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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _______________

 

Commission File No. 001-40609

 

1895 Bancorp of Wisconsin, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

 

61-1993378

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

 

 

 

7001 West Edgerton Avenue

Greenfield, Wisconsin

 

 

53220

(Address of Principal Executive Offices)

 

(Zip Code)

 

(414) 421-8200

(Registrant’s Telephone Number, Including Area Code)

 

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

BCOW

 

The NASDAQ Stock Market, LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No

 

6,109,644 shares of the Registrant’s common stock, par value $0.01 per share, were outstanding as of October 31, 2023.

 


 

1895 Bancorp of Wisconsin, Inc.

Form 10-Q

 

Table of Contents

 

 

 

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

 

Financial Statements

 

1

 

 

 

 

 

 

 

Consolidated Balance Sheets at September 30, 2023 (unaudited) and December 31, 2022

 

1

 

 

 

 

 

 

 

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

 

2

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

 

3

 

 

 

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

 

4

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)

 

5

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

6

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

38

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

52

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

52

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

52

 

 

 

 

 

Item 1A.

 

Risk Factors

 

52

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

 

52

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

52

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

52

 

 

 

 

 

Item 5.

 

Other Information

 

52

 

 

 

 

 

Item 6.

 

Exhibits

 

53

 

 

 

 

 

 

 

SIGNATURES

 

54

 

 


 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

1895 Bancorp of Wisconsin, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

 

September 30,
2023

 

 

December 31,
2022

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

23,241

 

 

$

26,029

 

Fed funds sold

 

 

3,362

 

 

 

2,315

 

Cash and cash equivalents

 

 

26,603

 

 

 

28,344

 

 

 

 

 

 

 

 

Marketable equity securities, stated at fair value

 

 

3,286

 

 

 

2,924

 

Available-for-sale securities, stated at fair value

 

 

104,641

 

 

 

114,492

 

Loans held for sale

 

 

410

 

 

 

125

 

Loans, net of deferred costs

 

 

386,296

 

 

 

362,777

 

Allowance for credit losses for loans

 

 

(3,614

)

 

 

(3,203

)

  Total loans, net of deferred loan costs and allowance for credit losses

 

 

382,682

 

 

 

359,574

 

Premises and equipment, net

 

 

5,240

 

 

 

5,451

 

Mortgage servicing rights, net

 

 

1,751

 

 

 

1,860

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

4,787

 

 

 

3,429

 

Accrued interest receivable

 

 

1,349

 

 

 

1,257

 

Cash value of life insurance

 

 

13,919

 

 

 

14,316

 

Other assets

 

 

9,908

 

 

 

11,244

 

TOTAL ASSETS

 

$

554,576

 

 

$

543,016

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Deposits

 

$

386,973

 

 

$

387,721

 

Advance payments by borrowers for taxes and insurance

 

 

10,264

 

 

 

1,029

 

FHLB advances

 

 

78,499

 

 

 

71,464

 

Accrued interest payable

 

 

1,099

 

 

 

291

 

Other liabilities

 

 

7,582

 

 

 

7,149

 

TOTAL LIABILITIES

 

 

484,417

 

 

 

467,654

 

Preferred stock, $0.01 par value, 10,000,000 shares authorized at September 30, 2023
    and December 31, 2022

 

 

 

 

 

 

Common stock (par value $0.01 per share) Authorized - 90,000,000 shares at
   September 30, 2023 and December 31, 2022; Issued –
6,154,164 at
   September 30, 2023 and
6,236,168 at December 31, 2022 (includes 162,690 and
   
211,349 unvested shares, respectively); Outstanding – 6,124,646 at
   September 30, 2023 and
6,206,105 at December 31, 2022 (includes 162,690 and
   
211,349 unvested shares, respectively)

 

 

62

 

 

 

62

 

Additional paid-in capital

 

 

49,907

 

 

 

49,931

 

Unallocated common stock of Employee Stock Ownership Plan (ESOP), 439,037 and
   
453,792 shares at September 30, 2023 and December 31, 2022, respectively

 

 

(4,167

)

 

 

(4,307

)

Less treasury stock at cost, 29,518 shares at September 30, 2023 and 30,063 shares at December 31, 2022

 

 

(295

)

 

 

(301

)

Retained earnings

 

 

36,175

 

 

 

41,468

 

Accumulated other comprehensive (loss) income, net of income taxes

 

 

(11,523

)

 

 

(11,491

)

Total stockholders’ equity

 

 

70,159

 

 

 

75,362

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

554,576

 

 

$

543,016

 

 

See accompanying notes to the unaudited consolidated financial statements.

1


 

1895 BANCORP OF WISCONSIN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) – Unaudited

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

4,423

 

 

$

3,563

 

 

$

12,487

 

 

$

9,862

 

Securities, taxable

 

 

656

 

 

 

613

 

 

 

1,847

 

 

 

1,727

 

Other

 

 

292

 

 

 

139

 

 

 

767

 

 

 

279

 

Total interest and dividend income

 

 

5,371

 

 

 

4,315

 

 

 

15,101

 

 

 

11,868

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

1,832

 

 

 

196

 

 

 

4,111

 

 

 

551

 

Borrowed funds

 

 

586

 

 

 

200

 

 

 

1,733

 

 

 

550

 

Other interest-bearing funds

 

 

1

 

 

 

2

 

 

 

4

 

 

 

7

 

Total interest expense

 

 

2,419

 

 

 

398

 

 

 

5,848

 

 

 

1,108

 

Net interest income

 

 

2,952

 

 

 

3,917

 

 

 

9,253

 

 

 

10,760

 

Provision for credit losses

 

 

75

 

 

 

 

 

 

225

 

 

 

210

 

Net interest income after provision for credit losses

 

 

2,877

 

 

