FB Bancorp, Inc. /MD/
For the period ended Mar 31, 2025. Filed May 12, 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 12, 2025
FBLA$16.86+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0000950170-24-126804
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069058
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 85 previous paragraphs and 73 current paragraphs.
41 unchanged; 25 reworded; 6 added; 15 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 27 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
offices, funded with capital raised through the Company’s stock offering in the third quarter of 2024. We have no current plans or intentions regarding any such expansion activities outside the previously mentioned full service branch in Lafayette, Louisiana opening in the second half of 2025.
Current report
Total Assets. Total assets were $1.24 billion at March 31, 2025, an increase of $16.8 million, or 1.4%, from $1.22 billion at December 31, 2024. The increase was primarily due to increased loans held for investment net of $13.7 million and available-for-sale securities of $6.9 million. These earning assets were funded by an increase in total deposits of $22.7 million, partially offset by a $12.0 million decrease in other borrowings.
Current report
Cash and Cash Equivalents. Cash levels decreased by $270 thousand, or 0.3%, to $98.6 million at March 31, 2025 from $98.8 million at December 31, 2024.
Current report
Borrowings. Borrowings decreased $12.0 million, or 16.3%, from $73.5 million at December 31, 2024 to $61.5 million at March 31, 2025. Borrowings have been paid down significantly over the last two quarters due to proceeds from the stock conversion and growth in deposits.
Current report
Interest Expense. Total interest expense decreased $0.3 million, or 5.7%, to $4.1 million for the three months ended March 31, 2025, from $4.4 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease in interest expense on other borrowed funds of $1.1 million, partially offset by an increase of $900 thousand in interest on deposits for the three months ended March 31, 2025. The decrease in interest on other borrowed funds was primarily due to a decrease in interest-bearing borrowing average balances of $97.1 million, or 57.6%, for the three months ended March 31, 2025 compared to the same period ended March 31, 2024. The Company retired over $100 million in borrowings in the fourth quarter of 2024 and into the first quarter of 2025 primarily using the proceeds of the Company’s stock conversion. Interest on deposits increased due to an increase in average balances and rate for the three months ended March 31, 2025 compared to the same period in 2024.
Current report
Non-interest Expense. Non-interest expense decreased $445,000, or 2.7%, to $15.9 million for the three months ended March 31, 2025, compared to $16.4 million for the three months ended March 31, 2024. The decrease was primarily due to a $526,000, or 5.2%, decrease in salaries and employee benefits. This was primarily caused by reductions in staffing levels within the mortgage banking segment to continue improvement in the segment’s profitability. Also contributing to non-interest expense reduction was a decrease of $327,000, or 60.9%, in advertising and marketing for the three months ended March 31, 2025 compared to the same period ended March 31, 2024. Hedging activity, net, increased $523,000, from a net benefit of $93,000 for the three months ended March 31, 2024 to a net expense of $430,000 for the three months ended March 31, 2025. Hedging activity is a direct result of interest rate movements in the secondary market of mortgage loans held for sale.
Removed paragraphs (15)
Previous report
Total Assets. Total assets were $1.41 billion at September 30, 2024, an increase of $282.7 million, or 25.1%, from $1.12 billion at December 31, 2023. The increase was primarily due to an increase in total cash and cash equivalents as a result of increases in non-interest deposits from the holding of tentative stock conversion proceeds of $254.0 million.
Previous report
Cash and Cash Equivalents. Cash levels increased by $206.4 million, or 237%, to $293.5 million at September 30, 2024 from $87.1 million at December 31, 2023. The increase was primarily the result of increases in non-interest bearing deposits from the holding of tentative stock conversion proceeds of $254 million.
Previous report
Borrowings. Borrowings increased $41.8 million, or 24.3%, from $172.2 million at December 31, 2023 to $214.0 million at September 30, 2024. Borrowings were used primarily to fund the origination of loans (both held for investment and held for sale).
