ECB Bancorp Inc MD
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
ECBK$21.45-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000950170-24-094509
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-123717
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 128 current paragraphs.
67 unchanged; 54 reworded; 6 added; 6 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Average interest-earning assets increased $145.3 million, to $1.31 billion for the three months ended September 30, 2024 from $1.17 billion for the three months ended September 30, 2023. The yield on interest-earning assets increased 39 basis points to 5.14% for the three months ended September 30, 2024 from 4.75% for the three months ended September 30, 2023.
Current report
Interest Expense. Total interest expense increased $2.8 million, or 34.5%, to $10.9 million for the three months ended September 30, 2024 from $8.1 million for the three months ended September 30, 2023. Interest expense on deposit accounts increased $3.0 million, or 50.5%, to $8.8 million for the three months ended September 30, 2024 from $5.8 million for the three months ended September 30, 2023, primarily due to an increase in the average balance of interest-bearing deposits of $165.7 million, or 23.2%, to $879.2 million for the three months ended September 30, 2024 from $713.5 million for the three months ended September 30, 2023 as well as an increase in the cost of interest-bearing deposits of 73 basis points to 3.98% for the three months ended September 30, 2024 from 3.25% for the three months ended September 30, 2023. Interest expense on FHLB advances decreased $168,000, or 7.5%, to $2.1 million for the three months ended September 30, 2024 from $2.2 million for the three months ended September 30, 2023, primarily due to a decrease in the average balance of FHLB advances of $15.1 million, or 6.8%, to $208.2 million for the three months ended September 30, 2024 from $223.3 million for the three months ended September 30, 2023, and a decrease in the cost of FHLB advances of 2 basis points to 3.95% for the three months ended September 30, 2024 from 3.97% for the three months ended September 30, 2023.
Current report
Director compensation increased $70,000, or 50.4%, driven by $83,000 in stock based compensation recorded during the three months ended September 30, 2024 as compared to $20,000 in stock based compensation recorded during the three months ended September 30, 2023. The director stock awards were granted at the end of the three months ended September 30, 2023;
Current report
Interest Expense. Total interest expense increased $10.0 million, or 47.6%, to $31.0 million for the nine months ended September 30, 2024 from $21.0 million for the nine months ended September 30, 2023. Interest expense on deposit accounts increased
Current report
Director compensation increased $247,000, or 65.2%, driven by $248,000 in stock based compensation recorded in the nine months ended September 30, 2024 as compared to $20,000 in stock based compensation costs recorded during the nine months ended September 30, 2023. The director stock awards were granted at the end of the third quarter of 2023;
Current report
Occupancy and equipment costs increased $93,000, or 13.4%, primarily due to our new branch in Woburn, MA;
Removed paragraphs (6)
Previous report
Interest Expense. Total interest expense increased $3.1 million, or 43.0%, to $10.4 million for the three months ended June 30, 2024 from $7.3 million for the three months ended June 30, 2023. Interest expense on deposit accounts increased $3.1 million, or 61.4%, to $8.2 million for the three months ended June 30, 2024 from $5.1 million for the three months ended June 30, 2023, primarily due to an increase in the cost of interest bearing deposits of 98 basis points to 3.91% for the three months ended June 30, 2024 from 2.93% for the three months ended June 30, 2023 and an increase in the average balance of interest-bearing deposits of $146.8 million, or 21.2%, to $838.7 million for the three months ended June 30, 2024 from $692.0 million for the three months ended June 30, 2023. Interest expense on FHLB advances increased $17,000, or 0.8%, to $2.2 million for the three months ended June 30, 2024 from $2.2 million for the three months ended June 30, 2023, primarily due to an increase in the cost of FHLB advances of 13 basis points to 3.99% for the three months ended June 30, 2024 from 3.86% for the three months ended June 30, 2023, partially offset by an decrease in the average balance of FHLB advances of $5.1 million, or 2.3%, to $223.1 million for the three months ended June 30, 2024 from $228.3 million for the three months ended June 30, 2023.
