The board of directors of
“We are pleased with our first quarter results, which is a good start to the year; operating earnings were solid, loan growth outpaced deposit growth during the quarter, our net interest margin expanded, and asset quality remained strong,” said
“Our lending team continues to successfully meet the credit needs of our customers and new clients while employing strong underwriting practices. Loan origination volumes remained steady and net loans receivable increased by
First Quarter 2024 Financial Highlights:
- Return on average assets (“ROAA”) was 0.95%, compared to 1.02% for the fourth quarter 2023, and 1.33% for the first quarter 2023.
- Return on average equity (“ROAE”) was 9.32%, compared to 10.88% from the preceding quarter, and 15.63% from the first quarter a year earlier.
- Net interest income was
$11.4 million , compared to$11.7 million for the fourth quarter of 2023, and$13.1 million for the first quarter 2023. - Net interest margin (“NIM”) expanded 4 basis points to 4.38%, compared to 4.34% from the preceding quarter, and contracted 13 basis points from 4.51% for the first quarter a year ago.
- Provision for credit losses was
$33,000 compared to$111,000 for the preceding quarter and$157,000 in the first quarter a year ago. - Gross loans balances grew by
$8.9 million , or 1%, to$694.2 million atMarch 31, 2024 , compared to$685.3 million atDecember 31, 2023 , and increased by$48.6 million , or 8%, from$645.6 million atMarch 31, 2023 . - Total deposits declined
$13.5 million to$995.8 million , compared to$1.01 billion atDecember 31, 2023 , and declined 10% from$1.11 billion atMarch 31, 2023 . Core deposits represented 88% of total deposits, with non-interest bearing deposits representing 41% of total deposits atMarch 31, 2024 . - Coverage of short-term funds available to uninsured and uncollateralized deposits was 251% at
March 31, 2024 compared to 243% atDecember 31, 2023 . Uninsured or uncollateralized deposits were 22% of total deposits atMarch 31, 2024 and 23% atDecember 31, 2023 . - Asset quality remains solid with nonperforming assets to total assets at 0.13%, compared to nonperforming assets to total assets at 0.06% for the preceding quarter, and 0.08% at
March 31, 2023 . - At
March 31, 2024 ,Pacific Financial continued to exceed regulatory well-capitalized requirements with a leverage ratio of 11.6% and a total risk-based capital ratio of 17.6%.
Income Statement Review
Net interest income decreased
Net interest margin (NIM) expanded 4 basis points to 4.38% for the first quarter of 2024, compared to 4.34% for the fourth quarter of 2023 and contracted 13 basis points compared to 4.51% for the first quarter of 2023. During the current quarter compared to the preceding quarter increases in asset yields outpaced the growth in cost of funds. Yield on interest earning assets increased 10 basis points to 5.24% for the first quarter of 2024 compared to 5.14% for the prior quarter and 4.72% in the like quarter a year ago. These increases on interest earning assets resulted mainly from increased loan yields.
Average loan yields increased 17 basis points to 5.97% during the current quarter, compared to 5.80% for the preceding quarter and increased 53 basis points from 5.44% for the first quarter 2023, as rates on new loan originations and variable rate loans have priced in a higher interest rate environment. The yield on Fed funds sold and interest-bearing bank deposits was 5.45% for the current quarter, compared to 5.42% for the preceding quarter, and 4.61% for the first quarter of 2023.
The Bank’s total cost of funds increased to 0.90% for the current quarter, compared to 0.83% for the preceding quarter, and 0.21% for the first quarter 2023. The increase in the costs of deposits was due to a change in deposit mix, as customers continued to look for yield by transferring balances from non-maturity deposits to higher rate certificates of deposit and increases in deposit rates, primarily money market and certificate of deposits rates.
