FFB Bancorp Earns $7.79 million, or $2.46 per Diluted Share, for First Quarter 2024
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FRESNO, Calif., April 17, 2024 (GLOBE NEWSWIRE) -- FFB Bancorp (the “Company”) (OTCQX: FFBB), the parent company of FFB Bank (the “Bank”), today reported net income of $7.79 million, or $2.46 per diluted share, for the first quarter of 2024, compared to $7.70 million, or $2.42 per diluted share, for the first quarter of 2023, and increased 3% from $7.57 million, or $2.38 per diluted share for the fourth quarter of 2023. All results are unaudited.
First Quarter 2024 Highlights: As of, or for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023:
- Pre-tax, pre-provision income increased 3.02% to $10.91 million.
- Net income increased 1% to $7.79 million.
- Return on average equity (“ROAE”) was 23.27%.
- Return on average assets (“ROAA”) was 2.32%.
- Net interest margin expanded 16 basis points to 5.15% from 4.98% a year earlier.
- Gross revenue (net interest income, before the provision for credit losses, plus non-interest income) increased 22% to $23.61 million.
- Total assets increased 9% to $1.40 billion.
- Total portfolio of loans increased 8% to $926.78 million.
- Total deposits increased 9% to $1.20 billion.
- Shareholder equity increased 37% to $138.72 million.
- Book value per common share increased 38% to $43.69.
- The Company’s tangible common equity ratio was 9.94%, while the Bank’s regulatory leverage capital ratio was 14.27% and total risk-based capital ratio was 20.79%, at March 31, 2024.
“First quarter 2024 results reflect robust growth in gross revenues which were up 22% year-over-year and 6% from the linked quarter,” said Steve Miller, President & CEO. “Merchant services income, net of operating expenses, increased 51% year-over-year and 25% from the linked quarter.”
“Overall credit quality remains strong, although we saw an increase in nonperforming assets and loan delinquencies related to the SBA portfolio during the quarter,” said Miller. “We continue to strengthen our balance sheet and added $378,000 to our allowance for credit loss during the quarter, reflecting prudent credit risk management. Our core deposit franchise continues to give us flexibility in how we manage our balance sheet, and our strategic focus is to organically expand our customer deposit base leveraging our regional expansion and national payments franchise,” said Miller.
Results of Operations
Operating revenue, consisting of net interest income before the provision for credit losses and non-interest income, increased 22% to $23.61 million for the first quarter of 2024, compared to $19.34 million for the first quarter a year ago, and increased 6% from $22.31 million from the fourth quarter of 2023.
Net interest income, before the provision for credit losses, increased 9% to $16.14 million for the first quarter of 2024, compared to $14.78 million for the same quarter a year ago, and decreased 1% from $16.38 million for the preceding quarter. “The slight decrease in net interest income during the first quarter was driven by continued pressure on deposit rates and higher funding costs,” said Bhavneet Gill, Chief Financial Officer.
The Company’s net interest margin (“NIM”) improved by 16 basis points to 5.15% for the first quarter of 2024, compared to 4.98% for the first quarter of 2023, and decreased 5 basis points from 5.19% for the preceding quarter. “Our yield on earning assets expanded 2 basis points in the first quarter with new loan production and investment purchases at higher rates, however, that was more than offset by the 6 basis point increase in the cost of funds. Our interest-bearing deposit balances increased 1% quarter over quarter while the cost of interest-bearing deposits increased 18 basis points in the first quarter,” said Gill.
The yield on earning assets was 6.15% for the first quarter of 2024, compared to 5.57% for the first quarter a year ago, and 6.13% for the linked quarter. The cost of funds increased to 1.00% for the first quarter of 2024, as customers continue to seek higher deposit rates in the current higher rate environment. The cost of funds was 0.58% for the same quarter a year earlier, and 0.93% for the preceding quarter.
Total non-interest income was $7.47 million for the first quarter of 2024, compared to $4.56 million for the first quarter of 2023, and $5.92 million for the preceding quarter. The increase in non-interest income from the preceding quarter was driven by merchant services revenue and a reduction in loss on sale of investment securities.
Merchant services revenue increased 64% to $6.07 million for the first quarter of 2024, compared to $3.70 million from the first quarter a year earlier, and increased 26% from $4.83 million for the preceding quarter. The increase in merchant service income from the preceding quarter was primarily due to an increase in revenue related to FFB Payments, our own organic ISO.
