CHAIN BRIDGE BANCORP INC
For the period ended Mar 31, 2025. Filed May 13, 2025.
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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.
Mar 31, 2025 · Filed May 13, 2025
CBNA$50.66+1.2%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 2024-11-13.
0001392272-24-000020
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001392272-25-000028
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 229 previous paragraphs and 229 current paragraphs.
109 unchanged; 93 reworded; 24 added; 23 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 25 previous and 23 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 (24)
Current report
Reclassification
Current report
Three Months Ended March 31, 2025 Highlights
Current report
•Return on average equity was 15.39% for the three months ended March 31, 2025, compared to 18.33% for the three months ended March 31, 2024.
Current report
•Return on average assets for the three months ended March 31, 2025 was 1.43%, compared to 1.39% for the three months ended March 31, 2024.
Current report
•Return on average risk-weighted assets was 5.74% for the three months ended March 31, 2025, compared to 3.82% for the three months ended March 31, 2024.5
Current report
5 Return on average risk-weighted assets is calculated as net income divided by average risk-weighted assets. Average risk-weighted assets are calculated using the last two quarter ends.
Current report
deposits from political organizations increase in the periods leading up to federal elections followed by a decline around the elections. Election outcomes may also impact the timing and scale of deposit inflows or outflows from political organizations, and this cycle was no exception. During the first quarter of 2025, the Company experienced a material increase in deposits from certain political organization clients, primarily attributable to a post-election surge in deposits following the November 2024 federal elections. A significant portion of the increase was concentrated in three accounts that each, individually, held more than 5% of total deposits at quarter-end. In the aggregate, these accounts totaled $472.0 million and represented 30.1% of consolidated total deposits as of March 31, 2025. While historically political organization deposits have began rebuilding in the quarters following an election, the pace and scale of the increase in the political organization deposits during the first quarter of 2025, and the resulting deposit concentration, differed from typical patterns we have observed in prior post-election periods and reflected elevated, event-driven fundraising activity.
Current report
Following the January 20, 2025, inauguration of President Trump, the administration has introduced a series of policy proposals aimed at reducing federal expenditures, federal real estate holdings, leases, and the federal workforce. These include a proposed 8% annual reduction in the Department of Defense budget over five years and a hiring policy limiting new hires to one for every four federal employees who leave. Additionally, the newly established Department of Government Efficiency Service (“DOGE”) has announced efforts to cut federal spending by $1 trillion, which may lead to further reductions in government contracts, agency budgets, and workforce levels. While the specifics of these proposals continue to evolve, the potential for significant federal spending cuts represents a known uncertainty that could materially impact the region’s economy.
Current report
These measures could have broad economic implications for the Washington, D.C. metropolitan area, given the region’s reliance on federal employment and contracting. As a known uncertainty, a reduction in federal workforce levels and agency budgets could negatively impact the financial stability of consumers and businesses dependent on government spending, increasing the credit risk of our consumer and commercial borrowers. Additionally, decreased demand for commercial office space and housing may place downward pressure on residential and commercial real estate values, which could further affect the region’s economy and the performance of our loan portfolio.
Current report
Our most significant accounting policies are described in the Notes to the Consolidated Financial Statements in our Form 10-K. These policies, together with the other disclosures presented in the financial statement notes and this Quarterly Report on Form 10-Q, provide information on the valuation of significant assets and liabilities and the methodologies used in determining those values. Based on the valuation techniques applied, and the sensitivity of financial statement amounts to the underlying methods, assumptions, and estimates, we have identified the determination of the allowance for credit losses and the fair value of securities as the areas that involve the most subjective or complex judgments and, as such, could be subject to revision as new information becomes available. We describe these policies in detail within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” section of our Form 10-K. There have been no material changes to our critical accounting policies from those disclosed in the Form 10-K.
Current report
NM — Comparisons from positive to negative values or to zero values are considered not meaningful.
Current report
NM — Comparisons from positive to negative values or to zero values are considered not meaningful.
Current report
State franchise taxes. For the three months ended March 31, 2025, our state franchise taxes increased $148 thousand, or 73.1%, compared to the three months ended March 31, 2024, primarily driven by the growth in the Bank’s capital which forms the basis for the tax computation for our Virginia bank franchise taxes.
Current report
Insurance expenses. For the three months ended March 31, 2025, our insurance expenses increased $89 thousand or 148.9%, compared to the three months ended March 31, 2024. The increase was primarily due to increased costs associated with directors and officers insurance, as a result of our operations as a public company.
Current report
During the first quarter of 2025, the Company experienced a material increase in deposits from certain political organization clients, primarily attributable to a post-election surge in deposits following the November 2024 federal elections. A significant portion of the increase was concentrated in three accounts that each, individually, held more than 5% of total deposits at quarter-end. In the aggregate, these accounts totaled $472.0 million and represented 30.1% of consolidated total deposits as of March 31, 2025. While historically political organization deposits have began rebuilding in the quarters following an election, the pace and scale of the increase in the political organization deposits during the first quarter of 2025, and the resulting deposit concentration, differed from typical patterns we have observed in prior post-election periods and reflected elevated, event-driven fundraising activity.
Current report
The Company treated these inflows as potentially temporary and maintained the balances in cash reserves held at the Federal Reserve and short-term U.S. Treasury securities that matured during the quarter.
Current report
On April 15, 2025 a significant outflow of approximately $506.5 million occurred across six political organization client accounts, including the three accounts that exceeded the 5% threshold at quarter-end. As of the close of business on April 15, 2025, the six accounts maintained approximately $56.8 million in aggregate balances. The Company funded these withdrawals using its cash reserves at the Federal Reserve. As of the close of business on April 15, 2025, the Company’s consolidated total deposits were $1.1 billion, with one deposit relationship exceeding 5% of consolidated total deposits at 5.15%. IntraFi Cash Service® (ICS®) One-Way Sell® deposits totaled $107.9 million. As of the close of business on May 12, 2025, the Company’s consolidated total deposits were $1.2 billion, with IntraFi Cash Service® (ICS®) One-Way Sell® deposits totaling $71.8 million.
Current report
Federal Reserve Bank Discount Window. The Bank also maintains eligibility for a secured line of credit with the Federal Reserve Bank of Richmond (“FRB”). To establish credit availability, the Bank will typically pledge securities. At March 31, 2025 and December 31, 2024, the Bank had not pledged any collateral to the FRB. Consequently, no credit availability was established, and no outstanding borrowings were recorded.
Current report
•Pacific Coast Bankers’ Bank: $50.0 million, maturing June 30, 2025
Current report
•First National Bankers’ Bank: $10.0 million, maturing June 30, 2025
Current report
•Community Bankers’ Bank: $8.0 million, maturing March 12, 2026
Current report
These federal funds lines renew annually, and balances may remain outstanding for periods ranging from 10 to 90 consecutive days. The use of these credit facilities is contingent upon compliance with specified financial conditions and covenants.
