FIRST CAPITAL INC
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
FCAP$62.35+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001171843-24-002868
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001171843-24-004793
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 27 previous paragraphs and 42 current paragraphs.
8 unchanged; 18 reworded; 10 added; 1 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 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 (10)
Current report
Safe Harbor Statement for Forward-Looking Statements
Current report
This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts nor guarantees of future performance; rather they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements can be identified by use of the words “expects,” “believes,” “anticipates,” “intends,” “could,” “should” and similar expressions. Forward-looking statements also include, but are not limited to, statements regarding estimated cost savings, plans and objectives for future operations, and the Company’s business and growth strategies.
Current report
Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements being materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; the ability of the Company to execute its business plan; legislative and regulatory changes; the quality and composition of the loan and investment securities portfolio; loan demand; deposit flows; competition; and changes in accounting principles and guidelines. Additional factors that may affect our results are discussed in Part II of this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 under “Item 1A. Risk Factors.” These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q and, except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.
Current report
Critical Accounting Policies
Current report
The discussion and analysis of the Company's financial condition and results of operations are based upon the Company's consolidated financial statements that have been prepared in accordance with GAAP. The preparation of the Company's financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses. These estimates are based upon historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The estimates and judgments that management believes involve the most complex and subjective estimates and judgments and have the most effect on the Company's reported financial position and results of operations are described as critical accounting policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. During the six months ended June 30, 2024, there was no significant change in the Company’s critical account policies or the application of critical accounting policies as disclosed in the Company’s Annual report on Form 10-K for the year ended December 31, 2023.
Current report
**Noninterest expense.**Noninterest expense increased $334,000 for the quarter ended June 30, 2024 as compared to the same period in 2023, due primarily to increases in compensation and benefits and professional fees of $160,000 and $138,000, respectively. The increase in compensation and benefits is due to standard increases in salary and wages as well as increases in the cost of Company-provided health insurance benefits. The increase in professional fees is primarily due to increased costs associated the with Company’s annual audit and fees being accrued for the Company’s ongoing core contract negotiations.
Current report
Total interest expense increased $3.5 million as the average cost of interest-bearing liabilities increased from 0.82% for the six months ended June 30, 2023 to 1.63% for the same period in 2024, in addition to an increase in the average balance of interest-bearing liabilities from $801.1 million for the first six months of 2023 to $832.2 million for the same period of 2024. The Company had average outstanding advances from the FHLB of $3.5 million and $2.3 million with an average rate of 5.67% and 5.19% during the six months ended June 30, 2024 and 2023, respectively. The Company had average outstanding borrowings under the Federal Reserve Bank’s BTFP of $32.8 million and $3.0 million with an average rate of 4.82% and 5.01% during the six months ended June 30, 2024 and 2023, respectively. The Company’s total average outstanding balance of borrowings were $36.3 million and $5.3 million with an average rate of 4.90% and 5.09% during the six months ended June 30, 2024 and 2023, respectively.
Current report
Noninterest income. Noninterest income increased $68,000 for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 primarily due to increases in gains on the sale of loans and other income of $80,000 and $65,000, respectively. The increase in other income is primarily due to the recognition of a $57,000 distribution related to the Company’s investment in a technology fund during the six months ended June 30, 2024 compared to no such distribution during the six months ended June 30, 2023. In addition, the Company recognized a $32,000 net gain on sale of available for securities during the six months ended June 30, 2024 compared to a $14,000 net loss during the six months ended June 30, 2023. The six months ended June 30, 2024 also included a $74,000 loss on equity securities compared to a $45,000 gain on equity securities during the same period in 2023.
Current report
**Noninterest expense.**Noninterest expense increased $690,000 for the six months ended June 30, 2024 as compared to the same period in 2023. This was primarily due to increases in compensation and benefits, professional fees and other expenses of $214,000, $211,000 and $146,000, respectively, when comparing the two periods. The increase in other expenses was primarily due to increases in fraud losses of $68,000, FDIC insurance premiums of $46,000 and the Company’s support of local communities through sponsorships and donations which increased $59,000 for the six months ended June 30, 2024 compared to the same period of 2023.
