Traditions Bancorp, Inc. Reports Second Quarter 2024 Earnings
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Quarterly Highlights – Second Quarter 2024 versus Second Quarter 2023
- Loans grew by
$20.1 million , or 3%, over 2Q23. - Over the previous 12 months, deposits increased by
$44.3 million , or 6%. Most of this growth was concentrated in brokered deposits, higher-cost time deposits, and money market specials as depositors became more rate-sensitive. Brokered CDs increased from$43.7 million in 2Q23 to$64.7 million at the end of 2Q24, representing 9% of total deposits. - The cost of deposits increased to 3.08% for 2Q24, up from 3.04% for 1Q24 and 1.87% for 2Q23.
- Net interest margin contracted to 2.99% in 2Q24 compared to 3.31% in 2Q23. This was driven by an increase in the total cost of funds, including borrowings, from 2.15% in 2Q23 to 3.19% in 2Q24.
- Gains on the sale of mortgages were
$1.5 million for 2Q24, increasing from$1.0 million in 2Q23 and$1.2 million in 1Q24. - Mortgage banking revenue has been solid in 2Q24 despite higher-for-longer interest rates caused by stubborn inflation and limited home inventories. The mortgage pipeline increased to
$25.8 million from$17.4 million in the linked quarter, up from$15.6 million onJune 30, 2023 . - A second-quarter cash dividend of
eight cents per common share was declared onJuly 18, 2024 , and is payable onAugust 12, 2024 , to shareholders of record at the close of business onAugust 2, 2024 . - Net interest income decreased
$0.4 million in 2Q24 from 2Q23, or 7%, driven by rising funding costs. - Other expense decreased by 4%, from
$6.4 million in 2Q23 to$6.2 million in 2Q24, primarily due to the expense reduction from the strategic realignment completed in 2023. - The 2Q24 credit loss provision was a negative
$171 thousand .
YTD Highlights – Six Months Ended
- Interest expense growth outpaced interest income due to the rising cost of funds, as net interest income decreased
$1.0 million , or 8%, over the six months endedJune 30, 2023 . - Gains on sale of mortgages increased by
$0.8 million , or 39%, despite a challenging rate environment and limited home inventories within the company's geographic footprint. - Other expense decreased by
$0.7 million , or 5%, year over year due to the strategic realignment completed in 2023. - Net interest margin contracted 43 basis points, from 3.38% in 2Q23 to 2.95% in 2Q24, driven by an increased cost of funds.
Credit Quality and Capital Insights
- Nonaccrual loans increased from
$3.8 million in 1Q24 to$4.4 million in the current quarter, driven by increased nonaccruals in the residential mortgage loan portfolio, which grew by$0.9 million over the prior quarter. Commercial loan nonaccruals fell by$0.3 million in the current quarter. - The company reported net charge-offs of
$20 thousand in 2Q24 after reporting none in 1Q24. - Non-performing assets to total assets stood at 0.51% in the current quarter compared to 0.53% in 1Q24 and 0.48% in 2Q23.
- Delinquencies greater than 30 days were 1.05% of total loans as of
June 30, 2024 , up from 0.85% as ofMarch 31, 2024 , and 0.80% as ofJune 30, 2023 . - The company's ACL ratio was 0.56% as of
June 30, 2024 , compared to 0.57% as ofMarch 31, 2024 , and 0.53% as ofJune 30, 2023 . -
Traditions Bancorp andTraditions Bank remain well-capitalized.
FINANCIAL HIGHLIGHTS (unaudited): |
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Selected Financial Data |
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2024 |
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2023 |
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2023 |
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Investment securities |
$ |
104,391 |
$ |
111,817 |
$ |
115,056 |
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Loans, net of unearned income |
|
673,251 |
|
668,813 |
|
653,121 |
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Allowance for credit losses |
|
3,747 |
|
3,730 |
|
3,472 |
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Total assets |
|
858,589 |
|
840,073 |
|
837,661 |
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Deposits |
|
737,875 |
|
731,051 |
|
693,599 |
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Borrowings |
|
40,000 |
|
32,500 |
|
70,987 |
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Shareholders' equity |
|
66,582 |
|
63,786 |
|
60,791 |
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Common book value per common share |
$ |
24.19 |
$ |
23.31 |
$ |
22.29 |
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Tier 1 book value per common share |
$ |
28.23 |
$ |
27.35 |
$ |
26.79 |
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Allowance/loans |
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0.56 % |
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0.56 % |
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0.53 % |
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Non-performing assets/total assets |
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0.51 % |
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0.47 % |
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0.48 % |
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Tier 1 capital/average assets |
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8.98 % |
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8.70 % |
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8.74 % |
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Tier 1 capital/risk-weighted assets |
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11.67 % |
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11.53 % |
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11.12 % |
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Total capital/risk-weighted assets |
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12.24 % |
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12.12 % |
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11.66 % |
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Common shares outstanding |
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2,753 |
|
2,737 |
|
2,727 |
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Three months ended |
Six months ended |
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Selected Operations Data |
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2024 |
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2023 |
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2024 |
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2023 |
Interest income |
$ |
11,290 |
$ |
9,855 |
$ |
22,171 |
$ |
18,686 |
Interest expense |
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(5,176) |
|
(3,296) |
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(10,172) |
|
(5,656) |
Net interest income |
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6,114 |
|
6,559 |
|
11,999 |
|
13,030 |
Provision for credit losses |
|
171 |
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(221) |
|
38 |
|
8 |
Investment securities gains (losses) |
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- |
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- |
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- |
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- |
Gains on sale of mortgages |
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1,516 |
|
1,014 |
|
2,748 |
|
1,983 |
Other income |
|
616 |
|
666 |
|
1,154 |
|
1,170 |
Other expense |
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(6,167) |
|
(6,397) |
|
(12,011) |
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(12,667) |
Income before income taxes |
|
2,250 |
|
1,621 |
|
3,928 |
|
3,524 |
Income taxes |
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(427) |
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(307) |
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(745) |
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(668) |
Net income |
$ |
1,823 |
$ |
1,314 |
$ |
3,183 |
$ |
2,856 |
Earnings per common share (basic) |
$ |
0.66 |
$ |
0.47 |
$ |
1.16 |
$ |
1.02 |
Earnings per common share (diluted) |
$ |
0.66 |
$ |
0.47 |
$ |
1.15 |
$ |
1.02 |
Return on average assets |
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0.86 % |
|
0.64 % |
|
0.76 % |
|
0.72 % |
Return on average equity |
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11.26 % |
|
8.53 % |
|
9.89 % |
|
9.40 % |
Net interest margin |
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2.99 % |
|
3.31 % |
|
2.95 % |
|
3.38 % |
Efficiency ratio |
|
74.79 % |
|
77.64 % |
|
75.54 % |
|
78.27 % |
Net charge-offs(recoveries)/average loans |
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0.01 % |
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0.01 % |
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0.01 % |
|
-0.04 % |
Average common shares |
|
2,755 |
|
2,768 |
|
2,751 |
|
2,788 |
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS:
This release contains forward-looking statements about
Forward-looking statements in this release speak only as of the date of this release and
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