Core Viewpoint - Old Point Financial Corporation's shareholders have approved the merger with TowneBank, marking a significant step towards the completion of the transaction, which is expected to finalize in the second half of 2025, pending regulatory approvals [1][2]. Company Overview - Old Point Financial Corporation (NASDAQ: OPOF) is the parent company of Old Point National Bank and Old Point Wealth Management, serving the Hampton Roads and Richmond regions of Virginia [3]. - Old Point National Bank is a community bank offering a variety of financial services, including checking, insurance, mortgage products, and commercial lending [3]. - Old Point Wealth Management is the largest wealth management provider in Hampton Roads, focusing on local asset management [3]. Merger Details - The merger is seen as a strategic partnership that will enhance value for shareholders and support community growth [2]. - The completion of the merger is subject to customary closing conditions, including regulatory approvals [1].

Financial Performance - Consolidated net income for Q1 2025 was $2.2 million, an increase of 25.7% from $1.7 million in Q1 2024, with diluted earnings per share rising to $0.42 from $0.34[128] - Return on average equity (ROE) for Q1 2025 was 7.50%, compared to 6.44% in Q1 2024[132] - Net interest income for Q1 2025 was $12.0 million, an increase of $467 thousand from Q1 2024, with a net interest margin (NIM) of 3.63%, up from 3.45% year-over-year[146] - Total noninterest income for Q1 2025 was $3.8 million, an increase of $625 thousand from Q1 2024, primarily due to gains on redemption of subordinated notes[163] - Noninterest expense decreased to $12.4 million in Q1 2025 from $12.7 million in Q1 2024, mainly due to reductions in salaries and employee benefits[164] - The adjusted operating earnings (non-GAAP) for the three months ended March 31, 2025, were $1.985 million, down from $2.880 million in the previous quarter[225] Assets and Loans - Total assets reached $1.5 billion as of March 31, 2025, reflecting a slight increase of $418 thousand or 0.03% from December 31, 2024[132] - Net loans held for investment were $1.0 billion, up $2.3 million or 0.2% from the previous quarter[132] - Total loans amounted to $1,012.8 million as of March 31, 2025, compared to $1,010.2 million at December 31, 2024[185] - Average loans for the three months ended March 31, 2025, totaled $1,076,894 thousand[193] - Average loans decreased by $64.0 million, or 5.9%, in Q1 2025 compared to Q1 2024, while average yields on loans increased by 18 basis points[148] Deposits - Total deposits increased by $2.6 million or 0.2% from December 31, 2024[132] - Total deposits reached $1.3 billion as of March 31, 2025, reflecting an increase of $2.6 million, or 0.2% from December 31, 2024[168] - Noninterest-bearing deposits rose by $15.7 million, or 4.4%, while time deposits decreased by $43.0 million, or 17.9%[168] - Average interest-bearing deposits in other banks increased by $45.5 million in Q1 2025 compared to Q1 2024, while the average yield on these deposits decreased by 107 basis points[150] Credit Quality - The Company recognized a provision for credit losses of $717 thousand in Q1 2025, significantly higher than $90 thousand in Q4 2024[132] - Non-performing assets increased to $4.2 million, a rise of 53.9% from $2.7 million at December 31, 2024[132] - The allowance for credit losses (ACL) was $12.0 million as of March 31, 2025, an increase from $11.6 million at December 31, 2024[186] - Loans past due 90 days or more and accruing interest increased by $1.2 million to $1.9 million as of March 31, 2025[185] - The ratio of net charge-offs to average loans was 0.03% for the three months ended March 31, 2025[193] Capital and Equity - Total stockholders' equity as of March 31, 2025, was $117.2 million, up 2.8% from $114.0 million on December 31, 2024[207] - The Common Equity Tier 1 Capital to Risk-Weighted Assets ratio was 13.04%, significantly above the regulatory minimum of 4.5%[211] - The Company issued $30.0 million of subordinated notes with a fixed interest rate of 3.5% for the first five years, qualifying as Tier 2 capital[212] Market and Economic Conditions - The Company is closely monitoring changes in the industry and market conditions that may affect liquidity, including potential impacts from rising market interest rates[215] - The impact of economic conditions, such as inflation and unemployment levels, is closely monitored as they affect customer behavior and loan demand[230] - Changes in the political landscape and regulatory policies may impact the Company's operations and financial performance[230] - The Company does not predict future interest rates or their exact effects on net interest income, emphasizing the uncertainty inherent in such projections[236] Proposed Merger - A proposed merger with TowneBank was announced, with shareholders to receive either $41.00 per share in cash or 1.14 shares of TowneBank common stock[130][131] - The Company faces significant risks related to the proposed Merger, including potential delays in regulatory approvals and adverse effects on business relationships[227]