Previous report
Interest Expense. Total interest expense increased $2.1 million, or 62.3%, to $5.5 million for the three months ended September 30, 2024, from $3.4 million for the three months ended September 30, 2023. The increase was due to both an increase in balances and in the average costs of interest-bearing deposits and other borrowings. Average interest-bearing liabilities increased $93.9 million, or 12.6%, to $836.9 million for the three months ended September 30, 2024 compared to $743.1 million for the three months ended September 30, 2023. The average cost of interest-bearing liabilities was 2.60% for the three months ended September 30, 2024 compared to 1.81% for the three months ended September 30, 2023. The increase in interest costs for both deposits and borrowings over the last year were due to significant increases in market interest rates in 2023.
Previous report
Non-interest Expense. Non-interest expense increased $708,000, or 4.2%, to $17.6 million for the three months ended September 30, 2024, compared to $16.9 million for the three months ended September 30, 2023. The increase was primarily due to a $1.1 million, or 296%, increase in hedging activity, net. This was caused by lower mortgage rates in the third quarter of 2024, partially offset by the increased gains from the sale of mortgage loans of $733,000 over the same period included in non-interest income. Amortization expense related to the book value of mortgage servicing rights decreased by $421,000, or 81.7%, for the three months ended September 30, 2024 compared to the same period in 2023 due to the large sales of secondary market mortgage loans serviced for others in 2023 and 2024. Salaries and employee benefits expense increased by $135,000, or 1.3%, for the three months ended September 30, 2024 compared to the same period in 2023 due to approximately $260,000 in one-time severance charges. The reductions mostly came from the mortgage banking division of Fidelity Bank. The reductions in payroll approximate $1.4 million in annual payroll starting in the fourth quarter of 2024.
Previous report
General. A net loss of $853,000 was recorded for the nine months ended September 30, 2024, compared to net income of $2.3 million for the nine months ended September 30, 2023. The decrease in net income was primarily due to a decrease in gain on sale of mortgage servicing rights of $2.2 million, a decrease in mortgage servicing revenue of $1.8 million, both partially offset in a decrease of $1.2 million in mortgage servicing rights amortization expenses. All of these items relate to the large sales of secondary market mortgage loans serviced for others in 2023 and 2024.
Previous report
Interest Income. Interest income increased $8.7 million, or 22.2%, to $48.0 million for the nine months ended September 30, 2024, compared to $39.3 million for the nine months ended September 30, 2023. This increase was primarily attributable to a $8.1 million, or 25.7%, increase in interest and fees on loans, both held for investment and held for sale.
Previous report
The average balance of loans held for sale during the nine months ended September 30, 2024 and 2023 remained approximately unchanged at $28.8 million for both periods. The average yield on these loans increased to 6.45% for the nine months ended September 30, 2024 from 6.13% for the nine months ended September 30, 2023.
Previous report
The average balance of investment securities decreased by $13.6 million, or 5.2%, to $248.1 million for the nine months ended September 30, 2024 from $261.7 million for the nine months ended September 30, 2023, while the average yield on investment securities increased to 3.72% for the nine months ended September 30, 2024 from 3.52% for the nine months ended September 30, 2023. The increase in the average yield on securities was due primarily to increasing bond yields throughout 2023 and 2024.
Previous report
Interest Expense. Total interest expense increased $8.6 million, or 140.0%, to $14.8 million for the nine months ended September 30, 2024, from $6.2 million for the nine months ended September 30, 2023. The increase was primarily due to increases in both balances and average costs of interest-bearing deposits and other borrowings. Average interest-bearing deposits increased $1.4 million, or 0.2%, to $625.4 million for the nine months ended September 30, 2024 compared to $624.0 million for the nine months ended September 30, 2023. The average cost of interest-bearing deposits was 1.78% for the nine months ended September 30, 2024 compared to 0.91% for the nine months ended September 30, 2023. Average borrowings increased $123.2 million, or 187.3%, to $189.0 million for the nine months ended September 30, 2024 compared to $65.8 million for the nine months ended September 30, 2023. The average cost of borrowings was 4.59% for the nine months ended September 30, 2024 compared to 3.88% for the nine months ended September 30, 2023. The increase in interest costs for both deposits and borrowings over the last year were due to major increases in market interest rates in 2023.
