Princeton Bancorp Inc
For the period ended Sep 30, 2024. Filed Nov 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.
Sep 30, 2024 · Filed Nov 14, 2024
BPRN$44.54+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001193125-24-198936
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001193125-24-258443
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 95 previous paragraphs and 93 current paragraphs.
64 unchanged; 24 reworded; 5 added; 6 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Total assets were $2.35 billion at September 30, 2024, an increase of $438.2 million, or 22.87% when compared to $1.92 billion at the end of 2023. The primary reason for the increase in total assets was the acquisition of Cornerstone Bank on August 23, 2024, which had approximately $303.5 million in assets (at fair value) at closing. When looking at specific components of the balance sheet, including acquired assets, the Company recorded an increase in net loans of $283.1 million primarily related to the Cornerstone acquisition, an increase in investments of $97.5 million, an increase in cash and cash equivalents of approximately $30.5 million.
Current report
Cash and cash equivalents increased $30.5 million, or 20.26%, to $181.1 million at September 30, 2024 compared to December 31, 2023.
Current report
Total deposits on September 30, 2024, increased $410.3 million, or 25.08%, when compared to December 31, 2023. The primary reasons for the increase in total deposits were the $282.8 million in deposits acquired from Cornerstone Bank and the $127.5 million increase from existing operations. The increase in the Company’s deposits consisted of increases in certificates of deposit of $149.0 million, money market deposits of $139.3 million, non-interest-bearing deposits of $53.6 million, interest-bearing demand deposits of $36.6 million and savings deposits of $31.8 million.
Current report
Total stockholders’ equity at September 30, 2024, increased $21.3 million or 8.86% when compared to December 31, 2023. The increase was primarily due to the $21.2 million increase inpaid-in capital associated with the issuance of common stock of $20.0 million related to the acquisition of Cornerstone and a decrease in accumulated other comprehensive income (loss) of $1.6 million. The ratio of equity to total assets at September 30, 2024 and at December 31, 2023 was 11.1% and 12.5%, respectively. The current period ratio decrease was primarily due to the Cornerstone Bank acquisition.
Current report
For the nine-month period ended September 30, 2024, non-interest expense was $44.0 million, compared to $37.7 million for the same period in 2023. The increase was primarily due to an increase in merger-related expenses of $2.2 million during 2024 as well as increases in salaries and employee benefits of $2.2 million over the same period in 2023 associated with merit increases as well as additional staff costs related to the Cornerstone and Noah acquisitions.
Removed paragraphs (6)
Previous report
On January 18, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Cornerstone Financial Corporation (“Cornerstone”), the New Jersey based bank holding company for Cornerstone Bank (“Cornerstone Bank”). Pursuant to the terms and conditions set forth in the Merger Agreement, Cornerstone will merge with and into the Company, with the Company surviving (the “Merger”). The Company plans to merge Cornerstone Bank with and into the Bank immediately after the Merger. The Company has received the requisite approvals of the Merger Agreement from the Federal Reserve, the Federal Deposit Insurance Corporation, and the New Jersey Department of Banking and Insurance. The Company anticipates that the Merger will close in August 2024.
Previous report
Total assets were $1.98 billion on June 30, 2024, an increase of $67.4 million, or 3.52%, when compared to $1.92 billion at the end of 2023. The primary reasons for the increase in total assets were an increase in available for sale securities of $40.3 million and an increase in net loans of $25.0 million.
Previous report
Cash and cash equivalents increased $748 thousand, or 0.50%, to $151.3 million at June 30, 2024 compared to December 31, 2023.
Previous report
Total deposits at June 30, 2024 increased $63.3 million, or 3.87%, when compared to December 31, 2023. Money market deposits increased $49.9 million, and certificates of deposit increased $41.3 million, partially offset by decreases in interest-bearing demand deposits of $24.2 million andnon-interest-bearing deposits of $4.2 million.
Previous report
Total stockholders’ equity on June 30, 2024 increased $4.6 million or 1.93% when compared to December 31, 2023. The increase was primarily due to the $5.7 million increase in retained earnings, consisting of $9.5 million in net income partially offset by $3.8 million of cash dividends recorded during the period. The ratio of equity to total assets at June 30, 2024 and at December 31, 2023 was 12.34% and 12.53%, respectively.