Core Insights - Old Point Financial Corporation (OPOF) reported a 23.5% increase in net income for Q1 2025, reaching 42 cents per share compared to 34 cents per share in the same quarter last year [2] - The company's net income rose to $2.2 million, a 25.7% increase from $1.7 million in the prior year [3] - Total revenue increased to $15.9 million from $14.8 million year-over-year, with noninterest income rising 19.4% to $3.8 million [4] Financial Performance - Net interest income grew by 4.1% year-over-year to $12 million, with a net interest margin (NIM) of 3.63%, up from 3.45% [3] - Noninterest expense decreased by 2% to $12.4 million, leading to an improved adjusted efficiency ratio of 78.3% from 85.8% [5] - Return on average assets (ROA) increased to 0.61%, while return on average equity (ROE) improved to 7.50% [6] Business Metrics - Loan balances averaged $1 billion, down 5.9% year-over-year, but average loan yields increased by 18 basis points to 5.60% [8] - Total deposits grew by 0.2% to $1.3 billion, with noninterest-bearing and savings deposits increasing, while time deposits fell by 17.9% [9] Credit Quality - Non-performing assets (NPAs) rose to $4.2 million, or 0.29% of total assets, up from $2.2 million, or 0.15% [10] - The allowance for credit losses increased to 1.17% of total loans, up from 1.12% [10] Strategic Developments - The company announced a planned merger with TowneBank, which is expected to enhance growth opportunities and operational efficiencies [11] - Old Point repurchased and retired a subordinated note, generating a gain of $0.7 million and reducing subordinated debt by $3.7 million [12]

Financial Performance - Net income for the first quarter of 2025 was $2.2 million, a decrease of $722 thousand or 25.1% from the fourth quarter of 2024, but an increase of $441 thousand or 25.7% from the first quarter of 2024[1]. - Basic earnings per share decreased to $0.42 in Q1 2025 from $0.57 in Q4 2024, representing a decline of 26.3%[38]. - Adjusted Operating Earnings (non-GAAP) for Q1 2025 were $1,985 thousand, a decrease of 30.98% from $2,880 thousand in Q4 2024 but an increase of 15.59% from $1,717 thousand in Q1 2024[41]. - Diluted EPS (GAAP) was $0.42 in Q1 2025, down 26.32% from $0.57 in Q4 2024 and up 23.53% from $0.34 in Q1 2024[41]. - Noninterest income rose to $3,847 thousand in Q1 2025, up 18.6% from $3,244 thousand in Q4 2024[38]. - Total noninterest expense for Q1 2025 was $12,447 thousand, an increase of 2.98% from $12,088 thousand in the previous quarter[38]. Asset and Deposit Growth - Total assets were $1.5 billion as of March 31, 2025, increasing by $418 thousand or 0.03% from December 31, 2024[5]. - Total deposits increased by $2.6 million or 0.2% from December 31, 2024, with noninterest-bearing deposits rising by $15.7 million or 4.4%[8]. - Total deposits increased to $1,257,478 thousand as of March 31, 2025, compared to $1,254,914 thousand at December 31, 2024, showing a growth of 0.2%[36]. - Total assets increased to $1,450,988 thousand as of March 31, 2025, compared to $1,450,570 thousand in the previous quarter and $1,445,489 thousand a year ago[40]. Credit Quality and Losses - Provision for credit losses was $717 thousand for the first quarter of 2025, compared to $90 thousand in the fourth quarter of 2024[12]. - Non-performing assets totaled $4.2 million as of March 31, 2025, an increase of $1.5 million or 53.9% from December 31, 2024[11]. - Allowance for credit losses on loans was 1.17% of total loans as of March 31, 2025, compared to 1.13% in the previous quarter and 1.12% a year ago[40]. - Loans charged off during the quarter, net of recoveries, amounted to $351 thousand for the quarter ended March 31, 2025[40]. Return Metrics - Return on average equity (ROE) was 7.50% for the first quarter of 2025, down from 9.96% in the fourth quarter of 2024[5]. - Return on average assets (ROA) was 0.61% for the quarter ended March 31, 2025, down from 0.77% in the previous quarter and 0.48% a year ago[40]. - Return on average equity (ROE) decreased to 7.50% for the quarter ended March 31, 2025, compared to 9.96% in the previous quarter and 6.44% a year ago[40]. Dividends and Shareholder Information - The Company declared a dividend of $0.14 per share for the first quarter of 2025, representing a payout ratio of 33.0% of earnings per share[18]. - Cash dividends declared per share remained stable at $0.14 for Q1 2025, consistent with