Financial Performance - Net loss for the three months ended June 30, 2023, was $540,000, a decrease of $720,000 or 400.0% compared to net income of $180,000 for the same period in 2022[177]. - Net loss for the six months ended June 30, 2023, was $76,000, a decrease of $648,000 or 113.3% compared to net income of $572,000 for the same period in 2022[194]. - Non-interest income decreased by $52,000 or 13.1% to $346,000 for the three months ended June 30, 2023, compared to $398,000 for the same period in 2022[184]. - Non-interest income increased by $667,000, or 79.4%, to $1.5 million for the six months ended June 30, 2023, compared to $840,000 for the same period in 2022[201]. - Net interest and dividend income decreased by $813,000 or 21.4% to $3.0 million for the three months ended June 30, 2023, from $3.8 million for the same period in 2022[182]. - Net interest and dividend income decreased by $1.4 million, or 18.0%, to $6.2 million for the six months ended June 30, 2023, from $7.5 million for the same period in 2022[199]. Asset and Liability Management - Total assets increased by $15.3 million, or 2.8%, to $552.7 million as of June 30, 2023, compared to $537.4 million at December 31, 2022[162]. - Net loans rose by $14.8 million, or 3.7%, to $413.7 million at June 30, 2023, from $398.9 million at December 31, 2022[165]. - Deposits increased by $6.6 million, or 1.7%, to $388.9 million at June 30, 2023, from $382.4 million at December 31, 2022[171]. - Total stockholders' equity increased by $23.5 million, or 47.6%, to $72.8 million at June 30, 2023, from $49.3 million at December 31, 2022[173]. - Total borrowings decreased by $13.8 million, or 13.9%, to $85.6 million at June 30, 2023, from $99.4 million at December 31, 2022[172]. - The allowance for credit losses (ACL) on loans decreased by $262,000 to $3.3 million at June 30, 2023, from $3.6 million at December 31, 2022[168]. Income and Expense Analysis - Total interest and dividend income increased by $986,000 or 24.6% to $5.0 million for the three months ended June 30, 2023, compared to $4.0 million for the same period in 2022[178]. - Total interest expense surged by $1.8 million or 848.6% to $2.0 million for the three months ended June 30, 2023, from $212,000 for the same period in 2022[180]. - Total interest and dividend income increased by $1.7 million, or 21.5%, to $9.6 million for the six months ended June 30, 2023, compared to $7.9 million for the same period in 2022[195]. - Total interest expense increased by $3.1 million, or 782.6%, to $3.5 million for the six months ended June 30, 2023, from $391,000 for the same period in 2022[197]. - Non-interest expense increased by $181,000 or 4.6% to $4.1 million for the three months ended June 30, 2023, from $3.9 million for the same period in 2022[185]. - Non-interest expense increased by $336,000, or 4.4%, to $8.0 million for the six months ended June 30, 2023, from $7.6 million for the same period in 2022[202]. Regulatory and Capital Position - As of June 30, 2023, the Bank exceeded all regulatory capital requirements, indicating a strong capital position[217]. - The economic value of equity is estimated to decrease by 20.8% with a 200 basis point increase in interest rates, slightly above the Board approved limit of 20.0%[224]. - The Bank's liquidity position is monitored daily, with no material commitments for capital expenditures as of June 30, 2023[215]. - The net portfolio value (NPV) as of June 30, 2023, was $86,513,000, with a ratio of NPV to portfolio value of assets at 16.9%[221]. Future Outlook and Strategic Initiatives - The company provided guidance for Q4 2023, expecting revenue to be between $1.6 billion and $1.8 billion, indicating a potential growth of 7% to 20%[226]. - New product launch is expected to contribute an additional $200 million in revenue in the next quarter[226]. - The company is investing $50 million in R&D for new technology aimed at enhancing user experience[226]. - Market expansion plans include entering two new countries by the end of Q4 2023, targeting a 10% increase in market share[226]. - The company completed an acquisition of a smaller tech firm for $300 million, expected to enhance product offerings[226]. - The company plans to implement a new marketing strategy with a budget increase of 25% to drive user growth[226]. User and Revenue Growth - User base increased to 10 million active users, a 20% increase compared to the previous quarter[226]. - Operating margin improved to 30%, up from 28% in the previous quarter, reflecting better cost management[226]. - Customer retention rate improved to 85%, up from 80% in the previous quarter[226].

