First Seacoast Bancorp, Inc.
For the period ended Mar 31, 2025. Filed May 9, 2025.
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.
Mar 31, 2025 · Filed May 9, 2025
FSEA$17.250.0%Stored close · as of Sep 30, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000950170-24-123711
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067539
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 105 previous paragraphs and 85 current paragraphs.
55 unchanged; 24 reworded; 5 added; 18 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 3 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 (5)
Current report
Borrowings. Total borrowings from the FHLB increased $11.1 million, or 21.3%, to $63.4 million at March 31, 2025 from $52.3 million at December 31, 2024 in support of our investment and loan growth initiatives.
Current report
Net Loss. Net loss was $603,000 for the three months ended March 31, 2025, compared to a net loss of $1.2 million for the three months ended March 31, 2024, a decrease of $549,000, or 47.7%. The decrease was due primarily to an increase in net interest and dividend income after provision (release) for credit losses of $268,000, an increase in total non-interest income of $54,000 and a decrease in income tax expense of $391,000, offset by an increase in total non-interest expense of $164,000, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
Interest expense on borrowings decreased $495,000, or 43.1%, to $654,000 for the three months ended March 31, 2025 from $1.1 million for the three months ended March 31, 2024 primarily due to the use of brokered deposits to fund our investment and loan growth initiatives. The average balance of borrowings decreased $40.4 million, or 41.5%, to $57.0 million for the three months ended March 31, 2025 from $97.4 million for the three months ended March 31, 2024. The weighted average annualized rate of borrowings decreased to 4.59% for the three months ended March 31, 2025 from 4.72% for the three months ended March 31, 2024 as a result of a decrease in market interest rates.
Current report
Income Taxes. Income tax expense decreased $391,000 to an income tax benefit of ($29,000) for the three months ended March 31, 2025 from an income tax expense of $362,000 for the three months ended March 31, 2024. The effective tax rate was 4.6% and 45.8% for the three months ended March 31, 2025 and 2024, respectively. Loss before income tax (benefit) expense was $(632,000) for the three months ended March 31, 2025 as compared to $(790,000) for the three months ended March 31, 2024. The income tax benefit and effective tax rate for the three months ended March 31, 2025 was less than statutory federal and state rates due primarily to a $120,000 increase in the deferred tax asset valuation allowance during the three months ended March 31, 2025. The income tax expense and effective tax rate for the three months ended March 31, 2024 was greater than statutory federal and state rates due primarily to a $645,000 increase in the deferred tax asset valuation allowance during the three months ended March 31, 2024. Net deferred tax assets of $7.0 million and $6.7 million as of March 31, 2025 and 2024, respectively, were reduced by a 100% valuation allowance because management believes that it is more likely than not that the benefit of these deferred tax assets will not be realized. The ultimate realization of these deferred tax assets is dependent upon the generation of future taxable income. The valuation allowance for these net deferred tax assets may be adjusted in the future if estimates of taxable income during the carryforward period are increased.
Current report
At March 31, 2025 and December 31, 2024, the Bank had an overnight line of credit with the FHLB for up to $3.0 million. The Bank has a secured credit facility with the FRB – BIC Program. The Bank’s unused available borrowing capacity at the FRB was $38.5 million and $-0- at March 31, 2025 and December 31, 2024, respectively. Additionally, at March 31, 2025 and December 31, 2024, the Bank had a $2.0 million unsecured Fed Funds borrowing line of credit with a correspondent bank. At March 31, 2025 and December 31, 2024, there were no outstanding balances under any of these additional credit facilities.
Removed paragraphs (18)
Previous report
Critical Accounting Policies and Use of Critical Accounting Estimates
Previous report
The effect of implementing ASC Topic 326 was recorded as a cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which ASC Topic 326 is effective, which was January 1, 2023. The adoption of the new standard resulted in a $295,000 decrease to the ACL which was partially offset by a $290,000 increase in the allowance for off-balance sheet commitments that are not unconditionally cancelable. The decrease in ACL was due to a reduced emphasis on qualitative factors under the CECL model as the underlying historical loss data of the selected peer group is more robust with broader time horizons as compared to our actual historical loss data used under the incurred loss methodology. Under the CECL model, subsequent changes in the ACL are recorded through a charge to the provision for credit losses in the statement of income as the amounts expected to be collected change.
Previous report
Borrowings. Total borrowings decreased $20.7 million, or 22.3%, to $72.3 million at September 30, 2024 from $93.0 million at December 31, 2023. Advances from FHLB decreased $20.7 million, or 28.4%, to $52.3 million at September 30, 2024 from $73.0 million at December 31, 2023 due primarily to a $42.9 million increase in total deposits offset by borrowings required in support of the Company’s investment and loan growth initiatives.
Previous report
Net Income (Loss). Net income was $44,000 for the three months ended September 30, 2024, compared to a net loss of $911,000 for the three months ended September 30, 2023, an increase of $955,000, or 104.8%. The increase was due primarily to a $415,000 increase in net interest and dividend income, a $104,000 decrease in provision for credit losses, a decrease in non-interest expenses of $173,000, and a $213,000 increase in income tax benefit during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous report
Interest expense on borrowings decreased $71,000 to $857,000, or 7.7%, for the three months ended September 30, 2024 from $928,000 for the three months ended September 30, 2023 primarily due to a decrease in the average balance of borrowings. The average balance of borrowings decreased $5.8 million, or 7.4%, to $72.4 million for the three months ended September 30, 2024 from $78.2 million for the three months ended September 30, 2023. The weighted average annualized rate of borrowings decreased to 4.73% for the three months ended September 30, 2024 from 4.75% for the three months ended September 30, 2023.