Noninterest income declined 5% to
Mortgage banking loan production increased during the current quarter compared to the prior quarter and the like quarter a year ago, this was despite ongoing market challenges, including the higher interest rate environment and limited inventory levels in the Bank’s markets. This higher production resulted in higher gains-on-sale of loans at
Noninterest expenses were
Income Tax Expense: Federal and
Balance Sheet Review
Total Assets declined by 1% to
Liquidity metrics continued to remain strong with total liquidity sources, both on and off balance sheet sources, at
The following table summarize the Bank’s available liquidity:
Liquidity | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
2024 | % of Deposits | 2023 | % of Deposits | $ Change | % Change | 2023 | % of Deposits | $ Change | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 80,052 | 8% | $ | 95,781 | 9% | $ | (15,729) | -16% | $ | 237,704 | 21% | $ | (157,652) | -66% | ||||||||||||||
139,144 | 14% | 140,049 | 14% | (905) | -1% | 116,886 | 11% | 22,258 | 19% | ||||||||||||||||||||
Secured lines of Credit (FHLB, FRB) | 337,553 | 34% | 327,264 | 32% | 10,289 | 3% | 318,179 | 29% | 19,374 | 6% | |||||||||||||||||||
Total short-term funds available | $ | 556,749 | 56% | $ | 563,094 | 55% | $ | (6,345) | -1% | $ | 672,769 | 61% | $ | (116,020) | -17% | ||||||||||||||
2024 | 2023 | 2023 | |||||||||||||||||||||||||||
Short-term funds available to uninsured/uncollateralized deposits | 251% | 243% | 259% | ||||||||||||||||||||||||||
Uninsured/uncollateralized deposits to total deposits | 22% | 23% | 23% | ||||||||||||||||||||||||||
Gross loans to deposits ratio | 69% | 67% | 57% | ||||||||||||||||||||||||||
Gross loans balances increased
The Company manages new loan origination volume and the portfolio using concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. The loan pipeline continues to be supported by sustained business development activity of its commercial lending teams. In addition, the loan portfolio continues to be well-diversified and is originated predominantly within the Company’s
Credit Quality: Non-performing assets remain minimal although increasing to
Allowance for Credit Losses (“ACL”) for loans was
Total Deposits were
Certificate of deposit balances increased
Shareholder’s Equity remained flat at
Book value per common share was
Financial Performance Overview | |||||||||||||||
(Unaudited) | |||||||||||||||
For the Three Months Ended | |||||||||||||||
2024 | 2023 | Change | 2023 | Change | |||||||||||
Performance Ratios | |||||||||||||||
Return on average assets, annualized | 0.95% | 1.02% | (0.07) | 1.33% | (0.38) | ||||||||||
Return on average equity, annualized | 9.32% | 10.88% | (1.56) | 15.63% | (6.31) | ||||||||||
Efficiency ratio (1) | 74.21% | 72.22% | 1.99 | 63.91% | 10.30 | ||||||||||
(1) Non-interest expense divided by net interest income plus noninterest income. | |||||||||||||||
Balance Sheet Overview | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | ||||||||||||||||
Assets: | (Dollars in thousands, except per share data) | |||||||||||||||||||||
Cash on hand and in banks | $ | 15,597 | $ | 16,716 | $ | (1,119) | -7% | $ | 16,593 | $ | (996) | -6% | ||||||||||
Interest bearing deposits | 75,705 | 91,355 | (15,650) | -17% | 235,958 | (160,253) | -68% | |||||||||||||||
Investment securities | 288,439 | 293,579 | (5,140) | -2% | 285,925 | 2,514 | 1% | |||||||||||||||
Loans held-for-sale | - | 1,103 | (1,103) | -100% | 249 | (249) | -100% | |||||||||||||||
Loans, net of deferred fees | 693,461 | 684,554 | 8,907 | 1% | 644,901 | 48,560 | 8% | |||||||||||||||
Allowance for loan losses | (8,580) | (8,530) | (50) | 1% | (8,231) | (349) | 4% | |||||||||||||||
Net loans | 684,881 | 676,024 | 8,857 | 1% | 636,670 | 48,211 | 8% | |||||||||||||||
