Infinity Bank Announces Second Quarter 2020 Financial Results

SANTA ANA, CA / ACCESSWIRE / August 4, 2020 / Infinity Bank (OTCQB:INFT) (the "Bank") announced financial results as of June 30, 2020.

Financial Highlights for the second quarter of 2020:

Both total loans and total deposits surpassed the $100 million mark
Total loans increased by $38.5 million at June 30, 2020
Total deposits increased by $59.9 at June 30, 2020
Total assets reached $180 million at June 30, 2020

Loans

Total loans increased by $38.5 million, or 50.4% to $115 million for the quarter ended June 30, 2020 compared to the first quarter of 2020 and by $41.2 million, or 55.8% compared to December 31, 2019. During the second quarter of 2020, the Bank funded more than $24.5 million in Paycheck Protection Program ("PPP") loans that were authorized under the CARES Act which was signed into law on March 27, 2020. The Bank decreased its loan to deposit ratio to 80.6% as of June 30, 2020 which is a decrease from 92.5% from the first quarter ending March 31, 2020, and an increase from 42.0% compared to the same time last year. PPP loans are guaranteed by the US Government and, therefore, do not require an allowance for loan and leases losses ("ALLL") to be allocated to them. As a result, while the Bank maintained an ALLL ratio of 1.25% on non-PPP loans, the overall ratio of ALLL to total loans decreased to 1.00%.

Deposits

Total deposits were $142.7 million, an increase of $59.9 million, or 72.4% for the quarter ended June 30, 2020 compared to March 31, 2020. Noninterest-bearing demand accounts increased by $27.9 million, or 75.7% for the quarter ended June 30, 2020 compared to March 31, 2020. Interest-bearing deposits increased by $12 million, or 26.1% compared to the quarter ended, March 31, 2020. During the second quarter of 2020, the Bank added short-term certificates of deposits in the amount of $20 million. These short-term certificates of deposit are expected to runoff by year end as the Bank's high levels of liquidity mitigates the need for these deposits. Additionally, as a result of the PPP loan program, the Bank added several key relationships that increased the Bank's overall core deposit base. Also, loan proceeds from the PPP loans were deposited into the Bank which further increased the deposit base.

The cost of total deposits for the quarter ended June 30, 2020 was 42 basis points, a decrease of 15 basis points compared to quarter ended March 31, 2020 and a decrease of 24 basis points when compared to the same time last year.

Net-Interest Income

Net-interest income totaled $1.2 million an increase of $19 thousand, or 1.6% for the quarter ended June 30, 2020 from previous quarter ended March 31, 2020. Net-interest income grew by $458 thousand, or 61.3% when compared to the same period last year. The Bank's primary source of revenue was driven by interest income from loans and other short-term investments. The Bank's net interest margin decreased by 125 basis points at the end of the quarter ended June 30, 2020 from the previous linked quarter and a decrease of 31 basis points compared to the same period in 2019. This decrease was primarily driven by the substantial lowering of a key rate by the Federal Reserve's Open Market Committee ("FOMC"). In particular, the FOMC lowered the target federal funds rates by 150 basis points during March of this year. That decrease directly impacted the Bank's net interest margin as many of our loans are tied to rate indices that are directly or indirectly based on the target federal funds rate set by the FOMC.

Non-Interest Income

At June 30, 2020, total non-interest income totaled $53 thousand, a decrease of $1 thousand, or 1.9% from previous quarter ended March 31, 2020. Non-interest income increased $26 thousand, or 96.3% when compared to this same period last year.

Non-Interest Expense

During the second quarter of 2020, the Bank's total non-interest expense decreased by $122 thousand, or 8.8% versus the quarter ended March 31, 2020. Non-interest expense increased $132 thousand, or 11.6% when compared to the comparable period ended June 30, 2019. The decrease in non-interest expense from the first quarter of 2020 compared to the second quarter of 2020 is primarily driven by a decrease in employee expense. A portion of employee expenses can vary based on the number and type of loans funded in a given period and have an inverse relationship with each other.

Net Income

The Bank recorded a net loss of $201 thousand ($0.06 per share) for the quarter ended June 30, 2020 versus a net loss of $182 thousand ($0.06 per share) and a net loss of $494 thousand ($0.15 per share) compared to the quarter ended, March 31, 2020 and quarter ended, June 30, 2019, respectively.