Previous report
For thesix-month period ended June 30, 2024, non-interest expense was $23.8 million, compared to $27.6 million for the same period in 2023. This decrease was primarily due to acquisition-related expenses of $7.0 million in the prior year period, partially offset by increases in salaries and employee benefits of $1.8 million and occupancy and equipment expense of $833 thousand.
Reworded paragraphs (24)
Previous wording
These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: the integration of the businesses of the Company and Cornerstone Financial Corporation (“Cornerstone”) following the completion of the business combination with Cornerstone, may be more difficult, time-consuming or costly than expected; the ability to complete the transaction on the expected timeframe may be more difficult, time-consuming or costly than expected; the global impact of the regional conflicts around the world, including the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Company’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Company’s products and services; credit risk associated with the Company’s lending activities; risks relating to the real estate market and the Company’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes …
Excerpt shortened here; the source contains the full paragraph.
Current wording
These forward-looking statements involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, estimates and intentions that are subject to change based on various important factors (some of which are beyond the Company’s control). The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, supply chain disruptions, labor shortages and additional interest rate increases by the Federal Reserve. Other factors that could cause actual results to differ materially from those indicated by forward-looking statements include, but are not limited to, the following factors: difficulties and delays in integrating the businesses of Cornerstone Bank and the Company, retaining Cornerstone’s customers or fully realizing cost savings and other benefits; the global impact of the military conflicts in the Ukraine and the Middle East; the impact of any future pandemics or other natural disasters; civil unrest, rioting, acts or threats of terrorism, or actions taken by the local, state and Federal governments in response to such events, which could impact business and economic conditions in our market area; the strength of the United States economy in general and the strength of the local economies in which the Company and Bank conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations; market volatility; the value of the Bank’s products and services as perceived by actual and prospective customers, including the features, pricing and quality compared to competitors’ products and services; the willingness of customers to substitute competitors’ products and services for the Bank’s products and services; credit risk associated with the Bank’s lending activities; risks relating to the real estate market and the Bank’s real estate collateral; the impact of changes in applicable laws and regulations and requirements arising out of our supervision by banking regulators; other regulatory requirements applicable to the Company and the Bank; and the timing and nature of the regulatory response to any applications filed by the Company and the Bank; technological changes; other acquisitions; changes in consumer spending and saving habits; those risks under the heading “Risk Factors” set forth in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2023, and the success of the Company at managing the risks…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 22 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Chesterfield, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Monroe, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge and Sicklerville. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation (“FDIC”).
Current wording
The Company is the holding company for The Bank of Princeton (the “Bank”), a community bank founded in 2007. The Bank is a New Jersey state-chartered commercial bank with 28 branches in New Jersey, including three in Princeton and others in Bordentown, Browns Mills, Burlington, Chesterfield, Cherry Hill, Cream Ridge, Deptford, Fort Lee, Hamilton, Kingston, Lakewood, Lambertville, Lawrenceville, Medford, Monroe, Moorestown, New Brunswick, Palisades Park, Pennington, Piscataway, Princeton Junction, Quakerbridge, Sicklerville, Voorhees, and Woodbury. There are also five branches in the Philadelphia, Pennsylvania area and two in the New York City metropolitan area. The Bank of Princeton is a member of the Federal Deposit Insurance Corporation (“FDIC”).
Previous wording
The US economy expanded at an annual rate of 2.8% over the three months ended June 30, 2024, lifted by consumer spending. Inflation has slowed after hitting a 40-year high, but households still grapple with a 20% increase in prices since 2021, an increase in energy prices, higher interest rates (impacting the real estate market) and uncertainties resulting from regional conflicts in around the world, including in Ukraine and the Middle East. U.S. unemployment, at 4.1%, is low but rising. The unemployment rate in New Jersey is 4.6% at June 30, 2024.
Current wording
The US economy expanded at an annual rate of 2.8% over the three months ended September 30, 2024, lifted by consumer spending. Inflation has slowed after hitting a 40-year high, but households still grapple with a 20% increase in prices since 2021, an increase in energy prices, higher interest rates (impacting the real estate market) and uncertainties resulting from regional conflicts in around the world, including in Ukraine and the Middle East. U.S. unemployment, at 4.7%, is low but rising. The unemployment rate in New Jersey is 4.6% at September 30, 2024.
