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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, 2022

 

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

 

 

6,621,077 shares of the Registrant’s common stock, par value $0.01 per share, were outstanding as of November 7, 2022.

 

 

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, 2022 (unaudited) and December 31, 2021

 

1

 

 

 

 

 

 

 

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)

 

2

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)

 

3

 

 

 

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)

 

4

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited)

 

5

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

6

 

 

 

 

 

Item 2.

 

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

 

32

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

43

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

43

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

43

 

 

 

 

 

Item 1A.

 

Risk Factors

 

43

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

43

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

43

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

43

 

 

 

 

 

Item 5.

 

Other Information

 

43

 

 

 

 

 

Item 6.

 

Exhibits

 

44

 

 

 

 

 

 

 

SIGNATURES

 

45

 

 

 

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,
2022

 

 

December 31,
2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

13,002

 

 

$

65,300

 

Fed funds sold

 

 

2,700

 

 

 

1,503

 

Cash and cash equivalents

 

 

15,702

 

 

 

66,803

 

 

 

 

 

 

 

 

Marketable equity securities, stated at fair value

 

 

2,723

 

 

 

3,544

 

Available-for-sale securities, stated at fair value

 

 

118,414

 

 

 

112,440

 

Loans held for sale

 

 

365

 

 

 

1,183

 

Loans, net of allowance for loan losses of $3,180 and $2,858 at
   September 30, 2022 and December 31, 2021, respectively

 

 

354,740

 

 

 

323,789

 

Premises and equipment, net

 

 

5,562

 

 

 

5,864

 

Mortgage servicing rights, net

 

 

1,890

 

 

 

2,036

 

Federal Home Loan Bank (FHLB) stock, at cost

 

 

3,205

 

 

 

3,032

 

Accrued interest receivable

 

 

1,106

 

 

 

948

 

Cash value of life insurance

 

 

14,209

 

 

 

13,892

 

Other assets

 

 

11,401

 

 

 

6,108

 

TOTAL ASSETS

 

$

529,317

 

 

$

539,639

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Deposits

 

$

379,298

 

 

$

384,501

 

Advance payments by borrowers for taxes and insurance

 

 

10,225

 

 

 

1,860

 

FHLB advances

 

 

56,951

 

 

 

55,442

 

Accrued interest payable

 

 

142

 

 

 

109

 

Other liabilities

 

 

6,798

 

 

 

6,834

 

TOTAL LIABILITIES

 

 

453,414

 

 

 

448,746

 

Preferred stock, $0.01 par value, 10,000,000 shares authorized at September 30, 2022
    and December 31, 2021

 

 

—

 

 

 

—

 

Common stock (par value $0.01 per share) Authorized - 90,000,000 shares at
   September 30, 2022 and December 31, 2021 Issued – 6,253,854 at
   September 30, 2022 and 6,402,571 at December 31, 2021 (includes 116,387 and
   97,128 unvested shares, respectively) Outstanding – 6,223,791 at
   September 30, 2022 and 6,372,508 at December 31, 2021 (includes 116,387 and
   97,128 unvested shares, respectively)

 

 

63

 

 

 

64

 

Additional paid-in capital

 

 

50,943

 

 

 

52,805

 

Unallocated common stock of Employee Stock Ownership Plan (ESOP), 458,765 and
   377,077 shares at September 30, 2022 and December 31, 2021, respectively

 

 

(4,354

)

 

 

(3,432

)

Less treasury stock at cost, 30,063 shares at September 30, 2022 and December 31, 2021

 

 

(301

)

 

 

(301

)

Retained earnings

 

 

41,443

 

 

 

41,615

 

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

 

 

(11,891

)

 

 

142

 

Total stockholders’ equity

 

 

75,903

 

 

 

90,893

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

529,317

 

 

$

539,639

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

3,563

 

 

$

2,939

 

 

$

9,862

 

 

$

9,357

 

Securities, taxable

 

 

613

 

 

 

368

 

 

 

1,727

 

 

 

971

 

Other

 

 

139

 

 

 

74

 

 

 

279

 

 

 

181

 

Total interest and dividend income

 

 

