HOME BANCORP INC

Previous wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2023 through June 30, 2024 and on its results of operations for the three and six months ended June 30, 2024 and 2023. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Current wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2023 through September 30, 2024 and on its results of operations for the three and nine months ended September 30, 2024 and 2023. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Previous wording

The Company reported net income for the second quarter of 2024 of $8.1 million, or $1.02 diluted EPS, down $1.7 million compared to the second quarter of 2023. Net income for the second quarter of 2023 totaled $9.8 million, or $1.21 diluted EPS. For the six months ended June 30, 2024, the Company reported net income $17.3 million, or $2.16 diluted EPS, down $3.8 million from $21.1 million, or $2.60 diluted EPS, reported for the six months ended June 30, 2023.

Current wording

The Company reported net income for the third quarter of 2024 of $9.4 million, or $1.18 diluted EPS, down $317,000 compared to the third quarter of 2023. Net income for the third quarter of 2023 totaled $9.8 million, or $1.22 diluted EPS. For the nine months ended September 30, 2024, the Company reported net income $26.8 million, or $3.34 diluted EPS, down $4.1 million from $30.9 million, or $3.82 diluted EPS, reported for the nine months ended September 30, 2023.

Previous wording

Key components of the Company’s performance during the three and six months ended June 30, 2024 include:

Current wording

Key components of the Company’s performance during the three and nine months ended September 30, 2024 include:

Previous wording

•Assets increased $90.8 million, or 2.7%, from December 31, 2023 to $3.4 billion at June 30, 2024.

Current wording

•Assets increased $121.9 million, or 3.7%, from December 31, 2023 to $3.4 billion at September 30, 2024.

Previous wording

•Total loans were $2.7 billion at June 30, 2024, up $79.7 million, or 3.1%, from December 31, 2023.

Current wording

•Total loans were $2.7 billion at September 30, 2024, up $86.6 million, or 3.4%, from December 31, 2023.

Previous wording

•During the three and six months ended June 30, 2024, the Company provisioned $1.3 million and $1.4 million, respectively, to the allowance for loan losses, primarily due to loan growth and net charge-offs. During the three and six months ended June 30, 2023, the Company provisioned $511,000 and $1.3 million, respectively, to the allowance for loan losses.

Current wording

•During the three and nine months ended September 30, 2024, the Company provisioned $140,000 and $1.5 million, respectively, to the allowance for loan losses, primarily due to loan growth and net charge-offs. During the three and nine months ended September 30, 2023, the Company provisioned $351,000 and $1.7 million, respectively, to the allowance for loan losses.

Previous wording

•The ALL totaled $32.2 million, or 1.21% of total loans, at June 30, 2024 compared to $31.5 million, or 1.22% of total loans, at December 31, 2023. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $34.7 million, or 1.30% of total loans, at June 30, 2024 compared to $34.1 million, or 1.32% of total loans, at December 31, 2023.

Current wording

•The ALL totaled $32.3 million, or 1.21% of total loans, at September 30, 2024 compared to $31.5 million, or 1.22% of total loans, at December 31, 2023. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $34.7 million, or 1.30% of total loans, at September 30, 2024 compared to $34.1 million, or 1.32% of total loans, at December 31, 2023.

Previous wording

•Nonperforming assets increased $6.7 million, or 64.1%, from $10.4 million, or 0.31% of total assets, at December 31, 2023 to $17.0 million, or 0.50% of total assets, at June 30, 2024. The increase in nonperforming assets was primarily due to one loan relationship being downgraded to substandard during the 2024 period.

Current wording

•Nonperforming assets increased $8.0 million, or 76.7%, from $10.4 million, or 0.31% of total assets, at December 31, 2023 to $18.4 million, or 0.53% of total assets, at September 30, 2024. The increase in nonperforming assets was primarily due to four loan relationships being downgraded to substandard during the 2024 period.

Previous wording

•Total deposits amounted to $2.7 billion at June 30, 2024, an increase of $52.3 million, or 2.0%, from December 31, 2023.

Current wording

•Total deposits amounted to $2.8 billion at September 30, 2024, an increase of $106.9 million, or 4.0%, from December 31, 2023.

Previous wording

•The net interest margin was 3.66% and 3.65% for the three and six months ended June 30, 2024, respectively, down 28 bps and down 41 bps from the three and six months ended June 30, 2023, respectively.

Current wording

•The net interest margin was 3.71% and 3.67% for the three and nine months ended September 30, 2024, respectively, down 4 bps and down 28 bps from the three and nine months ended September 30, 2023, respectively.