Previous report
Net Interest Income. Net interest income increased $97,000, or 0.3%, to $33.2 million for the nine months ended September 30, 2024, compared to $33.1 million for the nine months ended September 30,
Previous report
The increase reflected $8.7 million, or 22.2%, increase in interest income mostly offset by a $8.6 million, or 140.0%, increase in interest expense for the nine months ended September 30, 2024 compared to the same period in 2023.
Previous report
Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $820,000 provision for credit losses for the nine months ended September 30, 2024 compared to a provision for credit losses of $349,000 for the nine months ended September 30, 2023. The increase in the provision for credit losses was due primarily to loan growth during 2023 and 2024 and increases in nonperforming loans. The allowance for credit losses was $5.8 million and $6.2 million at September 30, 2024 and September 30, 2023, respectively, and represented 0.80% of total loans at September 30, 2024 and 0.93% of total loans at September 30, 2023.
Previous report
Non-interest Income. Non-interest income totaled $17.3 million for the nine months ended September 30, 2024, a decrease of $3.2 million, or 15.4%, from $20.5 million for the nine months ended September 30, 2023. The decrease in net income was primarily due to a decrease in gain on sale of mortgage servicing rights of $2.2 million and a decrease in mortgage servicing revenue of $1.8 million. Both of these relate to the large sales of secondary market mortgage loans serviced for others in 2023 and 2024.
Previous report
Non-interest Expense. Non-interest expense increased $211,000, or 0.4%, to $50.9 million for the nine months ended September 30, 2024, compared to $50.6 million for the nine months ended September 30, 2023. Hedging utilized to offset risk in interest rate fluctuations in the origination of secondary market mortgage loans increased by $950,000 for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to reduced mortgage rates in the mortgage market beginning in the second half of 2024. Data processing expenses increased $443,000, or 12.8%, and advertising and marketing expenses increased $345,000, or 26.8%, for the nine months ended September 30, 2024 compared to the same period in 2023. These expense increases were due to expansions in digital banking services. Amortization expense related to the book value of mortgage servicing rights decreased by $1.2 million, or 74.8%, for the nine months ended September 30, 2024 compared to the same period in 2023 due to the sales of secondary market mortgage loans serviced for others in 2023 and 2024. Salaries and employee benefits expense decreased by $404,000, or 1.3%, for the nine months ended September 30, 2024 compared to the same period in 2023 due to a reduction of approximately 22 employees, a 5.9% reduction in total employment. The reductions mostly came from the mortgage banking division of Fidelity Bank. Salaries and employee benefits include just over $260,000 of one-time severance charges.
Reworded paragraphs (25)
Previous wording
This discussion and analysis discusses information contained in our financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with the business and financial information regarding Fidelity Bank provided in this document, including the financial statements, which appear elsewhere in this document.
Current wording
This discussion and analysis discusses information contained in our financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with the business and financial information regarding FB Bancorp, Inc. provided in this document, including the financial statements, which appear elsewhere in this document.
Previous wording
After the completion of the conversion and stock offering, FB Bancorp will conduct its operations primarily through Fidelity Bank. Fidelity Bank’s business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential real estate loans, commercial real estate loans, commercial loans, home equity loans and lines of credit, consumer loans and construction loans. We also invest in securities, which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S. government sponsored enterprises. We offer a variety of deposit accounts including negotiable orders of withdrawal, which we refer to as “NOW” throughout this document, savings accounts, money market accounts and certificate of deposit accounts. Fidelity Bank is subject to comprehensive regulation and examination by the Louisiana Office of Financial Institutions and the FDIC.
Current wording
FB Bancorp, Inc. conducts its operations primarily through Fidelity Bank. Fidelity Bank’s business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential real estate loans, commercial real estate loans, commercial loans, home equity loans and lines of credit, consumer loans and construction loans. We also invest in securities, which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S. government sponsored enterprises. We offer a variety of deposit accounts including negotiable orders of withdrawal, which we refer to as “NOW” throughout this document, savings accounts, money market accounts and certificate of deposit accounts. Fidelity Bank is subject to comprehensive regulation and examination by the Louisiana Office of Financial Institutions and the FDIC. FB Bancorp Inc. is subject to comprehensive regulation and examination by the Federal Reserve Board.
