FFBW, Inc. /MD/ (FFBW)·Q2 2022 Earnings Summary

Executive Summary

• FFBW delivered solid profitability: net income rose to $0.64M and diluted EPS to $0.11, up from $0.09 in Q1 2022 and $0.07 in Q2 2021, aided by stronger net interest income and lower operating expense . Net interest margin expanded to 3.69% from 3.30% in Q1 2022 and 3.23% in Q2 2021, a key earnings driver as asset yields rose faster than funding costs .
• Operating leverage improved: noninterest expense fell year over year (to $2.24M vs $2.28M) while pre-tax income increased (to $0.86M vs $0.56M), offsetting softer noninterest income tied to lower gain on sale of loans .
• Credit quality remained a highlight: nonaccrual loans were 0.07% of total loans and the allowance covered nonperformers 16.1x, positioning the balance sheet conservatively into 2H22 .
• Capital return accelerated: the third repurchase program authorized up to 10% of shares; 266k shares (4.3%) were repurchased in Q2, reducing shares outstanding to ~6.01M, with an additional program authorized post-quarter for 400k shares . Potential stock catalysts include continued NIM expansion in a rising-rate backdrop and incremental EPS accretion from repurchases .

What Went Well and What Went Wrong

• What Went Well

  • NIM expansion: “weighted average yield on interest-earning assets increased 38 bps” year over year; NIM reached 3.69% vs 3.23% in Q2 2021 as higher-yield securities and Fed deposit rates lifted asset yields .
  • Cost discipline: noninterest expense decreased to $2.24M, driven by lower salaries/benefits and data processing, supporting operating leverage .
  • Capital return/strategy: management emphasized “disciplined” liquidity deployment into buybacks and selective securities; expects profitable loan growth in 2H22 supported by a new loan officer and a new branch .

• What Went Wrong

  • Mortgage banking softness: noninterest income declined modestly, primarily from a $59k reduction in gain on sale of loans, partially offset by higher service charges/fees .
  • Average earning assets pressure: average interest-earning assets declined $10.4M year over year, limiting absolute revenue growth despite higher yields .
  • Balance sheet contraction: total assets fell to $330.4M (from $357.1M at YE21), reflecting lower deposits and share repurchases; net loans ticked down sequentially to $217.4M (from $220.1M in Q1) .

Financial Results

KPIs and Balance Sheet

Notes:

• NIM improved on higher asset yields from securities additions and increased Fed deposit rates; funding costs remained low at 0.40% on interest-bearing liabilities (down 15 bps YoY) .
• Noninterest income softness was driven by lower mortgage gain-on-sale, partially offset by higher service charges .
• Expense decline YoY reflected lower salaries/benefits and data processing, partially offset by higher professional fees and occupancy/equipment .

Guidance Changes

No formal revenue, margin, OpEx, OI&E or tax rate guidance was provided in the press releases reviewed for Q2 2022 .

Earnings Call Themes & Trends

No earnings call transcript was found for Q2 2022 in company filings; themes below draw from management’s press releases.

Management Commentary

• “We have continued our disciplined approach to how we deploy our excess liquidity during the first half of the year, targeting share repurchases and limited investment security purchases… We remain committed to profitably growing the loan portfolio… expect to see those efforts materialize in the second half of the year with the assistance of a new loan officer and the addition of a new branch.” — Edward H. Schaefer, President & CEO
• Q1 context: “Our ability to grow our loan portfolio over the last twelve months as well as execute our share buyback programs allowed us to keep earnings per share in line quarter to quarter… We hope to continue to buy back shares in an accretive manner.” — Edward H. Schaefer

Q&A Highlights

• No Q2 2022 earnings call transcript was available in the company’s filings set reviewed; no Q&A items to report.

Estimates Context

• We attempted to retrieve S&P Global (Capital IQ) consensus for EPS and revenue; consensus estimates were unavailable for this micro-cap bank during the quarter, so results are shown versus prior periods rather than Street expectations.

Key Takeaways for Investors

• Core spread income is inflecting: NIM expanded to 3.69% (from 3.30% in Q1 and 3.23% in Q2 2021) as asset yields rose, outpacing modest funding cost pressure—an important EPS driver in a rising-rate environment .
• Operating leverage improved: noninterest expense declined YoY while pre-tax income grew, despite softer mortgage-related fees, indicating cost control and earnings resilience .
• Credit remains pristine: nonaccruals at 0.07% of loans and NPA at 0.05% of assets, with exceptionally high reserve coverage (1,607% of NPLs) providing protection if macro conditions soften .
• Capital return is a clear catalyst: active repurchases (266k shares in Q2) reduced share count to ~6.01M; post-quarter, a fourth program for up to 400k shares extends buyback capacity, supporting EPS accretion and TBVPS stability .
• Balance sheet capacity exists: deposits remain above pre-2021 levels with borrowings reduced to $1.5M, giving room to fund targeted loan growth when demand materializes in 2H22 .
• Watch 2H22 loan momentum: management flagged a new loan officer and a new branch as growth enablers; sustained NIM tailwind plus loan growth could further lift earnings power .
• Risk checks: continued mortgage banking softness and a smaller earning-asset base could temper revenue; monitor deposit betas and competitive funding dynamics as rates rise .

Citations

• Q2 2022 press release and financials:
• Q1 2022 press release and financials:
• Q4 2021 press release and financials:
• Repurchase update (post-quarter):