Mid-Year Review Signals Strong Financial Performance
09/20/24
By Christine Haugen, Executive Vice President and Chief Financial Officer
Consolidated earnings were $893,000, or $0.50 per share, for the quarter ended June 30, 2024, and $1,607,000, or $0.90 per share, for the six months ended June 30, 2024, as compared to consolidated earnings of $561,000, or $0.31 per share, for the quarter ended June 30, 2023, and $1,023,000, or $0.57 per share, for the six months ended June 30, 2023. This represents an increase of 59% for the comparative quarters and 57% year-over-year.
The first half of 2024 generated a strong yield on earning assets, which was up over 100 basis points from June 30, 2023, and is the result of significant loan production carrying a higher rate of interest than the matured loans during the same period. The Company also experienced a sizeable increase in its interest expense in the first half of 2024 as the result of significant deposit growth and the elevated interest rates maintained by the Federal Reserve during the period. Despite the continued higher rates, the Company’s increase in cost of deposits year-over-year of just over 50 basis points represents the smallest periodic increase since Q3 2022 when the Federal Reserve began rapidly increasing interest rates and indicates stabilization in the interest rate environment. Overall, the Company maintained a strong net interest margin at 4.12%, serving as the primary driver for the year-to-date earnings success.
From a balance sheet perspective, total assets were $283.1 million on June 30, 2024, which equates to net growth of 4% since December 31, 2023. Balance sheet growth is primarily derived from an increase in the Company’s liabilities, which experienced a significant shift in composition since year-end. Deposits ended the first half of 2024 at $252.8 million, an increase of $24.7 million or 11% since December 31, 2023, and relate entirely to core deposit generation. This increase in core deposits allowed for the repayment of $15.0 million in borrowings from the Federal Home Loan Bank during the first quarter. On June 30, 2024, the Company’s available liquidity is sourced entirely from its core deposit base; a significant achievement given the tightening of liquidity experienced in the industry over the past 24 months.
On June 30, 2024, the Company’s loan portfolio totaled $203.2 million, which represents an increase of $1.3 million or 1% from year-end. This increase consisted of $16.9 million in new loan originations and advances on construction lines of credit, offset by $15.5 million in scheduled loan maturities and participations sold. Advances and repayments on commercial lines of credit and normal payment attrition comprise the balance of the loan activity in the first half of 2024. Heading into the second half of the year, the Company has a very healthy loan pipeline.
The Bank remains Well Capitalized with a community bank leverage ratio of 10.11% and maintains its Bauer five-star rating.