Financial Performance - Net income available to common shareholders increased by $429,000, or 11.0%, to $4.3 million for the three months ended March 31, 2023, compared to $3.9 million for the same period in 2022[166]. - Earnings per diluted common share were $0.59 for the three months ended March 31, 2023, compared to $0.53 for the same period in 2022[166]. - The increase in net interest income was a primary driver for the increase in net income available to common shareholders[166]. - The Company experienced a decrease in the provision for credit losses, which contributed to the overall increase in net income[166]. - Total non-interest income for the three months ended March 31, 2023 increased by $742,000, or 7.5%, to $10,701,000 compared to $9,959,000 in the prior year[186]. Assets and Equity - Total assets increased by $19.0 million, or 3.1%, to $631.5 million as of March 31, 2023, from $612.5 million as of December 31, 2022[169]. - Shareholders' equity increased by $3.1 million, or 3.2%, to $99.6 million as of March 31, 2023, from $96.5 million as of December 31, 2022[170]. - Average tangible common equity increased to $57.8 million for the three months ended March 31, 2023, compared to $46.1 million for the same period in 2022[169]. Credit Losses and Allowances - The Company recorded an increase of $1.4 million to the allowance for credit losses for loans upon adopting the current expected credit loss (CECL) methodology[165]. - Provision for credit losses for the three months ended March 31, 2023 was $78,000, a decrease of 76.1% compared to $327,000 for the same period in the prior year[184]. - The total allowance for credit losses on loans increased by $1.4 million to $5.873 million as of March 31, 2023, compared to $4.153 million as of December 31, 2022, following the adoption of the CECL methodology[240]. Interest Income and Expenses - Net interest income increased by $376,000, or 5.8%, from $6.6 million for the three months ended March 31, 2022, to $7.0 million for the same period in 2023[176]. - The average yield on interest-earning assets increased by 141 basis points from 5.68% in Q1 2022 to 7.09% in Q1 2023[177]. - The average interest rate paid on interest-bearing liabilities increased by 269 basis points from 0.92% in Q1 2022 to 3.61% in Q1 2023[178]. - The average cost of funds for total deposits was 3.43% for the three months ended March 31, 2023, compared to 0.74% for the same period in 2022[244]. Deposits and Loans - Total deposits rose by $15.4 million, or 3.12%, to $508.4 million as of March 31, 2023, from $493.0 million as of December 31, 2022[244]. - The average volume of interest-bearing deposits increased by $59.3 million, or 16.7%, from $355.9 million in Q1 2022 to $415.2 million in Q1 2023[178]. - As of March 31, 2023, total loans increased by $4.9 million to $455.2 million compared to $450.3 million at December 31, 2022[224]. Non-Interest Income and Expenses - Total non-interest expense for the three months ended March 31, 2023 increased by $709,000, or 6.5%, to $11,668,000 compared to $10,959,000 in the prior year[193]. - Salaries and employee benefits increased by $407,000, or 5.5%, to $7,863,000 for the three months ended March 31, 2023, driven by increases in salaries and related payroll expenses[194]. - Service fees and other income increased by $1,000,000, or 45.1%, to $3,216,000 for the three months ended March 31, 2023, due to increases in pension administration fees and other income[191]. Capital Ratios - As of March 31, 2023, the company's CET1 and Total Capital ratios were 15.6% and 21.2%, respectively, indicating a robust capital position[171]. - Common Equity Tier 1 Capital to Risk Weighted Assets ratio increased to 15.63% as of March 31, 2023, compared to 14.80% as of December 31, 2022[253]. - Total Capital to Risk Weighted Assets ratio improved to 21.21% as of March 31, 2023, from 20.21% as of December 31, 2022[253]. Market Conditions and Risks - A simulated increase of 200 basis points in interest rates is projected to increase net interest income by 12.20% over a 12-month horizon[272]. - Inflation generally increases the costs of funds and operating overhead, affecting the performance of financial institutions more significantly than general inflation levels[273]. - The Company believes it has adequate liquidity to meet obligations, but potential economic downturns could restrict funding sources[260].

