EAGLE FINANCIAL SERVICES INC
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
EFSI$45.71+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0000950170-24-038718
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0000950170-25-047778
Item 7. 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 166 previous paragraphs and 183 current paragraphs.
90 unchanged; 61 reworded; 31 added; 15 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 19 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 (31)
Current report
NON-GAAP FINANCIAL MEASURES
Current report
This report refers to certain financial measures that are computed under a basis other than GAAP ("non-GAAP"). The Company uses certain non-GAAP financial measures, including tax-equivalent net interest income and efficiency ratio, to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. The methodology for determining these non-GAAP measures may differ among companies. Non-GAAP measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP.
Current report
the Bank's ability to manage liquidity;
Current report
the cost and availability of secondary funding sources;
Current report
Net income for 2024 was significantly impacted by a sale-leaseback transaction of the Bank's OTC branch in Winchester, VA, during the fourth quarter of 2024. The impact of the sale-leaseback transaction was a net of tax gain of $3.1 million, or $0.86 per share, and contributed 0.17% and 2.75% to ROA and ROE, respectively, for the twelve months ended December 31, 2024.
Current report
In conjunction with its capital offering completed in February of 2025, the Company executed on its strategy to restructure its investment portfolio in March 2025. While the restructuring is expected to result a pre-tax loss of $12.6 million for the quarter ended March 31, 2025, it is also expected to improve core net income, net interest income, net interest margin, and return on average assets beginning in the second quarter of 2025. See further details in the section titled Securities under the heading Financial Condition.
Current report
The net interest spread for the twelve months ended December 31, 2024 was 2.17%, an increase of five basis points compared to 2.12% for the twelve months ended December 31, 2023.
Current report
Other service charges and fees decreased during the twelve months ended December 31, 2024 compared to the same period in 2023. This decrease is attributable to no longer servicing sold marine loans, beginning during the third quarter of 2023.
Current report
Gain on the sale and disposal of bank premises and equipment was $3.9 million for the year ended December 31, 2024 reflecting the sale of the Company's operating center and branch building in a sales-leaseback transaction during the fourth quarter, resulting in a realized gain of $3.9 million.
Current report
Income from holdings in small business investment companies increased during 2024 as the result of higher cash distributions received compared to 2023. The level of distributions are based on the results of the individual companies performance.
Current report
Bank owned life insurance ("BOLI") fee income totaled $2.0 million for the year ended December 31, 2024 compared to $713 thousand for the year ended December 31, 2023. The increase was due to death benefit settlement gains of
Current report
Salaries and employee benefits expense decreased during 2024 reflecting decreases in salaries and stock-based compensation expenses while experiencing increases in employee benefits and annual incentive plan expenses. The Company had 231 and 241 full-time equivalent employees (FTEs) at December 31, 2024 and December 31, 2023, respectively. As part of the sale of the marine finance assets during the third quarter of 2023, the Company reduced its workforce associated with the marine lending division and ceased accepting new marine lending business. Stock based compensation expense decreased due to a higher level of share forfeitures recognized during the twelve months ended December 31, 2024, compared to the twelve months ended December 31, 2023. Partially offsetting these decreases were higher costs related to the annual incentive accrual, employee insurance and enhanced employee benefit plans.
Current report
Equipment expenses increased during the twelve months ended December 31, 2024 compared to the same period in 2023. A new loan origination system implemented during the fourth quarter of 2023 was a significant driver of the year-over-year increase.
Current report
A repossessed marine vessel was sold during the twelve months ended December 31, 2024, resulting in the recognition of a $204 thousand loss. There were no sales of repossessed assets during the twelve months ended December 31, 2023.
Current report
FDIC assessment expense decreased in 2024 reflecting an improvement in the financial ratios portion of the assessment rate, largely due to the decline in the one-year asset growth factor.
Current report
Computer software expense decreased during 2024 over 2023, largely due to the discontinuation of new marine lending subsequent to August 2023, including its loan software platform.
Current report
Other operating expenses decreased during 2024. The largest driver of the decrease was due to the workforce reduction described above, which included a change in control agreement, and sales and travel expenses in 2023. Additional year-over-year decreases reflect the Company's focus on expense control measures, as well as the impact of the adoption of ASU 2023-02 to account for its investments in low-income residential rental properties under the proportional amortization method effective January 1, 2024. Upon adoption of this accounting method, amortization expense is no longer recorded in other operating expenses, rather as an adjustment to income tax expense. These decreases were partially offset by increases in loan servicing and collections expenses.
Current report
The following table presents a summarized statement of operations for the community banking business segment for the twelve months ended December 31, 2024 and 2023.
Current report
Gain on sales of loans increased $1.0 million, or 91.67%, from 2023, largely reflecting an increase in sales of SBA loans. See further discussion of gain on sales of loans under the caption "Noninterest Income" above.
Current report
Other noninterest income for the twelve months ended December 31, 2024 was up by $6.4 million, or 87.70% compared to the same period in 2023 primarily reflecting the sale of the Company's operating center and branch building in a sales-leaseback transaction, resulting in a realized gain of $3.9 million.
Current report
The following table presents a summarized statement of operations for the marine lending segment for the twelve months ended December 31, 2024 and 2023.
Current report
Marine Lending net revenues declined $4.1 million, or 37.14%, for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 due to pay downs in the portfolio, which are not being replaced with new loan originations. The average balance of the marine loan portfolio was $239.9 million for the twelve months ended December 31, 2024, a decline of $33.9 million, compared to $273.8 million for the twelve months ended December 31, 2023. Additionally, there were no marine loan sales during 2024.
Current report
This decline was mostly offset by a decrease in noninterest expense due to the reduction in its workforce in August 2023. Noninterest expenses for twelve months ended December 31, 2024 primarily reflect servicing and collections expenses.
Current report
The following table presents a summarized statement of operations for the wealth management business segment for the twelve months ended December 31, 2024 and 2023.
Current report
Wealth Management's net revenues were up $698 thousand, or 14.17%, for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023, reflecting increases in both trust services and investment sales income. See further discussion of wealth management revenues under the caption "Noninterest Income" above.
Current report
Noninterest expense increased during 2024 primarily reflecting increases in salaries, commission and annual incentive plan expenses.