Previous wording

•The average rate paid on total interest-bearing deposits was 2.69% for the second quarter of 2024, which was up 139 bps from the second quarter of 2023. For the six months ended June 30, 2024, the average rate paid on total interest-bearing deposits was 2.60%, up 156 bps from the six months ended June 30, 2023.

Current wording

•The average rate paid on total interest-bearing deposits was 2.78% for the third quarter of 2024, which was up 94 bps from the third quarter of 2023. For the nine months ended September 30, 2024, the average rate paid on total interest-bearing deposits was 2.66%, up 134 bps from the nine months ended September 30, 2023.

Previous wording

•Total interest expense for the second quarter of 2024 was up $6.3 million, or 64.5%, compared to the second quarter of 2023 primarily due to the rising interest rate environment and the higher cost of deposits. For the six months ended June 30, 2024, total interest expense was up $15.0 million, or 92.1%, from the comparable period in 2023.

Current wording

•Total interest expense for the third quarter of 2024 was up $4.4 million, or 35.2%, compared to the third quarter of 2023 primarily due to the rising interest rate environment and the higher cost of deposits. For the nine months ended September 30, 2024, total interest expense was up $19.4 million, or 67.3%, from the comparable period in 2023.

Previous wording

•Noninterest income for the second quarter of 2024 was up $307,000, or 8.9%, compared to the second quarter of 2023, primarily due to an increase in other income (up $150,000), gain on sale of loans (up $100,000) and bank card fees (up $36,000). For the six months ended June 30, 2024, noninterest income was up $545,000, or 8.1%, from the comparable period in 2023 primarily due to an increase in other income (up $281,000), the absence of net loss on sale of securities totaling $249,000 during the first quarter of 2023, and an increase in gain on sale of loans (up $130,000), which were partially offset with a decrease in bank card fees (down $176,000).

Current wording

•Noninterest income for the third quarter of 2024 was down $707,000, or 16.1%, compared to the third quarter of 2023, primarily due to a decrease in gain on sale of loans (down $492,000) and a decrease in bank card fees (down $290,000), which were partially offset with an increase in other income (up $55,000). For the nine months ended September 30, 2024, noninterest income was down $162,000, or 1.5%, from the comparable period in 2023 primarily due to a decrease bank card fees (down $466,000) and a decrease in gain on sale of loans (down $362,000), which were partially offset with an increase in other income (up $336,000) and the absence of net loss on sale of securities totaling $249,000 during the first quarter of 2023.

Previous wording

•Noninterest expense for the second quarter of 2024 was up $849,000, or 4.1%, compared to the second quarter of 2023, primarily due to increases in data processing and communication (up $423,000), compensation and benefits (up $187,000), other noninterest expense (up $187,000), occupancy (up $156,000), professional services (up $122,000) and regulatory fees (up $108,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $285,000). For the six months ended June 30, 2024, noninterest expense was up $1.8 million, or 4.3%, from the comparable period in 2023 primarily due to the absence of a recovery of a previous loss on a foreclosed asset that occurred in the first quarter of 2023 in the amount of $739,000, increases in data processing and communication expense (up $616,000), other noninterest expense (up $421,000), professional services (up $233,000) and marketing and advertising expense (up $202,000), which were partially offset by a decrease in amortization of acquisition intangibles (down $153,000) and the reversal of provision for credit losses on unfunded commitments (down $495,000).

Current wording

•Noninterest expense for the third quarter of 2024 was up $920,000, or 4.3%, compared to the third quarter of 2023, primarily due to increases in compensation and benefits (up $566,000), data processing and communication (up $150,000), occupancy (up $322,000), and other expenses (up $267,000), which were partially offset with a decrease in marketing and advertising (down $256,000). For the nine months ended September 30, 2024, noninterest expense was up $2.7 million, or 4.3%, from the comparable period in 2023 primarily due to the absence of a recovery of a previous loss on a foreclosed asset that occurred in the first quarter of 2023 in the amount of $739,000, increases in data processing and communication expense (up $766,000), other noninterest expense (up $687,000), occupancy (up $582,000) and compensation and benefits (up $484,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $495,000).

Previous wording

Total loans at June 30, 2024 were $2.7 billion, up $79.7 million, or 3.1%, from December 31, 2023. The loan growth resulted primarily from the additions of loans across all loan types, with the exception of construction and land loans and consumer loans.

Current wording

Total loans at September 30, 2024 were $2.7 billion, up $86.6 million, or 3.4%, from December 31, 2023.

Previous wording

We continue to monitor and modify our ACL as conditions warrant. No assurance can be given that our level of ACL will cover all of the losses on our loans or that future adjustments to the ACL will not be necessary if economic and other conditions differ substantially from the conditions used by management to determine the current level of the ACL.

