Business First Bancshares Inc
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
BFST$32.20-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001628280-24-019869
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001624322-24-000011
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 197 previous paragraphs and 206 current paragraphs.
143 unchanged; 52 reworded; 9 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 30 previous and 35 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 (9)
Current report
•risks relating to the proposed acquisition of Oakwood Bancshares, Inc. (“Oakwood”) including, without limitation: the timing of consummation of the proposed merger; the risk that any condition to closing of the proposed merger may not be satisfied or waived; the risk that the merger may not be completed at all; the diversion of management time on issues related to the proposed merger; unexpected transaction costs, including the costs of integrating operations; the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected; the risk of deposit and customer attrition; any changes in deposit mix; unexpected operating and other costs, which may differ or change from expectation; the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees; increased competitive pressures on solicitations of customers by competitors; as well as difficulties and risks inherent with entering new markets;
Current report
•Total loans held for investmentof $5.2 billion, a $170.1 million, or 3.4%, increase from December 31, 2023.
Current report
For the six months ended June 30, 2024, net income available to common shareholders was $28.1 million, or $1.11 per basic common share and $1.10 per diluted common share, compared to net income of $32.1 million, or $1.28 per basic common share and $1.27 per diluted common share, for the six months ended June 30, 2023. Return on average assets, on an annualized basis, decreased to 0.84% for the six months ended June 30, 2024, from 1.04% for the six months ended June 30, 2023. Return on average equity, on an annualized basis, decreased to 9.73% for the six months ended June 30, 2024, as compared to 12.39% for the six months ended June 30, 2023.
Current report
For the six months ended June 30, 2024, net interest income totaled $105.5 million, and net interest margin and net interest spread were 3.39% and 2.42%, respectively, compared to $106.1 million, 3.69%, and 2.85%, respectively, for the six months ended June 30, 2023. The average yield on the loan portfolio was 6.97% for the six months ended June 30, 2024, compared to 6.44% for the six months ended June 30, 2023, and the average yield on total interest-earning assets was 6.28% for the six months ended June 30, 2024, compared to 5.75% for the six months ended June 30, 2023. For the six months ended June 30, 2024, overall cost of funds (which includes noninterest-bearing deposits) increased 88 basis points compared to the six months ended June 30, 2023, primarily due to the Federal Reserve increasing rates during 2023.
Current report
Total noninterest income increased $218,000, or 1.8%, for the three months ended June 30, 2024 from the same period in 2023. The increase is primarily due to the increases in the gains on sales of loans of $2.0 million, other income of $744,000, debit card and ATM fee income of $304,000 and swap fee income of $278,000, offset with the gain on the extinguishment of debt of $941,000 which occurred in the same period in 2023 and $2.4 million less in pass-through income from other investments from the same period in 2023.
Current report
Total noninterest income increased $1.2 million, or 6.0%, for the six months ended June 30, 2024 from the same period in 2023. The increase is primarily due to the increases in the gains on sales of loans of $1.5 million, other income of $1.4 million and swap fee income of $501,000, offset with the gain on the extinguishment of debt of $941,000 which occurred in the same period in 2023 and $2.3 million less in pass-through income from other investments from the same period in 2023.
Current report
For the six months ended June 30, 2024, total noninterest expense increased $7.3 million, or 9.3%, from the six months ended June 30, 2023, primarily attributed to the increase in salaries and employee benefits of $5.4 million, or 11.9%.
Current report
For the six months ended June 30, 2024, income tax expense totaled $8.2 million, a decrease of $1.3 million, or 13.9%, compared to $9.5 million for the same period in 2023. Our effective tax rates for the six months ended June 30, 2024, and 2023 were 21.0% and 21.5%, respectively.