“We continue to see revenue growth across our ISO partner sponsorships and from our own organic ISO, FFB Payments,” said Miller. “Our team continues to build a solid pipeline of payment related partners to support further revenue expansion for both ISO partner sponsorship, FFB Payments and new payment rail use cases. Our strategic initiatives for 2024 and beyond are focused on providing our customers access to all payment rails and growing our deposit franchise through the payment ecosystem. We realized a significant decrease in ISO Partner Sponsorship volume in the first quarter related to one ISO partner, however, that reduction in volume did not make a meaningful impact to revenue.”
| Merchant ISO Processing Volumes (in thousands) | |||||||||||||||||||
| Source | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | ||||||||||||||
| ISO Partner Sponsorship | $ | 3,486,203 | $ | 3,891,828 | $ | 3,491,321 | $ | 3,812,386 | $ | 2,763,289 | |||||||||
| FFB Payments- Sub-ISO Merchants | 19,683 | 13,665 | 12,382 | 20,992 | 21,478 | ||||||||||||||
| FFB Payments - Direct Merchants | 42,725 | 119,948 | 61,987 | 93,443 | 78,851 | ||||||||||||||
| Total volume | $ | 3,548,611 | $ | 4,025,441 | $ | 3,565,690 | $ | 3,926,821 | $ | 2,863,618 | |||||||||
| Merchant ISO Processing Revenues (in thousands) | |||||||||||||||||||
| Source of Revenue | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | ||||||||||||||
| Net Revenue*: | |||||||||||||||||||
| ISO Partner Sponsorship | $ | 1,961 | $ | 2,116 | $ | 2,169 | $ | 1,916 | $ | 2,183 | |||||||||
| Gross Revenue: | |||||||||||||||||||
| FFB Payments- Sub-ISO Merchants | 223 | 496 | 466 | 539 | 672 | ||||||||||||||
| FFB Payments - Direct Merchants | 1,513 | 4,761 | 2,078 | 2,693 | 3,213 | ||||||||||||||
| 1,736 | 5,257 | 2,544 | 3,232 | 3,885 | |||||||||||||||
| Gross Expense: | |||||||||||||||||||
| FFB Payments- Sub-ISO Merchants | 149 | 321 | 361 | 455 | 518 | ||||||||||||||
| FFB Payments - Direct Merchants | 1,095 | 2,468 | 1,428 | 1,720 | 1,842 | ||||||||||||||
| 1,244 | 2,789 | 1,789 | 2,175 | 2,360 | |||||||||||||||
| Net Revenue: | |||||||||||||||||||
| FFB Payments- Sub-ISO Merchants | 74 | 175 | 105 | 84 | 154 | ||||||||||||||
| FFB Payments - Direct Merchants | 418 | 2,293 | 650 | 973 | 1,371 | ||||||||||||||
| FFB Payments Net Revenue | 492 | 2,468 | 755 | 1,057 | 1,525 | ||||||||||||||
| Net Merchant Services Income: | $ | 2,453 | $ | 4,584 | $ | 2,924 | $ | 2,973 | $ | 3,708 | |||||||||
*ISO Partnership Sponsorship is recognized net of expense in Merchant Services Income. FFB Payments revenues are recognized gross in Merchant Services Income and Merchant Services expenses are recognized in Non-Interest Expense.
Total deposit fee income increased 22% to $796,000 for the first quarter of 2024, compared to $655,000 for the first quarter of 2023, and increased 2% from $783,000 for the preceding quarter.
There was a $451,000 gain on sale of loans during the first quarter of 2024, compared to a gain on sale of loans of $904,000 during the first quarter 2023, and a gain on sale of loans of $464,000 in the linked quarter. There was a loss on sale of investments of $373,000 during the first quarter of 2024, compared to a loss of $1.32 million during the first quarter 2023, and $1.11 million loss in the linked quarter. “We monitor the sale of loans and investment securities and manage concentrations accordingly. During the first quarter, we sold $1.75 million in bank subordinated debt securities and another $3.20 million in non-agency CMOs to further reduce credit exposure in the investment portfolio,” added Gill.
Non-interest expense increased 45% to $12.70 million for the first quarter of 2024, compared to $8.75 million for the first quarter 2023, and increased 15% from $11.05 million for the linked quarter. “The higher operating expenses incurred from a year ago and for the three months ended March 31, 2024 were partially related to the increase in merchant operating expense, as a result of higher merchant operating revenue. Excluding the impact of merchant operating expense, operating expenses are up 38% year over year and 12% from the prior quarter,” said Miller. “In addition to an increase in merchant operating expense, operating expenses were significantly impacted by higher salaries and employee benefits as we continued to invest in key talent and technology.”
“We made strategic investments in people and technology during the first quarter to support our payment ecosystem, product development, and regional expansion initiatives. These investments included hiring a team of data engineers and individuals focused on treasury management and product development. We had the opportunity to onboard talent ahead of our original expectations, which will enable our team to accelerate several key foundational initiatives for the future of our franchise,” said Miller. Full-time employees increased to 147 at March 31, 2024, compared to 107 full-time employees a year earlier, and 139 full-time employees from the linked quarter. As a result of the increased headcount, salaries and employee benefits increased 40% to $6.58 million for the first quarter of 2024, compared to $4.72 million for the first quarter of 2023, and increased 18% from $5.60 million in the linked quarter.