Current report
As of March 31, 2025 and December 31, 2024, the Bank had no outstanding balances under these federal funds purchase lines.
Current report
Commitments to grant loans increased from December 31, 2024 to March 31, 2025, primarily due to commercial loans which were in the process of origination at March 31, 2025. Credit card lines increased by $180 thousand, or 23.6% during the period, due to growth in the business credit card program. Unfunded commitments under lines of credit decreased $196 thousand, or 0.9% from December 31, 2024 to March 31, 2025, staying relatively consistent. Standby letters of credit were also relatively stable, increasing $198 thousand, or 4.4%.
Removed paragraphs (23)
Previous report
Reclassification and Initial Public Offering
Previous report
On October 7, 2024, the Company completed an offering of 1,850,000 shares of Class A Common Stock and received net proceeds of approximately $33.6 million after deducting underwriting discounts and commissions and estimated offering expenses. On November 1, 2024, the Company issued an additional 142,897, shares of Class A Common Stock as a result of the underwriters’ exercise of their 30-day option to purchase up to an additional 277,500 shares of its Class A Common Stock, resulting in net proceeds to the Company of approximately $2.9 million, after deducting underwriting discounts and commissions and estimated offering expenses.
Previous report
Share information in this Quarterly Report on Form 10-Q is presented on an as adjusted basis giving effect to the Reclassification.
Previous report
Nine Months ended September 30, 2024 Highlights
Previous report
•Return on average equity was 25.00% for the nine months ended September 30, 2024, compared to 10.10% for the nine months ended September 30, 2023. Return on average assets for the nine months ended September 30, 2024 was 1.79%, compared to 0.72% for the nine months ended September 30, 2023.
Previous report
•Yield on average earning assets was 3.77% for the nine months ended September 30, 2024, compared to 3.05% for the nine months ended September 30, 2023. Cost of funds decreased to 0.32% for the nine months ended September 30, 2024 from 0.44% for the nine months ended September 30, 2023.
Previous report
Between October 1, 2024, and November 12, 2024, deposits from political organizations declined. The Bank expects deposit outflows to continue through the end of the fourth quarter of 2024 and into early 2025. The deposit outflows observed between October 1, 2024, and November 12, 2024, occurred at levels consistent with patterns we have experienced during prior federal election cycles. See Note 5—Deposits in the Notes to Unaudited Consolidated Financial Statements contained within this Form 10-Q. However, future deposit levels and the timing of deposit fluctuations are difficult to predict and may differ from historical patterns. Our political organization clients are overwhelmingly affiliated with the Republican Party, and, as a result of the November 2024 federal elections, our clients’ post-election fundraising activities and deposit trajectories may be impacted. While we have previously provided banking services to certain key political organizations during election cycles, there is no assurance that we will be selected to provide such services in the future. Changes in deposit levels could materially impact our financial condition and results of operations, as discussed in the “Risk Factors” section in our Prospectus. To mitigate the risks associated with deposit seasonality, we aim to maintain a relatively high level of cash reserve deposits at the Federal Reserve.
Previous report
For the nine months ended September 30, 2024, our net income increased by $11.7 million compared to the nine months ended September 30, 2023, primarily due to a $13.0 million, or 65.3%, increase in net interest income. Earnings also benefited from a $5.4 million increase in noninterest income, derived primarily from fee income earned from One-Way Sell® deposit accounts, and a $1.1 million reduction of the credit loss provision, primarily resulting from the partial recovery of a bond in the first quarter of 2024 that was charged off during the first quarter of 2023, and a recapture of the provision for bond credit losses as shorter maturity periods result in a lower credit risk rating. An increase of $4.7 million in noninterest expense, driven most notably by increases in employment and professional services costs associated with the stock Reclassification, partially offset these positive earnings components.
Previous report
For the nine months ended September 30, 2024, our net interest income increased by $13.0 million, or 65.3%, compared to the nine months ended September 30, 2023, primarily driven by a $285.0 million increase in the average volume of interest-bearing deposits in other banks, principally at the Federal Reserve. This increase was primarily due to cyclical inflows of deposits from political organizations ahead of the 2024 federal elections, which started building in the second half of 2023 and were invested in interest-earning assets, such as reserves at the Federal Reserve. As a result, our net interest margin increased to 3.47% for the nine months ended September 30, 2024, from 2.64% for the nine months ended September 30, 2023.
Previous report
For the nine months ended September 30, 2024, our interest and fees on loans decreased 0.1% to $10.1 million compared to the nine months ended September 30, 2023 primarily driven by a 0.2% increase in average yield which was offset by a reduction of the average total loan balance of $14.5 million. The months following a general election, including the first nine months of 2023, often see elevated commercial and industrial loan balances, as political organizations typically utilize their lines of credit around election periods and may replay these balances over the subsequent six to twelve months, or as cash flows allow. In addition, rising interest rates caused a reduction in demand for consumer loans during the time between interim periods, and management has strategically allowed a decline in the commercial real estate portfolio. Rising interest rates have increased the cost of borrowing and remote work trends continue to be a concern for this portfolio. These factors negatively impact the value of commercial properties, making commercial real estate loans less attractive.
Previous report
2024, our interest expense on deposits decreased 13.6% compared to the prior period. The decrease was primarily driven by a $75.0 million decrease in average interest-bearing deposit balances, partially offset by a 0.16% increase in the average rate. As of September 30, 2024 and December 31, 2023, approximately 87.2% and 69.0%, respectively, of our deposits were noninterest bearing.
Previous report
For the three months ended September 30, 2024, interest on short-term borrowings increased by 117.7% compared to the prior period, primarily due to a $5.0 million increase in the average outstanding balance as well as an increase in the average rate from 7.62% to 8.31%. For the nine months ended September 30, 2024, interest on short-term borrowings increased by 44.0% compared to the prior period, due to a $1.5 million increase in the average outstanding balance as well as an increase in the average rate from 7.27% to 8.09%.
Previous report
For the three months ended September 30, 2024, our provision for credit losses consisted of a net recapture of $118 thousand, primarily attributable to the reduction in our loan portfolio, compared to a net provision of $7 thousand for the three months ended September 30, 2023.
Previous report
For the nine months ended September 30, 2024, our deposit placement services income increased by $4.5 million to $5.6 million compared to the nine months ended September 30, 2023. During both comparative periods, the increase in deposit placement services income is a direct result of the increase in the volume of One-Way Sell® deposits, and changes in the rate paid by ICS® for those deposits which typically adjust in a manner parallel to federal funds rate adjustments. Accounts enrolled in the ICS® network are further discussed under “— Financial Condition — Deposits” below.
Previous report
Loss on sale of securities. Because Chain Bridge historically has not actively engaged in bond sales, gains and losses from sales of securities are irregular. For the three months ended September 30, 2024, we incurred $65 thousand in losses on sales of securities compared to a $30 thousand loss for the three months ended September 30, 2023. For the nine months ended September 30, 2024, our loss on sale of securities was $65 thousand, compared to a $312 thousand loss for the nine months ended September 31, 2023. Sales for all periods in 2024 and 2023 were a result of decisions to divest of specific corporate issuers.