Previous report
Director compensation increased $90,000, or 75.6%, driven by $82,000 in stock based compensation recorded in the three months ended June 30, 2024, related to the 2023 Equity Incentive Plan. There were no stock based compensation costs in the three months ended June 30, 2023 related to this plan;
Previous report
FDIC deposit insurance expense decreased $88,000, or 31.2%. During the second quarter of 2023 there were increases in the assessment rates charged by the FDIC.
Previous report
Average interest-earning assets increased $153.1 million, to $1.26 billion for the six months ended June 30, 2024 from $1.11 billion for the six months ended June 30, 2023. The yield on interest-earning assets increased 40 basis points to 5.03% for the six months ended June 30, 2024 from 4.63% for the six months ended June 30, 2023.
Previous report
Interest Expense. Total interest expense increased $7.2 million, or 55.7%, to $20.2 million for the six months ended June 30, 2024 from $12.9 million for the six months ended June 30, 2023. Interest expense on deposit accounts increased $6.7 million, or 74.8%, to $15.7 million for the six months ended June 30, 2024 from $9.0 million for the six months ended June 30, 2023, primarily due to an increase in the cost of interest bearing deposits of 118 basis points to 3.85% for the six months ended June 30, 2024 from
Previous report
Director compensation increased $176,000, or 73.3%, driven by $165,000 in stock based compensation recorded in the six months ended June 30, 2024, related to the 2023 Equity Incentive Plan. There were no stock based compensation costs in the six months ended June 30, 2023 related to this plan; and
Reworded paragraphs (54)
Previous wording
Management’s discussion and analysis of the financial condition and results of operations at and for the three and six months ended June 30, 2024 and 2023 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.
Current wording
Management’s discussion and analysis of the financial condition and results of operations at and for the three and nine months ended September 30, 2024 and 2023 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.
Previous wording
Total Assets. Total assets increased $55.6 million, or 4.3%, to $1.34 billion at June 30, 2024 from $1.28 billion at December 31, 2023. The increase was primarily the result of increases in loans.
Current wording
Total Assets. Total assets increased $77.6 million, or 6.1%, to $1.36 billion at September 30, 2024 from $1.28 billion at December 31, 2023. The increase was primarily the result of increases in loans.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents decreased $7.6 million, or 6.4%, to $111.4 million at June 30, 2024 from $119.0 million at December 31, 2023. Cash and cash equivalents decreased primarily due to the deployment of these funds into loans.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $594,000, or 0.5%, to $119.6 million at September 30, 2024 from $119.0 million at December 31, 2023.
Previous wording
Investment Securities Available for Sale. Investment securities available for sale decreased $5.0 million, or 100.0%, to $0 as of June 30, 2024 from $5.0 million as of December 31, 2023 due to maturities. No securities were sold during the six months ended June 30, 2024.
Current wording
Investment Securities Available for Sale. Investment securities available for sale decreased $840,000, or 16.8%, to $4.2 million as of September 30, 2024 from $5.0 million as of December 31, 2023. The decrease was due to maturities and was partially offset by purchases. No securities were sold during the nine months ended September 30, 2024.
Previous wording
Investment Securities Held to Maturity. Investment securities held to maturity increased $3.5 million, or 4.5%, to $80.5 million as of June 30, 2024 from $77.0 million as of December 31, 2023 due to purchases of investment securities.
Current wording
Investment Securities Held to Maturity. Investment securities held to maturity increased $254,000, or 0.3%, to $77.2 million as of September 30, 2024 from $77.0 million as of December 31, 2023 due to purchases of investment securities partially offset by principal paydowns and maturities.
Previous wording
Loans. Gross loans increased $63.7 million, or 6.1%, to $1.11 billion at June 30, 2024 from $1.05 billion at December 31, 2023.
Current wording
Loans. Gross loans increased $75.9 million, or 7.2%, to $1.12 billion at September 30, 2024 from $1.05 billion at December 31, 2023.