Previous wording
Total available-for-sale investment securities increased million $40.3, or 44.16%, to $131.7 million at June 30, 2024 compared to December 31, 2023. This increase was related to the purchase of mortgage-backed securities U.S. government sponsored enterprises and U.S government agency securities during thesix-months ended June 30, 2024.
Current wording
Total available-for-sale investment securities increased million $97.5, or 106.74%, to $188.9 million at September 30, 2024 compared to December 31, 2023. This increase was related to the purchase of mortgage-backed securities of U.S. government sponsored enterprises, and U.S government agency securities along with $14.0 million in securities acquired in the Cornerstone Bank acquisition during the nine-months ended September 30, 2024.
Previous wording
Loans, net of deferred loan fees and costs, increased $25.0 million, or 1.62%, to $1.57 billion at June 30, 2024 compared to December 31, 2023. The increase in the Company’s net loans consisted of a $51.4 million increase in commercial real estate loans, partially offset by a decrease of $22.9 million in construction loans, a decrease of $2.0 million in residential mortgage loans, a decrease of $671 thousand in commercial and industrial loans and a decrease of $498 thousand in HELOC/consumer loans.
Current wording
Loans, net of deferred loan fees and costs, increased $283.1 million, or 18.28%, to $1.83 billion at September 30, 2024 compared to December 31, 2023. The primary reasons for the increase in net loans were the $255.5 million in loans acquired from Cornerstone Bank and the $26.1 million increase from existing operations. The increase in the Company’s net loans consisted of increases of $248.5 million in commercial real estate loans, $42.9 million in commercial and industrial loans, $32.3 million in residential mortgages, and $11.3 in home equity and consumer loans, all partially offset by a decrease of $51.9 million in construction loans.
Previous wording
The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied and nonowner-occupied CRE loans, was $1.19 billion or 75.8% of total loans of $1.57 billion at June 30, 2024. The Company’s CRE loan portfolio included $463.6 million or 38.8% of the total in multi-family loans, $352.5 million or 29.6% of the total innon-owner-occupied loans, $348.0 million or 29.1% of the total in owner-occupied loans and $30.3 million or 2.5% of the total in land loans. The Company’snon-owner-occupied portfolio by property type included $90.7 million in office buildings, $77.7 million in retail, $69.5 million in industrial warehousing, $43.6 million inmixed-use, $17.1 million in restaurants, $7.9 million in healthcare and $46.0 million in other. There were 585 loans in the Company’s CRE portfolio with an average and median loan size of $2.0 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.10 billion or 92.3% of the CRE portfolio and less than 80% for $1.18 billion or 99.2% of the CRE portfolio.
Current wording
The Company’s CRE loan portfolio, which includes multi-family, land, owner-occupied andnon-owner-occupied CRE loans, was $1.39 billion or 75.8% of total loans of $1.83 billion at September 30, 2024. There were 789 loans in the Company’s CRE portfolio with an average and median loan size of $1.8 million and $0.6 million, respectively. Loan to Value (“LTV”) estimates are less than 70% for $1.27 billion or 91.7% of the CRE portfolio and less than 80% for $1.37 billion or 99.2% of the CRE portfolio.
Previous wording
For the three-month andsix-month periods ended June 30, 2024, charge-offs were $84 thousand and $367 thousand, and recoveries were $99 thousand and $206 thousand. For the three-month andsix-month periods ended June 30, 2023, charge-offs were $1.9 million for both periods, and recoveries were $27 thousand and $30 thousand, respectively. The coverage ratio of the allowance for credit losses to period end loans was 1.17% at June 30, 2024 and 1.19% at December 31, 2023.
Current wording
For the three-month and nine-month periods ended September 30, 2024, charge-offs were $278 thousand and $645 thousand, and recoveries were $172 thousand and $378 thousand. For the three-month and nine-month periods ended September 30, 2023, charge-offs were zero and $1.9 million, and recoveries were $22 thousand and $52 thousand, respectively. The coverage ratio of the allowance for credit losses to period end loans was 1.27% at September 30, 2024 and 1.19% at December 31, 2023.
Previous wording
At June 30, 2024, non-performing assets totaled $3.2 million, a decrease of $3.5 million when compared to the amount at December 31, 2023. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 0.20% at June 30, 2024 and 0.43% at December 31, 2023.