Previous report
$4.7 million, or 32.8%, compared to the prior year, primarily driven by increases in salaries and employee benefits costs, as well as an increase in professional services costs related to the process of becoming a public company and costs associated with the Reclassification.
Previous report
Virginia bank franchise tax. For the three months ended September 30, 2024, our Virginia bank franchise tax increased $65 thousand, or 34.6%, compared to the three months ended September 30, 2023. Our Virginia bank franchise tax decreased 13.1% for the nine months ended September 30, 2024, compared to the corresponding period in the prior year. The franchise tax expense is based on estimated accruals throughout the year, and the Bank's adjusted capital serves as the basis for tax to be paid. Changes to capital expectations, total asset at each quarter end, and other factors that offset the taxable base cause the expense to fluctuate slightly throughout a year.
Previous report
Insurance expenses. For the three and nine months ended September 30, 2024, our insurance expenses were relatively unchanged, compared to the three and nine months ended September 30, 2023.
Previous report
As of September 30, 2024, the Bank maintained elevated deposit levels ahead of the November 2024 federal elections. We estimate that at least a majority of our deposit balances as of September 30, 2024 were sourced from political organizations. Deposits from political organizations are currently experiencing outflows, which we expect to continue through the end of the fourth quarter of 2024 and into early 2025, as the 2024 election cycle concludes. The outflows to date have been consistent with the seasonal patterns we have historically observed during federal election cycles. Historically, deposits from political organizations have typically increased in the periods leading up to federal elections and declined in the quarters during and after federal elections. The amount and timing of these deposit inflows and outflows are difficult to predict and may differ from historical patterns. See Note 5—Deposits in the Notes to Unaudited Consolidated Financial Statements contained within this Form 10-Q.
Previous report
Short-Term Borrowings. As of September 30, 2024 and December 31, 2023, the Company had an unsecured line of credit from a correspondent bank totaling $10.0 million with an outstanding balance of $10.0 million as of September 30, 2024 and $5.0 million as of December 31, 2023. On October 10, 2024, the Company used a portion of the net proceeds from the IPO to fully repay the $10.0 million outstanding balance. The Company subsequently closed the line on October 11, 2024.
Previous report
Unfunded commitments under lines of credit increased $14.8 million, or 64.5% from December 31, 2023 to September 30, 2024 primarily due to a $17.5 million increase in renewed availability under two lines of credit issued to political organizations. These lines were fully drawn subsequent to quarter end on October 16, 2024.
Previous report
Deposit account balances received from federal political organizations fluctuate due to the seasonality of fundraising and spending around federal elections. Historically, in the quarters leading up to federal elections, especially presidential elections, our deposits generally increase, and decline in the quarters during and after federal elections. The amount and timing of these deposit inflows and outflows are difficult to predict and may differ from historical patterns. As of September 30, 2024, the Bank’s deposits maintained an elevated level ahead of the November 2024 presidential election. Consistent with patterns observed in previous election cycles, deposits from political organizations are currently experiencing outflows, which we expect to continue through the end of the fourth quarter of 2024 and into early 2025, as the 2024 election cycle concludes. See Note 5—Deposits in the Notes to Unaudited Consolidated Financial Statements contained within this Form 10-Q. Management seeks to address liquidity needs related to seasonal outflows by identifying political organization accounts, tracking activity, communicating with clients and retaining high cash balances at the Federal Reserve to fund deposit outflows.
Previous report
The Company has a $10.0 million line of credit from a correspondent bank that it uses to provide capital to the Bank. As of September 30, 2024, $10.0 million was outstanding on this line of credit. On October 10, 2024, the Company used a portion of the net proceeds from the IPO to fully repay the $10.0 million outstanding balance. The Company subsequently closed the line on October 11, 2024.
Reworded paragraphs (93)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2023 included in our Prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” as well as the section entitled “Risk Factors” in our Prospectus. We assume no obligation to update any of these forward-looking statements except to the extent required by law.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024 included in our Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the section entitled “Cautionary Note Regarding Forward-Looking Statements” as well as the section entitled “Risk Factors” in our Form 10-K. We assume no obligation to update any of these forward-looking statements except to the extent required by law.
Previous wording
Chain Bridge Bancorp, Inc. (the “Company”) is a Delaware-chartered bank holding company and the parent of its wholly-owned subsidiary, Chain Bridge Bank, N.A. (the “Bank”), a nationally chartered commercial bank with fiduciary powers granted by the Office of the Comptroller of the Currency (the “OCC”). The Company was incorporated on May 26, 2006, and the Bank opened on August 6, 2007. The Company conducts substantially all of its operations through the Bank and has no other subsidiaries.
Current wording
Chain Bridge Bancorp, Inc. (the “Company”) is a Delaware-chartered bank holding company and a publicly traded bank holding company whose Class A common stock is listed on the New York Stock Exchange under the symbol “CBNA.” The Company was incorporated on May 26, 2006, and is subject to supervision and regulation by the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended. The Company serves as the registered bank holding company for Chain Bridge Bank, National Association (the “Bank”), its wholly-owned subsidiary. The Company does not own or control any other subsidiaries and conducts substantially all of its business through the Bank.
Previous wording
We offer a range of commercial and personal banking services, including deposits, treasury management, payments, loans, commercial lending, residential mortgage financing, consumer loans, trusts and estate administration, wealth management, and asset custody.
Current wording
We offer a broad range of commercial and personal banking services, including deposit accounts, multiple types of loan products, trusts administration, wealth management, and asset custody.
Previous wording
On October 3, 2024, in connection with its initial public offering (the “IPO”) Class A common stock, par value $0.01 per share (“Class A Common Stock”), the Company reclassified and converted each outstanding share of the Company’s existing common stock, par value $1.00 per share, into 170 shares of Class B common stock, par value $0.01 per share (“Class B Common Stock”) (the “Reclassification”).
Current wording
In connection with the IPO, on October 3, 2024, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which established two new classes of common stock, Class A common stock, par value $0.01 per share (“Class A Common Stock”) and Class B common stock, par value $0.01 per share (“Class B Common Stock”), and reclassified and converted each outstanding share of the Company’s existing common stock, par value $1.00 per share (“Old Common Stock”), into 170 shares of Class B Common Stock (the “Reclassification”). Share information presented prior to the Reclassification date of October 3, 2024 gives effect to the Reclassification and attributes all earnings to Class B shares because no Class A shares were outstanding prior to the Reclassification.
Previous wording
Highlights of our results of operations and financial condition as of and for the nine months ended September 30, 2024 are provided below.
Current wording
Highlights of our results of operations and financial condition as of and for the three months ended March 31, 2025 are provided below.