Previous wording
Multi-family real estate loans increased $28.8 million, or 10.0%, to $316.2 million at June 30, 2024 from $287.4 million at December 31, 2023.
Current wording
Multi-family real estate loans increased $39.6 million, or 13.8%, to $327.0 million at September 30, 2024 from $287.4 million at December 31, 2023.
Previous wording
Commercial real estate loans increased $14.5 million, or 7.4%, to $210.9 million at June 30, 2024 from $196.4 million at December 31, 2023.
Current wording
Commercial real estate loans increased $26.3 million, or 13.4%, to $222.7 million at September 30, 2024 from $196.4 million at December 31, 2023.
Previous wording
Residential real estate loans increased $8.2 million, or 2.0%, to $418.3 million at June 30, 2024 from $410.1 million at December 31, 2023.
Current wording
Residential real estate loans increased $9.2 million, or 2.3%, to $419.4 million at September 30, 2024 from $410.1 million at December 31, 2023.
Previous wording
Home equity lines of credit increased $4.6 million, or 14.0%, to $38.0 million at June 30, 2024 from $33.4 million at December 31, 2023.
Current wording
Home equity lines of credit increased $6.1 million, or 18.2%, to $39.4 million at September 30, 2024 from $33.4 million at December 31, 2023.
Previous wording
Commercial loans increased $5.0 million, or 53.9%, to $14.2 million at June 30, 2024 from $9.2 million at December 31, 2023.
Current wording
Commercial loans increased $5.3 million, or 57.4%, to $14.5 million at September 30, 2024 from $9.2 million at December 31, 2023.
Previous wording
Construction loans increased $2.6 million, or 2.3%, to $114.6 million at June 30, 2024 from $112.0 million at December 31, 2023.
Current wording
Construction loans decreased $10.6 million, or 9.5%, to $101.4 million at September 30, 2024 from $112.0 million at December 31, 2023.
Previous wording
Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $9.6 million and $9.9 million at June 30, 2024 and December 31, 2023, respectively. Accordingly, the decrease in the FHLB stock is due to decreased borrowings.
Current wording
Federal Home Loan Bank stock. The Federal Home Loan Bank (FHLB) is a cooperative bank that provides services to its member banking institutions. The primary reason for our membership in the FHLB is to gain access to a reliable source of wholesale funding and as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. We purchase and/or are subject to redemption of FHLB stock proportional to the volume of funding received and view the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return. We held an investment in FHLB stock of $9.9 million at September 30, 2024 and December 31, 2023.
Previous wording
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $234,000, or 1.6%, to $14.7 million at June 30, 2024 from $14.5 million at December 31, 2023. The increase was due to an increase of $234,000 in the cash surrender value of our bank-owned life insurance portfolio during the six months ended June 30, 2024.
Current wording
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is nontaxable. Bank-owned life insurance increased $353,000, or 2.4%, to $14.8 million at September 30, 2024 from $14.5 million at December 31, 2023. The increase was due to an increase of $353,000 in the cash surrender value of our bank-owned life insurance portfolio during the nine months ended September 30, 2024.
Previous wording
Deposits. Deposits increased $64.6 million, or 7.4%, to $932.8 million at June 30, 2024 from $868.2 million at December 31, 2023.
Current wording
Deposits. Deposits increased $76.1 million, or 8.8%, to $944.3 million at September 30, 2024 from $868.2 million at December 31, 2023.
Previous wording
Certificates of deposit increased $66.1 million, or 13.3%, to $564.6 million at June 30, 2024 from $498.5 million at December 31, 2023.
Current wording
Certificates of deposit increased $83.0 million, or 16.7%, to $581.5 million at September 30, 2024 from $498.5 million at December 31, 2023.
Previous wording
Money market deposit accounts increased $26.7 million, or 20.3%, to $158.1 million at June 30, 2024 from $131.4 million at December 31, 2023.
