Infinity Bank Announces Financial Results for 2019

SANTA ANA, CA / ACCESSWIRE / February 3, 2020 / Infinity Bank (OTCQB:INFT) (the "Bank") announced financial results as of December 31, 2019.

Financial Highlights for the fourth quarter of 2019:

Total loans increased by $27.4 million
Total deposits increased by $7.1 million
Net Interest Margin increased to 4.06%
Total assets increased to $116.6 million

Loans

At December 31, 2019, the Bank's loan portfolio totaled $73.8 million, an increase of $27.4 million, or 58.9% from the end of the third quarter of 2019 and by $59.9 million, or 430.5% compared to December 31, 2018. The Bank increased its loan to deposit ratio to 83.0% as of December 31, 2019. This represents an increase of 26.2% from the third quarter ending September 30, 2019, and an increase of 50.5% compared to December 31, 2018.

Deposits

On a year-over-year basis the Bank more than doubled its total deposits compared to December 31, 2018. The growth in deposit relationships was accomplished while maintaining the cost of funds at 59 basis points for the year ended December 31, 2019. Noninterest-bearing demand deposits increased by $8.4 million, or 23.9% compared to the third quarter ended September 30, 2019. On a year-over-year basis noninterest-bearing demand accounts increased $25.8 million, or 146.8% at December 31, 2019 versus December 31, 2018. Interest-bearing deposits decreased by $1.3 million, or 2.7% compared to the third quarter ending, September 30, 2019. On a year-over-year basis, interest bearing deposits increased by $20.3 million or 80.2% from December 31, 2018 to December 31, 2019. As of December 31, 2019, total deposits increased by $7.1 million, or 8.7% compared to September 30, 2019 and by $46.1 million or 107.6% compared to December 31, 2018.

Net-Interest Income

Net-interest income for the fourth quarter ended December 31, 2019 exceeded $1 million, an increase of $160 thousand or 17.8% compared to the third quarter of 2019. Net-interest income for the twelve months ended December 31, 2019 was $3.2 million compared to $897 thousand for the comparable period ending December 31, 2018 an increase of $2.3 million or 262.9%. The Bank's primary source of revenue was driven by interest income from loans and investment securities. The Bank's net interest margin increased by 168 basis points for the twelve months ended December 31, 2019 to 4.03% compared to the comparable period ended December 31, 2018.

Non-Interest Income

Total non-interest income for the fourth quarter of 2019 totaled $158 thousand, an increase of $26 thousand or 19.7% compared to the third quarter of 2019. Non-interest income for the twelve months ended December 31, 2019 totaled $336 thousand, an increase of $292 thousand or 663.6%, as compared to the comparable period ended December 31, 2018. The increase in non-interest income was primarily driven by gains on sale of investment securities in the amount of $203 thousand as the Bank took advantage of changes in interest rates to re-align the composition of its investment securities portfolio.

Non-Interest Expense

During the fourth quarter of 2019, the Bank's total non-interest expense increased by $126 thousand, or 10.9% versus the third quarter ended September 30, 2019. Non-interest expense for the twelve months ended December 31, 2019 totaled $4.8 million versus $3.9 million, an increase of $904 thousand or 23.4%, compared to the comparable period ended December 31, 2018. The increase in non-interest expense for the twelve months ended December 31, 2019 was primarily a result of additional staff as the Bank continued to grow.

Net Income

The Bank's net loss for the fourth quarter of 2019 totaled $407 thousand ($0.12 per share) versus a net loss of $298 thousand ($0.09 per share), or an increase of $109 thousand or 36.6% from the third quarter of 2019. On a year-over year basis, the Bank's net loss for the year 2019 was $1.9 million ($0.58 per share) versus $3.1 million ($0.94 per share) in 2018, an improvement of 37.7%. This improvement occurred despite the increase of reserves made to the allowance for loan and lease losses as a result of the substantial increase in the Bank's outstanding loans. The Bank's allowance for loan and lease losses represents 1.25% of total loans outstanding as of December 31, 2019.

Capital

As of December 31, 2019, the Bank remained well-capitalized with a tier 1 risk-based capital ratio of 28.55%, a total risk-based capital ratio of 29.57%, and a tier 1 leverage ratio of 24.13%.

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 Victor Guerrero

President & CEO COO & CFO

Phone: (657) 223-1000 Phone: (657) 223-1000

Bala@goinfinitybank.com 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)

 
December 31,
2019
 
 
September 30,
2019
 
 
December 31,
2018
 

ASSETS:

Cash and due from banks

 
$
13,476
 
 
$
26,847
 
 
$
40,285
 

Securities available for sale

 
 
27,788
 
 
 
34,833
 
 
 
15,715
 

Total Loans

 
 
73,840
 
 
 
46,460
 
 
 
13,919
 

Allowance for loan and lease losses

 
 
(923
)
 
 
(581
)
 
 
(174
)

Net Loans

 
 
72,917
 
 
 
45,879
 
 
 
13,745
 

Premises and equipment, net

 
 
1,960
 
 
 
2,061
 
 
 
527
 

Other assets

 
 
491
 
 
 
495
 
 
 
270
 

TOTAL ASSETS

 
$
116,632
 
 
$
110,115
 
 
$
70,542
 

LIABILITIES

Deposits:

Non-interest bearing

 
$
43,451
 
 
$
35,075
 
 
$
17,605
 

Interest bearing

 
 
45,567
 
 
 
46,825
 
 
 
25,283
 

Total deposits

 
 
89,018
 
 
 
81,900
 
 
 
42,888
 

Other liabilities

 
 
1,835
 
 
 
1,906
 
 
 
280
 

TOTAL LIABILITIES

 
 
90,853
 
 
 
83,806
 
 
 
43,168
 

Stockholders' Equity:

Common stock

 
 
32,652
 
 
 
32,577
 
 
 
32,362
 

Accumulated deficit

 
 
(4,934
)
 
 
(4,934
)
 
 
(3,105
)

Net income (loss)

 
 
(1,932
)
 
 
(1,525
)
 
 
(1,829
)

Accumulated other comprehensive gain

 
 
(7
)
 
 
191
 
 
 
(54
)

TOTAL STOCKHOLDERS' EQUITY

 
 
25,779
 
 
 
26,309
 
 
 
27,374
 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 
$
116,632
 
 
$
110,115
 
 
$
70,542
 

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

 
Three Months Ended
 
 
Twelve Months Ended
 

 
December 31,
2019
 
 
September 30,
2019
 
 
December 31,
2018
 
 
December 31,
2019
 
 
December 31,
2018
 

Interest Income:

Loans

 
$ 
943
 
 
$ 
651
 
 
$ 
97
 
 
$ 
2,320
 
 
$ 
176
 

Investment securities

 
 
168
 
 
 
159
 
 
 
104
 
 
 
561
 
 
 
283
 

Other short-term investments

 
 
67
 
 
 
188
 
 
 
189
 
 
 
763
 
 
 
476
 

Total interest income

 
 
1,178
 
 
 
998
 
 
 
390
 
 
 
3,644
 
 
 
935
 

Interest expense:

Deposits

 
 
119
 
 
 
99
 
 
 
24
 
 
 
389
 
 
 
38
 

Borrowed funds

 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 

Total interest expense

 
 
119
 
 
 
99
 
 
 
24
 
 
 
389
 
 
 
38
 

Net interest income

 
 
1,059
 
 
 
899
 
 
 
366
 
 
 
3,255
 
 
 
897
 

Provision for loan and lease losses

 
 
342
 
 
 
174
 
 
 
114
 
 
 
749
 
 
 
174
 

Net interest income after provision for loan and lease losses

 
 
717
 
 
 
725
 
 
 
252
 
 
 
2,506
 
 
 
723
 

Non-interest income:

Service charges and other fees

 
 
19
 
 
 
33
 
 
 
29
 
 
 
94
 
 
 
43
 

Other income

 
 
33
 
 
 
2
 
 
 
1
 
 
 
39
 
 
 
1
 

Gain (loss) on securities

 
 
106
 
 
 
97
 
 
 
–
 
 
 
203
 
 
 
–
 

Total non-interest income

 
 
158
 
 
 
132
 
 
 
30
 
 
 
336
 
 
 
44
 

Non-interest expense:

Salaries and employee benefits

 
 
831
 
 
 
769
 
 
 
785
 
 
 
3,187
 
 
 
2,687
 

Occupancy

 
 
82
 
 
 
82
 
 
 
87
 
 
 
324
 
 
 
319
 

Furniture, fixture & equipment

 
 
42
 
 
 
42
 
 
 
40
 
 
 
168
 
 
 
159
 

Data processing

 
 
66
 
 
 
60
 
 
 
37
 
 
 
232
 
 
 
93
 

Professional & legal

 
 
119
 
 
 
65
 
 
 
62
 
 
 
360
 
 
 
230
 

Marketing

 
 
19
 
 
 
12
 
 
 
21
 
 
 
53
 
 
 
68
 

Other expense

 
 
122
 
 
 
125
 
 
 
101
 
 
 
450
 
 
 
314
 

Total non-interest expense

 
 
1,281
 
 
 
1,155
 
 
 
1,133
 
 
 
4,774
 
 
 
3,870
 

Income (loss) before taxes

 
 
(406
)
 
 
(298
)
 
 
(851
)
 
 
(1,932
)
 
 
(3,103
)

Income tax expense

 
 
1
 
 
 
–
 
 
 
1
 
 
 
1
 
 
 
2
 

Net Income (Loss)

 
$ 
(407
)
 
$ 
(298
)
 
$ 
(852
)
 
$ 
(1,933
)
 
$ 
(3,105
)

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

 
$ 
(0.12
)
 
$ 
(0.09
)
 
$ 
(0.26
)
 
$ 
(0.58
)
 
$ 
(0.94
)

Common shares outstanding

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

 INFINITY BANK
UNAUDITED FINANCIAL HIGHLIGHTS

 
Three Months Ended
 
 
Twelve Months Ended
 

 
December 31,
2019
 
 
September 30,
2019
 
 
December 31,
2018
 
 
December 31,
2019
 
 
December 31,
2018
 

Performance Ratios (Based upon Reported Net Income):

Net interest margin

 
 
4.06
%
 
 
3.75
%
 
 
2.64
%
 
 
4.03
%
 
 
2.35
%

Cost of funds

 
 
0.59
%
 
 
0.54
%
 
 
0.32
%
 
 
0.59
%
 
 
0.29
%

Loan to deposit ratio

 
 
82.95
%
 
 
56.73
%
 
 
32.45
%
 
 
82.95
%
 
 
32.50
%

Asset Quality Summary:

Allowance for loan loss/Total loans

 
 
1.25
%
 
 
1.25
%
 
 
1.25
%
 
 
1.25
%
 
 
1.25
%

Capital Ratios:

Tier 1 risk-based capital ratio

 
 
28.55
%
 
 
40.30
%
 
 
124.74
%
 
 
40.30
%
 
 
124.74
%

Total risk-based capital ratio

 
 
29.57
%
 
 
41.20
%
 
 
125.53
%
 
 
41.20
%
 
 
125.53
%

Tier 1 leverage ratio

 
 
24.13
%
 
 
26.26
%
 
 
48.35
%
 
 
26.26
%
 
 
48.35
%

SOURCE: Infinity Bank Santa Ana California

ReleaseID: 574942