Previous wording
The following tables set forth selected historical financial and other data of Fidelity Bank for the periods and at the dates indicated. The information at September 30, 2024, and for the three months and nine months ended September 30, 2024 and 2023, is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. These adjustments are standard and recurring. The results of operations for the three months and nine months ended September 30, 2024 are not necessarily indicative of the results of operations that may be expected or realized for the entire year. The information at December 31, 2023 is derived in part from, and should be read together with, the audited financial statements and related notes beginning at page F-1 of the definitive prospectus dated August 12, 2024 as filed with the Securities and Exchange Commission on August 22, 2024.
Current wording
The following tables set forth selected historical financial and other data of Fidelity Bank for the periods and at the dates indicated. The information at March 31, 2025, and for the three months ended March 31, 2025 and 2024, is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. These adjustments are standard and recurring. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results of operations that may be expected or realized for the entire year. The information at December 31, 2024 is derived in part from, and should be read together with, the audited financial statements and related notes beginning at page F-1 of the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2025.
Previous wording
Available-for-Sale Investment Securities. Investment securities decreased $5.9 million, or 2.3%, to $244.0 million at September 30, 2024, from $249.9 million at December 31, 2023. Aggregate securities purchased totaled $17.0 million and aggregate securities sold totaled $12.6 million during the nine months ended September 30, 2024. Additionally, calls, maturities, and repayments contributed a decrease of $18.2 million in the aggregate. Partially offsetting these decreases was an increase in fair market value adjustments of $7.1 million.
Current wording
Available-for-Sale Investment Securities. Investment securities increased $6.9 million, or 2.8%, to $251.0 million at March 31, 2025, from $244.1 million at December 31, 2024. Aggregate securities purchased totaled $12.2 million and aggregate securities maturing, called, or sold totaled $11.0 million during the three months ended March 31, 2025. Adding to the net increase was an increase in fair market value adjustments of $5.4 million.
Previous wording
Loans Held for Investment, Net. Loans held for investment, net, increased by $65.0 million, or 9.9%, to $724.5 million at September 30, 2024 from $659.5 million at December 31, 2023. During the nine months ended September 30, 2024, loan originations (excluding loans held for sale) totaled $113.9 million. Increases to this category came primarily from the following: one- to four-family residential mortgage loans increased $7.1 million, or 2.8%, residential construction loans increased $13.2 million, or 84.0%, commercial real estate loans increased $24.0 million, or 11.6%, and home equity loans and lines of credit increased $7.4 million, or 7.6%. Other commercial loans which consists of business lines of credit, equipment loans and various non-real estate commercial loans increased $13.1 million, or 19.0%.
Current wording
Loans Held for Investment, Net. Loans held for investment, net, increased by $13.7 million, or 1.8%, to $764.4 million at March 31, 2025 from $750.7 million at December 31, 2024. During the three months ended March 31, 2025, loan originations (excluding loans held for sale) totaled $35.1 million. The increase in net loans held for investment came primarily from the following: residential construction loans increased $4.8 million, or 14.0%, commercial real estate loans increased $12.0 million, or 5.0%, and other commercial loans, which consists of business lines of credit, equipment loans and various non-real estate commercial loans increased $2.7 million, or 2.8%. The net increase was partially offset by the following: residential mortgage loans decreased $2.5 million, or 1.0%, and other consumer loans decreased $2.8 million, or 10.5%.
Previous wording
Increases in loan balances reflect our strategy to grow the commercial real estate loan portfolio while continuing to focus on owner-occupied one- to four-family residential mortgage loans. We have expanded our lending activities into the Baton Rouge and Lafayette, Louisiana markets, including adding lending teams in these markets.
Current wording
Increases in loan balances reflect our strategy to grow the commercial and commercial real estate loan portfolios while continuing to focus on owner-occupied one- to four-family residential mortgage loans. We have expanded our lending activities into the Baton Rouge and Lafayette, Louisiana markets, including adding lending teams in these markets.
