HBT Financial Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
HBT$37.00-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001628280-24-034168
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001628280-24-044316
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 195 previous paragraphs and 201 current paragraphs.
134 unchanged; 52 reworded; 12 added; 6 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 35 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 (12)
Current report
Below are selected factors that could affect the Company’s operating results. For a fuller discussion of the factors that could have a material impact on the operations and future prospects of the Company, see the "Risk Factors" section included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 6, 2024.
Current report
•A $1.5 million negative mortgage servicing rights fair value adjustment included in the third quarter of 2024 results;
Current report
•Net losses of $0.8 million realized on the sale of debt securities included in the third quarter of 2023 results not present in the third quarter of 2024 results;
Current report
•A $0.7 million increase in salaries expense, primarily driven by annual merit increases;
Current report
•A $1.5 million negative mortgage servicing rights fair value adjustment included in the 2024 results, compared to a $0.5 million negative mortgage servicing rights fair value adjustment included in the 2023 results; and
Current report
In September 2024, the Federal Open Markets Committee ("FOMC") lowered the target range for the federal funds rate by 50 basis points to a range of 4.75% to 5.00%. This decrease, and potential future decreases, may put downward pressure on our net interest margin, as the negative impact on floating rate loans may not be fully offset by the positive impacts of maturing fixed rate loans and securities repricing at higher rates or potential decreases in deposit costs. Generally, we expect increases in market interest rates will increase our net interest income and net interest margin in future periods, while decreases in market interest rates may decrease our net interest income and net interest margin in future periods; however, this depends upon the timing and extent of interest rate fluctuations and may not always be the case.
Current report
•A $1.5 million negative mortgage servicing rights fair value adjustment included the third quarter of 2024 results, primarily due to changes in the prepayment and future interest rate assumptions utilized in the valuations, compared to a $23 thousand positive mortgage servicing rights fair value adjustment included in the third quarter 2023 results;
Current report
•A $44 thousand loss on foreclosed assets was recognized during the third quarter of 2024, compared to a $0.6 million gain on foreclosed assets during the third quarter of 2023, primarily related to the sale of one property; and
Current report
•A $0.7 million increase in salaries expense, primarily driven by annual merit increases;
Current report
•A $0.3 million decrease in marketing and customer relations expense.
Current report
During the three months ended September 30, 2024 and 2023, we recorded income tax expense of $6.3 million, or an effective tax rate of 25.8%, and $6.9 million, or an effective tax rate of 25.9%, respectively. During the nine months ended September 30, 2024 and 2023, we recorded income tax expense of $18.5 million, or an effective tax rate of 26.4%, and $16.4 million, or an effective tax rate of 25.7%, respectively. The increase in effective tax rate during 2024 was primarily attributable to an additional $0.5 million of tax expense for a deferred tax asset write-down, recognized during the second quarter of 2024, as a result of an Illinois tax change.
Current report
Additionally, heightened net charge-offs within the commercial and industrial segment are primarily related to equipment finance loans which were purchased as part of a pool of loans during 2023.
Removed paragraphs (6)
Previous report
•Noninterest expense decreased by $3.5 million, primarily reflecting the absence of $0.8 million of legal fees and $0.8 million of accruals related to legal matters previously disclosed, the absence of $0.6 million of Town and Country acquisition-related expenses, and the realization of planned cost reductions following the Town and Country core system conversion completed in April 2023;
Previous report
•A provision for credit losses of $1.2 million was recognized during the three months ended June 30, 2024, compared to a negative provision for credit losses of $0.2 million during the three months ended June 30, 2023; and
Previous report
•A $0.2 million decrease in the mortgage servicing rights fair value adjustment, primarily due to changes in prepayment assumptions utilized in the valuations.
Previous report
•Additionally, the second quarter of 2024 results reflect the realization of planned cost reductions following the Town and Country core system conversion completed in April 2023.
Previous report
•Additionally, the 2024 results reflect the realization of planned cost reductions following the Town and Country core system conversion completed in April 2023.