Previous wording
•Consolidated net income was $17.2 million for the nine months ended September 30, 2024, compared to $5.5 million for the nine months ended September 30, 2023. Earnings per share for the nine months ended September 30, 2024 were $3.77, compared to $1.21 for the nine months ended September 30, 2023.4
Current wording
•Consolidated net income was $5.6 million for the three months ended March 31, 2025, compared to $3.9 million for the three months ended March 31, 2024. Earnings per share for the three months ended March 31, 2025 were $0.85, compared to $0.86 for the three months ended March 31, 2024.4
Previous wording
4 All earnings are attributed to Class B shares because no Class A shares were outstanding during the periods presented.
Current wording
4 For historical periods presented, all earnings are attributed to Class B shares because no Class A shares were outstanding.
Previous wording
•Net interest income, before provision for, or recapture of, credit losses, was $33.0 million for the nine months ended September 30, 2024, compared to $20.0 million for the nine months ended September 30, 2023. Net interest income, after provision for, or recapture of, credit losses was $33.4 million for the nine months ended September 30, 2024, compared to $19.3 million for the nine months ended September 30, 2023.
Current wording
•Net interest income, before provision for, or recapture of, credit losses, was $13.8 million for the three months ended March 31, 2025, compared to $8.8 million for the three months ended March 31, 2024. Net interest income, after provision for, or recapture of, credit losses was $13.9 million for the three months ended March 31, 2025, compared to $9.0 million for the three months ended March 31, 2024.
Previous wording
•Total assets were $1.6 billion as of September 30, 2024, compared to $1.2 billion as of December 31, 2023. Total deposits were $1.4 billion as of September 30, 2024, compared to $1.1 billion as of December 31, 2023. Excluded from these totals are One-Way Sell® deposits, which were placed at other banks through the IntraFi Cash Service® (“ICS®”) network. These One-Way Sell® deposits amounted to $432.3 million as of September 30, 2024, compared to $130.1 million as of December 31, 2023.
Current wording
•Total deposits were $1.6 billion as of March 31, 2025, compared to $1.2 billion as of December 31, 2024. Excluded from these totals are One-Way Sell® deposits, which were placed at other banks through the ICS® network. These One-Way Sell® deposits amounted to $93.2 million as of March 31, 2025, compared to $63.3 million as of December 31, 2024.
Previous wording
•Cash balances held at the Federal Reserve were $627.0 million as of September 30, 2024, compared to $309.8 million as of December 31, 2023.
Current wording
•Cash balances held at the Federal Reserve were $620.3 million as of March 31, 2025, compared to $406.7 million as of December 31, 2024.
Previous wording
•As of September 30, 2024, the Bank’s total investment debt securities portfolio balance was $597.1 million, compared to $566.2 million as of December 31, 2023.
Current wording
•As of March 31, 2025, the total debt securities portfolio balance was $774.6 million, compared to $658.8 million as of December 31, 2024.
Previous wording
•Book value per share was $22.95 as of September 30, 2024, compared to $18.26 as of December 31, 2023.
Current wording
•Book value per share was $23.09 as of March 31, 2025, compared to $21.98 as of December 31, 2024.
Previous wording
•As of September 30, 2024, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 29.29% and a tier 1 risk-based capital ratio of 28.17%.
Current wording
•As of March 31, 2025, the Company had a total risk-based capital ratio of 41.43% and a tier 1 risk-based capital ratio of 40.24%. The Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 38.12% and a tier 1 risk-based capital ratio of 36.93%.
Previous wording
•As of September 30, 2024, our liquidity ratio was 85.31%, compared to 78.75% as of December 31, 2023.
Current wording
•As of March 31, 2025, our liquidity ratio was 89.14%, compared to 85.13% as of December 31, 2024.
Previous wording
Short-term interest rates: The cyclical nature of our balance sheet and our focus on liquidity cause our primary revenue source, net interest income, to be highly correlated to short-term interest rates. We strive to maintain high liquidity and low loan-to-deposit ratios. Higher rates generally increase our net interest income because of our high levels of liquid interest-earning assets and low levels of interest-bearing deposits and borrowings. Conversely, if short-term interest rates fall, our net interest income would likely decrease due to our high levels of cash. The Federal Reserve began reducing its target federal funds rate in September 2024, and as short-term rates decline, our net interest income will be adversely affected. This relationship between our revenue and the yield curve may differ from that of banks that have lower levels of cash and liquidity and higher loan-to-deposit ratios.
Current wording
Short-term interest rates: The cyclical nature of our balance sheet and our focus on liquidity cause our primary revenue source, net interest income, to be highly correlated to short-term interest rates. We strive to maintain high liquidity and low loan-to-deposit ratios. Higher rates generally increase our net interest income because of our high levels of liquid interest-earning assets and low levels of interest-bearing deposits and borrowings. Conversely, if short-term interest rates fall, our net interest income would likely decrease due to our high levels of cash. The Federal Reserve has not adjusted its target federal funds rate through the first quarter of 2025, but did reduce the target rate during September, November and December of 2024. As short-term rates decline, our net interest income will be adversely affected. This relationship between our revenue and the yield curve may differ from that of banks that have lower levels of cash and liquidity and higher loan-to-deposit ratios.
Previous wording
Political organizations and federal election cycles: We provide deposit services to a wide range of political organizations, including political committees registered with the Federal Election Commission (“FEC”), such as campaign committees, party committees, and PACs and Super PACs, and other tax-exempt 527 organizations. These accounts are often associated with firms that provide treasury, legal or regulatory compliance services to political organizations. We estimate that at least a majority of our deposits were sourced from political organizations as of September 30, 2024.
Current wording
Political organizations and federal election cycles: We provide deposit services to a wide range of political organizations, including political committees registered with the Federal Election Commission (“FEC”), such as campaign committees; party committees; separate segregated funds (including trade association political action committees (“PACs”) and corporate PACs); non-connected committees (including independent expenditure-only committees (“Super PACs”), committees maintaining separate accounts for direct contributions and independent expenditures (“Hybrid PACs”), and committees other than authorized campaign committees, or those affiliated with such committees that are maintained or controlled by a candidate or federal officeholder (collectively, “Leadership PACs”)); and other tax-exempt organizations under Section 527 of the Internal Revenue Code. These accounts are often associated with firms that provide treasury, legal or regulatory compliance services to political organizations.
Previous wording
Federal election cycles significantly affect our deposit levels. These cycles also impact revenue-generating activities, such as wire transfers, payments, check processing, debit card usage, and treasury management services. Historically, in the quarters leading up to federal elections, especially presidential elections, our deposits, net interest income, and noninterest income generally increase. In the quarters during and after a federal election, we usually experience an outflow of our political organization deposits, causing our balance sheet and revenue to decline until clients resume fundraising for the next election cycle. As of September 30, 2024, the Bank experienced elevated deposit levels ahead of the November 2024 presidential election, consistent with patterns observed in previous election cycles.