Current report
Income tax expense. Income tax expense decreased $203,000 for the six months ended June 30, 2024 as compared to the same period in 2023 resulting in an effective tax rate of 14.7% for the six months ended June 30, 2024, compared to 15.5% for the same period in 2023. The decrease in income tax expense is primarily due to the Company’s recognition of six months of benefits from tax credit entity investments during 2024 which were only initiated during the latter part of the second quarter of 2023.
Removed paragraphs (1)
Previous report
**Noninterest expense.**Noninterest expense increased $356,000 for the quarter ended March 31, 2024 as compared to the same period in 2023, due primarily to increases in other expenses, professional fees, compensation and benefits, and data processing expenses of $163,000, $73,000, $54,000, and $45,000, respectively. The increase in other expenses was due primarily to increases in FDIC insurance premiums, consumer fraud losses, and cable and internet expense of $53,000, $34,000 and $26,000, respectively.
Reworded paragraphs (18)
Previous wording
Total assets decreased $1.3 million but remained at $1.16 billion at December 31, 2023 and March 31, 2024.
Current wording
Total assets increased $5.7 million but remained at $1.16 billion at December 31, 2023 and June 30, 2024.
Previous wording
Net loans receivable (excluding loans held for sale) increased $7.0 million from $614.4 million at December 31, 2023 to $621.4 million at March 31, 2024. Commercial real estate, multifamily residential and other construction, development and land loan increases of $6.2 million, $3.7 million and $1.4 million, respectively, were partially offset by a decrease of $2.3 million in home equity and second mortgage loans during the three months ended March 31, 2024.
Current wording
Net loans receivable (excluding loans held for sale) increased $15.6 million from $614.4 million at December 31, 2023 to $630.0 million at June 30, 2024. Commercial real estate, other construction, development and land loan and 1-4 family residential mortgage loan increases of $8.7 million, $6.6 million and $3.7 million, respectively, were partially offset by decreases of $3.5 million and $2.7 million in commercial business and multifamily residential loans, respectively, during the six months ended June 30, 2024.
Previous wording
Cash and cash equivalents increased from $38.7 million at December 31, 2023 to $42.1 million at March 31, 2024 as maturities of available for sale securities and increased borrowings under the FRB’s BTFP were partially offset by net deposit outflows at the Bank.
Current wording
Cash and cash equivalents increased from $38.7 million at December 31, 2023 to $50.6 million at June 30, 2024 as maturities of available for sale securities and increased borrowings under the FRB’s BTFP were partially offset by net deposit outflows at the Bank.
Previous wording
Securities available for sale decreased $9.1 million from $437.3 million at December 31, 2023 to $428.1 million at March 31, 2024. Purchases of $27.0 million of securities classified as available for sale were made during the three months ended March 31, 2024 and consisted primarily of U.S. government agency CMOs. Principal payments and maturities of available for sale securities totaled $9.5 million and $5.1 million, respectively, during the three months ended March 31, 2024. Securities classified as available for sale totaling $19.2 million were sold during the three months ended March 31, 2024 and consisted primarily of municipal bonds. There was also an unrealized loss of $2.1 million on the securities available for sale portfolio during the three month period ended March 31, 2024 due primarily to increasing market interest rates during the period.
Current wording
Securities available for sale decreased $23.0 million from $437.3 million at December 31, 2023 to $414.3 million at June 30, 2024. Purchases of $35.4 million of securities classified as available for sale were made during the six months ended June 30, 2024 and consisted primarily of U.S. government agency CMOs and municipal bonds. Principal payments and maturities of available for sale securities totaled $11.2 million and $22.5 million, respectively, during the six months ended June 30, 2024. Securities classified as available for sale totaling $19.2 million were sold during the six months ended June 30, 2024 and consisted primarily of municipal bonds. There was also an unrealized loss of $1.9 million on the securities available for sale portfolio during the six month period ended June 30, 2024 due primarily to increasing market interest rates during the period.
Previous wording
Total deposits decreased from $1.03 billion at December 31, 2023 to $1.01 billion at March 31, 2024. Interest-bearing checking accounts decreased $29.4 million during the three months ended March 31, 2024, while time deposits, noninterest-bearing check accounts and savings accounts increased $9.8 million, $3.8 million and $744,000 during the period, respectively. Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and national economic conditions, and fluctuations in our customers' own liquidity needs and may also be influenced by recent developments in the financial services industry. Significant competition for deposits driven by high interest rate alternatives for depositors is currently impacting deposit fluctuations and increasing our cost of deposits.
