AUBURN NATIONAL BANCORPORATION INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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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 2, 2024
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001193125-24-134060
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsTable 1 – Explanation of Non -GAAP Financial MeasuresTable 2 – Selected Quarterly Financial DataCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001193125-24-192937
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsTable 1 – Explanation of Non-GAAP Financial MeasuresTable 2 – Selected Quarterly Financial DataThe 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 1247 previous paragraphs and 1328 current paragraphs.
849 unchanged; 189 reworded; 279 added; 191 removed; 18 previous and 11 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 (279)
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General
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Auburn National Bancorporation, Inc. (the “Company”) is a bank holding company registered
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with the Board of Governors
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of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding
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Company Act of 1956, as amended (the
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“BHC Act”). The Company was incorporated in Delaware in 1990, and in 1994
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it succeeded its Alabama predecessor as the
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bank holding company controlling AuburnBank, an Alabama state
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member bank with its principal office in Auburn,
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Alabama (the “Bank”). The Company and its predecessor have controlled the Bank since 1984.
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As a bank holding
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company, the Company
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may diversify into a broader range of financial services and other business activities than currently
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are permitted to the Bank under applicable laws and regulations.
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The holding company structure also provides greater
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financial and operating flexibility than is presently permitted to the Bank.
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The Bank has operated continuously since 1907 and currently conducts its business primarily
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in East Alabama, including
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Lee County and surrounding areas.
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The Bank has been a member of the Federal Reserve System since April 1995.
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Bank’s primary regulators are the Federal
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Reserve and the Alabama Superintendent of Banks (the “Alabama
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Superintendent”).
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The Bank has been a member of the FHLB of Atlanta since 1991. Certain of the statements
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made in this
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discussion and analysis and elsewhere, including information incorporated
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herein by reference to other documents, are
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“forward-looking statements” as more fully described under “Special
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Cautionary Notice Regarding Forward-Looking
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Statements” below.
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Form 10-Q.
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known and unknown risks,
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including inflation, seasonality,
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hurricanes
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tariffs), sanctions or other events
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that may affect general economic conditions;
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use, beginning January 1,
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risks and payment
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the risks of increases in market interest rates or the continuation of restrictive monetary policies
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Removed paragraphs (191)
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involve known and unknown risks,
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including inflation, seasonality, natural
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other events that may affect
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general economic conditions;
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beginning January 1,
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from those used
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for sale, which
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tangible equity;
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our vendors’ systems or customers’
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“eligible retained earnings” over
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We
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(Dollars in thousands, except per share data)
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Net interest income (a)
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Less: tax-equivalent adjustment
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Total revenue
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Financial Measures."
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million for the first three months of 2024,
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compared to $2.0 million for the first
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three months of 2023.
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Basic and
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compared to $0.56 per share for the first three months of 2023.
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months of 2024, a 7% decrease compared to $7.2
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million for the first three months of 2023.
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The Company’s net interest
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margin (tax-equivalent) was 3.04% for the first three months
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of 2024 compared to 3.17%
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for the first three months of 2023.
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first three months of 2024 were
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Average total
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securities for the first three months of 2024 were $267.6 million compared to
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$402.7 million for the first three months of
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below.
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of total loans, at March 31, 2023.
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2024 of $0.3 million, compared to $0.1
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million during the first three months of 2023.
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composition of,
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which impacts the projected
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Noninterest income was $0.9 million in the first three months of 2024,
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compared to $0.8 million in the first three months of
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Noninterest expense was $5.7 million in the first three months of 2024,
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Reworded paragraphs (189)
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The following discussion and analysis is designed to provide a better
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The following discussion and analysis is intended to provide a better understanding of
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understanding of various factors related to the results
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various factors related to the results
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notes for the quarters ended March 31, 2024 and 2023, as well as the information
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notes for the quarters and six months ended June 30, 2024 and 2023, as well as the information
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contained in our Annual Report on Form
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contained in our Annual
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10-K for the year ended December 31, 2023.