Previous wording
Deposits. Deposits increased by $236.7 million, or 30.8%, to $1.01 billion at September 30, 2024 from $769.3 million at December 31, 2023. Core deposits (defined as all deposits other than certificates of deposit) increased $210.2 million, or 41.7%, to $714.6 million at September 30, 2024 from $504.4 million at December 31, 2023. The primary reason core deposits increased is due to approximately $254 million in tentative proceeds from the Bank's stock conversion held in a Bank deposit account. Certificates of deposit increased $26.6 million, or 10.0%, to $291.5 million at September 30, 2024 from $264.9 million at December 31, 2023. Our certificates of deposit included $94.0 million in wholesale and brokered certificates of deposit at September 30, 2024 and $90.6 million at December 31, 2023. Such deposits generally tend to be at higher yields than other types of deposits and generally do not represent direct customer relationships, but were utilized, in part, to fund loan growth.
Current wording
Deposits. Deposits increased by $22.7 million, or 2.8%, to $823.4 million at March 31, 2025 from $800.7 million at December 31, 2024. Core deposits (defined as all deposits other than certificates of deposit) increased $7.7 million, or 1.6%, to $492.6 million at March 31, 2025 from $484.9 million at December 31, 2024. Certificates of deposit increased $14.9 million, or 4.7%, to $330.8 million at March 31, 2025 from $315.9 million at December 31, 2024. Our certificates of deposit included $98.9 million in wholesale and brokered certificates of deposit at March 31, 2025 and $106.0 million at December 31, 2024. Such deposits generally tend to be at higher yields than other types of deposits and generally do not represent direct customer relationships, but were utilized, in part, to fund loan growth.
Previous wording
Total Equity. Total equity increased $4.7 million, or 3.0%, to $161.5 million at September 30, 2024 from $156.7 million at December 31, 2023. The increase resulted primarily from a $5.6 million decrease in accumulated other comprehensive loss. Comprehensive loss is solely related to unrealized losses on securities available for sale.
Current wording
Total Equity. Total equity increased $5.1 million, or 1.6%, to $331.4 million at March 31, 2025 from $326.3 million at December 31, 2024. The increase resulted primarily from a $4.3 million increase in accumulated other comprehensive income (loss). Comprehensive income is solely related to unrealized gains and losses on securities available for sale. Also contributing to the total equity increase was $0.7 million in retained earnings.
Previous wording
General. Net loss of $895,000 was recorded for the three months ended September 30, 2024, compared to net income of $2.4 million for the three months ended September 30, 2023. The decrease in net income was primarily due to a decrease in gains from the sale of mortgage servicing rights of $4.4 million. Mortgage servicing rights are generally sold when market prices exceed internal expected returns and are not a regular source of income. Also contributing to the income fluctuations over this three month ending from 2024 compared to 2023 is a $584,000, or 5.4%, increase in net interest income, and a $708,000, or 4.2%, increase in non-interest expenses.
Current wording
General. Net income of $705,000 was recorded for the three months ended March 31, 2025, compared to a net loss of $807,000 for the three months ended March 31, 2024. The increase in net income was primarily due to an increase of $1.9 million, or 17.7%, in net interest income and a decrease of $445 thousand, or 2.7%, in total non-interest expenses.
Previous wording
Interest Income. Interest income increased $2.7 million, or 18.9%, to $16.9 million for the three months ended September 30, 2024, compared to $14.2 million for the three months ended September 30, 2023. This increase was primarily attributable to a $2.4 million, or 20.7%, increase in interest and fees on loans, both held for investment and held for sale.
Current wording
Interest Income. Interest income increased $1.7 million, or 11.0%, to $16.9 million for the three months ended March 31, 2025, compared to $15.2 million for the three months ended March 31, 2024. This increase was primarily attributable to a $1.3 million, or 10.4%, increase in interest and fees on loans, both held for investment and held for sale.
Previous wording
The average balance of loans held for investment during the three months ended September 30, 2024 increased by $101.4 million, or 16.1%, while the average yield on these loans increased to 7.28% for the three months ended September 30, 2024 from 6.86% for the three months ended September 30, 2023. The increase in average yield on loans was due to both the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.