1,689 | 1,783 | (94) | -5% | 2,567 | (878) | -34% | ||||||||||||||||
Other assets | 68,275 | 68,339 | (64) | 0% | 65,572 | 2,703 | 4% | |||||||||||||||
Total assets | $ | 1,134,586 | $ | 1,148,899 | $ | (14,313) | -1% | $ | 1,243,534 | $ | (108,948) | -9% | ||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||
Total deposits | $ | 995,756 | $ | 1,009,292 | $ | (13,536) | -1% | $ | 1,110,368 | $ | (114,612) | -10% | ||||||||||
Borrowings | 13,403 | 13,403 | - | 0% | 13,403 | - | 0% | |||||||||||||||
Accrued interest payable and other liabilities | 10,702 | 11,513 | (811) | -7% | 10,848 | (146) | -1% | |||||||||||||||
Shareholders' equity | 114,725 | 114,691 | 34 | 0% | 108,915 | 5,810 | 5% | |||||||||||||||
Total liabilities and shareholders' equity | $ | 1,134,586 | $ | 1,148,899 | $ | (14,313) | -1% | $ | 1,243,534 | $ | (108,948) | -9% | ||||||||||
Common Shares Outstanding | 10,335,557 | 10,388,724 | (53,167) | -1% | 10,424,294 | (88,737) | -1% | |||||||||||||||
Book value per common share (1) | $ | 11.10 | $ | 11.04 | $ | 0.06 | 1% | $ | 10.45 | $ | 0.65 | 6% | ||||||||||
Tangible book value per common share (2) | $ | 9.80 | $ | 9.75 | $ | 0.05 | 1% | $ | 9.16 | $ | 0.64 | 7% | ||||||||||
(1) Book value per common share is calculated as the total common shareholders' equity divided by the period ending number of common stock shares outstanding. | ||||||||||||||||||||||
(2) Tangible book value per common share is calculated as the total common shareholders' equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. |
Income Statement Overview | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
Interest and dividend income | $ | 13,634 | $ | 13,813 | $ | (179) | -1% | $ | 13,690 | $ | (56) | 0% | ||||||||||
Interest expense | 2,233 | 2,161 | 72 | 3% | 593 | 1,640 | 277% | |||||||||||||||
Net interest income | 11,401 | 11,652 | (251) | -2% | 13,097 | (1,696) | -13% | |||||||||||||||
Provision for credit losses | 33 | 111 | (78) | -70% | 157 | (124) | -79% | |||||||||||||||
Noninterest income | 1,444 | 1,528 | (84) | -5% | 1,287 | 157 | 12% | |||||||||||||||
Noninterest expense | 9,532 | 9,519 | 13 | 0% | 9,187 | 345 | 4% | |||||||||||||||
Income before income taxes | 3,280 | 3,550 | (270) | -8% | 5,040 | (1,760) | -35% | |||||||||||||||
Income tax expense | 630 | 608 | 22 | 4% | 930 | (300) | -32% | |||||||||||||||
Net Income | $ | 2,650 | $ | 2,942 | $ | (292) | -10% | $ | 4,110 | $ | (1,460) | -36% | ||||||||||
Average common shares outstanding - basic | 10,350,830 | 10,411,812 | (60,982) | -1% | 10,418,292 | (67,462) | -1% | |||||||||||||||
Average common shares outstanding - diluted | 10,363,460 | 10,420,337 | (56,877) | -1% | 10,432,245 | (68,785) | -1% | |||||||||||||||
Income per common share | ||||||||||||||||||||||
Basic | $ | 0.26 | $ | 0.28 | $ | (0.02) | -7% | $ | 0.39 | $ | (0.13) | -33% | ||||||||||
Diluted | $ | 0.26 | $ | 0.28 | $ | (0.02) | -7% | $ | 0.39 | $ | (0.13) | -33% | ||||||||||
Effective tax rate | 19.2% | 17.1% | 2.1% | 18.5% | 0.7% | |||||||||||||||||
Noninterest Income | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Service charges on deposits | $ | 475 | $ | 478 | $ | (3) | -1% | $ | 473 | $ | 2 | 0% | ||||||||
Gain on sale of loans, net | 152 | 95 | 57 | 60% | 111 | 41 | 37% | |||||||||||||
Gain on sale of securities available for sale, net | - | - | - | 0% | (154) | 154 | 0% | |||||||||||||
Earnings on bank owned life insurance | 180 | 176 | 4 | 2% | 164 | 16 | 10% | |||||||||||||
Other noninterest income | ||||||||||||||||||||
Fee income | 626 | 764 | (138) | -18% | 705 | (79) | -11% | |||||||||||||
Other | 11 | 15 | (4) | -27% | (12) | 23 | -192% | |||||||||||||
Total noninterest income | $ | 1,444 | $ | 1,528 | $ | (84) | -5% | $ | 1,287 | $ | 157 | 12% | ||||||||
