of Nevada, Reno President, Brian Sandoval. The LiTDC was developed to demonstrate the chemical process designed for the Company’s Thacker Pass lithium project (“Thacker Pass”) in Humboldt Country, Nevada in an integrated process testing facility.

HIGHLIGHTS:

Official opening of Lithium Technical Development Center. Inauguration of the Company’s 30,000 ft² lithium process testing facility in Reno, Nevada.
Facility commissioned and operating as planned. Production commenced in June 2022 to replicate Thacker Pass’ flowsheet from raw ore to final product in an integrated process.
Lithium carbonate samples achieve battery-quality. Facility achieving battery-quality specifications with product samples being produced for potential customers and partners.
Early-works construction on track to commence in 2022. Federal appeal moving forward with briefings scheduled to be complete August 11, 2022, and oral arguments and a final decision expected shortly thereafter. The Company has all permits to commence construction. During construction, Thacker Pass is expected to employ over 1,000 workers.
Process underway to appoint engineering construction contractor. The Company has issued a request for proposal (“RFP”) from short-listed engineering, procurement and construction management firms (“EPCM”) to perform detailed engineering, execution planning and manage Thacker Pass’ construction.
Cultural assessment work was successfully completed in mid-July. Members of the Fort McDermitt Paiute and Shoshone Tribe (“Tribe”) were hired as cultural monitors to perform archeological mitigation work in collaboration with Far Western Anthropological Research Group.
Completing carbon intensity and water utilization analysis. Analysis prepared with a leading international environmental engineering consulting firm indicates Scope 1 and Scope 2 carbon emission intensity per tonne of lithium carbonate produced from Thacker Pass’ process is expected to be competitive to South American-based brine operations and substantially lower than US and Australian-based spodumene operations.
Continuing to advance Thacker Pass financing discussions. Formal application submitted to U.S. Department of Energy (“DOE”) in April 2022 through the Advanced Technology Vehicles Manufacturing (“ATVM”) loan program which is expected to fund the majority of Thacker Pass’ capital costs.

“As we prepare to break ground on Thacker Pass, we have never lost sight of our broader responsibility in developing the largest and most advanced new source of lithium in the U.S.,” said Jonathan Evans, President and CEO of Lithium Americas. “We hope to play a meaningful role in securing domestic supply of lithium to meet our country’s electrification needs, and we are committed to doing so in a manner that benefits the people of Nevada, Native Americans and the broader industry that has flourished in this state. Our new LiTDC will help cement Nevada’s place as a critical hub for battery development, and we are so thankful for the partnership of the University of Nevada, Reno as well as the support of the Governor’s office.”

“Addressing climate change remains a defining issue for the United States, and here in Nevada we have the chance to make a major difference in reducing carbon emissions while serving as an economic engine for America’s electrification,” said Governor Steve Sisolak. “Through the technological expertise of Lithium Americas and the research capacity of University of Nevada, Reno, the Lithium Technical Development Center being commissioned today is a shining example of the productive public-private partnerships that we are fostering across the state to power economic growth and responsible use of resources. This is a fantastic achievement for all involved that puts Nevada firmly at the center of the U.S.’s clean energy leadership.”

Inauguration of Lithium Technical Development Center in Reno, Nevada

In photo front left to right: Brian Sandoval, University of Nevada, Reno President; Jonathan Evans, President & CEO; Steve Sisolak, Governor of Nevada; Littlestar Abel; Maria Anderson, the Company’s Community Relations Manager; members of the Tribe; and Lithium Americas’ staff.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4eb3ac38-2ffe-47e0-a25a-71fc53254db1

LITHIUM TECHNICAL DEVELOPMENT CENTER
The Company has completed construction of a new integrated technology center in Reno to demonstrate the full Thacker Pass flowsheet and to produce lithium carbonate samples. The LiTDC will support ongoing optimization work, confirm assumptions in the design and operational parameters and provide product samples for potential customers and partners.

In addition, the 30,000 ft² facility has been designed to conduct test work on new target ores and brines and contains a state-of-the-art analytical laboratory capable of analyzing ultra-pure lithium compounds. Lithium Americas and the University of Nevada, Reno are collaborating on this commercial work, while also educating the next generation of engineers and researchers who will play an essential role in curbing harmful carbon emissions.

The LiTDC’s initial production, using the Thacker Pass flowsheet and sedimentary resources from the project site, successfully produced five kilograms of battery-quality lithium carbonate. In addition to generating sample material, the facility will enable the team to continually optimize and de-risk each step of the flowsheet.

PROCESS ENGINEERING AND DESIGN

Feasibility Study for Phase 1 and 2
Lithium Americas continues to advance a feasibility study (“Feasibility Study”) targeting an initial production capacity to 40,000 tonnes per annum (“tpa”) of lithium carbonate (“Phase 1”) with a second stage expansion targeting a total production capacity of 80,000 tpa (“Phase 2”). Capital costs are expected to substantially increase from the estimates in the 2018 pre-feasibility study due to processing and related infrastructure changes and the results of engineering and testing, incorporation of increased capacity, as well as external factors such as inflationary pressures and supply chain considerations. Results of the Feasibility Study are expected in the second half of 2022, to align with the strategic partnership and financing process and ongoing engineering and process testwork at the LiTDC.

EPCM Contract
The Company has issued a request for proposal for an EPCM contract for Phase 1. The awarding of the EPCM contract is part of a rigorous and competitive tender process involving multiple globally recognized industry firms.

PERMITTING AND REGULATORY
The Company is on track to begin early-works construction in 2022. All state and federal permits necessary to commence construction are in place. The federal appeal of the Record of Decision (“ROD”) is ongoing with briefings scheduled to end on August 11, 2022, with oral arguments and a final decision expected to follow shortly thereafter.

In June 2022, the Nevada State Environmental Commission upheld the Company’s approved Water Pollution Control Permit by denying an appeal in a 5-0 ruling. Cultural assessment and mitigation required as part of the ROD was successfully completed in mid-July by the Company’s consultant and Tribe members. Completion of this important archeological assessment and mitigation work is a key milestone in moving towards the commencement of construction.

A decision on the Company’s water rights transfer application by the state engineer to transfer the Company’s existing and optioned water rights, which is expected to provide sufficient water for all of Phase 1, is anticipated in 2022. The Company has recently commenced the process of negotiating additional water rights expected to be required for Phase 2 operations.

SOCIAL RESPONSIBILITY

Lithium Americas remains committed to engaging with key stakeholders throughout the lifecycle of our projects to better understand and address their interests and concerns, and to advance our shared priorities. The Company continues to collaboratively work with the Tribe and communities closest to Thacker Pass towards mutually beneficial relationships.

Fort McDermitt Paiute and Shoshone Tribe

The Company’s engagement plan includes regular consultation with the Tribe, which is the closest tribe to the project site. The Company is committed to providing community benefits, skills training and employment opportunities to the tribe as the project advances towards construction.

Building on several years of engagement and understanding of community needs, the Company has provided the Tribe with a draft benefits agreement that consists of infrastructure development (community center with a daycare, pre-school and cultural facilities), economic opportunities, training and employment opportunities. The agreement is the next step in the Company’s long-standing relationship with the Tribe and is under consideration.

Skills Training and Cultural Assessment Job Opportunities

In late 2021 and early 2022, the Company arranged for specialized cultural monitor training for Fort McDermitt Paiute and Shoshone Tribe members. Pursuant to an Archaeological Resources Protection Act Permit issued by the Bureau of Land Management (“BLM”), the cultural assessment and mitigation work commenced in April 2022 and successfully concluded in mid-July 2022. Eleven Tribe members were hired to work in collaboration with Far Western Anthropological Research Group to ensure strict standards were followed, and Native American interests were respected during the archeological mitigation work.

Community Engagement
The Company continues to actively participate in the local community Negotiating Work Group (“Work Group”), consisting of representatives of the local community Thacker Pass Concerned Citizens Group (“TPCCG”). The purpose of the Work Group is to develop agreements supported by scientific data and community buy-in to guide the planning, construction and operations of Thacker Pass. The Work Group focuses its discussions on identifying solutions that protect the safety and well-being of community members. For example, the Company has proposed to construct a new K-8 school for the community to replace the existing school built in the 1950s.

Job Creation and Skills Training

Lithium Americas is committed to employing locally and working with local service providers to the extent possible. The development of Thacker Pass will create jobs, increase economic activity and generate tax revenues for the state of Nevada. During the construction phase, Thacker Pass is expected to employ over 1,000 workers.

The Company is developing strategies to increase regional opportunities, including extending our recruitment network to diverse groups and proactively encouraging young people to consider a career with Lithium Americas and within our industry. As we move towards construction, we will continue to offer skills development with construction and heavy equipment operator training.

Initiative for Responsible Mining Assurance (IRMA)
Lithium Americas is a Pending Member of IRMA – the Initiative for Responsible Mining Assurance. In H1 2022, the Company worked with IRMA to pilot their new draft IRMA-Ready Standard for Responsible Mineral Exploration and Development.

ENVIRONMENTAL STEWARDSHIP

Lithium Americas is committed to minimizing the expected environmental footprint of Thacker Pass by incorporating environmental best practices and going beyond what is required by regulatory standards. The Company is designing Thacker Pass to be a low-carbon, low water utilization lithium operation, and has been working with a leading international environmental engineering consulting firm to develop the expected operational intensities.

Water Utilization

Thacker Pass is being designed for low-water consumption, heavily relying on water recycling to meet its needs. Current feasibility study planning work includes developing Thacker Pass as a Zero Liquid Discharge facility with filter dry stack tailings, which ensures there will be no discharge of industrial wastewater into the environment. A detailed water cycle assessment for Thacker Pass based on this planning work, estimated annual well-water withdrawal for Phase 1 of 3.5 million m³, and any water withdrawn will be recycled and reused approximately 7.2 times within the production process.

Greenhouse Gas (‘GHG’) Energy Intensity

Thacker Pass’ energy strategy relies significantly on the self-generation of carbon-free energy through waste heat capture at the proposed sulfuric acid plant (“SAP”). This is expected to generate approximately 45 MW of electricity annually during Phase 1 and an additional 45 MW in Phase 2, based on current feasibility study planning work. Benefits of the co-located SAP include a reduction of Scope 1 and Scope 2 carbon emission intensity per tonne of lithium carbonate produced and eliminating the need to truck sulfuric acid to site, which should reduce the number of transports to site by approximately two-thirds (Scope 3). As a result, the projected Scope 1 and 2 emission intensity for Thacker Pass is expected to be comparable to South American-based lithium brine operations and substantially lower than Australian-based spodumene operations. The Company is working towards baselining projected Scope 3 emissions.

2021 ESG-S Report

Lithium Americas recently published a 2021 Environment, Social, Governance and Safety (“ESG-S”) Report themed Enabling Transition, reaffirming the Company’s commitment to responsible development and production, as well as highlighting the Company’s ESG-S practices and overall progress made over the past two years (reporting period of January 1, 2020 to December 31, 2021). Refer to the full report on our corporate website at www.lithiumamericas.com/esg, to learn how Lithium Americas’ approach to safe and responsible development and shared value is driven by its commitment to be a steward of the environment, a community partner, an employer of choice and a company to be proud of.

FINANCING AND PARTNERSHIP PROCESS
In April 2022, the Company submitted a formal application to the DOE’s Loans Program Office to be used at Thacker Pass through the ATVM loan program. The ATVM Loan Program is designed to provide loans for facilities located in the United States for the manufacturing of advanced technology vehicles and qualifying components used in those vehicles.

In addition to potential funding from the DOE, the Company is exploring other complementary funding, offtake and partnership alternatives. As previously announced in February 2022, the Company continues to explore a separation of its US and Argentina operations. While no final decision has been made, the Company is exploring structuring alternatives to effect the separation.

ABOUT LITHIUM AMERICAS
Lithium Americas is focused on advancing lithium development projects in Argentina and the United States. In Argentina, Caucharí-Olaroz is advancing towards first production and Pastos Grandes represents further regional growth. In the United States, Thacker Pass has received its ROD and is advancing towards construction. The Company trades on both the Toronto Stock Exchange and on the New York Stock Exchange, under the ticker symbol “LAC”.

For further information contact:
Investor Relations
Telephone: 778-656-5820
Email: [email protected]
Website: www.lithiumamericas.com

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements in this release constitute “forward-looking statements” within the meaning of applicable United States securities legislation and “forward-looking information” under applicable Canadian securities legislation (collectively, “forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, its projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. These statements reflect the Company’s current expectations regarding future events, and financial or operating performance and results, and speak only as of the date of this release. Such statements include without limitation: timing and results of testing by the LiTDC facility; expected timing for various steps in the appeal of the ROD for the Thacker Pass project, and the results thereof; timing and results of financing for the Thacker Pass project, including in respect of the ATVM loan application; the expected results of carbon intensity and water utilization analysis testing, including in relation to comparables, and plans for further scoping work and studies; the impact of the Thacker Pass project on environmental and climate-related matters as contemplated under current feasibility study planning and design work; potential capital costs for development of the Thacker Pass project, and factors underlying an expected increase thereof; expected potential benefits of the Thacker Pass project for the creation of a battery supply chain in the United States, job creation, tax generation, economic and other benefits; the completion of a feasibility study for the Thacker Pass project and expected timing, production capacity and parameters of the study; expected benefits of the technical development center, including the expected outcome of optimization and testing work and the establishment of Nevada as a hub for battery development in the United States; the timing to start early-works construction; expected timing for a decision on the water rights transfer application for the Thacker Pass project; continuing positive relationships with local communities, tribes, government and other stakeholders; the extent of any benefits agreement reached with local communities and tribes; goals, strategies and objectives of the Company generally; and plans regarding strategic alternatives to finance the Thacker Pass project including a potential separation or other form of restructuring transaction involving any of the Company’s projects and the expected benefits of any such transaction.

Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to, risks associated with mining project development, achieving anticipated milestones and budgets as planned, and meeting expected timelines; results of the Company’s engineering, design and permitting program at the Thacker Pass project, including the Company meeting deadlines and receiving and maintaining permits as anticipated; timing, results and completion of a feasibility study and to make a construction decision for the Thacker Pass project including capital and operating cost estimation; successful development of the Company’s projects and ability to produce battery-grade lithium; current technological trends; availability of technology, including low carbon energy sources, on acceptable terms to advance the sustainability goals set out herein; changes to availability of loan funding, assessment criteria or government policies concerning the DOE loan application; risks associated with the novel nature of the deposit at Thacker Pass; availability of strategic alternatives to the Company and on satisfactory terms, including market conditions being favourable for a potential separation of any of the Company’s projects; ability to meet stock exchange listing requirements for the Company after any separation, and obtain any new listing for any entity resulting from a separation; risks inherent in litigation and regulatory proceedings that could result in additional unanticipated delays or rulings that are adverse for the Company or its projects; ability to maintain necessary permits or approvals in Argentina and the United States; maintaining local community and other stakeholder support in the regions where the Company’s projects are located; changing social perceptions and their impact on project development and litigation; ongoing global supply chain disruptions and their impact on developing the Company’s projects; the impact of increasing competition in the lithium business, including the Company’s competitive position in the industry, and availability of personnel, supplies and equipment; inflationary pressures and their impact on the Company, its projects and their economic feasibility, and the technology required to meet our goals and objects; ability to attract and retain skilled talent in a competitive hiring environment; expectations and anticipated impact of COVID-19 on the Company and its mineral properties; unanticipated changes in market price for the Company’s shares; changes to Lithium Americas’ current and future business plans and the strategic alternatives available to Lithium Americas; changes in government laws, regulations, policies and priorities and their impact on the Company and its projects; the impacts of climate change on the Thacker Pass project; environmental compliance costs; stock market conditions generally; demand, supply and pricing for lithium; and general economic and political conditions in Canada, the United States, Argentina and other jurisdictions where Lithium Americas conducts business.

There can be no assurance that any forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. As such, readers are cautioned not to place undue reliance on this information. Readers are further cautioned to review the full description of risks, uncertainties and management’s assumptions in the Company’s latest Annual Information Form and interim and annual Management’s Discussion and Analysis, which are available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. The Company expressly disclaims any obligation to update forward-looking statements as a result of new information, future events or otherwise, except as and to the extent required under applicable securities laws.

July 20, 2022 5:18 pm

First Internet Bancorp Reports Second Quarter 2022 Results

First Internet Bancorp Reports Second Quarter 2022 Results

Highlights for the second quarter include:

Quarterly net income of $9.5 million, compared to $11.2 million for the first quarter of 2022 and $13.1 million for the second quarter of 2021
Quarterly diluted earnings per share of $0.99, compared to $1.14 for the first quarter of 2022 and $1.31 for the second quarter of 2021
Quarterly adjusted net income of $10.3 million, or $1.06 per diluted share, when excluding nonrecurring expenses
Loan growth of $201.3 million, a 7.0% increase from the first quarter of 2022 and a 4.2% increase from the second quarter of 2021
Net interest margin and fully-taxable equivalent net interest margin increased 4 basis points (“bps”) and 5 bps, respectively, from the first quarter of 2022 to 2.60% and 2.74%, respectively
Repurchased 294,464 shares at an average price of $37.77

FISHERS, Ind.–(BUSINESS WIRE)–
First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the second quarter ended June 30, 2022. Net income for the second quarter of 2022 was $9.5 million, or $0.99 diluted earnings per share. This compares to net income of $11.2 million, or $1.14 diluted earnings per share, for the first quarter of 2022, and net income of $13.1 million, or $1.31 diluted earnings per share, for the second quarter of 2021.

“Strong production in both our commercial and consumer lending businesses has driven our loan balances to an all-time high, fueling second quarter results and creating a revenue stream for future periods,” said David Becker, Chairman and Chief Executive Officer. “During the first half of 2022, portfolio loan origination yields were up 100 bps over the same time last year, allowing us to deploy existing liquidity and drive growth in net interest margin. Furthermore, loan pipelines remain healthy and we have maintained exceptional asset quality. We are well-positioned to capitalize on growth opportunities for the remainder of the year.”

Mr. Becker concluded, “To be ready to meet our current and future customers’ needs, it is imperative that we continue to attract and retain top talent. At First Internet Bank, we have long fostered a workplace culture that promotes innovation, collaboration and customer focus while supporting work-life balance. It was gratifying to be named one of the “Top Workplaces in Central Indiana” for the ninth consecutive year as a result of these efforts. As an employer of choice, we felt a responsibility to address the rapid rise in transportation, housing and food costs so our employees could devote their best mental energy to serving our customers. In the second quarter, we implemented a $20.00 minimum hourly wage for full-time employees across the company. Additionally, we paid a bonus to those employees most impacted by the current inflationary environment. These initiatives demonstrate we intend to stand behind our professionals, who stand up for our customers on a daily basis. I would like to thank the entire First Internet Bank team for their commitment and focus on executing our strategies and consistently delivering solid financial performance while providing an exceptional experience for our customers.”

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2022 was $25.7 million, compared to $25.8 million for the first quarter of 2022, and $21.6 million for the second quarter of 2021. On a fully-taxable equivalent basis, net interest income for the second quarter of 2022 was $27.1 million, stable with the first quarter of 2022, and up compared to $23.0 million for the second quarter of 2021.

Total interest income for the second quarter of 2022 was $36.1 million, up slightly from the first quarter of 2022, and an increase of 8.2% compared to the second quarter of 2021. On a fully-taxable equivalent basis, total interest income for the second quarter of 2022 was $37.5 million, a slight increase from the first quarter of 2022, and an increase of 7.8% compared to the second quarter of 2021. Growth in interest income earned on the commercial and consumer loan portfolios, the securities portfolio and other earning assets essentially offset the decline in income earned on tax refund advance loans, which was primarily earned in the first quarter. The yield on average interest-earning assets for the second quarter of 2022 increased to 3.65% from 3.58% in the linked quarter due primarily to a 33 bp increase in the yield earned on securities and a 66 bp increase in the yield earned on other earning assets. Additionally, excluding the effect of tax refund advance loans, the yield on the loan portfolio increased 7 bps to 4.29%. Compared to the linked quarter, average loan balances increased $43.9 million, or 1.5%, while the average balance of securities decreased $28.3 million, or 4.4%, and the average balance of other earning assets decreased $133.7 million, or 29.3%. Excluding the effect of tax refund advance loans, average loan balances increased $101.2 million, or 3.5%.

Total interest expense for the second quarter of 2022 was $10.4 million, a slight increase compared to the first quarter of 2022, and a decrease of 11.4% compared to the second quarter of 2021. The increase in total interest expense compared to the linked quarter was due primarily to an increase in expense related to interest-bearing deposits, partially offset by lower expense paid on other borrowed funds.

During the second quarter of 2022, the average balance of interest-bearing deposits decreased $53.0 million, or 1.7%, compared to the first quarter of 2022 and the cost of these deposits increased 4 bps. The decrease in average interest-bearing deposit balances was due to the continued decline in average certificates and brokered deposit balances, which decreased $121.4 million, or 9.9%, during the quarter while the cost of these deposits increased 2 bps. Additionally, the average balance of money market accounts decreased $26.8 million, or 1.8%, compared to the first quarter of 2022 while the cost of these deposits increased 12 bps. This activity was partially offset by growth in average Banking-as-a-Service (“BaaS”) deposit balances, which increased $59.1 million during the quarter, and in average interest-bearing demand balances, which increased $30.0 million.