Current wording
Federal election cycles significantly affect our deposit levels. These cycles also impact revenue-generating activities, such as wire transfers, payments, check processing, debit card usage, and treasury management services. Historically,
Previous wording
Economic conditions: General economic conditions, including conditions in the Washington, D.C. metropolitan area, and government spending influence our deposit levels and earnings. As of September 30, 2024, we estimate that at least a majority of our deposit balances were sourced from political organizations, which we believe makes us less dependent on the broader economy. However, if the economy worsens, some political donors may contribute less, negatively impacting our deposit levels and income. In addition, a national or regional recession could increase the risk of loan defaults and negatively affect our municipal and corporate bonds, potentially leading to defaults. In particular, significant changes in government spending, particularly federal budget cuts, could adversely affect the Washington, D.C. metropolitan area economy and, consequently, our loan performance and deposit levels. Such changes may also impact the value of our investment securities portfolio, which includes U.S. government, municipal, and corporate bonds. Finally, rising inflation can increase our operational costs, including labor and technology expenses, while also potentially diminishing the purchasing power of our clients, further impacting our deposit and loan levels.
Current wording
Economic conditions: General economic conditions, particularly in the Washington, D.C. metropolitan area, and levels of government spending influence our deposit levels and earnings. At various points throughout 2024 and the first quarter of 2025, we estimate that at least a majority of our deposit balances were sourced from political organizations, which we believe reduces our direct exposure to broader economic trends. However, economic downturns may lead to declines in political donations, which could adversely affect our deposit levels and income. Additionally, national or regional recessions could increase the risk of loan defaults and negatively impact the credit quality of our municipal and corporate bonds, potentially leading to defaults.
Previous wording
Monetary Policy: We rely on the Federal Reserve’s payment of interest on reserve balances as a source of interest income. The rate of interest on reserve balances is determined by the Federal Reserve. The Federal Reserve has historically adjusted its interest on reserves rate in conjunction with the federal funds rate. Because this rate affects other money market yields, it can have a significant impact on our interest income. We are most exposed to monetary policy during federal election years such as in 2024 when campaign-related deposits rise and we match those liabilities with short-term assets such as Federal Reserve cash balances, which reprice immediately, and Treasury bills. Although higher interest rates decrease the value of our investment securities portfolio, they increase our interest income. While we have recently benefited from high short-term rates, the Federal Reserve began reducing its target federal funds rate in 2024. To the extent short-term rates decline, our net interest income will be adversely affected. The Federal Reserve has additional monetary tools that can impact our interest income through changes in rates, such as the overnight reverse repo rate and open market operations.
Current wording
Monetary Policy: We rely on the Federal Reserve’s payment of interest on reserve balances as a source of interest income. The rate of interest on reserve balances is determined by the Federal Reserve. The Federal Reserve has historically adjusted its interest on reserves rate in conjunction with the federal funds rate. We are most exposed to monetary policy during federal election years such as in 2024 when campaign-related deposits rise and we match those liabilities with short-term assets such as Federal Reserve cash balances, which reprice immediately, and Treasury bills. Although higher interest rates decrease the value of our investment securities portfolio, they increase our interest income. While we have recently benefited from high short-term rates, the Federal Reserve reduced its target federal funds rate three times in 2024. To the extent short-term rates decline, our net interest income will be adversely affected. The Federal Reserve has additional monetary tools that can impact our interest income through changes in rates, such as the overnight reverse repo rate and open market operations.
Previous wording
Regulatory and Supervisory Environment: We incur significant costs due to our regulation and supervision by the federal government. As a bank holding company, we are subject to comprehensive supervision and regulatory oversight by the Federal Reserve. The Bank’s primary regulator and supervisor is the OCC, which through regular examinations oversees our operations, risk management, compliance, and corporate governance. The Bank is also subject to FDIC secondary regulatory oversight that focuses on insurance standards, risk management practices, and overall regulatory compliance. We pay assessments to the FDIC and the OCC for their insurance and supervision. In addition, we manage our balance sheet to meet regulatory standards, such as capital ratio requirements. Failure to meet these standards may result in corrective actions, restrictions, and increased scrutiny from federal regulators. By adhering to these requirements, we aim to maintain our financial health and strengthen our market position. See “Supervision and Regulation.”
Current wording
Regulatory and Supervisory Environment: We incur significant costs due to our regulation and supervision by the federal government. As a bank holding company, we are subject to comprehensive supervision and regulatory oversight by the Federal Reserve. The Bank’s primary regulator and supervisor is the OCC, which through regular examinations oversees our operations, risk management, compliance, and corporate governance. The Bank is also subject to FDIC secondary regulatory oversight that focuses on insurance standards, risk management practices, and overall regulatory compliance. We pay assessments to the FDIC and the OCC for their insurance and supervision. In addition, we manage our balance sheet to meet regulatory standards, such as capital ratio requirements. Failure to meet these standards may result in corrective actions, restrictions, and increased scrutiny from federal regulators. By adhering to these requirements, we aim to maintain our financial health and strengthen our market position. See Item 1,“Business — Supervision and Regulation” in our Form 10-K.
Previous wording
Uninsured Deposits: Most of our deposits come from commercial clients rather than retail clients, resulting in a relatively high level of account balances exceeding the FDIC coverage limits. As of September 30, 2024, we estimate that approximately 81.4% of our total deposits were not insured by the FDIC. To manage the associated risks, we aim to maintain high levels of liquidity, asset quality, and financial strength.
Current wording
Uninsured Deposits: Most of our deposits come from commercial clients rather than retail clients, resulting in a relatively high level of account balances exceeding the FDIC coverage limits. As of March 31, 2025, we estimate that approximately 74.6% of our total deposits were not insured by the FDIC. To manage the associated risks, we aim to maintain high levels of liquidity, asset quality, and financial strength.
Previous wording
Public Company Costs: In preparation for, and following the completion of, our IPO, we have incurred, and expect to continue to incur, additional costs associated with operating as a public company. We expect that these costs will include additional personnel, legal, consulting, regulatory, insurance, accounting, investor relations and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules adopted by the SEC and national securities exchanges, requires public companies to implement specified corporate governance practices that are now applicable to us as a public company. These additional rules and regulations will increase our legal, regulatory and financial compliance costs and will make some activities more time consuming and costly.
Current wording
Public Company Costs: In preparation for, and following the completion of, our IPO, we have incurred, and expect to continue to incur, additional costs associated with operating as a public company. These costs have included, and will continue to include, additional personnel, legal, consulting, regulatory, insurance, accounting, investor relations and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules adopted by the SEC and national securities exchanges, requires public companies to implement specified corporate governance practices that are now applicable to us as a public company. These additional rules and regulations have increased our legal, regulatory and financial compliance costs and have made some activities more time consuming and costly.
Previous wording
Return on Average Equity. We use return on average equity to assess our effectiveness in utilizing stockholders’ equity to generate net income. In determining return on average equity for a given period, net income is divided by the average stockholders’ equity for that period.
Current wording
Return on Average Equity. We use return on average equity to assess our effectiveness in utilizing stockholders’ equity to generate net income. In determining return on average equity for a given period, annualized net income is divided by the average stockholders’ equity for that period.
