Executive Summary

Returned to profitability: BCOW posted GAAP net income of $0.124M and diluted EPS of $0.02 in Q3 2022, versus a loss of $0.241M (−$0.04 EPS) in Q2 2022 and a loss of $0.115M (−$0.02 EPS) in Q3 2021 .
Significant margin expansion: Net interest margin rose to 3.11% (from 2.65% in Q2 and 2.33% YoY) on higher loan yields and deployment of excess liquidity into securities; Q3 included $212k of loan prepayment fees supporting yields .
Mortgage banking still a headwind YoY: Noninterest income fell $149k YoY as gain-on-sale declined with secondary market volume down $26.6M YoY; sequentially, noninterest income improved from a very low Q2 base .
Capital actions and OCI pressure: The Board adopted a 5% buyback program in July and the company repurchased 184,270 shares in Q3; stockholders’ equity declined to $75.9M, driven primarily by a $16.5M increase in unrealized AFS losses (OCI) amid rising rates .
Estimates: Wall Street consensus (S&P Global) was unavailable for BCOW this quarter; therefore, beat/miss versus estimates cannot be assessed (S&P Global data unavailable today).

What Went Well and What Went Wrong

What Went Well
- Robust NIM and spread expansion: NIM increased to 3.11% and spread to 2.97% (+46 bps and +45 bps sequentially; +78 bps YoY) on higher loan yields and securities deployment .
- Loan growth and pricing: Average loans rose $22.3M YoY with a 48 bp increase in loan yields to 4.01%; Q3 benefited from $212k prepayment fees, reflecting a supportive rate and fee environment .
- Credit quality stable: Nonaccruals improved to 0.21% of total loans (from 0.31% at 12/31/21); allowance stood at 0.89% of loans, unchanged from Q2 .
What Went Wrong
- Mortgage banking downturn: Net gain on sale of loans declined $365k YoY on a $26.6M YoY drop in loans sold (to $5.6M), pressuring noninterest income .
- Operating expense inflation: Noninterest expense rose $449k YoY, including higher salaries/benefits with deferred comp plan mark-to-market and increases in wages, ESOP and incentive accruals .
- Capital/OCI pressure: AFS portfolio unrealized losses increased $16.5M YTD (rates-driven), reducing equity by ~$12.0M after tax; equity also declined ~$2.0M from share repurchases and ~$1.1M from higher unallocated ESOP shares .

Financial Results

Income Statement and Profitability (oldest → newest)

Metric	Q3 2021	Q2 2022	Q3 2022
Total interest and dividend income ($M)	$3.381	$3.667	$4.315
Net interest income ($M)	$3.032	$3.297	$3.917
Provision for loan losses ($M)	$0.030	$0.105	$0.000
Noninterest income ($M)	$0.628	$0.118	$0.479
Noninterest expense ($M)	$3.802	$3.684	$4.251
Net income ($M)	$(0.115)	$(0.241)	$0.124
Diluted EPS ($)	$(0.02)	$(0.04)	$0.02
Net interest margin (%)	2.33%	2.65%	3.11%
Interest rate spread (%)	2.19%	2.52%	2.97%

Notes: BCOW does not report “total revenue” as a single line item; banking “top line” is shown via total interest and dividend income and noninterest income.

Balance Sheet and Credit KPIs (oldest → newest)

Metric	12/31/2021	6/30/2022	9/30/2022
Total assets ($M)	$539.639	$535.626	$529.317
Cash & cash equivalents ($M)	$66.803	$20.221	$15.702
AFS securities ($M, FV)	$112.440	$126.676	$118.414
Net loans ($M)	$323.789	$349.619	$354.740
Deposits ($M)	$384.501	$383.062	$379.298
FHLB advances ($M)	$55.442	$57.435	$56.951
Stockholders’ equity ($M)	$90.893	$80.966	$75.903
Nonaccrual loans / total loans (%)	0.31%	0.23%	0.21%
ALLL / total loans (%)	0.88%	0.89%	0.89%

Drivers and context: YTD cash down as liquidity was deployed into securities ($37.1M purchases) and loan growth ($31.5M net), while AFS unrealized losses rose with rates; deposits decreased $5.2M YTD .

Guidance Changes

BCOW did not provide formal quantitative guidance for revenue, margin, expenses, or other line items in its Q3 2022 materials. No guidance ranges were issued for tax rate, segment metrics, or dividends .

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	FY/Q4 outlook	None	None	N/A

Related capital actions: Board authorized a stock repurchase program up to 5% of outstanding shares on July 29, 2022; the company repurchased 184,270 shares in Q3, reducing equity by ~$2.0M .

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 2022; themes are synthesized from company filings and press releases.

Topic	Q1 2022 (Mar-22)	Q2 2022 (Jun-22)	Q3 2022 (Sep-22)	Trend
Net interest margin and spread	NIM 2.85%, spread 2.71%; early benefits from securities deployment	NIM 2.65%, spread 2.52%; continued securities deployment	NIM 3.11%, spread 2.97%; higher loan yields plus $212k prepayment fees	Improving
Loan growth focus	Net loans essentially flat Q1; building pipeline	Net loans +$25.8M YTD to $349.6M	Net loans +$30.9M YTD to $354.7M; CRE +$22.5M; C&I +$6.9M	Strengthening
Mortgage banking	Sales volume down $33.6M YoY; gain-on-sale down	Noninterest income down sharply; gain-on-sale −$241k	Gain-on-sale −$365k YoY; loans sold down $26.6M YoY	Weak (rate-driven)
Deposit costs/liability mix	Cost of interest-bearing deposits down to 0.24%	Expense on FHLB down; mix stable	Interest expense up modestly on FHLB and money market rates	Gradual upward pressure
AFS portfolio/OCI	Purchases of $31.2M; unrealized loss increased $7.1M	AFS +$14.2M; unrealized losses up $11.9M YTD (pre-tax)	AFS +$6.0M YTD; unrealized loss +$16.5M YTD (pre-tax)	OCI pressure continues
Capital return	—	Adopted 5% buyback (7/29/22)	Repurchased 184,270 shares; −$2.0M equity impact	Active buybacks
Asset quality	Nonaccruals 0.29%; ALLL 0.93%	Nonaccruals 0.23%; ALLL 0.89%	Nonaccruals 0.21%; ALLL 0.89%	Stable/benign

Management Commentary

“The increase in interest and fees earned on loans was primarily due to a $22.3 million increase in the average amount of loans outstanding … and a 48 basis point increase in the yield earned on loans … The increase in the yield … was due to an increase in market rates as well as the collection of $212,000 in loan prepayment fees during the quarter.”
“The decrease in the net gain on sale of loans was primarily due to the decrease in the sale of mortgage loans held for sale, which decreased $26.6 million, from $32.2 million in the third quarter of 2021 to $5.6 million in the third quarter of 2022.”
“Non-interest expense increased … primarily due to a $391,000 increase in salaries and employee benefits expense … due primarily to a $218,000 increase in the market value of mutual funds held in our deferred compensation plan … [and] increases in wages, ESOP expense and the accrual for incentive bonuses.”
Strategic allocation: “The increase [in AFS securities] was the result of management’s strategy … to invest a significant portion of the Company’s liquidity … into securities with higher yields to increase future earnings, while maintaining a high degree of liquidity.”

Q&A Highlights

No earnings call transcript was available for Q3 2022; no Q&A disclosures to summarize (company provided results via 8-K and 10-Q) .

Estimates Context

S&P Global consensus estimates for Q3 2022 EPS and revenue were not available for BCOW today; as a result, we cannot assess beats or misses versus Wall Street expectations. Consider low analyst coverage for micro-cap community banks as a contributing factor.

Key Takeaways for Investors

Margin trajectory improving: NIM rose to 3.11% from 2.65% in Q2 on stronger asset yields and securities deployment; watch sustainability as deposit and FHLB costs rise in coming quarters .
Loan growth executing to plan: Net loans +$30.9M YTD with CRE and C&I growth aligned with strategy; supports forward NII, contingent on credit and funding dynamics .
Mortgage banking downside largely rate-driven: Substantial YoY declines in secondary market volume and gain-on-sale; expect muted contribution unless rate environment reverses .
Capital management active but OCI is a headwind: Buybacks (184k shares in Q3) provide per-share support; tangible equity pressure stems from AFS OCI with rates higher—monitor duration and capital buffers .
Credit quality benign: Nonaccruals at 0.21% and stable reserve ratio (0.89%) provide flexibility to pursue growth; continue to track as macro slows .
Liquidity/funding capacity in place: Capacity at FHLB and other lines enhances balance sheet flexibility amid deposit competition and loan growth .
No formal guidance or consensus estimates: Trading catalysts likely hinge on continued NIM expansion, funding cost management, and capital return pace rather than earnings “beats” optics this quarter .

1895 Bancorp of Wisconsin, Inc. /MD/ (BCOW)·Q3 2022 Earnings Summary