Beginning in March and through June 30, 2022, the Federal Reserve increased the Fed Funds rate 150 bps. Through this same period, the Company did not increase the rate paid on consumer, small business and commercial interest-bearing demand deposits. With regard to money market products during this period, the rate paid on consumer money market balances increased 50 bps, resulting in a cycle-to-date deposit beta of 33%, and the rate paid on small business and commercial money market balances increased 30 bps, resulting in a cycle-to-date deposit beta of 20%. As small business and commercial balances represent 62% of total money market balances and consumer balances represent 38%, the all-in cycle-to-date deposit beta on money market products is 25%.

Net interest margin (“NIM”) improved to 2.60% for the second quarter of 2022, up from 2.56% for the first quarter of 2022 and 2.11% for the second quarter of 2021. Fully-taxable equivalent NIM (“FTE NIM”) increased by 5 bps to 2.74% for the second quarter of 2022, up from 2.69% for the first quarter of 2022 and 2.25% for the second quarter of 2021. Excluding the impact of income from tax refund advance loans, adjusted FTE NIM was 2.72%, up 31 bps from the prior quarter. The increase in adjusted FTE NIM compared to the linked quarter was driven primarily by the increase in average loan balances and yields, as well as higher yields on securities and other earning assets, partially offset by the effect of higher interest-bearing deposit costs.

Noninterest Income

Noninterest income for the second quarter of 2022 was $4.3 million, compared to $6.8 million for the first quarter of 2022 and $9.0 million for the second quarter of 2021. The decrease compared to the prior quarter was driven primarily by a decrease in gain on sale of loans, lower other income and lower revenue from mortgage banking activities. Gain on sale of loans totaled $2.0 million for the second quarter of 2022, down $1.9 million, or 49.2%. The Company sold single tenant lease financing loans in the first quarter of 2022, which provided $0.4 million in gain on sale revenue, whereas revenue in the second quarter of 2022 consisted entirely of gain on the sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans. The decrease in revenue related to SBA loan sales was due to a lower volume of sales as well as lower net gain on sale premiums. Other income declined $0.3 million, or 55.6%, due primarily to a decline in the value of fund investments carried at fair market value. Lastly, mortgage banking revenue totaled $1.7 million for the second quarter of 2022, down $0.2 million, or 8.7%, from the linked quarter due to a decrease in interest rate locks and sold loan volume.

Noninterest Expense

Noninterest expense for the second quarter of 2022 was $18.0 million, compared to $18.8 million for the first quarter of 2022 and $15.1 million for the second quarter of 2021. The decrease of $0.8 million, or 4.2%, compared to the linked quarter was due primarily to lower loan expenses, consulting and professional fees and other expense, partially offset by increases in salaries and employee benefits and marketing costs. The decrease in loan expenses was driven primarily by lower servicing fees as $0.9 million of fees related to tax refund advance loans were incurred in the first quarter of 2022 as opposed to a nominal amount of such fees in the second quarter of 2022. The decrease in consulting and professional fees was due primarily to $0.9 million of nonrecurring consulting fees that were incurred in the linked quarter. Additionally, the Company incurred $0.1 million of acquisition-related costs in the second quarter of 2022 versus $0.2 million of such costs in the first quarter of 2022. The decrease in other expense was due to administrative and moving costs incurred in the linked quarter. The higher salaries and employee benefits expense was due mainly to $0.5 million in a discretionary inflation bonus paid to certain employees and $0.3 million of accelerated equity compensation related to employees who retired during the quarter, partially offset by lower incentive compensation in the Company’s small business lending and mortgage banking divisions. The increase in marketing costs was due to higher media costs, mortgage lead generation costs and sponsorships.

Income Taxes

The Company reported an income tax expense of $1.3 million for the second quarter of 2022 and an effective tax rate of 11.8%, compared to an income tax expense of $1.8 million and an effective tax rate of 13.8% for the first quarter of 2022 and an income tax expense of $2.4 million and an effective tax rate of 15.4% for the second quarter of 2021. The lower effective tax rate reflects the decline in noninterest income, resulting in a higher proportion of tax exempt income to total pre-tax income.

Loans and Credit Quality

Total loans as of June 30, 2022 were $3.1 billion, an increase of $201.3 million, or 7.0%, compared to March 31, 2022, and an increase of $124.5 million, or 4.2%, compared to June 30, 2021. Total commercial loan balances were $2.4 billion as of June 30, 2022, an increase of $97.7 million, or 4.2%, compared to March 31, 2022 and an increase of $3.1 million, or 0.1%, compared to June 30, 2021. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in franchise finance, public finance, investor commercial real estate, single tenant lease financing and commercial and industrial loan balances. These items were partially offset by net payoffs in healthcare finance.

Total consumer loan balances were $594.0 million as of June 30, 2022, an increase of $105.2 million, or 21.5%, compared to March 31, 2022 and an increase of $127.6 million, or 27.3%, compared to June 30, 2021. The increase compared to the linked quarter was due to higher balances in the residential mortgage, recreational vehicles and trailers loan portfolios.

Total delinquencies 30 days or more past due were 0.06% of total loans as of June 30, 2022 compared to 0.03% as of March 31, 2022 and 0.07% as of June 30, 2021. Overall credit quality improved during the quarter as nonperforming loans to total loans was 0.15% as of June 30, 2022, compared to 0.25% at March 31, 2022 and 0.31% as of June 30, 2021. Nonperforming loans totaled $4.5 million at quarter end, declining $2.6 million, or 36.1%, from March 31, 2022.

The allowance for loan losses as a percentage of total loans was 0.95% as of June 30, 2022, both in total and when excluding PPP loans, compared to 0.98% in both categories as of March 31, 2022 and 0.95% and 0.96%, respectively, as of June 30, 2021.

Net charge-offs of $0.3 million were recognized during the second quarter of 2022, resulting in net charge-offs to average loans of 0.04%, compared to net charge-offs to average loans of 0.05% for the first quarter of 2022 and net charge-offs to average loans of 0.35% for the second quarter of 2021. Excluding net charge-off activity related to tax refund advance loans, the Company recognized net recoveries of $0.1 million, resulting in net recoveries to average loans of 0.01%, during the second quarter of 2022. This compares to net recoveries of $1.1 million and net recoveries to average loans of 0.16% during the first quarter of 2022.

The provision for loan losses in the second quarter of 2022 was $1.2 million, compared to a provision of $0.8 million for the first quarter of 2022 and a provision of $21,000 for the second quarter of 2021. The provision for the second quarter of 2022 was driven primarily by the growth in the loan portfolio.

Capital

As of June 30, 2022, total shareholders’ equity was $365.3 million, a decrease of $9.3 million, or 2.5%, compared to March 31, 2022 and an increase of $6.7 million, or 1.9%, compared to June 30, 2021. The decline in shareholders’ equity during the second quarter of 2022 was due primarily to stock repurchase activity and an increase in accumulated other comprehensive loss resulting from a decline in the value of the available-for-sale securities portfolio caused by the continued rise in interest rates during the quarter. This was partially offset by the net income earned during the quarter and an increase in the value of interest rate swaps classified as cash flow hedges. Book value per common share increased to $38.85 as of June 30, 2022, up from $38.69 as of March 31, 2022 and up from $36.39 as of June 30, 2021. Tangible book value per share increased to $38.35, up from $38.21 and up from $35.92, each as of the same reference dates.

In connection with its previously announced stock repurchase program, the Company repurchased 294,464 shares of its common stock during the second quarter of 2022 at an average price of $37.77 per share. Including shares repurchased during the first quarter of 2022 and fourth quarter of 2021, the Company has repurchased a total of 498,167 shares at an average price of $41.50 per share under the program through June 30, 2022.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of June 30, 2022.

	As of June 30, 2022
	Company	Bank

Total shareholders’ equity to assets	8.91%	10.50%
Tangible common equity to tangible assets ¹	8.81%	10.40%
Tier 1 leverage ratio ²	9.45%	11.03%
Common equity tier 1 capital ratio ²	12.55%	14.67%
Tier 1 capital ratio ²	12.55%	14.67%
Total risk-based capital ratio ²	16.85%	15.61%

¹ This information represents a non-GAAP financial measure. For a discussion of non-GAAP financial measures, see the section below entitled “Non-GAAP Financial Measures.”
² Regulatory capital ratios are preliminary pending filing of the Company’s and the Bank’s regulatory reports.

Conference Call and Webcast

The Company will host a conference call and webcast at 12:00 p.m. Eastern Time on Thursday, July 21, 2022 to discuss its quarterly financial results. The call can be accessed via telephone at (844) 200-6205; access code: 984774. A recorded replay can be accessed through August 20, 2022 by dialing (866) 813-9403; access code: 314161.

Additionally, interested parties can listen to a live webcast of the call on the Company’s website at www.firstinternetbancorp.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

About First Internet Bancorp

First Internet Bancorp is a bank holding company with assets of $4.1 billion as of June 30, 2022. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The Bank provides consumer and small business deposit, SBA financing, franchise finance, residential mortgage loans, consumer loans, and specialty finance services nationally as well as commercial real estate loans, construction loans, commercial and industrial loans, and treasury management services on a regional basis. First Internet Bancorp’s common stock trades on the Nasdaq Global Select Market under the symbol “INBK” and is a component of the Russell 2000® Index. Additional information about the Company is available at www.firstinternetbancorp.com and additional information about the Bank, including its products and services, is available at www.firstib.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements with respect to the financial condition, results of operations, trends in lending policies and loan programs, plans and prospective business partnerships, objectives, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as “ahead,” “anticipate,” “believe,” “capitalize,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “growth,” “help,” “hope,” “intend,” “looking forward,” “may,” “opportunities,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “waiting on,” “well-positioned,” “will,” “working on,” “would” or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. Such statements are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, our business and operations and the business and operations of our vendors and customers: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans. Other factors that may cause such differences include: failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial real estate, commercial and industrial, public finance, SBA, healthcare finance and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of pending and future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; fluctuations in interest rates; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, total interest income – FTE, adjusted total interest income – FTE, net interest income – FTE, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, provision (benefit) for loan losses, excluding tax refund advance loans, average loans, excluding tax refund advance loans, net (recoveries) charge-offs to average loans, excluding tax refund advance loans, allowance for loan losses to loans, excluding PPP loans, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity, adjusted return on average tangible common equity, adjusted effective income tax rate, income before income taxes, excluding tax refund advance loans, income tax provision, excluding tax refund advance loans and net income, excluding tax refund advance loans are used by the Company’s management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”


First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Net income	$	9,545		$	11,209		$	13,096		$	20,754		$	23,546

Per share and share information
Earnings per share – basic	$	0.99		$	1.14		$	1.32		$	2.14		$	2.37
Earnings per share – diluted		0.99			1.14			1.31			2.13			2.36
Dividends declared per share		0.06			0.06			0.06			0.12			0.12
Book value per common share		38.85			38.69			36.39			38.85			36.39
Tangible book value per common share ¹		38.35			38.21			35.92			38.35			35.92
Common shares outstanding		9,404,000			9,683,727			9,854,153			9,404,000			9,854,153
Average common shares outstanding:
Basic		9,600,383			9,790,122			9,932,761			9,694,729			9,916,087
Diluted		9,658,689			9,870,394			9,981,422			9,764,232			9,970,147
Performance ratios
Return on average assets		0.93	%		1.08	%		1.25	%		1.01	%		1.13	%
Return on average shareholders’ equity		10.23	%		11.94	%		14.88	%		11.09	%		13.78	%
Return on average tangible common equity ¹		10.36	%		12.09	%		15.09	%		11.23	%		13.97	%
Net interest margin		2.60	%		2.56	%		2.11	%		2.58	%		2.08	%
Net interest margin – FTE ^1,2		2.74	%		2.69	%		2.25	%		2.71	%		2.21	%
Capital ratios ³
Total shareholders’ equity to assets		8.91	%		8.87	%		8.53	%		8.91	%		8.53	%
Tangible common equity to tangible assets ¹		8.81	%		8.77	%		8.43	%		8.81	%		8.43	%
Tier 1 leverage ratio		9.45	%		9.26	%		8.70	%		9.45	%		8.70	%
Common equity tier 1 capital ratio		12.55	%		13.16	%		12.23	%		12.55	%		12.55	%
Tier 1 capital ratio		12.55	%		13.16	%		12.23	%		12.55	%		12.55	%
Total risk-based capital ratio		16.85	%		17.62	%		15.51	%		16.85	%		16.85	%
Asset quality
Nonperforming loans	$	4,527		$	7,084		$	9,038		$	4,527		$	9,038
Nonperforming assets		4,550			7,085			10,338			4,550			10,338
Nonperforming loans to loans		0.15	%		0.25	%		0.31	%		0.15	%		0.31	%
Nonperforming assets to total assets		0.11	%		0.17	%		0.25	%		0.11	%		0.25	%
Allowance for loan losses to:
Loans		0.95	%		0.98	%		0.95	%		0.95	%		0.95	%
Loans, excluding PPP loans ¹		0.95	%		0.98	%		0.96	%		0.95	%		0.96	%
Nonperforming loans		644.0	%		398.8	%		310.5	%		644.0	%		310.5	%
Net charge-offs to average loans		0.04	%		0.05	%		0.35	%		0.05	%		0.18	%
Average balance sheet information
Loans	$	2,998,144		$	2,947,924		$	2,994,356		$	2,973,173		$	3,020,987
Total securities		620,396			648,728			574,684			634,485			561,630
Other earning assets		322,302			455,960			509,735			388,760			478,065
Total interest-earning assets		3,962,589			4,080,725			4,100,749			4,021,330			4,087,255
Total assets		4,097,865			4,214,918			4,206,966			4,156,068			4,190,212
Noninterest-bearing deposits		108,980			112,248			98,207			110,605			94,506
Interest-bearing deposits		3,018,422			3,071,420			3,109,165			3,044,775			3,112,557
Total deposits		3,127,402			3,183,668			3,207,372			3,155,380			3,207,063
Shareholders’ equity		374,274			380,767			352,894			377,504			344,478

¹ Refer to “Non-GAAP Financial Measures” section above and “Reconciliation of Non-GAAP Financial Measures” below
² On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate
³ Regulatory capital ratios are preliminary pending filing of the Company’s regulatory reports


First Internet Bancorp
Condensed Consolidated Balance Sheets (unaudited)
Dollar amounts in thousands


	June 30,			March 31,			June 30,
		2022			2022			2021

Assets
Cash and due from banks	$	6,155		$	20,976		$	4,347
Interest-bearing deposits		201,798			496,573			324,450
Securities available-for-sale, at fair value		425,489			465,288			663,519
Securities held-to-maturity, at amortized cost		185,113			163,370			65,659
Loans held-for-sale		31,580			33,991			27,587
Loans		3,082,127			2,880,780			2,957,608
Allowance for loan losses		(29,153	)		(28,251	)		(28,066	)
Net loans		3,052,974			2,852,529			2,929,542
Accrued interest receivable		17,466			15,263			16,345
Federal Home Loan Bank of Indianapolis stock		25,219			25,219			25,650
Cash surrender value of bank-owned life insurance		39,369			39,133			38,421
Premises and equipment, net		70,288			68,632			44,249
Goodwill		4,687			4,687			4,687
Servicing asset		5,345			5,249			4,120
Other real estate owned		–			–			1,300
Accrued income and other assets		34,323			34,487			54,766
Total assets	$	4,099,806		$	4,225,397		$	4,204,642

Liabilities
Noninterest-bearing deposits	$	126,153		$	119,196		$	113,996
Interest-bearing deposits		3,025,948			3,098,783			3,092,151
Total deposits		3,152,101			3,217,979			3,206,147
Advances from Federal Home Loan Bank		464,925			514,923			514,919
Subordinated debt		104,381			104,306			69,871
Accrued interest payable		2,005			1,532			1,132
Accrued expenses and other liabilities		11,062			12,002			53,932
Total liabilities		3,734,474			3,850,742			3,846,001
Shareholders’ equity
Voting common stock		204,071			214,473			222,486
Retained earnings		192,011			183,043			149,066
Accumulated other comprehensive loss		(30,750	)		(22,861	)		(12,911	)
Total shareholders’ equity		365,332			374,655			358,641
Total liabilities and shareholders’ equity	$	4,099,806		$	4,225,397		$	4,204,642


First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Interest income
Loans	$	32,415		$	33,188		$	30,835		$	65,603		$	61,720
Securities – taxable		2,567			2,221			1,921			4,788			3,700
Securities – non-taxable		328			249			259			577			540
Other earning assets		796			376			362			1,172			697
Total interest income		36,106			36,034			33,377			72,140			66,657
Interest expense
Deposits		6,408			6,097			7,705			12,505			16,333
Other borrowed funds		4,018			4,187			4,065			8,205			8,192
Total interest expense		10,426			10,284			11,770			20,710			24,525
Net interest income		25,680			25,750			21,607			51,430			42,132
Provision for loan losses		1,185			791			21			1,976			1,297
Net interest income after provision
for loan losses		24,495			24,959			21,586			49,454			40,835
Noninterest income
Service charges and fees		281			316			280			597			546
Loan servicing revenue		620			585			457			1,205			879
Loan servicing asset revaluation		(470	)		(297	)		(240	)		(767	)		(395	)
Mortgage banking activities		1,710			1,873			2,674			3,583			8,424
Gain on sale of loans		1,952			3,845			3,019			5,797			4,742
Gain on sale of premises and equipment		–			–			2,523			–			2,523
Other		221			498			249			719			618
Total noninterest income		4,314			6,820			8,962			11,134			17,337
Noninterest expense
Salaries and employee benefits		10,832			9,878			9,232			20,710			18,724
Marketing, advertising and promotion		920			756			872			1,676			1,552
Consulting and professional fees		1,197			1,925			1,078			3,122			2,064
Data processing		490			449			382			939			844
Loan expenses		693			1,582			541			2,275			1,075
Premises and equipment		2,419			2,540			1,587			4,959			3,188
Deposit insurance premium		287			281			275			568			700
Other		1,147			1,369			1,108			2,516			2,245
Total noninterest expense		17,985			18,780			15,075			36,765			30,392
Income before income taxes		10,824			12,999			15,473			23,823			27,780
Income tax provision		1,279			1,790			2,377			3,069			4,234
Net income	$	9,545		$	11,209		$	13,096		$	20,754		$	23,546

Per common share data
Earnings per share – basic	$	0.99		$	1.14		$	1.32		$	2.14		$	2.37
Earnings per share – diluted	$	0.99		$	1.14		$	1.31		$	2.13		$	2.36
Dividends declared per share	$	0.06		$	0.06		$	0.06		$	0.12		$	0.12

All periods presented have been reclassified to conform to the current period classification


First Internet Bancorp
Average Balances and Rates (unaudited)
Dollar amounts in thousands


	Three Months Ended

	June 30, 2022							March 31, 2022							June 30, 2021

	Average			Interest /		Yield /		Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	3,019,891		$	32,415	4.31	%	$	2,976,037		$	33,188	4.52	%	$	3,016,330		$	30,835	4.10	%
Securities – taxable		543,422			2,567	1.89	%		567,776			2,221	1.59	%		490,634			1,921	1.57	%
Securities – non-taxable		76,974			328	1.71	%		80,952			249	1.25	%		84,050			259	1.24	%
Other earning assets		322,302			796	0.99	%		455,960			376	0.33	%		509,735			362	0.28	%
Total interest-earning assets		3,962,589			36,106	3.65	%		4,080,725			36,034	3.58	%		4,100,749			33,377	3.26	%

Allowance for loan losses		(28,599	)						(27,974	)						(30,348	)
Noninterest-earning assets		163,875							162,167							136,565
Total assets	$	4,097,865						$	4,214,918						$	4,206,966

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	348,274		$	466	0.54	%	$	318,281		$	412	0.52	%	$	192,777		$	143	0.30	%
Savings accounts		66,657			68	0.41	%		60,616			53	0.35	%		55,811			49	0.35	%
Money market accounts		1,427,665			1,921	0.54	%		1,454,436			1,503	0.42	%		1,416,406			1,462	0.41	%
BaaS – brokered deposits		71,234			154	0.87	%		12,111			6	0.20	%		–			–	0.00	%
Certificates and brokered deposits		1,104,592			3,799	1.38	%		1,225,976			4,123	1.36	%		1,444,171			6,051	1.68	%
Total interest-bearing deposits		3,018,422			6,408	0.85	%		3,071,420			6,097	0.81	%		3,109,165			7,705	0.99	%
Other borrowed funds		583,553			4,018	2.76	%		619,191			4,187	2.74	%		584,751			4,065	2.79	%
Total interest-bearing liabilities		3,601,975			10,426	1.16	%		3,690,611			10,284	1.13	%		3,693,916			11,770	1.28	%

Noninterest-bearing deposits		108,980							112,248							98,207
Other noninterest-bearing liabilities		12,636							31,292							61,949
Total liabilities		3,723,591							3,834,151							3,854,072

