Fentura Financial, Inc. Announces Third Quarter 2022 Earnings (Unaudited)

Fentura Financial, Inc.

Figure 1

Stock Performance Five-Year Total Return

Dollars in thousands except per share amounts. Certain items in the prior period financial statements have been reclassified to conform with the September 30, 2022 presentation.

FENTON, Mich., Nov. 01, 2022 (GLOBE NEWSWIRE) -- Fentura Financial, Inc. (OTCQX: FETM) announces quarterly results of net income of $4,009 and $10,569 for the three and nine months ended September 30, 2022.

Ronald L. Justice, President and CEO, stated, "Our solid quarterly performance is reflective of a strong increase in net interest income from significant balance sheet growth. Both, balance sheet growth and rate trends during the quarter resulted in an improved net interest margin as well. Partially offsetting net interest income increase were reduction in gains on the sale of residential mortgages and provisions to the allowance for loan and lease losses. Provision increases were based on maintaining an appropriate reserve due to loan growth. We continue to monitor economic trend and concerns expressed in the market relating to a slowdown, but are encouraged by local loan demand and strong asset quality trends."

Following is a discussion of our financial performance as of, and for the three and nine months ended September 30, 2022. At the end of this document is a list of abbreviations and acronyms.

Results of Operations
The following table outlines our QTD results of operations and provides certain performance measures as of, and for the three months ended:

		9/30/2022				6/30/2022				3/31/2022				12/31/2021				9/30/2021
INCOME STATEMENT DATA
Interest income		$	15,726			$	13,411			$	12,301			$	11,749			$	11,584
Interest expense			1,738				785				599				645				653
Net interest income			13,988				12,626				11,702				11,104				10,931
Provision for loan losses			1,231				525				502				38				(436	)
Noninterest income			2,377				2,778				2,792				3,097				2,899
Noninterest expenses			10,125				10,544				10,151				9,957				9,453
Federal income tax expense			1,000				859				757				864				958
Net income		$	4,009			$	3,476			$	3,084			$	3,342			$	3,855
PER SHARE
Earnings		$	0.91			$	0.79			$	0.69			$	0.74			$	0.84
Dividends		$	0.09			$	0.09			$	0.09			$	0.08			$	0.08
Tangible book value(1)		$	25.22			$	24.53			$	24.97			$	25.43			$	26.53
Quoted market value
High		$	25.20			$	27.85			$	29.25			$	28.28			$	26.25
Low		$	23.00			$	24.40			$	27.10			$	25.75			$	25.60
Close(1)		$	23.00			$	25.00			$	27.90			$	28.28			$	25.75
PERFORMANCE RATIOS
Return on average assets			1.02	%			0.96	%			0.86	%			0.98	%			1.16	%
Return on average shareholders' equity			12.96	%			11.55	%			10.53	%			10.56	%			12.26	%
Return on average tangible shareholders' equity			14.10	%			12.60	%			11.49	%			10.87	%			12.63	%
Efficiency ratio			61.87	%			68.45	%			70.04	%			70.11	%			68.35	%
Yield on earning assets (FTE)			4.27	%			3.96	%			3.70	%			3.67	%			3.69	%
Rate on interest bearing liabilities			0.75	%			0.38	%			0.29	%			0.33	%			0.34	%
Net interest margin to earning assets (FTE)			3.79	%			3.73	%			3.52	%			3.47	%			3.48	%
BALANCE SHEET DATA(1)
Total investment securities		$	129,886			$	136,725			$	151,579			$	164,942			$	138,476
Gross loans		$	1,350,851			$	1,232,892			$	1,139,351			$	1,100,092			$	1,015,177
Allowance for loan losses		$	12,200			$	11,000			$	11,000			$	10,500			$	10,500
Total assets		$	1,595,126			$	1,474,307			$	1,435,501			$	1,417,801			$	1,329,300
Total deposits		$	1,345,209			$	1,231,543			$	1,252,892			$	1,228,298			$	1,144,291
Borrowed funds		$	116,600			$	111,000			$	52,000			$	50,000			$	50,000
Total shareholders' equity		$	121,630			$	118,566			$	121,346			$	124,455			$	124,809
Net loans to total deposits			99.51	%			99.22	%			90.06	%			88.71	%			87.80	%
Common shares outstanding			4,434,937				4,429,357				4,459,544				4,496,701				4,569,935
QTD BALANCE SHEET AVERAGES
Total assets		$	1,558,040			$	1,449,874			$	1,448,545			$	1,353,694			$	1,323,912
Earning assets		$	1,464,233			$	1,360,658			$	1,348,647			$	1,273,650			$	1,248,018
Interest bearing liabilities		$	917,888			$	826,708			$	831,200			$	773,082			$	756,545
Total shareholders' equity		$	122,695			$	120,659			$	118,759			$	125,500			$	124,720
Total tangible shareholders' equity		$	112,829			$	110,686			$	108,862			$	121,933			$	121,120
Earned common shares outstanding			4,408,399				4,417,447				4,451,607				4,520,962				4,582,401
Unvested stock grants			24,460				24,460				27,466				20,671				20,671
Total common shares outstanding			4,432,859				4,441,907				4,479,073				4,541,633				4,603,072
ASSET QUALITY
Nonperforming loans to gross loans(1)			0.12	%			0.16	%			0.20	%			0.18	%			0.82	%
Nonperforming assets to total assets(1)			0.12	%			0.16	%			0.19	%			0.17	%			0.63	%
Allowance for loan losses to gross loans(1)			0.90	%			0.89	%			0.97	%			0.95	%			1.03	%
Allowance for loan losses to gross loans, net of PPP loans(1)			0.90	%			0.89	%			0.97	%			0.96	%			1.04	%
Net charge-offs (recoveries) to QTD average gross loans			—	%			0.04	%			—	%			—	%			(0.01	)%
Provision for loan losses to QTD average gross loans			0.10	%			0.04	%			0.05	%			—	%			(0.04	)%
CAPITAL RATIOS(1)
Total capital to risk weighted assets			10.96	%			11.36	%			12.07	%			12.22	%			13.63	%
Tier 1 capital to risk weighted assets			10.07	%			10.50	%			11.13	%			11.30	%			12.64	%
CET1 capital to risk weighted assets			9.04	%			9.39	%			9.94	%			10.07	%			11.33	%
Tier 1 leverage ratio			8.91	%			9.30	%			9.07	%			9.13	%			10.21	%
(1) At end of period

