Bank7(BSVN)2024-11-05 14:18Financial Performance - Pre-tax net income for Q3 2024 was $15.5 million, an increase of $5.3 million, or 51.9%, compared to $10.2 million in Q3 2023[130] - Return on average assets and return on average equity for Q3 2024 were 2.73% and 23.67%, respectively, compared to 1.82% and 18.89% in Q3 2023[131] - Net interest income for Q3 2024 was $21.2 million, an increase from $20.7 million in Q3 2023[134] - Noninterest income for the three months ended September 30, 2024, was $3.7 million, an increase of $2.7 million or 265.1% from $1.0 million in the same period in 2023[156] - Total noninterest income for the nine months ended September 30, 2024, was $8.9 million, an increase of $6.4 million or 258.1% from $2.5 million in the same period in 2023[157] Loan and Deposit Metrics - Total loans reached $1.44 billion as of September 30, 2024, an increase of $44.8 million, or 3.2%, from the previous year[129] - Total deposits were $1.52 billion as of September 30, 2024, a decrease of $69.4 million, or 4.4%, compared to September 30, 2023[129] - Interest income on total loans for the first nine months of 2024 totaled $89.8 million, an increase of $8.7 million, or 10.7%, compared to the same period in 2023[141] - The commercial real estate loan category accounted for 56.2% of total loans as of September 30, 2024, up from 55.5% as of December 31, 2023[163] - Nonaccrual loans decreased to $6.95 million as of September 30, 2024, from $18.94 million at December 31, 2023, representing a decline of approximately 63.3%[177] Credit Quality and Loss Provisions - The provision for credit losses for Q3 2024 decreased by $4.2 million, or 100%, compared to the same period in 2023[132] - The allowance for credit losses as a percentage of gross loans decreased by 24 basis points to 1.24%[154] - The allowance for credit losses decreased to $17.9 million as of September 30, 2024, from $19.7 million as of December 31, 2023[163] - The total charge-offs for the nine months ended September 30, 2024, amounted to $2.0 million, compared to $23,000 for the same period in 2023, reflecting a significant increase in charge-offs[172] - The ratio of nonperforming loans to total loans improved to 0.54% as of September 30, 2024, compared to 2.13% at December 31, 2023[177] Interest Rate and Risk Management - The company employs a comprehensive loan grading system to determine risk potential in loans[215] - The ALCO Committee regularly reviews the sensitivity of assets and liabilities to interest rate changes and manages interest rate risk accordingly[230] - The company utilizes interest rate risk simulation models to assess the sensitivity of net interest income and fair value of equity to interest rate changes[231] - Under the static and dynamic growth models, a -100 basis point shift is estimated to result in a 0.66% decline in net interest income, while a +400 basis point shift could increase it by 20.62%[234] - The company’s exposure to interest rate risk is primarily managed through balance sheet structuring, without the use of leveraged derivatives or financial options[229] Capital and Liquidity - The Bank maintained a Tier 1 capital ratio of 12.93% as of September 30, 2024, exceeding the regulatory requirement[204] - Total shareholders' equity increased by $33.8 million to $204.2 million as of September 30, 2024, compared to $170.3 million as of December 31, 2023[205] - The liquidity position is supported by liquid assets and access to alternative funding sources, ensuring the ability to meet cash flow requirements[196] - The Company and the Bank met all capital adequacy requirements under the Basel III Capital Rules as of September 30, 2024[200] - Total capital to risk-weighted assets was 14.12% for the Bank as of September 30, 2024, indicating a well-capitalized status[204] Noninterest Expenses - Noninterest expense for the three months ended September 30, 2024, was $9.4 million, an increase of $2.0 million, or 27.2%, compared to $7.4 million for the same period in 2023[159] - Noninterest expense for the nine months ended September 30, 2024, was $27.7 million, an increase of $5.3 million, or 23.5%, compared to $22.4 million for the same period in 2023[160] - Salaries and employee benefits for the three months ended September 30, 2024, were $5.3 million, an increase of 8.6% from $4.9 million in the same period in 2023[159] - Noninterest expense related to "Other expense" surged to $1.9 million, a 176.6% increase from $688,000 in the same period last year[159] - Advertising and public relations expenses increased by 74.3% to $129,000 for the three months ended September 30, 2024, compared to $74,000 in the same period last year[159]