Current wording
Money market deposit accounts increased $32.1 million, or 24.4%, to $163.4 million at September 30, 2024 from $131.4 million at December 31, 2023.
Previous wording
Savings accounts decreased $25.2 million, or 18.4%, to $112.6 million at June 30, 2024 from $137.8 million at December 31, 2023.
Current wording
Savings accounts decreased $31.5 million, or 22.8%, to $106.4 million at September 30, 2024 from $137.8 million at December 31, 2023.
Previous wording
Demand deposit accounts decreased $541,000, or 0.7%, to $77.8 million at June 30, 2024 from $78.3 million at December 31, 2023.
Current wording
Demand deposit accounts decreased $4.3 million, or 5.5%, to $74.1 million at September 30, 2024 from $78.3 million at December 31, 2023.
Previous wording
Interest bearing checking accounts decreased $2.4 million, or 10.8%, to $19.8 million at June 30, 2024 from $22.2 million at December 31, 2023.
Current wording
Interest-bearing checking accounts decreased $3.2 million, or 14.5%, to $18.9 million at September 30, 2024 from $22.2 million at December 31, 2023
Previous wording
Core deposits (defined as all deposits other than certificates of deposit) decreased $1.5 million, or 0.4%, to $368.2 million at June 30, 2024 from $369.7 million at December 31, 2023.
Current wording
Core deposits (defined as all deposits other than certificates of deposit) decreased $6.9 million, or 1.9%, to $362.8 million at September 30, 2024 from $369.7 million at December 31, 2023.
Previous wording
Federal Home Loan Bank Advances. Advances from the Federal Home Loan Bank decreased $10.0 million, or 4.3%, to $224.0 million at June 30, 2024 from $234.0 million at December 31, 2023.
Current wording
Federal Home Loan Bank Advances. Advances from the Federal Home Loan Bank remained unchanged at $234.0 million from December 31, 2023 to September 30, 2024.
Previous wording
Shareholders' Equity. Total shareholders' equity increased $1.6 million, or 0.9%, to $166.5 million at June 30, 2024 from $164.9 million at December 31, 2023. This increase is primarily the result of earnings of $1.4 million and an increase of $427,000 in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by an increase in the fair value of cash flow hedges entered into during the six months ended June 30, 2024. Partially offsetting these increases to shareholders' equity was a decrease in additional paid-in capital of $457,000. This decrease was driven by $1.2 million in shares repurchased under our share repurchase plan, partially offset by an increase in Additional Paid In Capital of $699,000 related to stock based compensation and ESOP shares committed to be released. Our book value per share increased by $0.34 to $18.09 at June 30, 2024 from $17.75 at December 31, 2023.
Current wording
Shareholders' Equity. Total shareholders' equity increased $1.1 million, or 0.7%, to $166.0 million at September 30, 2024 from $164.9 million at December 31, 2023. This increase is primarily the result of net income of $2.5 million. Partially offsetting this increase in shareholders' equity was a decrease in accumulated other comprehensive income ("AOCI") of $910,000 and a decrease in additional paid-in capital of $761,000. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges entered into during the nine months ended September 30, 2024. The decrease in additional paid in capital was driven by $1.8 million in shares repurchased under our share repurchase plan, partially offset by an increase in additional paid in capital of $1.1 million related to stock based compensation and ESOP shares committed to be released. The book value per share increased $0.39 to $18.14 at September 30, 2024 from $17.75 at December 31, 2023.
Previous wording
Net Income. We recorded net income of $791,000 for the three months ended June 30, 2024, compared to net income of $1.4 million for the three months ended June 30, 2023. The decrease in net income was driven by a decrease in net interest and dividend income after the provision for loan losses as well as an increase in noninterest expense, partially offset by an increase in noninterest income.
Current wording
Net Income. We recorded net income of $1.1 million for the three months ended September 30, 2024, compared to net income of $1.3 million for the three months ended September 30, 2023. The decrease in net income was driven by an increase in net interest and dividend income, which was more than offset by an increase in provision for credit losses and an increase in noninterest expense.