Previous wording
Return on Average Assets. We monitor return on average assets to measure our operating performance and to determine how efficiently our assets are being used to generate net income. In determining return on average assets for a given period, net income is divided by the average total assets for that period.
Current wording
Return on Average Assets. We monitor return on average assets to measure our operating performance and to determine how efficiently our assets are being used to generate net income. In determining return on average assets for a given period, annualized net income is divided by the average total assets for that period.
Previous wording
— Deposits” for more information on these deposits. Service charges on deposit accounts include fees earned from monthly service charges, account analysis charges and interchange fee income. It also includes fees charged for transaction activities such as wire transfers, cash letters and overdrafts. Trust and wealth management income represents monthly service charges due from clients for managing and administering clients’ assets. Services include investment management and advisory services, custody of assets, trust services, and financial planning. Other income primarily relates to rental income and other minor items.
Current wording
Noninterest Income. Noninterest income consists primarily of service charge income earned from deposit placement services, service charges on accounts, revenue from trust and wealth management services, gains on sale of mortgage loans, net gains or losses on sales of securities and other income. The Company records as noninterest income deposit placement services income for One-Way Sell® deposits which are sold into the ICS® network. See “— Financial Condition — Deposits” for more information on these deposits. Service charges on deposit accounts include fees earned from monthly service charges, account analysis charges and interchange fee income. It also includes fees charged for transaction activities such as wire transfers, cash letters and overdrafts. Trust and wealth management income represents monthly service charges due from clients for managing and administering clients’ assets. Services include investment management and advisory services, custody of assets, trust services, and financial planning. Other income primarily relates to rental income and other minor items.
Previous wording
Noninterest Expense. Noninterest expense relates to fixed and variable overhead costs, the largest component of which is personnel expenses, including salaries and employee benefits. Certain expenses tend to vary based on the volume of activity and other factors, including data processing and communication expenses, occupancy, equipment expense, regulatory assessments and fees, marketing and business development costs, insurance expenses and other operating expenses.
Current wording
Noninterest Expense. Noninterest expense relates to fixed and variable overhead costs, the largest component of which is personnel expenses, including salaries and employee benefits. Certain expenses tend to vary based on the volume of activity and other factors, including professional services, data processing and communication expenses, occupancy, equipment expense, regulatory assessments and fees, marketing and business development costs, insurance expenses and other operating expenses.
Previous wording
Data processing and communication expenses primarily relate to expenses paid to third party providers of core processing, cloud computing and cybersecurity, a substantial component of which is paid to a core technology provider we rely on for the banking software used by our clients and back office functions. Professional services expenses include internal and external audit, legal, loan review, compliance audit and compliance monitoring fees. Occupancy and equipment expenses include depreciation for buildings and improvements, fixtures and furniture, equipment, and technology related items as well as building related expenses such as utilities and maintenance costs. The Commonwealth of Virginia levies a capital-based franchise tax on banks operating within the state, replacing the state income tax. FDIC and regulatory assessments represent costs incurred to cover quarterly or semi-annual payments to the FDIC or OCC for their insurance or supervision. FDIC assessments are based on a complicated matrix of factors to form an assessment rate, which is then applied to a base of quarterly average assets less quarterly tangible equity. Directors’ fees represent fees paid to our directors for board or committee meetings. Marketing and business development costs include sponsorships, membership dues, as well as marketing and advertising costs, which are subject to normal variability based on the volume and cost of sponsorship and business development activities. Insurance expenses include costs for coverage of fidelity bond, professional liability, property and casualty, workers compensation and cyber liability policies. Other operating costs include other operating and administrative costs such as other vendor and employee costs, postage and printing, office supplies, and subscriptions.
Current wording
Data processing and communication expenses primarily relate to expenses paid to third party providers of core processing, cloud computing and cybersecurity, a substantial component of which is paid to a core technology provider we rely on for the banking software used by our clients and back office functions. Professional services expenses include those such as internal and external audit, legal, loan review, compliance audit and compliance monitoring fees. Occupancy and equipment expenses include depreciation for buildings and improvements, fixtures and furniture, equipment, and technology related items as well as building related expenses such as utilities and maintenance costs. The Commonwealth of Virginia levies a capital-based franchise tax on banks operating within the state, replacing the state income tax. FDIC and regulatory assessments represent costs incurred to cover quarterly or semi-annual payments to the FDIC or OCC for their insurance or supervision. FDIC assessments are based on a complicated matrix of factors to form an assessment rate, which is then applied to a base of quarterly average assets less quarterly tangible equity. Directors’ fees represent fees paid to our directors for board or committee meetings. Marketing and business development costs include sponsorships, membership dues, as well as marketing and advertising costs, which are subject to normal variability based on the volume and cost of sponsorship and business development activities. Insurance expenses include costs for coverage of fidelity bond, professional liability, property and casualty, workers compensation and cyber liability policies. Other operating costs include other operating and administrative costs such as other vendor and employee costs, postage and printing, office supplies, and subscriptions.
Previous wording
Liquidity. Maintaining an adequate level of liquidity depends on our ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting our daily operations or the financial condition of the Bank. Because transaction account deposits form a primary source of our funding, and generally can be withdrawn on demand, managing our liquidity is a top priority. Our account at the Federal Reserve, which held $627.0 million as of September 30, 2024, is a primary source of our liquidity for daily and ongoing activities.
Current wording
Liquidity. Maintaining an adequate level of liquidity depends on our ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting our daily operations or the financial condition of the Bank. Because transaction account deposits form a primary source of our funding, and generally can be withdrawn on demand, managing our liquidity is a top priority. Our account at the Federal Reserve, which held $620.3 million as of March 31, 2025, is a primary source of our liquidity for daily and ongoing activities.
Previous wording
We prepare our consolidated financial statements according to generally accepted accounting principles in the United States (“GAAP”). Preparing these statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the balance sheet and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates most susceptible to significant change in the near term relate to determining the allowance for credit losses on loans and held-to-maturity securities. Our significant accounting policies and the effects of new accounting pronouncements are detailed in Note 1, “Organization and Summary of Significant Accounting Policies,” to our consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Prospectus.
Current wording
We prepare our consolidated financial statements according to generally accepted accounting principles in the United States (“GAAP”). Preparing these statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the balance sheet and the reported amounts of revenues and expenses during the reporting period.
Previous wording
For the three months ended September 30, 2024, our net income increased by $4.6 million compared to the three months ended September 30, 2023, primarily due to a $6.5 million, or 89.9%, increase in net interest income. Earnings also benefited from a $1.9 million increase in noninterest income, derived primarily from fee income earned from One-Way Sell® deposit accounts. An increase of $2.6 million in noninterest expense, driven most notably by increases in employment and professional services costs, partially offset these positive earnings components.