Current wording
At September 30, 2024, non-performing assets totaled $2.3 million, a decrease of $4.4 million when compared to the amount at December 31, 2023. Non-performing assets as a percentage of total loans, net of deferred fees and costs, was 0.13% at September 30, 2024 and 0.43% at December 31, 2023.
Previous wording
At June 30, 2024, the Company had approximately $505.0 million in uninsured deposits, consisting of $55.9 million innon-interest-bearing demand deposits, $147.4 million in interest-bearing demand deposits, $118.8 million in money market accounts, $21.1 million in savings deposits and $161.8 million in certificates of deposits.
Current wording
At September 30, 2024, the Company had approximately $616.7 million in uninsured deposits, consisting of $89.0 million innon-interest-bearing demand deposits, $184.9 million in interest-bearing demand deposits, $172.2 million in money market accounts, $27.7 million in savings deposits and $142.9 million in certificates of deposits.
Previous wording
As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. Based on available eligible securities and qualified real estate loan collateral, and a $70.0 million line of credit with the FHLB supporting municipal deposits, the Company had the ability to borrow an additional $491.8 million as of June 30, 2024.
Current wording
As a member of the FHLB we are eligible to borrow funds in an aggregate amount of up to 50% of the Company’s total assets, subject to its collateral requirements. Based on available eligible securities and qualified real estate loan collateral, the Company had the ability to borrow an additional $471.8 million as of September 30, 2024. The company maintained a $60.0 million letter of credit with the FHLB supporting municipal deposits as of September 30, 2024.
Previous wording
The Company reported net income of $5.1 million, or $0.80 per diluted common share, for the second quarter of 2024, compared to net income of $6.8 million, or $1.07 per diluted common share, for the second quarter of 2023. The $1.7 million decrease in net income for the second quarter of 2024 compared to the same period in 2023 was primarily due to acquisition-related items recorded in the second quarter of 2023 due to the Company’s acquisition of Noah Bank, resulting in a decrease innon-interest income of $9.5 million and an increase in income tax expense of $877 thousand, partially offset by a decrease innon-interest expenses of $5.8 million, a decrease in the provision for credit losses of $2.6 million and an increase in net interest income of $307 thousand when compared to the second quarter of 2023.
Current wording
The Company reported net loss of $(4.5) million, or ($0.68) per diluted common share, for the third quarter of 2024, compared to net income of $7.6 million, or $1.19 per diluted common share, for the third quarter of 2023. The $12.1 million decrease in net income for the third quarter of 2024 compared to the same period in 2023 was primarily due to acquisition-related items recorded in the third quarter of 2024 due to the Company’s acquisition of Cornerstone Bank. Specifically, the decrease was a result of an increase of $10.0 million innon-interest expense, and an increase in the provision for credit losses of $4.8 million. These increases were primarily the result of the Cornerstone acquisition which resulted in $7.8 million in merger-related expenses and a $3.2 million provision for credit loss associated with the acquired purchasednon-credit deteriorated loans.
Previous wording
Interest income increased $6.4 million for the three months ended June 30, 2024, compared to the same period in 2023. Interest income on loans increased $4.5 million due to increases in both the average balance of loans of $153.2 million and the yield of 58 basis points. Other interest and dividend income increased $1.2 million due to an increase in average balance of $81.6 million and an increase in the yield of 33 basis points. Interest on taxable available-for-sale securities increased $709 thousand due to a 185 basis point increase in yield and a $44.9 million increase in the average balance of taxable available-for-sale securities.
Current wording
Interest income increased $4.8 million for the three months ended September 30, 2024, compared to the same period in 2023. Interest income on loans increased $4.6 million due to increases in both the average balance of loans of $226.9 million and the yield of 25 basis points. Interest on taxable available-for-sale securities increased $916 thousand due to a 150 basis point increase in yield and a $65.0 million increase in the average balance of taxable available-for-sale securities. Other interest and dividend income decreased $737 thousand due to a decrease in average balance of $55.1 million offset by an increase in the yield of 5 basis points.
Previous wording
Interest expense on deposits increased $6.1 million to $13.4 million for the three-month period ended June 30, 2024, due to increases in both the rate paid on interest-bearing deposits of 120 basis points and in the average balance of interest-bearing deposits of $280.8 million over the same prior year period.