Current wording

We continue to monitor and modify our ACL as conditions warrant. No assurance can be given that our level of ACL will cover all of the losses on our loans or that future adjustments to the ACL will not be necessary if economic and other conditions differ substantially from the assumptions used by management to determine the current level of the ACL.

Previous wording

At June 30, 2024, the ALL totaled $32.2 million, or 1.21% of total loans, up $675,000 from $31.5 million, or 1.22% of total loans, at December 31, 2023. During the six months ended June 30, 2024, the Company provisioned $1.4 million of the allowance loan losses primarily due to loan growth and net charge-offs. Net loan charge-offs totaled $727,000 for the six months ended June 30, 2024.

Current wording

At September 30, 2024, the ALL totaled $32.3 million, or 1.21% of total loans, up $741,000 from $31.5 million, or 1.22% of total loans, at December 31, 2023. During the nine months ended September 30, 2024, the Company provisioned $1.5 million of the allowance loan losses primarily due to loan growth and net charge-offs. Net loan charge-offs totaled $801,000 for the nine months ended September 30, 2024.

Previous wording

At June 30, 2024 and December 31, 2023, loans identified as credit deteriorated loans and individually evaluated for expected losses were $4.5 million and $4.2 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.

Current wording

At September 30, 2024 and December 31, 2023, loans identified as credit deteriorated loans and individually evaluated for expected losses were $4.4 million and $4.2 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.

Previous wording

At June 30, 2024 and December 31, 2023, loans classified as substandard totaled $32.7 million and $28.2 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements. The $4.5 million, or 15.9%, increase in substandard loans at June 30, 2024 compared to December 31, 2023 was primarily due to one credit relationship being downgraded, partially offset by loan payoffs and improvements in other classified loans.

Current wording

At September 30, 2024 and December 31, 2023, loans classified as substandard totaled $34.7 million and $28.2 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements. The $6.5 million, or 23.1%, increase in substandard loans at September 30, 2024 compared to December 31, 2023 was primarily due to four credit relationships being downgraded, partially offset by loan payoffs and improvements in other classified loans.

Previous wording

Total nonperforming loans increased by $8.0 million, or 90.8%, to $16.8 million at June 30, 2024, compared to $8.8 million at December 31, 2023. The primary reason for the increase was one loan relationship with an aggregate outstanding balance of $4.7 million at June 30, 2024 that became nonperforming during the first quarter of 2024. This relationship is secured by 17 residential units in eight investment properties in New Orleans with an aggregate loan-to-value ratio of approximately 65%. We have commenced foreclosure proceedings on this relationship and do not expect any loss. There were also additional smaller loan balances downgraded to nonperforming during the period, but we do not anticipate any losses associated with these loans.

Current wording

Total nonperforming loans increased by $9.3 million, or 105.2%, to $18.1 million at September 30, 2024, compared to $8.8 million at December 31, 2023. The primary reason for the increase was one loan relationship with an aggregate outstanding balance of $4.7 million at September 30, 2024 that became nonperforming during the first quarter of 2024. This relationship is secured by 17 residential units in eight investment properties in New Orleans with an aggregate loan-to-value ratio of approximately 65%. We have commenced foreclosure proceedings on this relationship and do not expect any loss. There were also additional smaller loan balances downgraded to nonperforming during the period, but we do not anticipate any losses associated with these loans.

Previous wording

The Company’s investment securities portfolio totaled $413.5 million as of June 30, 2024, a decrease of $21.5 million, or 4.9%, from December 31, 2023. During the second quarters of 2024 and 2023, the Company had no gains or losses related to the sale of available-for-sale investment securities. At June 30, 2024, the Company had a net unrealized loss on its available for sale investment securities portfolio of $46.6 million, compared to a net unrealized loss of $43.4 million at December 31, 2023. The Company’s investment securities portfolio had an effective duration of 4.0 years and 4.2 years at June 30, 2024 and December 31, 2023, respectively.

Current wording

The Company’s investment securities portfolio totaled $421.8 million as of September 30, 2024, a decrease of $13.2 million, or 3.0%, from December 31, 2023. During the third quarters of 2024 and 2023, the Company had no gains or losses related to the sale of available-for-sale investment securities. At September 30, 2024, the Company had a net unrealized loss on its available for sale investment securities portfolio of $32.2 million, compared to a net unrealized loss of $43.4 million at December 31, 2023. The Company’s investment securities portfolio had an effective duration of 3.7 years and 4.2 years at September 30, 2024 and December 31, 2023, respectively.