Current wording
The average balance of loans held for investment during the three months ended March 31, 2025 increased by $79.9 million, or 11.7%, while the average yield on these loans increased to 7.08% for the three months ended March 31, 2025 from 7.06% for the three months ended March 31, 2024. The increase in average yield on loans was due to the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.
Previous wording
The average balance of loans held for sale during the three months ended September 30, 2024 decreased by $5.8 million, or 14.9%, while the average yield on these loans decreased to 6.13% for the three months ended September 30, 2024 from 6.56% for the three months ended September 30, 2023.
Current wording
The average balance of loans held for sale during the three months ended March 31, 2025 decreased by $1.6 million, or 6.9%, while the average yield on these loans decreased to 6.50% for the three months ended March 31, 2025 from 6.60% for the three months ended March 31, 2024.
Previous wording
The average balance of investment securities decreased by $9.3 million, or 3.6%, to $247.0 million for the three months ended September 30, 2024 from $256.3 million for the three months ended September 30, 2023, while the average yield on investment securities increased to 3.64% for the three months ended September 30, 2024 from 3.55% for the three months ended September 30, 2023. The increase in the average yield on securities was due primarily to increasing bond yields over this period.
Current wording
The average balance of investment securities increased by $1.7 million, or 0.7%, to $249.3 million for the three months ended March 31, 2025 from $247.6 million for the three months ended March 31, 2024, while the average yield on investment securities remained 3.74% for the three months ended March 31, 2025 and March 31, 2024.
Previous wording
Net Interest Income. Net interest income increased $584,000, or 5.4%, to $11.4 million for the three months ended September 30, 2024, compared to $10.8 million for the three months ended September 30, 2023. The increase is a result of interest-earning asset growth of $117.1 million and an increase in yield to 6.23% for the three months ending September 30, 2024 compared to 5.88% in the same period in 2023. The impact of earning asset growth was partially offset by a $93.9 million growth in total interest-bearing liabilities and an increase in cost of interest-bearing liabilities to 2.60% for the three months ending September 30, 2024 from 1.81% in the same period in 2023.
Current wording
Net Interest Income. Net interest income increased $1.9 million, or 17.7%, to $12.8 million for the three months ended March 31, 2025, compared to $10.9 million for the three months ended March 31, 2024. The increase is a result of interest-earning asset growth of $126.1 million, or 12.6%, partially offset by a decrease in yield to 6.08% for the three months ending March 31, 2025 compared to 6.12% in the same period in 2024. Also contributing to the increase in net interest income was the decrease in interest expense of $0.3 million, or 5.7%, to $4.1 million for the three months ended March 31, 2025, from $4.4 million for the three months ended March 31, 2024.
Previous wording
Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $300,000 provision for credit losses for the three months ended September 30, 2024 compared to a $725,000 provision for the same period ended September 30, 2023. The decrease in the provision for credit losses was due primarily to management's timing of accounting estimates and does not reflect annual trends. For the nine months ended September 30, 2024, provision expense has increased 135.0% compared to the same period in 2023.
Current wording
Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $385,000 provision for credit losses for the three months ended March 31, 2025 compared to a $245,000 provision for the same period ended March 31, 2024. The increase in the provision for credit losses was due primarily to growth in loans held for investment.
Previous wording
Total non-performing loans were $11.0 million at September 30, 2024, compared to $8.5 million at September 30, 2023. Classified loans totaled $12.7 million at September 30, 2024, compared to $14.9 million at September 30, 2023, and total loans past due greater than 30 days were $15.4 million and $12.7 million at those respective dates. Special mention loans were $3.5 million at September 30, 2024 compared to $10.7 million at September 30, 2023. As a percentage of non-performing loans, the allowance for credit losses was 53.0% at September 30, 2024 compared to 80.9% at September 30, 2023.