4,315

 

 

 

3,381

 

 

 

11,868

 

 

 

10,509

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

196

 

 

 

171

 

 

 

551

 

 

 

620

 

Borrowed funds

 

 

200

 

 

 

178

 

 

 

550

 

 

 

579

 

Other interest-bearing liabilities

 

 

2

 

 

 

—

 

 

 

7

 

 

 

—

 

Total interest expense

 

 

398

 

 

 

349

 

 

 

1,108

 

 

 

1,199

 

Net interest income

 

 

3,917

 

 

 

3,032

 

 

 

10,760

 

 

 

9,310

 

Provision for loan losses

 

 

—

 

 

 

30

 

 

 

210

 

 

 

30

 

Net interest income after provision for loan losses

 

 

3,917

 

 

 

3,002

 

 

 

10,550

 

 

 

9,280

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other fees

 

 

229

 

 

 

242

 

 

 

722

 

 

 

713

 

Loan servicing, net

 

 

167

 

 

 

204

 

 

 

515

 

 

 

971

 

Net gain on sale of loans

 

 

83

 

 

 

448

 

 

 

266

 

 

 

1,361

 

Net gain on sale of securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12

 

Increase in cash surrender value of insurance

 

 

108

 

 

 

103

 

 

 

317

 

 

 

304

 

Unrealized (loss) on marketable equity securities

 

 

(159

)

 

 

(377

)

 

 

(892

)

 

 

(5

)

Other

 

 

51

 

 

 

8

 

 

 

58

 

 

 

15

 

Total noninterest income

 

 

479

 

 

 

628

 

 

 

986

 

 

 

3,371

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,528

 

 

 

2,137

 

 

 

6,846

 

 

 

7,290

 

Advertising and promotions

 

 

33

 

 

 

52

 

 

 

146

 

 

 

84

 

Data processing

 

 

221

 

 

 

206

 

 

 

630

 

 

 

611

 

Occupancy and equipment

 

 

326

 

 

 

341

 

 

 

1,010

 

 

 

1,076

 

FDIC assessment

 

 

36

 

 

 

38

 

 

 

99

 

 

 

105

 

Other

 

 

1,107

 

 

 

1,028

 

 

 

3,149

 

 

 

3,086

 

Total noninterest expense

 

 

4,251

 

 

 

3,802

 

 

 

11,880

 

 

 

12,252

 

Income (loss) before income taxes

 

 

145

 

 

 

(172

)

 

 

(344

)

 

 

399

 

Income tax expense (benefit)

 

 

21

 

 

 

(57

)

 

 

(172

)

 

 

45

 

Net income (loss)

 

$

124

 

 

$

(115

)

 

$

(172

)

 

$

354

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

(0.02

)

 

$

(0.03

)

 

$

0.06

 

Diluted

 

$

0.02

 

 

$

(0.02

)

 

$

(0.03

)

 

$

0.06

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,810,185

 

 

 

6,011,247

 

 

 

5,842,184

 

 

 

6,035,289

 

Diluted

 

 

5,983,241

 

 

 

6,011,247

 

 

 

5,842,184

 

 

 

6,262,722

 

 

See accompanying notes to the unaudited consolidated financial statements.

2

 

1895 Bancorp of Wisconsin, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands) - Unaudited

 

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

124

 

 

$

(115

)

 

$

(172

)

 

$

354

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(4,549

)

 

 

(39

)

 

 

(16,483

)

 

 

(392

)

Reclassification adjustment for (gains) realized in net
   income on available-for-sale securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(12

)

Other comprehensive (loss) before tax effect

 

 

(4,549

)

 

 

(39

)

 

 

(16,483

)

 

 

(404

)

Tax effect of other comprehensive (loss) income items

 

 

1,228

 

 

 

10

 

 

 

4,451

 

 

 

108

 

Other comprehensive (loss), net of tax

 

 

(3,321

)

 

 

(29

)

 

 

(12,032

)

 

 

(296

)

Comprehensive (loss) income

 

$

(3,197

)

 

$

(144

)

 

$

(12,204

)

 

$

58

 

 

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

 

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 retirement of shares-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