Current report
For the six months ended June 30, 2024, core net income available to common shareholders, was $29.1 million, or $1.14 per diluted common share, compared to core net income available to common shareholders of $31.5 million, or $1.25 per diluted common share, for the six months ended June 30, 2023. Notable noncore events impacting earnings for the six months ended June 30, 2024, included $50,000 in a gain on the sale of a former bank premises and $1.1 million in acquisition-related expenses, compared to $941,000 in a gain on the extinguishment of debt due to the premium associated with the debt from the TCBI acquisition in 2022, which was attributed to the $5.7 million subordinated debt redemption, and $171,000 in acquisition-related expenses for the same period in 2023.
Removed paragraphs (2)
Previous report
•Total loans held for investmentof $5.1 billion, a $96.1 million, or 1.9%, increase from December 31, 2023.
Previous report
Total noninterest income increased $1.0 million, or 11.9%, from the three months ended March 31, 2023.
Reworded paragraphs (52)
Previous wording
The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2023 to March 31, 2024, and its results of operations for the three months ended March 31, 2024. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this reportand should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2023, including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements.
Current wording
The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2023 to June 30, 2024, and its results of operations for the three and six months ended June 30, 2024. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this reportand should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2023, including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements.
Previous wording
We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. As of March 31, 2024, we had total assets of $6.7 billion, total loans of $5.1 billion, total deposits of $5.6 billion, and total shareholders’ equity of $649.0 million.
Current wording
We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. As of June 30, 2024, we had total assets of $6.7 billion, total loans of $5.2 billion, total deposits of $5.6 billion, and total shareholders’ equity of $664.5 million.
Previous wording
On April 11, 2023, the Bank opened two new lines of credit for additional contingent liquidity, totaling $726.2 million and $1.0 billion as of March 31, 2024, and December 31, 2023, respectively, through the Federal Reserve discount window. The Bank has not yet drawn on either of the lines of credit as of the date of this report.
Current wording
On April 11, 2023, the Bank opened two new lines of credit for additional contingent liquidity, totaling $851.1 million and $1.0 billion as of June 30, 2024, and December 31, 2023, respectively, through the Federal Reserve discount window. The Bank has not yet drawn on either of the lines of credit as of the date of this report.
Previous wording
On April 25, 2024, we, and Oakwood Bancshares, Inc. a Texas corporation ("Oakwood"), entererd into an Agreement and Plan of Reorganization, providing for the acquisition by us, of Oakwood. Oakwood had $843.0 million of total assets, including $732.0 million of deposits and $654.0 million of loans, as of December 31, 2023.
Current wording
On April 25, 2024, we, and Oakwood Bancshares, Inc. a Texas corporation ("Oakwood"), entererd into an Agreement and Plan of Reorganization, providing for the acquisition by us, of Oakwood. Oakwood had $839.7 million of total assets, including $726.6 million of deposits and $675.6 million of loans, as of March 31, 2024.
Previous wording
The financial highlights as of and for the three months ended March 31, 2024, include:
Current wording
The financial highlights as of and for the six months ended June 30, 2024, include:
Previous wording
•Total assetsof $6.7 billion, a $111.0 million, or 1.7%, increase from December 31, 2023.
Current wording
•Total assetsof $6.7 billion, a $119.3 million, or 1.8%, increase from December 31, 2023.
Previous wording
•Total deposits of $5.6 billion, a $324.0 million, or 6.2%, increase from December 31, 2023.
Current wording
•Total deposits of $5.6 billion, a $314.9 million, or 6.0%, increase from December 31, 2023.
Previous wording
•Net income available to common shareholdersof $12.2 million for the three months ended March 31, 2024, a $1.5 million, or 10.6%, decrease from the three months ended March 31, 2023.
Current wording
•Net income available to common shareholdersof $28.1 million for the six months ended June 30, 2024, a $4.0 million, or 12.4%, decrease from the six months ended June 30, 2023.
Previous wording
•Net interest income of $51.5 million for the three months ended March 31, 2024, a decrease of $1.2 million, or 2.3%, from the three months ended March 31, 2023.