Current wording
Interest expense on deposits increased $4.4 million to $14.7 million for the three-month period ended September 30, 2024, due to increases in both the rate paid on interest-bearing deposits of 68 basis points and in the average balance of interest-bearing deposits of $223.5 million over the same prior year period.
Previous wording
The Company recorded a reversal of credit losses of $118 thousand during the three-months ended June 30, 2024, which consisted of $169 thousand decrease recorded to the allowance of credit losses, offset by an increase to the provision for credit losses of $51 thousand related to unfunded commitments, which are recorded in other liabilities on the Company’s statements of financial condition. Charge-offs were $84 thousand, and recoveries were $99 thousand, for the quarter ended June 30, 2024.
Current wording
The Company recorded a provision of credit losses of $4.6 million during the three-months ended September 30, 2024, $3.2 million related to the CECL impact for purchasednon-credit deteriorated loans associated with loans acquired in the Cornerstone acquisition, and $1.5 million recorded to the allowance of credit losses resulting from quantitative factors changes in the Company’s loan portfolio assumptions, offset by an decrease to the provision for credit losses of $88 thousand related to unfunded commitments, which are recorded in other liabilities on the Company’s statements of financial condition. Charge-offs were $278 thousand, and recoveries were $172 thousand, for the quarter ended September 30, 2024.
Previous wording
Totalnon-interest income was $2.1 million for the three-months ended June 30, 2024, a decrease of $9.5 million or 82.0% when compared to the same prior year period. The decrease was primarily due to the bargain purchase gain of $9.7 million attributed to the acquisition of Noah Bank, which closed in May 2023.
Current wording
Totalnon-interest income was $2.1 million for the three-months ended September 30, 2024, a decrease of $347 thousand or 14.4% when compared to the same prior year period.
Previous wording
Totalnon-interest expense was $12.0 million for the three-months ended June 30, 2024, a decrease of $5.8 million or 32.6% when compared to the same prior year period. The decrease was due primarily to $7.0 million in merger-related expenses recorded, $667 thousand more in salaries and benefits expense and $145 thousand more in occupancy and equipment expenses during the three-months ended June 30, 2023 that were all primarily associated with the Noah Bank acquisition in 2023.
Current wording
Totalnon-interest expense was $20.1 million for the three-months ended September 30, 2024, an increase of $10.0 million or 98.3% when compared to the same prior year period. The increase was due primarily to $7.8 million in merger-related expenses recorded, $379 thousand more in salaries and benefits expense and $214 thousand more in data processing and communications expenses during the three-months ended September 30, 2024, of which were all primarily associated with the Cornerstone Bank acquisition.
Previous wording
For the three months ended June 30, 2024, the Company recorded an income tax expense of $1.0 million, resulting in an effective tax rate of 16.8%, compared to an income tax expense of $161 thousand resulting in an effective tax rate of 2.32% for the quarter ended June 30, 2023. The effective tax rate in the second quarter of 2023 was lower than the current quarter’s rate because of thenon-taxable $9.7 million bargain purchase gain from the Noah bank acquisition.
Current wording
For the three months ended September 30, 2024, the Company recorded an income tax benefit of $1.1 million, resulting in an effective tax rate of (20.1%), compared to an income tax expense of $1.5 million resulting in an effective tax rate of 16.6% for the quarter ended September 30, 2023.
Previous wording
Comparison of Operating Results for the Six Months Ended June 30, 2024, and 2023
Current wording
Comparison of Operating Results for the Nine Months Ended September 30, 2024, and 2023
Previous wording
The Company reported net income of $9.5 million, or $1.48 per diluted common share, for thesix-month period ended June 30, 2024, compared to net income of $12.9 million, or $2.02 per diluted common share, for the same period in 2023. The decrease in net income for thesix-month period ended June 30, 2024, compared to the same period in 2023, was primarily due to acquisition-related items recorded during 2023 due to the acquisition of Noah Bank. In addition, net interest income declined $906 thousand over the two periods for the reasons described below.
Current wording
The Company reported net income of $5.0 million, or $0.77 per diluted common share, for the nine-month period ended September 30, 2024, compared to net income of $20.5 million, or $3.21 per diluted common share, for the same period in 2023. The decrease in net income for the nine-month period ended September 30, 2024, compared to the same period in 2023, was primarily the result of a $9.7 bargain purchase gain in 2023 from the Company’s acquisition of Noah Bank in May of that year, a reduction of $2.6 million of income tax expense and the additional operating expenses recorded in 2024 related to the Cornerstone acquisition.