Shareholders’ equity		374,274							380,767							352,894
Total liabilities and shareholders’ equity	$	4,097,865						$	4,214,918						$	4,206,966

Net interest income				$	25,680						$	25,750						$	21,607

Interest rate spread						2.49	%						2.45	%						1.98	%

Net interest margin						2.60	%						2.56	%						2.11	%

Net interest margin – FTE ^2,3						2.74	%						2.69	%						2.25	%

¹ Includes nonaccrual loans

² On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate

³ Refer to “Non-GAAP Financial Measures” section above and “Reconciliation of Non-GAAP Financial Measures” below


First Internet Bancorp
Average Balances and Rates (unaudited)
Dollar amounts in thousands


	Six Months Ended

	June 30, 2022							June 30, 2021

	Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	2,998,085		$	65,603	4.41	%	$	3,047,560		$	61,720	4.08	%
Securities – taxable		555,533			4,788	1.74	%		476,049			3,700	1.57	%
Securities – non-taxable		78,952			577	1.47	%		85,581			540	1.27	%
Other earning assets		388,760			1,172	0.61	%		478,065			697	0.29	%
Total interest-earning assets		4,021,330			72,140	3.62	%		4,087,255			66,657	3.29	%
Allowance for loan losses		(28,288	)						(30,117	)
Noninterest-earning assets		163,026							133,074
Total assets	$	4,156,068						$	4,190,212

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	333,361		$	878	0.53	%	$	186,795		$	276	0.30	%
Savings accounts		63,653			121	0.38	%		50,950			89	0.35	%
Money market accounts		1,440,976			3,425	0.48	%		1,393,145			2,853	0.41	%
BaaS – brokered deposits		41,836			160	0.77	%		–			–	0.00	%
Certificates and brokered deposits		1,164,949			7,921	1.37	%		1,481,667			13,115	1.78	%
Total interest-bearing deposits		3,044,775			12,505	0.83	%		3,112,557			16,333	1.06	%
Other borrowed funds		601,274			8,205	2.75	%		584,268			8,192	2.83	%
Total interest-bearing liabilities		3,646,049			20,710	1.15	%		3,696,825			24,525	1.34	%

Noninterest-bearing deposits		110,605							94,506
Other noninterest-bearing liabilities		21,910							54,403
Total liabilities		3,778,564							3,845,734

Shareholders’ equity		377,504							344,478
Total liabilities and shareholders’ equity	$	4,156,068						$	4,190,212

Net interest income				$	51,430						$	42,132

Interest rate spread						2.47	%						1.95	%

Net interest margin						2.58	%						2.08	%

Net interest margin – FTE ^2,3						2.71	%						2.21	%

¹ Includes nonaccrual loans

² On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate

³ Refer to “Non-GAAP Financial Measures” section above and “Reconciliation of Non-GAAP Financial Measures” below

First Internet Bancorp
Loans and Deposits (unaudited)
Dollar amounts in thousands


	June 30, 2022				March 31, 2022				June 30, 2021

	Amount		Percent		Amount		Percent		Amount		Percent

Commercial loans
Commercial and industrial	$	110,540	3.6	%	$	99,808	3.5	%	$	96,203	3.3	%
Owner-occupied commercial real estate		61,277	2.0	%		56,752	2.0	%		87,136	2.9	%
Investor commercial real estate		52,648	1.7	%		34,627	1.2	%		28,871	1.0	%
Construction		143,475	4.7	%		149,662	5.2	%		117,970	4.0	%
Single tenant lease financing		867,181	28.1	%		852,519	29.6	%		913,115	30.9	%
Public finance		613,759	19.9	%		587,817	20.4	%		612,138	20.7	%
Healthcare finance		317,180	10.3	%		354,574	12.3	%		455,890	15.3	%
Small business lending		102,724	3.3	%		97,040	3.4	%		123,293	4.2	%
Franchise finance		168,942	5.5	%		107,246	3.7	%		–	0.0	%
Total commercial loans		2,437,726	79.1	%		2,340,045	81.3	%		2,434,616	82.3	%

Consumer loans
Residential mortgage		281,124	9.1	%		191,153	6.6	%		177,148	6.0	%
Home equity		19,928	0.6	%		18,100	0.6	%		17,510	0.6	%
Trailers		154,555	5.0	%		148,870	5.2	%		148,795	5.0	%
Recreational vehicles		105,876	3.4	%		93,458	3.2	%		91,030	3.1	%
Other consumer loans		32,524	1.2	%		28,002	1.0	%		31,971	1.1	%
Tax refund advance loans		–	0.0	%		9,177	0.3	%		–	0.0	%
Total consumer loans		594,007	19.3	%		488,760	16.9	%		466,454	15.8	%

Net deferred loan fees, premiums, discounts and other ¹		50,394	1.6	%		51,975	1.8	%		56,538	1.9	%

Total loans	$	3,082,127	100.0	%	$	2,880,780	100.0	%	$	2,957,608	100.0	%


	June 30, 2022				March 31, 2022				June 30, 2021

	Amount		Percent		Amount		Percent		Amount		Percent

Deposits
Noninterest-bearing deposits	$	126,153	4.0	%	$	119,197	3.7	%	$	113,996	3.6	%
Interest-bearing demand deposits		350,551	11.1	%		334,723	10.4	%		196,841	6.1	%
Savings accounts		65,365	2.1	%		66,320	2.1	%		56,298	1.8	%
Money market accounts		1,363,424	43.3	%		1,475,857	45.8	%		1,432,355	44.6	%
BaaS – brokered deposits		194,133	6.2	%		50,006	1.6	%		–	0.0	%
Certificates of deposits		800,598	25.3	%		889,789	27.6	%		1,087,350	33.9	%
Brokered deposits		251,877	8.0	%		282,087	8.8	%		319,307	10.0	%

Total deposits	$	3,152,101	100.0	%	$	3,217,979	100.0	%	$	3,206,147	100.0	%

¹ Includes carrying value adjustments of $35.4 million, $36.4 million and $40.4 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Total equity – GAAP	$	365,332		$	374,655		$	358,641		$	365,332		$	358,641
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible common equity	$	360,645		$	369,968		$	353,954		$	360,645		$	353,954

Total assets – GAAP	$	4,099,806		$	4,225,397		$	4,204,642		$	4,099,806		$	4,204,642
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible assets	$	4,095,119		$	4,220,710		$	4,199,955		$	4,095,119		$	4,199,955

Common shares outstanding		9,404,000			9,683,727			9,854,153			9,404,000			9,854,153

Book value per common share	$	38.85		$	38.69		$	36.39		$	38.85		$	36.39
Effect of goodwill		(0.50	)		(0.48	)		(0.47	)		(0.50	)		(0.47	)
Tangible book value per common share	$	38.35		$	38.21		$	35.92		$	38.35		$	35.92

Total shareholders’ equity to assets		8.91	%		8.87	%		8.53	%		8.91	%		8.53	%
Effect of goodwill		(0.10	%)		(0.10	%)		(0.10	%)		(0.10	%)		(0.10	%)
Tangible common equity to tangible assets		8.81	%		8.77	%		8.43	%		8.81	%		8.43	%

Total average equity – GAAP	$	374,274		$	380,767		$	352,894		$	377,504		$	344,478
Adjustments:
Average goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Average tangible common equity	$	369,587		$	376,080		$	348,207		$	372,817		$	339,791

Return on average shareholders’ equity		10.23	%		11.94	%		14.88	%		11.09	%		13.78	%
Effect of goodwill		0.13	%		0.15	%		0.21	%		0.14	%		0.19	%
Return on average tangible common equity		10.36	%		12.09	%		15.09	%		11.23	%		13.97	%

Total interest income	$	36,106		$	36,034		$	33,377		$	72,140		$	66,657
Adjustments:
Fully-taxable equivalent adjustments ¹		1,377			1,314			1,394			2,691			2,750
Total interest income – FTE	$	37,483		$	37,348		$	34,771		$	74,831		$	69,407

Total interest income – FTE	$	37,483		$	37,348		$	34,771		$	74,831		$	69,407
Adjustments:
Income from tax refund advance loans		(149	)		(2,864	)		–			(3,013	)		–
Adjusted total interest income – FTE	$	37,334		$	34,484		$	34,771		$	71,818		$	69,407

Net interest income	$	25,680		$	25,750		$	21,607		$	51,430		$	42,132
Adjustments:
Fully-taxable equivalent adjustments ¹		1,377			1,314			1,394			2,691			2,750
Net interest income – FTE	$	27,057		$	27,064		$	23,001		$	54,121		$	44,882

Net interest income	$	25,680		$	25,750		$	21,607		$	51,430		$	42,132
Adjustments:
Income from tax refund advance loans		(149	)		(2,864	)		–			(3,013	)		–
Adjusted net interest income	$	25,531		$	22,886		$	21,607		$	48,417		$	42,132

Net interest income	$	25,680		$	25,750		$	21,607		$	51,430		$	42,132
Adjustments:
Fully-taxable equivalent adjustments ¹		1,377			1,314			1,394			2,691			2,750
Income from tax refund advance loans		(149	)		(2,864	)		–			(3,013	)		–
Adjusted net interest income – FTE	$	26,908		$	24,200		$	23,001		$	51,108		$	44,882
¹ Assuming a 21% tax rate

First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Net interest margin		2.60	%		2.56	%		2.11	%		2.58	%		2.08	%
Effect of fully-taxable equivalent adjustments ¹		0.14	%		0.13	%		0.14	%		0.13	%		0.13	%
Net interest margin – FTE		2.74	%		2.69	%		2.25	%		2.71	%		2.21	%

Net interest margin		2.60	%		2.56	%		2.11	%		2.58	%		2.08	%
Effect of income from tax refund advance loans		(0.02	%)		(0.28	%)		0.00	%		(0.15	%)		0.00	%
Adjusted net interest margin		2.58	%		2.28	%		2.11	%		2.43	%		2.08	%

Net interest margin		2.60	%		2.56	%		2.11	%		2.58	%		2.08	%
Effect of fully-taxable equivalent adjustments ¹		0.14	%		0.13	%		0.14	%		0.13	%		0.13	%
Effect of income from tax refund advance loans		(0.02	%)		(0.28	%)		0.00	%		(0.15	%)		0.00	%
Adjusted net interest margin – FTE		2.72	%		2.41	%		2.25	%		2.56	%		2.21	%

Provision for loan losses	$	1,185		$	791		$	21		$	1,976		$	1,297
Adjustments:
Provision for tax refund advance loans losses		(18	)		(1,842	)		–			(1,860	)		–
Provision (benefit) for loan losses, excluding tax refund advance loans	$	1,167		$	(1,051	)	$	21		$	116		$	1,297

Average loans	$	2,998,144		$	2,947,924		$	2,994,356		$	2,973,173		$	3,020,987
Adjustments:
Average tax refund advance loans		(3,185	)		(60,499	)		–			(29,096	)		–
Average loans, excluding tax refund advance loans	$	2,994,959		$	2,887,425		$	2,994,356		$	2,944,077		$	3,020,987

Net charge-offs to average loans		0.04	%		0.05	%		0.35	%		0.05	%		0.18	%
Adjustments:
Effect of tax refund advance lending net charge-offs to average loans		(0.05	%)		(0.21	%)		0.00	%		(0.13	%)		0.00	%
Net (recoveries) charge-offs to average loans, excluding tax refund advance loans		(0.01	%)		(0.16	%)		0.35	%		(0.08	%)		0.18	%

Allowance for loan losses	$	29,153		$	28,251		$	28,066		$	29,153		$	28,066

Loans	$	3,082,127		$	2,880,780		$	2,957,608		$	3,082,127		$	2,957,608
Adjustments:
PPP loans		(194	)		(1,003	)		(39,682	)		(194	)		(39,682	)
Loans, excluding PPP loans	$	3,081,933		$	2,879,777		$	2,917,926		$	3,081,933		$	2,917,926

Allowance for loan losses to loans		0.95	%		0.98	%		0.95	%		0.95	%		0.95	%
Effect of PPP loans		0.00	%		0.00	%		0.01	%		0.00	%		0.01	%
Allowance for loan losses to loans, excluding PPP loans		0.95	%		0.98	%		0.96	%		0.95	%		0.96	%
¹ Assuming a 21% tax rate

First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Noninterest expense – GAAP	$	17,985		$	18,780		$	15,075		$	36,765		$	30,392
Adjustments:
Acquisition-related expenses		(103	)		(170	)		–			(273	)		–
Nonrecurring consulting fee		–			(875	)		–			(875	)		–
Discretionary inflation bonus		(531	)		–			–			(531	)		–
Accelerated equity compensation		(289	)		–			–			(289	)		–
Adjusted noninterest expense	$	17,062		$	17,735		$	15,075		$	34,797		$	30,392

Income before income taxes – GAAP	$	10,824		$	12,999		$	15,473		$	23,823		$	27,780
Adjustments:
Gain on sale of premises and equipment		–			–			(2,523	)		–			(2,523	)
Acquisition-related expenses		103			170			–			273			–
Nonrecurring consulting fee		–			875			–			875			–
Discretionary inflation bonus		531			–			–			531			–
Accelerated equity compensation		289			–			–			289			–
Adjusted income before income taxes	$	11,747		$	14,044		$	12,950		$	25,791		$	25,257

Income tax provision – GAAP	$	1,279		$	1,790		$	2,377		$	3,069		$	4,234
Adjustments:¹
Gain on sale of premises and equipment		–			–			(530	)		–			(530	)
Acquisition-related expenses		21			36			–			57			–
Nonrecurring consulting fee		–			184			–			184			–
Discretionary inflation bonus		112			–			–			112			–
Accelerated equity compensation		61			–			–			61			–
Adjusted income tax provision	$	1,473		$	2,010		$	1,847		$	3,483		$	3,704

Net income – GAAP	$	9,545		$	11,209		$	13,096		$	20,754		$	23,546
Adjustments:
Gain on sale of premises and equipment		–			–			(1,993	)		–			(1,993	)
Acquisition-related expenses		82			134			–			216			–
Nonrecurring consulting fee		–			691			–			691			–
Discretionary inflation bonus		419			–			–			419			–
Accelerated equity compensation		228			–			–			228			–
Adjusted net income	$	10,274		$	12,034		$	11,103		$	22,308		$	21,553

Diluted average common shares outstanding		9,658,689			9,870,394			9,981,422			9,764,232			9,970,147

Diluted earnings per share – GAAP	$	0.99		$	1.14		$	1.31		$	2.13		$	2.36
Adjustments:
Effect of gain on sale of premises and equipment		–			–			(0.20	)		–			(0.20	)
Effect of acquisition-related expenses		0.01			0.01			–			0.02			–
Effect of nonrecurring consulting fee		–			0.07			–			0.07			–
Effect of discretionary inflation bonus		0.04			–			–			0.04			–
Effect of accelerated equity compensation		0.02			–			–			0.02			–
Adjusted diluted earnings per share	$	1.06		$	1.22		$	1.11		$	2.28		$	2.16

Return on average assets		0.93	%		1.08	%		1.25	%		1.01	%		1.13	%
Effect of gain on sale of premises and equipment		0.00	%		0.00	%		(0.19	%)		0.00	%		(0.09	%)
Effect of acquisition-related expenses		0.01	%		0.01	%		0.00	%		0.01	%		0.00	%
Effect of nonrecurring consulting fee		0.00	%		0.07	%		0.00	%		0.03	%		0.00	%
Effect of discretionary inflation bonus		0.04	%		0.00	%		0.00	%		0.02	%		0.00	%
Effect of accelerated equity compensation		0.02	%		0.00	%		0.00	%		0.01	%		0.00	%
Adjusted return on average assets		1.00	%		1.16	%		1.06	%		1.08	%		1.04	%

¹ Assuming a 21% tax rate


First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data


	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021

Return on average shareholders’ equity		10.23	%		11.94	%		14.88	%		11.09	%		13.78	%
Effect of gain on sale of premises and equipment		0.00	%		0.00	%		(2.26	%)		0.00	%		(1.16	%)
Effect of acquisition-related expenses		0.09	%		0.14	%		0.00	%		0.12	%		0.00	%
Effect of nonrecurring consulting fee		0.00	%		0.74	%		0.00	%		0.37	%		0.00	%
Effect of discretionary inflation bonus		0.45	%		0.00	%		0.00	%		0.22	%		0.00	%
Effect of accelerated equity compensation		0.24	%		0.00	%		0.00	%		0.12	%		0.00	%
Adjusted return on average shareholders’ equity		11.01	%		12.82	%		12.62	%		11.92	%		12.62	%

Return on average tangible common equity		10.36	%		12.09	%		15.09	%		11.23	%		13.97	%
Effect of gain on sale of premises and equipment		0.00	%		0.00	%		(2.30	%)		0.00	%		(1.18	%)
Effect of acquisition-related expenses		0.09	%		0.14	%		0.00	%		0.12	%		0.00	%
Effect of nonrecurring consulting fee		0.00	%		0.75	%		0.00	%		0.37	%		0.00	%
Effect of discretionary inflation bonus		0.45	%		0.00	%		0.00	%		0.23	%		0.00	%
Effect of accelerated equity compensation		0.25	%		0.00	%		0.00	%		0.12	%		0.00	%
Adjusted return on average tangible common equity		11.15	%		12.98	%		12.79	%		12.07	%		12.79	%

Effective income tax rate		11.8	%		13.8	%		15.4	%		12.9	%		15.2	%
Effect of gain on sale of premises and equipment		0.0	%		0.0	%		(1.1	%)		0.0	%		(0.5	%)
Effect of acquisition-related expenses		0.2	%		0.3	%		0.0	%		0.2	%		0.0	%
Effect of nonrecurring consulting fee		0.0	%		1.3	%		0.0	%		0.7	%		0.0	%
Effect of discretionary inflation bonus		1.0	%		0.0	%		0.0	%		0.5	%		0.0	%
Effect of accelerated equity compensation		0.6	%		0.0	%		0.0	%		0.3	%		0.0	%
Adjusted effective income tax rate		13.6	%		15.4	%		14.3	%		14.6	%		14.7	%

Income before income taxes – GAAP	$	10,824		$	12,999		$	15,473		$	23,823		$	27,780
Adjustments:
Income from tax refund advance lending		(149	)		(2,864	)		–			(3,013	)		–
Provision for tax refund advance lending losses		18			1,842			–			1,860			–
Tax refund advance lending servicing fee		9			921			–			930			–
Income before income taxes, excluding tax refund advance loans	$	10,702		$	12,898		$	15,473		$	23,600		$	27,780

Income tax provision – GAAP	$	1,279		$	1,790		$	2,377		$	3,069		$	4,234
Adjustments:¹
Income from tax refund advance lending		(31	)		(601	)		–			(633	)		–
Provision for tax refund advance lending losses		4			387			–			391			–
Tax refund advance lending servicing fee		2			193			–			195			–
Income tax provision, excluding tax refund advance loans	$	1,254		$	1,769		$	2,377		$	3,022		$	4,234

Net income – GAAP	$	9,545		$	11,209		$	13,096		$	20,754		$	23,546
Adjustments:
Income from tax refund advance lending		(118	)		(2,263	)		–			(2,380	)		–
Provision for tax refund advance lending losses		14			1,455			–			1,469			–
Tax refund advance lending servicing fee		7			728			–			735			–
Net income, excluding tax refund advance loans	$	9,448		$	11,129		$	13,096		$	20,578		$	23,546
¹Assuming a 21% tax rate

View source version on businesswire.com: https://www.businesswire.com/news/home/20220718005776/en/

Investors/Analysts

Paula Deemer

Director of Corporate Administration

(317) 428-4628

[email protected]

Media

Nicole Lorch

President & Chief Operating Officer

(317) 532-7906

[email protected]

KEYWORDS: United States North America Indiana

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

Logo

July 20, 2022 5:18 pm

Southern States Bancshares, Inc. Announces Quarterly Cash Dividend of $0.09 Per Share

ANNISTON, Ala., July 20, 2022 (GLOBE NEWSWIRE) — Southern States Bancshares, Inc. (NASDAQ: SSBK) (“Southern States”), the holding company for Southern States Bank, an Alabama state-chartered commercial bank (the “Bank”), today announced that its Board of Directors has declared a cash dividend on its common stock of $0.09 per share. The dividend is payable on August 17, 2022 to shareholders of record as of August 4, 2022.

About Southern States Bancshares, Inc.

Headquartered in Anniston, Alabama, Southern States Bancshares, Inc. is a bank holding company that operates primarily through its wholly-owned subsidiary, Southern States Bank. The Bank is a full-service community banking institution, which offers an array of deposit, loan and other banking-related products and services to businesses and individuals in its communities. The Bank operates 15 branches in Alabama and Georgia and two loan production offices in Atlanta.

Contact Information:

Lynn Joyce
(205) 820-8065
[email protected]

Kevin Dobbs
(310) 622-8245
[email protected]

July 20, 2022 5:18 pm

Equifax Delivers Record Second Quarter Revenue

PR Newswire

ATLANTA
, July 20, 2022 /PRNewswire/ — Equifax^® (NYSE: EFX) today announced financial results for the quarter ended June 30, 2022.

