SHF Holdings Inc. (Nasdaq: SHFS), which operates as Safe Harbor Financial, was able to stem its losses in the first quarter of 2023, ending only $1.4 million in the red, a major improvement from the $37 million loss in the final quarter of last year.
The losses in Q1 also were offset by the news that the cannabis financial institution has secured an additional $1 billion deposit capacity through Five Star Bank. In conjunction with a 150% year-over-year revenue increase and deposits from cannabis clients that the company reported, company leadership said Safe Harbor is in a strong position heading into the rest of 2023.
“For the first time in Safe Harbor’s history, we surpassed $1 billion in quarterly processed deposits, which reflects the regulated cannabis industry’s continued need for reliable and fully compliant financial services,” Sundie Seefried, Safe Harbor’s CEO, said in a press release, referring to the $1.1 billion in deposits Safe Harbor received in the quarter, up 33% from $808 million in deposits in Q1 2022.
“During the quarter, our monthly average balances on deposit also reached a new high, putting the company in an even better position as we continue to build our lending portfolio,” Seefried said. “Given this strong momentum, our recently announced partnership with Five Star Bank comes at an opportune time in Safe Harbor’s evolution: by increasing our capacity to accept up to an additional $1 billion in cannabis-business related deposits, this partnership supports Safe Harbor’s continued investment and deposit income growth, while enabling us to deliver the most robust and affordable cannabis banking solution available.”
The monthly average number of accounts Safe Harbor also skyrocketed year-over-year by 68%, to 993 from 590. And revenues were up 247% to $4.2 million from $1.7 million the same period in 2022, thanks largely to the increase in clientele.
Safe Harbor finished the quarter with $8.6 million in the bank and $89.1 million in total assets. It reduced its debts by 60%, but also still has $45.1 million in liabilities.
The company blamed its $1.4 million quarterly loss on its increase in capital expenditures – which grew to $5.8 million from $1.2 million a year prior – and “the loss in value of several of the financial instruments placed in connection with the business combination transaction with Northern Lights Acquisition Corp.”
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