Current wording
Total deposits decreased from $1.03 billion at December 31, 2023 to $1.01 billion at June 30 2024. Interest-bearing checking accounts, non-interest-bearing checking accounts and savings accounts decreased $30.4 million, $1.6 million and $7.1 million, respectively, during the six months ended June 30, 2024, while time deposits increased $28.1 million during the period. Deposit inflows and outflows are influenced by prevailing market interest rates, competition, local and national economic conditions, and fluctuations in our customers' own liquidity needs and may also be influenced by recent developments in the financial services industry. Significant competition for deposits driven by high interest rate alternatives for depositors is currently impacting deposit fluctuations and increasing our cost of deposits.
Previous wording
The Company had $33.6 million and $21.5 million in borrowings outstanding from the FRB under the BTFP at March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB and the BTFP in order to meet daily liquidity requirements and to fund growth in earning assets.
Current wording
The Company had $33.6 million and $21.5 million in borrowings outstanding from the FRB under the BTFP at June 30, 2024 and December 31, 2023, respectively. During the six months ended June 30, 2024, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB and the BTFP in order to meet daily liquidity requirements and to fund growth in earning assets.
Previous wording
Total stockholders' equity attributable to the Company increased from $105.2 million at December 31, 2023 to $105.7 million at March 31, 2024, due to a $2.0 million increase in retained net income partially offset by a $1.6 million net unrealized loss on available for sale securities. The net unrealized loss on available for sale securities during the period is primarily due to increases in market interest rates.
Current wording
Total stockholders' equity attributable to the Company increased from $105.2 million at December 31, 2023 to $107.8 million at June 30, 2024, due to a $4.0 million increase in retained net income partially offset by a $1.6 million net unrealized loss on available for sale securities. The net unrealized loss on available for sale securities during the period is primarily due to increases in market interest rates.
Previous wording
Net income. ** **Net income attributable to the Company was $3.0 million ($0.88 per diluted share) for the three months ended March 31, 2024 compared to $3.8 million ($1.14 per diluted share) for the three months ended March 31, 2023.
Current wording
Net income. ** **Net income attributable to the Company was $2.8 million ($0.85 per diluted share) for the three months ended June 30, 2024 compared to $2.7 million ($0.82 per diluted share) for the three months ended June 30, 2023.
Previous wording
Net interest income. ** **Net interest income after provision for credit losses decreased $678,000 for the three months ended March 31, 2024 as compared to the same period in 2023.
Current wording
Net interest income. ** **Net interest income after provision for credit losses increased $335,000 for the three months ended June 30, 2024 as compared to the same period in 2023.
Previous wording
Total interest income increased $1.7 million when comparing the periods due to an increase in the average tax-equivalent yield on interest-earning assets from 3.73% for the first quarter of 2023 to 4.29% for the first quarter of 2024. The average balance of interest-earning assets was $1.12 billion for the first quarters of 2023 and 2024. The increase in the tax-equivalent yield was primarily due to an increase in the tax equivalent yield on loans to 5.91% for the first quarter of 2024 compared to 5.40% for the same period in 2023.
Current wording
Total interest income increased $1.6 million when comparing the periods due to an increase in the average tax-equivalent yield on interest-earning assets from 3.88% for the second quarter of 2023 to 4.42% for the second quarter of 2024. The average balance of interest-earning assets was $1.12 billion for the second quarters of 2023 and 2024. The increase in the tax-equivalent yield was primarily due to an increase in the tax equivalent yield on loans to 5.99% for the second quarter of 2024 compared to 5.56% for the same period in 2023.
Previous wording
Total interest expense increased $2.2 million when comparing the periods due to an increase in the average cost of interest-bearing liabilities from 0.51% for the first quarter of 2023 to 1.55% for the first quarter of 2024, in addition to an increase in the average balance of interest-bearing liabilities from $788.2 million for the first quarter of 2023 to $833.7 million for the first quarter of 2024. The Company had average outstanding advances from the FHLB of $3.4 million with an average rate of 5.63% and average outstanding borrowings under the FRB’s BTFP of $31.9 million with an average rate of 4.81% during the quarter ended March 31, 2024. The Company’s total average outstanding balance of borrowings during the quarter ended March 31, 2024 was $35.3 million with an average rate of 4.89%. There were no outstanding borrowed funds during the same quarter in 2023.