Current report
In conjunction with its capital offering completed in February of 2025, the Company executed on its strategy to restructure its investment securities portfolio. In March of 2025, approximately $100 million available for sale securities, with a weighted average yield of 1.72%, have been sold and resulting sales proceeds have been used to purchase approximately $72 million in available for sale securities with a weighted average yield of 4.70%. The Company anticipates that a pre-tax loss of approximately $12.6 million resulting from the sales of the investment securities will be recognized in the first quarter of 2025.
Current report
The Company has policies and procedures designed to control credit risk and to maintain the quality of its loan portfolio. These include underwriting standards for new originations and ongoing monitoring and reporting of asset quality and adequacy of the allowance for credit losses. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk on a quarterly basis.
Current report
Loans risk rated as special mention, which exhibit negative trends and potential weaknesses, totaled $50.1 million at December 31, 2024 compared to $33.5 million at December 31, 2023. The increase in special mention loans of $16.6 million was primarily in the owner-occupied commercial real estate portfolio as loans were downgraded from pass as the result of not having current financial statement information available at their annual review. Upon receipt of current financial information, the loans will be evaluated and returned to a pass classification if appropriate. Loans risk rated as classified, include substandard, doubtful, and loss loans, totaled $4.5 million and $8.0 million at December 31, 2024 and 2023, respectively. Included in the December 31, 2024 classified balance of $4.5 million were current and accruing loans on the watch list totaling $2.4 million. All other loans were classified as pass, exhibiting acceptable history of profits, cash flow ability and liquidity.
Current report
Other real estate owned and repossessed assets increased from $304 thousand at December 31, 2023 to $514 thousand at December 31, 2024, consisting of repossessed assets. Three marine vessels and three commercial vehicles, were repossessed during 2024 and placed into repossessed assets. Sales of repossessed assets during 2024 included the three commercial vehicles and a marine vessel repossessed in 2023. A net loss of $204 thousand was recognized on the sale of repossessed assets for the twelve months ended December 31, 2024. There were no sales of repossessed assets in 2023.
Current report
On February 10, 2025, the Company completed a public stock offering and issued 1,562,500 shares of its common stock, $2.50 par value per share. On February 13, 2025, an additional 234,375 shares were issued upon exercise of the underwriters overallotment option. The public offering price was $32.00. The expected proceeds to the Company, after deducting the underwriting discount and commissions but before deducting operating expenses payable by the Company, are approximately $53.8 million. The offering of common stock was made pursuant to a registration statement on Form S-3 (File No. 333-269804) that was declared effective by the SEC on February 28, 2023. A final prospectus supplement dated February 6, 2025 and accompanying prospectus dated February 28, 2023, which form part of the registration statement have been filed with the SEC.
Removed paragraphs (15)
Previous report
NM - Not Meaningful
Previous report
Other service charges and fees increased during the twelve months ended December 31, 2023 compared to the same period in 2022. This increase can be attributed to increased ATM fee income. ATM fee income can fluctuate based on ATM usage by non-customers.
Previous report
The Company recorded a net loss of $737 thousand on its sale $15.4 million in available for sale securities during 2022. There were no sales of available for sale securities during the year ended December 31, 2023.
Previous report
NM - Not Meaningful
Previous report
The Company’s growth has had an impact on noninterest expenses. Total assets have grown by $208.9 million or 12.9% from December 31, 2022 to December 31, 2023. This growth has required investments to be made in the Company’s infrastructure, causing increases in salaries and employee benefits, occupancy expenses, equipment expenses, advertising and marketing expenses, computer software expense, and other operating expenses. In addition, increases in asset size and capital levels have impacted both the FDIC assessment and bank franchise tax amounts.
Previous report
Salaries and employee benefits expense increased during 2023. Annual pay increases, staffing changes, increasing insurance costs and enhanced employee incentive plans have attributed to these increases. The Company had 241 full-time equivalent employees (FTEs) at both December 31, 2022 and December 31, 2023. As part of the sale of the marine finance assets during the third quarter, the Company reduced its workforce associated with the marine lending division as it expects to cease accepting new marine lending business. While additional expenses were incurred at the time of the sale, the workforce reduction will have a positive impact on salaries and employee benefits expense going forward.
Previous report
ATM network fees increased during the year ended December 31, 2023 compared to the year ended December 31, 2022. This is mainly due to fluctuations in customer usage.
Previous report
FDIC assessment and bank franchise taxes both increased in 2023 reflecting growth in the Company. The increase in FDIC assessment was also due to a two basis point increase in the assessment rate charged by the FDIC, which was applied to all financial institutions.
Previous report
Computer software expense increased during 2023 over 2022, largely due to investments in software platforms to improve operating efficiencies and customer experience with bank products and services.
Previous report
Other operating expenses increased during 2023. This increase is due primarily to a change in control agreement related to the workforce reduction described above and increased loan related expenses due to a higher loan origination volume. Also reflected in the year-over-year increase were a greater amount of charitable contributions and costs for education, training and travel.
Previous report
Financial information for the parent company is included in the "All Other" category. The parent company's operating results are comprised primarily of interest expense associated with subordinated debt. Refer to Notes 1 and 27 of the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous report
The following table provides income and asset information as of and for the twelve months ended December 31, 2023 and 2022, which are included within the Consolidated Balance Sheets and Consolidated Statements of Income. Variances that the Company believes require explanation are discussed below the table.
Previous report
The decrease in community banking segment net income for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due to impact of the rising interest rate environment as the cost of interest-bearing liabilities outpaced income earned on interest-earning assets along with an increase in noninterest expenses. Interest expense increased by $21.8 million, or 542.1%, compared to an increase in interest income of $20.4 million, or 43.0%. The year-over-year decrease was also impacted by the increase in noninterest expense, partially offset by an increase in noninterest income and a decrease in income tax expense. The increase in noninterest expense is largely due to the Bank's growth and an increase in the allocated cost of funding. This growth has required investments to be made in the Bank’s infrastructure, causing increases in salaries and employee benefits, occupancy expenses, equipment expenses, advertising and marketing expenses, computer software expenses, and other operating expenses. In addition, increases in asset size and capital levels have impacted both the FDIC assessment and bank franchise tax amounts.
Previous report
The increase in marine lending segment net income for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to higher interest income resulting from loan growth, as well as the effects of rising interest rates on asset yields. The average balance of marine loans increased $108.1 million, or 65.18% during 2023. The increase in interest income was partially offset by higher interest expense and salaries and employee benefits expense.