Noninterest Expense | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Salaries and employee benefits | $ | 5,994 | $ | 5,787 | $ | 207 | 4% | % | $ | 5,785 | $ | 209 | 4% | ||||||
Occupancy | 641 | 679 | (38) | -6 | % | 531 | 110 | 21% | |||||||||||
Equipment | 284 | 301 | (17) | -6 | % | 287 | (3) | -1% | |||||||||||
Data processing | 950 | 971 | (21) | -2 | % | 951 | (1) | 0% | |||||||||||
Professional services | 210 | 238 | (28) | -12 | % | 241 | (31) | -13% | |||||||||||
State and local taxes | 150 | 187 | (37) | -20 | % | 178 | (28) | -16% | |||||||||||
134 | 144 | (10) | -7 | % | 154 | (20) | -13% | ||||||||||||
Other noninterest expense: | |||||||||||||||||||
Director fees | 88 | 82 | 6 | 7% | % | 71 | 17 | 24% | |||||||||||
Communication | 67 | 73 | (6) | -8 | % | 59 | 8 | 14% | |||||||||||
Advertising | 104 | 114 | (10) | -9 | % | 60 | 44 | 73% | |||||||||||
Professional liability insurance | 72 | 79 | (7) | -9 | % | 67 | 5 | 7% | |||||||||||
Amortization | 45 | 43 | 2 | 5% | % | 44 | 1 | 2% | |||||||||||
Other | 793 | 821 | (28) | -3 | % | 759 | 34 | 4% | |||||||||||
Total noninterest expense | $ | 9,532 | $ | 9,519 | $ | 13 | 0% | % | $ | 9,187 | $ | 345 | 4% | ||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
2024 | % of Total | 2023 | % of Total | $ Change | % Change | 2023 | % of Total | $ Change | % Change | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||
Collateralized mortgage obligations | $ | 129,213 | 45% | $ | 126,949 | 43% | $ | 2,264 | 2% | $ | 122,992 | 43% | $ | 6,221 | 5% | |||||||||||||||||
Mortgage backed securities | 37,753 | 13% | 38,103 | 13% | (350) | -1% | 32,294 | 11% | 5,459 | 17% | ||||||||||||||||||||||
77,826 | 27% | 83,748 | 29% | (5,922) | -7% | 84,814 | 30% | (6,988) | -8% | |||||||||||||||||||||||
Municipal securities | 43,647 | 15% | 44,779 | 15% | (1,132) | -3% | 44,827 | 16% | (1,180) | -3% | ||||||||||||||||||||||
Corporate debt securities | - | 0% | - | 0% | - | 0% | 998 | 0% | (998) | -100% | ||||||||||||||||||||||
Total | $ | 288,439 | 100% | $ | 293,579 | 100% | $ | (5,140) | -2% | $ | 285,925 | 100% | $ | 2,514 | 1% | |||||||||||||||||
Held to maturity securities | $ | 49,132 | 17% | $ | 55,454 | 19% | $ | (6,322) | -11% | $ | 58,595 | 20% | $ | (9,463) | -16% | |||||||||||||||||
Available for sale securities | $ | 239,307 | 83% | $ | 238,125 | 81% | $ | 1,182 | 0% | $ | 227,330 | 80% | $ | 11,977 | 5% | |||||||||||||||||
$ | 244,762 | 85% | $ | 248,768 | 85% | $ | (4,006) | -2% | $ | 240,061 | 84% | $ | 4,701 | 2% | ||||||||||||||||||
$ | 43,008 | 15% | $ | 43,687 | 15% | $ | (679) | -2% | $ | 44,614 | 16% | $ | (1,606) | -4% | ||||||||||||||||||
Non-rated securities | $ | 669 | 0% | $ | 1,124 | 0% | $ | (455) | -40% | $ | 1,250 | 0% | $ | (581) | -46% | |||||||||||||||||
AFS Unrealized Gain (Loss) | $ | (21,464) | -7% | $ | (20,808) | -7% | $ | (656) | 0% | $ | (20,518) | -7% | $ | (946) | 0% | |||||||||||||||||
Loans by Category | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
2024 | % of Gross Loans | 2023 | % of Gross Loans | $ Change | % Change | 2023 | % of Gross Loans | $ Change | % Change | |||||||||||||||||||||||
Commercial: | (Dollars in thousands) | |||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 71,212 | 10 | % | $ | 75,322 | 11 | % | $ | (4,110 | ) | -5 | % | $ | 75,279 | 12 | % | $ | (4,067 | ) | -5 | % | ||||||||||
PPP | 108 | 0 | % | 122 | 0 | % | (14 | ) | -11 | % | 405 | 0 | % | (297 | ) | -73 | % | |||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Construction and development | 51,978 | 7 | % | 48,720 | 7 | % | 3,258 | 7 | % | 34,918 | 5 | % | 17,060 | 49 | % | |||||||||||||||||
Residential 1-4 family | 99,808 | 14 | % | 96,301 | 14 | % | 3,507 | 4 | % | 85,380 | 13 | % | 14,428 | 17 | % | |||||||||||||||||