Capital

At June 30, 2020, the Bank remained well-capitalized under the regulatory capital ratio guidelines with a tier 1 risk-based capital ratio of 18.8%, a total risk-based capital ratio of 19.6%, and a tier 1 leverage ratio of 15.4%.

ABOUT INFINITY BANK

Infinity Bank is a community bank that commenced operations in February, 2018. The Bank is focused on serving the banking needs of commercial businesses, professional service entities, their owners, employees and families. The Bank offers a broad selection of depository products and services as well as business loan and commercial real estate financing products uniquely designed for each client. For more information about Infinity Bank and its services, please visit the website at www.goinfinitybank.com.

Contact Information:

Bala Balkrishna
CEO
Phone: (657) 223-1000
Bala@goinfinitybank.com

Victor Guerrero
President, COO & CFO
Phone: (657) 223-1000
Victor@goinfinitybank.com

This news release contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may be identified by use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions. Forward-looking statements are based upon various assumptions and analyses made by the Bank considering management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guaranteeing of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Bank's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Accordingly, you should not place undue reliance on such statements. Factors that could affect the Bank's results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Bank's control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Bank; unanticipated or significant increases in loan losses; changes in accounting principles, policies or guidelines may cause the Bank's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Bank's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Bank conducts business, or conditions in the securities markets or the banking industry may be less favorable than the Bank currently anticipates; legislation or regulatory changes may adversely affect the Bank's business; technological changes may be more difficult or expensive than the Bank anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Bank anticipates; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Bank anticipates.

INFINITY BANK
UNAUDITED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)

 
June 30,
2020
 
 
March 31,
2020
 
 
December 31,
2019
 

ASSETS:

Cash and due from banks

 
$
42,136
 
 
$
25,475
 
 
$
13,476
 

Securities available for sale

 
 
21,130
 
 
 
6,542
 
 
 
27,788
 

Total Loans

 
 
115,036
 
 
 
76,499
 
 
 
73,840
 

Allowance for loan and lease losses

 
 
(1,148
)
 
 
(956
)
 
 
(923
)

Net Loans

 
 
113,888
 
 
 
75,543
 
 
 
72,917
 

Premises and equipment, net

 
 
1,754
 
 
 
1,859
 
 
 
1,960
 

Other assets

 
 
1,100
 
 
 
726
 
 
 
491
 

TOTAL ASSETS

 
$
180,008
 
 
$
110,145
 
 
$
116,632
 

LIABILITIES

Deposits:

Non-interest bearing

 
$
64,800
 
 
$
36,879
 
 
$
43,451
 

Interest bearing

 
 
57,820
 
 
 
45,848
 
 
 
45,567
 

Time certificates of deposit

 
 
20,037
 
 
 
–
 
 
 
–
 

Total deposits

 
 
142,657
 
 
 
82,727
 
 
 
89,018
 

Other liabilities

 
 
11,801
 
 
 
1,780
 
 
 
1,835
 

TOTAL LIABILITIES

 
 
154,458
 
 
 
84,507
 
 
 
90,853
 

Stockholders' Equity:

Common stock

 
 
32,806
 
 
 
32,732
 
 
 
32,652
 

Accumulated deficit

 
 
(6,866
)
 
 
(6,866
)
 
 
(4,934
)

Net income (loss)

 
 
(383
)
 
 
(182
)
 
 
(1,932
)

Accumulated other comprehensive gain

 
 
(7
)
 
 
(46
)
 
 
(7
)

TOTAL STOCKHOLDERS' EQUITY

 
 
25,550
 
 
 
25,638
 
 
 
25,779
 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 
$
180,008
 
 
$
110,145
 
 
$
116,632
 

INFINITY BANK
UNAUDITED STATEMENTS OF OPERATIONS
(Dollars in thousands except share and per share amounts)

 
For the Three Months Ended
 
 
For the Six Months Ended
 

 
June 30,
2020
 
 
March 31,
2020
 
 
June 30,
2019
 
 
June 30,
2020
 
 
June 30,
2019
 

Interest Income:

Loans

 
$
1,307
 
 
$
1,159
 
 
$
453
 
 
$
2,466
 
 
$
726
 

Investment securities

 
 
19
 
 
 
94
 
 
 
127
 
 
 
113
 
 
 
234
 

Other short-term investments

 
 
25
 
 
 
60
 
 
 
275
 
 
 
85
 
 
 
509
 

Total interest income

 
 
1,351
 
 
 
1,313
 
 
 
855
 
 
 
2,664
 
 
 
1,469
 

Interest expense:

Deposits

 
 