Previous report
During the three and six months ended June 30, 2024, we recognized an additional $0.5 million of tax expense for a deferred tax asset write-down, primarily as a result of an Illinois tax change. This was the primary driver of the increase in our effective tax rate to 27.6% during the three months ended June 30, 2024 from 26.2% during the three months ended June 30, 2023, and to 26.7% during the six months ended June 30, 2024 from 25.5% during the six months ended June 30, 2023.
Reworded paragraphs (52)
Previous wording
The following is management’s discussion and analysis of the financial condition as of June 30, 2024 (unaudited), as compared with December 31, 2023, and the results of operations for the three and six months ended June 30, 2024 and 2023 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 6, 2024. Results of operations for the three and six months ended June 30, 2024 and 2023 are not necessarily indicative of results to be attained for the year ended December 31, 2024, or for any other period.
Current wording
The following is management’s discussion and analysis of the financial condition as of September 30, 2024 (unaudited), as compared with December 31, 2023, and the results of operations for the three and nine months ended September 30, 2024 and 2023 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 6, 2024. Results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of results to be attained for the year ended December 31, 2024, or for any other period.
Previous wording
There were no acquisition-related expenses during the three and six months ended June 30, 2024. Acquisition-related expenses totaled $0.6 million during the three months ended June 30, 2023 and $13.7 million during the six months ended June 30, 2023, including the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million through provision for credit losses.
Current wording
There were no acquisition-related expenses during 2024 or during the third and fourth quarter of 2023. Acquisition-related expenses totaled $13.7 million during the nine months ended September 30, 2023, including the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million through provision for credit losses.
Previous wording
The Company's business and financial performance are affected by economic conditions generally in the U.S. and more directly in the Illinois and Iowa markets where we primarily operate. The significant economic factors that are most relevant to our business and our financial performance include the general economic conditions in the U.S. and in the Company's markets (including the effect of inflationary pressures), unemployment rates, real estate markets, and interest rates.
Current wording
The Company's business and financial performance are affected by economic conditions generally in the U.S. and more directly in the Illinois and Iowa markets where we primarily operate. The significant economic factors relevant to our business and our financial performance include the general economic conditions in the U.S. and in the Company's markets (including the effect of inflationary pressures), unemployment rates, real estate markets, and interest rates.
Previous wording
We qualify as an “emerging growth company” under the JOBS Act. The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. The Company may remain an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, which is December 31, 2024, (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues, (3) the date on which the Company is deemed to be a “large accelerated filer” under the Exchange Act, or (4) the date on which the Company has, during the previous three year period, issued, publicly or privately, more than $1.0 billion in non-convertible debt securities. We have elected to use the extended transition period until we are no longer an emerging growth company or until we choose to affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.
Current wording
We qualify as an “emerging growth company” under the JOBS Act. The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. The Company may remain an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, which is December 31, 2024, (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues, (3) the date on which the Company is deemed to be a “large accelerated filer” under the Exchange Act, or (4) the date on which the Company has, during the previous three year period, issued, publicly or privately, more than $1.0 billion in non-convertible debt securities. We have elected to use the extended transition period until we are no longer an emerging growth company or until we choose to affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies. The Company expects to exit its status as an emerging growth company as of December 31, 2024.