Multi-family | 54,430 | 8 | % | 51,025 | 7 | % | 3,405 | 7 | % | 40,882 | 6 | % | 13,548 | 33 | % | |||||||||||||||||
Commercial real estate -- owner occupied | 167,631 | 24 | % | 164,443 | 24 | % | 3,188 | 2 | % | 160,534 | 25 | % | 7,097 | 4 | % | |||||||||||||||||
Commercial real estate -- non owner occupied | 157,322 | 23 | % | 155,280 | 23 | % | 2,042 | 1 | % | 151,923 | 24 | % | 5,399 | 4 | % | |||||||||||||||||
Farmland | 26,752 | 4 | % | 27,273 | 4 | % | (521 | ) | -2 | % | 26,451 | 4 | % | 301 | 1 | % | ||||||||||||||||
Consumer | 64,988 | 10 | % | 66,863 | 10 | % | (1,875 | ) | -3 | % | 69,867 | 11 | % | (4,879 | ) | -7 | % | |||||||||||||||
Gross Loans | 694,229 | 100 | % | 685,349 | 100 | % | 8,880 | 1 | % | 645,639 | 100 | % | 48,590 | 8 | % | |||||||||||||||||
Less: allowance for loan losses | (8,580 | ) | (8,530 | ) | (50 | ) | (8,231 | ) | (349 | ) | ||||||||||||||||||||||
Less: deferred fees | (768 | ) | (795 | ) | 27 | (738 | ) | (30 | ) | |||||||||||||||||||||||
Net loans | $ | 684,881 | $ | 676,024 | $ | 8,857 | $ | 636,670 | $ | 48,211 | ||||||||||||||||||||||
Loan Concentration | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
2024 | % of Risk | 2023 | % of Risk | Change | 2023 | % of Risk Based Capital | Change | |||||||||||||||||||||||||
Commercial: | (Dollars in thousands) | |||||||||||||||||||||||||||||||
Commercial and agricultural | $ | 71,212 | 51 | % | $ | 75,322 | 54 | % | -3 | % | $ | 75,279 | 57 | % | -6 | % | ||||||||||||||||
PPP | 108 | 0 | % | 122 | 0 | % | 0 | % | 405 | 0 | % | 0 | % | |||||||||||||||||||
Real estate: | ||||||||||||||||||||||||||||||||
Construction and development | 51,978 | 37 | % | 48,720 | 35 | % | 2 | % | 34,918 | 26 | % | 11 | % | |||||||||||||||||||
Residential 1-4 family | 99,808 | 72 | % | 96,301 | 70 | % | 2 | % | 85,380 | 64 | % | 8 | % | |||||||||||||||||||
Multi-family | 54,430 | 39 | % | 51,025 | 37 | % | 2 | % | 40,882 | 31 | % | 8 | % | |||||||||||||||||||
Commercial real estate -- owner occupied | 167,631 | 120 | % | 164,443 | 119 | % | 1 | % | 160,534 | 121 | % | -1 | % | |||||||||||||||||||
Commercial real estate -- non owner occupied | 157,322 | 113 | % | 155,280 | 112 | % | 1 | % | 151,923 | 115 | % | -2 | % | |||||||||||||||||||
Farmland | 26,752 | 19 | % | 27,273 | 20 | % | -1 | % | 26,451 | 20 | % | -1 | % | |||||||||||||||||||
Consumer | 64,988 | 47 | % | 66,863 | 48 | % | -1 | % | 69,867 | 53 | % | -6 | % | |||||||||||||||||||
Gross Loans | $ | 694,229 | $ | 685,349 | $ | 645,639 | ||||||||||||||||||||||||||
Regulatory | $ | 261,155 | 188 | % | $ | 252,493 | 182 | % | 6 | % | $ | 225,163 | 170 | % | 18 | % | ||||||||||||||||
Total Risk Based Capital* | $ | 139,255 | $ | 138,449 | $ | 132,579 | ||||||||||||||||||||||||||
* | ||||||||||||||||||||||||||||||||
The following table presents the Commercial real estate – non owner occupied loan balances, including loans in the process of construction and development, by collateral type: | ||||||||||||||||||||||||||||||||
Non-Owner Occupied Commercial Real Estate Composition* | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
2024 | % of Total | |||||||||||||||||||||||||||||||
Multifamily | $ | 61,085 | 27 | % | ||||||||||||||||||||||||||||
Retail | 36,192 | 16 | % | |||||||||||||||||||||||||||||
Hospitality | 32,468 | 14 | % | |||||||||||||||||||||||||||||
Office | 23,730 | 10 | % | |||||||||||||||||||||||||||||
Mini Storage | 23,438 | 10 | % | |||||||||||||||||||||||||||||
Mixed Use | 22,204 | 10 | % | |||||||||||||||||||||||||||||
Industrial | 13,348 | 6 | % | |||||||||||||||||||||||||||||
Warehouse | 7,483 | 3 | % | |||||||||||||||||||||||||||||
Special Purpose | 7,058 | 3 | % | |||||||||||||||||||||||||||||
Other | 3,259 | 0 | % | |||||||||||||||||||||||||||||
Total | $ | 230,265 | ||||||||||||||||||||||||||||||