Current wording
Total interest expense increased $1.3 million when comparing the periods due to an increase in the average cost of interest-bearing liabilities from 1.12% for the second quarter of 2023 to 1.71% for the second quarter of 2024, in addition to an increase in the average balance of interest-bearing liabilities from $813.9 million for the second quarter of 2023 to $830.7 million for the second quarter of 2024. The Company had average outstanding advances from the FHLB of $3.6 and $4.5 million with an average rate of 5.71% and 5.19% during the quarters ended June 30, 2024 and 2023, respectively. The Company had average outstanding borrowings under the FRB’s BTFP of $33.6 million and $6.1 million with an average rate of 4.84% and 5.01% during the quarters ended June 30, 2024 and 2023, respectively. The Company’s total average outstanding balance of borrowings during the quarters ended June 30, 2024 and 2023 was $37.2 million and $10.6 million with an average rate of 4.93% and 5.09%, respectively.
Previous wording
As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin decreased from 3.38% for the quarter ended March 31, 2023 to 3.14% for the same period in 2024.
Current wording
As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin increased from 3.06% for the quarter ended June 30, 2023 to 3.15% for the same period in 2024.
Previous wording
Provision for credit losses. Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $193,000 for the quarter ended March 31, 2023 to $280,000 for the quarter ended March 31, 2024. The increase was due to loan growth during the period as well as management’s consideration of macroeconomic uncertainty. The Bank recognized net charge-offs of $55,000 and $203,000 for the quarters ended March 31, 2024 and 2023, respectively.
Current wording
Provision for credit losses. Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $350,000 for the quarter ended June 30, 2023 to $360,000 for the quarter ended June 30, 2024. The increase was due to loan growth during the period, the increase in the nonperforming assets during the quarter, as well as management’s consideration of macroeconomic uncertainty. The Bank recognized net charge-offs of $30,000 and $158,000 for the quarters ended June 30, 2024 and 2023, respectively.
Previous wording
Noninterest income. Noninterest income decreased $92,000 for the quarter ended March 31, 2024 as compared to the same period in 2023. The Company recognized a $27,000 decrease in ATM and debit card fees, when comparing the two periods. In addition, the Company recognized a $68,000 loss on equity securities for the quarter ended March 31, 2024 compared to a gain of $137,000 for the same quarter in 2023. These were partially offset by increases of $58,000 and $31,000 in other income and service charges on deposit accounts, respectively. In addition, there was a $32,000 gain on sale of available for sale securities during the quarter ended March 31, 2024 and no such sale in 2023.
Current wording
Noninterest income. Noninterest income increased $160,000 for the quarter ended June 30, 2024 as compared to the same period in 2023. The Company recognized a $65,000 increase in gains on sale of loans, when comparing the two periods. In addition, the Company recognized a $6,000 loss on equity securities for the quarter ended June 30, 2024 compared to a $92,000 loss for the same quarter in 2023.
Previous wording
Income tax expense. Income tax expense decreased $262,000 for the first quarter of 2024 as compared to the first quarter of 2023 primarily due to increased benefits from tax credit entity investments during 2024. As a result, the effective tax rate for the quarter ended March 31, 2024 was 14.6% compared to 16.8% for the same period in 2023.
Current wording
Income tax expense. Income tax expense increased $59,000 for the second quarter of 2024 as compared to the second quarter of 2023 primarily due to the initial recognition of benefits from tax credit entity investments during 2023. As a result, the effective tax rate for the quarter ended June 30, 2024 was 14.7% compared to 13.6% for the same period in 2023.
Previous wording
The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At March 31, 2024, the Bank had cash and cash equivalents of $42.1 million and securities available-for-sale with a fair value of $428.1 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions.
Current wording
The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At June 30, 2024, the Bank had cash and cash equivalents of $50.6 million and securities available-for-sale with a fair value of $414.3 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions.
Previous wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company, on a stand-alone basis, is responsible for paying any dividends declared to its shareholders. The Board of Directors of the Company also has authorized the repurchase of shares of its 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 in any calendar year, without the receipt of prior approval from the Indiana Department of Financial Institutions (“IDFI”), cannot exceed net income for that year to date plus retained net income (as defined under Indiana law) for the preceding two calendar years. On a stand-alone basis, the Company had liquid assets of $2.9 million at March 31, 2024.