Current wording
•Net interest income of $105.5 million for the six months ended June 30, 2024, a decrease of $535,000, or 0.5%, from the six months ended June 30, 2023.
Previous wording
•Allowance for credit losses of 0.88% of total loans held for investment, compared to 0.88% as of December 31, 2023, and a ratio of nonperforming loans to total loans held for investment of 0.43%, compared to 0.34% as of December 31, 2023.
Current wording
•Allowance for credit losses of 0.86% of total loans held for investment, compared to 0.88% as of December 31, 2023, and a ratio of nonperforming loans to total loans held for investment of 0.43%, compared to 0.34% as of December 31, 2023.
Previous wording
•Earnings per common sharefor the first three months of 2024 of $0.49 per basic common share and $0.48 per diluted common share, compared to $0.55 per basic common share and $0.54 per diluted common share for the first three months of 2023.
Current wording
•Earnings per common sharefor the first six months of 2024 of $1.11 per basic common share and $1.10 per diluted common share, compared to $1.28 per basic common share and $1.27 per diluted common share for the first six months of 2023.
Previous wording
•Return on average assetsof 0.74% over the first three months of 2024, compared to 0.91% for the first three months of 2023.
Current wording
•Return on average assetsof 0.84% over the first six months of 2024, compared to 1.04% for the first six months of 2023.
Previous wording
•Return on average common equityof 8.51% over the first three months of 2024, compared to 10.73% for the first three months of 2023.
Current wording
•Return on average common equityof 9.73% over the first six months of 2024, compared to 12.39% for the first six months of 2023.
Previous wording
•Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.38%, 9.14%, 10.42% and 12.78%, respectively, compared to 9.52%, 9.15%, 10.46% and 12.85% at December 31, 2023.
Current wording
•Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 9.49%, 9.29%, 10.57% and 12.88%, respectively, compared to 9.52%, 9.15%, 10.46% and 12.85% at December 31, 2023.
Previous wording
•Book value per common share of $22.64, an increase of 0.3% from $22.58 at December 31, 2023.
Current wording
•Book value per common share of $23.24, an increase of 2.9% from $22.58 at December 31, 2023.
Previous wording
Results of Operations for the Three Months Ended March 31, 2024, and 2023
Current wording
Results of Operations for the Three and Six Months Ended June 30, 2024, and 2023
Previous wording
For the three months ended March 31, 2024, net income available to common shareholders was $12.2 million, or $0.49 per basic common share and $0.48 per diluted common share, compared to net income of $13.7 million, or $0.55 per basic common share and $0.54 per diluted common share, for the three months ended March 31, 2023. Return on average assets, on an annualized basis, decreased to 0.74% for the three months ended March 31, 2024, from 0.91% for the three months ended March 31, 2023. Return on average equity, on an annualized basis, decreased to 8.51% for the three months ended March 31, 2024, as compared to 10.73% for the three months ended March 31, 2023.
Current wording
For the three months ended June 30, 2024, net income available to common shareholders was $15.9 million, or $0.63 per basic common share and $0.62 per diluted common share, compared to net income of $18.4 million, or $0.73 per basic and diluted common share, for the three months ended June 30, 2023. Return on average assets, on an annualized basis, decreased to 0.95% for the three months ended June 30, 2024, from 1.18% for the three months ended June 30, 2023. Return on average equity, on an annualized basis, decreased to 10.94% for the three months ended June 30, 2024, as compared to 13.99% for the three months ended June 30, 2023.
Previous wording
For the three months ended March 31, 2024, net interest income totaled $51.5 million, and net interest margin and net interest spread were 3.32% and 2.36%, respectively, compared to $52.7 million, 3.75%, and 2.96%, respectively, for the three months ended March 31, 2023. The average yield on the loan portfolio was 6.88% for the three months ended March 31, 2024, compared to 6.34% for the three months ended March 31, 2023, and the average yield on total interest-earning assets was 6.18% for the three months ended March 31, 2024, compared to 5.65% for the three months ended March 31, 2023. For the three months ended March 31, 2024, overall cost of funds (which includes noninterest-bearing deposits) increased 103 basis points compared to the three months ended March 31, 2023, primarily due to the federal reserve increasing rates during 2023.