Previous report
Net Interest and Dividend Income. Net interest and dividend income increased $415,000, or 16.2%, to $3.0 million for the three months ended September 30, 2024 from $2.6 million for the three months ended September 30, 2023. This increase was due to an increase of $38.4 million, or 7.2%, in the average balance of interest-earning assets, consisting primarily of increases in the average balances of loans, taxable debt securities, and interest-bearing deposits with other banks offset by a decrease in the average balances of non-taxable debt securities and Federal Home Loan Bank stock, during the three months ended September 30, 2024, offset by a $41.6 million, or 10.2%, increase in the average balance of interest-bearing liabilities, consisting primarily of increases in the average balances of savings and time deposits, offset by decreases in the average balances of borrowings, money market deposits and NOW and demand deposits. Annualized net interest margin increased to 2.08% for the three months ended September 30, 2024 from 1.92% for the three months ended September 30, 2023 due primarily to an increase in the average yield on interest-earning assets offset by an increase in the average rate of interest-bearing deposits and borrowings.
Previous report
Income Taxes. Income tax benefit increased $213,000, or 49.9%, to $640,000 for the three months ended September 30, 2024 from $427,000 for the three months ended September 30, 2023. The effective tax rate was (107.4)% and (31.9)% for the three months ended September 30, 2024 and 2023, respectively. The income tax benefit and effective tax rate for the three months ended September 30, 2024 was greater than statutory federal and state rates due primarily to the reduction of $802,000 of the deferred tax asset valuation allowance as of June 30, 2024 resulting from the change in accumulated other comprehensive income during the three months ended September 30, 2024, offset by a $742,000 decrease in loss before income tax benefit.
Previous report
Net Income (Loss). Net income was $895,000 for the nine months ended September 30, 2024, compared to a net loss of $987,000 for the nine months ended September 30, 2023, an increase of $1.9 million. The increase was due primarily to an increase in non-interest income of $1.7 million, a $152,000 increase in net interest and dividend income, a $190,000 decrease in provision for credit losses, and a decrease in non-interest expenses of $298,000 offset by a decrease in income tax benefit of $491,000 during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous report
Interest and Dividend Income. Total interest and dividend income increased $4.1 million, or 27.8%, to $18.9 million for the nine months ended September 30, 2024 compared to $14.8 million for the nine months ended September 30, 2023. The increase was due to a $1.7 million increase in interest and dividend income on investments and a $2.4 million increase in interest and fees on loans.
Previous report
Average interest-earning assets increased $37.5 million, to $566.1 million for the nine months ended September 30, 2024 from $528.5 million for the nine months ended September 30, 2023. The weighted average annualized yield on interest earning-assets increased to 4.45% for the nine months ended September 30, 2024 from 3.73% for the nine months ended September 30, 2023 primarily due to an increase in market interest rates. The weighted average annualized yield for the loan portfolio increased to 4.52% for the nine months ended September 30, 2024 from 3.96% for the nine months ended September 30, 2023 due primarily to an increase in market interest rates. The weighted average annualized yield for all other interest-earning assets increased to 4.25% for the nine months ended September 30, 2024 from 2.92% for the nine months ended September 30, 2023 due primarily to an increase in market interest rates.
Previous report
Interest Expense. Total interest expense increased $4.0 million, or 65.4%, to $10.0 million for the nine months ended September 30, 2024 from $6.0 million for the nine months ended September 30, 2023. Interest expense on deposits increased $3.5 million, or 100.7%, to $6.9 million for the nine months ended September 30, 2024 from $3.4 million for the nine months ended September 30, 2023. The average balance of interest-bearing deposits increased $42.2 million, or 13.5%, to $354.2 million for the nine months ended September 30, 2024 from $312.0 million for the nine months ended September 30, 2023 primarily as a result of an increase in the average balance of money market, savings and time deposits offset by a decrease in the average balances of NOW and demand deposits. The weighted average annualized rate of interest-bearing deposits increased to 2.61% for the nine months ended September 30, 2024 from 1.46% for the nine months ended September 30, 2023 primarily as a result of an increase in market interest rates.
Previous report
Interest expense on borrowings increased $476,000, or 18.4%, to $3.1 million for the nine months ended September 30, 2024 from $2.6 million for the nine months ended September 30, 2023 primarily due to an increase in the average balance of borrowings and an increase in market interest rates. The average balance of borrowings increased $8.4 million, or 10.8%, to $86.5 million for the nine months ended September 30, 2024 from $78.0 million for the nine months ended September 30, 2023. The weighted average annualized rate of borrowings increased to 4.73% for the nine months ended September 30, 2024 from 4.43% for the nine months ended September 30, 2023 due to an increase in market interest rates.
Previous report
Non-Interest Income. Non-interest income increased $1.7 million, or 95.2%, to $3.6 million for the nine months ended September 30, 2024 compared to $1.8 million for the nine months ended September 30, 2023. The increase in non-interest income during the nine months ended September 30, 2024 was due primarily to a one-time $2.5 million gain on the sale of land and buildings recognized during the nine months ended September 30, 2024 as compared to an $849,000 gain on termination of interest rate swaps recognized during the nine months ended September 30, 2023.
