Financial Performance - Net interest income for Q3 2020 was $11.9 million, compared to $11.6 million in Q3 2019, and for the nine months ended September 30, 2020, it was $36.9 million, up from $31.7 million in the same period of 2019[223]. - Net interest income for the three months ended September 30, 2020, was $11,909 thousand, up from $11,593 thousand in the same period of 2019, representing an increase of 2.7%[229]. - The company reported a net interest income increase of $5,145 thousand for the nine months ended September 30, 2020, compared to the same period in 2019, totaling $36,883 thousand[232]. - Total non-interest income increased by 39.80% to $5,062 million for the three months ended September 30, 2020, compared to $3,621 million in the prior year[243]. - Loan servicing income rose by 60.22% to $1,144 million for the three months ended September 30, 2020, driven by higher mortgage loan origination fees[243]. - Gain on sale of loans increased by 192.64% to $1,987 million for the three months ended September 30, 2020, reflecting higher origination volumes[243]. Interest Margin and Rates - The net interest margin for Q3 2020 was 3.11%, down from 3.34% in Q3 2019, primarily due to the Federal Reserve's actions that lowered overnight interest rates by 125 basis points in March 2020[224]. - For the nine months ended September 30, 2020, the net interest margin was 3.36%, slightly up from 3.35% in the same period of 2019, attributed to an increase in the accretion of purchased credit impaired discounts[225]. - The net interest margin exceeded the interest rate spread due to non-interest-bearing sources of funds supporting interest-earning assets[222]. - The interest rate spread decreased to 2.92% for the three months ended September 30, 2020, down from 3.11% in the same period of 2019[229]. - The average yield on loans decreased to 4.48% for the three months ended September 30, 2020, down from 5.08% in the same period of 2019[229]. Loan and Deposit Growth - The company originated $139 million in SBA Paycheck Protection Program loans during Q3 2020, contributing to the increase in net interest income[223]. - Total deposits rose to $1,064,077 thousand for the three months ended September 30, 2020, compared to $1,005,084 thousand in the same period of 2019, marking a growth of 5.9%[229]. - Loans increased to $1,258,224 thousand for the three months ended September 30, 2020, from $1,143,252 thousand in the same period of 2019, reflecting a growth of 10.1%[229]. - Total loans outstanding increased by $53 million to $1.23 billion as of September 30, 2020, from $1.18 billion at December 31, 2019[265]. - Total loans increased to $12.579 billion as of September 30, 2020, compared to $5.396 billion at December 31, 2019, reflecting a growth of 133%[284]. Allowance for Loan Losses - The allowance for loan losses is based on ongoing assessments of estimated probable incurred losses, considering factors such as historical loss experience and prevailing economic conditions[210]. - The company continues to refine its allowance for loan losses methodology, emphasizing historical performance adjusted for economic and qualitative factors[211]. - The allowance for loan losses increased to $14.8 million at September 30, 2020, representing 1.21% of loans receivable, up from $10.3 million or 0.88% at December 31, 2019[272]. - The allowance for loan losses (ALL) increased to $14,836 million at the end of the period, up from $10,320 million at the beginning of the period, representing a 43.0% increase[279]. - The company added $5,250 million to the ALL via provision for loan losses charged to operations during the period[279]. Asset and Equity Changes - Cash and cash equivalents increased to $115.5 million at September 30, 2020, from $55.8 million at December 31, 2019, reflecting robust deposit levels and loan growth[258]. - Total assets at the end of the period were $1,622,593 million, an increase from $1,531,249 million at the end of the previous year, representing a growth of 6.0%[279]. - Total stockholders' equity rose to $157.3 million at September 30, 2020, from $150.6 million at December 31, 2019, primarily due to net income of $9.2 million[299]. Nonperforming Assets and Loan Performance - Total nonperforming assets (NPAs) decreased by $6.7 million to $14,916 million as of September 30, 2020, from $21,620 million as of December 31, 2019, primarily due to reductions in acquired non-performing loans[281]. - The ratio of nonperforming loans (NPLs) to total loans was 1.15% as of September 30, 2020, down from 1.71% a year earlier, indicating improved loan performance[279]. - Nonperforming assets decreased to $14.9 million or 0.92% of total assets at September 30, 2020, down from $21.6 million or 1.41% at December 31, 2019[284]. Capital and Liquidity - The Bank's Tier 1 capital to risk-weighted assets ratio was 13.7% as of September 30, 2020, exceeding the required minimum of 6.0%[310]. - Total capital to risk-weighted assets ratio was 15.0% as of September 30, 2020, above the minimum requirement of 8.0%[310]. - The Bank's liquidity is considered adequate, with no known events likely to materially affect liquidity[305]. - The Bank could borrow $139.2 million under the Federal Reserve's PPPLF facility as of September 30, 2020[303]. - The Company maintains a line of credit with the Federal Reserve Bank with a capacity of $1.0 million[304].
Citizens munity Bancorp(CZWI) - 2020 Q3 - Quarterly Report