Occupancy and equipment expenses increased 6% from a year ago, representing 3% of non-interest expense, and increased 22% from the preceding quarter. Other operating expense increased 39% to $3.38 million from a year earlier and increased 3% from the preceding quarter. Increases in data processing expense, software licenses and subscriptions, professional fees, and marketing expense were all primary drivers of the year-over-year increase. Merchant operating expense totaled $2.36 million for the first quarter of 2024, compared to $1.24 million for the first quarter of 2023 and $1.85 million for the preceding quarter. The year-over-year increase in merchant operating expense is attributed to an increase in volume and revenue for the FFB Payments lines of business. Merchant operating expenses include interchange fees, chargebacks, partnership fees, and other card brand fees.
The efficiency ratio was 52.96% for the first quarter of 2024, compared to 42.35% for the same quarter a year ago, and 47.17% for the preceding quarter. The efficiency ratio can fluctuate period over period based on changes in merchant services gross revenues and associated expenses. The Company also calculates an adjusted efficiency ratio where the merchant services gross expense, which is included in noninterest expense, is netted against merchant services revenue in noninterest income. The adjusted efficiency ratio was 47.82% for the first quarter of 2024, compared to 38.65% for the same quarter a year ago, and 42.63% for the linked quarter.
Balance Sheet Review
Total assets increased 9% to $1.40 billion at March 31, 2024, compared to $1.28 billion at March 31, 2023, and increased 2% from $1.36 billion at December 31, 2023.
The total portfolio of loans increased 8%, or $65.60 million, to $926.78 million, compared to $861.18 million at March 31, 2023, and decreased $1.56 million, from $928.34 million on a linked quarter basis. “We recorded a $451,000 gain on sale of $5.76 million in SBA loans during the first quarter,” said Gill.
Commercial real estate loans increased 6% year-over-year to $545.36 million, representing 59% of total loans at March 31, 2024. The CRE portfolio includes approximately $237.35 million in multi-family loans originated by the Southern California team that the Company may consider selling at some point in the future for liquidity and concentration management. The multi-family portfolio includes $58.61 million in short-term bridge loans for transitional projects of multi-family properties. The short-term bridge loans are conservatively underwritten with minimum DSCR and liquidity requirements. Approximately 49.8% of the current bridge loan portfolio will come due during the second quarter of 2024 to roll off or get refinanced and sold. The bank continues to market our bridge loan product in a more measured approach keeping to our conservative underwriting standards. Real estate construction and land development loans increased 7% from a year ago to $77.32 million, representing 8% of total loans, while residential RE 1-4 family loans totaled $16.11 million, or 2% of loans, at March 31, 2024.
The commercial and industrial (C&I) portfolio increased 12% to $224.55 million, at March 31, 2024, compared to $200.91 million a year earlier, and increased 3% from $218.90 million at December 31, 2023. C&I loans represented 24% of total loans at March 31, 2024. Agriculture loans represented 7% of the loan portfolio at March 31, 2024. At March 31, 2024, the SBA, USDA, and other government agencies guaranteed loans totaled $57.87 million, or 6.2% of the loan portfolio.
The investment portfolio totaled $328.91 million at March 31, 2024, compared to $328.58 million a year earlier, and increased 1% compared to $326.01 million at December 31, 2023. The investment portfolio consists of mortgage-backed and municipal securities, both tax exempt and taxable, treasury securities as well as other domestic debt. Approximately $25.26 million in agency backed securities were purchased during the first quarter to replace portfolio balances that had paid down or paid off. The quarterly increase in the investment portfolio balance is attributed to purchases of $25.26 million in agency backed securities, partially offset by investment sales of $4.95 million and regular paydowns. At March 31, 2024, the Company had a net unrealized loss position on its investment securities portfolio of $28.50 million, compared to a net unrealized loss of $27.75 million at December 31, 2023. The Company’s investment securities portfolio had an effective duration of 5.36 years at March 31, 2024, compared to 5.41 years at December 31, 2023.
Total deposits increased 9%, or $101.22 million, to $1.20 billion at March 31, 2024, compared to $1.10 billion from a year earlier, and increased 5% from $1.15 billion at December 31, 2023. The quarter over quarter increase in deposit balances is primarily attributed to a $67.03 million increase in wholesale deposits. Non-interest bearing demand deposits decreased 1% to $751.64 million at March 31, 2024, compared to $759.42 million at March 31, 2023, and decreased 3% from $775.51 million at December 31, 2023. Non-interest bearing demand deposits represented 63% of total deposits at March 31, 2024. Included in non-interest bearing deposits are $88.2 million from ISO partners for merchant reserves, $133.5 million from ISO partners for settlement, and $6.2 million in ISO partner operating accounts.
