Old Point Financial (OPOF) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2024 was $2.4 million, a 74.9% increase from $1.4 million in Q3 2023, with diluted earnings per share rising from $0.27 to $0.47[118] - Return on average equity (ROE) for Q3 2024 was 8.39%, up from 5.25% in Q3 2023[120] - Net interest income for Q3 2024 was $12.3 million, a 7.7% increase from $11.4 million in Q3 2023[124] - Total noninterest income for Q3 2024 was $3.5 million, a slight decrease of $10 thousand compared to Q3 2023, primarily due to lower mortgage banking income[160] - Noninterest expense decreased to $12.4 million in Q3 2024 from $12.9 million in Q3 2023, driven by reductions in salaries and employee benefits[161] - Total revenue (FTE) (non-GAAP) for the three months ended September 30, 2024, was $15,819, up from $14,950 in the same period last year, reflecting a growth of 5.8%[218] - Efficiency ratio for the three months ended September 30, 2024, was 78.53%, significantly improved from 86.40% in the same period last year[218] Asset and Liability Management - Total assets reached $1.5 billion as of September 30, 2024, reflecting a $31.6 million or 2.2% increase since December 31, 2023[119] - Net loans held for investment decreased by $54.0 million, or 5.1%, to $1.0 billion from December 31, 2023[119] - Total deposits increased by $52.4 million, or 4.3%, from December 31, 2023[119] - Total stockholders' equity increased by 8.1% to $115.5 million as of September 30, 2024, from $106.8 million on December 31, 2023[197] - The loan portfolio's ending balance was $1,025.7 million as of September 30, 2024, down from $1,080.3 million at December 31, 2023[174] - The Company had FHLB advances of $40.0 million as of September 30, 2024, down from $69.5 million at December 31, 2023[166] - The Company experienced an increase in cash and cash equivalents by $96.0 million from December 31, 2023, to September 30, 2024[164] Credit Quality - Provision for credit losses was $282 thousand in Q3 2024, down from $505 thousand in Q3 2023[125] - Charged-off loans totaled $1.5 million in the first nine months of 2024, compared to $1.2 million in the same period of 2023, indicating a rise in loan defaults[157] - The annualized net loans charged off to average loans ratio was 0.18% for Q3 2024, up from 0.09% in Q3 2023, reflecting increased credit risk[157] - The Allowance for Credit Losses (ACL) was $11.9 million as of September 30, 2024, down from $12.4 million as of December 31, 2023[182] - The ACLL (Allowance for Credit Losses on Loans) decreased to $11,700 thousand from $12,206 thousand, a reduction of 4.2%[183] - Nonperforming assets remained low as of September 30, 2024, although future economic conditions could impact performance[178] Interest Rate and Economic Sensitivity - Net interest margin (NIM) improved to 3.56% in Q3 2024, compared to 3.33% in Q3 2023[123] - The company anticipates a marginal decrease in net interest income under various interest rate scenarios, with a projected decrease of $4,380 (9.15%) if rates increase by 300 basis points[230] - The company is slightly asset sensitive as of September 30, 2024, indicating that net interest income will increase with rising interest rates[228] - The estimated change in net economic value for a +300 basis points change in the yield curve is $32,400 thousand, representing a 13.97% increase[233] Capital and Liquidity - As of September 30, 2024, the Common Equity Tier 1 Capital to Risk-Weighted Assets ratio is 12.76%, significantly above the regulatory minimum of 4.5%[205] - The Total Capital to Risk-Weighted Assets ratio stands at 13.80%, exceeding the regulatory minimum of 8.0%[205] - The Tier 1 Leverage ratio is reported at 9.99%, well above the required minimum of 4.0%[205] - The liquidity coverage ratio is reported at 933.4%, indicating strong liquidity management[211] - Total funding sources amount to $778,667 thousand, with available liquidity after commitments totaling $738,667 thousand[211] Strategic Initiatives - The Company plans to consider investing capital in share repurchases to improve shareholder return, as measured by ROE and EPS[198] - The Company is focusing on increasing lower-cost deposits by targeting new noninterest-bearing deposits and savings deposits[194] - The company is focusing on expense reduction initiatives and strategic shifts in mortgage lending to enhance future financial performance[219] Regulatory and Compliance - The company has maintained effective disclosure controls and procedures as evaluated by the CEO and CFO[235] - There were no changes in the company's internal control over financial reporting during the third quarter ended September 30, 2024[238]