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First Savings Financial Group reports Q1 EPS 41c, consensus 63c
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First Savings Financial Group reports Q1 EPS 41c, consensus 63c

Reports Q1 provision for loan losses $984,000 due primarily to loan portfolio growth, compared to a provision of $526,000 for the same period in 2021. Reports Q1 net charge-offs of $264,000, of which $247,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $47,000 in 2021. Larry W. Myers, President and CEO, stated, "This Q1 was challenging and included a number of generally nonrecurring items that adversely affected net income. The core banking segment recognized higher than normal provisions for loan losses due primarily to a $109M increase in gross loans for the quarter. The SBA lending segment recognized a $351,000 impairment for the loan servicing asset due to the high-rate environment. And, due to restructuring during the quarter, the mortgage banking segment recognized approximately $1.8M of expense that will not be recognized in future periods. This restructuring in mortgage banking included changes in leadership, elimination of surplus staffing positions, closure of nonperforming loan production offices, or LPOs, and reduction in third-party and vendor related expenses. As part of the restructuring, the Bank has strategically focused on a predominately Midwest footprint for LPOs and a greater alignment of these with the core banking operations. While some expenses associated with the restructuring will be recognized in the quarter ending March 31, we are confident that this restructuring and realignment will result in the cessation of the significant losses recognized by the mortgage banking segment in recent quarters. The core banking segment continues to perform well and asset quality remains strong, but it’s increasing facing margin compression as funding costs increase in this rate environment, particularly those associated with wholesale funding sources such as home loan bank advances and brokered deposits. We are encouraged by the strong performance of the core banking segment and are optimistic for enhanced performance of the SBA lending and mortgage banking segments in future periods. Lastly, the Company repurchased 73,392 of its common shares during the quarter, in addition to the 199,195 purchased in the Q3 and Q4 of FY22, which together totaled more than 3.8% of outstanding shares."

Published first on TheFly

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