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Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on
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and Results of Operations”, “Quantitative and Qualitative Disclosures about
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and Results of Operations”, “Quantitative and Qualitative Disclosures about Market
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Market Risk”, “Risk Factors” “Description of
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Risk”, “Risk Factors” “Description of
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anticipations, assumptions, estimates, intentions and future performance, and
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anticipations, assumptions, estimates, intentions and future performance, and involve
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“project,” “could,” “intend,” “target” and other similar words
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“project,” “could,” “intend,” “target” and other similar words and expressions
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and expressions of the future. These forward-looking
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of the future. These forward-looking
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disasters or climate change, such as rising sea and water levels, hurricanes
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natural disasters or climate change, such as rising sea and water levels,
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the effects of war or other conflicts, acts of terrorism, trade restrictions, sanctions or
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the effects of war or other conflicts, acts of terrorism, trade restrictions (including
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their application by our regulators, including capital and liquidity requirements, and changes
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their application by our regulators, including capital and liquidity requirements, and
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in the scope and cost
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changes in the scope and cost
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changes in accounting pronouncements and interpretations, including the required use,
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changes in accounting pronouncements and interpretations, including the required
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market and credit conditions, including changes in borrowers’ credit risks and payment behaviors
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market and credit conditions, including unemployment rates, changes in borrowers’ credit
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in our CECL models and loan portfolio reviews;
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behaviors from those used in our CECL models and loan portfolio reviews;
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the risks of increases in market interest rates creating unrealized losses on our securities available
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unrealized losses on our securities available for sale, which adversely affect
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adversely affect our stockholders’ equity for financial reporting purposes and our
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reporting purposes and our tangible equity;
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the effects of competition from a wide variety of local, regional, national
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the effects of competition from a wide variety of local, regional,
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and other providers of financial,
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national and other providers of financial,
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cyber-attacks and data breaches that may compromise our systems,
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cyber-attacks and data breaches that may compromise our systems, our
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maintenance of a capital conservation buffer of 2.5% and our future earnings and
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maintenance of a capital conservation buffer of 2.5% and our future earnings
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have no obligation and do not undertake to update, revise or correct any of the
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do not undertake to update, revise or correct any of the
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See "Table 1 - Explanation of Non-GAAP
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See "Table 1 - Explanation of Non-GAAP Financial Measures."
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The Company’s net earnings were $1.4
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The Company’s net earnings were $3.1
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diluted earnings per share were $0.39 per share for the first three months of 2024,
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Basic and diluted earnings per share were $0.89 per share for the first six months of 2024,
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This decrease was primarily due to a smaller balance sheet and a decrease in the
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This decrease was primarily due to a smaller balance sheet and a decrease
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This decrease was primarily due to increased cost of funds
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This decrease was primarily due to increased cost of interest
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which was partially offset by a more favorable asset mix and
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which was partially offset by a more favorable asset mix and higher yields
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Average loans for the
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Average loans for the first six
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$560.9 million, a 12% increase from the first three months of 2023.
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months of 2024 were $567.4 million, a 12% increase from the first six months of 2023
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balance sheet repositioning strategy in the fourth quarter of
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balance sheet repositioning strategy in the fourth
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Balance Sheet and Interest Rates” and “Net Interest Income and Margin”
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Balance Sheet and Interest Rates” and “Net Interest Income and
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for credit losses was $7.2 million, or 1.27% of total loans, compared to $6.9
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for credit losses was $7.1 million, or 1.24% of total loans, compared to $6.9
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million, or 1.23% of total loans, at December 31, 2023, and $6.8 million, or 1.35%
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million, or 1.23% of total loans, at December 31, 2023, and $6.6
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The Company recorded a provision for credit losses during the first three months of
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The Company recorded a provision for credit losses during the first six months of 2024
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The provision for credit losses under CECL reflects the Company’s
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The provision for credit losses under CECL reflects
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evaluation of its credit risk profile and its future economic outlook and forecasts.
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and its future economic outlook and forecasts.
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Our CECL model is largely influenced by economic factors including,
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largely influenced by economic factors including, most notably,
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million, or 1.27% of total loans, at June 30, 2023.
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the Company’s evaluation of its credit risk profile
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ASU 2023-02 Investments – Equity Method and Joint Ventures
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which allows the proportional amortization method for our NMTC
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The increase in the provision for credit losses in the first quarter of 2024,
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total loans, at December 31, 2023, and $6.6 million, or 1.27% of total loans, at June 30, 2023.
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The Company’s income from mortgage lending
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attributable to the origination and sale of mortgage loans.
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With the adoption of this ASU,
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sell program through the Intrafi network.
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The Company had no brokered deposits at June 30, 2024 or December 31,
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higher yields on interest earning assets.
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The increase in the provision for credit
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macroeconomic factors used in our CECL modeling.
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to $0.3 million for the first three months
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Net interest income (tax-equivalent) was $6.7 million for the first three
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The increase in the provision for
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was related to changes in the composition
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macroeconomic factors used in our CECL modeling.
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which requires us to estimate all expected credit
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beginning in 2023, the allowance for credit losses
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on outstanding loans. As of March 31, 2024 and December 31, 2023, our allowance
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Our allowance for credit losses as a percentage of total loans was 1.27%
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quality ratios for the first quarter of 2024 and
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loans for the first quarter of 2024 and the
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31, 2024, compared to $270.7 million,
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Credit risk, which arises from the risk than an obligor fails to perform on an obligation;
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For public business entities, the new standard
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a material impact on the Company’s consolidated