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FFBW, Inc. /MD/ (FFBW)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 delivered stable profitability with net income of $0.51M and diluted EPS of $0.10, up 11.1% year over year; net interest margin expanded sharply to 3.91% (+97 bps YoY) on higher asset yields .
  • Noninterest income fell 23.9% YoY due to non-recurrence of grant income, while noninterest expense rose on higher compensation; provision for loan losses of $0.093M resumed, reflecting prudent credit positioning in a rising-rate environment .
  • Deposits and escrow declined vs year-end amid share repurchases and borrowings reduction; tangible book value per share was $13.87, and shares outstanding fell to 5.566M on buybacks (new program authorized to repurchase up to ~7% of remaining shares) .
  • Management highlighted anticipated loan growth materializing and emphasized liquidity discipline given rate pressure and a possible recession; no formal financial guidance was provided; no earnings call transcript was found in the document set .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.91% vs 2.94% in Q3 2021, driven by higher yields on loans, securities, and Fed deposits, despite lower average interest-earning assets; interest and dividend income rose 18.4% YoY to $3.167M .
  • Credit quality remained strong: allowance for loan losses at 1.09% of total loans and 1,702.8% of non-performing loans; non-performing assets were just 0.05% of total assets .
  • Capital return continued: completion of a 625K-share repurchase program and adoption of a new 400K-share program; shares outstanding declined to 5.566M at quarter-end, supporting per-share metrics .

Management quote:

  • “Continuing to fund profitable growth and share repurchases will require our team to execute both on our depository as well as loan growth plans given the pressure that rising rates are putting on liquidity… we remain focused on our strong credit discipline.” — Edward H. Schaefer, President & CEO .

What Went Wrong

  • Noninterest income decreased 23.9% YoY to $0.248M due to the non-recurrence of $0.086M grant income recognized in Q3 2021 .
  • Noninterest expense increased by $0.218M YoY to $2.394M, primarily from salaries and employee benefits (+$0.174M), partially offsetting NIM gains .
  • Average interest-earning assets fell $28.2M YoY and total assets decreased $43.3M from year-end to $313.8M, reflecting deposit declines, lower borrowings, and share repurchase activity—tightening balance sheet liquidity .

Financial Results

Income Statement Comparison

MetricQ3 2021 (oldest)Q1 2022Q2 2022Q3 2022 (newest)
Interest & Dividend Income ($USD Millions)$2.674 $2.810 $3.041 $3.167
Interest Expense ($USD Millions)$0.246 $0.197 $0.198 $0.250
Net Interest Income ($USD Millions)$2.428 $2.613 $2.843 $2.917
Provision for Loan Losses ($USD Millions)$0.000 $0.000 $0.000 $0.093
Noninterest Income ($USD Millions)$0.326 $0.258 $0.254 $0.248
Noninterest Expense ($USD Millions)$2.176 $2.117 $2.240 $2.394
Income Before Taxes ($USD Millions)$0.578 $0.754 $0.857 $0.678
Provision for Income Taxes ($USD Millions)$0.119 $0.187 $0.218 $0.168
Net Income ($USD Millions)$0.459 $0.567 $0.639 $0.510
Diluted EPS ($USD)$0.07 $0.09 $0.11 $0.10

Margins and Coverage

MetricQ3 2021 (oldest)Q1 2022Q2 2022Q3 2022 (newest)
Net Interest Margin (%)2.94% 3.30% 3.69% 3.91%
Allowance for Loan Loss / Total Loans (%)—1.09% 1.11% 1.09%
Allowance / Non-Performing Loans (%)—873.0% 1,607.3% 1,702.8%
Nonaccrual Loans / Total Loans (%)—0.12% 0.07% 0.06%
Non-Performing Assets / Total Assets (%)—0.08% 0.05% 0.05%
Tangible Book Value per Share ($)—$13.89 $13.92 $13.87

Balance Sheet Snapshot

MetricDec 31 2021 (oldest)Mar 31 2022Jun 30 2022Sep 30 2022 (newest)
Total Assets ($USD Millions)$357.077 $341.684 $330.426 $313.783
Cash & Cash Equivalents ($USD Millions)$67.002 $54.751 $42.314 $16.049
Available-for-Sale Securities ($USD Millions)$48.398 $47.055 $50.274 $47.472
Net Loans ($USD Millions)$222.604 $220.080 $217.405 $228.300
Deposits & Escrow ($USD Millions)$255.352 $246.817 $244.079 $235.267
Borrowings ($USD Millions)$6.500 $6.500 $1.500 $0.000
Total Equity ($USD Millions)$93.972 $87.186 $83.856 $77.460