the previous quarter[38]. - Investors are encouraged to read the definitive proxy statement regarding the proposed transaction with TowneBank for important information[28]. Merger and Future Outlook - The Company entered into a merger agreement with TowneBank, subject to shareholder and regulatory approvals[2]. - The forward-looking statements include expectations regarding the proposed merger with TowneBank and anticipated future operations and financial performance[23]. - The Company is subject to significant risks and uncertainties that could materially affect its operations and future prospects, including the timely closing of the merger and regulatory approvals[25]. - The Company does not intend to update or clarify any forward-looking statements except as required by law, indicating a cautious approach to future projections[26]. Non-GAAP Financial Measures - The Company emphasizes the importance of non-GAAP financial measures to provide additional understanding of ongoing operations and enhance comparability with other financial periods[22]. - The book value per share of the Company's common stock was $22.96, and the tangible book value per share (non-GAAP) was $22.61 as of March 31, 2025[20]. - Total stockholders' equity (GAAP) increased to $117,217 thousand in Q1 2025 from $113,970 thousand in Q4 2024 and $107,630 thousand in Q1 2024[41].

Financial Performance - Old Point Financial Corporation reported net income of $2.2 million for Q1 2025, a decrease of 25.1% from $2.9 million in Q4 2024, but an increase of 25.7% from $1.7 million in Q1 2024 [1][12] - Diluted earnings per share were $0.42 for Q1 2025, down from $0.57 in Q4 2024 and up from $0.34 in Q1 2024 [1][12] - Adjusted operating earnings for Q1 2025 were $2.0 million, or $0.39 per diluted share, compared to $1.7 million, or $0.34 per share, for Q1 2024 [1] Balance Sheet and Asset Quality - Total assets increased to $1.5 billion as of March 31, 2025, up $418 thousand or 0.03% from December 31, 2024 [7][12] - Net loans held for investment rose to $1.0 billion, an increase of $2.3 million or 0.2% from December 31, 2024 [7][12] - Total deposits were $1.3 billion, up $2.6 million or 0.2% from December 31, 2024, with noninterest-bearing deposits increasing by $15.7 million or 4.4% [8][12] Non-Performing Assets and Credit Losses - Non-performing assets totaled $4.2 million as of March 31, 2025, an increase of 53.9% from $2.7 million at December 31, 2024 [10][12] - The provision for credit losses was $717 thousand for Q1 2025, significantly higher than $90 thousand in Q4 2024 and $80 thousand in Q1 2024 [11][12] Income and Expenses - Net interest income for Q1 2025 was $12.0 million, a decrease of $244 thousand or 2.0% from Q4 2024, but an increase of $468 thousand or 4.1% from Q1 2024 [14][12] - Total noninterest income was $3.8 million for Q1 2025, compared to $3.2 million for both Q4 2024 and Q1 2024 [17][12] - Noninterest expense totaled $12.4 million for Q1 2025, an increase from $12.1 million in Q4 2024 but a decrease from $12.7 million in Q1 2024 [18][12] Capital Management - The Company declared a dividend of $0.14 per share for Q1 2025, consistent with Q4 2024, representing a payout ratio of 33.0% of earnings per share [19][12] - Total stockholders' equity increased to $117.2 million as of March 31, 2025, up $3.2 million or 2.8% from December 31, 2024 [9][12] Merger Agreement - On April 2, 2025, Old Point Financial Corporation entered into a merger agreement with TowneBank, subject to shareholder and regulatory approvals [2][3] - The merger is expected to provide a stronger platform for growth and enhanced value for shareholders, customers, and employees [5][12]

Group 1 - Monteverde & Associates PC is investigating Old Point Financial Corporation in relation to its proposed merger with TowneBank, where shareholders can choose to receive $41.00 in cash or 1.1400 shares of TowneBank common stock for each share of Old Point outstanding common stock [1] - The firm has a successful track record in recovering millions of dollars for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1] - Monteverde & Associates PC operates from the Empire State Building in New York City and is a national class action securities firm with experience in trial and appellate courts, including the U.S. Supreme Court [2][3] Group 2 - The firm encourages shareholders of Old Point Financial Corporation to reach out for additional information or concerns regarding the merger [3] - The firm emphasizes that no company, director, or officer is above the law, highlighting its commitment to shareholder rights [3] - Contact information for Juan Monteverde, Esq. is provided for shareholders seeking further assistance [3]