Previous wording
June 30, 2024 from 4.87% during the three months ended June 30, 2023. The yield for the three months ended June 30, 2024 benefited from new loans with higher rates as well as adjustable rate loans repricing higher. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 36 basis points to 2.86% during the three months ended June 30, 2024 from 2.50% during the three months ended June 30, 2023. The increase in other interest income resulted primarily from an increase of $37.4 million in the average balance of short term investments to $105.2 million for the three months ended June 30, 2024 from $67.8 million for the three months ended June 30, 2023 as well as an increase in the yield on short term investments of 37 basis points to 5.48% during the three months ended June 30, 2024 from 5.11% during the three months ended June 30, 2023. The increase in yield was driven by increases in the rate paid on reserves at the Federal Reserve Bank.
Current wording
Interest and Dividend Income. Interest and dividend income increased $3.0 million, or 21.1%, to $17.2 million for the three months ended September 30, 2024 from $14.2 million for the three months ended September 30, 2023. This increase was due to a $2.5 million increase in interest and fees on loans, an $80,000 increase in interest and dividends on investment securities and a $373,000 increase in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $119.6 million in the average balance of the loan portfolio to $1.12 billion for the three months ended September 30, 2024 from $1.00 billion for the three months ended September 30, 2023, as well as an increase in the average yield of 39 basis points to 5.27% during the three months ended September 30, 2024 from 4.88% during the three months ended September 30, 2023. The yield for the three months ended September 30, 2024 benefited from new loans with higher rates as well as adjustable rate loans repricing higher. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 42 basis points to 3.00% during the three months ended September 30, 2024 from 2.58% during the three months ended September 30, 2023. The increase in other interest income resulted primarily from an increase of $27.3 million in the average balance of short term investments to $110.5 million for the three months ended September 30, 2024 from $83.2 million for the three months ended September 30, 2023.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income decreased $386,000, or 6.0%, to $6.0 million for the three months ended June 30, 2024 from $6.4 million for the three months ended June 30, 2023, primarily due to a decrease in the net interest rate spread of 42 basis points to 1.14% for the three months ended June 30, 2024 from 1.56% for the three months ended June 30, 2023, as well as a $6.9 million decrease in the average balance of net interest-earning assets during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The decrease in the net interest rate spread was due to an increase in the cost of interest-bearing liabilities that exceeded the increase in the yield on interest-earning assets resulting from the significant increase in market interest rates that directly impact our funding costs. The net interest margin decreased 36 basis points to 1.82% for the three months ended June 30, 2024 from 2.18% for the three months ended June 30, 2023.
Current wording
Net Interest and Dividend Income. Net interest and dividend income increased $205,000, or 3.4%, to $6.3 million for the three months ended September 30, 2024 from $6.1 million for the three months ended September 30, 2023, primarily due to a $145.3 million increase in the average balance of interest-earning assets during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, partially offset by a decrease in net interest margin of 15 basis points to 1.85% for the three months ended September 30, 2024 from 2.00% for the three months ended September 30, 2023. The decrease in the net interest margin was due to an increase in the cost of interest-bearing liabilities that exceeded the increase in the yield on interest-earning assets resulting from the significant increase in market interest rates that directly impact our funding costs.
Previous wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, a provision for credit losses of $292,000 was recorded for the three months ended June 30, 2024, compared to a provision for credit losses of $0 for the three months ended June 30, 2023. The provision for credit losses for the quarter ended June 30, 2024 was driven by loan growth. The $0 provision for credit losses for the quarter ended June 30, 2023 included a provision for loan losses, offset by a benefit to the provision for off balance sheet commitments.
Current wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, a provision for credit losses of $46,000 was recorded for the three months ended September 30, 2024, compared to a benefit for credit losses of $184,000 for the three months ended September 30, 2023. The increase in the provision was driven by higher loan growth during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. In addition, the three months ended September 30, 2023 included a shift in the mix of our loan portfolio to loan segments with lower estimated credit loss reserve requirements.
