William Penn Bancorporation(US:WMPN)2024-09-05 17:38Loan Portfolio and Lending Activities - As of June 30, 2024, 44.7% of the total loan portfolio, amounting to $211.9 million, was secured by commercial non-residential real estate and related loans, up from 25.9% or $120.4 million in June 30, 2021[204]. - The company plans to continue increasing its commercial lending activities, particularly in commercial real estate and multi-family residential loans, to diversify its balance sheet[204]. - Total loans amounted to $473,561 thousand, a decrease from $480,856 thousand, representing a 0.27% decline year-over-year[229]. - One- to four-family residential loans totaled $127,911 thousand, down from $135,046 thousand, reflecting a 5.4% decrease[229]. - Home equity and HELOCs decreased to $30,767 thousand from $32,684 thousand, a decline of 5.9%[229]. - Total commercial real estate loans increased to $289,071 thousand from $286,580 thousand, showing a 0.87% growth[229]. Financial Performance - The company recorded a net income of $168 thousand, or $0.02 per share, for the year ended June 30, 2024, compared to $2.8 million, or $0.22 per share, for the previous year[244]. - Net interest income for the year ended June 30, 2024, was $17.1 million, a decrease of $6.0 million, or 25.8%, compared to the previous year[245]. - Non-interest income totaled $2.8 million for the year ended June 30, 2024, an increase of $886 thousand, or 45.4%, from the previous year[249]. - Non-interest expense totaled $20.9 million for the year ended June 30, 2024, a decrease of $1.2 million, or 5.3%, from the previous year[250]. - The company recorded a $458 thousand income tax benefit for the year ended June 30, 2024, reflecting an effective tax rate of (157.9)%[251]. Asset and Liability Management - Total assets decreased by $28.9 million, or 3.4%, to $818.7 million at June 30, 2024, primarily due to a $21.0 million decrease in investments and a $6.9 million decrease in net loans[222]. - Cash and cash equivalents decreased by $595 thousand, or 2.9%, to $20.2 million at June 30, 2024, largely due to stock repurchases totaling $38.0 million[223]. - The investment portfolio decreased by $20.6 million, or 7.7%, to $245.8 million at June 30, 2024, driven by principal paydowns of securities[224]. - Total interest-earning assets decreased to $744.4 million in 2024 from $777.7 million in 2023, with a net interest income of $17.1 million compared to $23.1 million in the previous year[253]. - Total interest-bearing liabilities increased to $621.0 million in 2024 from $603.5 million in 2023, with total interest-bearing deposits rising to $570.0 million[253]. Credit Quality and Risk Management - The allowance for credit losses is considered a critical accounting policy, with potential future adjustments based on economic conditions[214]. - The company continues to assess the collectability of non-performing loans, with potential for additional losses if property values decline[215]. - The allowance for credit losses totaled $3.0 million, or 0.63% of total loans, as of June 30, 2024, down from $3.3 million, or 0.69% of total loans, as of June 30, 2023[246]. - Non-performing assets decreased by 20.7% to $3.3 million as of June 30, 2024, from $4.2 million as of June 30, 2023, resulting in a ratio of non-performing assets to total assets of 0.40%[261]. - The company emphasized a conservative credit risk management strategy, focusing on diversification and monitoring to limit potential losses from defaults[257]. Capital Management and Shareholder Returns - The company has authorized multiple stock repurchase programs, including a fifth program for up to 1,281,019 shares, representing approximately 10.0% of outstanding shares, completed on August 28, 2023[210]. - The company declared a one-time special dividend of $0.30 per common share on July 21, 2021, and regular cash dividends totaling $0.12 per common share for the fiscal years ended June 30, 2024 and 2023[211]. - Stockholders' equity decreased by $36.1 million, or 22.5%, to $124.6 million at June 30, 2024, primarily due to share repurchases totaling $38.0 million[242]. Technology and Operational Efficiency - The company is focused on enhancing its technology platform with substantial investments in IT infrastructure, including online and mobile banking technologies[209]. - The company has consolidated several branches to optimize its operations, including the consolidation of three branches into one effective June 30, 2022, and two branches into one effective December 31, 2022[206]. Deposits and Borrowings - Deposits decreased by $5.5 million, or 0.9%, to $629.8 million from $635.3 million year-over-year[236]. - The company reported a $31.6 million decrease in money market accounts and an $8.1 million decrease in savings accounts[236]. - Borrowings increased by $14.0 million, or 41.2%, to $48.0 million as of June 30, 2024, from $34.0 million as of June 30, 2023[240].