*Includes loans in the process of construction and development | ||||||||||||||||||||||||||||||||
Deposits by Category | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
2024 | % of Total | 2023 | % of Total | $ Change | % Change | 2023 | % of Total | $ Change | % Change | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Interest-bearing demand | $ | 177,735 | 17 | % | $ | 183,436 | 18 | % | $ | (5,701 | ) | -3 | % | $ | 215,853 | 20 | % | $ | (38,118 | ) | -18 | % | |||||
Money market | 169,095 | 17 | % | 179,344 | 17 | % | (10,249 | ) | -6 | % | 183,066 | 16 | % | (13,971 | ) | -8 | % | ||||||||||
Savings | 129,796 | 13 | % | 136,408 | 14 | % | (6,612 | ) | -5 | % | 165,694 | 15 | % | (35,898 | ) | -22 | % | ||||||||||
Time deposits (CDs) | 114,644 | 12 | % | 100,832 | 10 | % | 13,812 | 14 | % | 65,231 | 6 | % | 49,413 | 76 | % | ||||||||||||
Total interest-bearing deposits | 591,270 | 59 | % | 600,020 | 59 | % | (8,750 | ) | -1 | % | 629,844 | 57 | % | (38,574 | ) | -6 | % | ||||||||||
Non-interest bearing demand | 404,486 | 41 | % | 409,272 | 41 | % | (4,786 | ) | -1 | % | 480,524 | 43 | % | (76,038 | ) | -16 | % | ||||||||||
Total deposits | $ | 995,756 | 100 | % | $ | 1,009,292 | 100 | % | $ | (13,536 | ) | -1 | % | $ | 1,110,368 | 100 | % | $ | (114,612 | ) | -10 | % | |||||
Insured Deposits | $ | 645,784 | 65 | % | $ | 647,330 | 64 | % | $ | (1,546 | ) | 0 | % | $ | 700,960 | 64 | % | $ | (55,176 | ) | -8 | % | |||||
Collaterialized Deposits | 127,733 | 13 | % | 129,895 | 13 | % | (2,162 | ) | -2 | % | 149,856 | 13 | % | (22,123 | ) | -15 | % | ||||||||||
Uninsured Deposits | 222,239 | 22 | % | 232,067 | 23 | % | (9,828 | ) | -4 | % | 259,552 | 23 | % | (37,313 | ) | -14 | % | ||||||||||
Total Deposits | $ | 995,756 | 100 | % | $ | 1,009,292 | 100 | % | $ | (13,536 | ) | -1 | % | $ | 1,110,368 | 100 | % | $ | (114,612 | ) | -10 | % | |||||
Consumer Deposits | $ | 470,442 | 47 | % | $ | 470,425 | 46 | % | $ | 17 | 0 | % | $ | 502,430 | 45 | % | $ | (31,988 | ) | -6 | % | ||||||
Business Deposits | 387,917 | 39 | % | 398,977 | 40 | % | (11,060 | ) | -3 | % | 447,778 | 40 | % | (59,861 | ) | -13 | % | ||||||||||
Public Deposits | 137,397 | 14 | % | 139,890 | 14 | % | (2,493 | ) | -2 | % | 160,160 | 15 | % | (22,763 | ) | -14 | % | ||||||||||
Total Deposits | $ | 995,756 | 100 | % | $ | 1,009,292 | 100 | % | $ | (13,536 | ) | -1 | % | $ | 1,110,368 | 100 | % | $ | (114,612 | ) | -10 | % | |||||
The following table summarizes the capital measures of the Company and the Bank respectively, at the dates listed below.
Capital Measures | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
2024 | 2023 | Change | 2023 | Change | Well Capitalized Under Prompt Correction Action Regulations | |||||||||||||
Total risk-based capital ratio | 17.6 | % | 17.7 | % | (0.1 | ) | 17.5 | % | 0.1 | N/A | ||||||||
Tier 1 risk-based capital ratio | 16.5 | % | 16.5 | % | - | 16.3 | % | 0.2 | N/A | |||||||||
Common equity tier 1 ratio | 14.8 | % | 14.9 | % | (0.1 | ) | 14.6 | % | 0.2 | N/A | ||||||||
Leverage ratio | 11.6 | % | 11.3 | % | 0.3 | 9.9 | % | 1.7 | N/A | |||||||||
Tangible common equity ratio | 9.0 | % | 8.9 | % | 0.1 | 7.8 | % | 1.2 | N/A | |||||||||
Total risk-based capital ratio | 17.6 | % | 17.6 | % | - | 17.4 | % | 0.2 | 10.5 | % | ||||||||
Tier 1 risk-based capital ratio | 16.4 | % | 16.4 | % | - | 16.2 | % | 0.2 | 8.5 | % | ||||||||
Common equity tier 1 ratio | 16.4 | % | 16.4 | % | - | 16.2 | % | 0.2 | 7.0 | % | ||||||||
Leverage ratio | 11.5 | % | 11.2 | % | 0.3 | 9.8 | % | 1.7 | 7.5 | % | ||||||||
The following tables set forth information regarding average balances of interest-earning assets and interest-bearing liabilities and the resultant yields or cost, and the net interest margin on a tax equivalent basis. Loans held for sale and non-accrual loans are included in total loans.