Previous wording
Noninterest Income. Noninterest income increased $49,000, or 20.4%, to $289,000 for the three months ended June 30, 2024 from $240,000 for the three months ended June 30, 2023. The increase was driven by increases in income from bank-owned life insurance, net gains on sales of loans and customer service fees. The table below sets forth our noninterest income for three months ended June 30, 2024 and 2023:
Current wording
Noninterest Income. Noninterest income decreased $18,000, or 5.6%, to $304,000 for the three months ended September 30, 2024 from $322,000 for the three months ended September 30, 2023. The decrease was driven by lower income from bank-owned life insurance as the third quarter of 2023 included a $72,000 gain recognized into income from a life insurance policy death benefit. Partially offsetting this decrease were increases in both net gains on sales of loans and customer service fees. The table below sets forth our noninterest income for three months ended September 30, 2024 and 2023:
Previous wording
Noninterest Expense. Noninterest expense increased $236,000, or 5.0%, to $4.9 million for the three months ended June 30, 2024 from $4.7 million for the three months ended June 30, 2023. Significant changes are as follows:
Current wording
Noninterest Expense. Noninterest expense increased $200,000, or 4.2%, to $5.0 million for the three months ended September 30, 2024 from $4.8 million for the three months ended September 30, 2023. Significant changes are as follows:
Previous wording
Salaries and employee benefits increased $732,000, or 12.8%, driven by $484,000 in stock based compensation recorded in the six months ended June 30, 2024, related to the 2023 Equity Incentive Plan. There were no stock based compensation costs in the six months ended June 30, 2023 related to this plan;
Current wording
Salaries and employee benefits increased $288,000, or 9.9%, driven by $245,000 in stock based compensation recorded during the three months ended September 30, 2024, related to the 2023 Equity Incentive Plan. There were no stock based compensation costs recorded during the three months ended September 30, 2023 as the employee stock awards were granted in the fourth quarter of 2023;
Previous wording
Advertising and promotions decreased $102,000, or 49.0%. We have strategically reduced certain advertising costs in an effort to manage overall noninterest expenses;
Current wording
Advertising and promotions decreased $42,000, or 20.9%. We have strategically reduced certain advertising costs in an effort to manage overall noninterest expenses; and
Previous wording
Professional fees decreased $64,000, or 21.7%, primarily due to higher legal and consulting costs during the 2023 period related to operating a new publicly traded company; and
Current wording
Professional fees decreased $64,000, or 21.1%, primarily due to higher legal and consulting costs during the three months ended September 30, 2023 related to operating a new publicly traded company.
Previous wording
Income Tax Expense. We recorded a provision for income tax expense of $272,000 for the three months ended June 30, 2024, compared to a provision for income tax expense of $503,000 for the three months ended June 30, 2023, reflecting effective tax rates of 25.6% and 26.1%, respectively.
Current wording
Income Tax Expense. We recorded a provision for income tax expense of $405,000 for the three months ended September 30, 2024, compared to a provision for income tax expense of $440,000 for the three months ended September 30, 2023, reflecting effective tax rates of 26.3% and 24.7%, respectively.
Previous wording
(1) Excludes interest and dividends on cost method investments of $214,000 and $159,000 for the three months ended June 30, 2024 and 2023, respectively.
Current wording
(1) Excludes interest and dividends on cost method investments of $202,000 and $193,000 for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Comparison of Operating Results for the Six Months Ended June 30, 2024 and June 30, 2023
Current wording
Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023
Previous wording
Net Income. We recorded net income of $1.4 million for the six months ended June 30, 2024, compared to net income of $2.3 million for the six months ended June 30, 2023. The decrease in net income was driven by a decrease in net interest and dividend income after the provision for loan losses as well as an increase in noninterest expense, partially offset by an increase in noninterest income.