Strong second quarter 2022 revenue of $1.317 billion, up 7% despite the weakening mortgage market and negative impact of foreign exchange
Workforce Solutions revenue growth of 21%; thirteen consecutive quarters of double-digit revenue growth
Strong new product innovation leveraging new EFX Cloud with Vitality Index over 13%
Revising Full Year Guidance reflecting expected further decline in U.S. mortgage market and negative impact of foreign exchange

“We delivered solid results with record second quarter revenue of $1.317 billion, up 7% despite the 33% decline in the U.S. mortgage market and greater than expected negative impact of foreign exchange. Our non-mortgage business, which is over 75% of Equifax, delivered very strong constant dollar revenue growth of 22% reflecting broad-based strength across our businesses. Our largest and fastest-growing business, Workforce Solutions, again powered our results, with total growth of over 21%, driven by stronger than expected non-mortgage revenue growth of over 50%. International also delivered very strong local currency revenue growth of 11.5%. USIS revenue declined 7.5%, due to the expected decline in mortgage revenue. USIS non-mortgage revenue growth was weaker than expected at 4%, despite delivering strong non-mortgage B2B online revenue growth of 9%,” said Mark W. Begor, Equifax Chief Executive Officer. “Despite the strength of our First Half results, we are adjusting our full-year 2022 guidance to reflect our expectation of a larger decline in the U.S. mortgage market and a larger negative impact of FX than was expected when we provided guidance in April. Our guidance for 2022 is for revenue at a midpoint of $5.10 billion and Adjusted EPS of $7.68 per share, a reduction of $100 million in revenue and $0.47 per share from our April guidance. This adjusted guidance reflects an expectation that the U.S. mortgage market, as measured by mortgage market credit inquiries, will decline by over 46% in the second half of 2022 versus the prior year. Our expectations for 2022 non-mortgage constant dollar revenue growth are principally unchanged at a very strong 19%.”

“We are confident in the future growth of the New Equifax as we make strong progress on our EFX Cloud transformation, leverage our new Cloud capabilities to accelerate new product roll-outs, and invest in new product and data and analytics capabilities to drive further growth. We continue to invest in bolt-on acquisitions and have completed ten since January 2021, as we continue to reinvest to broaden our capabilities and position Equifax for strong future growth. We are energized about the future and our ability to deliver higher margins and free cash flow in 2023 and beyond.”

Financial Results Summary

The company reported revenue of $1,316.7 million in the second quarter of 2022, up 7 percent compared to the second quarter of 2021 on a reported basis and 8 percent on a local currency basis.

Net income attributable to Equifax of $200.6 million was down 7 percent in the second quarter of 2022 compared to net income attributable to Equifax of $215.1 million in the second quarter of 2021.

Diluted EPS attributable to Equifax was $1.63 for the second quarter of 2022, down 6 percent compared to $1.74 in the second quarter of 2021.

Workforce Solutions second quarter results

Total revenue was $609.2 million in the second quarter of 2022, a 21 percent increase compared to the second quarter of 2021. Operating margin for Workforce Solutions was 46.2 percent in the second quarter of 2022 compared to 53.0 percent in the second quarter of 2021. Adjusted EBITDA margin for Workforce Solutions was 53.4 percent in the second quarter of 2022 compared to 57.5 percent in the second quarter of 2021.
Verification Services revenue was $504.5 million, up 28 percent compared to the second quarter of 2021.
Employer Services revenue was $104.7 million, down 3 percent compared to the second quarter of 2021.

USIS second quarter results

Total revenue was $421.4 million in the second quarter of 2022, down 8 percent compared to $455.7 million in the second quarter of 2021. Operating margin for USIS was 26.6 percent in the second quarter of 2022 compared to 30.0 percent in the second quarter of 2021. Adjusted EBITDA margin for USIS was 38.2 percent in the second quarter of 2022 compared to 38.9 percent in the second quarter of 2021.
Online Information Solutions revenue was $329.2 million, down 5 percent compared to the second quarter of 2021.
Mortgage Solutions revenue was $36.8 million, down 25 percent compared to the second quarter of 2021.
Financial Marketing Services revenue was $55.4 million, down 5 percent compared to the second quarter of 2021.

International second quarter results

Total revenue was $286.1 million in the second quarter of 2022, up 3 percent and up 11 percent compared to the second quarter of 2021 on a reported and local currency basis, respectively. Operating margin for International was 11.3 percent in the second quarter of 2022, compared to 12.1 percent in the second quarter of 2021. Adjusted EBITDA margin for International was 24.7 percent in the second quarter of 2022, compared to 26.8 percent in the second quarter of 2021.
Asia Pacific revenue was $90.1 million, down 2 percent and up 6 percent compared to the second quarter of 2021 on a reported and local currency basis, respectively.
Europe revenue was $79.8 million, up 4 percent and up 16 percent compared to the second quarter of 2021 on a reported and local currency basis, respectively.
Canada revenue was $64.0 million, down 1 percent and up 2 percent compared to the second quarter of 2021 on a reported and local currency basis, respectively.
Latin America revenue was $52.2 million, up 18 percent and up 28 percent compared to the second quarter of 2021 on a reported and local currency basis, respectively.

Adjusted EPS and Adjusted EBITDA Margin

Adjusted EPS attributable to Equifax was $2.09 in the second quarter of 2022, up 5 percent compared to the second quarter of 2021.
Adjusted EBITDA margin was 35.0 percent in the second quarter of 2022 compared to 34.9 percent in the second quarter of 2021.
These financial measures exclude adjustments as described further in the Non-GAAP Financial Measures section below.

2022 Third Quarter and Full Year Guidance
	Q3 2022		FY 2022
	Low-End	High-End	Low-End	High-End
Reported Revenue	$1.210 billion	$1.230 billion	$5.070 billion	$5.130 billion
Reported Revenue Growth	(1.1) %	0.6 %	3.0 %	4.2 %
Local Currency Growth ⁽¹⁾	0.8 %	2.5 %	4.6 %	5.8 %
Organic Local Currency Growth ⁽¹⁾	(3.2) %	(1.5) %	1.1 %	2.3 %
Adjusted Earnings Per Share	$1.60 per share	$1.70 per share	$7.55 per share	$7.80 per share
(1) Refer to page 8 for definitions.

About Equifax

At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by more than 13,000 employees worldwide, Equifax operates or has investments in 25 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit Equifax.com.

Earnings Conference Call and Audio Webcast

In conjunction with this release, Equifax will host a conference call on July 21, 2022 at 8:30 a.m. (ET) via a live audio webcast. To access the webcast and related presentation materials, go to the Investor Relations section of our website at www.equifax.com. The discussion will be available via replay at the same site shortly after the conclusion of the webcast. This press release is also available at that website.

Non-GAAP Financial Measures

This earnings release presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent noted above for different periods) for acquisition-related amortization expense, legal expenses related to the 2017 cybersecurity incident, fair value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, and Argentina highly inflationary foreign currency adjustment. All adjustments are net of tax, with a reconciling item with the aggregated tax impact of the adjustments. This earnings release also presents adjusted EBITDA and adjusted EBITDA margin which is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items. These are important financial measures for Equifax but are not financial measures as defined by GAAP.

These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of net income or EPS as determined in accordance with GAAP.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A. This information can also be found under “Investor Relations/Financial Information/Non-GAAP Financial Measures” on our website at www.equifax.com.

Forward-Looking Statements

This release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, the U.S. mortgage market, economic conditions and effective tax rates. While the Company believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect.

Several factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to, actions taken by us, including restructuring or strategic initiatives (including our technology, data and security cloud transformation, capital investments and asset acquisitions or dispositions), as well as developments beyond our control, including, but not limited to, changes in the U.S. mortgage market environment, as well as changes more generally in U.S. and worldwide economic conditions that materially impact consumer spending, such as rising interest rates and inflation, consumer debt and employment and the demand for Equifax’s products and services. Further deteriorations in economic conditions or interest rate increases, could lead to a further or prolonged decline in demand for our products and services and negatively impact our business. It may also continue to impact financial markets and corporate credit markets which could adversely impact our access to financing or the terms of any financing. We also cannot at this time predict the extent of the impact of the COVID-19 pandemic and resulting economic impact, but it could have a material adverse effect on our business, financial position, results of operations and cash flows. Other risk factors include the impact of our technology and security transformation and improvements in our information technology and data security infrastructure; changes in tax regulations; adverse or uncertain economic conditions and changes in credit and financial markets, such as rising interest rates and inflation; potential adverse developments in new and pending legal proceedings or government investigations; risks associated with our ability to comply with business practice commitments and similar obligations under settlement agreements and consent orders entered into in connection with the 2017 cybersecurity incident; economic, political and other risks associated with international sales and operations; risks relating to unauthorized access to data or breaches of confidential information due to criminal conduct, attacks by hackers, employee or insider malfeasance and/or human error; changes in, and the effects of, laws and regulations and government policies governing or affecting our business, including, without limitation, our examination and supervision by the Consumer Financial Protection Bureau, a federal agency that holds primary responsibility for the regulation of consumer protection with respect to financial products and services in the U.S., oversight by the U.K. Financial Conduct Authority and Information Commissioner’s Office of our debt collections services and core credit reporting businesses in the U.K., oversight by the Office of Australian Information Commission, the Australian Competition and Consumer Commission and other regulatory entities of our credit reporting business in Australia and the impact of current privacy laws and regulations, including the European General Data Protection Regulation and the California Consumer Privacy Act, or any future privacy laws and regulations; federal or state responses to identity theft concerns; our ability to successfully develop and market new products and services, respond to pricing and other competitive pressures, complete and integrate acquisitions and other investments and achieve targeted cost efficiencies; timing and amount of capital expenditures; changes in capital markets and corresponding effects on the Company’s investments and benefit plan obligations; foreign currency exchange rates and earnings repatriation limitations; and the decisions of taxing authorities which could affect our effective tax rates. A summary of additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended December 31, 2021 including without limitation under the captions “Item 1. Business — Governmental Regulation” and “– Forward-Looking Statements” and “Item 1A. Risk Factors” and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are given only as at the date of this release and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact:

Trevor Burns	Kate Walker
Investor Relations	Media Relations
[email protected]	[email protected]

EQUIFAX CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended June 30,
	2022	2021
(In millions, except per share amounts)	(Unaudited)
Operating revenue	$ 1,316.7	$ 1,234.8
Operating expenses:
Cost of services (exclusive of depreciation and amortization below)	542.1	483.0
Selling, general and administrative expenses	330.2	328.4
Depreciation and amortization	139.8	117.4
Total operating expenses	1,012.1	928.8
Operating income	304.6	306.0
Interest expense	(41.6)	(34.9)
Other income, net	1.8	6.0
Consolidated income before income taxes	264.8	277.1
Provision for income taxes	(63.4)	(61.2)
Consolidated net income	201.4	215.9
Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests	(0.8)	(0.8)
Net income attributable to Equifax	$ 200.6	$ 215.1
Basic earnings per common share:
Net income attributable to Equifax	$ 1.64	$ 1.77
Weighted-average shares used in computing basic earnings per share	122.4	121.8
Diluted earnings per common share:
Net income attributable to Equifax	$ 1.63	$ 1.74
Weighted-average shares used in computing diluted earnings per share	123.3	123.5
Dividends per common share	$ 0.39	$ 0.39

EQUIFAX CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2022	December 31, 2021
(In millions, except par values)	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$ 223.6	$ 224.7
Trade accounts receivable, net of allowance for doubtful accounts of $15.6 and $13.9 at June 30, 2022 and December 31, 2021, respectively	892.9	727.6
Prepaid expenses	153.9	108.4
Other current assets	82.9	60.2
Total current assets	1,353.3	1,120.9
Property and equipment:
Capitalized internal-use software and system costs	1,908.7	1,727.3
Data processing equipment and furniture	302.7	299.6
Land, buildings and improvements	256.5	250.3
Total property and equipment	2,467.9	2,277.2
Less accumulated depreciation and amortization	(1,034.0)	(961.3)
Total property and equipment, net	1,433.9	1,315.9
Goodwill	6,238.7	6,258.1
Indefinite-lived intangible assets	94.9	94.9
Purchased intangible assets, net	1,827.4	1,898.0
Other assets, net	273.0	353.1
Total assets	$ 11,221.2	$ 11,040.9
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt	$ 1,611.7	$ 824.8
Accounts payable	190.4	211.6
Accrued expenses	224.6	237.5
Accrued salaries and bonuses	158.7	257.9
Deferred revenue	109.4	121.3
Other current liabilities	338.4	638.2
Total current liabilities	2,633.2	2,291.3
Long-term debt	4,073.5	4,470.1
Deferred income tax liabilities, net	395.4	358.2
Long-term pension and other postretirement benefit liabilities	121.3	130.1
Other long-term liabilities	176.8	190.0
Total liabilities	7,400.2	7,439.7
Preferred stock, $0.01 par value: Authorized shares – 10.0; Issued shares – none	—	—
Common stock, $1.25 par value: Authorized shares – 300.0; Issued shares – 189.3 at June 30, 2022 and December 31, 2021; Outstanding shares – 122.4 and 122.1 at June 30, 2022 and December 31, 2021, respectively	236.6	236.6
Paid-in capital	1,563.2	1,536.7
Retained earnings	5,078.1	4,751.6
Accumulated other comprehensive loss	(414.4)	(295.4)
Treasury stock, at cost, 66.3 and 66.6 shares at June 30, 2022 and December 31, 2021, respectively	(2,652.6)	(2,639.2)
Stock held by employee benefit trusts, at cost, 0.6 shares at June 30, 2022 and December 31, 2021	(5.9)	(5.9)
Total Equifax shareholders’ equity	3,805.0	3,584.4
Noncontrolling interests including redeemable noncontrolling interests	16.0	16.8
Total equity	3,821.0	3,601.2
Total liabilities and equity	$ 11,221.2	$ 11,040.9

EQUIFAX CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
	2022	2021
(In millions)	(Unaudited)
Operating activities:
Consolidated net income	$ 424.2	$ 418.8
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization	281.2	236.4
Stock-based compensation expense	36.7	33.9
Deferred income taxes	26.7	14.1
(Gain) loss on fair market value adjustment and gain on sale of equity investments	(2.4)	17.5
Gain on divestiture	—	(0.2)
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net	(170.5)	(51.3)
Other assets, current and long-term	(43.4)	5.3
Current and long term liabilities, excluding debt	(475.7)	(123.4)
Cash provided by operating activities	76.8	551.1
Investing activities:
Capital expenditures	(315.4)	(235.5)
Acquisitions, net of cash acquired	(111.4)	(861.6)
Cash received from divestiture	98.1	1.5
Cash used in investing activities	(328.7)	(1,095.6)
Financing activities:
Net short-term borrowings	386.7	(0.6)
Payments on long-term debt	—	(500.1)
Treasury stock purchases	—	(69.9)
Dividends paid to Equifax shareholders	(95.7)	(95.0)
Dividends paid to noncontrolling interests	(2.4)	(5.8)
Proceeds from exercise of stock options and employee stock purchase plan	8.7	25.1
Payment of taxes related to settlement of equity awards	(32.3)	(30.4)
Purchase of noncontrolling interests	—	(3.6)
Cash provided by (used in) financing activities	265.0	(680.3)
Effect of foreign currency exchange rates on cash and cash equivalents	(14.2)	(1.7)
Decrease in cash and cash equivalents	(1.1)	(1,226.5)
Cash and cash equivalents, beginning of period	224.7	1,684.6
Cash and cash equivalents, end of period	$ 223.6	$ 458.1

Common Questions & Answers (Unaudited)
(Dollars in millions)

1. Can you provide a further analysis of operating revenue by operating segment?

Operating revenue consists of the following components:

(In millions)	Three Months Ended June 30,
					Local Currency	Organic Local Currency
Operating revenue:	2022	2021	$ Change	% Change	% Change ⁽¹⁾	% Change ⁽²⁾
Verification Services	$ 504.5	$ 394.5	$ 110.0	28 %		17 %
Employer Services	104.7	107.5	(2.8)	(3) %		(9) %
Total Workforce Solutions	609.2	502.0	107.2	21 %		11 %
Online Information Solutions	329.2	347.8	(18.6)	(5) %		(6) %
Mortgage Solutions	36.8	49.3	(12.5)	(25) %		(25) %
Financial Marketing Services	55.4	58.6	(3.2)	(5) %		(5) %
Total U.S. Information Solutions	421.4	455.7	(34.3)	(8) %		(8) %
Asia Pacific	90.1	91.6	(1.5)	(2) %	6 %	6 %
Europe	79.8	76.7	3.1	4 %	16 %	16 %
Canada	64.0	64.7	(0.7)	(1) %	2 %	2 %
Latin America	52.2	44.1	8.1	18 %	28 %	19 %
Total International	286.1	277.1	9.0	3 %	11 %	10 %
Total operating revenue	$ 1,316.7	$ 1,234.8	$ 81.9	7 %	8 %	4 %


(1)	Local currency revenue change is calculated by conforming 2022 results using 2021 exchange rates.

(2)	Organic local currency revenue growth is defined as local currency revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. This adjustment is made for 12 months following the acquisition.

2. What is the estimate of the change in overall U.S. Mortgage Market transaction volume that is included in the 2022 third quarter and full year guidance provided?

Equifax estimates the change year over year in overall U.S. Mortgage Market transaction volume based on the change in total U.S. mortgage credit inquiries received by Equifax. The change year over year in total U.S. mortgage credit inquiries received by Equifax in the second quarter of 2022 was a decrease of 33%. The guidance provided on page 3 assumes a change year over year in total U.S. Mortgage Market Credit inquiries received by Equifax in the third and fourth quarters of 2022 to be declines of over 46%. For full year 2022 our guidance assumes a decline of over 37%. At the levels indicated for the second half of 2022, U.S. Mortgage Market Credit Inquiries will be approaching 30% below the average second half of year levels from the period prior to the pandemic, measured as the average credit inquiries in the second half of each year over the 2015-2019 period.

3. Why is operating cash flow for the six months ended June 30, 2022 a source of cash of $76.8 million?

In the first quarter of 2022, Equifax deposited the balance of $345.0 million into the restitution fund for the U.S. consumer class action settlement. This payment is reflected as a use of cash in the Consolidated Statement of Cash Flows within the operating cash flow section under the line titled Current and long term liabilities, excluding debt. Further changes in operating cash flow were due to increased working capital balances during the year.

Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited)
(Dollars in millions, except per share amounts)

A. Reconciliation of net income attributable to Equifax to diluted EPS attributable to Equifax, defined as net income adjusted for acquisition-related amortization expense, legal expenses related to the 2017 cybersecurity incident, fair value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, and income tax adjustments:

	Three Months Ended June 30,
(In millions, except per share amounts)	2022	2021	$ Change	% Change
Net income attributable to Equifax	$ 200.6	$ 215.1	$ (14.5)	(7) %
Acquisition-related amortization expense of certain acquired intangibles ⁽¹⁾	57.9	40.1	17.8	44 %
Legal expenses related to the 2017 cybersecurity incident ⁽²⁾	0.5	(1.1)	1.6	(145) %
Fair market value adjustment and gain on sale of equity investments ⁽³⁾	6.7	5.6	1.1	20 %
Foreign currency impact of certain intercompany loans ⁽⁴⁾	(3.0)	(2.7)	(0.3)	11 %
Acquisition-related costs other than acquisition amortization ⁽⁵⁾	12.0	0.9	11.1	1,233 %
Income tax effects of stock awards that are recognized upon vesting or settlement ⁽⁶⁾	(2.0)	(4.6)	2.6	(57) %
Argentina highly inflationary foreign currency adjustment ⁽⁷⁾	(0.1)	0.1	(0.2)	nm
Tax impact of adjustments ⁽⁸⁾	(14.7)	(8.3)	(6.4)	nm
Net income attributable to Equifax, adjusted for items listed above	$ 257.9	$ 245.1	$ 12.8	5 %
Diluted EPS attributable to Equifax, adjusted for the items listed above	$ 2.09	$ 1.98	$ 0.11	5 %
Weighted-average shares used in computing diluted EPS	123.3	123.5


nm – not meaningful

(1)	During the second quarter of 2022, we recorded acquisition-related amortization expense of certain acquired intangibles of $57.9 million ($47.2 million, net of tax). We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the significant cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. The $10.7 million of tax is comprised of $14.8 million of tax expense net of $4.1 million of a cash income tax benefit. During the second quarter of 2021, we recorded acquisition-related amortization expense of certain acquired intangibles of $40.1 million ($33.8 million, net of tax). The $6.3 million of tax is comprised of $10.3 million of tax expense net of $4.0 million of a cash income tax benefit. See the Notes to this reconciliation for additional detail.

(2)	During the second quarter of 2022, we recorded legal expenses related to the 2017 cybersecurity incident of $0.5 million ($0.4 million, net of tax). During the second quarter of 2021, we recorded legal expenses related to the 2017 cybersecurity incident of $1.1 million ($0.8 million, net of tax). See the Notes to this reconciliation for additional detail.