Previous report
Averages as disclosed are based on the outstanding balances of the loans in each segment. These averages do not include net deferred costs and premiums
Reworded paragraphs (61)
Previous wording
The Company is a bank holding company which owns 100% of the stock of Bank of Clarke (the “Bank”). Accordingly, the results of operations for the Company are dependent upon the operations of the Bank. The Bank conducts a commercial banking business which consists of attracting deposits from the general public and investing those funds in commercial, consumer and real estate loans and corporate, municipal and U.S. government agency securities. The Bank also operates a wealth management division, which provides both a full-service trust department and a separate brokerage area. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation to the extent permitted by law. At December 31, 2023, the Company had total assets of $1.83 billion, net loans of $1.45 billion, total deposits of $1.51 billion and shareholders’ equity of $108.4 million. The Company’s net income was $9.4 million for the year ended December 31, 2023.
Current wording
The Company is a bank holding company which owns 100% of the stock of Bank of Clarke (the “Bank”). Accordingly, the results of operations for the Company are dependent upon the operations of the Bank. The Bank conducts a commercial banking business which consists of attracting deposits from the general public and investing those funds in commercial, consumer and real estate loans and corporate, municipal and U.S. government agency securities. The Bank also operates a wealth management division, which provides both a full-service trust department and a separate brokerage area. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation to the extent permitted by law. At December 31, 2024, the Company had total assets of $1.87 billion, net loans of $1.45 billion, total deposits of $1.58 billion and shareholders’ equity of $119.0 million. The Company’s net income was $15.3 million for the year ended December 31, 2024.
Previous wording
The Bank is a locally owned and managed financial institution. This allows the Bank to be flexible and responsive in the products and services it offers. The Bank grows primarily by lending funds to local residents and businesses at a competitive price that reflects the inherent risk of lending. The Bank attempts to fund these loans through deposits gathered from local residents and businesses. The Bank prices its deposits by comparing alternative sources of funds and selecting the lowest cost available. When deposits are not adequate to fund asset growth, the Bank relies on borrowings, both short and long term. The Bank’s primary source of borrowed funds is the Federal Home Loan Bank of Atlanta which offers numerous terms and rate structures to the Bank.
Current wording
The Bank is a locally managed financial institution as well as predominantly locally owned. While the Company expanded its ownership to institutional investors though a public offering of its common stock in February 2025, its operating strategy remains the same. The public offering increased the number of shares outstanding by 50% and added approximately $53.5 million in capital. This operating strategy allows the Bank to be flexible and responsive in the products and services it offers and to further grow by lending funds to local residents and businesses at a competitive price that reflects the inherent risk of lending. The Bank strives to fund these loans through deposits gathered from local residents and businesses. The Bank prices its deposits by comparing alternative sources of funds and selecting the lowest cost available. When deposits are not adequate to fund asset growth, the Bank relies on borrowings, both short and long term. The Bank’s primary source of borrowed funds is the Federal Home Loan Bank of Atlanta which offers numerous terms and rate structures to the Bank.
Previous wording
The Bank uses a tiered approach to approve credit requests consisting of individual lending authorities, joint approval of Co-Approval officers (Executive, Regional Credit Officer, Small Business Credit Officer), and a director loan committee. Lending limits for individuals are set by the Board of Directors and are determined by loan purpose, collateral type, and internal risk rating of the borrower. The highest individual authority (Executive) is assigned to the Bank’s President/ Chief Executive Officer, Chief Banking Officer and Chief Credit Officer (approval authority only). Two Executive officers may combine their authority to approve loan requests to borrowers with credit exposure up to $10.0 million on a secured basis and $6.0 million unsecured. Three Executive officers may combine to approve loan requests to borrowers with credit exposure up to $15.0 million on a secured basis and $9.0 million unsecured. Consumer Central Lenders can co-approve consumer, home equity lines of credit and home equity loan requests up to their stated authorities. Officers in Categories A through F have lesser authorities and with approval of an Executive officer may extend loans to borrowers with exposure of $5.0 million on a secured basis and $3.0 million unsecured. Officers in Categories A through F can also utilize the co-approval of the Regional and Small Business Credit Officers to extend loans with exposures up to $2.5 million and $1.5 million respectively on a secured basis, and up to $1 million and $750 thousand respectively on an unsecured basis. Loans exceeding $15.0 million and up to the Bank’s legal lending limit can be approved by the Director Loan Committee consisting of four directors (three directors constituting a quorum). The Director’s Loan Committee also reviews and approves changes to the Bank’s Loan Policy as presented by management. The following sections discuss the major loan categories within the total loan portfolio:
Current wording
The Bank uses a tiered approach to approve credit requests consisting of individual lending authorities, joint approval of Co-Approval officers (Executive, Regional Credit Officer, Small Business Credit Officer), and a director loan committee. Lending limits for individuals are set by the Board of Directors and are determined by loan purpose, collateral type, and internal risk rating of the borrower. The highest individual authority (Executive) is assigned to the Bank’s President/ Chief Executive Officer, Chief Banking Officer and Chief Credit Officer (approval authority only). Two Executive officers may combine their authority to approve loan requests to borrowers with credit exposure up to $10.0 million on a secured basis and $6.0 million unsecured. Three Executive officers may combine to approve loan requests to borrowers with credit exposure up to $15.0 million on a secured basis and $9.0 million unsecured. Consumer Central Lenders are individual lenders who have been assigned to an Approval Category (A through F) based on their level of experience and job function. Consumer Central Lenders can co-approve consumer, home equity lines of credit and home equity loan requests up to their stated authorities. Officers in Categories A through F have lesser authorities and with approval of an Executive officer may extend loans to borrowers with exposure of $5.0 million on a secured basis and $3.0 million unsecured. Officers in Categories A through F can also utilize the co-approval of the Regional and Small Business Credit Officers to extend loans with exposures up to $2.5 million and $1.5 million, respectively on a secured basis, and up to $1 million and $750 thousand, respectively on an unsecured basis. Loans exceeding $15.0 million and up to the Bank’s legal lending limit can be approved by the Risk Committee consisting of four directors (three directors constituting a quorum). The Director’s Loan Committee also reviews and approves changes to the Bank’s Loan Policy as presented by management. The following sections discuss the major loan categories within the total loan portfolio:
Previous wording
Commercial business loans generally have more risk than residential mortgage loans but have higher yields. To manage these risks, the Bank generally obtains appropriate collateral and personal guarantees from the borrower’s principal owners and monitors the financial condition of its business borrowers. Residential mortgage loans generally are made on the basis of the borrower’s ability to make repayment from employment and other income and are secured by real estate whose value tends to be readily ascertainable. In contrast, commercial business loans typically are made on the basis of the borrower’s ability to make repayment from cash flow from its business and are secured by business assets, such as, accounts receivable, equipment and inventory. As a result, the availability of funds for the repayment of commercial business loans is substantially dependent on the success of the business itself. Furthermore, the collateral for commercial business loans may depreciate over time and generally cannot be appraised with as much precision as residential real estate. Refer to the Marine Lending section below for discussion of additional commercial and industrial lending.