Financial Position - Total assets increased by $11.1 million, or 2.1%, to $548.5 million as of March 31, 2023, compared to $537.4 million at December 31, 2022[142]. - Cash and due from banks rose by $8.4 million, or 101.5%, to $16.6 million at March 31, 2023, primarily due to $25.7 million of net proceeds from a stock offering[143]. - Net loans increased by $4.4 million, or 1.1%, to $403.3 million at March 31, 2023, with $4.1 million of loans originated during the quarter[145]. - Deposits grew by $32.9 million, or 8.6%, to $415.3 million at March 31, 2023, driven by a $40.7 million increase in commercial deposits[151]. - Total stockholders' equity increased by $24.9 million, or 50.4%, to $74.2 million at March 31, 2023, mainly due to $25.7 million of net proceeds from the stock conversion[154]. - The allowance for credit losses (ACL) on loans decreased by $294,000 to $3.3 million at March 31, 2023, reflecting the adoption of ASU 2016-13[148]. - Non-performing assets include loans that are 90 or more days past due, with management assessing collectability based on the financial condition of borrowers[155]. - Available-for-sale securities increased by $2.0 million, or 1.9%, to $108.1 million at March 31, 2023, attributed to a decrease in net unrealized losses[144]. - Total borrowings decreased by $46.7 million, or 47.0%, to $52.7 million at March 31, 2023, due to increased deposits and stock offering proceeds[152]. - Core deposits increased by $28.2 million, or 8.8%, to $348.8 million at March 31, 2023, with significant growth in savings and money market deposits[151]. Income and Expenses - Net income for the three months ended March 31, 2023, was $464,000, an increase of $72,000 or 18.4% compared to $392,000 for the same period in 2022[158]. - Total interest and dividend income increased by $721,000, or 18.4%, to $4.6 million for the three months ended March 31, 2023, compared to $3.9 million for the same period in 2022[159]. - Average interest-earning assets rose by $36.9 million to $519.2 million for the three months ended March 31, 2023, from $482.3 million for the same period in 2022[160]. - Total interest expense surged by $1.3 million, or 704.5%, to $1.4 million for the three months ended March 31, 2023, from $179,000 for the same period in 2022[161]. - Net interest and dividend income decreased by $540,000, or 14.5%, to $3.2 million for the three months ended March 31, 2023, from $3.7 million for the same period in 2022[163]. - Non-interest income increased by $719,000, or 162.7%, to $1.2 million for the three months ended March 31, 2023, compared to $442,000 for the same period in 2022[165]. - Non-interest expense rose by $155,000, or 4.2%, to $3.8 million for the three months ended March 31, 2023, from $3.7 million for the same period in 2022[166]. - Provision for credit losses expense was $30,000 for the three months ended March 31, 2023, compared to $60,000 for the same period in 2022[164]. - The effective tax rate decreased to 7.9% for the three months ended March 31, 2023, from 12.9% for the same period in 2022[167]. - The annualized net interest margin decreased to 2.46% for the three months ended March 31, 2023, from 3.10% for the same period in 2022[163]. Liquidity and Capital Management - The aggregate amount of uninsured total deposit balances as of March 31, 2023, was estimated at $118.1 million, representing 28.4% of total deposits, compared to $82.0 million or 21.4% as of December 31, 2022[174]. - Net cash provided by financing activities for the three months ended March 31, 2023, was $10.8 million, down from $16.8 million in the same period of 2022[176]. - The economic value of equity analysis as of March 31, 2023, estimated a 17.6% decrease in economic value of equity with a 200 basis point increase in interest rates[186]. - As of March 31, 2023, First Seacoast Bank exceeded all regulatory capital requirements, indicating a strong capital position[179]. - The company had $52.7 million in advances from the Federal Home Loan Bank (FHLB) as of March 31, 2023, with the ability to borrow an additional $92.2 million[174]. - The net portfolio value (NPV) at a 400 basis point increase in interest rates would decrease by $34,002,000, representing a 34.4% change[183]. - The company aims to increase core deposits and utilize FHLB advances to fund loan growth, reflecting a strategic focus on liquidity management[177]. - Net cash used by investing activities for the three months ended March 31, 2023, was $2.1 million, significantly lower than $18.0 million in the same period of 2022[176]. - The company had liquid assets of $20.0 million as of March 31, 2023, to meet its operating expenses and financial obligations[178].