Previous wording
For the three months ended June 30, 2024, net income was $18.1 million, decreasing by $0.4 million, or 2.2%, when compared to net income for the three months ended June 30, 2023. Notable changes include the following:
Current wording
For the three months ended September 30, 2024, net income was $18.2 million, decreasing by $1.5 million, or 7.8%, when compared to net income for the three months ended September 30, 2023. Notable changes include the following:
Previous wording
•Net interest income decreased $1.8 million, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets;
Current wording
•A $0.5 million decrease in net interest income, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets; and
Previous wording
For the six months ended June 30, 2024, net income was $33.3 million, increasing by $5.6 million, or 20.4%, when compared to net income for the six months ended June 30, 2023. Notable changes include the following:
Current wording
For the nine months ended September 30, 2024, net income was $51.5 million, increasing by $4.1 million, or 8.7%, when compared to net income for the nine months ended September 30, 2023. Notable changes include the following:
Previous wording
•There were no Town and Country acquisition-related expenses during the six months ended June 30, 2024, compared to $13.7 million of acquisition-related expenses incurred during the six months ended June 30, 2023;
Current wording
•There were no Town and Country acquisition-related expenses during the nine months ended September 30, 2024, compared to $13.7 million of acquisition-related expenses incurred during the nine months ended September 30, 2023;
Previous wording
•Net losses of $3.4 million were realized on the sale of debt securities during the six months ended June 30, 2024, compared to net losses of $1.0 million realized during the six months ended June 30, 2023;
Current wording
•Net losses of $3.4 million were realized on the sale of debt securities during the nine months ended September 30, 2024, compared to net losses of $1.8 million realized during the nine months ended September 30, 2023;
Previous wording
•A $2.0 million decrease in net interest income, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets;
Current wording
•A $2.5 million decrease in net interest income, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets;
Previous wording
•A $2.7 million increase in tax expense primarily reflects higher pre-tax income resulting from the above items as well as an additional $0.5 million for a deferred tax expense write-down, primarily as a result of an Illinois tax change. This increased our effective tax rate to 26.7% during the six months ended June 30, 2024, compared to 25.5% during the six months ended June 30, 2023. We expect this write-down to be earned back over several years through reduced tax expense.
Current wording
•A $2.1 million increase in income tax expense, primarily reflecting higher pre-tax income resulting from the above items as well as an additional $0.5 million for a deferred tax expense write-down, primarily as a result of an Illinois tax change. This increased our effective tax rate to 26.4% during the nine months ended September 30, 2024, compared to 25.7% during the nine months ended September 30, 2023. We expect this write-down to be earned back over several years through reduced tax expense.
Previous wording
Net interest income for the three months ended June 30, 2024 was $47.0 million, decreasing $1.8 million, or 3.8%, when compared to the three months ended June 30, 2023. The decrease is primarily attributable to an increase in funding costs which were mostly offset by higher yields on interest-earning assets and an increase in interest-earning assets.
Current wording
Net interest income for the three months ended September 30, 2024 was $47.7 million, decreasing $0.5 million, or 1.1%, when compared to the three months ended September 30, 2023. The decrease is primarily attributable to an increase in funding costs which were mostly offset by higher yields on interest-earning assets and an increase in interest-earning assets.
Previous wording
Net interest margin decreased to 3.95% for the three months ended June 30, 2024, compared to 4.16% for the three months ended June 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. Additionally, the contribution of acquired loan discount accretion to net interest margin decreased to 8 basis points during the three months ended June 30, 2024, from 9 basis points during the three months ended June 30, 2023.
Current wording
Net interest margin decreased to 3.98% for the three months ended September 30, 2024, compared to 4.07% for the three months ended September 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. The contribution of acquired loan discount accretion to net interest margin was flat for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, remaining at 10 basis points.
Previous wording
Net interest income for the six months ended June 30, 2024 was $93.7 million, decreasing $2.0 million, or 2.1%, when compared to the six months ended June 30, 2023. The decrease is primarily attributable to an increase in funding costs which were mostly offset by higher yields on interest-earning assets and higher interest-earning asset balances following the Town and Country merger.
Current wording
Net interest income for the nine months ended September 30, 2024 was $141.4 million, decreasing $2.5 million, or 1.8%, when compared to the nine months ended September 30, 2023. The decrease is primarily attributable to an increase in funding costs which were partially offset by higher yields on interest-earning assets and higher interest-earning asset balances following the Town and Country merger.
Previous wording
Net interest margin decreased to 3.95% for the six months ended June 30, 2024, compared to 4.18% for the six months ended June 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. Additionally, the contribution of acquired loan discount accretion to net interest margin increased to 9 basis points during the six months ended June 30, 2024, compared to 8 basis points during the six months ended June 30, 2023.
Current wording
Net interest margin decreased to 3.96% for the nine months ended September 30, 2024, compared to 4.14% for the nine months ended September 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. Additionally, the contribution of acquired loan discount accretion to net interest margin increased to 10 basis points during the nine months ended September 30, 2024, compared to 9 basis points during the nine months ended September 30, 2023.