Current wording
Commercial business loans generally have more risk than residential mortgage loans but have higher yields. To manage these risks, the Bank generally obtains appropriate collateral and personal guarantees from the borrower’s principal owners and monitors the financial condition of its business borrowers. Residential mortgage loans generally are made on the basis of the borrower’s ability to make repayment from employment and other income and are secured by real estate whose value tends to be readily ascertainable. In contrast, commercial business loans typically are made on the basis of the borrower’s ability to make repayment from cash flow from its business and are secured by business assets, such as, accounts receivable, equipment and inventory. As a result, the availability of funds for the repayment of commercial business loans is substantially dependent on the success of the business itself. Furthermore, the collateral for commercial business loans may depreciate over time and generally cannot be appraised with as much precision as residential real estate.
Previous wording
Through August 22, 2023, the Bank’s marine lending unit included originated retail loans, classified as commercial and industrial loans or consumer loans, depending on the borrower, and dealer floor plan loans, classified as commercial and industrial loans. The Company’s relationships were limited to well established dealers of global premium brand manufacturers with the top three manufacturer customers in business between 30 and 100 years. Retail loans were generally limited to premium manufacturers with established relationships with the Company which have a vested interest in the secondary market pricing of their respective brand due to the limited inventory available for resale. Consequently, while not contractually committed, manufacturers will often support secondary resale values which can have the effect of reducing losses from non-performing retail marine loans. Retail borrowers generally have very high credit scores, substantial down payments, substantial net worth, personal liquidity, and excess cash flow. See additional discussion under the heading "Business Segments" as well as Note 27 to the Consolidated Financial Statements presented in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
Current wording
The Bank's marine loan portfolio is comprised of originated retail loans. In August 2023, the Company completed a sale of specific assets from its marine lending segment and reduced its workforce associated with the marine lending division, as it ceased accepting new marine lending business. As part of the sale, the Company sold its interest in marine vessel floor plan loans, its rights to service loans that had been sold to secondary market investors prior to the date of sale, and other assets that were not individually significant. Subsequent to the sale the Company retained ownership of its portfolio of marine vessel retail loans, which continue to constitute a significant portion of the Company's assets, revenues, and earnings. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid. Retail loans were generally limited to premium manufacturers with established relationships with the Company which have a vested interest in the secondary market pricing of their respective brand due to the limited inventory available for resale. Consequently, while not contractually committed, manufacturers will often support secondary resale values which can have the effect of reducing losses from non-performing retail marine loans. Retail borrowers generally have very high credit scores, substantial down payments, substantial net worth, personal liquidity, and excess cash flow.
Previous wording
The Company makes forward looking statements in this report that are subject to risks and uncertainties. These forward looking statements include statements regarding our profitability, liquidity, allowance for loan losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward looking statements. These forward looking statements are subject to significant uncertainties because they are based upon or are affected by factors including:
Current wording
The Company makes forward looking statements in this report that are subject to risks and uncertainties. These forward looking statements include statements regarding our profitability, liquidity, allowance for credit losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward looking statements. These forward looking statements are subject to significant uncertainties because they are based upon or are affected by factors including:
Previous wording
the ability to successfully manage growth or implement growth strategies if the Bank is unable to identify attractive markets, locations or opportunities to expand in the future, expand into new markets, or successfully implement new product lines;
Current wording
the ability to successfully manage growth or implement growth strategies if the Bank is unable to identify attractive markets, locations or opportunities to expand in the future or if the Bank is unable to successfully integrate new branches, business lines or other growth opportunities into its existing operations;
Previous wording
changes in general economic and business conditions in the market area;
Current wording
changes in general economic and business conditions in the Bank’s market area;
Previous wording
reliance on the management team, including the ability to attract and retain key personnel;
Current wording
reliance on the Bank’s management team, including the ability to attract and retain key personnel;
Previous wording
effects of soundness of other financial institutions;
Current wording
effects of the soundness of other financial institutions;
Previous wording
changes in accounting policies and banking and other laws and regulations; and
Current wording
changes in accounting policies and banking and other law and regulations; and
Previous wording
other factors described in Item 1A., “Risk Factors,” above.
Current wording
other factors described in Item 1A., “Risk Factors,” in this annual report on Form 10-K.
Previous wording
Net income for 2023 was $9.4 million, a decrease of $5.2 million or 35.56% from 2022’s net income of $14.5 million. Basic and diluted earnings per share were $2.66 and $4.17 for 2023 and 2022, respectively.
Current wording
Net income for 2024 was $15.3 million, an increase of $6.0 million or 63.97% from 2023’s net income of $9.4 million. Basic and diluted earnings per share were $4.32 and $2.66 for 2024 and 2023, respectively.
Previous wording
Return on average assets (“ROA”) measures how efficiently the Company uses its assets to produce net income. Some issues reflected within this efficiency include the Company’s asset mix, funding sources, pricing, fee generation, and cost control. The ROA of the Company, on an annualized basis, was 0.54% and 1.02% for 2023 and 2022, respectively.
Current wording
Return on average assets (“ROA”) measures how efficiently the Company uses its assets to produce net income. Factors reflected within this efficiency include the Company’s asset mix, funding sources, pricing, fee generation, and cost control. The ROA of the Company, on an annualized basis, was 0.85% and 0.54% for 2024 and 2023, respectively.
Previous wording
Return on average equity (“ROE”) measures the utilization of shareholders’ equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company’s assets are funded by the shareholders. The ROE for the Company was 9.05% and 14.06% for 2023 and 2022, respectively.
Current wording
Return on average equity (“ROE”) measures the utilization of shareholders’ equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company’s assets are funded by the shareholders. The ROE for the Company was 13.77% and 9.05% for 2024 and 2023, respectively.