Previous wording

The following table summarizes activity in the Company’s investment securities portfolio during the six months ended June 30, 2024.

Current wording

The following table summarizes activity in the Company’s investment securities portfolio during the nine months ended September 30, 2024.

Previous wording

Deposits totaled $2.7 billion at June 30, 2024, an increase of $52.3 million, or 2.0%, compared to December 31, 2023. The following table summarizes the changes in the Company’s deposits from December 31, 2023 to June 30, 2024.

Current wording

Deposits totaled $2.8 billion at September 30, 2024, an increase of $106.9 million, or 4.0%, compared to December 31, 2023. The following table summarizes the changes in the Company’s deposits from December 31, 2023 to September 30, 2024.

Previous wording

The average rate paid on interest-bearing deposits was 2.69% for the second quarter of 2024, up 139 bps compared to the second quarter of 2023. At June 30, 2024, certificates of deposit maturing within the next 12 months totaled $686.2 million.

Current wording

The average rate paid on interest-bearing deposits was 2.78% for the third quarter of 2024, up 94 bps compared to the third quarter of 2023. At September 30, 2024, certificates of deposit maturing within the next 12 months totaled $680.8 million.

Previous wording

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $780.1 million at June 30, 2024 and $748.6 million at December 31, 2023. Public funds in excess of the FDIC insurance limits are fully collateralized.

Current wording

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $818.7 million at September 30, 2024 and $748.6 million at December 31, 2023. Public funds in excess of the FDIC insurance limits are fully collateralized.

Previous wording

The carrying value of subordinated debt was $54.3 million and $54.2 million at June 30, 2024 and December 31, 2023, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.

Current wording

The carrying value of subordinated debt was $54.4 million and $54.2 million at September 30, 2024 and December 31, 2023, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.

Previous wording

On March 12, 2023, the Federal Reserve Board created the BTFP, which offers loans to banks with a term up to one year with no prepayment penalty. The loans are secured by pledging qualifying securities and are valued at par for collateral. In 2024, the Bank participated in the BTFP and had an outstanding debt of $135.0 million at June 30, 2024. The average balance of other borrowings, which included the BTFP loan was $140.6 million for the second quarter of 2024, up $135.0 million compared to the second quarter of 2023.

Current wording

On March 12, 2023, the Federal Reserve Board created the BTFP, which offers loans to banks with a term up to one year with no prepayment penalty. The loans are secured by pledging qualifying securities and are valued at par for collateral. In 2024, the Bank participated in the BTFP and had an outstanding debt of $135.0 million at September 30, 2024. The average balance of other borrowings, which included the BTFP loan was $140.5 million for the third quarter of 2024, up $135.0 million compared to the third quarter of 2023.

Previous wording

The average balance of total FHLB advances was $46.5 million for the second quarter of 2024, down $226.3 million compared to the second quarter of 2023. For the six months ended June 30, 2024, the average balance of total FHLB advances was $59.1 million, down $185.2 million compared to the six months ended June 30, 2023.

Current wording

The average balance of total FHLB advances was $56.7 million for the third quarter of 2024, down $216.3 million compared to the third quarter of 2023. For the nine months ended September 30, 2024, the average balance of total FHLB advances was $58.3 million, down $195.7 million compared to the nine months ended September 30, 2023. We reduced our FHLB advances in 2024 primarily due to our increased utilization of BTFP loans as an alternative source of funds.

Previous wording

The Company had $45.0 million short-term FHLB advances as of June 30, 2024 compared to $150.0 million as of December 31, 2023. At June 30, 2024 and December 31, 2023, the Company had $38.5 million and $42.7 million in long-term FHLB advances, respectively, and $1.1 billion and $1.0 billion in additional FHLB advances available, respectively.

Current wording

The Company had no short-term FHLB advances as of September 30, 2024 compared to $150.0 million as of December 31, 2023. At September 30, 2024 and December 31, 2023, the Company had $38.4 million and $42.7 million in long-term FHLB advances, respectively, and $1.1 billion and $1.0 billion in additional FHLB advances available, respectively.

Previous wording

Total shareholders’ equity increased $8.4 million, or 2.3%, from $367.4 million at December 31, 2023 to $375.8 million at June 30, 2024. Shareholders' equity increased primarily due to net income of $17.3 million, which was partially offset by an increase in accumulated other comprehensive loss on available for sale investment securities, cash dividends and share repurchases during the six months ended June 30, 2024.

Current wording

Total shareholders’ equity increased $26.0 million, or 7.1%, from $367.4 million at December 31, 2023 to $393.5 million at September 30, 2024. Shareholders' equity increased primarily due to net income of $26.8 million and a decrease in accumulated other comprehensive loss on available for sale investment securities, which were partially offset by cash dividends and share repurchases during the nine months ended September 30, 2024.