Current wording
For the three months ended March 31, 2025, our net income increased by $1.7 million compared to the three months ended March 31, 2024, primarily due to a $5.1 million, or 57.5%, increase in net interest income. An increase of $1.8 million in noninterest expense, driven most notably by increases in employment, professional services, and insurance costs associated with increased public company expenses, coupled with an increase in our state franchise taxes, partially offset the increase in net income. A $953 thousand decrease in noninterest income, driven by a decline in deposit placement services income following the reduction in One-Way Sell® balances, also partially offset the positive earnings components.
Previous wording
For the three months ended September 30, 2024, our net interest income increased by $6.5 million, or 89.9%, compared to the three months ended September 30, 2023, primarily driven by a $417.5 million increase in the average volume of interest-bearing deposits in other banks, principally at the Federal Reserve. This increase was primarily due to cyclical inflows of deposits from political organizations ahead of the 2024 federal elections, which started building in the second half of 2023 and were invested in interest-earning assets, such as reserves at the Federal Reserve. As a result, our net interest margin increased to 3.73% for the three months ended September 30, 2024, from 2.78% for the three months ended September 30, 2023.
Current wording
For the three months ended March 31, 2025, our net interest income increased by $5.1 million, or 57.5%, compared to the three months ended March 31, 2024, primarily driven by a $328.9 million increase in the average balance of interest-bearing deposits in other banks, principally at the Federal Reserve. This increase was primarily due to inflows of deposits from political organizations, which were invested in interest-earning assets, such as reserves at the Federal Reserve. As a result, our net interest margin increased to 3.56% for the three months ended March 31, 2025, from 3.15% for the three months ended March 31, 2024. See “— Financial Condition — Deposits” for additional information regarding deposit levels.
Previous wording
Interest and fees on loans. Loan interest income is comprised of fixed and adjustable-rate structures related to residential and commercial real estate loan products, commercial loans and other consumer loan products. Deferred loan origination fees, net of deferred loan origination costs, accrete to the loan’s yield over the life of the loan. For the three months ended September 30, 2024, our interest and fees on loans increased 0.8% to $3.4 million compared to the three months ended September 30, 2023 primarily driven by a 0.2% increase in average yield which was offset by a reduction of the average total loan balance of $11.4 million. The Company has strategically allowed a decline in the commercial real estate portfolio. Rising interest rates have increased the cost of borrowing and remote work trends continue to be a concern for this portfolio. These factors negatively impact the value of commercial properties, making commercial real estate loans less attractive.
Current wording
Interest and fees on loans. Loan interest income is comprised of fixed and adjustable-rate structures related to residential and commercial real estate loan products, commercial loans and other consumer loan products. Deferred loan origination fees, net of deferred loan origination costs, accrete to the loan’s yield over the life of the loan. For the three months ended March 31, 2025, our interest and fees on loans increased 9.4% to $3.6 million compared to the three months ended March 31, 2024 primarily driven by a 0.32% increase in average yield and an increase of the average total loan balance of $5.7 million.
Previous wording
Interest and dividends on securities, taxable. For the three months ended September 30, 2024, our interest and dividends on taxable securities increased 30.4% to $3.6 million from $2.7 million for the three months ended September 30, 2023. The average balance for all taxable securities increased $27.1 million when comparing the periods, and the yield improved 0.50%. As portions of maturing bonds have been reinvested, we have observed a steady increase in the average yield for the taxable securities portfolio. In addition to actively reinvesting maturing bonds during the second half of 2024, the Company invested funds from temporarily elevated deposit levels in short term U.S. Treasury bonds that will mature during the fourth quarter of 2024, which is intended to align with the timing of expected deposit outflows following the 2024 federal elections.
Current wording
Interest and dividends on securities, taxable. For the three months ended March 31, 2025, our interest and dividends on taxable securities increased 60.8% to $4.6 million from $2.9 million for the three months ended March 31, 2024. The average balance for all taxable securities increased $136.4 million when comparing the periods, and the yield improved 0.61%. As portions of maturing bonds have been reinvested, we have observed a steady increase in the average yield for the taxable securities portfolio. The Company reinvested maturing bonds and invested funds from temporarily elevated deposit levels in short term U.S. Treasury securities with maturities during 2025 and into 2026, which is intended to align with the timing of expected deposit outflows.
Previous wording
Interest on securities, tax-exempt. For the three months ended September 30, 2024, our interest on tax-exempt securities decreased 6.6% from the prior period due primarily to a $3.8 million decline in the average balance of tax-exempt securities. For the nine months ended September 30, 2024, our interest on tax-exempt securities decreased 6.0% from the prior period due primarily to a $3.7 million decline in the average balance of tax-exempt securities. In recent years, the attainable yields for any new investment in this segment and the investment landscape have left tax-exempt securities less attractive than their taxable counterparts. Accordingly, as tax-exempt securities have matured, those proceeds have been invested into taxable municipal securities.
Current wording
Interest on securities, tax-exempt. For the three months ended March 31, 2025, our interest on tax-exempt securities decreased 4.0% from the prior period due primarily to a $2.6 million decline in the average balance of tax-exempt securities. In recent years, the attainable yields for any new investment in this segment and the investment landscape have left tax-exempt securities less attractive than their taxable counterparts. Accordingly, as tax-exempt securities have matured, those proceeds have been invested into taxable municipal securities.
Previous wording
Interest on interest-bearing deposits in banks. Chain Bridge earns interest for accounts held at certain correspondent banks, which are primarily reserves held at the Federal Reserve. The Federal Reserve has historically adjusted its interest on reserves rate in conjunction with the federal funds rate. The interest rate paid by the Federal Reserve on reserve balances increased from 5.15% to 5.40% on July 27, 2023 and decreased from 5.40% to 4.90% on September 29, 2024. For the three months ended September 30, 2024, our interest on interest-bearing deposits in banks increased by $5.7 million compared to the prior period, primarily driven by a $417.5 million increase in average balances. For the nine months ended September 30, 2024, our interest on interest-bearing deposits in banks increased by $11.9 million compared to the prior period, primarily driven by a $285.0 million increase in average balances, in addition to a 0.33% increase in the average yield for the period.
Current wording
Interest on interest-bearing deposits in banks. Chain Bridge earns interest for accounts held at certain correspondent banks, which are primarily reserves held at the Federal Reserve. The Federal Reserve has historically adjusted its interest on reserves rate in conjunction with the federal funds rate. The interest rate paid by the Federal Reserve on reserve balances decreased three times throughout 2024, to 4.40% on December 19, 2024. For the three months ended March 31, 2025, our interest on interest-bearing deposits in banks increased by $3.0 million compared to the prior period, primarily driven by a $328.9 million increase in average balances, which was slightly offset by a decrease in yield of 1.08%.