The following table outlines the Corporation's YTD results of operations and provides certain performance measures as of, and for the nine months ended:

		9/30/2022				9/30/2021				9/30/2020				9/30/2019				9/30/2018
INCOME STATEMENT DATA
Interest income		$	41,438			$	35,161			$	34,355			$	32,465			$	26,419
Interest expense			3,122				2,091				4,952				6,469				3,901
Net interest income			38,316				33,070				29,403				25,996				22,518
Provision for loan losses			2,258				(218	)			4,652				899				767
Noninterest income			7,947				10,983				14,964				6,034				6,574
Noninterest expenses			30,820				27,706				23,713				19,808				18,403
Federal income tax expense			2,616				3,328				3,271				2,297				1,817
Net income		$	10,569			$	13,237			$	12,731			$	9,026			$	8,105
PER SHARE
Earnings		$	2.39			$	2.86			$	2.73			$	1.94			$	2.23
Dividends		$	0.270			$	0.240			$	0.225			$	0.210			$	0.180
Tangible book value(1)		$	25.22			$	26.53			$	23.50			$	20.37			$	16.91
Quoted market value
High		$	29.25			$	27.40			$	26.00			$	21.00			$	23.00
Low		$	23.00			$	21.90			$	12.55			$	20.05			$	18.88
Close(1)		$	23.00			$	25.75			$	16.93			$	21.00			$	21.15
PERFORMANCE RATIOS
Return on average assets			0.95	%			1.36	%			1.45	%			1.27	%			1.32	%
Return on average shareholders' equity			11.71	%			14.55	%			15.79	%			12.73	%			17.29	%
Return on average tangible shareholders' equity			12.75	%			15.00	%			16.40	%			13.35	%			18.77	%
Efficiency ratio			66.62	%			62.89	%			53.45	%			61.84	%			63.26	%
Yield on earning assets (FTE)			3.99	%			3.83	%			4.12	%			4.81	%			4.59	%
Rate on interest bearing liabilities			0.49	%			0.37	%			0.93	%			1.43	%			0.98	%
Net interest margin to earning assets (FTE)			3.69	%			3.60	%			3.52	%			3.85	%			3.91	%
BALANCE SHEET DATA(1)
Total investment securities		$	129,886			$	138,476			$	78,179			$	62,351			$	79,531
Gross loans		$	1,350,851			$	1,015,177			$	1,060,885			$	826,597			$	728,302
Allowance for loan losses		$	12,200			$	10,500			$	10,100			$	5,413			$	4,146
Total assets		$	1,595,126			$	1,329,300			$	1,284,845			$	978,046			$	909,901
Total deposits		$	1,345,209			$	1,144,291			$	1,061,470			$	801,101			$	766,587
Borrowed funds		$	116,600			$	50,000			$	96,217			$	69,000			$	74,000
Total shareholders' equity		$	121,630			$	124,809			$	114,081			$	99,142			$	66,340
Net loans to total deposits			99.51	%			87.80	%			98.99	%			102.51	%			94.46	%
Common shares outstanding			4,434,937				4,569,935				4,691,142				4,658,722				3,645,402
YTD BALANCE SHEET AVERAGES
Total assets