(3)	During the second quarter of 2022, we recorded an unrealized loss on the fair market value adjustment and gain on sale of equity investments of $6.7 million ($5.7 million, net of tax). During the second quarter of 2021, we recorded an unrealized loss on the fair market value adjustment of an equity investment of $5.6 million ($3.5 million, net of tax). The fair value adjustments were recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional details.

(4)	During the second quarter of 2022 and 2021 , we recorded a foreign currency gain on certain intercompany loans of $3.0 million and $2.7 million, respectively. The impact was recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional detail.

(5)	During the second quarter of 2022, we recorded $12.0 million ($9.1 million, net of tax) for acquisition costs other than acquisition-related amortization. During the second quarter of 2021, we recorded $0.9 million ($0.7 million, net of tax) for acquisition costs other than acquisition-related amortization. These costs primarily related to integration costs resulting from recent acquisitions and were recorded in operating income. See the Notes to this reconciliation for additional detail.

(6)	During the second quarter of 2022, we recorded a tax benefit of $2.0 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. During the second quarter of 2021, we recorded a tax benefit of $4.6 million related to the tax effects of deductions for stock compensation expense in excess of amounts recorded for compensation costs. See the Notes to this reconciliation for additional detail.

(7)	Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers in 2018. During the second quarter of 2022 and 2021, we recorded a foreign currency gain of $0.1 million and a foreign currency loss of $0.1 million, respectively, related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy. See the Notes to this reconciliation for additional detail.

(8)	During the second quarter of 2022, we recorded the tax impact of adjustments of $14.7 million comprised of (i) acquisition-related amortization expense of certain acquired intangibles of $10.7 million ($14.8 million of tax expense net of $4.1 million of cash income tax benefit), (ii) a tax adjustment of $0.1 million related to legal expenses for the 2017 cybersecurity incident, (iii) a tax adjustment of $1.0 million related to the loss on fair market value adjustment of equity investments and (iv) a tax adjustment of $2.9 million related to acquisition costs other than acquisition-related amortization.

	During the second quarter of 2021, we recorded the tax impact of adjustments of $8.3 million comprised of (i) acquisition-related amortization expense of certain acquired intangibles of $6.3 million ($10.3 million of tax expense net of $4.0 million of cash income tax benefit), (ii) a tax adjustment of $0.3 million for legal expenses related to the 2017 cybersecurity incident, (iii) a tax adjustment of $2.1 million related to the loss on fair market value adjustment of an equity investment and (iv) a tax adjustment of $0.2 million related to acquisition costs other than acquisition-related amortization.

B. Reconciliation of net income attributable to Equifax to adjusted EBITDA, defined as net income excluding income taxes, interest expense, net, depreciation and amortization expense, legal expenses related to the 2017 cybersecurity incident, fair value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment and presentation of adjusted EBITDA margin:

	Three Months Ended June 30,
(in millions)	2022	2021	$ Change	% Change
Revenue	$ 1,316.7	$ 1,234.8	$ 81.9	7 %

Net income attributable to Equifax	$ 200.6	$ 215.1	$ (14.5)	(7) %
Income taxes	63.4	61.2	2.2	4 %
Interest expense, net*	41.4	34.7	6.7	19 %
Depreciation and amortization	139.8	117.4	22.4	19 %
Legal expenses related to the 2017 cybersecurity incident ⁽¹⁾	0.5	(1.1)	1.6	(145) %
Fair market value adjustment and gain on sale of equity investments ⁽²⁾	6.7	5.6	1.1	20 %
Foreign currency impact of certain intercompany loans ⁽³⁾	(3.0)	(2.7)	(0.3)	11 %
Acquisition-related amounts other than acquisition amortization ⁽⁴⁾	12.0	0.9	11.1	1,233 %
Argentina highly inflationary foreign currency adjustment ⁽⁵⁾	(0.1)	0.1	(0.2)	(200) %
Adjusted EBITDA, excluding the items listed above	$ 461.3	$ 431.2	$ 30.1	7 %
Adjusted EBITDA margin	35.0 %	34.9 %


nm – not meaningful
*Excludes interest income of $0.2 million in 2022 and $0.2 million 2021.

(1)	During the second quarter of 2022, we recorded legal expenses related to the 2017 cybersecurity incident of $0.5 million ($0.4 million, net of tax). During the second quarter of 2021, we recorded legal expenses related to the 2017 cybersecurity incident of $1.1 million ($0.8 million, net of tax). See the Notes to this reconciliation for additional detail.

(2)	During the second quarter of 2022, we recorded an unrealized loss on the fair market value adjustment and gain on sale of equity investments of $6.7 million ($5.7 million, net of tax). During the second quarter of 2021, we recorded an unrealized loss on the fair market value adjustment of an equity investment of $5.6 million ($3.5 million, net of tax). The fair value adjustments were recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional details.

(3)	During the second quarter of 2022 and 2021, we recorded a foreign currency gain on certain intercompany loans of $3.0 million and $2.7 million, respectively. The impact was recorded to the Other income, net line item within the Consolidated Statements of Income. See the Notes to this reconciliation for additional detail.

(4)	During the second quarter of 2022, we recorded $12.0 million ($9.1 million, net of tax) for acquisition costs other than acquisition-related amortization. During the second quarter of 2021, we recorded $0.9 million ($0.7 million, net of tax) for acquisition costs other than acquisition-related amortization. These costs primarily related to integration costs resulting from recent acquisitions and were recorded in operating income. See the Notes to this reconciliation for additional detail.

(5)	Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers in 2018. During the second quarter of 2022 and second quarter of 2021, we recorded a foreign currency gain of $0.1 million and a foreign currency loss of $0.1 million, respectively, related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy. See the Notes to this reconciliation for additional detail.

C. Reconciliation of operating income by segment to Adjusted EBITDA, excluding depreciation and amortization expense, other income, net, noncontrolling interest, legal expenses related to the 2017 cybersecurity incident, fair value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment and presentation of adjusted EBITDA margin for each of the segments:

(In millions)	Three Months Ended June 30, 2022
		Workforce Solutions	U.S. Information Solutions	International	General Corporate Expense	Total
		Workforce Solutions	U.S. Information Solutions	International	General Corporate Expense	Total
Revenue		$ 609.2	$ 421.4	$ 286.1	—	$ 1,316.7
Operating income		281.2	112.0	32.4	(121.0)	304.6
Depreciation and amortization		40.1	46.3	34.0	19.4	139.8
Other income, net*		—	27.9	(30.9)	4.6	1.6
Noncontrolling interest		—	—	(0.8)	—	(0.8)
Adjustments ⁽¹⁾		4.1	(25.4)	35.9	1.5	16.1
Adjusted EBITDA		$ 325.4	$ 160.8	$ 70.6	$ (95.5)	$ 461.3
Operating margin		46.2 %	26.6 %	11.3 %	nm	23.1 %
Adjusted EBITDA margin		53.4 %	38.2 %	24.7 %	nm	35.0 %

nm – not meaningful

*Excludes interest income of $0.2 million in International.

(In millions)	Three Months Ended June 30, 2021
	Workforce Solutions	U.S. Information Solutions	International	General Corporate Expense	Total
	Workforce Solutions	U.S. Information Solutions	International	General Corporate Expense	Total
Revenue	$ 502.0	$ 455.7	$ 277.1	—	$ 1,234.8
Operating income	265.8	136.7	33.4	(129.9)	306.0
Depreciation and amortization	22.9	39.4	35.6	19.5	117.4
Other income, net*	—	0.8	0.5	4.5	5.8
Noncontrolling interest	—	—	(0.8)	—	(0.8)
Adjustments ⁽¹⁾	—	0.5	5.7	(3.4)	2.8
Adjusted EBITDA	$ 288.7	$ 177.4	$ 74.4	$ (109.3)	$ 431.2
Operating margin	53.0 %	30.0 %	12.1 %	nm	24.8 %
Adjusted EBITDA margin	57.5 %	38.9 %	26.8 %	nm	34.9 %


nm – not meaningful
*Excludes interest income of $0.2 million in International.

(1)	During the second quarter of 2022, we recorded pre-tax expenses of $0.5 million for legal expenses related to the 2017 cybersecurity incident, a $6.7 million unrealized loss on the fair value adjustment and gain on sale of equity investments, a $3.0 million foreign currency gain on certain intercompany loans and $12.0 million in acquisition costs other than acquisition-related amortization.

	During the second quarter of 2021, we recorded $1.1 million of legal fees related to the 2017 cybersecurity incident, a $5.6 million unrealized loss on the fair value adjustment of an equity investment, a $2.7 million foreign currency gain on certain intercompany loans, $0.9 million in acquisition costs other than acquisition-related amortization and a foreign currency loss of $0.1 million related to the impact of remeasuring the peso denominated monetary assets and liabilities as a result of Argentina being a highly inflationary economy.

Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures

Diluted EPS attributable to Equifax is adjusted for the following items:

Acquisition-related amortization expense – During the second quarter of 2022 and 2021, we recorded acquisition-related amortization expense of certain acquired intangibles of $57.9 million ($47.2 million, net of tax) and $40.1 million ($33.8 million, net of tax), respectively. We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the material cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. These financial measures are not prepared in conformity with GAAP. Management believes excluding the impact of amortization expense is useful because excluding acquisition-related amortization and other items that are not comparable allows investors to evaluate our performance for different periods on a more comparable basis. Certain acquired intangibles result in material cash income tax savings which are not reflected in earnings. Management believes that including a benefit to reflect the cash income tax savings is useful as it allows investors to better value Equifax. Management makes these adjustments to earnings when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital.

Legal expenses related to the 2017 cybersecurity incident – Legal expenses related to the 2017 cybersecurity incident include legal fees to respond to subsequent litigation and government investigations for both periods presented. During the second quarter of 2022 and 2021, we recorded legal expenses related to the 2017 cybersecurity incident of $0.5 million ($0.4 million, net of tax) and $1.1 million ($0.8 million, net of tax). Management believes excluding these charges is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. Management makes these adjustments to net income when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods. The legal expenses related to the 2017 cybersecurity incident do not include losses accrued for certain legal proceedings and government investigations related to the 2017 cybersecurity incident.

Fair market value adjustment and gain on sale of equity investments – During the second quarter of 2022, we recorded a $6.7 million ($5.7 million, net of tax) unrealized loss related to adjusting our investment in Brazil to fair value and gains related to the sale of two equity method investments. During the second quarter of 2021 we recorded a $5.6 million ($3.5 million, net of tax) unrealized loss related to adjusting our investment in Brazil to fair value. The investment in Brazil has a readily determinable fair value and is adjusted to fair value at the end of each reporting period, with unrealized gains or losses to be recorded within the Consolidated Statements of Income in Other income, net. Management believes excluding these charges from certain financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2022 and 2021, since the non-operating gains or losses are not comparable among the periods. This is consistent with how our management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.

Foreign currency impact of certain intercompany loans – During the second quarter of 2022 and 2021, we recorded a gain of $3.0 million and $2.7 million, respectively, related to foreign currency impact of certain intercompany loans. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.

Acquisition-related costs other than acquisition amortization – During the second quarter of 2022 and 2021, we recorded $12.0 million ($9.1 million, net of tax) and $0.9 million ($0.7 million, net of tax), respectively, for acquisition costs other than acquisition-related amortization. These costs primarily related to integration costs resulting from recent acquisitions and were recorded in operating income. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results, since a charge of such an amount is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting, and analyzing future periods.

Income tax effects of stock awards that are recognized upon vesting or settlement – During the second quarter of 2022, we recorded a tax benefit of $2.0 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. During the second quarter of 2021, we recorded a tax benefit of $4.6 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. Management believes excluding this tax effect from financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2022 and 2021 because these amounts are non-operating and relate to income tax benefits or deficiencies for stock awards recognized when tax amounts differ from recognized stock compensation cost. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.

Argentina highly inflationary foreign currency adjustment – Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers. We recorded a foreign currency gain of $0.1 million and foreign currency loss of $0.1 million during the second quarter of 2022 and second quarter of 2021, respectively, as a result of remeasuring the peso denominated monetary assets and liabilities due to Argentina being highly inflationary. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax’s historical performance and is useful when planning, forecasting and analyzing future periods.

Adjusted EBITDA and EBITDA margin – Management defines adjusted EBITDA as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items. Management believes the use of adjusted EBITDA and adjusted EBITDA margin allows investors to evaluate our performance for different periods on a more comparable basis.

View original content to download multimedia:https://www.prnewswire.com/news-releases/equifax-delivers-record-second-quarter-revenue-301590507.html

SOURCE Equifax Inc.

July 20, 2022 5:18 pm

CROWN HOLDINGS, INC. REPORTS SECOND QUARTER 2022 RESULTS

PR Newswire

YARDLEY, Pa.
, July 20, 2022 /PRNewswire/ — Crown Holdings, Inc. (NYSE: CCK) today announced its financial results for the second quarter ended June 30, 2022.

Highlights

Earnings per share of $2.43 versus $0.95 in 2021
Global beverage can volumes grew 4%
Self-made two-piece food cans up 43%
Global beverage can capacity expansion projects on schedule
Kiwiplan sale completed for $180 million, after tax gain of $102 million
Repurchased $600 million in Company shares year to date

Net sales in the second quarter were $3,510 million compared to $2,856 million in the second quarter of 2021 reflecting increased beverage can unit volumes and the pass through of higher raw material costs partially offset by unfavorable foreign currency translation of $104 million.

Income from operations was $466 million in the second quarter compared to $385 million in the second quarter of 2021. Segment income of $432 million in the second quarter improved by $37 million compared to the $395 million in the prior year second quarter primarily due to improved profitability in the North American tinplate and can-making equipment businesses, recovery of inflation incurred in prior years and increased beverage can unit volumes, partially offset by unfavorable foreign currency translation of $11 million.

Commenting on the quarter, Timothy J. Donahue, President and Chief Executive Officer, stated, “The Company performed well during the quarter despite accelerating European energy prices and currency translation headwinds. Global beverage can demand continues to be robust, with virtually every region operating at full capacity. Shipment growth during the second quarter was particularly strong in Mexico, the Middle East and Southeast Asia. In North America, demand currently exceeds our ability to supply, and we expect to remain in an over-sold position at least through the end of 2023.

“On April 1^st, the inflation recovery mechanisms built into our North American beverage can contracts commenced, allowing us to begin to recoup many of the cost increases experienced over the past year. As previously noted, the Company is in the process of negotiating pending beverage can contracts in Europe to include more comprehensive raw material and other inflationary pass-through provisions. Demand remains strong across most Transit Packaging businesses with overall performance level to the prior year when accounting for currency translation and the sale of the Kiwiplan business. The Transit business has initiated an overhead cost reduction program that will begin to yield benefits during the second half of 2022 and throughout 2023. Performance across the North American Tinplate and can-making equipment businesses reflects firm demand and the installation of new two-piece food can capacity to plants in Iowa and Pennsylvania during 2021. Additional capacity is expected to be commercialized later this year as we complete the construction of a third two-piece food can line at the Owatonna, Minnesota plant.”

To meet customers’ global beverage can requirements, the Company will commercialize significant new beverage can capacity through the end of 2023 with several projects in construction, including new multi-line greenfield plants in Martinsville, Virginia; Mesquite, Nevada; Uberaba, Brazil; and Peterborough, United Kingdom. The first line in Uberaba began commercial production in May. Additional production lines are being installed to existing plants in Phnom Penh, Cambodia; Agoncillo, Spain; and Parma, Italy.

Interest expense was $64 million in the second quarter of 2022 compared to $68 million in 2021 as lower outstanding debt balances were partially offset by higher borrowing costs.

Net income attributable to Crown Holdings in the second quarter was $295 million compared to $128 million in the second quarter of 2021. Reported diluted earnings per share were $2.43 in the second quarter of 2022 compared to $0.95 in 2021. Adjusted diluted earnings per share was $2.10 compared to $2.14 in 2021.

In the second quarter of 2022, the Company recorded a restructuring charge of $29 million related to an overhead cost reduction program in the Transit Packaging segment. The Company expects to realize annual savings of approximately $60 million, reducing headcount by approximately 600 employees. Additionally, the Company recorded a gain of $113 million ($102 million net of tax) in the second quarter of 2022 for the sale of the Transit Packaging segment’s Kiwiplan business.

Six Month Results
Net sales for the first six months of 2022 were $6,672 million compared to $5,420 million in the first six months of 2021, primarily due to increased sales unit volumes and the pass through of higher raw material costs which more than offset unfavorable foreign currency translation of $153 million.

Income from operations was $810 million in the first half of 2022 compared to $712 million in the first half of 2021. Segment income in the first half of 2022 was $815 million versus $764 million in the prior year period, primarily due to improved profitability in the North American tinplate and can-making equipment businesses and higher global beverage can sales unit volumes, offsetting unfavorable foreign currency translation of $19 million.

Interest expense was $118 million for the first six months of 2022 compared to $137 million in 2021 primarily due to lower outstanding debt balances.

Net income attributable to Crown Holdings in the first six months of 2022 was $511 million compared to $339 million in the first six months of 2021. Reported diluted earnings per share were $4.15 compared to $2.52 in 2021 and adjusted diluted earnings per share were $4.11 compared to $3.97 in 2021.

The following supplemental information is provided below: a reconciliation from net income and diluted earnings per share to adjusted net income and adjusted diluted earnings per share, the impact of foreign currency translation by segment and net income and diluted earnings per share at constant currencies.

Outlook
The Company currently expects third quarter adjusted earnings to be in the range of $1.75 to $1.85 per share, and full year adjusted earnings in the range of $7.65 to $7.85 per share. The full year guidance assumes approximately a $0.50 headwind due to the stronger U.S. dollar and higher energy cost in Europe.

Non-GAAP Measures
Segment income, adjusted free cash flow, adjusted net leverage ratio, adjusted net income, the adjusted effective tax rate, adjusted diluted earnings per share, adjusted EBITDA and amounts presented at constant currency exchange rates are not defined terms under U.S. generally accepted accounting principles (non-GAAP measures). Non-GAAP measures should not be considered in isolation or as a substitute for income from operations, net income, diluted earnings per share, effective tax rates, cash flow or leverage ratio data prepared in accordance with U.S. GAAP and may not be comparable to calculations of similarly titled measures by other companies.

The Company views segment income as the principal measure of the performance of its operations and adjusted free cash flow and adjusted net leverage ratio as the principal measure of its liquidity. The Company considers all of these measures in the allocation of resources. Adjusted free cash flow has certain limitations, however, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. Reconciliations of estimated adjusted diluted earnings per share for the third quarter and full year of 2022 to estimated diluted earnings per share on a GAAP basis are not provided in this release due to the unavailability of estimates of the following, the timing and magnitude of which the Company is unable to reliably forecast without unreasonable efforts, which are excluded from estimated adjusted diluted earnings per share and could have a significant impact on earnings per share on a GAAP basis: gains or losses on the sale of businesses or other assets, restructuring and other costs, asset impairment charges, asbestos-related charges, losses from early extinguishment of debt, pension settlement and curtailment charges, the tax and noncontrolling interest impact of the items above, and the impact of tax law changes or other tax matters. The Company believes that adjusted net income, the adjusted effective tax rate and adjusted diluted earnings per share are useful in evaluating the Company’s operations as these measures are adjusted for items that affect comparability between periods. The Company believes that adjusted free cash flow and adjusted net leverage ratio provide meaningful measures of liquidity and a useful basis for assessing the Company’s ability to fund its activities, including the financing of acquisitions, debt repayments, share repurchases or dividends. Segment income, adjusted free cash flow, adjusted net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA are derived from the Company’s Consolidated Statements of Operations and Cash Flows and Consolidated Balance Sheets, as applicable, and reconciliations to segment income, adjusted free cash flow, net leverage ratio, the adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA can be found within this release.

Conference Call
The Company will hold a conference call tomorrow, July 21, 2022 at 9:00 a.m. (EDT) to discuss this news release. Forward-looking and other material information may be discussed on the conference call. The dial-in numbers for the conference call are 630-395-0194 or toll-free 888-324-8108 and the access password is “packaging.” A live webcast of the call will be made available to the public on the internet at the Company’s website, www.crowncork.com. A replay of the conference call will be available for a one-week period ending at midnight on July 28. The telephone numbers for the replay are 203-369-1213 or toll free 866-452-2107.

Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all other information in this press release consists of forward-looking statements. These forward-looking statements involve a number of risks, uncertainties and other factors, including the future impact of the coronavirus pandemic on the Company’s operations, including the Company’s ability to continue to operate its plants, distribute its products, and maintain its supply chain; the impact of the coronavirus pandemic on demand for the Company’s products; the future impact of currency translation; the continuation of performance and market trends in 2022, including consumer preference for beverage cans and increasing global beverage can demand; future demand for food cans; and the Company’s ability to successfully complete its previously announced capacity expansion projects and begin production within expected timelines, including any delays related to the pandemic, that may cause actual results to be materially different from those expressed or implied in the forward-looking statements. Important factors that could cause the statements made in this press release or the actual results of operations or financial condition of the Company to differ are discussed under the caption “Forward Looking Statements” in the Company’s Form 10-K Annual Report for the year ended December 31, 2021 and in subsequent filings made prior to or after the date hereof. The Company does not intend to review or revise any particular forward-looking statement in light of future events.