Previous wording
Net interest income, the difference between total interest income and total interest expense, is the Company’s primary source of earnings. Net interest income was $50.3 million for 2023 and $49.2 million for 2022, which represents an increase of $1.1 million or 2.19%. Net interest income is derived from the volume of earning assets and the rates earned on those assets as compared to the cost of funds. Total interest income was $83.1 million for 2023 and $54.7 million for 2022, which represents an increase of $28.4 million or 52.01% for 2023. Total interest expense was $32.8 million for 2023 and $5.5 million for 2022, which represents an increase of $27.4 million or 499.98% in 2023. The increase in total interest income, total interest expense and net interest income during 2023 was driven by the growth in interest-earning assets, interest-bearing liabilities and the rising interest rate environment. Refer to the table titled “Volume and Rate Analysis” for further detail.
Current wording
Net interest income, the difference between total interest income and total interest expense, is the Company’s primary source of earnings. Net interest income was $51.2 million for 2024 and $50.3 million for 2023, which represents an increase of $971 thousand or 1.93%. Net interest income is derived from the volume of earning assets and the rates earned on those assets as compared to the cost of funds. Total interest income was $91.3 million for 2024 and $83.1 million for 2023, which represents an increase of $8.2 million or 9.90% for 2024. Total interest expense was $40.1 million for 2024 and $32.8 million for 2023, which represents an increase of $7.3 million or 22.10% in 2024. The increase in total interest income, total interest expense and net interest income during 2024 was driven by higher rates, growth in interest-bearing liabilities and, to a lesser extent, growth in interest-earning assets. The average rate on interest-earning assets and interest-bearing liabilities increased 45 basis points and 40 basis points, respectively, during the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023, while average balances of interest-earning assets and interest-bearing liabilities increased 0.69% and 6.68%, respectively. Refer to the table titled “Volume and Rate Analysis” for further detail.
Previous wording
The net interest margin was 2.96% for 2023 and 3.68% for 2022. The net interest margin is calculated by dividing tax-equivalent net interest income by total average earnings assets. Tax-equivalent net interest income is calculated by adding the tax benefit on certain securities and loans, whose interest is tax-exempt, to total interest income then subtracting total interest expense. The tax rate used to calculate the tax benefit was the federal statutory rate of 21%. The table titled “Tax-Equivalent Net Interest Income” reconciles net interest income to tax-equivalent net interest income, which is not a measurement under GAAP, for the years ended December 31, 2023 and 2022.
Current wording
The net interest margin was 3.00% for 2024 and 2.96% for 2023. The net interest margin is calculated by dividing tax-equivalent net interest income by total average earnings assets. Tax-equivalent net interest income is calculated by adding the tax benefit on certain securities and loans, whose interest is tax-exempt, to total interest income then subtracting total interest expense. The tax rate used to calculate the tax benefit was the federal statutory rate of 21%. The table titled “Tax-Equivalent Net Interest Income” reconciles net interest income to tax-equivalent net interest income, which is not a measurement under GAAP, for the years ended December 31, 2024 and 2023.
Previous wording
Net interest income and net interest margin may experience some decline due to additional deposit pricing pressure as interest rates continue to increase or remain at the current level and increased competition for new deposits is experienced. These combined also could result in the Company having to borrow wholesale funding to fund asset growth which is more expensive than deposits.
Current wording
Net interest income and net interest margin may experience some decline due to deposit pricing pressure as interest rates change and ongoing competition for new deposits is experienced. These combined factors also could result in the Company having to borrow wholesale funding to fund asset growth which is more expensive than deposits.
Previous wording
The table titled “Average Balances, Income and Expenses, Yields and Rates” displays the composition of interest earnings assets and interest bearing liabilities and their respective yields and rates for the years ended December 31, 2023 and 2022.
Current wording
The following table titled “Average Balances, Income and Expenses, Yields and Rates” displays the composition of interest earning assets and interest bearing liabilities and their respective yields and rates for the years ended December 31, 2024 and 2023.
Previous wording
The tax-equivalent yield on earning assets increased 81 basis points from 2022 to 2023. The tax-equivalent yield on securities increased 41 basis points from 2022 to 2023. The tax-equivalent yield on loans increased 79 basis points from 2022 to 2023. The increase in the tax-equivalent yield on earning assets resulted mostly from the increase in the tax-equivalent yield on loans. The increase in the tax-equivalent yield on loans as compared to the corresponding period in the prior year was due to a combination of increase of volume of loans and the rising interest rate environment.
Current wording
The tax-equivalent yield on earning assets increased 45 basis points from 2023 to 2024. The tax-equivalent yield on securities increased 13 basis points from 2023 to 2024. The tax-equivalent yield on loans increased 33 basis points from 2023 to 2024. The increase in the tax-equivalent yield on earning assets resulted mostly from the sustained elevated interest rate environment as well as the increase in total average loan balances. The increase in average loan balances is primarily due to real estate loans, which more than offset the balance decline in the marine loan portfolio as loans pay down and were not replaced with new originations.
Previous wording
The average rate on interest-bearing liabilities increased 210 basis points from 2022 to 2023. The average rate on total interest-bearing deposits increased 200 basis points from 2022 to 2023. The Federal Reserve's interest rate increases beginning early 2022 and continuing into 2023 heightened interest rates paid on deposit accounts. In general, deposit pricing is done in response to monetary policy actions and yield curve changes. Local competition for funds also affects the cost of time deposits, which are primarily comprised of certificates of deposit. The Company prefers to rely most heavily on non-maturity deposits when possible, which include NOW accounts, money market accounts, and savings accounts. The average balance of non-maturity interest-bearing deposits increased $29.1 million or 4.65% from $624.3 million during 2022 to $653.3 million in 2023. The Company also actively pursued time deposits during 2023 adding $210.2 million, or 28.03%, in average balances, primarily in amounts less than $250,000. These time deposits were obtained through pricing and, to a lesser extent, entering into a $30.0 million brokered account during the first quarter. The cost of total time deposits increased to 4.08% during 2023 from 0.79% during 2022. The cost of interest-bearing liabilities was also higher during 2023 due increased usage of FHLB advances, which had a 148 basis point, or 45.3%, increase in cost combined with a $123.0 million increase in average balance.