Net Interest Margin | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(Annualized, tax-equivalent basis) | ||||||||||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | ||||||||||||||||
Average Balances | (Dollars in thousands) | |||||||||||||||||||||
Gross loans | $ | 688,918 | $ | 675,622 | $ | 13,296 | 2 | % | $ | 643,851 | $ | 45,067 | 7 | % | ||||||||
Loans held for sale | $ | 595 | $ | 709 | $ | (114 | ) | -16 | % | $ | 584 | $ | 11 | 2 | % | |||||||
Investment securities | $ | 292,375 | $ | 289,245 | $ | 3,130 | 1 | % | $ | 287,714 | $ | 4,661 | 2 | % | ||||||||
Federal funds sold & interest bearing deposits in banks | $ | 68,873 | $ | 105,177 | $ | (36,304 | ) | -35 | % | $ | 251,118 | $ | (182,245 | ) | -73 | % | ||||||
Total interest-earning assets | $ | 1,050,761 | $ | 1,070,753 | $ | (19,992 | ) | -2 | % | $ | 1,183,267 | $ | (132,506 | ) | -11 | % | ||||||
Non-interest bearing demand deposits | $ | 395,004 | $ | 419,994 | $ | (24,990 | ) | -6 | % | $ | 483,135 | $ | (88,131 | ) | -18 | % | ||||||
Interest bearing deposits | $ | 590,410 | $ | 593,464 | $ | (3,054 | ) | -1 | % | $ | 643,972 | $ | (53,562 | ) | -8 | % | ||||||
Total Deposits | $ | 985,414 | $ | 1,013,458 | $ | (28,044 | ) | -3 | % | $ | 1,127,107 | $ | (141,693 | ) | -13 | % | ||||||
Borrowings | $ | 13,403 | $ | 13,403 | $ | - | 0 | % | $ | 13,403 | $ | - | 0 | % | ||||||||
Total interest-bearing liabilities | $ | 603,813 | $ | 606,867 | $ | (3,054 | ) | -1 | % | $ | 657,375 | $ | (53,562 | ) | -8 | % | ||||||
Total Equity | $ | 114,309 | $ | 107,251 | $ | 7,058 | 7 | % | $ | 106,612 | $ | 7,697 | 7 | % | ||||||||
For the Three Months Ended, | ||||||||||||||||||||||
2024 | 2023 | Change | 2023 | Change | ||||||||||||||||||
Yield on average gross loans (1) | 5.97 | % | 5.80 | % | 0.17 | 5.44 | % | 0.53 | ||||||||||||||
Yield on average investment securities (1) | 3.45 | % | 3.48 | % | (0.03 | ) | 3.20 | % | 0.25 | |||||||||||||
Yield on Fed funds sold & interest bearing deposits in banks | 5.45 | % | 5.42 | % | 0.03 | 4.61 | % | 0.84 | ||||||||||||||
Cost of average interest bearing deposits | 1.36 | % | 1.28 | % | 0.08 | 0.24 | % | 1.12 | ||||||||||||||
Cost of average borrowings | 7.26 | % | 7.31 | % | (0.05 | ) | 6.45 | % | 0.81 | |||||||||||||
Cost of average total deposits and borrowings | 0.90 | % | 0.83 | % | 0.07 | 0.21 | % | 0.69 | ||||||||||||||
Yield on average interest-earning assets | 5.24 | % | 5.14 | % | 0.10 | 4.72 | % | 0.52 | ||||||||||||||
Cost of average interest-bearing liabilities | 1.49 | % | 1.41 | % | 0.08 | 0.37 | % | 1.12 | ||||||||||||||
Net interest spread | 3.75 | % | 3.73 | % | 0.02 | 4.35 | % | (0.60 | ) | |||||||||||||
Net interest margin (1) | 4.38 | % | 4.34 | % | 0.04 | 4.51 | % | (0.13 | ) | |||||||||||||
(1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. | ||||||||||||||||||||||
Credit Quality | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | |||||||||||||||
Risk rating: | (Dollars in thousands) | ||||||||||||||||||||
Pass | $ | 684,779 | $ | 674,993 | $ | 9,786 | 1 | % | $ | 635,187 | $ | 49,592 | 8 | % | |||||||
Special Mention | 4,771 | 4,669 | 102 | 2 | % | 4,736 | 35 | 1 | % | ||||||||||||
Substandard | 4,679 | 5,687 | (1,008 | ) | -18 | % | 5,716 | (1,037 | ) | -18 | % | ||||||||||
Gross Loans | $ | 694,229 | $ | 685,349 | $ | 8,880 | 1 | % | $ | 645,639 | $ | 48,590 | 8 | % | |||||||
Classified loans1 to gross loans | 0.67 | % | 0.83 | % | 0.89 | % | |||||||||||||||
ACL as a percentage of classified loans1 | 183.37 | % | 149.94 | % | 144.00 | % | |||||||||||||||
Delinquent loans 30-90 days, not in nonaccrual status, to gross loans | 0.10 | % | 0.08 | % | 0.03 | % | |||||||||||||||
¹Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower's financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. | |||||||||||||||||||||
Nonperforming Assets | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