Capital Adequacy and Regulatory Compliance - As of December 31, 2024, the Bank met all capital adequacy requirements under the Basel III Final Rules, including the capital conservation buffer[51]. - The Basel III Capital Rules require a minimum CET1 ratio of at least 4.5%, plus a 2.5% capital conservation buffer, resulting in a minimum CET1 ratio of at least 7%[50]. - The Bank has not elected to opt into the Community Bank Leverage Ratio Framework (CBLRF) as of December 31, 2024[53]. - The FDIC's basic limit on deposit insurance coverage is $250,000 per depositor[58]. - Total base assessment rates for institutions with less than $10 billion in assets range from 2.5 to 32 basis points as of December 31, 2024[59]. - The FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, effective from the first quarterly assessment period of 2023[60]. - The Bank received an "Outstanding" CRA rating during its last evaluation in 2022[67]. - The proposed rules from July 2023 will significantly alter how banks with $100 billion or more in total assets calculate risk-based assets, but do not apply to the Company[52]. - The Company does not expect any impact on its ability to receive dividends from the Bank based on its current financial condition[48]. - The Dodd-Frank Act allows the FDIC to manage the required amount of reserves for the DIF, with a target designated reserve ratio of 2%[59]. - The Company does not anticipate any material impact on its business, operations, or financial condition due to the modified CRA regulations, which will be applicable starting January 1, 2026, with certain data reporting requirements effective from January 1, 2027[68]. Regulatory and Compliance Obligations - The Company is subject to various laws and regulations aimed at combating money laundering and terrorist financing, which impose significant compliance costs and obligations[71]. - The Corporate Transparency Act requires reporting companies to disclose beneficial ownership interests, with initial filing obligations for newly-formed companies and subsequent reports for updates[73]. - The Company is monitoring regulatory developments related to the Corporate Transparency Act, including future FinCEN rulemakings, to assess its impact[74]. - The federal banking agencies have adopted guidelines for cybersecurity programs, expecting financial institutions to maintain sufficient business continuity planning processes[75]. - The Company is subject to consumer protection laws and regulations, including the Truth in Lending Act and the Equal Credit Opportunity Act, which mandate certain disclosure requirements[78]. Economic and Interest Rate Risk - The Company’s earnings are influenced by the monetary policies of the Federal Reserve Board, which can affect the source and cost of funds and rates of return on loans and investments[86]. - Future legislative and regulatory initiatives may change the operating environment of the Company in substantial and unpredictable ways, potentially affecting costs and permissible activities[87]. - Interest rate risk is the primary market risk exposure for the Company, managed through policies approved by the ALCO and Board of Directors[292]. - As of December 31, 2024, the company's net interest income is projected to decrease marginally under various interest rate scenarios, with a decrease of $3,570,000 (6.90%) under a -300 basis points scenario[296]. - The company's balance sheet is slightly asset sensitive for a 300 basis points upward scenario, indicating a potential increase in net interest income when interest rates rise[294]. - The estimated change in net economic value of equity at December 31, 2024 shows an increase of $24,600,000 (9.97%) under a +300 basis points scenario[300]. - Under a -200 basis points scenario, the net economic value of equity is projected to decrease by $38,400,000 (15.56%)[300]. - The company uses computer simulation analysis to project net interest income under multiple interest rate scenarios, incorporating various assumptions such as growth and changes in asset and liability mix[293]. - Management cannot predict future interest rates or their exact effect on net interest income, emphasizing the inherent limitations in such computations[296]. - Economic value simulation indicates the longer-term earnings capability of the balance sheet, calculated based on discounted cash flow analysis[299]. - The company anticipates that changes in interest rates may significantly affect prepayments of loans and mortgage-backed securities, potentially impacting interest rate sensitivity[297]. - The economic value simulation for December 31, 2023 shows a change in economic value of equity of $3,200,000 (1.34%) under a +300 basis points scenario[300]. - The company aims to maintain a relatively neutral interest rate risk profile to minimize exposure to fluctuations in market rates[294].