Current wording
Total non-performing loans were $15.4 million at March 31, 2025, compared to $9.0 million at March 31, 2024 with 87.5% of this increase coming from one- to four-family residential loans. One- to four-family residential loans historically have lower loss rates compared to other Company loan types. Classified loans totaled $20.4 million at March 31, 2025, compared to $12.1 million at March 31, 2024, and total loans past due greater than 30 days were $35.9 million and $14.3 million at those respective dates. Special mention loans were $1.0 million at March 31, 2025 compared to $12.6 million at March 31, 2024. As a percentage of non-performing loans, the allowance for credit losses was 40.1% at March 31, 2025 compared to 67.1% at March 31, 2024.
Previous wording
The allowance for credit losses reflects the estimate management believes to be appropriate to cover probable expected losses that were inherent in the loan portfolio at September 30, 2024. While management believes the estimates and assumptions used in the determination of the adequacy of the allowance are reasonable, such estimates and assumptions could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions. Any increase in future provisions that may be required may adversely impact Fidelity Bank’s financial condition and results of operations. In addition, bank regulatory agencies periodically review the allowance for credit losses and may recommend an increase in the provision for possible credit losses or the recognition of loan charge-offs, based on judgments different than those of management.
Current wording
The allowance for credit losses reflects the estimate management believes to be appropriate to cover probable expected losses that were inherent in the loan portfolio at March 31, 2025. While management believes the estimates and assumptions used in the determination of the adequacy of the allowance are reasonable, such estimates and assumptions could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions. Any increase in future provisions that may be required may adversely impact the Company’s financial condition and results of operations. In addition, bank regulatory agencies periodically review the allowance for credit losses and may recommend an increase in the provision for possible credit losses or the recognition of loan charge-offs, based on judgments different than those of management.
Previous wording
Non-interest Income. Non-interest income totaled $5.4 million for the three months ended September 30, 2024, an decrease of $4.4 million, or 45.0%, from $9.8 million for the three months ended September 30, 2023. The decrease was primarily due to the third quarter 2023 sale of secondary market mortgage loans serviced for others and a corresponding gain on sale of $4.7 million compared to another servicing sale in 2024 resulting in $334,000 of gain. Both these gains reflect the sale of loans serviced with origination years of 2020 and 2021 when mortgage rates were at a historic low. Mortgage servicing revenue declined by $693,000 to $118,000 for the three months ended September 30, 2024 from $811,000 for the three months ended September 30, 2023 due to the sales of secondary market mortgage loans serviced for others in 2023 and 2024.
Current wording
Non-interest Income. Non-interest income totaled $4.4 million for the three months ended March 31, 2025, a decrease of $311 thousand, or 6.6%, from $4.7 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease in mortgage servicing revenue of $230,000 to $118,000 for the three months ended March 31, 2025 from $348,000 for the three months ended March 31, 2024 due to the sales of secondary market mortgage loans serviced for others in 2023 and 2024.
Previous wording
Provision (Benefit) for Income Taxes. The benefit for income taxes was $247,000 for the three months ended September 30, 2024, compared to a provision of $545,000 for the three months ended September 30, 2023. The changes are a direct reflection of net income (loss) before income taxes for each period and not a material change in the Bank's effective tax rates.
Current wording
Provision (Benefit) for Income Taxes. The provision for income taxes was $173,000 for the three months ended March 31, 2025, compared to a benefit of $230,000 for the three months ended March 31, 2024. The changes are a direct reflection of net income (loss) before income taxes for each period and not a material change in the Bank's effective tax rates.
Previous wording
The table above indicates that at September 30, 2024, we would have experienced a 3.00% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 2.25% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated increases (decreases) in the percentage of change in EVE in the table above are within the Board of Directors’ guidelines.
Current wording
The table above indicates that at March 31, 2025, we would have experienced a 5.30% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.29% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated increases (decreases) in the percentage of change in EVE in the table above are within the Board of Directors’ guidelines.
Previous wording
The table above indicates that at September 30, 2024, we would have experienced a 4.30% increase in NII in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 9.20% decrease in NII in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated decreases in the percentage of change in the net interest income in the table above are within the Board of Directors’ guidelines.
Current wording
The table above indicates that at March 31, 2025, we would have experienced a 2.70% increase in NII in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 8.20% decrease in NII in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated decreases in the percentage of change in the net interest income in the table above are within the Board of Directors’ guidelines.