There were no short-term borrowings at March 31, 2024, compared to $34.00 million at December 31, 2023, and $22.00 million at March 31, 2023. The following table summarizes the Company's primary and secondary sources of liquidity which were available at March 31, 2024:
| Liquidity Source (in thousands) | March 31, 2024 | December 31, 2023 | |||||
| Cash and cash equivalents | $ | 90,916 | $ | 62,603 | |||
| Unpledged investment securities, fair value | 91,634 | 84,506 | |||||
| FHLB advance capacity | 290,202 | 275,679 | |||||
| Federal Reserve discount window capacity | 178,255 | 179,836 | |||||
| Correspondent bank unsecured lines of credit | 91,500 | 91,500 | |||||
| $ | 742,507 | $ | 694,124 | ||||
The total primary and secondary liquidity of $742.51 million at March 31, 2024 represents an increase of $48.4 million in primary and secondary liquidity quarter over quarter.
Shareholders’ equity increased 37% to $138.72 million at March 31, 2024, compared to $100.99 million from a year ago, and grew 6% from $130.70 million at December 31, 2023. Book value per common share increased 38% to $43.69, at March 31, 2024, compared to $31.77 at March 31, 2023, and increased 6% from $41.21 at December 31, 2023.
“The tangible common equity ratio was 9.94% at March 31, 2024, compared to 7.90% a year earlier, and 9.58% at December 31, 2023,” stated Gill. “Our tangible common equity and book value increased during the quarter as a result of quarterly net income, partially offset by an increase in accumulated other comprehensive income (‘AOCI’) loss related to the investment portfolio.”
At the Bank level, unrealized losses and gains reflected in AOCI are not included in regulatory capital. As a result, Tier-1 capital at the Bank for regulatory purposes was $195.01 million at quarter end excluding the unrealized loss. The regulatory leverage capital ratio was 14.27% for the current quarter, while the total risk-based capital ratio was 20.79%, exceeding regulatory minimums to be considered well-capitalized.
Asset Quality
Nonperforming assets increased to $7.16 million, or 0.51% of total assets, at March 31, 2024, compared to $6.01 million, or 0.44% of total assets, from the preceding quarter. Of the $7.16 million nonperforming loans, $4.73 million are covered by SBA guarantees. Total delinquent loans increased to $6.50 million at March 31, 2024, compared to $2.62 million at December 31, 2023. The increase in nonperforming assets and delinquent loans was attributed to the SBA loans originated by the Bank. Total delinquent loans as of March 31, 2024 include $2.06 million in purchased government guaranteed loans, which are guaranteed by the SBA for the full payment of the principal plus interest.
Past due loans 30-60 days were $3.22 million at March 31, 2024, compared to $1.08 million at December 31, 2023, and $148,000 at March 31, 2023. There were $1.95 million past due loans from 60-90 days at March 31, 2024, compared to $199,000 at December 31, 2023 and $98,000 past due loans from 60-90 days a year earlier. Past due loans 90+ days at quarter end totaled $1.33 million at March 31, 2024, compared to $7.29 million, at March 31, 2023. Of the $6.50 million in past due loans at March 31, 2024, $2.06 million were purchased government guaranteed loans with an unconditional guarantee.
| Delinquent Loan Summary (in thousands) | Organic | Purchased Govt. Guaranteed | Total | ||||||||
| Delinquent accruing loans 30-59 days | $ | 2,722 | $ | 498 | $ | 3,220 | |||||
| Delinquent accruing loans 60-90 days | 1,719 | 231 | 1950 | ||||||||
| Delinquent accruing loans 90+ days | — | 1,332 | 1,332 | ||||||||
| Total delinquent accruing loans | $ | 4,441 | $ | 2,061 | $ | 6,502 | |||||
| Non-Accrual Loan Summary (in thousands) | Organic | Purchased Govt. Guaranteed | Total | ||||||||
| Loans on non-accrual | $ | 7,156 | $ | — | $ | 7,156 | |||||
| Non-accrual loans with SBA guarantees | 4,730 | — | 4,730 | ||||||||
| Net Bank exposure to non-accrual loans | $ | 2,426 | $ | — | $ | 2,426 | |||||
There was a $378,000 provision for credit losses in the first quarter of 2024, compared to $217,000 provision for loan losses in the first quarter a year ago, and a $769,000 provision for credit losses booked in the fourth quarter of 2023.