Current wording
For the three months ended June 30, 2024, net interest income totaled $54.0 million, and net interest margin and net interest spread were 3.45% and 2.47%, respectively, compared to $53.3 million, 3.63%, and 2.75%, respectively, for the three months ended June 30, 2023. The average yield on the loan portfolio was 7.07% for the three months ended June 30, 2024, compared to 6.54% for the three months ended June 30, 2023, and the average yield on total interest-earning assets was 6.38% for the three months ended June 30, 2024, compared to 5.84% for the three months ended June 30, 2023. For the three months ended June 30, 2024, overall cost of funds (which includes noninterest-bearing deposits) increased 76 basis points compared to the three months ended June 30, 2023, primarily due to the Federal Reserve increasing rates during 2023.
Previous wording
The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three months ended March 31, 2024, and 2023, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below are net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. Averages presented in the table below, and throughout this report, are month-end averages.
Current wording
The following tables present, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. For the three and six months ended June 30, 2024, and 2023, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans carrying a zero yield. The average total loans reflected below are net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield. Averages presented in the tables below, and throughout this report, are month-end averages.
Previous wording
The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates. For the purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
Current wording
The following tables present information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates. For the purposes of these tables, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
Previous wording
Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $1.2 million for the three months ended March 31, 2024, and $3.2 million for the same period in 2023. The lower provision for the three months ended March 31, 2024, compared to the same period in 2023 relates primarily to higher loan growth in 2023 as well as the application of qualitative factors within the CECL model.
Current wording
Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management. For a description of the factors taken into account by management in determining the allowance for credit losses see “—Financial Condition—Allowance for Credit Losses.” The provision for credit losses was $1.3 million for the three months ended June 30, 2024, and $538,000 for the same period in 2023. For the six months ended June 30, 2024, and 2023, the provision for credit losses was $2.5 million and $3.8 million, respectively. The higher provision for the three months ended June 30, 2024, compared to the same period in 2023 relates primarily to higher net charge-offs in the current period, caused primarily by the resolution of two commercial relationships totaling $613,000 of net charge-offs. The lower provision for the six months ended June 30, 2024, compared to the same period in 2023 relates primarily to an improved macro-economic and market outlook in the current six-month period. Additionally, net charge-offs were elevated during the six months ended June 30, 2023 due to the resolution of certain acquired credit deteriorated loans.
Previous wording
Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions and pass-through income from other investments (small business investment company (“SBIC”) partnerships and fintech technology (“Fintech”) funds. The following table presents, for the periods indicated, the major categories of noninterest income:
Current wording
Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions and pass-through income from other investments (small business investment company (“SBIC”) partnerships and fintech technology (“Fintech”) funds. The following tables present, for the periods indicated, the major categories of noninterest income:
Previous wording
The following table presents, for the periods indicated, the major categories of noninterest expense:
Current wording
The following tables present, for the periods indicated, the major categories of noninterest expense:
Previous wording
Total noninterest expense increased $3.8 million, or 9.9%, from the three months ended March 31, 2023, primarily attributed to the increase in salaries and employee benefits of $2.2 million, or 9.7%, and an increase in data processing of $1.1 million, or 73.7%. Data processing for the three months ended March 31, 2023 was impacted by an accrual adjustment.
Current wording
For the three months ended June 30, 2024, total noninterest expense increased $3.4 million, or 8.6%, from the three months ended June 30, 2023, primarily attributed to the increase in salaries and employee benefits of $3.2 million, or 14.3%.
