William Penn Bancorporation(US:WMPN)2023-11-02 16:49Financial Position - Total assets decreased by $17.6 million, or 2.1%, to $830.0 million as of September 30, 2023, from $847.6 million at June 30, 2023[170]. - Cash and cash equivalents decreased by $2.8 million, or 13.6%, to $18.0 million as of September 30, 2023, primarily due to the repurchase of 1,624,018 shares at a total cost of $19.8 million[171]. - Total investments decreased by $11.1 million, or 4.2%, to $255.3 million as of September 30, 2023, mainly due to a $6.0 million increase in gross unrealized losses on available-for-sale securities[172]. - Net loans decreased by $5.4 million, or 1.1%, to $472.1 million as of September 30, 2023, attributed to a slowdown in borrower demand due to the interest rate environment[173]. - Deposits decreased by $8.8 million, or 1.4%, to $626.5 million as of September 30, 2023, primarily due to a decrease in money market accounts and non-interest bearing checking accounts[174]. - Borrowings increased by $17.0 million, or 50.0%, to $51.0 million as of September 30, 2023, to fund share repurchases[175]. - Stockholders' equity decreased by $24.3 million, or 15.1%, to $136.4 million as of September 30, 2023, mainly due to share repurchases and an increase in accumulated other comprehensive loss[176]. - Book value per share was $12.60 as of September 30, 2023, down from $12.91 as of June 30, 2023[177]. - Tangible book value per share decreased to $12.10 as of September 30, 2023, down from $12.48 as of June 30, 2023[200]. - The bank's total stockholders' equity was $136,394,000 as of September 30, 2023, down from $160,745,000 as of June 30, 2023[200]. Income and Expenses - For the three months ended September 30, 2023, net income was $179 thousand, a decrease of 82.57% from $1.0 million in the same period in 2022[181]. - Net interest income for the same period was $4.7 million, down 23.99% from $6.2 million in the prior year, with a net interest margin of 2.52% compared to 3.19%[182]. - Non-interest income increased to $650 thousand, a rise of 130.5% from $282 thousand, primarily due to a $73 thousand unrealized gain on equity securities[186]. - Non-interest expenses totaled $5.2 million, a decrease of 6.08% from $5.6 million, mainly driven by a reduction in salaries and employee benefits[187]. - Core net income for the three months ended September 30, 2023, was $123,000, a significant decrease from $1,027,000 in the same period of 2022[203]. Credit Quality - The allowance for credit losses is a critical accounting policy, with approximately $3.7 million in non-performing assets as of September 30, 2023[162]. - The provision for credit losses was recorded at $5 thousand, with an allowance for credit losses totaling $3.6 million, or 0.75% of total loans[183]. - Asset quality metrics remained strong, with non-performing assets to total assets decreasing to 0.45% from 0.49%[189]. - The company had no loans modified for borrowers experiencing financial difficulty during the quarter[192]. - Future provisions for credit losses may be necessary based on changes in economic conditions and other factors[184]. Interest Rate Risk - Average interest-earning assets were $753.98 million, with total interest income of $8.01 million, resulting in an annualized yield of 4.25%[194]. - As of September 30, 2023, net interest income is projected to decrease by approximately 7.87% to 15.91% in a rising interest rate environment[219]. - In a declining interest rate environment, one-year net interest income is expected to increase by approximately 5.57% to 11.16%[219]. - Economic value at risk would be negatively impacted by a rise in interest rates and positively impacted by a decline in interest rates[220]. - The company has established an interest rate floor of zero percent for measuring interest rate risk[220]. - The net portfolio value (NPV) is estimated to decrease by 7.63% in a +200 basis points scenario[219]. - In a -200 basis points scenario, the NPV is estimated to increase by 5.86%[219]. - The NPV is projected to be $173,343 in a +200 basis points scenario[219]. - The NPV is projected to be $198,656 in a -200 basis points scenario[219]. - The company is closely monitoring interest rate changes to assess their impact on financial performance[220]. - The analysis indicates significant sensitivity of net interest income and NPV to interest rate fluctuations[219]. Liquidity - The liquidity ratio was 39.4% as of September 30, 2023, a decrease from 40.8% as of June 30, 2023, indicating a slight decline in liquidity management[204]. - The bank had an available borrowing limit of $290.2 million with the FHLB of Pittsburgh as of September 30, 2023, with $51.0 million of advances outstanding[207]. - Average assets for the three months ended September 30, 2023, were $836,094,000, compared to $864,752,000 for the same period in 2022[203]. - The return on average assets (GAAP) was 0.09% for the three months ended September 30, 2023, down from 0.48% in the same period of 2022[203]. - The return on average equity (GAAP) was 0.47% for the three months ended September 30, 2023, compared to 2.14% for the same period in 2022[203]. Commitments - Commitments to originate loans totaled $9.5 million as of September 30, 2023, with unfunded commitments under lines of credit amounting to $72.4 million[208].