Previous wording
Interest income increased $13.9 million for thesix-months ended June 30, 2024, compared to the same period in 2023. Interest income on loans increased $9.6 million due to increases in both the average balance of loans of $164.1 million and the yield of 59 basis points. Other interest and dividend income increased $3.3 million due to an increase in average balance of $117.4 million and an increase in the yield of 40 basis points. Interest on taxable available-for-sale securities increased $995 thousand due to a 158 basis point increase in yield and a $30.7 million increase in the average balance of taxable available-for-sale securities.
Current wording
Interest income increased $18.7 million for the nine-months ended September 30, 2024, compared to the same period in 2023. Interest income on loans increased $14.2 million due to increases in both the average balance of loans of $185.1 million and the yield of 47 basis points. Interest on taxable available-for-sale securities increased $1.9 million due to a 158 basis point increase in yield and a $42.2 million increase in the average balance of taxable available-for-sale securities. Other interest and dividend income increased $2.6 million due to an increase in average balance of $59.3 million and an increase in the yield of 16 basis points.
Previous wording
Interest expense on deposits increased $14.8 million to $26.1 million for thesix-month period ended June 30, 2024, due to increases in both the rate paid on interest-bearing deposits of 162 basis points and in the average balance of interest-bearing deposits of $315.9 million over the same prior year period.
Current wording
Interest expense on deposits increased $19.3 million to $40.8 million for the nine-month period ended September 30, 2024, due to increases in both the rate paid on interest-bearing deposits of 126 basis points and in the average balance of interest-bearing deposits of $284.6 million over the same prior year period.
Previous wording
The Company recorded a $68 thousand provision for credit losses for thesix-month period ended June 30, 2024 and recorded $2.7 million provision for credit losses for thesix-month period ended June 30, 2023. The decrease for thesix-month period ended June 30, 2024, compared with the same prior year period, is primarily due to $1.7 million of the provision related tonon-purchased credit deteriorated loans acquired in the Noah Bank acquisition and net charge-offs of $1.8 million recorded for thesix-month period ended June 30, 2023. For thesix-month periods ended June 30, 2024, charge-offs were $367 thousand, and recoveries were $206 thousand.
Current wording
The Company recorded a $4.7 million provision for credit losses for the nine-month period ended September 30, 2024, and recorded $2.5 million provision for credit losses for the nine-month period ended September 30, 2023. The increase for the nine-month period ended September 30, 2024, compared with the same prior year period, is primarily due to $3.2 million of the provision related to purchasednon-credit deteriorated loans acquired in the Cornerstone Bank acquisition and $1.5 million recorded to the allowance of credit losses resulting from changes in the quantitative factors used in the Company’s loan portfolio assumptions. For the nine-month periods ended September 30, 2024, charge-offs were $646 thousand, and recoveries were $378 thousand.
Previous wording
For thesix-month period ended June 30, 2024, non-interest income decreased $8.9 million or 68.5%, from the samesix-month period in 2023, primarily due to the $9.7 million bargain purchase gain from the Noah acquisition recorded in thesix-month period ended June 30, 2023.
Current wording
For the nine-month period ended September 30, 2024, non-interest income decreased $9.2 million or (60.1%), from the same nine-month period in 2023, primarily due to the $9.7 million bargain purchase gain from the Noah acquisition recorded in the nine-month period ended September 30, 2023.
Previous wording
For thesix-month period ended June 30, 2024, the Bank recorded an income tax expense of $2.1 million, resulting in an effective tax rate of 18.2%, compared to an income tax expense of $2.1 million resulting in an effective tax rate of 13.8% for thesix-month period ended June 30, 2023. The effective tax rate for thesix-month period ended June 30, 2023 was substantially lower as a result of thenon-taxable bargain purchase gain related to the Noah acquisition.
Current wording
For the nine-month period ended September 30, 2024, the Bank recorded an income tax expense of $1.0 million, resulting in an effective tax rate of 16.35%, compared to an income tax expense of $3.6 million resulting in an effective tax rate of 14.86% for the nine-month period ended September 30, 2023.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations