Executive Summary

Q4 2021 resulted in a net loss of $0.269M, driven by elevated noninterest expense and softer mortgage banking activity; net interest income improved sequentially to $3.392M while provision remained negligible .
Full-year 2021 net income was $0.085M ($0.01 diluted EPS) versus $1.317M ($0.28 diluted EPS) in 2020, primarily due to a $2.5M decline in noninterest income and a $1.2M increase in noninterest expense despite lower funding costs .
Management redeployed liquidity into AFS securities (+$53.7M YoY to $112.4M) and retained more first mortgage loans to support future earnings; capital ratios remained strong (Total RBC 20.2%, Tier 1 RBC 19.4%) .
No formal guidance or earnings call transcript found; consensus estimates via S&P Global were unavailable for Q4 2021, limiting beat/miss assessment .

What Went Well and What Went Wrong

What Went Well

Liquidity redeployment into higher-yielding AFS securities: “management’s decision to invest a portion of the Company’s cash and cash equivalents into securities with higher yields to increase future earnings, while maintaining a high degree of liquidity” .
Strategic retention of residential mortgages: “decision to retain more of these loans…to increase earnings by investing a portion of our liquidity in higher yielding assets” .
Strong capital position: Total risk-based capital 20.2%, Tier 1 19.4%, providing cushion for growth and credit normalization .

What Went Wrong

Noninterest income decline, notably mortgage and securities gains: -$2.5M YoY, led by lower gain on sale of loans (-$2.0M) and lower securities gains (-$1.0M), reflecting a slowdown in mortgage activity and realized gains .
Elevated noninterest expense: +$1.2M YoY, including +$751k salaries/benefits and +$344k other noninterest expenses, pressuring quarterly results .
Headwinds from low-rate environment: Average yield on earning assets fell to 2.84% (from 3.48% in 2020), though partially offset by lower funding costs (0.44% vs. 0.91%) .

Financial Results

Quarterly Operating Results

Metric ($000 unless noted)	Q2 2021	Q3 2021	Q4 2021
Total interest income	3,511	3,381	3,729
Total interest expense	393	349	337
Net interest income	3,118	3,032	3,392
Provision for loan losses	0	30	0
Noninterest income	1,134	628	899
Noninterest expense	4,361	3,802	4,669
Income before taxes	(109)	(172)	(378)
Income tax expense (benefit)	(58)	(57)	(109)
Net income	(51)	(115)	(269)
EPS (basic/diluted, $)	(0.01)/(0.01)	(0.02)/(0.02)	N/A (not disclosed)

Notes: Q4 2021 amounts derived as FY 2021 minus 9M 2021 per reported figures .

Balance Sheet and KPIs

KPI	Q2 2021 (6/30)	Q3 2021 (9/30)	Q4 2021 (12/31)
Total assets ($000)	605,577	541,189	539,639
Loans, net ($000)	330,903	330,310	323,789
Deposits ($000)	466,184	374,314	384,501
FHLB advances ($000)	63,423	55,934	55,442
Cash & cash equivalents ($000)	145,817	86,856	66,803
AFS securities ($000)	—	—	112,440
Allowance for loan losses ($000)	2,732	2,788	2,900 (0.88% of loans)
Nonaccrual loans (% of total)	—	—	0.31%
Total RBC / Tier 1 RBC (%)	—	—	20.2% / 19.4%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
All metrics	Q1 2022 / FY 2022	N/A	No formal guidance provided in reviewed materials	N/A

Earnings Call Themes & Trends

No earnings call transcript was found for Q4 2021. Themes below reflect press release disclosures.

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Interest rate environment	“Net interest income decreased due to a declining interest rate environment brought on by the COVID-19 pandemic.” (Q3)	Lower asset yields (2.84% vs. 3.48% in 2020); lower funding costs (0.44% vs. 0.91%)	Rate pressure persisted; funding cost benefit sustained
Mortgage banking activity	Lower gains on sale of loans vs. prior year (Q2/Q3)	“Decrease in the volume of mortgage loans originated and sold” lowered gains	Down vs. 2020; activity remained subdued
Securities portfolio deployment	High liquidity in mid-2021 (cash $145.8M)	AFS securities +$53.7M YoY to $112.4M	Proactive redeployment to support earnings
PPP loan forgiveness impact	—	Decrease in commercial loans largely due to PPP forgiveness	Balance sheet mix shifting (lower commercial, higher 1st mortgage)
Capital	Equity up post conversion/offer (Q3)	Total RBC 20.2%, Tier 1 RBC 19.4%	Strong capitalization sustained
Asset quality	Allowance $2.732M (Q2), $2.788M (Q3)	Allowance $2.9M (0.88%), nonaccruals 0.31%	Stable/improving nonaccrual ratio

Management Commentary

“The increase in securities was the result of management’s decision to invest a portion of the Company’s cash and cash equivalents into securities with higher yields to increase future earnings, while maintaining a high degree of liquidity.”
“The decrease in net gain on sale of loans was primarily due to a decrease in the volume of mortgage loans originated and sold.”
“A significant portion of the decrease in commercial loans was the result of the forgiveness of PPP loans.”
“The weighted average yield on our interest-earning assets decreased from 3.48% for 2020 to 2.84% for 2021 and our average cost of interest-bearing liabilities decreased from 0.91% for 2020 to 0.44% for 2021.”

Q&A Highlights

No Q4 2021 earnings call transcript was found; therefore no Q&A themes or guidance clarifications were available in our primary source set [SearchDocuments: no earnings-call-transcript returned].

Estimates Context

Consensus estimates for Q4 2021 EPS and revenue were unavailable via S&P Global at the time of analysis; we attempted to retrieve but no data was accessible for BCOW. Where estimates would normally be presented, they are marked unavailable due to lack of coverage or data constraints. Values retrieved from S&P Global.*

Key Takeaways for Investors

Sequential NII improvement in Q4 (to $3.392M) and near-zero provision indicate core credit costs are contained; expense control is the key lever for restoring quarterly profitability .
Mortgage banking headwinds and lower securities gains weighed on noninterest income; management’s liquidity redeployment and loan retention strategy aim to stabilize earnings as rates normalize .
Capital strength (Total RBC 20.2%) provides optionality for balance sheet growth, but commercial loan balances will reflect PPP runoff; residential first mortgage growth partially offsets .
Asset quality metrics remain solid (nonaccruals 0.31% of loans; allowance 0.88%), supporting risk-adjusted earnings resilience .
Near-term trading: absence of formal guidance and no call transcript may limit catalysts; watch quarterly run-rate of noninterest expense and mortgage activity for inflections .
Medium-term thesis: securities portfolio yield pickup and retained mortgages can lift NII; operating efficiency and fee income diversification will be pivotal to achieving consistent quarterly profitability .

Citations:

1895 Bancorp of Wisconsin, Inc. /MD/ (BCOW)·Q4 2021 Earnings Summary