Current wording
The average rate on interest-bearing liabilities increased 40 basis points from 2023 to 2024. The average rate on total interest-bearing deposits increased 54 basis points from 2023 to 2024. The Federal Reserve's interest rate increases began in early 2022, continued into 2023 and have remained heightened during 2024 impacting interest rates paid on deposit accounts. In general, deposit pricing is done in response to monetary policy actions and yield curve changes. Local competition for funds also affects the cost of time deposits, which are primarily comprised of certificates of deposit. The Company prefers to rely most heavily on non-maturity deposits when possible, which include NOW accounts, money market accounts, and savings accounts. The average balance of non-maturity interest-bearing deposits increased $4.9 million or 0.75% from $653.3 million during 2023 to $658.2 million in 2024. The Company also actively pursued time deposits during 2024 adding $94.1 million, or 28.01%, in average balances, primarily in amounts less than $250,000. These time deposits were obtained through pricing and customer outreach efforts. The average cost of total time deposits increased to 4.56% during 2024 from 4.08% during 2023. The cost of interest-bearing deposits were slightly offset by decreases in average balance and rate of FHLB advances of $17.2 million and six basis points, respectively during 2024, reflecting the payoff of higher cost advances and not replacing balances at the same level.
Previous wording
The table titled “Volume and Rate Analysis” provides information about the effect of changes in financial assets and liabilities and changes in rates on net interest income.
Current wording
The following table titled “Volume and Rate Analysis (Tax-Equivalent Basis)” provides information about the effect of changes in financial assets and liabilities and changes in rates on net interest income.
Previous wording
Tax-equivalent net interest income increased $1.1 million during 2023. The net increase in tax-equivalent net interest income during 2023 is comprised of an increase due to volume of $6.7 million and a decrease due to rate of $5.6 million. The increase in tax-equivalent net interest income during 2023 was largely affected by the increased volume of taxable loans, as well as increases in rates earned from interest-earning assets. This increase was mostly offset by the increased volume in borrowing and time deposits and increases in rates paid on interest bearing liabilities.
Current wording
Tax-equivalent net interest income increased $977 thousand during 2024. The net increase in tax-equivalent net interest income during 2024 is comprised of an increase due to rate of $3.5 million and a decrease due to volume of $2.6 million. The increase in tax-equivalent net interest income during 2024 was largely affected by an increase in rates earned on taxable loans and federal funds sold and interest-bearing deposits in other banks, as well as increased volume of loans. This increase was mostly offset by the increased volume in time deposits and increases in rates paid on interest- bearing deposits.
Previous wording
The provision for credit losses is based upon management’s estimate of the amount required to maintain an adequate allowance for credit losses as discussed within the Critical Accounting Policies section above and Note 1 to the Consolidated Financial Statements presented in Item 8, Financial Statements and Supplementary Data. The provision for credit losses was $1.6 million for 2023 and $1.8 million for 2022. The amount of provision for credit losses on loans is affected by several factors including the growth rate of loans, net charge-offs (recoveries), and the estimated amount of expected losses within the loan portfolio.The amount of provision for credit losses during each period reflects the results of the Company’s analysis used to determine the adequacy of the allowance for credit losses. The provision for credit losses in 2023 reflects loan growth during the year, largely in the residential and commercial real estate portfolios. Net charge-offs during 2023 totaled $443 thousand. The provision for loan losses in 2022 reflects loan growth in the portfolio partially offset by net recoveries of $601 thousand during 2022. The Company is committed to maintaining an allowance that it believes will adequately absorb the current expected losses in the loan portfolio. This commitment is more fully discussed in the “Asset Quality” section.
Current wording
The provision for credit losses is based upon management’s estimate of the amount required to maintain an adequate allowance for credit losses as discussed within the Critical Accounting Policies section above and Note 1 to the Consolidated Financial Statements presented in Item 8, Financial Statements and Supplementary Data. The provision for credit losses was $2.6 million for 2024 and $1.6 million for 2023. The amount of provision for credit losses on loans is affected by several factors including the growth rate of loans, net charge-offs (recoveries), and the estimated amount of expected losses within the loan portfolio.The amount of provision for credit losses during each period reflects the results of the Company’s analysis used to determine the adequacy of the allowance for credit losses. The provision for credit losses in 2024 resulted largely from a $1.9 million provision against the marine portfolio due to charge-offs against six marine loans totaling $1.8 million. Also contributing to the provision for credit losses total were specific reserves on two individually evaluated relationships of $248 thousand, and growth in the portfolio balance as compared to the prior measurement period. Net charge-offs during 2024 totaled $2.0 million. The provision for credit losses in 2023 reflects loan growth during the year, largely in the residential and commercial real estate portfolios. Net charge-offs during 2023 totaled $443 thousand. The Company is committed to maintaining an allowance that it believes will adequately absorb the current expected losses in the loan portfolio. This commitment is more fully discussed in the “Asset Quality” section.
Previous wording
Total noninterest income was $14.7 million and $13.3 million during 2023 and 2022, respectively. This represents an increase of $1.4 million or 10.49% for 2023. Management reviews the activities which generate noninterest income on an ongoing basis.
Current wording
Total noninterest income was $21.6 million and $14.8 million during 2024 and 2023, respectively. This represents an increase of $6.8 million or 45.85% for 2024. Management reviews the activities which generate noninterest income on an ongoing basis.
Previous wording
Wealth management fees increased from 2022 to 2023. Wealth management fee income is comprised of income from fiduciary activities as well as commissions from the sale of non-deposit investment products. The amount of income from wealth management fees is determined by the number of active accounts and total assets under management. New business efforts in addition to fee increases and one-time fees for estates and other services have contributed to the year over year increase in revenue.
Current wording
Wealth management fees increased from 2023 to 2024. Wealth management fee income is comprised of income from fiduciary activities as well as commissions from the sale of non-deposit investment products. The amount of income from fiduciary activities is determined by the number of active accounts and total assets under management. Higher interest rates and more favorable conditions in the stock market have resulted in an expansion of total assets under management. One-time fees for estates and other services have also contributed to the year over year increase in revenue. Investment sales increased as favorable market activity during 2024 made the use of brokerage and advisory investments more attractive.
Previous wording
Gain on the sale of marine finance assets was $435 thousand for the year ended December 31, 2023. On August 23, 2023, the Company completed the sale of certain marine finance division assets. Refer to additional discussion of marine lending under the heading "Lending Policies" in Item 7 above and in Notes 1 and 27 to the Consolidated Financial Statements.
Current wording
Gain on the sale of marine finance assets was $435 thousand for the year ended December 31, 2023 as the result of the Company's sale of certain marine finance division assets on August 23, 2023. Refer to additional discussion of marine lending under the heading "Lending Policies" in Item 7 above and in Notes 1 and 27 to the Consolidated Financial Statements.