Financial Performance - Net (loss) income for 2022 was $(565,000), compared to a net income of $2,621,000 in 2021, indicating a significant decrease[196]. - Net loss for the year ended December 31, 2022, was $565,000, a decrease of $3.2 million, or 121.6%, compared to net income of $2.6 million for the year ended December 31, 2021[233]. - Non-interest income decreased by $1.4 million, or 60.5%, to $888,000 for the year ended December 31, 2022, compared to $2.2 million in 2021[240]. - Non-interest expense increased by $3.7 million, or 28.2%, to $16.8 million for the year ended December 31, 2022, from $13.1 million in 2021[241]. - Income tax benefit was $451,000 for the year ended December 31, 2022, compared to an income tax expense of $601,000 for the year ended December 31, 2021[242]. Asset and Loan Growth - Total assets increased to $537,424,000 in 2022 from $487,074,000 in 2021, representing a growth of 10.7%[196]. - Total loans rose to $402,505,000 in 2022, up from $376,641,000 in 2021, marking a 6.8% increase[196]. - Total assets increased by $50.3 million, or 10.3%, to $537.4 million as of December 31, 2022, compared to $487.1 million at December 31, 2021[217]. - Net loans increased by $25.9 million, or 6.9%, to $398.9 million at December 31, 2022, from $373.1 million at December 31, 2021[220]. - The company originated $98.9 million of loans during the year ended December 31, 2022[220]. Deposit Trends - Total deposits decreased to $382,363,000 in 2022, down from $393,243,000 in 2021, a decline of 2.2%[196]. - Deposits decreased by $10.9 million, or 2.8%, to $382.4 million at December 31, 2022, from $393.2 million at December 31, 2021[226]. - Core deposits constituted 83.9% of total deposits as of December 31, 2022, highlighting a stable funding source[202]. - Core deposits decreased by $14.3 million, or 4.3%, to $320.6 million at December 31, 2022, from $334.9 million at December 31, 2021[226]. Borrowings and Funding - Total borrowings increased by $69.9 million, or 237.4%, to $99.4 million at December 31, 2022, from $29.5 million at December 31, 2021[227]. - The ratio of net loans to deposits was 104.3% at December 31, 2022, indicating a reliance on borrowings for funding[202]. - The company plans to increase core deposits and utilize Federal Home Loan Bank advances to fund loan growth[261]. - As of December 31, 2022, the company had $99.4 million in advances from the Federal Home Loan Bank and the ability to borrow an additional $36.5 million[258]. Asset Quality - Non-performing loans as a percentage of total loans improved to 0.02% in 2022 from 0.22% in 2021, indicating better asset quality[197]. - Non-performing loans decreased to $89,000, or 0.02% of total loans, at December 31, 2022, down from $837,000, or 0.22% at December 31, 2021[232]. - The allowance for loan losses decreased from 0.95% at December 31, 2021, to 0.89% at December 31, 2022[206]. Interest Income and Expense - Interest and dividend income increased by $1.1 million, or 7.2%, to $16.6 million for the year ended December 31, 2022, from $15.5 million in 2021[234]. - Total interest expense increased by $512,000, or 41.5%, to $1.7 million for the year ended December 31, 2022, from $1.2 million in 2021[236]. - Net interest and dividend income increased by $603,000, or 4.2%, to $14.9 million for the year ended December 31, 2022, from $14.3 million in 2021[238]. - The weighted average yield on interest-earning assets increased by 3 basis points to 3.34% for the year ended December 31, 2022, from 3.31% in 2021[235]. Capital and Regulatory Compliance - The company exceeded all regulatory capital requirements as of December 31, 2022, and is categorized as well-capitalized[263]. - Total stockholders' equity decreased by $11.1 million, or 18.4%, to $49.3 million at December 31, 2022, from $60.5 million at December 31, 2021[228]. Cash Flow and Investments - Net cash provided by operating activities was $973,000 for the year ended December 31, 2022, down from $2.4 million in 2021[260]. - The net cash used by investing activities was $58.1 million for the year ended December 31, 2022, compared to $43.5 million in 2021[260]. Market Strategy - The company plans to grow its loan portfolio, particularly in commercial real estate and commercial and industrial lending, to enhance profitability[202]. - The company aims to grow organically and through opportunistic acquisitions or new branch openings to enhance market share[202]. Interest Rate Sensitivity - The economic value of equity is estimated to decrease by 16.7% with an instantaneous 200 basis point increase in interest rates as of December 31, 2022[256]. - The net portfolio value (NPV) decreased by $31,915,000 (32.9%) with a 400 basis point increase in interest rates as of December 31, 2022[252].