“The SBA portfolio is a segment we have been watching very closely since rates have increased so rapidly over the last two years, putting pressure on borrowers. A majority of the loans within the portfolio are floating rate loans and borrowers are unlikely to see any interest rate relief until interest rates fall significantly,” added Miller. “A portion of the portfolio consists of loans guaranteed by the U.S. Government. This group of loans consists of fully guaranteed loans the Company has purchased, as well as organic SBA and USDA loans the Bank has originated. When the effect of these guarantees is considered relative to the loan portfolio, the ratio of allowance for credit losses to the total, non-guaranteed, loan portfolio was 1.20%, as of March 31, 2024, and our total unguaranteed exposure on these SBA loans is $34.28 million spread over 203 loans.”
“We incurred net recoveries of $4,000 during the current quarter, compared to $406,000 net charge offs in the first quarter a year ago, and $766,000 in net charge offs in the preceding quarter,” said Miller. “Our loan portfolio increased 8% from a year ago with commercial real estate (“CRE”) loans representing 59% of the total loan portfolio. Within the CRE portfolio, there are $41.25 million in loans for CRE office as shown in the table below. Since the majority of our CRE office exposure is concentrated in the Central Valley, we feel the volatility that the city center markets are experiencing is not as prominent in the Central Valley. Our credit metrics remain strong as we continue to maintain conservative underwriting standards.”
| (in thousands) | CRE Office Exposure of March 31, 2024 | ||||||||||
| Region | Owner-Occupied | Non-Owner Occupied | Total | ||||||||
| Central Valley | $ | 20,450 | $ | 11,134 | $ | 31,584 | |||||
| Southern California | 2,308 | 358 | 2,666 | ||||||||
| Other California | 2,330 | 4,129 | 6,459 | ||||||||
| Total California | 25,088 | 15,621 | 40,709 | ||||||||
| Out of California | — | 540 | 540 | ||||||||
| Total CRE Office | $ | 25,088 | $ | 16,161 | $ | 41,249 | |||||
The ratio of allowance for credit losses to total loans was 1.12% at March 31, 2024, compared to 1.08% a year earlier and 1.07% at December 31, 2023.
About FFB Bancorp
FFB Bancorp, formerly Communities First Financial Corporation, a bank holding company established in 2014, is the parent company of FFB Bank, founded in 2005 in Fresno, California. As a leading SBA Lender in California’s Central Valley and one of the few direct acquiring banks in the United States, FFB Bank offers clients a range of personal and business checking accounts, payment processes, and loan programs. Among the Bank’s awards and accomplishments, it was ranked #4 on American Banker’s list of the Top 200 Publicly Traded Banks under $2 Billion in Assets for 2022. For 2022, the Bank was also ranked by S&P Global as the #18 best performing community bank under $3 billion in assets. The Company has also received recognition as part of the OTCQX Best 50 Companies for 2019, 2023, and 2024. For additional information, you can visit the Company’s website at www.ffb.bank or by contacting a representative at 559-439-0200.
Forward Looking Statements
This earnings release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on managements’ expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Company’s ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; and, in particular, actions taken by the Federal Reserve to try and control inflation; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company’s business; international developments; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Member FDIC
| Select Financial Information and Ratios | For the Quarter Ended: | ||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| BALANCE SHEET- ENDING BALANCES: | |||||||||||
| Total assets | $ | 1,395,095 | $ | 1,364,326 | $ | 1,278,514 | |||||