Previous wording
For the three months ended March 31, 2024, income tax expense totaled $3.6 million, a decrease of $572,000, or 13.6%, compared to $4.2 million for the same period in 2023. Our effective tax rates for the three months ended March 31, 2024, and 2023 were 21.1% and 21.9%, respectively.
Current wording
For the three months ended June 30, 2024, income tax expense totaled $4.6 million, a decrease of $746,000, or 14.1%, compared to $5.3 million for the same period in 2023. Our effective tax rates for the three months ended June 30, 2024, and 2023 were 21.0% and 21.2%, respectively.
Previous wording
Our total assets increased $111.0 million, or 1.7%, from December 31, 2023, to March 31, 2024, due primarily from the increase in our loan portfolio.
Current wording
Our total assets increased $119.3 million, or 1.8%, from December 31, 2023, to June 30, 2024, due primarily from the increase in our loan portfolio.
Previous wording
As of March 31, 2024, total loans, excluding mortgage loans held for sale, were $5.1 billion, an increase of $96.1 million, or 1.9%, compared to $5.0 billion as of December 31, 2023. Additionally, $77,000, and $835,000 in loans were classified as loans held for sale as of March 31, 2024, and December 31, 2023, respectively.
Current wording
As of June 30, 2024, total loans, excluding mortgage loans held for sale, were $5.2 billion, an increase of $170.1 million, or 3.4%, compared to $5.0 billion as of December 31, 2023. Additionally, $680,000, and $835,000 in loans were classified as loans held for sale as of June 30, 2024, and December 31, 2023, respectively.
Previous wording
Total loans held for investment as a percentage of total deposits were 91.3% and 95.1% as of March 31, 2024, and December 31, 2023, respectively. Total loans held for investment as a percentage of total assets were 76.0% and 75.8% as of March 31, 2024, and December 31, 2023, respectively.
Current wording
Total loans held for investment as a percentage of total deposits were 92.8% and 95.1% as of June 30, 2024, and December 31, 2023, respectively. Total loans held for investment as a percentage of total assets were 77.0% and 75.8% as of June 30, 2024, and December 31, 2023, respectively.
Previous wording
Real Estate: Commercial loans decreased slightly, by $2.0 million or 0.1%, remaining at $2.2 billion as of March 31, 2024.
Current wording
Real Estate: Commercial loans decreased $19.8 million or 0.9%, remaining at $2.2 billion as of June 30, 2024.
Previous wording
Real Estate: Construction loans decreased $7.8 million, or 1.2%, to $662.0 million as of March 31, 2024, from $669.8 million as of December 31, 2023.
Current wording
Real Estate: Construction loans decreased $32.3 million, or 4.8%, to $637.5 million as of June 30, 2024, from $669.8 million as of December 31, 2023.
Previous wording
Real Estate: Residential loans increased $34.6 million, or 5.1%, to $717.0 million as of March 31, 2024, from $682.4 million as of December 31, 2023.
Current wording
Real Estate: Residential loans increased $61.5 million, or 9.0%, to $743.9 million as of June 30, 2024, from $682.4 million as of December 31, 2023.
Previous wording
Commercial loans increased $68.1 million, or 5.0%, to $1.4 billion as of March 31, 2024, from $1.4 billion as of December 31, 2023.
Current wording
Commercial loans increased $161.6 million, or 11.9%, to $1.5 billion as of June 30, 2024, from $1.4 billion as of December 31, 2023.
Previous wording
Consumer and other loans increased $3.1 million, or 4.9%, to $67.0 million as of March 31, 2024, from $63.8 million as of December 31, 2023.
Current wording
Consumer and other loans decreased $828,000, or 1.3%, to $63.0 million as of June 30, 2024, from $63.8 million as of December 31, 2023.
Previous wording
We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $23.0 million and$18.8 million in nonperforming assets as of March 31, 2024, and December 31, 2023, respectively. We had $21.6 million in nonperforming loans as of March 31, 2024, compared to $17.1 million as of December 31, 2023. The increase in nonperforming assets from December 31, 2023, to March 31, 2024, is primarily due to two lending relationships secured by residential real estate.