Financial Performance - Net income for Q4 2024 was $2.9 million, a 20.9% increase from Q3 2024 and a 94.2% increase from Q4 2023[2] - Net income for the twelve months ended December 31, 2024, was $9,508,000, representing a 23.0% increase from $7,730,000 in the previous year[31] - Basic earnings per share for Q4 2024 was $0.57, up from $0.47 in Q3 2024 and $0.29 in Q4 2023, indicating a significant year-over-year growth of 96.6%[31] - Earnings per common share, diluted, increased to $0.57 in Q4 2024 from $0.47 in Q3 2024 and $0.29 in Q4 2023[35] Assets and Liabilities - Total assets reached $1.5 billion, a 0.3% increase from December 31, 2023[3] - Total assets as of December 31, 2024, were $1,478,544,000, an increase from $1,465,230,000 at the end of Q3 2024[32] - Total assets increased to $1,454,342 thousand in 2024 from $1,429,051 thousand in 2023, indicating a growth of approximately 1.6%[33] - Net loans held for investment decreased by $69.3 million, or 6.5%, from December 31, 2023, totaling $998.7 million[3] - The Company reported $998.71 million in net loans as of December 31, 2024, down from $1,068.05 million in 2023[29] Deposits and Equity - Total deposits increased by $24.5 million, or 2.0%, from December 31, 2023, reaching $1.3 billion[6] - Total deposits increased to $1,254.91 million as of December 31, 2024, up from $1,230.40 million in 2023[30] - The Company's total stockholders' equity increased by $7.2 million, or 6.7%, from December 31, 2023, to $114.0 million[7] - Total stockholders' equity as of December 31, 2024, was $113,970 thousand, up from $106,778 thousand in 2023, representing an increase of approximately 6.0%[36] Income and Expenses - Total interest and dividend income for Q4 2024 was $18,386,000, a slight decrease of 0.7% from $18,520,000 in Q3 2024, and an increase of 2.5% from $17,937,000 in Q4 2023[31] - Net interest income after provision for credit losses for Q4 2024 was $12,162,000, compared to $12,028,000 in Q3 2024 and $10,502,000 in Q4 2023, reflecting a year-over-year increase of 15.8%[31] - Noninterest income for Q4 2024 was $3.2 million, a decrease from $3.5 million in Q3 2024 and Q4 2023[15] - Total noninterest income for the twelve months ended December 31, 2024, was $13,409,000, slightly down from $13,873,000 in the previous year[31] - Total noninterest expense for the twelve months ended December 31, 2024, was $49,509,000, a decrease from $50,407,000 in the previous year[31] - Noninterest expense totaled $12.1 million for Q4 2024, a decrease from $12.4 million in Q3 2024 and $12.2 million in Q4 2023[16] Ratios and Margins - Return on average equity (ROE) was 9.96% for Q4 2024, up from 8.39% in Q3 2024 and 5.88% in Q4 2023[3] - The return on average assets (ROA) improved to 0.77% in Q4 2024 from 0.65% in Q3 2024, and 0.40% in Q4 2023[35] - The efficiency ratio for 2024 was reported at 78.01%, slightly improved from 78.53% in Q3 2024 and 79.53% in Q4 2023[35] - Net interest margin (NIM) for Q4 2024 was 3.52%, a decrease from 3.56% in Q3 2024 but an increase from 3.45% in Q4 2023[8] - The net interest margin for Q4 2024 was 3.53%, compared to 3.57% in Q3 2024 and 3.46% in Q4 2023[32] - The net interest margin (FTE) for 2024 was 3.55%, compared to 3.62% in 2023, indicating a slight decline[35] Credit Quality - Provision for credit losses was $90 thousand in Q4 2024, down from $282 thousand in Q3 2024 and $1.4 million in Q4 2023[10] - Non-performing assets (NPAs) as a percentage of total assets remained stable at 0.19% in Q4 2024, compared to 0.18% in Q3 2024 and 0.15% in Q4 2023[35] - The allowance for credit losses on loans was 1.13% of total loans as of December 31, 2024, consistent with the previous year[35] Dividends - For Q4 2024, the Company declared a dividend of $0.14 per share, maintaining a payout ratio of 24.7% of earnings per share[17] - Cash dividends declared per share remained