| Total portfolio loans | 926,781 | 928,344 | 861,181 | ||||||||
| Investment securities | 328,906 | 326,006 | 328,575 | ||||||||
| Total deposits | 1,200,529 | 1,145,170 | 1,099,311 | ||||||||
| Shareholders equity, net | 138,716 | 130,700 | 100,986 | ||||||||
| INCOME STATEMENT DATA | |||||||||||
| Gross revenue | 23,610 | 22,305 | 19,337 | ||||||||
| Operating expense | 12,701 | 11,047 | 8,748 | ||||||||
| Pre-tax, pre-provision income | 10,909 | 11,258 | 10,589 | ||||||||
| Net income after tax | 7,790 | 7,565 | 7,698 | ||||||||
| SHARE DATA | |||||||||||
| Basic earnings per share | $ | 2.46 | $ | 2.39 | $ | 2.43 | |||||
| Fully diluted EPS | $ | 2.46 | $ | 2.38 | $ | 2.42 | |||||
| Book value per common share | $ | 43.69 | $ | 41.21 | $ | 31.77 | |||||
| Common shares outstanding | 3,175,045 | 3,171,690 | 3,178,651 | ||||||||
| Fully diluted shares | 3,170,467 | 3,173,401 | 3,177,393 | ||||||||
| FFBB - Stock price | $ | 82.99 | $ | 75.98 | $ | 62.90 | |||||
| RATIOS | |||||||||||
| Return on average assets | 2.32 | % | 2.24 | % | 2.47 | % | |||||
| Return on average equity | 23.27 | % | 25.75 | % | 32.49 | % | |||||
| Efficiency ratio | 52.96 | % | 47.17 | % | 42.35 | % | |||||
| Adjusted efficiency ratio | 47.82 | % | 42.63 | % | 38.65 | % | |||||
| Yield on earning assets | 6.15 | % | 6.13 | % | 5.57 | % | |||||
| Yield on investment securities | 4.47 | % | 4.61 | % | 4.21 | % | |||||
| Yield on portfolio loans | 6.68 | % | 6.58 | % | 6.10 | % | |||||
| Cost to fund earning assets | 1.00 | % | 0.93 | % | 0.58 | % | |||||
| Cost of interest-bearing deposits | 2.57 | % | 2.40 | % | 1.14 | % | |||||
| Net Interest Margin | 5.15 | % | 5.19 | % | 4.98 | % | |||||
| Equity to assets | 9.94 | % | 9.58 | % | 7.90 | % | |||||
| Net loan to deposit ratio | 77.20 | % | 81.07 | % | 78.34 | % | |||||
| Full time equivalent employees | 147 | 139 | 107 | ||||||||
| BALANCE SHEET- AVERAGES | |||||||||||
| Total assets | 1,347,625 | 1,341,435 | 1,264,171 | ||||||||
| Total portfolio loans | 925,561 | 917,620 | 845,659 | ||||||||
| Investment securities | 315,820 | 294,060 | 335,662 | ||||||||
| Total deposits | 1,149,117 | 1,150,441 | 1,088,664 | ||||||||
| Shareholders equity, net | 134,621 | 116,545 | 96,081 | ||||||||
| Consolidated Balance Sheet (unaudited) (in thousands) | March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 37,360 | $ | 30,147 | $ | 27,696 | |||||
| Interest bearing deposits in banks | 53,556 | 32,456 | 22,972 | ||||||||
| CDs in other banks | 1,693 | 1,673 | 2,877 | ||||||||
| Investment securities | 328,906 | 326,006 | 328,575 | ||||||||
| Loans held for sale | — | — | — | ||||||||
| Construction & land development | 77,318 | 75,773 | 72,090 | ||||||||
| Residential RE 1-4 family | 16,114 | 17,355 | 15,783 | ||||||||
| Commercial real estate | 545,358 | 556,239 | 513,613 | ||||||||
| Agriculture | 63,281 | 59,961 | 58,735 | ||||||||
| Commercial and industrial | 224,551 | 218,896 | 200,909 | ||||||||
| Consumer and other | 159 | 120 | 51 | ||||||||
| Portfolio loans | 926,781 | 928,344 | 861,181 | ||||||||
| Deferred fees & discounts | (4,181 | ) | (3,631 | ) | (3,220 | ) | |||||
| Allowance for credit losses | (10,407 | ) | (9,966 | ) | (9,271 | ) | |||||
| Loans, net | 912,193 | 914,747 | 848,690 | ||||||||
| Non-marketable equity investments | 7,357 | 7,125 | 5,592 | ||||||||
| Cash value of life insurance | 12,119 | 12,029 | 8,641 | ||||||||
| Accrued interest and other assets | 41,911 | 40,143 | 33,471 | ||||||||
| Total assets | $ | 1,395,095 | $ | 1,364,326 | $ | 1,278,514 | |||||
| LIABILITIES AND EQUITY | |||||||||||
| Non-interest bearing deposits | $ | 751,636 | $ | 775,507 | $ | 759,417 | |||||
| Interest checking | 54,659 | 52,203 | 32,637 | ||||||||
| Savings | 52,090 | 51,880 | 71,542 | ||||||||
| Money market | 220,559 | 160,205 | 163,995 | ||||||||
| Certificates of deposits | 121,585 | 105,375 | 71,720 | ||||||||