Previous wording
Our net interest margin decreased modestly beginning in the second quarter of 2023 as increased competition for deposits drove an increase in our funding costs. This continued during the remainder of 2023 with increases in funding costs outpacing increases in interest-earning asset yields. Our deposit balances and funding costs began to stabilize during the first quarter of 2024, but increases in market interest rates could lead to further increases in funding costs or decreases in core deposit balances which may be replaced by higher cost funding sources, such as FHLB advances and brokered deposits.
Current wording
Our net interest margin decreased modestly beginning in the second quarter of 2023 as increased competition for deposits drove an increase in our funding costs. This continued during the remainder of 2023 with increases in funding costs outpacing increases in interest-earning asset yields. Our deposit balances and funding costs began to stabilize during the first quarter of 2024.
Previous wording
The Company recorded a provision for credit losses of $1.2 million for the second quarter of 2024, compared to a $0.2 million negative provision during the second quarter of 2023. The second quarter of 2024 provision for credit losses primarily reflects a $0.9 million increase in required reserves resulting from changes in economic forecasts and a $0.9 million increase in required reserves driven by increased loan balances and changes within the loan portfolio which were mostly offset by a $0.7 million decrease in specific reserves.
Current wording
The Company recorded a provision for credit losses of $0.6 million during the three months ended September 30, 2024, compared to a $0.5 million provision during the three months ended September 30, 2023. The third quarter of 2024 provision for credit losses primarily reflects a $1.2 million increase in required reserves resulting from changes in economic forecasts; a $0.2 million increase in required reserves resulting from qualitative factor changes; a $0.6 million decrease in required reserves driven by decreased loan balances and changes within the loan portfolio; and a $0.2 million decrease in specific reserves.
Previous wording
The Company recorded a provision for credit losses of $1.7 million for the six months ended June 30, 2024. The 2024 provision for credit losses primarily reflects a $3.7 million increase in required reserves resulting from changes in qualitative factors; a $1.2 million decrease in required reserves resulting from changes in economic forecasts; a $0.8 million decrease in specific reserves on individually evaluated loans; and a $0.1 million decrease in required reserves driven by changes within the loan portfolio.
Current wording
The Company recorded a provision for credit losses of $2.3 million for the nine months ended September 30, 2024. The 2024 provision for credit losses primarily reflects a $3.9 million increase in required reserves resulting from changes in qualitative factors; a $0.1 million increase in required reserves resulting from changes in economic forecasts; a $1.0 million decrease in specific reserves on individually evaluated loans; and a $0.7 million decrease in required reserves driven by changes within the loan portfolio.
Previous wording
Additionally, the 2023 results included the establishment of an allowance for credit losses of $0.8 million on debt securities available-for-sale, related to one bank subordinated debt security, which was later reversed during the third quarter of 2023 after a merger announcement by the issuer of the bank subordinated debt security.
Current wording
Additionally, the 2023 results included the establishment of an allowance for credit losses of $0.8 million on debt securities available-for-sale during the first half of 2023, related to one bank subordinated debt security, which was later reversed during the third quarter of 2023 after a merger announcement by the issuer of the bank subordinated debt security.
Previous wording
Total noninterest income for the three months ended June 30, 2024, was $9.6 million, a decrease of $0.3 million, or 3.1%, from the three months ended June 30, 2023. Notable changes in noninterest income include the following:
Current wording
Total noninterest income for the three months ended September 30, 2024, was $8.7 million, a decrease of $0.8 million, or 8.3%, from the three months ended September 30, 2023. Notable changes in noninterest income include the following:
Previous wording
•Impairment losses on bank premises of $0.6 million related to the closure of two branch premises, now held for sale, were recognized during 2024 which were not present in the 2023 results;
Current wording
•Realized losses of $0.8 million on the sale of securities recognized during the third quarter of 2023, which were not present in the third quarter 2024 results;
Previous wording
•A $0.3 million increase in wealth management fees, driven by higher values of assets under management; and
Current wording
•A $0.3 million increase in wealth management fees, driven by higher values of assets under management.