Crown Holdings, Inc., through its subsidiaries, is a leading global supplier of rigid packaging products to consumer marketing companies, as well as transit and protective packaging products, equipment and services to a broad range of end markets. World headquarters are located in Yardley, Pennsylvania.

For more information, contact:
Kevin C. Clothier, Senior Vice President and Chief Financial Officer, (215) 698-5281
Thomas T. Fischer, Vice President, Investor Relations and Corporate Affairs, (215) 552-3720

Unaudited Consolidated Statements of Operations, Balance Sheets, Statements of Cash Flows, Segment Information and Supplemental Data follow.

Consolidated Statements of Operations (Unaudited) (in millions, except share and per share data)

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Net sales	$3,510	$2,856	$6,672	$5,420
Cost of products sold	2,861	2,244	5,408	4,226
Depreciation and amortization	116	111	231	223
Selling and administrative expense	140	147	297	290
Restructuring and other	(73)	(31)	(74)	(31)
Income from operations ⁽¹⁾	466	385	810	712
Other pension and postretirement	(4)	(2)	(8)	(3)
Foreign exchange	7	1	(3)	(1)
Earnings before interest and taxes	463	386	821	716
Interest expense	64	68	118	137
Interest income	(3)	(1)	(6)	(3)
Income from continuing operations before income taxes	402	319	709	582
Provision for income taxes	85	146	163	211
Equity earnings	12	3	29	5
Income from continuing operations	329	176	575	376
Income (loss) from discontinued operations		(3)		42
Net income	329	173	575	418
Net income from continuing operations attributable to noncontrolling interests	34	45	64	78
Net income from discontinued operations attributable to noncontrolling interests				1
Net income attributable to Crown Holdings	$295	$128	$511	$339


⁽¹⁾	Reconciliation from income from operations to segment income follows.

Earnings Per Share

	Three Months Ended June 30,			Six Months Ended June 30,
	2022		2021	2022	2021
Net income attributable to Crown Holdings
From continuing operations	$295	$131		$511	$298
From discontinued operations ⁽¹⁾		(3)			41
Total	$295	$128		$511	$339
Earnings per share attributable to Crown Holdings:
Basic earnings per share from continuing operations	$2.44	$0.98		$4.18	$2.23
Basic earnings per share from discontinued operations		(0.02)			0.31
Basic earnings per common share	$2.44	$0.96		$4.18	$2.54

Diluted earnings per common share from continuing operations	$2.43	$0.97		$4.15	$2.22
Diluted earnings per common share from discontinued operations		(0.02)			0.30
Diluted earnings per common share	$2.43	$0.95		$4.15	$2.52

Weighted average common shares outstanding:
Basic	120,980,821	133,146,361		122,305,457	133,379,911
Diluted	121,622,534	134,179,586		122,991,134	134,400,624
Actual common shares outstanding at quarter end	121,166,297	132,157,477		121,166,297	132,157,477

⁽¹⁾	Discontinued operations does not include any allocation of interest expense or indirect costs.

Consolidated Supplemental Financial Data (Unaudited)
(in millions)



Reconciliation from Income from Operations to Segment Income
The Company views segment income, as defined below, as a principal measure of performance of its operations and for the allocation of resources. Segment income is defined by the Company as income from operations adjusted to exclude intangibles amortization charges and provisions for restructuring and other.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Income from operations	$	466	$	385	$	810	$	712
Intangibles amortization		39		41		79		83
Restructuring and other		(73)		(31)		(74)		(31)
Segment income	$	432	$	395	$	815	$	764

Segment Information

Net Sales	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Americas Beverage	$	1,378	$	1,096	$	2,604	$	2,089
European Beverage		599		479		1,109		868
Asia Pacific		432		330		845		661
Transit Packaging		691		637		1,348		1,194
Other ⁽¹⁾		410		314		766		608
Total net sales	$	3,510	$	2,856	$	6,672	$	5,420


Segment Income

Americas Beverage	$	216	$	197	$	380	$	385
European Beverage		56		78		109		140
Asia Pacific		55		47		108		99
Transit Packaging		74		82		135		152
Other ⁽¹⁾		62		36		156		72
Corporate and other unallocated items		(31)		(45)		(73)		(84)
Total segment income	$	432	$	395	$	815	$	764


⁽¹⁾	Includes the Company’s food can, aerosol can and closures businesses in North America, and beverage tooling and equipment operations in the U.S. and United Kingdom.

Consolidated Supplemental Data (Unaudited)
(in millions, except per share data)


Reconciliation from Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share

The following table reconciles reported net income and diluted earnings per share attributable to the Company to adjusted net income and adjusted diluted earnings per share, as used elsewhere in this release. Some or all of each reconciling item is reported within discontinued operations in the Consolidated Statement of Operations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income/diluted earnings per share attributable to Crown Holdings, as reported	$295	$2.43	$128	$0.95	$511	$4.15	$339	$2.52
Intangibles amortization ⁽¹⁾	39	0.32	41	0.31	79	0.64	88	0.65
Restructuring and other ⁽²⁾	(73)	(0.60)	(25)	(0.19)	(74)	(0.60)	(23)	(0.17)
Loss from discontinued operations ⁽³⁾			70	0.52			70	0.52
Income taxes ⁽⁴⁾	(8)	(0.07)	63	0.47	(15)	(0.12)	49	0.37
Equity earnings ⁽⁵⁾	2	0.02			4	0.04
Noncontrolling interests ⁽⁶⁾			10	0.08			10	0.08
Adjusted net income/diluted earnings per share	$255	$2.10	$287	$2.14	$505	$4.11	$533	$3.97

Effective tax rate as reported ⁽⁷⁾	21.1 %		49.1 %		23.0 %		36.7 %
Adjusted effective tax rate ⁽⁷⁾	25.3 %		24.1 %		24.9 %		24.2 %

Adjusted net income, adjusted diluted earnings per share and the adjusted effective tax rate are non-GAAP measures and are not meant to be considered in isolation or as a substitute for net income, diluted earnings per share and effective tax rates determined in accordance with U.S. generally accepted accounting principles. The Company believes these non- GAAP measures provide useful information to evaluate the performance of the Company’s ongoing business.

(1)	In the second quarter and first six months of 2022, the Company recorded charges of $39 million ($30 million net of tax) and $79 million ($61 million net of tax) for intangibles amortization arising from prior acquisitions. In the second quarter and first six months of 2021, the Company recorded charges of $41 million ($30 million net of tax) and $88 million ($66 million net of tax) for intangibles amortization.

(2)	In the second quarter and first six months of 2022, the Company recorded net restructuring and other gains of $73 million ($72 million net of tax) and $74 million ($74 million net of tax). In the second quarter and first six months of 2021, the Company recorded net restructuring and other gains of $25 million ($17 million net of tax) and $23 million ($15 million net of tax).

(3)	In the second quarter of 2021, the Company recorded an after-tax charge of $70 million (primarily due to cumulative translation adjustments of approximately $600 million) in connection with the agreement to sell its European Tinplate operations.

(4)	The Company recorded income tax benefits of $8 million and $15 million in the second quarter and first six months of 2022 and income tax charges of $63 and $49 in the second quarter and first six months of 2021 related to tax matters including changes in tax laws, tax settlements, valuation allowance adjustments and for the items described above.

(5)	In the second quarter and first six months of 2022, the Company recorded its proportional share of intangible amortization and inventory step-up charges recorded by its equity method affiliate, Eviosys. These charges were recorded net of tax by the Company in the line Equity earnings.

(6)	In the second quarter of 2021, the Company recorded noncontrolling interest charges of $10 million related to the items described above.

(7)	The reported and adjusted effective tax rates include income from discontinued operations, which is reported net of tax in the statement of operations. Income tax effects on adjusted net income were calculated using the applicable tax rates of the underlying jurisdiction.

Impact of Foreign Currency Translation by Segment – Favorable/(Unfavorable)⁽¹⁾

	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	Net Sales	Segment Income		Net Sales	Segment Income
Americas Beverage				$1
European Beverage	($51)	($3)		(71)	($6)
Asia Pacific	(10)	(1)		(17)	(3)
Transit Packaging	(38)	(5)		(60)	(8)
Corporate and other	(5)	(2)		(6)	(2)
	($104)	($11)		($153)	($19)

Net Income and Diluted Earnings Per Share Attributable to Crown Holdings at Constant Currency

The following table presents net income attributable to Crown Holdings and diluted earnings per share using constant foreign currency exchange rates for translation. We present constant currency information to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations.


	Three Months Ended June 30,				Six Months Ended June 30,
		As Reported 2022	2022 at 2021 Rates ⁽¹⁾	As Reported 2021	As Reported 2022	2022 at 2021 Rates ⁽¹⁾	As Reported 2021
Net Income		$295	$307	$128	$511	$528	$339
Adjusted Net Income ⁽²⁾		$255	$264	$287	$505	$518	$533

Diluted earnings per share		$2.43	$2.52	$0.95	$4.15	$4.29	$2.52
Adjusted diluted earnings per share ⁽³⁾		$2.10	$2.17	$2.14	$4.11	$4.21	$3.97

⁽¹⁾	The impact of foreign currency translation represents the difference between actual current year U.S. dollar results and pro forma amounts assuming constant foreign currency exchange rates for translation in both periods. In order to compute the difference, the Company compares actual U.S. dollar results to an amount calculated by multiplying or dividing, as appropriate, the current U.S. dollar results by current year average foreign exchange rates and then multiplying or dividing, as appropriate, those amounts by the applicable prior year average foreign exchange rates.

⁽²⁾	2021 includes $71 and $121 of Adjusted Net Income for the European Tinplate business that was sold in August of 2021 for the three and six months ended, respectively.

⁽³⁾	2021 includes $0.53 and $0.90 of Diluted earnings per share for the European Tinplate business that was sold in August of 2021 for the three and six months ended, respectively.

Consolidated Balance Sheets (Condensed & Unaudited) (in millions)
June 30,	2022			2021
Assets
Current assets
Cash and cash equivalents		$	438		$	566
Receivables, net			2,151			1,766
Inventories			2,220			1,492
Prepaid expenses and other current assets			298			295
Current assets held for sale			17			2,986
Total current assets			5,124			7,105

Goodwill and intangible assets, net			4,349			4,770
Property, plant and equipment, net			4,133			3,783
Other non-current assets			816			1,037
Total assets		$	14,422		$	16,695


Liabilities and equity
Current liabilities
Short-term debt		$	76		$	76
Current maturities of long-term debt			1,088			94
Accounts payable and accrued liabilities			4,215			3,224
Current liabilities held for sale						1,120
Total current liabilities			5,379			4,514

Long-term debt, excluding current maturities			5,466			7,879
Other non-current liabilities			1,387			1,578

Noncontrolling interests			451			462
Crown Holdings shareholders’ equity			1,739			2,262
Total equity			2,190			2,724
Total liabilities and equity		$	14,422		$	16,695

Consolidated Statements of Cash Flows (Condensed & Unaudited) (in millions)
Six months ended June 30,	2022		2021
Cash flows from operating activities
Net income	$	575	$	418
Depreciation and amortization		231		239
Restructuring and other		(74)		(23)
Loss from disposal of discontinued operations				70
Pension expense		16		25
Pension contributions		33		(11)
Stock-based compensation		16		17
Working capital changes and other		(601)		(566)

Net cash provided by operating activities ⁽¹⁾		196		169

Cash flows from investing activities
Capital expenditures		(310)		(325)
Acquisitions and divestitures		151
Other		29		14

Net cash used for investing activities		(130)		(311)

Cash flows from financing activities
Net change in debt		650		(41)
Debt issue costs		(7)
Dividends paid to shareholders		(53)		(53)
Common stock repurchased		(600)		(297)
Dividends paid to noncontrolling interests		(24)		(24)
Other, net		(4)		(8)

Net cash used for financing activities		(38)		(423)

Effect of exchange rate changes on cash and cash equivalents		(95)		(9)

Net change in cash and cash equivalents		(67)		(574)
Cash and cash equivalents at January 1		593		1,238

Cash and cash equivalents at June 30 ⁽²⁾	$	526	$	664


	(1)	Adjusted free cash flow is defined by the Company as net cash from operating activities less capital expenditures and certain other items. A reconciliation of net cash from operating activities to adjusted free cash flow for the three and six months ended June 30, 2022 and 2021 follows.

	(2)	Cash and cash equivalents include $88 and $98 of restricted cash at June 30, 2022 and 2021.


	Three Months Ended June 30,			Six Months Ended June 30,
	2022		2021	2022	2021
Net cash from operating activities	$497		$554	$196	$169
U.K. pension settlement ⁽³⁾	(17)			(41)
Interest included in investing activities ⁽⁴⁾				13	13
Capital expenditures	(193)	(190)		(310)	(325)
Adjusted free cash flow	$287		$364	$(142)	$(143)



	(3)	In September 2021, the Company made a contribution of $271 million to its U.K. defined pension plan in advance of a full settlement of the plan’s obligations in November 2021. The Company expects $175 million of the contribution to be repaid as the plan sells its remaining illiquid assets. The Company was reimbursed $55 million in the fourth quarter of 2021 and $41 million during the first six months of 2022.

	(4)	Interest benefit of cross currency swaps included in investing activities.

Consolidated Supplemental Data (Unaudited) (in millions)


Reconciliation of Adjusted EBITDA and Net Leverage Ratio

	June YTD 2022	June YTD 2021	Full Year 2021	Twelve Months Ended June 30, 2022

Income from operations	$810	$712	$1,363	$1,461
Add:
Intangibles amortization	79	83	165	161
Restructuring and other	(74)	(31)	(28)	(71)
Segment income	815	764	1,500	1,551
Depreciation	152	140	282	294
Adjusted EBITDA	$967	$904	$1,782	$1,845

Total debt			$6,262	$6,630
Less cash			531	438
Net debt			$5,731	$6,192

Adjusted net leverage ratio			3.2x	3.4x

View original content:https://www.prnewswire.com/news-releases/crown-holdings-inc-reports-second-quarter-2022-results-301590506.html

SOURCE Crown Holdings, Inc.

July 20, 2022 5:18 pm

Supermicro Provides Fourth Quarter Fiscal Year 2022 Business Update

Supermicro Provides Fourth Quarter Fiscal Year 2022 Business Update

Expects to Exceed Prior Financial Guidance

SAN JOSE, Calif.–(BUSINESS WIRE)–Super Micro Computer, Inc. (Nasdaq: SMCI), a global leader in high-performance total IT solutions including AI, IoT, server, storage, software, and green computing solutions, today announced preliminary financial information for its fourth quarter of fiscal year 2022 ended June 30, 2022.

Due to customer design wins ramping and our total IT solution value, Super Micro anticipates the following results:

	Expected Range	Prior Guidance
Net Sales	$1.58B to $1.63B	$1.4B to $1.48B
GAAP diluted net income per common share	$2.20 to $2.30	$1.45 to $1.64
Non-GAAP diluted net income per common share	$2.30 to $2.40	$1.51 to $1.69

This unaudited financial information is based on preliminary results and management’s estimates and is inherently uncertain and subject to revision in connection with the Company’s financial closing procedures and finalization of the Company’s financial statements for its fourth quarter of fiscal year 2022. Actual results for the fourth quarter of fiscal year 2022 may differ materially from these preliminary unaudited financial results.

Conference Call and Webcast Information

Supermicro will release fourth quarter and full fiscal year 2022 financial results in a press release on Tuesday, August 9, 2022, after the close of regular trading. The Company will hold a phone conference to discuss these results with investors and financial analysts beginning at 2:00 p.m. Pacific Time (PDT). Those wishing to access the live webcast may use the following link:

https://events.q4inc.com/attendee/634441043

A replay of the webcast will be available shortly after the call on the Investor Relations section of the Company’s website (https://ir.supermicro.com) and will remain accessible for one year.

The conference call can be accessed by registering online at:

https://conferencingportals.com/event/fIceWmPv

After registering, a confirmation will be sent through email, including dial-in details and unique conference call codes for entry. Registration is open during the live call, but to ensure connectivity for the full call, it is recommended that participants register a day in advance and dial-in for the call at least 10 minutes before the start of the call.

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this press release that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, the fourth quarter of fiscal year 2022 preliminary financial information, including both net sales and GAAP and non-GAAP diluted net income per common share. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated, including completion of the Company’s financial closing procedures and finalization of the Company’s unaudited financial statements for its fiscal fourth quarter of 2022. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in such filings, particularly in our Annual Report on Form 10-K for our fiscal year ended June 30, 2021.

Use of Non-GAAP Financial Measures

Non-GAAP diluted net income per common share discussed in this press release adds back stock-based compensation expenses, and other expenses, which are all adjusted for the related tax effects of the applicable items. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company’s financial and operational performance. However, the non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, the reconciliation between the Company’s GAAP diluted net income per common share and non-GAAP diluted net income per common share for the fourth quarter of fiscal 2022 is stock-based compensation of $8.9 million and other expenses of $0.2 million, less related tax effect of $2.6 million. The Company’s projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 17.4% and 18.0%, respectively, and a fully diluted share count of 54.3 million shares for GAAP and fully diluted share count of 55.6 million shares for non-GAAP.

About Super Micro Computer, Inc.

Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in San Jose, California, Supermicro is committed to delivering first to market innovation for Enterprise, Cloud, AI and 5G Telco/Edge IT Infrastructure. We are transforming into a Total IT Solutions provider with server, AI, storage, IoT and switch systems, software and services while continuing to deliver advanced high-volume motherboard, power, and chassis products. The products are designed and manufactured in-house (in US, Taiwan, and Netherlands) leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power and cooling solutions (air conditioned, free air cooling or liquid cooling).

Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220720006024/en/

Investor Relations Contact

Michael Staiger

email: [email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Networks Internet Hardware Data Management IOT (Internet of Things) Apps/Applications Technology Environment 5G Green Technology Engineering Telecommunications Manufacturing

MEDIA:

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July 20, 2022 5:18 pm

CBNK Announces Record Quarterly Earnings

Diluted EPS of $0.80, ROAA of 2.23%, and ROAE of 22.16% for 2Q 2022

ROCKVILLE, Md., July 20, 2022 (GLOBE NEWSWIRE) — Capital Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the “Bank”), today reported net income of $11.5 million, or $0.80 per diluted share, for the second quarter of 2022 representing 19.3% growth when compared to net income of $9.6 million, or $0.68 per diluted share, for the second quarter of 2021. Net portfolio loans increased $81.4 million, or 21.4 percent annualized, during the second quarter.

“Loan growth, stable deposit costs, OpenSky^® performance and lower than anticipated expenses drove another quarter of outstanding performance,” said Ed Barry, CEO of the Company and the Bank. “Credit quality in our commercial and consumer loan portfolios remains stable with an anticipated increase in loss provisions in our OpenSky^® loan portfolio. Continued aggressive marketing by fintech and credit card companies offering unsecured subprime credit cards has resulted in account growth headwinds in OpenSky^®, but we are confident that our approach to serving this market and our investments to scale our platform will continue to deliver substantial profits in this business. Our multi-year effort to transform our deposit franchise continues to show results and will help drive results in the rising rate environment.”

“We are pleased with how well Capital Bank’s diversified business model continues to perform despite changes in macroeconomic conditions” said Steven Schwartz, Chairman of the Board of the Company. “Our extremely dedicated management team and fully engaged Board remain focused on increasing shareholder value by improving our unique mix of products with the adoption of state-of-the-art technology to deliver coveted financial solutions to our customers.”

Second Quarter 2022 Highlights

Capital Bancorp, Inc.

Record Earnings – Continued strong performance by the Commercial Bank and OpenSky^® contributed to the second quarter’s record results. Quarterly net income increased to $11.5 million from $9.6 million in the second quarter of 2021 due mainly to increased net interest income due to loan growth and an increase in rates. The increase in net interest income was offset by an increase in the loan loss provision and a decrease in noninterest income. Earnings were $0.80 per diluted share for the three months ended June 30, 2022 and $0.68 for the three months ended June 30, 2021.
Continued Outstanding Performance Ratios – Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 2.23% and 22.16%, respectively, for the three months ended June 30, 2022, compared to 1.90% and 22.36%, respectively, for the three months ended June 30, 2021.
Expanded Net Interest Margin – Net interest margin was 7.06% for the three months ended June 30, 2022, compared to 5.47% for the same three month period last year. The margin expansion was primarily driven by increases in the yield on portfolio loans including credit card loans to card holders whose accounts have been open for more than a year as origination costs on these accounts are amortized in the first year and no longer offset annual renewal fees. Rate increases in our adjustable rate portfolios also contributed to the margin expansion.
Robust Capital Positions – As of June 30, 2022, the Company reported a common equity tier 1 capital ratio of 15.55% and an allowance for loan losses to total portfolio loans ratio of 1.63%, or 1.64% excluding SBA-PPP loans. Tangible book value per common share grew 15.0 percent to $14.80 at June 30, 2022 when compared to the same quarter in 2021.

