Blueharbor bank : Reports Fourth Quarter 2022 Net Income

PRESS RELEASE

For Immediate Release

blueharbor bank Reports Fourth Quarter 2022 Net Income

MOORESVILLE, NC, January 20, 2023 - blueharbor bank (the "Bank") today reported net income of $2,046,022 and $0.68 per diluted share for the fourth quarter of 2022, an increase of 66% or $813,899 as compared to $1,232,123 and $0.41 per diluted share for the fourth quarter of 2021. For the twelve months ended December 31, 2022, the Bank is reporting net income of $6,903,187 and $2.28 per diluted share, an increase of 43% or $2,073,638 as compared to $4,829,549 and $1.60 per diluted share for the same twelve months in 2021.

The Bank reported total assets of $406.4 million at December 31, 2022, a decrease of $4.4 million, or 1%, when compared to $410.8 million at December 31, 2021. Gross loans increased $49.2 million, or 17%, to $335.5 million at December 31, 2022, from $286.3 million at December 31, 2021. Total deposits were $359.5 million at December 31, 2022, a decrease of $7.2 million, or 2%, when compared to $366.7 million at December 31, 2021. Although total deposits decreased during 2022, noninterest bearing deposits increased $14.7 million, or 13%, for the year ended December 31, 2022, and represent 37% of total deposits.

Asset quality remained very strong for 2022, with total non-performing assets representing only 0.02% of total assets at December 31, 2022 and December 31, 2021.

Capital levels also remained very solid at December 31, 2022, with total risk based capital at 14.3%, both common equity tier 1 and tier 1 to risk-weighted assets of 13.4%, and tier 1 leverage ratio of 11.2%.

Net interest income, a key metric, was $4,134,903 for the quarter ending December 31, 2022, an increase of $1,189,975, or 40%, from the same period in 2021. The change in net interest income was due to loan growth and increase on the yield on loans.

Net interest income was $14,238,731 for the twelve months ending December 31, 2022, an increase of $3,520,672, or 33%, from the same period in 2021. The increase was due to loan growth and greater yields on interest earning assets.

Provision for loan losses for the quarter ended December 31, 2022, was $110,338 compared to $101,183 for the same period in 2021. Provision for loan losses for the year ended December 31, 2022, was $283,696 compared to a small recovery of loan losses of ($37,174) recorded for the year ended December 31, 2021. The increase was due to several factors: higher loan growth in 2022 than in 2021, the release of provisions in 2021 due to improving economic conditions and a recovery of a charged off loan during 2021.

Noninterest income was $610,617 for the quarter ended December 31, 2022, compared to $703,566 for the quarter ended December 31, 2021. A decrease of $92,949, or 13%, and is attributable to lower mortgage fees. Noninterest income was $2,692,632 for the year ended December 31, 2022, an increase of $166,842 over $2,525,790 that was recorded for the year ended December 31, 2021.

Noninterest Expense was $2,002,118 for the quarter ended December 31, 2022, an increase of $34,487, or 2%, when compared to $1,967,631 for the quarter ended December 31, 2021. The increase was due to higher occupancy and furniture and equipment expenses for the new Statesville branch completed in September of 2022. Data processing expenses also increased during the period due to a greater number of customers and accounts. Noninterest Expense was $7,767,458 for the year ended December 31, 2022, compared to $7,093,808 for the year ended December 31, 2021. The increase of $673,650 was due to higher salary and benefit expenses and data processing fees.

Jim Marshall, President and Chief Executive Officer, commented, "Overall it was a very solid 4th quarter and year for our bank. Rising interest rates obviously were instrumental in our performance after a decade or more of abnormally low rates. Net interest margins may see pressure as deposit costs continue to rise as well. Our credit quality is performing nicely in the face of inflationary pressures and increased interest costs to our customers.

We continue to receive accolades as one of the best performing banks based in North Carolina and BLHK stock performed very well returning a 24% gain in 2022, which was a tough year by most any measurement for securities."

blueharbor bank is headquartered in Mooresville with additional branches in Huntersville and Statesville and loan production offices in Belmont and Morehead City. blueharbor bank's website is www.blueharborbank.comand our common stock is quoted on the OTXQX Market under the symbol "BLHK."

Summary Selected Financial Data Schedule attached below.

Forward-LookingStatement:

This press release contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management's current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. As such, actual results and outcomes may materially differ from what may be expressed or forecast in such forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit levels, loan demand and asset quality, including real estate and other collateral values; changes in banking regulations and accounting principles, policies or guidelines; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. blueharbor bank takes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this press release.

SOURCE:	blueharbor bank	CONTACT:	Jim Marshall
			President and Chief Executive Officer
			blueharbor bank
			[phone]

Summary Selected Financial Data
			(Unaudited)			(Audited)
			December 31,			December 31,
Balance Sheet Data:			2022			2021
Total Assets	$	406,356,659	$	410,808,535
Total Gross Loans			335,496,493			286,275,297
Allowance for Loan Losses			3,171,448			2,862,753
Total Deposits			359,486,348			366,731,922
Total Shareholders' Equity			42,490,336			39,990,927

				(Unaudited)						(Unaudited)
				Three Months Ended				Twelve Months Ended
				December 31,						December 31,
Earnings and Per Share Data:				2022					2021					2022				2021
Interest Income	$	4,424,179		$	3,093,803		$	14,917,840		$	11,601,516
Interest Expense				289,276					148,875					679,109				883,457
Net Interest Income				4,134,903					2,944,928					14,238,731				10,718,059
Provision for Loan Losses				110,338					101,183					283,696				(37,174)
Net Interest Income after									2,843,745					13,955,035				10,755,233
Provision for Loan Losses				4,024,565
Noninterest Income				610,617					703,566					2,692,632				2,525,790
Noninterest Expense				2,002,118					1,967,631					7,767,458				7,093,808
Net Income before Taxes				2,633,064					1,579,680					8,880,209				6,187,215
Income Taxes				587,042					347,557					1,977,022				1,357,666
Net Income		$	2,046,022			$	1,232,123			$	6,903,187			$	4,829,549
Basic Income per Share		$	0.70			$	0.42			$	2.37			$	1.66
Diluted Income per Share
	$	0.68			$	0.41				$	2.28			$	1.60
Annualized Performance Ratios:
Return on average assets				1.98%				1.19%				1.63%			1.27%
Return on average equity				19.41%				12.39%				17.01%			12.81%
Efficiency ratio				42.2%				53.9%				45.9%			53.6%
Overhead ratio				33.7%				42.9%				35.6%			42.6%
Net Interest Margin				4.28%				3.03%				3.59%			3.04%
Cost of Funds				0.49%				0.24%				0.27%			0.39%
				(Unaudited)			(Unaudited)
				December 31,			December 31,
				2022					2021
Financial Ratios:
Book Value	$	14.47		$	13.66
Texas Ratio				0.16%				0.21%
Nonperforming Assets to Total Assets Ratio				0.02%				0.02%
Loan to Deposit Ratio				93.3%				78.1%
Tier 1 Leverage Ratio				11.2%				9.7%
Common Equity Tier 1 Risk‐Based Capital Ratio				13.4%				13.1%
Tier 1 Risk‐Based Capital Ratio				13.4%				13.1%
Total Risk‐Based Capital Ratio				14.3%				14.0%