| Total deposits | 1,200,529 | 1,145,170 | 1,099,311 | ||||||||
| Short-term borrowings | — | 34,000 | 22,000 | ||||||||
| Long-term debt | 39,638 | 39,599 | 39,481 | ||||||||
| Other liabilities | 16,212 | 14,857 | 16,736 | ||||||||
| Total liabilities | 1,256,379 | 1,233,626 | 1,177,528 | ||||||||
| Common stock | 36,910 | 36,178 | 35,073 | ||||||||
| Retained earnings | 121,780 | 113,991 | 88,167 | ||||||||
| Accumulated other comprehensive loss | (19,974 | ) | (19,469 | ) | (22,254 | ) | |||||
| Shareholders' equity | 138,716 | 130,700 | 100,986 | ||||||||
| Total liabilities and shareholders' equity | $ | 1,395,095 | $ | 1,364,326 | $ | 1,278,514 | |||||
| Consolidated Income Statement (unaudited) | Quarter ended: | ||||||||||
| (in thousands) | March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||
| INTEREST INCOME: | |||||||||||
| Loan interest income | $ | 15,372 | $ | 15,208 | $ | 12,729 | |||||
| Investment income | 3,512 | 3,418 | 3,484 | ||||||||
| Int. on fed funds & CDs in other banks | 255 | 583 | 228 | ||||||||
| Dividends from non-marketable equity | 129 | 118 | 75 | ||||||||
| Total interest income | 19,268 | 19,327 | 16,516 | ||||||||
| INTEREST EXPENSE: | |||||||||||
| Int. on deposits | 2,518 | 2,359 | 957 | ||||||||
| Int. on short-term borrowings | 149 | 123 | 313 | ||||||||
| Int. on long-term debt | 464 | 464 | 464 | ||||||||
| Total interest expense | 3,131 | 2,946 | 1,734 | ||||||||
| Net interest income | 16,137 | 16,381 | 14,782 | ||||||||
| PROVISION FOR CREDIT LOSSES | 378 | 769 | 217 | ||||||||
| Net interest income after provision | 15,759 | 15,612 | 14,565 | ||||||||
| NON-INTEREST INCOME: | |||||||||||
| Total deposit fee income | 796 | 783 | 655 | ||||||||
| Debit / credit card interchange income | 167 | 161 | 141 | ||||||||
| Merchant services income | 6,068 | 4,825 | 3,697 | ||||||||
| Gain on sale of loans | 451 | 464 | 904 | ||||||||
| Loss on sale of investments | (373 | ) | (1,114 | ) | (1,320 | ) | |||||
| Other operating income | 364 | 805 | 478 | ||||||||
| Total non-interest income | 7,473 | 5,924 | 4,555 | ||||||||
| NON-INTEREST EXPENSE: | |||||||||||
| Salaries & employee benefits | 6,582 | 5,598 | 4,716 | ||||||||
| Occupancy expense | 383 | 313 | 362 | ||||||||
| Merchant services operating expense | 2,360 | 1,852 | 1,244 | ||||||||
| Other operating expense | 3,376 | 3,284 | 2,426 | ||||||||
| Total non-interest expense | 12,701 | 11,047 | 8,748 | ||||||||
| Income before provision for income tax | 10,531 | 10,489 | 10,372 | ||||||||
| PROVISION FOR INCOME TAXES | 2,741 | 2,924 | 2,674 | ||||||||
| Net income | $ | 7,790 | $ | 7,565 | $ | 7,698 | |||||
| ASSET QUALITY (in thousands) | March 31, 2024 | December 31, 2023 | March 31, 2023 | ||||||||
| Delinquent accruing loans 30-60 days | $ | 3,220 | $ | 1,076 | $ | 148 | |||||
| Delinquent accruing loans 60-90 days | 1,950 | 199 | 98 | ||||||||
| Delinquent accruing loans 90+ days | 1,332 | 1,345 | 7,288 | ||||||||
| Total delinquent accruing loans | $ | 6,502 | $ | 2,620 | $ | 7,534 | |||||
| Loans on non-accrual | $ | 7,156 | $ | 6,006 | $ | 6,323 | |||||
| Other real estate owned | — | — | — | ||||||||
| Nonperforming assets | $ | 7,156 | $ | 6,006 | $ | 6,323 | |||||
| Delinquent 30-60 / Total Loans | 0.35 | % | 0.12 | % | 0.02 | % | |||||
| Delinquent 60-90 / Total Loans | 0.21 | % | 0.02 | % | 0.01 | % | |||||
| Delinquent 90+ / Total Loans | 0.14 | % | 0.14 | % | 0.85 | % | |||||
| Delinquent Loans / Total Loans | 0.70 | % | 0.28 | % | 0.87 | % | |||||
| Non-accrual / Total Loans | 0.77 | % | 0.65 | % | 0.73 | % | |||||
| Nonperforming assets to total assets | 0.51 | % | 0.44 | % | 0.49 | % | |||||
| Year-to-date charge-off activity | |||||||||||
| Charge-offs | $ | — | $ | 1,445 | $ | 409 | |||||
| Recoveries | 4 | 73 | 3 | ||||||||
| Net (recoveries) charge-offs | $ | (4 | ) | $ | 1,372 | $ | 406 | ||||
| Annualized net loan losses to average loans | — | % | 0.15 | % | 0.19 | % | |||||