Previous wording

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At June 30, 2024, certificates of deposit maturing within the next 12 months totaled $686.2 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

Current wording

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At September 30, 2024, certificates of deposit maturing within the next 12 months totaled $680.8 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

Previous wording

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the six months ended June 30, 2024, the average balance of outstanding FHLB advances was $59.1 million. At June 30, 2024, the Company had $83.5 million in total outstanding FHLB advances.

Current wording

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the nine months ended September 30, 2024, the average balance of outstanding FHLB advances was $58.3 million. At September 30, 2024, the Company had $38.4 million in total outstanding FHLB advances.

Previous wording

During the second quarters of 2020, 2023 and 2024, the Company entered into certain interest rate swap agreements as part of its interest rate risk management strategy. The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. During 2024 and 2023, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 6 of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.

Current wording

The Company periodically has entered into interest rate swap agreements as part of its interest rate risk management strategy. The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. During 2024 and 2023, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 6 of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.

Previous wording

Net income for the second quarter of 2024 was $8.1 million, down $1.7 million compared to the second quarter of 2023. Diluted EPS for the second quarter of 2024 was $1.02, down $0.19 compared to the second quarter of 2023.

Current wording

Net income for the third quarter of 2024 was $9.4 million, down $317,000 compared to the third quarter of 2023. Diluted EPS for the third quarter of 2024 was $1.18, down $0.04 compared to the third quarter of 2023.

Previous wording

Net income for the six months ended June 30, 2024 was $17.3 million, down $3.8 million, compared to the six months ended June 30, 2023. Diluted EPS for the six months ended June 30, 2024 was $2.16, down $0.44 compared to the six months ended June 30, 2023.

Current wording

Net income for the nine months ended September 30, 2024 was $26.8 million, down $4.1 million, compared to the nine months ended September 30, 2023. Diluted EPS for the nine months ended September 30, 2024 was $3.34, down $0.48 compared to the nine months ended September 30, 2023.

Previous wording

During the three and six months ended June 30, 2024, the Company provisioned $1.3 million and $1.4 million, respectively, to the allowance for loan losses primarily due to loan growth and net charge-offs. During the three and six months ended June 30, 2023, the Company provisioned $511,000 and $1.3 million, respectively, to the allowance for loan losses primarily due to loan growth.

Current wording

During the three and nine months ended September 30, 2024, the Company provisioned $140,000 and $1.5 million, respectively, to the allowance for loan losses primarily due to loan growth and net charge-offs. During the three and nine months ended September 30, 2023, the Company provisioned $351,000 and $1.7 million, respectively, to the allowance for loan losses primarily due to loan growth.

Previous wording

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 2.77% and 3.31% for the quarters ended June 30, 2024 and 2023, respectively, and 2.79% and 3.51% for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 2.80% and 2.99% for the quarters ended September 30, 2024 and 2023, respectively, and 2.80% and 3.33% for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Net interest income totaled $29.4 million for the second quarter of 2024, down $913,000, or 3.0%, compared to the second quarter of 2023. For the six months ended June 30, 2024, net interest income totaled $58.3 million, down $3.6 million, or 5.8%, compared to the six months ended June 30, 2023.

Current wording

Net interest income totaled $30.4 million for the third quarter of 2024, up $873,000, or 3.0%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, net interest income totaled $88.7 million, down $2.7 million, or 3.0%, compared to the nine months ended September 30, 2023.

Previous wording

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.66% and 3.94% for the quarters ended June 30, 2024 and 2023, respectively. For the same periods, the average loan yield was 6.28% and 5.82%, respectively. The net interest margin for the six months ended June 30, 2024 and 2023 was 3.65% and 4.06%, respectively. For the same periods, the average loan yield was 6.23% and 5.74%, respectively.

Current wording

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.71% and 3.75% for the quarters ended September 30, 2024 and 2023, respectively. For the same periods, the average loan yield was 6.43% and 5.95%, respectively. The net interest margin for the nine months ended September 30, 2024 and 2023 was 3.67% and 3.95%, respectively. For the same periods, the average loan yield was 6.30% and 5.82%, respectively.

Previous wording

Acquired loan discount accretion included in interest income totaled $490,000 and $647,000 for the quarters ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, acquired loan discount accretion included in interest income totaled $1.0 million and $1.3 million, respectively.

Current wording

Acquired loan discount accretion included in interest income totaled $452,000 and $634,000 for the quarters ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, acquired loan discount accretion included in interest income totaled $1.5 million and $1.9 million, respectively.