Current wording
Net Income. We recorded net income of $2.5 million for the nine months ended September 30, 2024, compared to net income of $3.7 million for the nine months ended September 30, 2023. The decrease in net income was driven by an increase in noninterest expense as well as a decrease in net interest and dividend income, partially offset by a lower provision for credit losses as well as higher noninterest income.
Previous wording
Interest and Dividend Income. Interest and dividend income increased $6.4 million, or 24.8%, to $32.1 million for the six months ended June 30, 2024 from $25.7 million for the six months ended June 30, 2023. This increase was due to a $4.6 million increase in interest and fees on loans, a $316,000 increase in interest and dividends on investment securities and a $1.5 million increase in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $106.8 million in the average balance of the loan portfolio to $1.08 billion for the six months ended June 30, 2024 from $970.7 million for the six months ended June 30, 2023, as well as an increase in the average yield of 36 basis points to 5.15% during the six months ended June 30, 2024 from 4.79% during the six months ended June 30, 2023. The yield for the six months ended June 30, 2024 benefited from new loans with higher rates as well as adjustable rate loans repricing higher. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 32 basis points to 2.81% during the six months ended June 30, 2024 from 2.49% during the six months ended June 30, 2023. The increase in other interest income resulted primarily from an increase of $47.9 million in the average balance of short term investments to $107.1 million for the six months ended June 30, 2024 from $59.2 million for the six months ended June 30, 2023 as well as an increase in the yield on short term investments of 59 basis points to 5.48% during the six months ended June 30, 2024 from 4.89% during the six months ended June 30, 2023. The increase in yield was driven by increases in the rate paid on reserves at the Federal Reserve Bank.
Current wording
Interest and Dividend Income. Interest and dividend income increased $9.4 million, or 23.5%, to $49.2 million for the nine months ended September 30, 2024 from $39.9 million for the nine months ended September 30, 2023. This increase was due to a $7.1 million increase in interest and fees on loans, a $396,000 increase in interest and dividends on investment securities and a $1.9 million increase in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $111.1 million in the average balance of the loan portfolio to $1.09 billion for the nine months ended September 30, 2024 from $981.1 million for the nine months ended September 30, 2023, as well as an increase in the average yield of 37 basis points to 5.19% during the nine months ended September 30, 2024 from 4.82% during the nine months ended September 30, 2023. The yield for the nine months ended September 30, 2024 benefited from new loans with higher rates as well as adjustable rate loans repricing higher. The increase in interest and dividend income on investment securities was driven by an increase in the yield on securities of 36 basis points to 2.88% during the nine months ended September 30, 2024 from 2.52% during the nine months ended September 30, 2023. The increase in other interest income resulted primarily from an increase of $40.9 million in the average balance of short term investments to $108.2 million for the nine months ended September 30, 2024 from $67.3 million for the nine months ended September 30, 2023 as well as an increase in the yield on short term investments of 35 basis points to 5.45% during the nine months ended September 30, 2024 from 5.10% during the nine months ended September 30, 2023. The increase in yield was driven by increases in the rate paid on reserves at the Federal Reserve Bank.
Previous wording
Average interest-earning assets increased $134.8 million, to $1.28 billion for the three months ended June 30, 2024 from $1.15 billion for the three months ended June 30, 2023. The yield on interest-earning assets increased 35 basis points to 5.07% for the three months ended June 30, 2024 from 4.72% for the three months ended June 30, 2023.
Current wording
Average interest-earning assets increased $150.4 million, to $1.28 billion for the nine months ended September 30, 2024 from $1.13 billion for the nine months ended September 30, 2023. The yield on interest-earning assets increased 40 basis points to 5.07% for the nine months ended September 30, 2024 from 4.67% for the nine months ended September 30, 2023.