consistent at $0.14 for both Q4 2024 and Q3 2024[31] - The Company continues to review cash dividends and payout ratios in light of economic conditions and future earnings expectations[17] Other Information - The Company emphasizes the importance of non-GAAP financial measures for understanding ongoing operations and enhancing comparability with prior periods[21] - The Company expects to recover investments in debt securities through scheduled payments of principal and interest, with unrealized losses not expected to affect earnings or regulatory capital[18] - The book value per share of the Company's common stock was $22.44, with a tangible book value per share of $22.09 as of December 31, 2024[20] - The average balance of loans for Q4 2024 was $1,018,029,000, with an interest income of $14,414,000, yielding an interest rate of 5.63%[32] - The average balance of loans for 2024 was $1,048,395 thousand, with an interest income of $58,733 thousand and a yield of 5.60%, compared to $1,078,303 thousand, $56,305 thousand, and 5.22% in 2023[33]

Core Viewpoint - Old Point Financial Corporation reported record earnings for 2024 despite a challenging banking environment, with a focus on capital, asset quality, liquidity, and expense discipline [2] Financial Performance - Net income for Q4 2024 was $2.9 million, up from $2.4 million in Q3 2024 and $1.5 million in Q4 2023, with diluted earnings per share of $0.57 [1] - For the year ended December 31, 2024, net income was $9.5 million, an increase of 23% from $7.7 million in 2023 [1][8] - Return on average equity (ROE) for Q4 2024 was 9.96%, compared to 8.39% in Q3 2024 and 5.88% in Q4 2023 [8] - Return on average assets (ROA) for Q4 2024 was 0.77%, up from 0.64% in Q3 2024 and 0.40% in Q4 2023 [8] Balance Sheet and Asset Quality - Total assets increased to $1.5 billion as of December 31, 2024, up $4.2 million from the previous year [4] - Net loans held for investment decreased by $69.3 million, or 6.5%, to $998.7 million, primarily due to declines in consumer, construction, and commercial loans [4] - Total deposits rose to $1.3 billion, an increase of $24.5 million, or 2.0%, from December 31, 2023 [5] - Non-performing assets (NPAs) were $2.7 million, representing 0.19% of total assets, slightly up from 0.15% a year earlier [7] Noninterest Income and Expense - Total noninterest income for Q4 2024 was $3.2 million, down from $3.5 million in Q3 2024 and Q4 2023 [13] - Noninterest expense totaled $12.1 million for Q4 2024, a decrease from $12.4 million in Q3 2024 and $12.2 million in Q4 2023 [14] Capital Management - Total stockholders' equity increased by $7.2 million, or 6.7%, to $114.0 million as of December 31, 2024 [6] - The Company declared a dividend of $0.14 per share for Q4 2024, consistent with the previous year, representing a payout ratio of 24.7% [15] Interest Income and Margin - Net interest income for Q4 2024 was $12.3 million, a slight decrease from the previous quarter but an increase of 3.3% from Q4 2023 [10] - Net interest margin (NIM) was 3.52% for Q4 2024, down from 3.56% in Q3 2024 but up from 3.45% in Q4 2023 [11]

Financial Performance - Net income for Q3 2024 was $2.4 million, a 74.9% increase from $1.4 million in Q3 2023, with diluted earnings per share rising from $0.27 to $0.47[118] - Return on average equity (ROE) for Q3 2024 was 8.39%, up from 5.25% in Q3 2023[120] - Net interest income for Q3 2024 was $12.3 million, a 7.7% increase from $11.4 million in Q3 2023[124] - Total noninterest income for Q3 2024 was $3.5 million, a slight decrease of $10 thousand compared to Q3 2023, primarily due to lower mortgage banking income[160] - Noninterest expense decreased to $12.4 million in Q3 2024 from $12.9 million in Q3 2023, driven by reductions in salaries and employee benefits[161] - Total revenue (FTE) (non-GAAP) for the three months ended September 30, 2024, was $15,819, up from $14,950 in the same period last year, reflecting a growth of 5.8%[218] - Efficiency ratio for the three months ended September 30, 2024, was 78.53%, significantly improved from 86.40% in the same period last year[218] Asset and Liability Management - Total assets reached $1.5 billion as of September 30, 2024, reflecting a $31.6 million or 2.2% increase since December 31, 2023[119] - Net loans held for investment decreased by $54.0 million, or 5.1%, to $1.0 billion from December 31, 2023[119] - Total deposits increased by $52.4 million, or 4.3%, from December 31, 2023[119] - Total stockholders' equity increased by 8.1% to $115.5 million as of September 30, 2024, from $106.8 million on December 31, 2023[197] - The loan portfolio's ending balance was $1,025.7 million as of September 30, 2024, down from $1,080.3 million at December 31, 2023[174] - The Company had FHLB advances of $40.0 million as of September 30, 2024, down from $69.5 million at December 31, 2023[166] - The Company experienced an increase in cash and cash equivalents by $96.0 million from December 31, 2023, to September 30, 2024[164] Credit Quality - Provision for credit losses was $282 thousand in Q3 2024, down from $505 thousand in Q3 2023[125] - Charged-off loans totaled $1.5 million in the first nine months of 2024, compared to $1.2 million in the same period of 2023, indicating a rise in loan defaults[157] - The annualized net loans charged off to average loans ratio was 0.18% for Q3 2024, up from 0.09% in Q3 2023, reflecting increased credit risk[157] - The Allowance for Credit Losses (ACL) was $11.9 million as of September 30, 2024, down from $12.4 million as of December 31, 2023[182] - The ACLL (Allowance for Credit Losses on Loans) decreased to $11,700 thousand from $12,206 thousand, a reduction of 4.2%[183] - Nonperforming assets remained low as of September 30, 2024, although future economic conditions could impact performance[178] Interest Rate and Economic Sensitivity - Net interest margin (NIM) improved to 3.56% in Q3 2024, compared to 3.33% in Q3 2023[123] - The company anticipates a marginal decrease in net interest income under various interest rate scenarios, with a projected decrease of $4,380 (9.15%) if rates increase by 300 basis points[230] - The company is slightly asset sensitive as of September 30, 2024, indicating that net interest income will increase with rising interest rates[228] - The estimated change in net economic value for a +300 basis points change in the yield curve is $32,400 thousand, representing a 13.97% increase[233] Capital and Liquidity - As of September 30, 2024, the Common Equity Tier 1 Capital to Risk-Weighted Assets ratio is 12.76%, significantly above the regulatory minimum of 4.5%[205] - The Total Capital to Risk-Weighted Assets ratio stands at 13.80%, exceeding the regulatory minimum of 8.0%[205] - The Tier 1 Leverage ratio is reported at 9.99%, well above the required minimum of 4.0%[205] - The liquidity coverage ratio is reported at 933.4%, indicating strong liquidity management[211] - Total funding sources amount to $778,667 thousand, with available liquidity after commitments totaling $738,667 thousand[211] Strategic Initiatives - The Company plans to consider investing capital in share repurchases to improve shareholder return, as measured by ROE and EPS[198] - The Company is focusing on increasing lower-cost deposits by targeting new noninterest-bearing deposits and savings deposits[194] - The company is focusing on expense reduction initiatives and strategic shifts in mortgage lending to enhance future financial performance[219] Regulatory and Compliance - The company has maintained effective disclosure controls and procedures as evaluated by the CEO and CFO[235] - There were no changes in the company's internal control over financial reporting during the third quarter ended September 30, 2024[238]