Current wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company, on a stand-alone basis, is responsible for paying any dividends declared to its shareholders. The Board of Directors of the Company also has authorized the repurchase of shares of its 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 in any calendar year, without the receipt of prior approval from the Indiana Department of Financial Institutions (“IDFI”), cannot exceed net income for that year to date plus retained net income (as defined under Indiana law) for the preceding two calendar years. On a stand-alone basis, the Company had liquid assets of $2.8 million at June 30, 2024.
Previous wording
The Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. Beginning in 2020, qualifying community banks with assets of less than $10 billion are eligible to opt in to the Community Bank Leverage Ratio (“CBLR”) framework. The CBLR is the ratio of a bank’s tangible equity capital to average total consolidated assets. A qualifying community bank that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies may consider a financial institution’s risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. The federal banking agencies must set the minimum capital for the new CBLR at not less than 8% and not more than 10%, and has set the minimum ratio at 9% effective January 1, 2022. A financial institution that falls below the minimum CBLR generally has a two quarter grace period to get back into compliance as long as it maintains a minimum CBLR of 8%. A financial institution can elect to be subject to or opt out of the CBLR framework at any time. As a qualified community bank, the Bank had opted into the CBLR framework as of March 31, 2024 and December 31, 2023 and its CBLR was 10.29% and 9.92% as of those dates, respectively. Management believes that the Bank met all capital adequacy requirements to which it was subject as of March 31, 2024. At both March 31, 2024 and December 31, 2023, the Bank was considered “well-capitalized” under applicable regulatory guidelines.
Current wording
The Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. Beginning in 2020, qualifying community banks with assets of less than $10 billion are eligible to opt in to the Community Bank Leverage Ratio (“CBLR”) framework. The CBLR is the ratio of a bank’s tangible equity capital to average total consolidated assets. A qualifying community bank that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies may consider a financial institution’s risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. The federal banking agencies must set the minimum capital for the new CBLR at not less than 8% and not more than 10%, and has set the minimum ratio at 9% effective January 1, 2022. A financial institution that falls below the minimum CBLR generally has a two quarter grace period to get back into compliance as long as it maintains a minimum CBLR of 8%. A financial institution can elect to be subject to or opt out of the CBLR framework at any time. As a qualified community bank, the Bank had opted into the CBLR framework as of June 30, 2024 and December 31, 2023 and its CBLR was 10.44% and 9.92% as of those dates, respectively. Management believes that the Bank met all capital adequacy requirements to which it was subject as of June 30, 2024. At both June 30, 2024 and December 31, 2023, the Bank was considered “well-capitalized” under applicable regulatory guidelines.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Results of Operations for the Six Month Periods Ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
Net income. ** **Net income attributable to the Company was $5.8 million ($1.73 per diluted share) for the six months ended June 30, 2024 compared to $6.5 million ($1.95 per diluted share) for the six months ended June 30, 2023.
Current report — wording carried from elsewhere
Net interest income. ** **Net interest income after provision for credit losses decreased $343,000 for the six months ended June 30, 2024 compared to the same period in 2023.
Current report — wording carried from elsewhere
Total interest income increased $3.3 million when comparing the two periods due to an increase in the average tax-equivalent yield on interest-earning assets from 3.81% for the six months ended June 30, 2023 to 4.36% for the same period in 2024. The increase in the tax-equivalent yield was primarily due to an increase in the tax equivalent yield on loans to 5.95% for the first six months of 2024 compared to 5.48% for the same period in 2023.
Current report — wording carried from elsewhere
As a result of the changes in interest-earning assets and interest-bearing liabilities, the tax-equivalent net interest margin decreased from 3.22% for the six months ended June 30, 2023 to 3.15% for the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Provision for credit losses. Based on management’s analysis of the ACL on loans, the provision for credit losses increased from $543,000 for the six months ended June 30, 2023 to $640,000 for the six months ended June 30, 2024. The increase was due to loan growth during the period, the increase in the nonperforming assets during the second quarter, as well as management’s consideration of macroeconomic uncertainty. The Bank recognized net charge-offs of $85,000 for the six months ended June 30, 2024 compared to $361,000 for the same period in 2023.