Previous wording
2.67% for the six months ended June 30, 2023 and an increase in the average balance of interest-bearing deposits of $142.8 million, or 21.1%, to $819.3 million for the six months ended June 30, 2024 from $676.5 million for the six months ended June 30, 2023. Interest expense on FHLB advances increased $507,000, or 12.8%, to $4.5 million for the six months ended June 30, 2024 from $4.0 million for the six months ended June 30, 2023, primarily due to an increase in the average balance of FHLB advances of $16.8 million, or 8.1%, to $225.2 million for the six months ended June 30, 2024 from $208.3 million for the six months ended June 30, 2023 as well as an increase in the cost of FHLB advances of 15 basis points to 4.00% for the six months ended June 30, 2024 from 3.85% for the six months ended June 30, 2023. The increase in FHLB advances was used to fund loan growth and for liquidity management.
Current wording
$9.7 million, or 65.2%, to $24.5 million for the nine months ended September 30, 2024 from $14.8 million for the nine months ended September 30, 2023. The increase was primarily due to an increase in the average balance of interest-bearing deposits of $150.5 million, or 21.8%, to $839.4 million for the nine months ended September 30, 2024 from $688.9 million for the nine months ended September 30, 2023 as well as an increase in the cost of interest-bearing deposits of 102 basis points to 3.90% for the nine months ended September 30, 2024 from 2.88% for the nine months ended September 30, 2023. Interest expense on FHLB advances increased $337,000, or 5.4%, to $6.6 million for the nine months ended September 30, 2024 from $6.2 million for the nine months ended September 30, 2023, primarily due to an increase in the average balance of FHLB advances of $6.1 million, or 2.8%, to $219.5 million for the nine months ended September 30, 2024 from $213.4 million for the nine months ended September 30, 2023 as well as an increase in the cost of FHLB advances of 10 basis points to 3.99% for the nine months ended September 30, 2024 from 3.89% for the nine months ended September 30, 2023. The increase in FHLB advances was used to fund loan growth and for liquidity management.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income decreased $852,000, or 6.7%, to $11.9 million for the six months ended June 30, 2024 from $12.8 million for the six months ended June 30, 2023, primarily due to a decrease in the net interest rate spread of 53 basis points to 1.15% for the six months ended June 30, 2024 from 1.68% for the six months ended June 30, 2023, as well as a $6.6 million decrease in the average balance of net interest-earning assets during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The decrease in the net interest rate spread was due to an increase in the cost of interest-bearing liabilities that exceeded the increase in the yield on interest-earning assets resulting from the significant increase in market interest rates that directly impact our funding costs. The net interest margin decreased 45 basis points to 1.83% for the six months ended June 30, 2024 from 2.28% for the six months ended June 30, 2023.
Current wording
Net Interest and Dividend Income. Net interest and dividend income decreased $646,000, or 3.4%, to $18.2 million for the nine months ended September 30, 2024 from $18.9 million for the nine months ended September 30, 2023, primarily due to a decrease in the net interest margin of 35 basis points to 1.83% for the nine months ended September 30, 2024 from 2.18% for the nine months ended September 30, 2023. The decrease in the net interest margin was due to an increase in the cost of interest-bearing liabilities that exceeded the increase in the yield on interest-earning assets resulting from the significant increase in market interest rates that directly impact our funding costs.
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Current report — wording carried from elsewhere
Professional fees decreased $131,000, or 13.6%, primarily due to higher legal and consulting costs during the nine months ended September 30, 2023 related to operating a new publicly traded company.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest and Dividend Income. Interest and dividend income increased $2.7 million, or 20.0%, to $16.4 million for the three months ended June 30, 2024 from $13.7 million for the three months ended June 30, 2023. This increase was due to a $2.1 million increase in interest and fees on loans, a $112,000 increase in interest and dividends on investment securities and a $571,000 increase in interest on short term investments. The increase in interest and fees on loans was driven by an increase of $99.0 million in the average balance of the loan portfolio to $1.10 billion for the three months ended June 30, 2024 from $998.1 million for the three months ended June 30, 2023, as well as an increase in the average yield of 33 basis points to 5.20% during the three months ended