Previous report
Non-Interest Expense. Non-interest expense decreased $298,000, or 2.5%, to $11.8 million for the nine months ended September 30, 2024 from $12.1 million for the nine months ended September 30, 2023. The decrease was primarily due to a $434,000, or 5.9%, decrease in salaries and employee benefits, a $89,000, or 23.5%, decrease in marketing, a $67,000, or 19.6%, decrease in equipment expense and a $153,000, or 12.8%, decrease in data processing offset by a $107,000, or 18.3%, increase in occupancy expense, a $108,000, or 55.7%, increase in deposit insurance fees and a $172,000, or 23.7%, increase in professional fees and assessments. The decrease in salaries and employee benefits during the nine months ended September 30, 2024 was due to the adjustment of staffing levels in late 2023 reflecting the expected reduction in 2024 residential mortgage and commercial lending activity offset by normal salary increases. The increase in occupancy expense was due primarily to the increase in lease expense associated with the sale-leaseback transaction completed on June 11, 2024.
Previous report
Income Taxes. Income tax benefit decreased $491,000, or 73.6%, to a benefit of $176,000 for the nine months ended September 30, 2024 from a benefit of $667,000 for the nine months ended September 30, 2023. The effective tax rate was (24.4)% and (40.3)% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in income tax benefit and the effective tax rate for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was due primarily to a $2.4 million increase in income before income tax benefit offset by the release of $398,000 of the deferred tax asset valuation allowance established at December 31, 2023 resulting from the decrease in net unrealized losses of the securities available-for-sale portfolio during the nine months ended September 30, 2024.
Previous report
Average Balance Sheets
Previous report
Rate/Volume Analysis
Previous report
The Bank has established two secured credit facilities with the FRB – Bank Term Funding Program (“BTFP”) and Borrower-In-Custody of Collateral Program (“BIC”). The BTFP ceased extending new loans on March 11, 2024. At September 30, 2024 and December 31, 2023, we had $20.0 million outstanding in advances from the FRB secured by government-sponsored enterprise obligations, mortgage-backed securities and collateralized mortgage obligations issued by various U.S. Government agencies, owned as of March 12, 2023, December 31, 2023 and September 30, 2024. The interest rate is the one-year overnight index swap rate plus 10 basis points and fixed for the term of the advance – up to one year - on the day the advance is made. The advance matures on December 13, 2024 at a fixed annual interest rate of 4.89%. At September 30, 2024 and December 31, 2023, the Bank’s borrowing capacity is $50.6 million under the BIC and is based upon eligible collateral -principally general obligation municipal bonds. The entire balance of this credit facility was available at September 30, 2024 and December 31, 2023. No further advances can be requested under the BTFP after March 11, 2024.
Reworded paragraphs (24)
Previous wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the Company’s consolidated financial condition at September 30, 2024 and consolidated results of operations for the three and nine months ended September 30, 2024 and 2023. It should be read in conjunction with our unaudited consolidated financial statements and accompanying notes presented elsewhere in this report and with the Company’s audited consolidated financial statements and accompanying notes presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on March 29, 2024 with the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation.
Current wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the Company’s consolidated financial condition at March 31, 2025 and consolidated results of operations for the three months ended March 31, 2025 and 2024. It should be read in conjunction with our unaudited consolidated financial statements and accompanying notes presented elsewhere in this report and with the Company’s audited consolidated financial statements and accompanying notes presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on March 21, 2025 with the Securities and Exchange Commission. Certain prior year amounts have been reclassified to conform to the current year presentation.
Previous wording
Total Assets. Total assets were $601.8 million as of September 30, 2024, an increase of $30.7 million, or 5.4%, compared to total assets of $571.0 million at December 31, 2023. The increase was due primarily to a $10.4 million increase in cash and due from banks, a $7.9 million increase in net loans, a $11.2 million increase in securities available-for-sale, and a $5.0 million increase in other assets, offset by a $3.4 million decrease in land, building and equipment, net. The increase in other assets and decrease in land, building and equipment, net, was due primarily to accounting for the sale-leaseback transaction encompassing the Bank's main office and branches which was completed on June 11, 2024.
Current wording
Total Assets. Total assets were $592.6 million as of March 31, 2025, an increase of $11.9 million, or 2.0%, compared to total assets of $580.8 million at December 31, 2024. The increase was due primarily to a $9.6 million increase in net loans and a $3.3 million increase in securities available-for-sale offset by a $920,000 decrease in cash and due from banks.
Previous wording
Cash and Due From Banks. Cash and due from banks increased $10.4 million, or 172.2%, to $16.5 million at September 30, 2024 from $6.1 million at December 31, 2023. This increase primarily resulted from a $42.9 million increase in total deposits and $7.4 million of net proceeds from the sale of land and building, offset by a $20.7 million decrease in borrowings, a $7.9 million increase in net loans, a $11.2 million increase in securities available-for-sale, and $3.3 million of common stock repurchases during the nine months ended September 30, 2024.
Current wording
Cash and Due From Banks. Cash and due from banks decreased $920,000, or 13.0%, to $6.2 million at March 31, 2025 from $7.1 million at December 31, 2024. This decrease primarily resulted from a $9.6 million increase in net loans and a $3.3 million increase in securities available-for-sale offset by an $11.1 million increase in borrowings and a $1.3 million increase in mortgagors' tax escrow during the three months ended March 31, 2025.