Previous wording
During 2023, the Company sold $32.1 million in mortgage loans on the secondary market, $51.7 million of loans from the commercial and consumer loan portfolios and $8.0 million in Small Business Association ("SBA") loans. During 2022, the Company sold $12.2 million in mortgage loans on the secondary market, $155.0 million of loans from the commercial and consumer loan portfolios and $2.8 million in SBA loans. These loan sales resulted in gains of $1.4 million and $1.9 million during the years ended December 31, 2023 and 2022, respectively.
Current wording
During 2024, the Company sold $59.0 million in mortgage loans on the secondary market and $14.3 million in Small Business Association ("SBA") loans. During 2023, the Company sold $32.1 million in mortgage loans on the secondary market, $51.7 million of loans from the commercial and consumer loan portfolios and $8.0 million in SBA loans. These loan sales resulted in gains of $2.1 million and $1.4 million during the years ended December 31, 2024 and 2023, respectively.
Previous wording
Bank owned life insurance ("BOLI") fee income increased during 2023 when compared to 2022 as a result of an investment of $5 million into BOLI by the Company during the fourth quarter of 2023.
Current wording
$907 thousand and increased earnings on the cash surrender value reflecting the impact of market conditions and an investment of $5 million into BOLI by the Company during the fourth quarter of 2023.
Previous wording
Other operating income decreased during 2023. The fluctuation from 2022 to 2023 is mostly attributed to cash distributions received from investments in Small Business Investment Companies during 2022 that were not received during 2023 and loan swap fee income. The decrease in loan swap fee income was attributable to less loan swap fee income recognized during 2023 compared to 2022. Loan swap agreements with initial notional balances of $20.9 million and $21.2 million were entered into during the years ended December 31, 2023 and 2022, respectively. In 2022, the Bank also earned a fee for its participation in a loan swap agreement with an outside lead bank.
Current wording
Other operating income decreased primarily as a result of a decline in loan swap fee income recognized during 2024 compared to 2023. Loan swap agreements with initial notional balances of $4.1 million and $20.9 million were entered into during the years ended December 31, 2024 and 2023, respectively.
Previous wording
Total noninterest expenses were $52.8 million and $43.1 million during 2023 and 2022, respectively. This represents an increase of $9.7 million or 22.52% during 2023.
Current wording
Total noninterest expenses were $51.3 million and $52.8 million during 2024 and 2023, respectively. This represents a decrease of $1.4 million or 2.70% during 2024.
Previous wording
On August 23, 2023, the Company completed a sale of specific assets from its marine lending segment. As part of the sale, the Company sold its interest in marine vessel floor plan loans totaling $52.8 million, its rights to service loans that had been sold to secondary market investors prior to the date of sale (valued at $595 thousand on balance sheet prior to sale), and other assets that were not individually significant. The Company received total consideration, net of selling expenses, of $53.5 million and recognized a gain of $435 thousand. The assets sold as well as their related revenues and contribution to earnings did not constitute a significant portion of the Company's assets or operating results for the year ended December 31, 2023. As part of the sale, the Company reduced its workforce associated with the marine lending division, as it expects to cease accepting new marine lending business. Subsequent to the sale of these assets, the Company retained ownership of approximately $260.5 million of marine vessel retail loans which continue to constitute a significant portion of the Company's assets, revenues, and earnings. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid.
Current wording
On August 23, 2023, the Company completed a sale of specific assets from its marine lending segment. As part of the sale, the Company sold its interest in marine vessel floor plan loans totaling $52.8 million, its rights to service loans that had been sold to secondary market investors prior to the date of sale (valued at $595 thousand on balance sheet prior to sale), and other assets that were not individually significant. The Company received total consideration, net of selling expenses, of $53.5 million and recognized a gain of $435 thousand. The assets sold as well as their related revenues and contribution to earnings did not constitute a significant portion of the Company's assets or operating results for the year ended December 31, 2023. As part of the sale, the Company reduced its workforce associated with the marine lending division, and ceased accepting new marine lending business. Subsequent to the sale of these assets, the Company retained ownership of approximately $260.5 million of marine vessel retail loans which continue to constitute a significant portion of the Company's assets, revenues, and earnings. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid. Subsequent to the sale, non-interest expenses related to marine lending have been significantly reduced or eliminated as discussed in variance explanation paragraphs below.
Previous wording
Advertising and marketing expenses increased during 2023 reflecting the Company's continued marketing and branding campaigns, including its recognition of receiving a Great Place to Work® certified. designation. In addition expenses in 2023 were higher due to the rebranding that occurred in early 2023.
Current wording
Advertising and marketing expenses decreased during 2024. This reflects an increase in the Company's continued marketing campaigns, including its recognition of receiving a Great Place to Work® certified. designation, which was more than offset by a reduction in business development expenses during 2024. The reduction in business development expenses was due to the discontinuation of new marine lending subsequent to August 2023 and corporate rebranding that occurred in early 2023.
Previous wording
Professional fees increased during 2023. There are several factors that contributed to the increase of professional fees during 2023. Expenses related to the ESOP termination and the new stock incentive plan caused increases to legal expense, while the outsourcing of a portion of the internal audit function related to FDICIA testing caused increases to audit expenses.
Current wording
Professional fees decreased during 2024. There are several factors that contributed to the decrease, primarily legal and professional expenses related to the marine lending business transaction and legal fees for the ESOP termination and establishment of a new stock incentive plan that were recognized during 2023.
Previous wording
The efficiency ratio of the Company was 81.55% and 67.90% for 2023 and 2022, respectively. The efficiency ratio is calculated by dividing total noninterest expenses by the sum of tax-equivalent net interest income and total noninterest income, excluding gains and losses on investment portfolio sales and other gains/losses from OREO, repossessed assets, sale or disposals of bank assets, etc. The tax rate utilized is 21%. The Company calculates and reviews this ratio as a means of evaluating operational efficiency. A reconciliation of tax-equivalent net interest income, which is not a measurement under GAAP, to net interest income is presented within the Net Interest Income section above.
Current wording
The efficiency ratio of the Company was 75.08% and 81.55% for 2024 and 2023, respectively. The improvement in the efficiency ratio during 2024 reflects an increase in noninterest income, coupled with lower noninterest expenses. Noninterest expenses during the twelve months ended December 31, 2023 included one-time expenses of $1.0 million related to the sale of the marine finance assets during the third quarter of 2023. Excluding these expenses, the efficiency ratio for 2023 would have been 80.00%. The efficiency ratio is not a measurement under GAAP. It is calculated by dividing total noninterest expenses by the sum of tax-equivalent net interest income and total noninterest income. The Company adjusts for non-recurring items such as gains and losses on investment portfolio sales and other gains/losses from OREO, repossessed assets, sale or disposals of bank assets, etc. The tax rate utilized is 21%. The Company calculates and reviews this ratio as a means of evaluating operational efficiency.