| CREDIT LOSS RESERVE RATIOS: | |||||||||||
| Allowance for credit losses | $ | 10,407 | $ | 9,966 | $ | 9,271 | |||||
| Total loans | $ | 926,781 | $ | 928,344 | $ | 861,181 | |||||
| Purchased govt. guaranteed loans | $ | 19,642 | $ | 20,276 | $ | 28,224 | |||||
| Originated govt. guaranteed loans | $ | 38,228 | $ | 36,371 | $ | 34,090 | |||||
| ACL / Total loans | 1.12 | % | 1.07 | % | 1.08 | % | |||||
| ACL / Loans less 100% govt. gte. loans (Purchased) | 1.15 | % | 1.10 | % | 1.11 | % | |||||
| ACL / Loans less all govt. guaranteed loans | 1.20 | % | 1.14 | % | 1.16 | % | |||||
| ACL / Total assets | 0.75 | % | 0.73 | % | 0.73 | % | |||||
| For the Quarter Ended: | |||||||||||||||||||
| SELECT FINANCIAL TREND INFORMATION | Mar. 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | Mar. 31, 2023 | ||||||||||||||
| BALANCE SHEET- PERIOD END | |||||||||||||||||||
| Total assets | $ | 1,395,095 | $ | 1,364,326 | $ | 1,308,866 | $ | 1,303,909 | $ | 1,278,514 | |||||||||
| Loans held for sale | — | — | — | — | — | ||||||||||||||
| Loans held for investment | 926,781 | 928,344 | 897,746 | 875,180 | 861,181 | ||||||||||||||
| Investment securities | 328,906 | 326,006 | 290,011 | 304,043 | 328,575 | ||||||||||||||
| Non-interest bearing deposits | 751,636 | 775,507 | 737,366 | 723,007 | 759,417 | ||||||||||||||
| Interest bearing deposits | 448,893 | 369,663 | 394,679 | 356,032 | 339,894 | ||||||||||||||
| Total deposits | 1,200,529 | 1,145,170 | 1,132,045 | 1,079,039 | 1,099,311 | ||||||||||||||
| Short-term borrowings | — | 34,000 | — | 55,000 | 22,000 | ||||||||||||||
| Long-term debt | 39,638 | 39,599 | 39,560 | 39,520 | 39,481 | ||||||||||||||
| Total equity | 158,690 | 150,169 | 142,301 | 133,006 | 123,240 | ||||||||||||||
| Accumulated other comprehensive income | (19,974 | ) | (19,469 | ) | (29,409 | ) | (23,450 | ) | (22,254 | ) | |||||||||
| Shareholders' equity | 138,716 | 130,700 | 112,892 | 109,556 | 100,986 | ||||||||||||||
| QUARTERLY INCOME STATEMENT | |||||||||||||||||||
| Interest income | $ | 19,268 | $ | 19,327 | $ | 18,434 | $ | 18,377 | $ | 16,516 | |||||||||
| Interest expense | 3,131 | 2,946 | 2,457 | 1,985 | 1,734 | ||||||||||||||
| Net interest income | 16,137 | 16,381 | 15,977 | 16,392 | 14,782 | ||||||||||||||
| Non-interest income | 7,473 | 5,924 | 6,449 | 8,117 | 4,555 | ||||||||||||||
| Gross revenue | 23,610 | 22,305 | 22,426 | 24,509 | 19,337 | ||||||||||||||
| Provision for credit losses | 378 | 769 | 152 | 612 | 217 | ||||||||||||||
| Non-interest expense | 12,701 | 11,047 | 10,107 | 10,704 | 8,748 | ||||||||||||||
| Net income before tax | 10,531 | 10,489 | 12,167 | 13,193 | 10,372 | ||||||||||||||
| Tax provision | 2,741 | 2,924 | 3,295 | 3,770 | 2,674 | ||||||||||||||
| Net income after tax | 7,790 | 7,565 | 8,872 | 9,423 | 7,698 | ||||||||||||||
| BALANCE SHEET- AVERAGE BALANCE | |||||||||||||||||||
| Total assets | $ | 1,347,625 | $ | 1,341,435 | $ | 1,293,998 | $ | 1,361,187 | $ | 1,264,171 | |||||||||
| Loans held for sale | — | — | — | 59 | 1,132 | ||||||||||||||
| Loans held for investment | 925,561 | 917,620 | 871,931 | 885,590 | 845,659 | ||||||||||||||
| Investment securities | 315,820 | 294,060 | 300,285 | 325,002 | 335,662 | ||||||||||||||
| Non-interest bearing deposits | 755,603 | 760,153 | 757,118 | 853,044 | 748,111 | ||||||||||||||
| Interest bearing deposits | 393,514 | 390,288 | 361,758 | 341,269 | 340,553 | ||||||||||||||
| Total deposits | 1,149,117 | 1,150,441 | 1,118,876 | 1,194,313 | 1,088,664 | ||||||||||||||
| Short-term borrowings | 9,562 | 9,805 | 1,571 | 4,231 | 25,384 | ||||||||||||||
| Long-term debt | 39,620 | 39,580 | 39,541 | 39,502 | 39,462 | ||||||||||||||
| Shareholders' equity | 134,621 | 116,545 | 111,530 | 104,083 | 96,081 | ||||||||||||||
Contact: Steve Miller - President & CEO
Bhavneet Gill – EVP & CFO
(559) 439-0200
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