 

3,917

 

 

 

9,028

 

 

 

10,550

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other fees

 

 

235

 

 

 

229

 

 

 

699

 

 

 

722

 

Loan servicing, net

 

 

172

 

 

 

167

 

 

 

502

 

 

 

515

 

Net gain on sale of loans

 

 

73

 

 

 

83

 

 

 

141

 

 

 

266

 

Net (loss) on sale of securities

 

 

(1,925

)

 

 

 

 

 

(1,925

)

 

 

 

Increase in cash surrender value of insurance

 

 

107

 

 

 

108

 

 

 

324

 

 

 

317

 

Unrealized gain (loss) on marketable equity securities

 

 

(158

)

 

 

(159

)

 

 

287

 

 

 

(892

)

Other

 

 

113

 

 

 

51

 

 

 

278

 

 

 

58

 

Total noninterest income

 

 

(1,383

)

 

 

479

 

 

 

306

 

 

 

986

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,264

 

 

 

2,687

 

 

 

7,792

 

 

 

7,738

 

Unrealized gain (loss) on marketable equity securities

 

 

(158

)

 

 

(159

)

 

 

287

 

 

 

(892

)

Advertising and promotions

 

 

54

 

 

 

33

 

 

 

124

 

 

 

146

 

Data processing

 

 

225

 

 

 

221

 

 

 

672

 

 

 

630

 

Occupancy and equipment

 

 

285

 

 

 

326

 

 

 

922

 

 

 

1,010

 

FDIC assessment

 

 

61

 

 

 

36

 

 

 

182

 

 

 

99

 

Other

 

 

979

 

 

 

1,107

 

 

 

2,864

 

 

 

3,149

 

Total noninterest expense

 

 

3,710

 

 

 

4,251

 

 

 

12,843

 

 

 

11,880

 

(Loss) income before income taxes

 

 

(2,216

)

 

 

145

 

 

 

(3,509

)

 

 

(344

)

Income tax expense (benefit)

 

 

1,425

 

 

 

21

 

 

 

1,001

 

 

 

(172

)

Net (loss) income

 

$

(3,641

)

 

$

124

 

 

$

(4,510

)

 

$

(172

)

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.66

)

 

$

0.02

 

 

$

(0.81

)

 

$

(0.03

)

Diluted(1)

 

$

(0.66

)

 

$

0.02

 

 

$

(0.81

)

 

$

(0.03

)

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,534,711

 

 

 

5,810,185

 

 

 

5,538,509

 

 

 

5,842,184

 

Diluted(1)

 

 

5,534,711

 

 

 

5,983,241

 

 

 

5,538,509

 

 

 

5,842,184

 

 

See accompanying notes to the unaudited consolidated financial statements.

(1) Diluted loss per share and average shares outstanding excludes all common shares if their effect is anti-dilutive.

2


 

1895 Bancorp of Wisconsin, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) - Unaudited

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(3,641

)

 

$

124

 

 

$

(4,510

)

 

$

(172

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding (losses) arising during the
   period on available-for-sale securities

 

 

(2,357

)

 

 

(4,549

)

 

 

(1,969

)

 

 

(16,483

)

Net realized losses on available-for-sale securities included in income

 

 

1,925

 

 

 

 

 

 

1,925

 

 

 

 

Other comprehensive (loss) before tax effect

 

 

(432

)

 

 

(4,549

)

 

 

(44

)

 

 

(16,483

)

Tax effect of other comprehensive (loss) income items

 

 

116

 

 

 

1,228

 

 

 

12

 

 

 

4,451

 

Other comprehensive (loss), net of tax

 

 

(316

)

 

 

(3,321

)

 

 

(32

)

 

 

(12,032

)

Comprehensive (loss)

 

$

(3,957

)

 

$

(3,197

)

 

$

(4,542

)

 

$

(12,204

)

 

See accompanying notes to the unaudited consolidated financial statements.

3


1895 Bancorp of Wisconsin, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands) - Unaudited

 

 

Common Stock

 

 

Additional Paid-In Capital

 

 

Unallocated Common Stock of ESOP

 

 

Treasury Stock

 

 

Retained Earnings

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Total Stockholders' Equity

 

Balance as of June 30, 2022

$

64

 

 

$

52,855

 

 

$

(4,401

)

 

$

(301

)

 

$

41,319

 

 

$

(8,570

)

 

$

80,966

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

124

 

 

 

 

 

 

124

 

Other comprehensive (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,321

)

 

 

(3,321

)

ESOP shares committed to be released (4,892 shares)

 

 

 

 

2

 

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

49

 

Repurchase and cancellation of common stock-stock repurchase program (184,270 shares)

 

(1

)

 

 

(1,994

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,995

)

Stock compensation expense

 

 

 

 

80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 

Balance as of September 30, 2022

$

63

 

 

$

50,943

 

 

$

(4,354

)

 

$

(301

)

 

$

41,443

 

 

$

(11,891

)

 

$

75,903

 

Balance as of June 30, 2023

$

62

 

 

$

49,964

 

 

$

(4,214

)

 

$

(295

)

 

$

39,816

 

 

$

(11,207

)

 

$

74,126

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,641

)

 

 

 

 

 

(3,641

)

Other comprehensive (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(316

)

 

 

(316

)

ESOP shares committed to be released (4,973 shares)

 

 

 

 

(16

)

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

31

 

Repurchase and cancellation of common stock-stock repurchase program (32,107 shares)

 

 

 

 

(238

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(238

)

Stock options exercised (3,159 shares)

 

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

Stock compensation expense

 

 

 

 

178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

178

 

Balance as of September 30, 2023

$

62

 

 

$

49,907

 

 

$

(4,167

)

 

$

(295

)

 

$

36,175

 

 

$

(11,523

)