Slide 1: Financial Results Fourth Quarter 2024
Financial Results Fourth Quarter 2024
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to the financial condition, results of operations
Slide 3: Fourth Quarter 2024 Highlights
Fourth Quarter 2024 Highlights Net income of $7.3 million, up 4.9% from 3Q24 Net interest margin of 1.67% and FTE NIM of 1.75%1,2, both up 5 bps from 3Q24 Diluted EPS of $0.83, up 3.8% from 3Q24 Deposit costs declined 17 bps while the yield on interest Adjusted total revenue of $34.8 milli
Slide 4: Loan Portfolio Overview
Loan Portfolio Overview Total portfolio loan balances increased $134.8 million, or 3.3%, from 3Q24 Commercial loan balances increased $139.1 million, or 4.3%, from 3Q24 Consumer loan balances decreased $2.0 million, or 0.2%, from 3Q24 4Q24 funded portfolio loan origination yields were 7.26%,
Slide 5: Deposit Composition
Deposit Composition Total deposits increased 2.8% from 3Q24 and are up 21.3% from 4Q23 Diversified deposit base comprised of consumer, small business, fintech, commercial and public funds Deposit base is further diversified by product type among checking, money market/savings and CDs Quarter
Slide 6: Liquidity and 4Q24 Deposit Update
Liquidity and 4Q24 Deposit Update Cash and unused borrowing capacity totaled $2.2 billion at December 31, 2024 – Currently represents 173% of total uninsured deposits and 222% of adjusted uninsured deposits Growth in fintech deposits supplemented by CD production Excess liquidity used to fund
Slide 7: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income on a GAAP and FTE basis were up Net Interest Income – GAAP and FTE1 8.2% and 7.9%, respectively, from 3Q24 Dollars in millions $24.7 NIM and FTE NIM1 benefiting from interest-bearing $21.0 $21.9 $22.5 $22.9 liability costs declining
Slide 8: Net Interest Margin Drivers
Net Interest Margin Drivers Linked-quarter FTE NIM1 increased 5 bps from 3Q24; benefited from lower interest-bearing liability costs – Weighted average yield of 7.26% on funded portfolio originations during 4Q24, remaining well above total portfolio yield – Securities yields were down slightly whi
Slide 9: Noninterest Income
Noninterest Income Noninterest income of $15.9 million, up 32.5% from $12.0 million in 3Q24 – 4Q24 amount includes $4.7 million of prepayment and terminated interest rate swap gains related to the paydown of FHLB advances – Adjusted noninterest income of $11.2 million was down 6.9% from 3Q24 Gai
Slide 10: Noninterest Expense
Noninterest Expense Noninterest expense of $24.0 million, up 5.1% from $22.8 million in 3Q24 Salaries and employee benefits increased $0.6 million, or 4.4%, as the Company continued to invest in small business lending, risk management and information technology Other noninterest expense increa
Slide 11: Asset Quality
Asset Quality Allowance for credit losses to total loans of 1.07% in 4Q24, down 6 bps from 3Q24 – Small business lending ACL to unguaranteed balances of 5.7% Quarterly provision for credit losses was $7.2 million, compared to $3.4 million in 3Q24 – Increase in provision reflects NCO action taken
Slide 12: Capital
Capital Tangible common equity to tangible assets increased 8 bps from 3Q24 to 6.62%1 – Smaller balance sheet more than offset the impact of higher interest rates on AOCI Tangible book value per share of $43.771, down 0.3% from 3Q24 and up 5.7% from 4Q23 CET1 and TRBC ratios at both the Compan
Slide 13: Small Business Lending
Small Business Lending $331.9 million of balances as of December 31, 2024 Nationwide platform providing growth capital to entrepreneurs and small business owners Diversified by geography and industry type 8th largest Small Business Administration 7(a) lender for the SBA’s 2025 fiscal year-to
Slide 14: Construction and Investor Commercial Real Estate
Construction and Investor Commercial Real Estate $683.0 million of combined balances as of December 31, 2024 4Q24 unfunded commitment balances – Commercial construction/development: $417.0 million Average current loan balance of $10.4 million for investor CRE – Residential construction/develop
Slide 15: Franchise Finance
Franchise Finance $536.9 million of balances as of December 31, 2024 Focused on providing growth financing to franchisees in a variety of industry segments Diversified by geography, industry and brand Average loan size of $0.8 million Portfolio Mix by Borrower Use Portfolio Mix by State Port
Slide 16: Single Tenant Lease Financing
Single Tenant Lease Financing $949.7 million of balances as of December 31, 2024 Strong historical credit performance Long-term financing of single tenant properties occupied No delinquencies in this portfolio by historically strong national and regional tenants Minimal office exposure; 1.