Commercial Bank

Strong Portfolio Loan Growth – Portfolio loans, excluding credit cards, increased by $199.2 million, or 15.6 percent, to $1.5 billion at June 30, 2022 compared to June 30, 2021. This growth was mainly due to a 29.0 percent increase in commercial real estate loans of $136.8 million, of which $92.9 million was owner occupied. Also contributing to the growth was a 22.0 percent increase in commercial and industrial loans of $34.9 million and an 7.8 percent increase in construction real estate loans of $17.4 million when comparing the quarter ended June 30, 2022 to the quarter ended June 30, 2021.
Improving Credit Metrics – Non-performing assets (“NPAs”) decreased to 0.34% of total assets at June 30, 2022 compared to 0.54% at June 30, 2021 with the disposition of $3.2 million in other real estate owned and a reduction in nonaccrual loans of $1.0 million as management continues to focus on reducing non-performing assets. The provision for loan losses increased $1.3 million compared to the second quarter of 2021. The current provision for the three months ended June 30, 2022 was $2.0 million and was related to the growth in the unsecured credit card loans and secured customer attrition which tends to result in an increase in charge offs of certain fees in excess of the secured portion of the loan.
SBA-PPP Loans
– SBA-PPP loans, net of $301 thousand in unearned fees, totaled $15.9 million at June 30, 2022 which was comprised of $1.4 million in 2020 originations and $14.7 million of 2021 originations. As of June 30, 2022, the Company has obtained forgiveness for $359.5 million of SBA-PPP loans.

Capital Bank Home Loans

Slowing Mortgage Originations – Origination volumes declined 68.2 percent, to $84.4 million, in the second quarter of 2022, when compared to $265.5 million in the second quarter of 2021. The continued steepening of the yield curve in the second quarter of 2022 slowed originations from the year earlier when low interest rates fueled refinance volumes.
Purchase Volume – While purchase volumes increased to 85.2 percent of total originations for the second quarter of 2022, up from 50.6 percent during the second quarter of 2021, total purchase originations declined by 46.7% during the same period.

OpenSky

^®

Strong Revenue Growth – OpenSky^® revenue grew by 22.1 percent to $23.0 million for the quarter ended June 30, 2022 from the same period in 2021 due to an increase in average credit card loan balances as well as an increase in the yield on those credit card loans. Normal customer attrition and aggressive marketing by fintech and credit card companies offering unsecured subprime credit cards has resulted in the continued decline in the total number of OpenSky^® accounts.
Continued Growth in OpenSky
^®
Loans – OpenSky^®loan balances, net of reserves, increased by $20.8 million to $142.2 million compared to $121.4 million in the second quarter of 2021. Corresponding deposit balances decreased 11.4 percent or $27.6 million from $241.7 million at June 30, 2021 to $214.1 million at June 30, 2022.

2022 Highlights

Capital Bancorp

Diversified Businesses Drive Net Income – Net income for the six months ended June 30, 2022 increased 16.6 percent to $21.7 million, or $1.52 per diluted share, from $18.6 million, or $1.32 per diluted share for the six months ended June 30, 2021. Continued strong operating results demonstrate the advantages of the Company’s diversified business lines that are, in certain respects, non-correlated across economic cycles.
Top Tier Performance Ratios – Improved earnings supported ROAA and ROAE of 2.12% and 21.25%, respectively, for the six months ended June 30, 2022 compared to 1.88% and 22.33%, respectively, for the six months ended June 30, 2021.
Expanded Net Interest Margin – For the six months ended June 30, 2022, net interest margin increased by 161 basis points to 6.93% compared to 5.32% for the six months ended June 30, 2021. The margin improvement was primarily driven by increases in the yield on portfolio loans including credit card loans to card holders whose accounts have been open for more than a year as origination costs on these accounts are amortized in the first year and no longer offset annual renewal fees.. Rate increases in our adjustable rate portfolios also contributed to the margin expansion.
Stable Efficiency Ratio – The efficiency ratio decreased to 63.52% for the six months ended June 30, 2022 compared to 66.73% for the same six month period in the prior year.
Strong Balance Sheet Growth – Total assets increased $99.5 million, or 4.8 percent during the six months ended June 30, 2022 and was primarily funded by a $91.8 million increase in deposits.The growth of earning assets on the balance sheet consisted primarily of increases in cash equivalents of $67.5 million, portfolio loans net of deferred fees of $83.7 million which includes OpenSky^® net loan growth of $15.8 million, and investment securities available for sale of $42.1 million. Asset growth was primarily offset by a decrease of $92.4 million in SBA-PPP loans.

Commercial Bank

Strong Portfolio Loan Growth – During the first six months of 2022, portfolio loans, excluding credit card loans, increased by $84.2 million, or 12.2 percent on an annualized basis, to $1.5 billion at June 30, 2022 compared to the first six months of 2021 when portfolio loans, excluding credit card loans, increased by $61.0 million to $1.3 billion at June 30, 2021. The 2022 growth was primarily due to a $52.3 million increase in commercial real estate loans, of which $47.7 million was owner occupied, and a $28.6 million increase in residential real estate.
Improved Deposit Franchise and Lower Cost of Funding – While total deposits at June 30, 2022 decreased in comparison to total deposits at June 30, 2021, the composition of the deposit portfolio has continued to shift into a more favorable source of funding. Noninterest bearing deposits continue to grow and represented 44.6 percent of total deposits at June 30, 2022. The cost of interest bearing liabilities declined to 0.43% from 0.73% for the same period in the prior year, due mainly to the run-off of higher cost time deposits which have been replaced with lower cost money market accounts.
COVID-19 Related Deferrals – At June 30, 2022, outstanding loans deferred due to COVID-19 amounted to $2.3 million, a decrease of 86.9 percent from $11.9 million at June 30, 2021.

Capital Bank Home Loans

Gain on Sale – The year-to-date gain on sale of mortgage loans decreased to $5.0 million at June 30, 2022 from $19.8 million at June 30, 2021 due mainly to the $424.4 million, or 68.5 percent, decline in mortgage originations. The steepening yield curve in 2022 has slowed originations from the year earlier period when low interest rates fueled refinance volumes. Gain on sale margins, down slightly from 2.91% for the six months ended June 30, 2021, remained strong at 2.48% for the six months ended June 30, 2022. Historically-low housing inventory, shortages in new home building materials, and fluctuating interest rates are likely to continue suppressing origination volumes into 2022.

OpenSky

^®

Balance Growth Offsets Account Attrition – Gross credit card balances increased by $20.7 million, or 16.7 percent, at June 30, 2022 when compared to June 30, 2021. The growth in credit card loan balances coupled with an increase in interest rates accounted for the $12.4 million growth in interest income when comparing the six months ended June 30, 2022 to the same period in 2021. A decrease in overall credit card accounts led to a reduction in credit card fees, which decreased by 11.1 percent to $12.1 million compared to $13.7 million for the same six month period last year.


COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited

	Quarter Ended								Six months ended
	June 30,								June 30,
(dollars in thousands except per share data)		2022			2021		% Change			2022			2021		% Change
Earnings Summary
Interest income	$	36,556		$	29,289		24.8	%	$	70,957		$	55,927		26.9	%
Interest expense		1,156			1,769		(34.7	)%		2,226			3,964		(43.8	)%
Net interest income		35,400			27,520		28.6	%		68,731			51,963		32.3	%
Provision for loan losses		2,035			781		160.6	%		2,987			1,284		132.6	%
Noninterest income		8,362			13,471		(37.9	)%		16,650			27,421		(39.3	)%
Noninterest expense		27,130			27,205		(0.3	)%		54,232			52,972		2.4	%
Income before income taxes		14,597			13,005		12.2	%		28,162			25,128		12.1	%
Income tax expense		3,089			3,357		(8.0	)%		6,443			6,499		(0.9	)%
Net income	$	11,508		$	9,648		19.3	%	$	21,719		$	18,629		16.6	%

Pre-tax pre-provision net revenue (“PPNR”) ⁽²⁾	$	16,632		$	13,786		20.6	%	$	31,149		$	26,412		17.9	%
Weighted average common shares – Basic		14,007			13,766		1.8	%		13,998			13,762		1.7	%
Weighted average common shares – Diluted		14,313			14,172		1.0	%		14,323			14,070		1.8	%
Earnings per share – Basic	$	0.82		$	0.70		17.1	%	$	1.55		$	1.35		14.8	%
Earnings per share – Diluted	$	0.80		$	0.68		17.6	%	$	1.52		$	1.32		15.2	%
Return on average assets ⁽¹⁾		2.23	%		1.90	%	17.4	%		2.12	%		1.88	%	12.8	%
Return on average assets, excluding impact of SBA-PPP loans^{(1) (2)}		2.04	%		1.65	%	23.6	%		1.86	%		1.60	%	16.3	%
Return on average equity		22.16	%		22.36	%	(0.9	)%		21.25	%		22.33	%	(4.8	)%

	Quarter Ended				2Q22 vs. 2Q21		Quarter Ended
	June 30,				2Q22 vs. 2Q21		March 31,		December 31,		September 30,
(in thousands except per share data)		2022		2021	% Change			2022		2021		2021
Balance Sheet Highlights
Assets	$	2,154,846	$	2,151,850	0.1	%	$	2,122,453	$	2,055,300	$	2,169,556
Investment securities available for sale		226,509		160,515	41.1	%		172,712		184,455		189,165
Mortgage loans held for sale		11,708		47,935	(75.6	)%		17,036		15,989		36,005
SBA-PPP loans, net of fees		15,864		202,763	(92.2	)%		51,085		108,285		137,178
Portfolio loans receivable ⁽³⁾		1,607,677		1,392,471	15.5	%		1,526,256		1,523,982		1,445,126
Allowance for loan losses		26,419		24,079	9.7	%		25,252		25,181		24,753
Deposits		1,888,920		1,917,419	(1.5	)%		1,862,722		1,797,137		1,921,238
FHLB borrowings		22,000		22,000	—	%		22,000		22,000		22,000
Other borrowed funds		12,062		12,062	—	%		12,062		12,062		12,062
Total stockholders’ equity		207,316		177,204	17.0	%		201,492		197,903		189,080
Tangible common equity⁽²⁾		207,316		177,204	17.0	%		201,492		197,903		189,080

Common shares outstanding		14,010		13,772	1.7	%		14,001		13,962		13,802
Tangible book value per share⁽²⁾	$	14.80	$	12.87	15.0	%	$	14.39	$	14.17	$	13.70

______________
⁽¹⁾	Annualized for the quarterly periods
⁽²⁾	Refer to Appendix for reconciliation of non-GAAP measures.
⁽³⁾	Loans are reflected net of deferred fees and costs.

Operating Results – Comparison of Three Months Ended June 30, 2022 and 2021

For the three months ended June 30, 2022, net interest income increased $7.9 million, or 28.6 percent, to $35.4 million from the same period in 2021, primarily due to an increase in interest earned on the credit card loan portfolio. The net interest margin increased 159 basis points to 7.06% for the three months ended June 30, 2022 from the same period in 2021 due in large part to the acceleration of the deferred fees associated with the SBA-PPP loan forgiveness as well as the recognition of deferred fees on the credit card loans. Net interest margin, excluding credit card and SBA-PPP loans, was 3.86% for the second quarter of 2022 compared to 3.55% for the same period in 2021. For the three months ended June 30, 2022, average interest earning assets decreased $4.9 million, or 0.2 percent, to $2.0 billion as compared to the same period in 2021, and the average yield on interest earning assets increased 147 basis points. Compared to the same period in the prior year, average interest bearing liabilities decreased $60.0 million, or 5.5 percent, while the average cost of interest-bearing liabilities decreased 20 basis points to 0.45% from 0.65%.

The provision for loan losses of $2.0 million for the three months ended June 30, 2022 was related to growth in the credit card portfolio and the cycling of credit card accounts. Net charge-offs for the second quarter of 2022 were $868 thousand, or 0.23% on an annualized basis of average portfolio loans, compared to $252 thousand, or 0.08% on an annualized basis of average loans for the second quarter of 2021. All of the $868 thousand in net charge-offs during the quarter were related to the credit card portfolio.

For the quarter ended June 30, 2022, noninterest income was $8.4 million, a decrease of $5.1 million, or 37.9 percent, from $13.5 million in the prior year quarter. The decrease was primarily the result of reduced mortgage banking revenue.

Net credit card loan balances increased by $20.8 million to $142.2 million as of June 30, 2022 from $121.4 million at June 30, 2021. The related deposit account balances decreased 11.4 percent to $214.1 million at June 30, 2022 when compared to $241.7 million at June 30, 2021. For the three months ended June 30, 2022, OpenSky’s^®secured credit card accounts decreased by 14 thousand net compared to 65 thousand net new accounts for the same period in 2021 as the elevated new account originations related to Covid stimulus payments subside.

The efficiency ratio for the three months ended June 30, 2022 decreased to 62.00% compared to 66.37% for the three months ended June 30, 2021.

Noninterest expense was $27.1 million for the three months ended June 30, 2022, as compared to $27.2 million for the three months ended June 30, 2021, a decrease of $74 thousand, or 0.3 percent. The decrease was primarily driven by decreases in data processing expenses of $2.9 million and loan processing expenses of $640 thousand, and were offset by increases in salaries and employee benefits of $1.3 million, advertising expenses of $930 thousand, and professional fees of $1.1 million.

Operating Results – Comparison of Six Months Ended June 30, 2022 and 2021

For the six months ended June 30, 2022, net interest income increased $16.8 million, or 32.3 percent, to $68.7 million from the same period in 2021, primarily due to an increase in average balances in the portfolio loans. The net interest margin increased 161 basis points to 6.93% for the six months ended June 30, 2022 from the same period in 2021. Net interest margin, excluding credit card and SBA-PPP loans, was 3.84% for the six months ended June 30, 2022 compared to 3.59% for the same period in 2021. For the six months ended June 30, 2022, average interest earning assets increased $30.8 million, or 1.6 percent, to $2.0 billion as compared to the same period in 2021, and the average yield on interest earning assets increased 143 basis points. Compared to the same period in the prior year, average interest-bearing liabilities decreased $56.9 million, or 5.2 percent, while the average cost of interest bearing liabilities decreased 30 basis points to 0.43% from 0.73%.

For the six months ended June 30, 2022, the provision for loan losses was $3.0 million, an increase of $1.7 million from the prior year. Net charge-offs for the six months ended June 30, 2022 were $1.7 million, or 0.23% annualized of average portfolio loans, compared to $640 thousand, or 0.10% annualized of average portfolio loans, for the same period in 2021. The $1.7 million in net charge-offs during the six months ended June 30, 2022 was comprised of credit card portfolio net charge-offs.

For the six months ended June 30, 2022, noninterest income was $16.7 million, a decrease of $10.8 million, or 39.3 percent, from the same period in 2021. The decrease was primarily driven by the reduction in mortgage banking revenues of $9.7 million.

For the six months ended June 30, 2022, the Bank had a net decrease of 44 thousand OpenSky^® secured credit card accounts, decreasing the total number of open accounts to 616 thousand. This compares to 139 thousand net new originations for the same period last year, which increased total open accounts to 708 thousand.

The efficiency ratio for the six months ended June 30, 2022 decreased to 63.52% compared to 66.73% for the six months ended June 30, 2021 due to increases in interest income.

Noninterest expense was $54.2 million for the six months ended June 30, 2022, as compared to $53.0 million for the six months ended June 30, 2021, an increase of $1.3 million, or 2.4 percent. The increase was primarily driven by a $3.1 million, or 17.7 percent, increase in salaries and benefits, an increase in professional fees of 58.6 percent, or $1.8 million, and an $1.7 million, or 81.7 percent, increase in advertising expense. The increase was partially offset by a $3.9 million, or 20.0 percent, decrease in data processing and a $1.3 million, or 64.1 percent, decrease in loan processing. The decrease of $3.9 million in data processing expenses was primarily due to a contract renegotiation.

Financial Condition

Total assets at June 30, 2022 were $2.2 billion, comparable to the balance at June 30, 2021. Net portfolio loans, which exclude mortgage loans held for sale and SBA-PPP loans, totaled $1.6 billion as of June 30, 2022, an increase of 15.5 percent as compared to $1.4 billion at June 30, 2021.

While total deposits were $1.9 billion for the period ended June 30, 2022, a slight decline from the balance at June 30, 2021, the composition of the deposit portfolio shifted, with a decrease in higher costing time deposits of $121.9 million, or 43.1 percent, when comparing June 30, 2022 to June 30, 2021 to lower costing money market accounts and noninterest bearing accounts. At June 30, 2022, there were no listing service or brokered deposits compared to $68.2 million at June 30, 2021.

The Company recorded a provision for loan losses of $3.0 million during the six months ended June 30, 2022, which increased the allowance for loan losses to $26.4 million, or 1.63% of total loans (1.64%, excluding SBA-PPP loans, on a non-GAAP basis) at June 30, 2022. Nonperforming assets were $7.3 million, or 0.34% of total assets, as of June 30, 2022, down from $11.6 million, or 0.54% of total assets, at June 30, 2021, and was comprised solely of nonperforming loans. Included in nonperforming loans at June 30, 2022 were troubled debt restructurings of $519 thousand.

Stockholders’ equity increased to $207.3 million as of June 30, 2022, compared to $177.2 million at June 30, 2021. This increase was primarily attributable to earnings during the period of $21.7 million which were offset by unrealized losses recorded net of tax on the available for sale securities in the rising interest rate environment creating a $12.3 million reduction in accumulated other comprehensive income during the period. As of June 30, 2022, the Bank’s capital ratios continued to exceed the regulatory requirements for a “well-capitalized” institution.


Consolidated Statements of Income (Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Interest income
Loans, including fees	$	35,304	$	28,641	$	69,193	$	54,709
Investment securities available for sale		779		544		1,149		1,021
Federal funds sold and other		473		104		615		197
Total interest income		36,556		29,289		70,957		55,927

Interest expense
Deposits		964		1,582		1,847		3,589
Borrowed funds		192		187		379		375
Total interest expense		1,156		1,769		2,226		3,964

Net interest income		35,400		27,520		68,731		51,963
Provision for loan losses		2,035		781		2,987		1,284
Net interest income after provision for loan losses		33,365		26,739		65,744		50,679

Noninterest income
Service charges on deposits		183		165		346		312
Credit card fees		6,210		7,715		12,134		13,655
Mortgage banking revenue		1,528		5,270		3,318		13,013
Gain on sale of investment securities available for sale, net		—		153		—		153
Other fees and charges		441		168		852		288
Total noninterest income		8,362		13,471		16,650		27,421

Noninterest expenses
Salaries and employee benefits		10,071		8,750		20,381		17,317
Occupancy and equipment		1,313		1,195		2,339		2,324
Professional fees		2,417		1,362		4,738		2,987
Data processing		7,266		10,122		15,542		19,433
Advertising		2,223		1,293		3,862		2,126
Loan processing		335		975		727		2,026
Other operating		3,505		3,508		6,643		6,759
Total noninterest expenses		27,130		27,205		54,232		52,972
Income before income taxes		14,597		13,005		28,162		25,128
Income tax expense		3,089		3,357		6,443		6,499
Net income	$	11,508	$	9,648	$	21,719	$	18,629

Consolidated Balance Sheets
(in thousands except share data)	(unaudited) June 30, 2022			December 31, 2021
Assets
Cash and due from banks	$	14,776		$	42,914
Interest bearing deposits at other financial institutions		234,823			136,824
Federal funds sold		1,285			3,657
Total cash and cash equivalents		250,884			183,395
Investment securities available for sale		226,509			184,455
Marketable equity securities		245			245
Restricted investments		3,615			3,498
Loans held for sale		11,708			15,989
SBA-PPP loans receivable, net of fees		15,864			108,285
Portfolio loans receivable, net of deferred fees and costs		1,607,677			1,523,982
Less allowance for loan losses		(26,419	)		(25,181	)
Total portfolio loans held for investment, net		1,581,258			1,498,801
Premises and equipment, net		3,315			3,282
Accrued interest receivable		7,276			7,901
Deferred income taxes, net		12,929			9,793
Other real estate owned		—			86
Bank owned life insurance		36,011			35,506
Other assets		5,232			4,064
Total assets	$	2,154,846		$	2,055,300

Liabilities
Deposits
Noninterest bearing	$	842,363		$	787,650
Interest bearing		1,046,557			1,009,487
Total deposits		1,888,920			1,797,137
Federal Home Loan Bank advances		22,000			22,000
Other borrowed funds		12,062			12,062
Accrued interest payable		300			473
Other liabilities		24,248			25,725
Total liabilities		1,947,530			1,857,397

Stockholders’ equity
Common stock, $.01 par value; 49,000,000 shares authorized; 14,010,158 and 13,962,334 issued and outstanding		140			140
Additional paid-in capital		55,762			54,306
Retained earnings		164,750			144,533
Accumulated other comprehensive loss		(13,336	)		(1,076	)
Total stockholders’ equity		207,316			197,903
Total liabilities and stockholders’ equity	$	2,154,846		$	2,055,300

The following table shows the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

	Three Months Ended June 30,
		2022						2021
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate ⁽¹⁾		Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate ⁽¹⁾
	(Dollars in thousands)
Assets
Interest earning assets:
Interest bearing deposits	$	218,251	$	429	0.79	%	$	259,330	$	63	0.10	%
Federal funds sold		1,655		2	0.48			3,087		—	—
Investment securities available for sale		215,172		779	1.45			139,997		544	1.56
Restricted stock and equity securities		3,854		42	4.37			3,478		41	4.70
Loans held for sale		11,447		134	4.70			44,644		314	2.82
SBA-PPP loans receivable		28,870		1,120	15.56			250,040		2,272	3.64
Portfolio loans receivable⁽²⁾		1,532,671		34,050	8.91			1,316,224		26,055	7.94
Total interest earning assets		2,011,920		36,556	7.29			2,016,800		29,289	5.82
Noninterest earning assets		56,298						24,432
Total assets	$	2,068,218					$	2,041,232

Liabilities and Stockholders’ Equity
Interest bearing liabilities:
Interest bearing demand accounts	$	259,192		38	0.06		$	282,197		50	0.07
Savings		9,913		1	0.04			6,634		1	0.05
Money market accounts		566,303		396	0.28			460,669		352	0.31
Time deposits		160,279		529	1.32			304,519		1,179	1.55
Borrowed funds		34,062		192	2.27			35,770		187	2.10
Total interest bearing liabilities		1,029,749		1,156	0.45			1,089,789		1,769	0.65
Noninterest bearing liabilities:
Noninterest bearing liabilities		22,647						20,111
Noninterest bearing deposits		807,558						758,255
Stockholders’ equity		208,264						173,077
Total liabilities and stockholders’ equity	$	2,068,218					$	2,041,232

Net interest spread					6.84	%					5.17	%
Net interest income			$	35,400					$	27,520
Net interest margin⁽³⁾					7.06	%					5.47	%

_______________
⁽¹⁾	Annualized.
⁽²⁾	Includes nonaccrual loans.
⁽³⁾	For the three months ended June 30, 2022 and June 30, 2021, collectively, SBA-PPP loans and credit card loans accounted for 320 and 192 basis points of the reported net interest margin, respectively.