Previous wording
Total noninterest income for the six months ended June 30, 2024, was $15.2 million, a decrease of $2.1 million, or 12.2%, from the six months ended June 30, 2023. Notable changes in noninterest income include the following:
Current wording
Total noninterest income for the nine months ended September 30, 2024, was $23.9 million, a decrease of $2.9 million, or 10.8%, from the nine months ended September 30, 2023. Notable changes in noninterest income include the following:
Previous wording
•Net losses of $3.4 million were realized on the sale of debt securities during the six months ended June 30, 2024, compared to net losses of $1.0 million realized during the six months ended June 30, 2023;
Current wording
•Net losses of $3.4 million were realized on the sale of debt securities during the nine months ended September 30, 2024, compared to net losses of $1.8 million realized during the nine months ended September 30, 2023;
Previous wording
•A $0.5 million increase in the mortgage servicing rights fair value adjustment, primarily due to changes in prepayment assumptions utilized in the valuations.
Current wording
•A $1.5 million negative mortgage servicing rights fair value adjustment included in the 2024 results, primarily due to changes in the prepayment and future interest rate assumptions utilized in the valuations, compared to a $0.5 million negative mortgage servicing rights fair value adjustment included in the 2023 results;
Previous wording
•A $0.6 million increase in wealth management fees, driven by higher values of assets under management; and
Current wording
•A $0.8 million increase in wealth management fees, driven by higher values of assets under management.
Previous wording
Total noninterest expense for the three months ended June 30, 2024, was $30.5 million, a decrease of $3.5 million, or 10.2%, from the three months ended June 30, 2023. Notable changes in noninterest expense include the following:
Current wording
Total noninterest expense for the three months ended September 30, 2024, was $31.3 million, an increase of $0.7 million, or 2.1%, from the three months ended September 30, 2023. Notable changes in noninterest expense include the following:
Previous wording
Total noninterest expense for the six months ended June 30, 2024, was $61.8 million, a decrease of $8.1 million, or 11.6%, from the six months ended June 30, 2023. Notable changes in noninterest expense include the following:
Current wording
Total noninterest expense for the nine months ended September 30, 2024, was $93.1 million, a decrease of $7.5 million, or 7.4%, from the nine months ended September 30, 2023. Notable changes in noninterest expense include the following:
Previous wording
•There were no Town and Country acquisition-related noninterest expenses for the six months ended June 30, 2024, but acquisition-related noninterest expenses totaled $7.8 million for the six months ended June 30, 2023;
Current wording
•There were no Town and Country acquisition-related noninterest expenses for the nine months ended September 30, 2024, but acquisition-related noninterest expenses totaled $7.8 million for the nine months ended September 30, 2023;
Previous wording
•Excluding Town and Country acquisition-related expenses, the $0.5 million increase in salaries expense was primarily driven by annual merit increases;
Current wording
•Excluding Town and Country acquisition-related expenses, the $1.2 million increase in salaries expense was primarily driven by annual merit increases;
Previous wording
•Excluding Town and Country acquisition-related expenses, the $0.6 million increase in benefits expense was primarily attributable to higher medical benefits expenses;
Current wording
•Excluding Town and Country acquisition-related expenses, the $1.0 million increase in benefits expense was primarily attributable to higher medical benefits expenses; and
Previous wording
•Excluding Town and Country acquisition-related expenses, the $1.6 million decrease in other noninterest expense primarily reflects the absence of $0.8 million of legal fees and $0.8 million of accruals related to legal matters previously disclosed; and
Current wording
•Excluding Town and Country acquisition-related expenses, the $1.9 million decrease in other noninterest expense primarily reflects the absence of $0.8 million of legal fees and $0.8 million of accruals related to litigation matters disclosed in Note 14 to the Company's Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Previous wording
•Debt securities decreased $99.3 million, largely due to the sale of $66.8 million of municipal securities with sales proceeds used to reduce wholesale funding. Additionally, paydowns, maturities, and calls of debt securities generated another $58.5 million of cash proceeds with a portion reinvested into securities at currently higher yields;
Current wording
•Debt securities decreased $65.5 million, largely due to the sale of $66.8 million of municipal securities with sales proceeds used to reduce wholesale funding. Additionally, paydowns, maturities, and calls of debt securities generated another $85.2 million of cash proceeds with $67.3 million being reinvested into debt securities at currently higher yields;
Previous wording
•Loans decreased by $18.9 million, driven by lower line of credit utilization and early payoffs of loans; and
Current wording
•Loans decreased by $34.6 million, driven by lower line of credit utilization and early payoffs of loans; and
Previous wording
•The $82.7 million decrease in total deposits was primarily attributable to a $114.9 million decrease in brokered deposits and a $18.8 million decrease in higher cost reciprocal wealth management customer deposits included with money market deposits, partially offset by the addition of $65.0 million of time deposits from a State of Illinois loan matching program which are a lower cost source of funding.
