ECB Bancorp(ECBK) - 2023 Q1 - Quarterly Report

Financial Position - Total assets increased by $92.4 million, or 8.7$1.16 billion at March 31, 2023, from $1.06 billion at December 31, 2022[132] - Shareholders' equity increased by$351,000, or 0.2%, to $163.1 million at March 31, 2023, primarily due to net income of$901,000[138] - Cash and cash equivalents increased by $5.3 million, or 8.5$67.3 million at March 31, 2023, attributed to higher deposits and borrowings[133] - Federal Home Loan Bank advances increased by $34.0 million, or 19.5$208.0 million at March 31, 2023, to support loan growth and liquidity[137] - As of March 31, 2023, the company exceeded all regulatory capital requirements and was categorized as well-capitalized[162] Loan and Deposit Activity - Net loans increased by $85.6 million, or 9.7$971.2 million at March 31, 2023, with significant growth in commercial real estate loans by $36.3 million, or 23.2$56.3 million, or 7.8%, to $774.4 million at March 31, 2023, driven by a$76.0 million increase in certificates of deposit, or 23.8%[136] - Core deposits decreased by $19.8 million, or 5.0$378.6 million at March 31, 2023, from $398.3 million at December 31, 2022[136] - The company originated and purchased$109.6 million in loans during the three months ended March 31, 2023, compared to $557.5 million for the year ended December 31, 2022[158] - Net increases in deposits were$56.3 million for the three months ended March 31, 2023, and $146.4 million for the year ended December 31, 2022[159] - The level of brokered time deposits increased from$100.8 million at December 31, 2022, to $112.7 million at March 31, 2023[159] Income and Expenses - Net income for the three months ended March 31, 2023, was$901,000, a decrease from $1.4 million for the same period in 2022[139] - Interest and dividend income rose by$6.5 million, or 115.0%, to $12.1 million for the three months ended March 31, 2023, primarily due to a$5.7 million increase in interest and fees on loans[140] - Total interest expense increased by $5.0 million, or 725.5$5.7 million for the three months ended March 31, 2023, compared to $690,000 for the same period in 2022[142] - Net interest and dividend income rose by$1.4 million, or 29.4%, to $6.4 million for the three months ended March 31, 2023, from$4.9 million in the prior year[143] - Noninterest income decreased by $22,000, or 8.8$229,000 for the three months ended March 31, 2023, from $251,000 in the prior year[145] - Noninterest expense increased by$1.3 million, or 41.7%, to $4.5 million for the three months ended March 31, 2023, driven by higher salaries and professional fees[146] - Income tax expense decreased by$176,000, or 35.6%, to $319,000 for the three months ended March 31, 2023, from$495,000 in the prior year[146] Asset and Interest Metrics - Average interest-earning assets increased by $433.4 million to$1.08 billion for the three months ended March 31, 2023[141] - Average balance of interest-bearing deposits increased by $168.4 million, or 34.2$660.8 million for the three months ended March 31, 2023, from $492.4 million in the prior year[142] - The average balance of net interest-earning assets increased by$226.7 million during the three months ended March 31, 2023[143] - The net interest margin decreased by 70 basis points to 2.38% for the three months ended March 31, 2023, from 3.08% for the same period in 2022[143] Liquidity and Commitments - At March 31, 2023, the company had outstanding advances of $208.0 million from the Federal Home Loan Bank and unused borrowing capacity of$209.4 million with the same bank[153] - As of March 31, 2023, the company had $30.3 million in loan commitments outstanding, with$79.4 million in unused lines of credit and $72.1 million in unadvanced construction loans[155] - Non-brokered certificates of deposit due within one year totaled$136.7 million, representing 17.7% of total deposits, indicating potential liquidity challenges if these deposits do not remain[156] - The company is committed to maintaining a strong liquidity position and anticipates sufficient funds to meet current funding commitments[161] Impact of Economic Factors - Provision for credit losses increased by $758,000, or 626.4$879,000 for the three months ended March 31, 2023, compared to $121,000 for the same period in 2022, primarily due to loan portfolio growth[144] - The primary impact of inflation on the company's operations is reflected in increased operating costs, with interest rates having a more significant impact on performance[163]