Feb 2022 Evergreen Bank Group reports record earnings and provides updates on digital and FinTech strategies
Bancorp Financial, Inc. (the "Company"), the parent company of Evergreen Bank Group (the "Bank" or "Evergreen") today announced record earnings for 2021. The Company's net income was $24.8 million for 2021 as compared to $11.5 million for 2020.
Net interest income was $59.0 million, representing a net interest margin of 4.92%, as compared to $54.6 million and a margin of 4.55% for the same period in 2020. The Bank's nationwide powersport portfolio continues to drive the strong yield on earning assets.
Provision for loan losses was $0.3 million for 2021 as compared to $13.9 million during 2020. The allowance for loan losses stands at 1.91%, still significantly elevated over pre- pandemic levels. The Bank has recognized very low losses from Covid and remains cautiously optimistic about continued recovery.
Non-interest income at the Bank was $3.0 million for 2021 as compared to $2.3 million in 2020. Non-interest expense was $30.0 million for 2021 as compared to $27.9 million in 2020, primarily due to infrastructure costs for the new digital strategy and staffing related to overall growth.
Total assets were $1.20 billion at December 31, 2021, down 3.7% from $1.25 billion from year-end 2020 primarily due to lower loan demand. Commercial lending growth has been challenging as the Bank's primary focus has been on current customers impacted by Covid-19.
Powersport demand is at an all-time high, but 2021 originations were only up slightly as inventories have been lower in 2021 because of supply chain issues. As powersport inventory issues are resolved throughout 2022, pent up demand should result in solid loan growth in 2022. Other lending areas within the Bank have also seen lower growth because of the ongoing pandemic but are also expected to pick up pace throughout 2022.
Looking ahead to 2022 - "While we are projecting strong earnings in 2022, we do not expect net income to reach our 2021 levels. We are projecting some net interest margin pressure as the Fed moves short term rates. Plus, we plan to add more to the provision as we are projecting the record low loan loss rates in 2021 will reverse back to historical loss rate numbers. The provision will also increase as we account for higher loan growth in 2022. In addition, we are committed to aggressive technology investments as it relates to our digital and FinTech strategies. We truly believe the financial institutions with the best technology will create the most shareholder value and long-term profitability," said Jill Voss, EVP and Chief Financial Officer.
The Company was excited to pay its first quarterly shareholder dividend in 8 years. In December the Board of Directors declared a $.20 dividend per share outstanding that was paid to shareholders of record as of December 31, 2021 in January2022. While capital and earnings continue to be strong, the Company intends to continue to pay a quarterly dividend throughout 2022.
|Cash and cash equivalents||$ 116,536,612||$ 153,516,636|
|Investments||$ 96,113,046||$ 85,362,728|
|Loans, net||$ 951,287,254||$ 972,799,291|
|Bank owned life insurance||$ 12,680,356||$ 13,088,565|
|Other assets||$ 24,179,299||$ 22,181,794|
|Total Assets||$ 1,200,796,567||$ 1,246,949,014|
|Liabilities and Stockholders' Equity|
|Deposits||$ 994,057,949||$ 1,048,619,471|
|Notes Payable||$ 57,700,000||$ 63,426,647|
|Subordinated debt||$ 0||$ 12,500,000|
|Other liabilities||$ 14,510,993||$ 9,558,419|
|Total Liabilities||$ 1,066,268,942||$ 1,134,104,537|
|Stockholders' Equity||$ 134,527,625||$ 112,844,477|
|Total Liabilities and Stockholders' Equity||$ 1,200,796,567||$ 1,246,949,014|
|Evergreen Bank Group Capital Ratios:|
|Common equity tier 1 capital ratio||15.61%||13.07%|
|Tier 1 risk-based capital ratio||15.61%||13.07%|
|Total risk-based capital ratio||16.89%||14.33%|
|Tier 1 leverage ratio||13.23%||10.72%|
Accelerating Digital Strategy and FinTech Integrations
Evergreen will be launching phase one of its robust best-in-class digital banking solution in March 2022. The enhancements will focus on the Evergreen brand with subsequent phases focused on the Bank's powersport divisions, FreedomRoad Financial and Performance Finance. Evergreen partnered with several premier financial technology companies ("FinTechs") to greatly enhance the customer digital banking experience, both via a computer or mobile device. Current and new customers will be able to open deposit accounts on their mobile device or online in just minutes. "We truly believe our new digital solutions and FinTech partnerships that we plan to roll out over the next several quarters will rival any Neobank or Tech-Savvy National Bank," said Darin Campbell, President & CEO.
March 2022 New Digital Banking Launch Will Include:
g – Evergreen will be launching an award winning and entirely digital and fully automated platform – offering customers the ability to open accounts in just over 2 minutes. The solution will also be fully integrated to support the automated onboarding process by combining 120 plus data points related to Know-Your-Customer (KYC) checks to enhance fraud prevention.
g – Evergreen will be launching an award winning and entirely digital and fully automated platform – focused on a superior user experience that aligns with the customer's daily life.
p – The Evergreen solution will leverage AppXchange and APIs – offering two new fully integrated financial wellness tools:
Insurance App – The award winning and top-rated insurance company digital solution offers the easiest and fastest way for customers to switch to better homeowners and renters insurance options.
Lower Your Bills App – This 4-star service is like having your own personal account manager and will help lower customers' monthly bills. The service will negotiate recurring monthly bills (i.e., internet, cable, satellite, mobile/wireless, home security, and other services), and help cancel unwanted subscriptions (e.g., a monthly shave club).
– Evergreen will be launching an award-winning solution that is securely integrated in the new digital banking platform. This best-in-class solution provides customers with a seamless experience for viewing all their data on our single platform. Budgeting, account aggregation, auto-categorization, and debt management tools will be available to customers.
– Apple Pay and Google Pay are securely connected to the Evergreen debit card - replacing the physical card and cash with an easier, more secure and private payment method.
p – Evergreen will be launching best-in-class mobile remote deposit capture technology – offering customers the highest mobile check image acquisition rates in the industry.
– Evergreen will be launching industry-leading payment and transfer solutions – offering customers the latest digital payment technology when paying bills (one-time, future, and recurring) and when transferring money to another individual's account.
"We are extremely excited to launch phase one of our new digital strategy in March. The upgrades we're making over the next 18 months will be robust – stay tuned for phase two and three of our plan as we will be rolling out several industry leading upgrades to our platform," said Dan Inendino, SVP – Head of Digital Banking & Chief Marketing Officer.
"Prelude to phase two will be separate branded solutions for our national powersport lending divisions (FinTechs), FreedomRoad Financial and Performance Finance. We are excited to offer this new technology to our current loan-only customers and the thousands of new customers we add nationally each month. Our ability to seamlessly cross-sell competitive deposit products, along with integrated FinTech Marketplace products, to our large national customer base will only increase customer loyalty and drive additional profitability," said Darin Campbell, President & CEO.
National Digital Lending Strategy:
g ( – Evergreen plans to launch new enhancements to the current LOS along with several new digital lending applications over the next several quarters – offering original equipment manufacturers (OEMs), dealers, and all consumer customers best-in-class direct and indirect lending options.
"We are laser focused on simplifying the loan process for our dealers and customers. We are adding more features for dealers to instantly make changes from application to funding, offer pre-approved options, mobile device options, advanced contracting, and expanded automated decisioning. We love our dealers, and they are the lifeblood of our business. We are always looking for ways to make their lives easier and help them sell units," said Tom Collins, EVP – Head of Powersport Lending.
FinTech Banking Strategy:
g – Evergreen plans to work with a partner to launch a FinTech partnership program – offering banking services for a fee to select FinTechs.
"We don't think there is any question that bank and FinTech partnerships will lead the way to future financial services –traditional banks can ignore the change or take advantage of the tremendous opportunity to unlock a new revenue stream. We plan to partner with a proven platform that can help us manage and scale our program," said Darin Campbell, President & CEO.
Evergreen Bank Group (the "Bank") is an Illinois-chartered community bank wholly-owned by Bancorp Financial, Inc., a Delaware corporation (the "Company"). The Bank was formed in 1999 and became a subsidiary of the Company as a result of a merger transaction during 2007. The Bank is headquartered in Oak Brook, Illinois.
This document contains certain forward-looking statements as deined in applicable federal securities laws. These forward-looking statements describe future plans or strategies and may include the Company's and the Bank's expectations of future results. The Company's and the Bank's ability to predict results or the effect of future plans or strategies or qualitative or quantitative changes is inherently uncertain. Actual results may differ materially from stated expectations.
SOURCE Evergreen Bank Group
|INCOME STATEMENTS||Unaudited YTD
|Interest income on loans||$ 64,454,874||$ 68,356,649|
|Interest income on investments
and cash in banks
|$ 1,871,103||$ 2,450,211|
|Total Interest Income||$ 66,325,977||$ 70,806,860|
|Interest expense on deposits||$ 5,840,556||$ 14,151,591|
|Interest expense on debt||$ 1,519,705||$ 2,047,230|
|Total Interest Expense||$ 7,360,261||$ 16,198,821|
|Net Interest Income||$ 58,965,716||$ 54,608,039|
|Provision for loan losses||$ 325,000||$ 13,900,000|
|Other non interest income||$ 3,044,165||$ 2,332,711|
|Other non interest expense||$ 29,996,559||$ 27,872,360|
|Net Income before Taxes||$ 31,688,322||$ 15,168,390|
|Income tax expense||$ 6,940,268||$ 3,669,644|
|Net Income||$ 24,748,054||$ 11,498,746|
|Return on Average Assets||2.03%||1.07%|
|Return on Average Equity||19.82%||12.14%|