Current wording
We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. We had $24.3 million and$18.8 million in nonperforming assets as of June 30, 2024, and December 31, 2023, respectively. We had $22.4 million in nonperforming loans as of June 30, 2024, compared to $17.1 million as of December 31, 2023. The increase in nonperforming assets from December 31, 2023, to June 30, 2024, is primarily due to two lending relationships secured by residential real estate and one commercial loan that is unsecured.
Previous wording
As of March 31, 2024, the allowance for credit losses totaled $44.5 million, or 0.88%, of total loans held for investment. As of December 31, 2023, the allowance for credit losses totaled $43.7 million, or 0.88%, of total loans held for investment.
Current wording
As of June 30, 2024, the allowance for credit losses totaled $44.5 million, or 0.86%, of total loans held for investment. As of December 31, 2023, the allowance for credit losses totaled $43.7 million, or 0.88%, of total loans held for investment.
Previous wording
We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of March 31, 2024, the carrying amount of investment securities totaled $872.9 million, a decrease of $6.7 million, or 0.8%, compared to $879.6 million as of December 31, 2023. The decrease was primarily due to unrealized losses in the first three months of 2024. Securities represented 13.0% and 13.4% of total assets as of March 31, 2024, and December 31, 2023, respectively.
Current wording
We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements. As of June 30, 2024, the carrying amount of investment securities totaled $875.0 million, a decrease of $4.5 million, or 0.5%, compared to $879.6 million as of December 31, 2023. The decrease was primarily due to unrealized losses and paydowns in the first six months of 2024. Securities represented 13.1% and 13.4% of total assets as of June 30, 2024, and December 31, 2023, respectively.
Previous wording
The contractual maturity of mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal and, consequently, the average life of this security will be lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 4.53 years with an estimated effective duration of 3.71 years as of March 31, 2024.
Current wording
The contractual maturity of mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal and, consequently, the average life of this security will be lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of our investment portfolio was 4.80 years with an estimated effective duration of 3.84 years as of June 30, 2024.
Previous wording
As of March 31, 2024, and December 31, 2023, the Company held other equity securities of $34.9 million and $33.9 million, respectively, comprised mainly of FHLB stock, small business investment companies (“SBICs”) and financial technology (“Fintech”) fund investments.
Current wording
As of June 30, 2024, and December 31, 2023, the Company held other equity securities of $38.8 million and $33.9 million, respectively, comprised mainly of FHLB stock, small business investment companies (“SBICs”) and financial technology (“Fintech”) fund investments.
Previous wording
Total deposits as of March 31, 2024, were $5.6 billion, an increase of $324.0 million, or 6.2%, compared to $5.2 billion as of December 31, 2023. Total uninsured deposits were $2.2 billion, or 39.8%, of total deposits as of March 31, 2024 compared to $2.0 billion, or 38.9%, of total deposits as of December 31, 2023. Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.
Current wording
Total deposits as of June 30, 2024, were $5.6 billion, an increase of $314.9 million, or 6.0%, compared to $5.2 billion as of December 31, 2023. Total uninsured deposits were $2.3 billion, or 40.7%, of total deposits as of June 30, 2024 compared to $2.0 billion, or 38.9%, of total deposits as of December 31, 2023. Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.
Previous wording
Noninterest-bearing deposits as of March 31, 2024, were $1.3 billion compared to $1.3 billion as of December 31, 2023, a decrease of $4.0 million, or 0.3%.
Current wording
Noninterest-bearing deposits as of June 30, 2024, were $1.3 billion compared to $1.3 billion as of December 31, 2023, an increase of $11.1 million, or 0.9%.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(1)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Current report — wording carried from elsewhere
(2)Net interest margin is equal to net interest income divided by average interest-earning assets.