Slide 17: Healthcare Finance
Healthcare Finance $181.4 million of balances as of December 31, 2024 Average loan size of $406,000 Strong historical credit performance to date No delinquencies in this portfolio Portfolio Mix by Borrower Use Portfolio Mix by Borrower Portfolio Mix by State Practice Refi or 4% 5% Acquisitio
Slide 18: Public Finance
Public Finance $485.9 million of balances as of December 31, 2024 No delinquencies or losses since inception Provides a range of credit solutions for government and not-for-profit entities Borrowers’ needs include short-term financing, debt refinancing, infrastructure improvements, economic
Slide 19: C&I and Owner-Occupied Commercial Real Estate
C&I and Owner-Occupied Commercial Real Estate $173.8 million of combined balances as of December 31, Minimal office exposure; 1.3% of combined loan 2024 balances consisting of suburban office space Current C&I LOC utilization of 31% Average loan sizes C&I: $768,000 Owner-occupied CRE: $8
Slide 20: Residential Mortgage
Residential Mortgage $393.4 million of balances as of December 31, 2024 (includes home equity balances) Historically direct-to-consumer originations centrally located at corporate headquarters Focused on high quality borrowers – Average loan size of $203,000 – Average credit score at originati
Slide 21: Specialty Consumer
Specialty Consumer $407.9 million of balances as of December 31, 2024 Direct-to-consumer and nationwide dealer network originations Focused on high quality borrowers – Average credit score at origination of 778 – Average loan size of $27,000 Strong historical credit performance Concentration
Slide 22: Appendix
Appendix 22
Slide 23: Loan Portfolio Composition
Loan Portfolio Composition Dollars in thousands 2021 2022 2023 1Q24 2Q24 3Q24 4Q24 Commercial loans Commercial and industrial $ 96,008 $ 126,108 $ 129,349 $ 133,897 $ 115,585 $ 111,199 $ 120,175 Owner-occupied commercial real estate 66,732 61,836 57,286 57,787 58,089 56,461 53,591 Investor commercia
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 2018 2019 2020 2021 2022 2023 2024 Total equity - GAAP $288,735 $304,913 $330,944 $380,338 $364,974 $362,795 $384,063 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible c
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 4Q23 1Q24 2Q24 3Q24 4Q24 Total equity - GAAP $362,795 $366,739 $371,953 $385,129 $384,063 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $358,108 $362,052 $367,266 $380
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 4Q23 1Q24 2Q24 3Q24 4Q24 Total revenue - GAAP $27,208 $29,081 $32,360 $33,794 $39,487 Adjustments: Gain on prepayment of FHLB advance - - - - (1,829) Gain on termination of swaps - - - - (2,904) Adjusted re
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 4Q23 1Q24 2Q24 3Q24 4Q24 Income tax provision (benefit) - GAAP $ (585) $ 429 $ 218 $ 620 $ 999 Adjustments:1 IT termination fees - - 95 - - Anniversary expenses - - 25 - - Gain on prepayment of FHLB advance
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 4Q23 1Q24 2Q24 3Q24 4Q24 Return on average assets 0.32% 0.40% 0.44% 0.50% 0.50% Effect of IT termination fees 0.00% 0.00% 0.03% 0.00% 0.00% Effect of anniversary expenses 0.00% 0.00% 0.01% 0.00% 0.00% Effec
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 4Q24 Tangible common equity $379,376 Adjustments: Accumulated other comprehensive loss 32,653 Adjusted tangible common equity $412,029 Tangible assets $5,733,172 Adjustments: Cash in excess of $300 million (166,410) Adjusted tangible