2024 | 2023 | $ Change | % Change | 2023 | $ Change | % Change | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Total nonaccrual loans, beginning of three month period | $ | 664 | $ | 1,219 | $ | (555 | ) | -46 | % | $ | 869 | $ | (205 | ) | -24 | % | |||||
Transfer to performing loans | - | (478 | ) | 478 | -100 | % | (21 | ) | 21 | -100 | % | ||||||||||
Addition of nonaccrual loans | 1,089 | - | 1,089 | 100 | % | 241 | 848 | 352 | % | ||||||||||||
Moved to other assets owned | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Principal payments, net | (227 | ) | (77 | ) | (150 | ) | 195 | % | (128 | ) | (99 | ) | 77 | % | |||||||
Charge-offs, net | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Total nonaccrual loans, end of three month period | $ | 1,526 | $ | 664 | $ | 862 | 130 | % | $ | 961 | $ | 565 | 59 | % | |||||||
Other real estate owned and foreclosed assets | - | - | - | 0 | % | - | - | 0 | % | ||||||||||||
Total nonperforming assets | $ | 1,526 | $ | 664 | $ | 862 | 130 | % | $ | 961 | $ | 565 | 59 | % | |||||||
Accruing loans past due 90 days or more | $ | - | $ | - | $ | - | 0 | % | $ | - | $ | - | 0 | % | |||||||
Percentage of nonperforming assets to total assets | 0.13 | % | 0.06 | % | 0.08 | % | |||||||||||||||
Nonperforming loans to total loans | 0.22 | % | 0.10 | % | 0.15 | % | |||||||||||||||
Allowance for Credit Losses | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
For the Three Months Ended, | |||||||||||||||||||||
$ Change | % Change | $ Change | % Change | ||||||||||||||||||
Loans: | (Dollars in thousands) | ||||||||||||||||||||
Gross loans outstanding at end of period | $ | 694,229 | $ | 685,349 | $ | 8,880 | 1 | % | $ | 645,639 | $ | 48,590 | 8 | % | |||||||
Average loans outstanding, gross | $ | 688,918 | $ | 675,622 | $ | 13,296 | 2 | % | $ | 643,851 | $ | 45,067 | 7 | % | |||||||
Allowance for credit losses, beginning of period | $ | 8,530 | $ | 8,347 | $ | 183 | 2 | % | $ | 8,236 | $ | 294 | 4 | % | |||||||
Impact of CECL Adoption (ASC 326) | - | - | - | 0 | % | (157 | ) | 157 | -100 | % | |||||||||||
Commercial | (3 | ) | - | (3 | ) | -100 | % | - | (3 | ) | -100 | % | |||||||||
- | - | - | 0 | % | - | - | 0 | % | |||||||||||||
(2 | ) | - | (2 | ) | -100 | % | - | (2 | ) | -100 | % | ||||||||||
Consumer | (30 | ) | (20 | ) | (10 | ) | 50 | % | (39 | ) | 9 | -23 | % | ||||||||
Total charge-offs | (35 | ) | (20 | ) | (15 | ) | 75 | % | (39 | ) | 4 | -10 | % | ||||||||
Commercial | - | 40 | (40 | ) | -100 | % | 27 | (27 | ) | -100 | % | ||||||||||
- | - | - | 0 | % | - | - | 0 | % | |||||||||||||
- | - | - | 0 | % | - | - | 0 | % | |||||||||||||
Consumer | 2 | 1 | 1 | 100 | % | 13 | (11 | ) | -85 | % | |||||||||||
Total recoveries | 2 | 41 | (39 | ) | -95 | % | 40 | (38 | ) | -95 | % | ||||||||||
Net recoveries/(charge-offs) | (33 | ) | 21 | (54 | ) | -257 | % | 1 | (34 | ) | -3400 | % | |||||||||
Provision (benefit) to income | 83 | 162 | (79 | ) | -49 | % | 151 | (68 | ) | -45 | % | ||||||||||
Allowance for credit losses, end of period | $ | 8,580 | $ | 8,530 | $ | 50 | 1 | % | $ | 8,231 | $ | 349 | 4 | % | |||||||
Ratio of net loans charged-off to average | |||||||||||||||||||||
gross loans outstanding, annualized | 0.02 | % | -0.01 | % | 0.03 | % | 0.00 | % | 0.02 | % | |||||||||||
Ratio of allowance for credit losses to | |||||||||||||||||||||
gross loans outstanding | 1.24 | % | 1.24 | % | 0.00 | % | 1.27 | % | -0.03 | % | |||||||||||
Unfunded Loan Commitments: | |||||||||||||||||||||
Allowance for credit losses, beginning of period | $ | 698 | $ | 749 | $ | (51 | ) | -7 | % | $ | 203 | $ | 495 | 244 | % | ||||||
Impact of CECL Adoption (ASC 326) | - | - | - | 0 | % | 609 | (609 | ) | -100 | % | |||||||||||
Provision (benefit) to income | (50 | ) | (51 | ) | 1 | -2 | % | 5 | (55 | ) | -1100 | % | |||||||||
Allowance for credit losses, end of period | $ | 648 | $ | 698 | $ | (50 | ) | -7 | % | $ | 817 | $ | (169 | ) | -21 | % | |||||
ABOUT
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of
Source:
2024 GlobeNewswire, Inc., source