	Six Months Ended June 30,
		2022						2021
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate(1)		Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate(1)
	(Dollars in thousands)
Assets
Interest earning assets:
Interest bearing deposits	$	208,043	$	530	0.51	%	$	232,712	$	113	0.10	%
Federal funds sold		3,148		2	0.13			3,477		—	0.00
Investment securities available for sale		197,965		1,149	1.17			123,443		1,022	1.67
Restricted stock and equity securities		3,810		83	4.39			3,691		83	4.56
Loans held for sale		12,467		245	3.96			58,475		794	2.74
SBA-PPP loans receivable		55,917		3,186	11.49			242,619		4,741	3.94
Portfolio loans receivable⁽¹⁾		1,519,857		65,762	8.73			1,305,973		49,174	7.59
Total interest earning assets		2,001,207		70,957	7.15			1,970,390		55,927	5.72
Noninterest earning assets		61,533						25,113
Total assets	$	2,062,740					$	1,995,503

Liabilities and Stockholders’ Equity
Interest bearing liabilities:
Interest bearing demand accounts	$	276,490		74	0.05		$	269,647		118	0.09
Savings		9,098		3	0.07			6,127		2	0.05
Money market accounts		552,858		697	0.25			465,882		881	0.38
Time deposits		165,485		1,073	1.31			318,512		2,588	1.64
Borrowed funds		34,062		379	2.24			34,699		375	2.18
Total interest bearing liabilities		1,037,993		2,226	0.43			1,094,867		3,964	0.73
Noninterest bearing liabilities:
Noninterest bearing liabilities		23,397						22,940
Noninterest bearing deposits		795,221						709,443
Stockholders’ equity		206,129						168,253
Total liabilities and stockholders’ equity	$	2,062,740					$	1,995,503

Net interest spread					6.72	%					4.99	%
Net interest income			$	68,731					$	51,963
Net interest margin⁽²⁾					6.93	%					5.32	%

_______________
⁽¹⁾	Includes nonaccrual loans.
⁽²⁾	For the six months ended June 30, 2022 and June 30, 2021, collectively, SBA-PPP loans and credit card loans accounted for 309 and 173 basis points of the reported net interest margin, respectively.

The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment for the three and six months ended June 30, 2022 and June 30, 2021.


Segments

For the Three Months Ended June 30, 2022
(in thousands)	Commercial Bank		CBHL			OpenSky ^®		Corporate ⁽²⁾		Eliminations			Consolidated
Interest income	$	18,912	$	134		$	16,780	$	758	$	(28	)	$	36,556
Interest expense		952		64			—		168		(28	)		1,156
Net interest income		17,960		70			16,780		590		—			35,400
Provision for loan losses		—		—			2,035		—		—			2,035
Net interest income after provision		17,960		70			14,745		590		—			33,365
Noninterest income		526		1,626			6,210		—		—			8,362
Noninterest expense⁽¹⁾		12,859		2,217			11,940		114		—			27,130
Net income before taxes	$	5,627	$	(521	)	$	9,015	$	476	$	—		$	14,597

Total assets	$	1,958,893	$	12,257		$	137,180	$	226,950	$	(180,434	)	$	2,154,846

For the Three Months Ended June 30, 2021
Interest income	$	17,297	$	313		$	11,114	$	600	$	(35	)	$	29,289
Interest expense		1,413		221			—		170		(35	)		1,769
Net interest income		15,884		92			11,114		430		—			27,520
Provision for loan losses		349		—			432		—		—			781
Net interest income after provision		15,535		92			10,682		430		—			26,739
Noninterest income		260		5,454			7,715		42		—			13,471
Noninterest expense⁽¹⁾		10,489		3,283			13,328		105		—			27,205
Net income before taxes	$	5,306	$	2,263		$	5,069	$	367	$	—		$	13,005

Total assets	$	1,943,106	$	49,110		$	128,009	$	197,071	$	(165,446	)	$	2,151,850

________________________
⁽¹⁾	Noninterest expense includes $6.7 million and $9.3 million in data processing expense in OpenSky’s^® segment for the three months ended June 30, 2022 and 2021, respectively.
⁽²⁾	The Corporate segment invests idle cash in revenue producing assets including interest bearing cash accounts, loan participations and other appropriate investments for the Company.


For the Six Months Ended June 30, 2022
(in thousands)	Commercial Bank		CBHL			OpenSky ^®		Corporate ⁽²⁾		Eliminations			Consolidated
Interest income	$	37,412	$	245		$	31,720	$	1,645	$	(65	)	$	70,957
Interest expense		1,805		145			—		341		(65	)		2,226
Net interest income		35,607		100			31,720		1,304		—			68,731
Provision for loan losses		—		—			2,987		—		—			2,987
Net interest income after provision		35,607		100			28,733		1,304		—			65,744
Noninterest income		1,083		3,433			12,134		—		—			16,650
Noninterest expense⁽¹⁾		24,922		4,316			24,822		172		—			54,232
Net income before taxes	$	11,768	$	(783	)	$	16,045	$	1,132	$	—		$	28,162

Total assets	$	1,958,893	$	12,257		$	137,180	$	226,950	$	(180,434	)	$	2,154,846

For the Six Months Ended June 30, 2021
Interest income	$	34,861	$	789		$	19,309	$	1,029		(61	)	$	55,927
Interest expense		3,124		569			—		332		(61	)		3,964
Net interest income		31,737		220			19,309		697		—			51,963
Provision for loan losses		729		—			485		70		—			1,284
Net interest income after provision		31,008		220			18,824		627		—			50,679
Noninterest income		498		13,227			13,655		41		—			27,421
Noninterest expense⁽¹⁾		19,888		7,202			25,702		180		—			52,972
Net income before taxes	$	11,618	$	6,245		$	6,777	$	488	$	—		$	25,128

Total assets	$	1,943,106	$	49,110		$	128,009	$	197,071	$	(165,446	)	$	2,151,850

________________________
⁽¹⁾	Noninterest expense includes $14.3 million and $17.9 million in data processing expense in OpenSky’s^® segment for the six months ended June 30, 2022 and 2021, respectively.
⁽²⁾	The Corporate segment invests idle cash in revenue producing assets including interest bearing cash accounts, loan participations and other appropriate investments for the Company.


HISTORICAL FINANCIAL HIGHLIGHTS – Unaudited
	Quarter Ended
(dollars in thousands except per share data)	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Earnings:
Net income	$	11,508		$	10,211		$	10,171		$	11,177		$	9,648
Earnings per common share, diluted		0.80			0.71			0.71			0.79			0.68
Net interest margin		7.06	%		6.79	%		6.49	%		6.27	%		5.47	%
Net interest margin, excluding credit cards & SBA-PPP loans ⁽¹⁾		3.86	%		3.82	%		3.70	%		3.52	%		3.55	%
Return on average assets⁽²⁾		2.23	%		2.01	%		1.95	%		2.13	%		1.90	%
Return on average assets, excluding impact of SBA-PPP loans⁽¹⁾⁽²⁾		2.04	%		1.67	%		1.80	%		1.99	%		1.65	%
Return on average equity⁽²⁾		22.16	%		20.30	%		20.66	%		23.87	%		22.36	%
Efficiency ratio		62.00	%		65.12	%		65.83	%		64.10	%		66.37	%
Balance Sheet:
Total portfolio loans receivable, net	$	1,607,677		$	1,526,256		$	1,523,982		$	1,445,126		$	1,392,471
Total deposits		1,888,920			1,862,722			1,797,137			1,921,238			1,917,419
Total assets		2,154,846			2,122,453			2,055,300			2,169,556			2,151,850
Total shareholders’ equity		207,316			201,492			197,903			189,080			177,204
Asset Quality Ratios:
Nonperforming assets to total assets		0.34	%		0.28	%		0.56	%		0.77	%		0.54	%
Nonperforming assets to total assets, excluding the SBA-PPP loans ⁽¹⁾		0.34	%		0.29	%		0.59	%		0.83	%		0.60	%
Nonperforming loans to total loans		0.45	%		0.38	%		0.70	%		0.85	%		0.52	%
Nonperforming loans to portfolio loans ⁽¹⁾		0.46	%		0.39	%		0.75	%		0.94	%		0.60	%
Net charge-offs to average portfolio loans ⁽¹⁾⁽²⁾		0.23	%		0.24	%		0.18	%		0.08	%		0.08	%
Allowance for loan losses to total loans		1.63	%		1.60	%		1.54	%		1.56	%		1.51	%
Allowance for loan losses to portfolio loans ⁽¹⁾		1.64	%		1.65	%		1.65	%		1.71	%		1.73	%
Allowance for loan losses to non-performing loans		360.06	%		422.65	%		220.40	%		182.48	%		287.40	%
Bank Capital Ratios:
Total risk based capital ratio		14.34	%		14.36	%		13.79	%		13.86	%		13.51	%
Tier 1 risk based capital ratio		13.09	%		13.10	%		12.53	%		12.60	%		12.25	%
Leverage ratio		9.11	%		8.74	%		8.36	%		7.83	%		7.58	%
Common equity Tier 1 capital ratio		13.09	%		13.10	%		12.53	%		12.60	%		12.25	%
Tangible common equity		8.17	%		8.11	%		8.36	%		7.57	%		7.17	%
Holding Company Capital Ratios:
Total risk based capital ratio		17.66	%		17.16	%		16.41	%		15.75	%		16.14	%
Tier 1 risk based capital ratio		15.70	%		15.19	%		14.43	%		14.49	%		14.10	%
Leverage ratio		10.93	%		10.25	%		9.73	%		9.12	%		8.78	%
Common equity Tier 1 capital ratio		15.55	%		15.04	%		14.28	%		14.34	%		13.94	%
Tangible common equity		9.62	%		9.49	%		9.63	%		8.72	%		8.23	%
Composition of Loans:
SBA-PPP loans, net	$	15,864		$	51,085		$	108,285		$	137,178		$	202,763
Residential real estate	$	430,244		$	420,242		$	401,607		$	418,205		$	420,015
Commercial real estate		608,646			564,725			556,339			502,523			471,807
Construction real estate		241,249			245,722			255,147			251,256			223,832
Commercial and industrial		193,262			177,504			175,956			143,244			158,392
Credit card, net of reserve		142,166			123,750			141,120			134,979			121,410
Other consumer loans		856			909			1,033			1,425			1,034
Portfolio loans receivable	$	1,616,423		$	1,532,852		$	1,531,202		$	1,451,632		$	1,396,490
Deferred origination fees, net		(8,746	)		(6,596	)		(7,220	)		(6,506	)		(4,019	)
Portfolio loans receivable, net	$	1,607,677		$	1,526,256		$	1,523,982		$	1,445,126		$	1,392,471
Composition of Deposits:
Noninterest bearing	$	842,363		$	825,174		$	787,650		$	833,187		$	828,308
Interest-bearing demand		305,377			279,591			330,924			369,812			314,883
Savings		10,078			9,894			6,994			6,682			6,965
Money markets		570,298			585,920			493,919			493,029			484,567
Time deposits		160,804			162,143			177,650			218,528			282,696
Total Deposits	$	1,888,920		$	1,862,722		$	1,797,137		$	1,921,238		$	1,917,419
Capital Bank Home Loan Metrics:
Origination of loans held for sale	$	84,432		$	110,446		$	158,051		$	217,175		$	265,517
Mortgage loans sold		89,797			109,953			178,068			229,111			278,384
Gain on sale of loans		1,918			3,042			4,423			6,108			7,763
Purchase volume as a % of originations		85.23	%		73.16	%		56.44	%		50.98	%		50.64	%
Gain on sale as a % of loans sold⁽³⁾		2.14	%		2.77	%		2.48	%		2.67	%		2.79	%
Mortgage commissions	$	772		$	1,125		$	1,462		$	1,884		$	2,364
OpenSky ^® Portfolio Metrics:
Active customer accounts		616,435			630,709			660,397			700,383			707,600
Secured credit card loans, gross	$	118,938		$	109,978		$	125,898		$	125,393		$	116,054
Unsecured credit card loans, gross		25,641			16,233			17,682			12,037			7,808
Noninterest secured credit card deposits		214,110			220,354			229,530			242,405			241,724

_______________
⁽¹⁾	Refer to Appendix for reconciliation of non-GAAP measures.
⁽²⁾	Annualized.
⁽³⁾	Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.


Return on Average Assets, as Adjusted	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021

Net Income		11,508		10,211		10,171		11,177		9,648
Less: SBA-PPP loan income	$	1,120		2,066		1,347		1,525		2,272
Net Income, as Adjusted	$	10,388		8,145		8,824		9,652		7,376
Average Total Assets	$	2,068,218		2,057,201		2,066,283		2,084,772		2,041,232
Less: Average SBA-PPP Loans		28,870		83,264		116,595		162,217		250,040
Average Total Assets, as Adjusted	$	2,039,348		1,973,937		1,949,688		1,922,555		1,791,192
Return on Average Assets, as Adjusted		2.04	%	1.67	%	1.80	%	1.99	%	1.65	%


Net Interest Margin, as Adjusted	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Net Interest Income	$	35,400		$	33,331		$	32,671		$	32,059		$	27,520
Less Credit card loan income		16,376			14,487			15,010			15,086			10,497
Less SBA-PPP loan income		1,120			2,066			1,347			1,525			2,272
Net Interest Income, as Adjusted	$	17,904		$	16,778		$	16,314		$	15,448		$	14,751
Average Interest Earning Assets		2,011,920			1,990,377			1,996,331			2,026,616			2,016,801
Less Average credit card loans		124,548			124,923			131,306			124,771			100,456
Less Average SBA-PPP loans		28,870			83,264			116,595			162,217			250,040
Total Average Interest Earning Assets, as Adjusted	$	1,858,502		$	1,782,190		$	1,748,430		$	1,739,628		$	1,666,305
Net Interest Margin, as Adjusted		3.86	%		3.82	%		3.70	%		3.52	%		3.55	%


Tangible Book Value per Share	Quarters Ended
Dollars in thousands, except per share amounts	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021

Total Stockholders’ Equity	$	207,316	$	201,492	$	197,903	$	189,080	$	177,204
Less: Preferred equity		—		—		—		—		—
Less: Intangible assets		—		—		—		—		—
Tangible Common Equity	$	207,316	$	201,492	$	197,903	$	189,080	$	177,204
Period End Shares Outstanding		14,010,158		14,000,520		13,962,334		13,801,936		13,771,615
Tangible Book Value per Share	$	14.80	$	14.39	$	14.17	$	13.70	$	12.87


Allowance for Loan Losses to Total Portfolio Loans	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Allowance for Loan Losses	$	26,419		$	25,252		$	25,181		$	24,753		$	24,079
Total Loans		1,623,541			1,577,341			1,632,267			1,582,304			1,595,234
Less: SBA-PPP loans		15,864			51,085			108,285			137,178			202,763
Total Portfolio Loans	$	1,607,677		$	1,526,256		$	1,523,982		$	1,445,126		$	1,392,471
Allowance for Loan Losses to Total Portfolio Loans		1.64	%		1.65	%		1.65	%		1.71	%		1.73	%


Nonperforming Assets to Total Assets, net SBA-PPP Loans	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Total Nonperforming Assets	$	7,338		$	5,975		$	11,512		$	16,801		$	11,615
Total Assets		2,154,846			2,122,453			2,055,300			2,169,556			2,151,850
Less: SBA-PPP loans		15,864			51,085			108,285			137,178			202,763
Total Assets, net SBA-PPP Loans	$	2,138,982		$	2,071,368		$	1,947,015		$	2,032,378		$	1,949,087
Nonperforming Assets to Total Assets, net SBA-PPP Loans		0.34	%		0.29	%		0.59	%		0.83	%		0.60	%


Nonperforming Loans to Total Portfolio Loans	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Total Nonperforming Loans	$	7,338		$	5,975		$	11,425		$	13,565		$	8,378
Total Loans		1,623,541			1,577,341			1,632,267			1,582,304			1,595,234
Less: SBA-PPP loans		15,864			51,085			108,285			137,178			202,763
Total Portfolio Loans	$	1,607,677		$	1,526,256		$	1,523,982		$	1,445,126		$	1,392,471
Nonperforming Loans to Total Portfolio Loans		0.46	%		0.39	%		0.75	%		0.94	%		0.60	%


Net Charge-offs to Average Portfolio Loans	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Total Net Charge-offs	$	868		$	881		$	672		$	301		$	252
Total Average Loans		1,561,541			1,590,166			1,582,473			1,569,198			1,567,973
Less: Average SBA-PPP loans		28,870			83,264			116,595			162,217			250,040
Total Average Portfolio Loans	$	1,532,671		$	1,506,902		$	1,465,878		$	1,406,981		$	1,317,933
Net Charge-offs to Average Portfolio Loans		0.23	%		0.24	%		0.18	%		0.08	%		0.08	%


Pre-tax, Pre-Provision Net Revenue (“PPNR”)	Quarters Ended
Dollars in thousands	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021

Net income	$	11,508		$	10,211		$	10,171		$	11,177		$	9,648
Add: Income Tax Expense		3,089			3,354			3,522			3,877			3,357
Add: Provision for Loan Losses		2,035			952			1,100			975			781
Pre-tax, Pre-Provision Net Revenue (“PPNR”)	$	16,632		$	14,517		$	14,793		$	16,029		$	13,786

ABOUT CAPITAL BANCORP, INC.

Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. The Company’s wholly-owned subsidiary, Capital Bank, N.A., is the fourth largest bank headquartered in Maryland at June 30, 2022. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in five locations in the greater Washington, D.C. and Baltimore, Maryland markets. Capital Bancorp had assets of approximately $2.2 billion at June 30, 2022 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company’s website www.CapitalBankMD.com under its investor relations page.

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “optimistic,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing war in Ukraine; the magnitude and duration of the COVID-19 pandemic and related variants and mutations and their impact on the global economy and financial market conditions and our business, results of operations, and financial condition; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; the transition away from USD LIBOR and uncertainty regarding potential alternative reference rates, including SOFR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; and other factors that may affect our future results.

These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

FINANCIAL CONTACT: Alan Jackson (240) 283-0402

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE: www.CapitalBankMD.com

July 20, 2022 5:18 pm

Granite Announces Timing of Earnings Release and Investor Conference Call

Granite Announces Timing of Earnings Release and Investor Conference Call

WATSONVILLE, Calif.–(BUSINESS WIRE)–
Granite Construction Incorporated (NYSE: GVA) will release second quarter financial results on Thursday, July 28, 2022, before the market opens. The Company will host an investor conference call at 8:00 a.m. PT, Thursday, July 28, 2022.

The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite’s Investor Relations website approximately one hour after the call. A replay will be available after the live call through August 4, 2022, by calling 1-877-344-7529, replay access code 2178808; international callers may dial 1-412-317-0088.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit the Granite website, and connect with Granite on LinkedIn, Twitter, Facebook and Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005574/en/

Granite Construction Incorporated

Investors

Wenjun Xu, 831-761-7861

Media

Erin Kuhlman, 831-768-4111

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Other Construction & Property Manufacturing Commercial Building & Real Estate Construction & Property Urban Planning Other Manufacturing

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