Previous wording
Income tax expense was $1.3 million and $3.2 million for the years ended December 31, 2023 and 2022, respectively. These amounts correspond to an effective tax rate of 12.00% and 17.83% for 2023 and 2022, respectively. The effective tax rate is below the statutory rate of 21%, due primarily to tax credits on qualified affordable housing project investments as discussed in Note 25 to the Consolidated Financial Statements as well as qualified rehabilitation credits. During 2023, one of the Company's rehabilitation tax credit investments was finalized and the total amount of credits to be received was determined and certified. The effective tax rate is also impacted by tax-exempt income on investment securities and loans. Note 9 to the Consolidated Financial Statements provides a reconciliation between income tax expense computed using the federal statutory income tax rate and the Company’s actual income tax expense during 2023 and 2022.
Current wording
Income tax expense was $3.6 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively. These amounts correspond to an effective tax rate of 18.82% and 12.00% for 2024 and 2023, respectively. The effective tax rate is below the statutory rate of 21%, due primarily to the recognition of tax-exempt life insurance income, qualified rehabilitation credits and tax credits on qualified affordable housing project investments as discussed in Note 25 to the Consolidated Financial Statements. During both 2024 and 2023, qualified rehabilitation projects were completed and the corresponding tax credits were finalized with the total amount of credits to be received determined and certified. The effective tax rate is also impacted by tax-exempt income on investment securities and loans. Note 9 to the Consolidated Financial Statements provides a reconciliation between income tax expense computed using the federal statutory income tax rate and the Company’s actual income tax expense during 2024 and 2023.
Previous wording
The Company has three reportable operating segments: community banking, marine lending and wealth management. Revenue from community banking operations consist primarily of net interest income related to investments in non-marine loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity. Revenue from marine lending operations consist primarily of net interest income related to commercial and consumer marine loans and gains on sales of loans. The wealth management division's net revenues are comprised primarily of income from offering wealth management services and insurance products through third-party service providers.
Current wording
The Company has three reportable operating segments: community banking, marine lending and wealth management. See Note 27 to the Consolidated Financial Statements.
Previous wording
The Company’s total assets were $1.83 billion at December 31, 2023, an increase of $208.9 million or 12.92% from $1.62 billion at December 31, 2022. Securities decreased $11.7 million or 7.85% between 2022 and 2023. Loans, net of the allowance for credit losses, increased by $135.6 million or 10.33% from 2022 to 2023. Total liabilities were $1.72 billion at December 31, 2023, compared to $1.51 billion at December 31, 2022. Total shareholders’ equity at year end 2023 and 2022 was $108.4 million and $101.7 million, respectively.
Current wording
The Company’s total assets were $1.87 billion at December 31, 2024, an increase of $40.6 million or 2.22% from $1.83 billion at December 31, 2023. Securities decreased $16.1 million or 11.72% between 2023 and 2024. Loans, net of the allowance for credit losses, increased by $3.8 million or 0.26% from 2023 to 2024. Total liabilities were $1.75 billion at December 31, 2024, compared to $1.72 billion at December 31, 2023. Total shareholders’ equity at year end 2024 and 2023 was $119.0 million and $108.4 million, respectively.
Previous wording
Total securities, excluding restricted stock, were $137.4 million and $149.2 million for the years ended December 31, 2023 and December 31, 2022, respectively. The Company did not purchase any securities during 2023. The Company had $14.5 million in maturities, calls, and principal repayments on securities during 2023. This amount includes $728 thousand or 5.03% in obligations of U.S. government corporations and agencies, $12.9 million or 89.17% in mortgage-backed securities, and $840 thousand or 5.80% in obligations of states and political subdivisions. Note 2 to the Consolidated Financial Statements provides additional details about the Company’s securities portfolio as of December 31, 2023 and 2022.
Current wording
Total securities, excluding restricted stock, were $121.3 million and $137.4 million for the years ended December 31, 2024 and December 31, 2023, respectively. The Company purchased U.S. Treasuries totaling $5.0 million during 2024. The Company had $20.0 million in maturities, calls, and principal repayments on securities during 2024. This amount includes $1.1 million, or 5.25%, in obligations of U.S. government corporations and agencies, $5.0 million, or 24.92%, in U.S. Treasuries, $12.7 million, or 63.49%, in mortgage-backed securities, and $1.3 million, or 6.34%, in obligations of states and political subdivisions. Note 2 to the Consolidated Financial Statements provides additional details about the Company’s securities portfolio as of December 31, 2024 and 2023.
Previous wording
The ability to dispose of available for sale securities prior to maturity provides management more options to react to future rate changes and provides more liquidity, when needed, to meet short-term obligations. The Company had net unrealized losses on available for sale securities of $22.8 million and $25.9 million at December 31, 2023 and 2022, respectively. Unrealized gains or losses on available for sale securities are reported within shareholders’ equity, net of the related deferred tax effect, as accumulated other comprehensive income (loss).
Current wording
The ability to dispose of available for sale securities prior to maturity provides management more options to react to future rate changes and provides more liquidity, when needed, to meet short-term obligations. The Company had net unrealized losses on available for sale securities of $23.6 million and $22.8 million at December 31, 2024 and 2023, respectively. Unrealized gains or losses on available for sale securities are reported within shareholders’ equity, net of the related deferred tax effect, as accumulated other comprehensive income (loss).
Showing the first 40 of 61 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On August 23, 2023, the Company completed a sale of specific assets from its marine lending segment. As part of the sale, the Company sold its interest in marine vessel floor plan loans totaling $52.8 million, its rights to service loans that had been sold to secondary market investors prior to the date of sale (valued at $595 thousand on balance sheet prior to sale), and other assets that were not individually significant. The Company received total consideration, net of selling expenses, of $53.5 million and recognized a gain of $435 thousand. As part of the sale, the Company reduced its workforce associated with the marine lending division, as it ceased accepting new marine lending business. Subsequent to the sale of these assets, the Company retained ownership of approximately $260.5 million of marine vessel retail loans which continue to constitute a significant portion of the Company's assets, revenues, and earnings. At present, the Company expects to hold the retained outstanding loans until they are ultimately repaid.