Financial Performance - The total assets of Tectonic Financial, Inc. increased to $612.54 million as of December 31, 2022, compared to $585.01 million in 2021, reflecting a growth of approximately 4.5%[451] - Loans, net of allowance for loan losses, rose to $445.82 million in 2022 from $424.60 million in 2021, indicating an increase of about 5.0%[451] - Total deposits grew to $493.03 million in 2022, up from $444.17 million in 2021, representing an increase of approximately 11.0%[451] - Retained earnings increased significantly to $48.56 million in 2022, compared to $34.85 million in 2021, marking a growth of around 39.5%[451] - Net income for 2022 was $17,030,000, slightly down from $17,034,000 in 2021, indicating a marginal decrease of 0.02%[456] - Earnings per common share (basic) decreased to $2.19 in 2022 from $2.28 in 2021, a decline of 3.9%[453] - The company reported a comprehensive income of $14,990,000 in 2022, down from $16,638,000 in 2021, a decline of 9.9%[456] - The Company earned $291,000 and $919,000 under the Tectonic Advisors-CWA Services Agreement for the years ended December 31, 2022 and 2021, respectively, indicating a decline of approximately 68%[586] - Income from subsidiaries for the year ended December 31, 2022, was $18.211 million, slightly up from $18.158 million in 2021[629] - The company's net income for 2022 was $17.030 million, compared to $17.034 million in 2021, indicating a stable performance[629] Interest Income and Expenses - Total interest income increased to $33,385,000 in 2022 from $29,384,000 in 2021, representing a growth of 6.8%[453] - Net interest income after provision for loan losses rose to $26,217,000 in 2022, compared to $23,543,000 in 2021, an increase of 11.4%[453] - Total interest expense for the Banking segment rose to $4,993,000 in 2022 from $2,736,000 in 2021, representing an increase of approximately 82.5%[596] - Total non-interest income grew to $40,040,000 in 2022, up from $36,624,000 in 2021, reflecting an increase of 9.9%[453] - Total non-interest expense increased to $44,805,000 in 2022, compared to $38,330,000 in 2021, marking a rise of 16.9%[453] Loan Portfolio and Allowance for Loan Losses - The allowance for loan losses was $4,513,000 as of December 31, 2022, compared to $4,152,000 in 2021, indicating an increase of about 8.7%[519] - The provision for loan losses was $1,264,000 in 2022, down from $2,214,000 in 2021, a decrease of 42.9%[453] - The total recorded investment in loans as of December 31, 2022, was $450,332,000, compared to $428,747,000 in 2021, indicating growth in the loan portfolio[550] - The total impaired loans as of December 31, 2022, amounted to $2,126,000, a decrease from $3,071,000 as of December 31, 2021[538] - The Company identified one troubled debt restructuring (TDR) loan amounting to $902,000 as of December 31, 2022, with $812,000 guaranteed[536] - Non-accrual loans totaled $2,466,000 as of December 31, 2022, an increase from $2,188,000 in 2021[535] Capital and Regulatory Compliance - The Bank's total capital to risk-weighted assets ratio was 20.21%, significantly exceeding the required minimum of 10.5% under Basel III[593] - The Common Equity Tier 1 (CET1) capital to risk-weighted assets ratio for Tectonic Financial, Inc. was 14.80% as of December 31, 2022, well above the required minimum of 7.0%[593] - The Company’s regulatory capital ratios are in excess of the capital conservation buffer and the levels established for "well capitalized" institutions under the Basel III Rules as of December 31, 2022[592] Assets and Liabilities - The total liabilities of Tectonic Financial, Inc. were $516.04 million as of December 31, 2022, compared to $500.22 million in 2021, reflecting an increase of approximately 3.2%[451] - Cash and cash equivalents at the end of 2022 were $42,155,000, down from $45,992,000 at the end of 2021, a decrease of 6.0%[461] - The total amortized cost of securities held to maturity as of December 31, 2022, was $25.262 million, with a fair value of $26.482 million[511] - The estimated fair value of available-for-sale securities was $20,633,000, down from an amortized cost of $23,630,000, indicating a decline in value[518] Regulatory and Reporting - Tectonic Financial, Inc. is classified as an "emerging growth company" and may take advantage of reduced regulatory and reporting requirements until annual gross revenues exceed $1.07 billion[296] - The company has opted to present only two years of audited financial statements as permitted under the JOBS Act[295] - The Company reported no uncertain tax positions recognized in the financial statements[494] Miscellaneous - The Company has established a measurement system for monitoring net interest rate sensitivity, which is managed by the Bank's Asset Liability Committee[437] - The Company provides investment advisory services, with fees based on a percentage of assets under management, recognized ratably over the service period[503] - The Company maintains cash in bank deposit accounts, which may exceed federally insured limits, but has not experienced losses in such accounts[469] - The Company had no foreclosed assets reported in its consolidated balance sheets as of December 31, 2022, and had $1.1 million in foreclosed assets at December 31, 2021[488]