146
 
 
 
127
 
 
 
108
 
 
 
273
 
 
 
171
 

Borrowed funds

 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
 
 

Total interest expense

 
 
146
 
 
 
127
 
 
 
108
 
 
 
273
 
 
 
171
 

Net interest income

 
 
1,205
 
 
 
1,186
 
 
 
747
 
 
 
2,391
 
 
 
1,298
 

Provision for loan and lease losses

 
 
192
 
 
 
33
 
 
 
133
 
 
 
225
 
 
 
233
 

Net interest income after provision for loan and lease losses

 
 
1,013
 
 
 
1,153
 
 
 
614
 
 
 
2,166
 
 
 
1,065
 

Non-interest income:

Service charges and other fees

 
 
20
 
 
 
23
 
 
 
13
 
 
 
43
 
 
 
20
 

Other income

 
 
31
 
 
 
24
 
 
 
14
 
 
 
55
 
 
 
26
 

Gain (loss) on securities

 
 
2
 
 
 
7
 
 
 
–
 
 
 
9
 
 
 
–
 

Total non-interest income

 
 
53
 
 
 
54
 
 
 
27
 
 
 
107
 
 
 
46
 

Non-interest expense:

Salaries and employee benefits

 
 
825
 
 
 
972
 
 
 
766
 
 
 
1,797
 
 
 
1,588
 

Occupancy

 
 
91
 
 
 
92
 
 
 
78
 
 
 
183
 
 
 
160
 

Furniture, fixture & equipment

 
 
51
 
 
 
41
 
 
 
43
 
 
 
92
 
 
 
85
 

Data processing

 
 
77
 
 
 
69
 
 
 
60
 
 
 
146
 
 
 
105
 

Professional & legal

 
 
72
 
 
 
82
 
 
 
72
 
 
 
154
 
 
 
175
 

Marketing

 
 
14
 
 
 
7
 
 
 
11
 
 
 
21
 
 
 
23
 

Other expense

 
 
137
 
 
 
126
 
 
 
105
 
 
 
263
 
 
 
203
 

Total non-interest expense

 
 
1,267
 
 
 
1,389
 
 
 
1,135
 
 
 
2,656
 
 
 
2,339
 

Income (loss) before taxes

 
 
(201
)
 
 
(182
)
 
 
(494
)
 
 
(383
)
 
 
(1,228
)

Income tax expense

 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 

Net Income (Loss)

 
$
(201
)
 
$
(182
)
 
$
(494
)
 
$
(383
)
 
$
(1,228
)

Earnings (loss) per share ("EPS"): Basic

 
$
(0.06
)
 
$
(0.06
)
 
$
(0.15
)
 
$
(0.12
)
 
$
(0.37
)

Common shares outstanding

 
 
3,306,429
 
 
 
3,306,429
 
 
 
3,300,000
 
 
 
3,306,429
 
 
 
3,300,000
 

INFINITY BANK
UNAUDITED FINANCIAL HIGHLIGHTS

 
At and For the Three Months Ended
 
 
At and For the Six Months Ended
 

 
June 30,
2020
 
 
March 31,
2020
 
 
June 30,
2019
 
 
June 30,
2020
 
 
June 30,
2019
 

Performance Ratios

(Based upon Reported Net Income):

Net interest margin

 
 
2.98
%
 
 
4.23
%
 
 
3.29
%
 
 
3.50
%
 
 
3.23
%

Cost of funds

 
 
0.42
%
 
 
0.57
%
 
 
0.66
%
 
 
0.48
%
 
 
0.62
%

Loan to deposit ratio

 
 
80.64
%
 
 
92.47
%
 
 
41.97
%
 
 
80.64
%
 
 
41.97
%

Asset Quality Summary:

Allowance for loan loss/Total loans

 
 
1.00
%
 
 
1.25
%
 
 
1.25
%
 
 
1.00
%
 
 
1.25
%

Capital Ratios:

Tier 1 risk-based capital ratio

 
 
18.77
%
 
 
27.39
%
 
 
58.16
%
 
 
18.77
%
 
 
58.16
%

Total risk-based capital ratio

 
 
19.61
%
 
 
28.41
%
 
 
59.05
%
 
 
19.61
%
 
 
59.05
%

Tier 1 leverage ratio

 
 
15.37
%
 
 
22.17
%
 
 
28.40
%
 
 
15.37
%
 
 
28.40
%

SOURCE: Infinity Bank Santa Ana California

ReleaseID: 600255