Share Metrics

MetricQ3 2021 (oldest)Q1 2022Q2 2022Q3 2022 (newest)
Dilutive Weighted Avg Shares (Millions)6.374 6.105 5.596 5.234
Shares Outstanding at Quarter-End (Millions)——6.006 5.566

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial GuidanceQ3 2022Not provided Not provided Maintained (no formal guidance)

Notes:

  • No explicit guidance ranges for revenue, margins, OpEx, tax rate, or dividends were provided in Q1–Q3 2022 press releases .

Earnings Call Themes & Trends

Note: No earnings call transcript was available in the document set for Q3 2022; themes reflect management’s press release commentary across quarters.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2022)Trend
Liquidity & Rate EnvironmentEmphasized disciplined deployment of excess liquidity into share repurchases and selective securities; lower deposit costs supported NIM .“Pressure that rising rates are putting on liquidity” requires execution on both deposits and loan growth .Tightening liquidity; NIM tailwind offset by funding pressure .
Loan GrowthExpected to materialize in H2 with new loan officer and new branch .“Started to see the loan growth that we anticipated” .Improving trajectory .
Credit DisciplineStrong allowance coverage and low NPAs; provision at $0 in Q1–Q2 .Provision resumed ($0.093M); allowance remains robust, NPAs low .Conservative stance amid macro uncertainty .
Capital ReturnRepurchase program authorized up to 10% outstanding; ongoing buybacks .Completed 625K shares and adopted new 400K-share program (~7% of remaining shares); 81K repurchased in Q3 .Continued accretive buybacks .
Branch Expansion / TalentAdded new branch and loan officer to support growth .Continued execution to support deposit and loan growth plans .Scaling franchise .
Macro / Recession RiskNoted broader macro normalization from PPP/mortgage refi impacts in prior year .“Possible recession in our future,” focus on credit discipline .Heightened caution .

Management Commentary

  • Strategic priorities: “Continuing to fund profitable growth and share repurchases will require our team to execute both on our depository as well as loan growth plans…” .
  • Risk posture: “…with a possible recession in our future, we remain focused on our strong credit discipline.” .
  • Capital management: Completion of 625K-share repurchase and adoption of new 400K-share program; resultant shares outstanding at 5.566M .
  • Q2 tone on growth: “We remain committed to profitably growing the loan portfolio while maintaining a strong credit position and expect to see those efforts materialize in the second half of the year…” .
  • Q1 perspective on earnings normalization: PPP and refinance tailwinds did not recur; focus on growing small business banking and accretive buybacks to support tangible book per share .

Q&A Highlights

  • No public earnings call transcript or Q&A was found in the document set; analysis is based on detailed press releases .

Estimates Context

  • S&P Global/Capital IQ consensus estimates for Q3 2022 could not be retrieved at the time of analysis due to system limits; therefore, comparisons to Street were not available. As a result, we anchor the recap on reported results and intra-year trends .
  • Given micro-cap status and limited coverage, portfolio managers should focus on NIM trajectory, credit metrics, and balance sheet liquidity/funding mix as primary drivers in lieu of formal consensus comparisons .

Key Takeaways for Investors

  • Net interest margin expansion remains the core earnings lever; continued asset yield increases offset smaller average interest-earning assets—monitor deposit betas and funding costs as rates rise .
  • Credit quality is a differentiator: extremely low NPAs (0.05% of assets) and high allowance coverage (1,702.8% of NPLs) provide cushion as macro risks increase .
  • Balance sheet optimization continues: share repurchases and reduced borrowings compress assets and equity but support per-share metrics (TBV/share $13.87) .
  • Loan growth is turning up; execution on deposit acquisition and loan origination is critical to sustain NIM and earnings in a tightening liquidity environment .
  • Near-term trading: With no formal guidance and limited Street coverage, catalysts are quarterly NIM prints, credit metrics, and buyback pace; downside risk if deposit costs rise faster than asset yields .
  • Medium-term thesis: Franchise scaling (branch expansion, talent) plus disciplined credit and capital returns can compound TBV/share; macro downside could bring provisions higher—watch recession indicators .
  • Action: Track quarterly changes in noninterest expense (comp), noninterest income variability (one-time items), and deposit mix to assess sustainability of earnings per share improvements .