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. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from maturities of securities and sales of mortgage loans. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and the Federal Reserve Board’s Bank Term Funding Program. At September 30, 2024, we had $120.0 million in borrowings with the Federal Reserve Bank under the Bank Term Funding Program and $94.0 million of outstanding borrowings from the Federal Home Loan Bank of Dallas. At September 30, 2024, we had the capacity to borrow an additional $321.4 million from the Federal Home Loan Bank of Dallas and an additional $46.1 million from the Federal Reserve Board discount window.
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. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from maturities of securities and sales of mortgage loans. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and the Federal Reserve Board’s Bank Discount Window. At March 31, 2025, we had $61.5 million of outstanding borrowings from the Federal Home Loan Bank of Dallas. At March 31, 2025, we had the capacity to borrow an additional $369 million from the Federal Home Loan Bank of Dallas and an additional $153.0 million from the Federal Reserve Board discount window.
Previous wording
At September 30, 2024, Fidelity Bank’s Tier 1 leverage capital was $165.5 million, or 13.8% of adjusted assets. Accordingly, it was categorized as well-capitalized at September 30, 2024. Management is not aware of any conditions or events since the most recent notification that would change our category. For further information, see Note 7 to the notes to financial statements included elsewhere in this document.
Current wording
At March 31, 2025, Fidelity Bank’s Tier 1 leverage capital was $254.8 million, or 20.3% of adjusted assets. Accordingly, it was categorized as well-capitalized at March 31, 2025. Management is not aware of any conditions or events since the most recent notification that would change our category. For further information, see Note 8 of the financial statements included elsewhere in this document.
Previous wording
Off-Balance Sheet Arrangements. At September 30, 2024, we had $206.3 million of outstanding commitments to originate loans, which included $161.4 million in revolving lines of credit, $23.3 million in residential construction loans and $21.6 million in commercial construction loans and lines of credit. At September 30, 2024, none of our revolving lines of credit related to commercial real estate loans. Certificates of deposit that are scheduled to mature in less than one year from September 30, 2024 totaled $228.3 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Dallas advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Current wording
Off-Balance Sheet Arrangements. At March 31, 2025, we had $223.9 million of outstanding commitments to originate loans, which included $181.1 million in revolving lines of credit, $23.8 million in residential construction loans and $19.0 million in commercial construction loans and lines of credit. At March 31, 2025, none of our revolving lines of credit related to commercial real estate loans. Certificates of deposit that are scheduled to mature in less than one year from March 31, 2025 totaled $219.2 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Dallas advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Previous wording
For a discussion of the impact of recent accounting pronouncements, see Note 1 of the notes to our financial statements elsewhere in this document.
Current wording
For a discussion of the impact of recent accounting pronouncements, see Note 1 of the notes to our financial statements included elsewhere in this document.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Comparison of Operating Results for the Nine Months Ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
The average balance of loans held for investment during the nine months ended September 30, 2024 increased by $111.0 million, or 18.6%, while the average yield on these loans increased to 7.19% for the nine months ended September 30, 2024 from 6.75% for the nine months ended September 30, 2023. The increase in average yield on loans was due to both the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.
Previous report — wording carried elsewhere
Total non-performing loans were $11.0 million at September 30, 2024, compared to $8.5 million at September 30, 2023. Classified loans totaled $12.7 million at September 30, 2024, compared to $14.9 million at September 30, 2023, and total loans past due greater than 30 days were $15.4 million and $12.7 million at those respective dates. Special mention loans were $3.5 million at September 30, 2024 compared to $10.7 million at September 30, 2023. As a percentage of non-performing loans, the allowance for credit losses was 53.0% at September 30, 2024 compared to 80.9% at September 30, 2023.
Previous report — wording carried elsewhere
Provision (Benefit) for Income Taxes. The benefit for income taxes was $234,000 for the nine months ended September 30, 2024, compared to a provision of $359,000 for the nine months ended September 30, 2023. The changes are a direct reflection of net income (loss) before income taxes for each period and not a material change in the Bank's effective tax rates.