Previous wording
Available-for-Sale Securities. Available-for-sale securities increased by $11.2 million, or 9.2%, to $133.0 million at September 30, 2024 from $121.9 million at December 31, 2023. This increase was primarily due to investment purchases totaling $18.1 million and a $1.5 million decrease in net unrealized losses within the portfolio, offset by $8.1 million of proceeds from maturities and principal payments during the nine months ended September 30, 2024. The unrealized losses within the portfolio are due to noncredit-related factors, including changes in market interest rates and other market conditions, and therefore we recorded no allowance for credit losses on available-for-sale debt securities as of September 30, 2024.
Current wording
Available-for-Sale Securities. Available-for-sale securities increased by $3.3 million, or 2.7%, to $123.5 million at March 31, 2025 from $120.2 million at December 31, 2024. This increase was due primarily to $6.9 million of investment purchases and a $124,000 decrease in net unrealized losses within the portfolio offset by proceeds from principal payments totaling $3.6 million during the three months ended March 31, 2025. Management believes that the unrealized losses within the portfolio are due to noncredit-related factors, including changes in market interest rates and other market conditions, and therefore we recorded no allowance for credit losses on available-for-sale debt securities as of March 31, 2025.
Previous wording
Net Loans. Net loans increased $7.9 million, or 1.9%, to $434.5 million at September 30, 2024 from $426.6 million at December 31, 2023. During the nine months ended September 30, 2024, we originated $5.9 million of loans, net of principal collections, and purchased $1.8 million of participation interests in commercial and industrial loans through our membership in a national community bank loan program. As of September 30, 2024 and December 31, 2023, the portfolio of purchased loans had an outstanding principal balance of $34.1 million and $33.3 million, respectively, and were performing in accordance with their original repayment terms.
Current wording
Net Loans. Net loans increased $9.6 million, or 2.2%, to $445.1 million at March 31, 2025 from $435.5 million at December 31, 2024. During the three months ended March 31, 2025, we originated $7.8 million of loans, net of principal collections, and purchased $1.5 million of participation interests in commercial loans through our membership in a national community bank loan program and $433,000 of consumer loans secured by manufactured housing properties. As of March 31, 2025 and December 31, 2024, the portfolio of purchased loans had outstanding principal balances of $35.7 million and $34.3 million, respectively, and were performing in accordance with their original repayment terms.
Previous wording
One- to four-family residential mortgage loans increased $10.9 million, or 4.0%, to $279.8 million at September 30, 2024 from $268.9 million at December 31, 2023. Commercial real estate mortgage loans decreased $870,000, or 1.0%, to $85.7 million at September 30, 2024 from $86.6 million at December 31, 2023. Multi-family loans decreased $1.8 million, or 23.2%, to $5.8 million at September 30, 2024 from $7.6 million at December 31, 2023. Commercial and industrial loans decreased $1.4 million, or 5.6%, to $24.1 million at September 30, 2024 from $25.5 million at December 31, 2023. Acquisition, development, and land loans decreased $3.9 million, or 22.4%, to $13.6 million at September 30, 2024 from $17.5 million at December 31, 2023. Home equity loans and lines of credit increased $2.6 million, or 18.3%, to $16.7 million at September 30, 2024 from $14.1 million at December 31, 2023. Consumer loans increased $2.5 million, or 25.0%, to $12.3 million at September 30, 2024 from $9.8 million at December 31, 2023.
Current wording
One- to four-family residential mortgage loans increased $1.7 million, or 0.6%, to $277.0 million at March 31, 2025 from $275.2 million at December 31, 2024. Commercial real estate mortgage loans increased $3.5 million, or 4.1%, to $89.6 million at March 31, 2025 from $86.0 million at December 31, 2024. Multi-family loans decreased $90,000, or 1.6%, to $5.7 million at March 31, 2025 from $5.8 million at December 31, 2024. Commercial and industrial loans increased $854,000, or 3.6%, to $24.6 million at March 31, 2025 from $23.7 million at December 31, 2024. Acquisition, development, and land loans increased $2.5 million, or 16.5%, to $17.4 million at March 31, 2025 from $14.9 million at December 31, 2024. Home equity loans and lines of credit increased $1.1 million, or 5.2%, to $22.0 million at March 31, 2025 from $20.9 million at December 31, 2024. Consumer loans increased $82,000, or 0.7%, to $12.5 million at March 31, 2025 from $12.4 million at December 31, 2024.
Previous wording
Our strategy to grow the balance sheet continues to be through originations and, to a lesser extent, purchases of one- to four-family residential mortgage loans, commercial and industrial loans, and consumer loans secured by manufactured housing properties, while also diversifying into higher yielding commercial real estate mortgage loans and commercial and industrial loans to improve net margins and manage interest rate risk. We also continue to consider selling selected, conforming 15-year and 30-year residential fixed rate mortgage loans to the secondary market on a servicing retained basis as market conditions allow, providing us a recurring source of revenue from loan servicing income and gains on the sale of such loans.
Current wording
Our strategy to grow the balance sheet continues to be through originations and, to a lesser extent, purchases of commercial loan participations, one- to four-family residential mortgage loans and consumer loans secured by manufactured housing properties, while also diversifying into higher yielding commercial real estate mortgage loans and commercial and industrial loans to improve net interest margin and manage interest rate risk. We also continue to sell selected, conforming 15-year and 30-year residential fixed rate mortgage loans to the secondary market on a servicing retained basis as market conditions allow, providing us a recurring source of revenue from loan servicing income and gains on the sale of such loans.