Previous wording
Interest on deposits. The Bank pays a variable interest rate to depositors for their non-maturing savings, interest-bearing checking, and money market accounts. In addition, the Bank issues time deposits that pay a fixed rate of interest until the instrument matures. For the three months ended September 30, 2024, our interest expense on deposits decreased 5.6% compared to the prior period. The decrease was primarily driven by a $64.7 million decrease in average interest-bearing deposit balances, partially offset by a 0.27% increase in the average rate. For the nine months ended September 30,
Current wording
Interest on deposits. The Bank pays a variable interest rate to depositors for their non-maturing savings, interest-bearing checking, and money market accounts. In addition, the Bank issues time deposits that pay a fixed rate of interest until the instrument matures. For the three months ended March 31, 2025, our interest expense on deposits increased 10.5% compared to the three months ended March 31, 2024. The increase was primarily driven by a $72.8 million increase in average interest-bearing deposit balances, partially offset by a 0.17% decrease in the average rate. As of March 31, 2025 and March 31, 2024, approximately 79.3% and 73.4%, respectively, of our deposits were noninterest bearing.
Previous wording
Interest on short-term borrowings. As of September 30, 2024, the Company had an outstanding balance of $10.0 million on its $10.0 million unsecured line of credit with a correspondent bank. The interest rate applicable to advances under this unsecured line of credit is determined by the reference rate the Company elects to have applied to the advance, which may be the correspondent bank’s base rate, the daily Secured Overnight Financing Rate (“SOFR”) or a term SOFR rate, plus a credit spread adjustment. This line of credit is held by the Company, not the Bank. On October 10, 2024, the Company used a portion of the net proceeds from the IPO to fully repay the $10.0 million outstanding principal balance on this line of credit and closed the line on October 11, 2024. Substantially all interest on short-term borrowings is related to this line of credit. The Bank currently has no borrowings, and there are no outstanding draws on its lines of credit with the FHLB, the Federal Reserve, or other third-party institutions.
Current wording
Interest on short-term borrowings. As of March 31, 2025, the Company had no short-term borrowings, compared to March 31, 2024, when the Company had an outstanding balance of $5.0 million on its $10.0 million unsecured line of credit with a correspondent bank. On October 10, 2024, the Company used a portion of the net proceeds from the IPO to fully repay the outstanding principal balance on this line of credit and closed the line on October 11, 2024. Substantially all interest on short-term borrowings reported during the three months ended March 31, 2024 was related to this line of credit. The Bank currently has no borrowings, and there are no outstanding draws on its lines of credit with the FHLB, the Federal Reserve, or other third-party institutions.
Previous wording
For the nine months ended September 30, 2024, our provision for credit losses consisted of a net recapture of $410 thousand, compared to a net provision of $722 thousand for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, we received proceeds totaling $210 thousand for a bond we wrote off in its entirety during the nine months ended September 30, 2023 related to a single corporate issuer whose business was ultimately closed by a regulatory authority. In addition, we recaptured provisions totaling $297 thousand because the shortening time to maturity of our held to maturity securities portfolio resulted in a lower required reserve in accordance with our ACL methodology, compared to the $804 thousand provision for securities credit losses recorded for the nine months ended September 30, 2023 which pertains to a single corporate bond discussed above.
Current wording
For the three months ended March 31, 2025, our provision for credit losses consisted of a net recapture of $65 thousand. Within the loan portfolio, the $38 thousand recapture resulted from a reduction in outstanding balances, partially offset by an increase in the overall reserve rate for loan credit losses. Within our securities portfolio, the shortening time to maturity of our held to maturity securities portfolio resulted in a lower required reserve in accordance with our ACL methodology. During the three months ended March 31, 2024, we reported a net recapture of $194 thousand. The net recapture during the three months ended March 31, 2024 was primarily attributable to the sale of a bond for $210 thousand which was related to a single corporate issuer whose business was closed by a regulatory authority and entirely written off in 2023.
Previous wording
For the three months ended September 30, 2024, our noninterest income increased by $1.9 million, or 152.3%, to $3.1 million compared to the three months ended September 30, 2023 primarily driven by an increase in deposit placement services income, which is fee income we earn on One-Way Sell® deposits sold through the ICS® network. For the nine months ended September 30, 2024, our noninterest income increased by $5.4 million, or 279.1%, to 7.4 million compared to the prior period primarily driven by an increase in fee income on One-Way Sell® deposits sold through the ICS® network, and partially offset by a loss on the sale of corporate bonds.
Current wording
For the three months ended March 31, 2025, our noninterest income decreased by $953 thousand, or 57.8%, to $695 thousand compared to the three months ended March 31, 2024 primarily driven by a decrease in deposit placement services income, which is fee income we earn on One-Way Sell® deposits sold through the ICS® network.
Previous wording
Trust and wealth management income. For the three and nine months ended September 30, 2024, our trust and wealth management income increased by 63.1% and 64.4%, respectively, compared to the corresponding periods in the prior year. These increases were primarily due to a rise in the volume of total assets under administration, which grew to $384.0 million at September 30, 2024 from $185.8 million at September 30, 2023. The size and mix of the assets under administration drove the income growth. Assets under management, which produce a higher rate of income under our fee structure, increased 56.9% from September 30, 2023, while assets under custody increased 137.3% over the same period.
Current wording
Trust and wealth management income. For the three months ended March 31, 2025, our trust and wealth management income increased by $83 thousand, or 44.6%, compared to the three months ended March 31, 2024. This increase was primarily due to a rise in the volume of total assets under administration, which grew to $409.4 million at March 31, 2025 from $267.5 million at March 31, 2024. The size and mix of the assets under administration drove the income growth. Assets under management, which produce a higher rate of income under our fee structure, increased 70.7% from March 31, 2024, while assets under custody increased 45.4% over the same period.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•Total assets were $1.7 billion as of March 31, 2025, compared to $1.4 billion as of December 31, 2024.
Current report — wording carried from elsewhere
The effects of new accounting pronouncements are detailed in Note 1 to the Consolidated Financial Statements, “Organization and Summary of Significant Accounting Policies.”
Current report — wording carried from elsewhere
March 31, 2025 and December 31, 2024, the secured line of credit had no collateral pledged and therefore no available or outstanding balance.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Noninterest Income. Noninterest income consists primarily of service charge income earned from deposit placement services, service charges on accounts, revenue from trust and wealth management services, gains on sale of mortgage loans, net gains or losses on sales of securities and other income. The Company records as noninterest income deposit placement services income for One-Way Sell® deposits which are sold into the ICS® network. See “— Financial Condition
Previous report — wording carried elsewhere
1 Average balances for securities transferred from AFS to HTM at fair value are shown at carrying value. Average balances for AFS and all other HTM bonds are shown at amortized cost.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, our interest and dividends on taxable securities increased 11.4% to $9.3 million from $8.4 million for the nine months ended September 30, 2023. The average balance for all taxable securities decreased $8.0 million when comparing the periods, although the decline was fully offset by a 0.27% increase in yield. As portions of maturing bonds have been reinvested, we have observed a steady increase in the average yield for the taxable securities portfolio.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, our income tax expense was $4.4 million, representing an increase of 255.1%, compared to $1.2 million for the nine months ended September 30, 2023. The increase was driven by the increase in pre-tax earnings, which increased 219.7% during the comparable period.