Financial Performance - Net income for the year ended December 31, 2024 was $1.8 million, a decrease of $147,000 compared to $1.9 million for the year ended December 31, 2023[226]. - Net income decreased by $147,000 to $1.8 million for the year ended December 31, 2024, attributed to a $1.0 million decrease in net interest income[252]. - Noninterest income increased by $528,000, or 67.3%, to $1.3 million for 2024 from $785,000 for 2023, primarily due to gains from the disposal of premises and equipment[266]. - Total noninterest expenses rose by $394,000, or 4.0%, to $10.2 million in 2024, driven by increases in salaries and employee benefits, professional fees, and data processing expenses[268]. - Income tax expense decreased by $70,000, or 12.8%, to $475,000 for 2024, with an effective tax rate of 21.1% compared to 22.1% in 2023[269]. Asset and Deposit Growth - Consolidated assets increased by $11.6 million, or 2.6%, from $439.7 million at December 31, 2023 to $451.3 million at December 31, 2024[222]. - Deposits increased by $21.2 million, or 6.4%, from $333.0 million at December 31, 2023 to $354.2 million at December 31, 2024[222]. - Total deposits increased by $21.2 million, or 6.4%, to $354.2 million at December 31, 2024, driven by a $28.2 million increase in certificates of deposit[248]. - Core deposits decreased by $7.1 million, or 3.8%, to $180.4 million at December 31, 2024 from $187.5 million at December 31, 2023[231]. - Cash and cash equivalents totaled $37.8 million at December 31, 2024, with unpledged debt securities classified as available-for-sale amounting to $26.7 million[278]. Loan Portfolio - Commercial real estate and commercial and industrial loan portfolios increased from $201.4 million, or 61.7% of total loans at December 31, 2023, to $226.4 million, or 64.7% of total loans at December 31, 2024[227]. - Net loans receivable increased by $23.4 million, or 7.3%, to $344.8 million at December 31, 2024 from $321.4 million at December 31, 2023[242]. - The commercial real estate portfolio has an average Loan-to-Value ratio of 59.2% and a Debt Service Coverage ratio of 1.41 times as of December 31, 2024, with 83.5% or $126.2 million of the portfolio subject to stress testing[243]. - The hospitality portfolio's loan exposure totaled $25.5 million with an average Loan-to-Value ratio of 58.5% and a Debt Service Coverage ratio of 1.90 times as of December 31, 2024[244]. - As of December 31, 2024, the company had outstanding commitments to originate loans of $24.0 million, unused lines of credit totaling $12.4 million, and $6.7 million in stand-by letters of credit[281]. Interest Income and Expense - Total interest income increased by $3.7 million, or 18.4%, to $23.5 million for the year ended December 31, 2024, driven by a $41.4 million increase in the average balance of interest-earning assets[253]. - Interest expense increased by $4.7 million, or 60.6%, to $12.4 million for the year ended December 31, 2024, due to increases in interest expense on deposits[257]. - Net interest income decreased by $1.0 million, or 8.4%, to $11.1 million for the year ended December 31, 2024, with a net interest margin decrease of 53 basis points to 2.54%[261]. - Average interest-earning assets increased to $437.4 million in 2024, generating net interest income of $11.1 million, down from $12.1 million in 2023[271]. - The net interest margin decreased to 2.54% in 2024 from 3.07% in 2023, reflecting changes in interest rates and volumes[271]. Capital and Liquidity - Stockholders' equity increased by $1.7 million, or 3.6%, to $48.7 million at December 31, 2024, primarily due to net income of $1.8 million[250]. - The liquidity ratio averaged 15.1% for the year ended December 31, 2024, significantly above the target of 5.0%[276]. - The company maintained a strong liquidity position and exceeded all regulatory capital requirements, being classified as "well capitalized" under regulatory guidelines[280]. - Total borrowings from the Federal Home Loan Bank of Pittsburgh decreased by $12.6 million, or 22.9%, to $42.5 million at December 31, 2024[249]. Other Considerations - The allowance for credit losses on loans was $4.4 million, or 1.25%, of loans outstanding at December 31, 2024, compared to $4.5 million, or 1.38%, at December 31, 2023[263]. - The gain on disposal of premises and equipment was $494,000 in 2024, resulting from the sale of a branch location in Oxford, Pennsylvania[266]. - Certificates of deposit due within one year totaled $151.1 million, representing 86.9% of total certificates of deposit and 42.7% of total deposits[279]. - Certificates of deposit maturing in less than one year from December 31, 2024, totaled $151.1 million, with management expecting a substantial portion to be renewed[281]. - The company anticipates sufficient funds to meet current lending commitments, but may need to utilize Federal Home Loan Bank advances or raise interest rates if a significant portion of deposits is not retained[281]. - The primary impact of inflation on the company's operations is reflected in increased operating costs, with interest rates having a more significant impact on performance than inflation[284].
PB Bankshares(PBBK) - 2024 Q4 - Annual Report