Previous wording
Our ACL on loans was $3.4 million at September 30, 2024 and December 31, 2023. The Company measures and records it ACL based upon ASC Topic 326 and its credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. ASC Topic 326 requires financial assets measured at amortized cost, including loans, to be presented at the net amount expected to be collected, through an ACL that are expected to occur over the remaining life of the asset, rather than incurred losses. ASC Topic 326 requires the measurement of all expected credit losses for loans held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASC Topic 326 requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied at prior reporting dates are still permitted, though the inputs to those techniques have changed to reflect the full amount of expected credit losses. The Bank has selected the Weighted Average Remaining Maturity Model (“WARM” or "CECL model"), for the loss calculation of each of the Bank’s loan pools utilizing a third-party software application. The WARM uses a quarterly loss rate and future expectations of loan balances to calculate an ACL. A loss rate is applied to pool balances over time.
Current wording
Our ACL on loans was $3.5 million at March 31, 2025 and December 31, 2024 based upon ASU 2016-13 and its credit impairment standard for financial assets measured at amortized cost and available-for-sale debt securities. The ASU requires financial assets measured at amortized cost, including loans, to be presented at the net amount expected to be collected, through an ACL that are expected to occur over the remaining life of the asset, rather than incurred losses. The ASU requires the measurement of all expected credit losses for loans held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, the ASU requires the use of forward-looking information to form credit loss estimates. Many of the loss estimation techniques applied at prior reporting dates are still permitted, though the inputs to those techniques have changed to reflect the full amount of expected credit losses. We have selected the Weighted Average Remaining Maturity Model (“WARM” or "CECL model"), for the loss calculation of each of our loan pools utilizing a third-party software application. The WARM uses a quarterly loss rate and future expectations of loan balances to calculate an ACL. A loss rate is applied to pool balances over time.
Previous wording
Deposits. Our deposits are generated primarily from residents within our primary market area. We offer a selection of deposit accounts, including non-interest-bearing and interest-bearing checking accounts, savings accounts, money market accounts and time deposits, for both individuals and businesses. As of September 30, 2024 and December 31, 2023, the aggregate amount of uninsured deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was estimated not to exceed $110.3 million, or 24.7% of total deposits, and $102.5 million, or 25.3% of total deposits, respectively.
Current wording
Deposits. Our deposits are generated primarily from residents within our primary market area. We offer a selection of deposit accounts, including non-interest-bearing and interest-bearing checking accounts, savings accounts, money market accounts and time deposits, for both individuals and businesses. As of March 31, 2025 and December 31, 2024, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was estimated not to exceed $111.4 million, or 24.5% of total deposits, and $112.2 million, or 24.7% of total deposits, respectively.
Previous wording
For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we began offering in late 2023 the CDARS® program, which allows us to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance coverage. We receive a like amount of deposits from other participating financial institutions. In addition, we offer the ICS™ program, an insured deposit “sweep” program for demand deposits which is a product offered by IntraFi Network, LLC, which is also the provider of the CDARS® program. Similarly to the certificates of deposit’s discussed above, we receive a like amount of deposits from other financial institutions and all customer deposits are insured by the FDIC. These “reciprocal” CDARS® and ICS deposits are classified as “brokered” deposits in regulatory reports and "core" deposits in our consolidated balance sheet. At September 30, 2024 our “reciprocal” CDARS® and ICS deposits were $-0- and $6.4 million, respectively. At December 31, 2023, our “reciprocal” CDARS® and ICS deposits were $-0- and $1.1 million, respectively.
Current wording
For customers requiring full FDIC insurance on certificates of deposit in excess of $250,000, we began offering in late 2023 the CDARS® program, which allows us to place the certificates of deposit with other participating banks to maximize the customers’ FDIC insurance coverage. We receive a like amount of deposits from other participating financial institutions. In addition, we offer the ICS™ program, an insured deposit “sweep” program for demand deposits which is a product offered by IntraFi Network, LLC, which is also the provider of the CDARS® program. Similarly to the certificates of deposit’s discussed above, we receive a like amount of deposits from other financial institutions and all customer deposits are insured by the FDIC. These “reciprocal” CDARS® and ICS deposits are classified as “brokered” deposits in regulatory reports and "core" deposits in our consolidated balance sheet. At March 31, 2025 our “reciprocal” CDARS® and ICS deposits were $-0- and $5.5 million, respectively. At December 31, 2024, our “reciprocal” CDARS® and ICS deposits were $-0- and $6.0 million, respectively.
Previous wording
Deposits increased $42.9 million, or 10.6%, to $447.7 million at September 30, 2024 from $404.8 million at December 31, 2023 primarily as a result of an $14.9 million increase in commercial deposits and a $28.0 million increase in retail deposits. Core deposits (defined as deposits other than time deposits) increased $6.2 million, or 2.0%, to $319.7 million at September 30, 2024 from $313.5 million at December 31, 2023. As of September 30, 2024, savings deposits increased $16.3 million, money market deposits decreased $12.5 million, NOW and demand deposit accounts increased $2.4 million and time deposits increased $36.7 million. There were $56.7 million and $23.6 million of brokered deposits included in time deposits at September 30, 2024 and December 31, 2023, respectively. Additionally, there were $21.8 million and $20.9 million of brokered deposits included in savings deposits at September 30, 2024 and December 31, 2023, respectively. Deposits from related parties totaled $12.1 million and $10.7 million at of September 30, 2024 and December 31, 2023, respectively.
Current wording
Deposits decreased $74,000 to $454.1 million at March 31, 2025 from $454.2 million at December 31, 2024 primarily as a result of a $1.8 million decrease in retail deposits offset by a $1.8 million increase in commercial deposits. Core deposits (defined as deposits other than time deposits, including CDARS® and ICS deposits) increased $1.1 million, or 0.4%, to $319.6 million at March 31, 2025 from $318.5 million at December 31, 2024. As of March 31, 2025, savings deposits decreased $840,000, money market deposits increased $351,000, NOW and demand deposits increased $1.6 million and time deposits decreased $1.2 million. There were $62.5 million and $63.1 million of brokered deposits included in time deposits at March 31, 2025 and December 31, 2024.
Previous wording
Total Stockholders’ Equity. Total stockholders’ equity decreased $829,000, or 1.2%, to $65.8 million at September 30, 2024 from $66.6 million at December 31, 2023. This decrease was due primarily to $3.3 million of common stock repurchases offset by other comprehensive income of $969,000 related to net changes in unrealized holding losses in the available-for-sale securities portfolio as a result of decreases in market interest rates during the nine months ended September 30, 2024, net income of $895,000 for the nine months ended September 30, 2024, and the recognition of $421,000 of previously unearned compensation.
Current wording
Total Stockholders’ Equity. Total stockholders’ equity decreased $824,000, or 1.3%, to $61.2 million at March 31, 2025 from $62.1 million at December 31, 2024. This decrease was due primarily to a net loss of $603,000 for the three months ended March 31, 2025 and $574,000 of common stock repurchases, partially offset by the recognition of $233,000 of previously unearned compensation.
Previous wording
Non-performing loans were $-0- and $141,000 at September 30, 2024 and December 31, 2023, respectively. At December 31, 2023, non-performing loans consisted of a residential mortgage loan and an associated home equity loan with outstanding balances totaling $141,000 and an estimated collateral market value of $216,000. The property was sold on July 19, 2024 and all outstanding balances were repaid. At September 30, 2024 and December 31, 2023, we had no foreclosed assets.
Current wording
Non-performing loans were $-0- at March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, we had no foreclosed assets.
Previous wording
Interest and Dividend Income. Total interest and dividend income increased $1.4 million, or 26.9%, to $6.6 million for the three months ended September 30, 2024 compared to $5.2 million for the three months ended September 30, 2023. This increase was due to a $567,000 increase in interest and dividend income on investments and a $820,000 increase in interest and fees on loans.
Current wording
Interest and Dividend Income. Total interest and dividend income increased $362,000, or 6.0%, to $6.4 million for the three months ended March 31, 2025 compared to $6.1 million for the three months ended March 31, 2024. This increase was due to a $64,000 increase in interest and dividend income on investments and a $298,000 increase in interest and fees on loans.
Previous wording
Average interest-earning assets increased $38.4 million, to $574.6 million for the three months ended September 30, 2024 from $536.2 million for the three months ended September 30, 2023. The weighted average annualized yield on interest earning-assets increased to 4.56% for the three months ended September 30, 2024 from 3.85% for the three months ended September 30, 2023 primarily due to an increase in market interest rates. The weighted average annualized yield for the loan portfolio increased to 4.67% for the three months ended September 30, 2024 from 4.09% for the three months ended September 30, 2023 due primarily to an increase in market interest rates. The weighted average annualized yield for all other interest-earning assets increased to 4.22% for the three months ended September 30, 2024 from 3.00% for the three months ended September 30, 2023 due primarily to an increase in market interest rates.
Current wording
Average interest-earning assets increased $11.9 million, to $571.0 million for the three months ended March 31, 2025 from $559.1 million for the three months ended March 31, 2024. The weighted average annualized yield on interest earning-assets increased to 4.51% for the three months ended March 31, 2025 from 4.34% for the three months ended March 31, 2024 primarily due to an increase in market interest rates. The weighted average annualized yield for the loan portfolio increased to 4.57% for the three months ended March 31, 2025 from 4.40% for the three months ended March 31, 2024 due primarily to an increase in market interest rates. The weighted average annualized yield for all other interest-earning assets increased to 4.28% for the three months ended March 31, 2025 from 4.17% for the three months ended March 31, 2024 due primarily to an increase in market interest rates.
Previous wording
Interest Expense. Total interest expense increased $972,000, or 37.4%, to $3.6 million for the three months ended September 30, 2024 from $2.6 million for the three months ended September 30, 2023. Interest expense on deposits increased $1.0 million, or 62.5%, to $2.7 million for the three months ended September 30, 2024 from $1.7 million for the three months ended September 30, 2023. The average balance of interest-bearing deposits increased $47.3 million, or 14.4%, to $375.8 million for the three months ended September 30, 2024 from $328.5 million for the three months ended September 30, 2023 primarily as a result of an increase in the average balance of savings and time deposits offset by a decrease in the average balances of money market deposits and NOW and demand deposits. The weighted average annualized rate of interest-bearing deposits increased to 2.88% for the three months ended September 30, 2024 from 2.03% for the three months ended September 30, 2023 primarily as a result of an increase in market interest rates.
Current wording
Interest Expense. Total interest expense increased $74,000, or 2.3%, to $3.3 million for the three months ended March 31, 2025 from $3.2 million for the three months ended March 31, 2024. Interest expense on deposits increased $569,000, or 28.0%, to $2.6 million for the three months ended March 31, 2025 from $2.0 million for the three months ended March 31, 2024. The average balance of interest-bearing deposits increased $53.6 million, or 15.8%, to $392.4 million for the three months ended March 31, 2025 from $338.8 million for the three months ended March 31, 2024 primarily as a result of an increase in the average balances of savings deposits and time deposits offset by a decrease in the average balances of money market deposits. The weighted average annualized rate of interest-bearing deposits increased to 2.65% for the three months ended March 31, 2025 from 2.39% for the three months ended March 31, 2024 primarily as a result of an increase in market interest rates.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income increased $152,000, or 1.7%, to $8.9 million for the nine months ended September 30, 2024 from $8.7 million for the nine months ended September 30, 2023. The increase was due to a $37.5 million, or 7.1%, increase in the average balance of interest-earning assets, consisting primarily of increases in the average balances of loans and taxable debt securities, offset by a $50.4 million, or 12.9%, increase in the average balance of interest-bearing liabilities, consisting primarily of an increase in the average balance of borrowings, money market, savings and time deposits, during the nine months ended September 30, 2024. Annualized net interest margin decreased to 2.10% for the nine months ended September 30, 2024 from 2.21% for the nine months ended September 30, 2023 due primarily to an increase in the average rate of interest-bearing deposits and borrowings offset by an increase in the average yield on interest-earning assets.
Current wording
Net Interest and Dividend Income. Net interest and dividend income increased $288,000, or 10.0%, to $3.2 million for the three months ended March 31, 2025 from $2.9 million for the three months ended March 31, 2024. This increase was due to an increase of $11.9 million, or 2.1%, in the average balance of interest-earning assets, consisting primarily of an increase in the average balance of interest-earning loans, during the three months ended March 31, 2025 offset by a $13.3 million, or 3.0%, increase in the average balance of interest-bearing liabilities, consisting primarily of increases in the average balances of interest-bearing deposits offset by decreases in the average balances of borrowings. Annualized net interest margin increased to 2.23% for the three months ended March 31, 2025 from 2.07% for the three months ended March 31, 2024 due primarily to an increase in net interest income and an increase in the average yield on interest-earning assets.
Previous wording
Provision (Release) for Credit Losses. Based on management’s analysis of the ACL, a $16,000 provision for credit losses was recorded for the three months ended September 30, 2024, compared to a $120,000 provision for credit losses for the three months ended September 30, 2023. The provision for credit losses for the three months ended September 30, 2024 consisted of a $20,000 provision for credit losses on loans and a $(4,000) release of credit losses for off-balance sheet credit exposures. The provision for credit losses for the three months ended September 30, 2023 consisted of a $30,000 provision for credit losses on loans and a $90,000 provision for credit losses for off-balance sheet credit exposures.
Current wording
Provision (Release) for Credit Losses. Based on management’s analysis of the ACL, a $-0- provision for credit losses was recorded for the three months ended March 31, 2025, compared to a $(20,000) release of credit losses for the three months ended March 31, 2024. The provision for credit losses for the three months ended March 31, 2025 consisted of $-0- for the provision for credit losses on available-for-sale securities, a $30,000 provision for credit losses on loans and a $(30,000) release of credit losses on off-balance sheet credit exposures. The release of credit losses for the three months ended March 31, 2024 consisted of $-0- for the provision for credit losses on available-for-sale securities, a $30,000 for the provision for credit losses on loans and a $(50,000) release of credit losses on off-balance sheet credit exposures.
Previous wording
Non-Interest Income. Non-interest income increased $50,000, or 15.9%, to $364,000 for the three months ended September 30, 2024 compared to $314,000 for the three months ended September 30, 2023. The increase in non-interest income during the three months ended September 30, 2024 was due primarily to a $41,000 increase in investment service fees.
Current wording
Non-Interest Income. Non-interest income increased $54,000, or 18.2%, to $351,000 for the three months ended March 31, 2025 compared to $297,000 for the three months ended March 31, 2024. The increase in non-interest income during the three months ended March 31, 2025 was due primarily to an increase in investment and customer service fees.
Previous wording
Non-Interest Expense. Non-interest expense decreased $173,000, or 4.2%, to $3.9 million for the three months ended September 30, 2024 from $4.1 million for the three months ended September 30, 2023. The decrease was primarily due to a $169,000, or 6.8%, decrease in salaries and employee benefits, a $71,000, or 40.8%, decrease in marketing, a $42,000, or 36.5%, decrease in equipment expense and a $60,000, or 14.9%, decrease in data processing offset by a $114,000, or 55.6%, increase in occupancy expense and a $50,000, or 25.5%, increase in professional fees and assessments. The decrease in salaries and employee benefits during the three months ended September 30, 2024 was due to the adjustment of staffing levels in late 2023 reflecting the expected reduction in 2024 residential mortgage and commercial lending activity offset by normal salary increases. The increase in occupancy expense was due primarily to the increase in lease expense associated with the sale-leaseback transaction completed on June 11, 2024.
Current wording
Non-Interest Expense. Non-interest expense increased $164,000, or 4.1%, to $4.2 million for the three months ended March 31, 2025 from $4.0 million for the three months ended March 31, 2024. The increase was primarily due to a $118,000 increase in salaries and employee benefits, a $133,000 increase in occupancy expense and a $53,000 increase in data processing, offset by a $52,000 decrease in professional fees and assessments and a $33,000 decrease in equipment expense. The increase in salaries and employee benefits was due to normal salary increases and an increase in compensation expense associated with incentive and non-statutory stock options granted in December 2024. The increase in occupancy expense was due primarily to the increase in lease expense associated with the sale-leaseback transaction completed on June 11, 2024.
Previous wording
Net deferred fee expense included in loan interest totaled $153,000 and $103,000 for the three months ended September 30, 2024 and 2023, respectively.
Current wording
(4) Net deferred fee expense included in loan interest totaled $(141,000) and $(81,000) for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. As of September 30, 2024 and December 31, 2023, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, had an estimated value not exceeding $110.3 million, or 24.7% of total deposits, and $102.5 million, or 25.3% of total deposits, respectively. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the FHLB and FRB as supplemental sources of funds. At September 30, 2024 and December 31, 2023, we had $52.3 million and $73.0 million outstanding in advances from the FHLB, respectively, and the ability to borrow an additional $94.0 million and $71.8 million, respectively, as well as an overnight line of credit for up to $3.0 million. Additionally, at September 30, 2024 and December 31, 2023, the Bank had a total of $2.0 million and $5.0 million, respectively, of unsecured Fed Funds borrowing lines of credit with correspondent banks. At September 30, 2024 and December 31, 2023, there were no outstanding balances under any of these additional credit facilities.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. As of March 31, 2025 and December 31, 2024, the aggregate amount of uninsured total deposit balances, which is the portion exceeding the $250,000 FDIC insurance limit, was an estimated value not exceeding $111.4 million, or 24.5% of total deposits, and $112.2 million, or 24.7% of total deposits, respectively. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans and proceeds from sales and maturities of securities. We also rely on borrowings from the FHLB and FRB as supplemental sources of funds. At March 31, 2025 and December 31, 2024, we had $63.4 million and $52.3 million outstanding in advances from the FHLB, respectively, and the ability to borrow an additional $88.8 million and $94.0 million, respectively.
Previous wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash used by operating activities was $1.2 million and $417,000 for the nine months ended September 30, 2024 and 2023, respectively. Net cash used by investing activities, which consists primarily of disbursements for loan originations and purchases, and the purchase of securities available-for-sale, offset by proceeds from the sale of land and building and unwinding of interest rate swaps, principal collections on loans and proceeds from the sale, maturity and principal payments on securities available-for-sale, was $10.1 million and $25.5 million for the nine months ended September 30, 2024 and 2023, respectively. Net cash provided by financing activities, consisting primarily of proceeds from the sale of common stock, treasury stock purchases, activity in deposit accounts and FHLB advances, was $21.7 million and $24.8 million for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities and financing activities. Net cash provided (used) by operating activities was $573,000 and $(70,000) for the three months ended March 31, 2025 and 2024, respectively. Net cash used by investing activities, which consists primarily of disbursements for loan originations and purchases of securities available-for-sale offset by principal collections on loans and proceeds from the sale, maturity and principal payments on securities available-for-sale, was $13.3 million and $6.9 million for the three months ended March 31, 2025 and 2024, respectively. Net cash provided by financing activities, consisting primarily of activity in deposit accounts and FHLB advances offset by treasury stock purchases, was $11.8 million and $7.6 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
First Seacoast Bancorp, Inc. is a separate legal entity from First Seacoast Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At September 30, 2024, the Company (on an unconsolidated basis) had liquid assets of $17.1 million.
Current wording
First Seacoast Bancorp, Inc. is a separate legal entity from First Seacoast Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations and to fund repurchases of shares of common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At March 31, 2025, the Company (on an unconsolidated basis) had liquid assets of $16.5 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Additionally, there were $22.0 million and $22.1 million of brokered deposits included in savings deposits at March 31, 2025 and December 31, 2024, respectively. Deposits from related parties totaled $11.4 million and $11.6 million at March 31, 2025 and December 31, 2024, respectively.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023
Previous report — wording carried elsewhere
Provision (Release) for Credit Losses. Based on management’s analysis of the ACL, a $(20,000) release of credit losses was recorded for the nine months ended September 30, 2024, compared to a $170,000 provision for credit losses expense for the nine months ended September 30, 2023. The release of credit losses for the nine months ended September 30, 2024 consisted of an $80,000 provision for credit losses on loans and a $(100,000) release of credit losses for off-balance sheet credit exposures. The provision for credit losses expense for the nine months ended September 30, 2023 consisted of a $65,000 provision for credit losses on loans and a $105,000 provision for credit losses for off-balance sheet credit exposures.
Previous report — wording carried elsewhere
The following table sets forth average balance sheets, average yields and costs and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of net deferred fee income, discounts and premiums that are amortized or accreted to interest income or interest expense. Average loan balances exclude loans held for sale, if applicable. The following table includes no out-of-period items or adjustments.
Previous report — wording carried elsewhere
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
Previous report — wording carried elsewhere
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
Previous report — wording carried elsewhere
Net interest margin represents net interest income divided by average total interest-earning assets.
Previous report — wording carried elsewhere
Net deferred fee expense included in loan interest totaled $354,000 and $276,000 for the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.