Current wording
•The $120.7 million decrease in total deposits was primarily attributable to a $114.9 million decrease in brokered deposits. Deposit balances continued to shift towards higher cost deposit products, such as time deposits which increased $176.7 million, including the addition of $65.0 million of time deposits from a State of Illinois loan matching program that are a lower cost source of funding.
Previous wording
Loans, before allowance for credit losses were $3.39 billion at June 30, 2024, a decrease of $18.9 million, or 0.6%, from December 31, 2023. Notable changes include the following:
Current wording
Loans, before allowance for credit losses were $3.37 billion at September 30, 2024, a decrease of $34.6 million, or 1.0%, from December 31, 2023. Notable changes include the following:
Previous wording
•A $16.3 million decrease in line utilization on existing lines of credit, including $13.2 million drawn on two customers' lines of credit in late December 2023 that paid off in early January 2024;
Current wording
•A $12.5 million decrease in line of credit utilization, including $13.2 million drawn on two customers' lines of credit in late December 2023 that paid off in early January 2024;
Previous wording
•A $12.0 million increase in multi-family loans and a $8.5 million increase in commercial real estate – non-owner occupied loans primarily attributable to completed construction projects transferred from the construction and land development category, partially offset by early payoffs; and
Current wording
•A $14.8 million increase in multi-family loans and a $8.5 million increase in commercial real estate – non-owner occupied loans primarily attributable to completed construction projects transferred from the construction and land development category, partially offset by early payoffs; and
Previous wording
•A $1.4 million increase in construction loans primarily attributable to draws on existing construction projects and new construction loans to existing customers, mostly offset by transfers of completed projects into other categories.
Current wording
•A $4.8 million decrease in construction loans primarily attributable to transfers of completed projects into other categories, partially offset by draws on existing construction projects and new construction loans to existing customers.
Previous wording
Multi-family loans totaled $430.0 million as of June 30, 2024 and are primarily made based on projected cash flows from the rental or sale of the underlying collateral. As of June 30, 2024, multi-family loans had a weighted average LTV of 57%, based on the most recent appraisals available, which are generally obtained at the time of origination.
Current wording
Multi-family loans totaled $432.7 million as of September 30, 2024 and are primarily made based on projected cash flows from the rental or sale of the underlying collateral. As of September 30, 2024, multi-family loans had a weighted average LTV of 58%, based on the most recent appraisals available, which are generally obtained at the time of origination.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•A $0.6 million decrease in income tax expense, primarily reflecting lower pre-tax income resulting from the above items.
Current report — wording carried from elsewhere
Additionally, the 2023 results included the reversal of an allowance for credit losses of $0.8 million on debt securities available-for-sale related to one bank subordinated debt security after a merger announcement by the issuer.
Current report — wording carried from elsewhere
•A $0.4 million increase in benefits, primarily attributable to higher medical benefits expenses; and
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•An additional $0.5 million of tax expense was recognized during the second quarter of 2024 for a deferred tax expense write-down, primarily as a result of an Illinois tax change. This increased our effective tax rate to 27.6% during the second quarter of 2024 compared to 26.2% during the second quarter of 2023. We expect this write-down to be earned back over several years through reduced tax expense.
Previous report — wording carried elsewhere
•There were no Town and Country acquisition-related noninterest expenses for the three months ended June 30, 2024, but acquisition-related noninterest expenses totaled $0.6 million for the three months ended June 30, 2023;
Previous report — wording carried elsewhere
•Excluding Town and Country acquisition-related expenses, the $1.8 million decrease in other noninterest expense primarily reflects the absence of $0.8 million of legal fees and $0.8 million of accruals related to legal matters previously disclosed; and