TECTONIC FINANCI(TECTP) - 2022 Q4 - Annual Report

Financial Performance - The total assets of Tectonic Financial, Inc. increased to $612.54 million as of December 31, 2022, compared to $585.01 million in 2021, reflecting a growth of approximately 4.5%[451] - Loans, net of allowance for loan losses, rose to $445.82 million in 2022 from $424.60 million in 2021, indicating an increase of about 5.0%[451] - Total deposits grew to $493.03 million in 2022, up from $444.17 million in 2021, representing an increase of approximately 11.0%[451] - Retained earnings increased significantly to $48.56 million in 2022, compared to $34.85 million in 2021, marking a growth of around 39.5%[451] - Net income for 2022 was $17,030,000, slightly down from $17,034,000 in 2021, indicating a marginal decrease of 0.02%[456] - Earnings per common share (basic) decreased to $2.19 in 2022 from $2.28 in 2021, a decline of 3.9%[453] - The company reported a comprehensive income of $14,990,000 in 2022, down from $16,638,000 in 2021, a decline of 9.9%[456] - The Company earned $291,000 and $919,000 under the Tectonic Advisors-CWA Services Agreement for the years ended December 31, 2022 and 2021, respectively, indicating a decline of approximately 68%[586] - Income from subsidiaries for the year ended December 31, 2022, was $18.211 million, slightly up from $18.158 million in 2021[629] - The company's net income for 2022 was $17.030 million, compared to $17.034 million in 2021, indicating a stable performance[629] Interest Income and Expenses - Total interest income increased to $33,385,000 in 2022 from $29,384,000 in 2021, representing a growth of 6.8%[453] - Net interest income after provision for loan losses rose to $26,217,000 in 2022, compared to $23,543,000 in 2021, an increase of 11.4%[453] - Total interest expense for the Banking segment rose to $4,993,000 in 2022 from $2,736,000 in 2021, representing an increase of approximately 82.5%[596] - Total non-interest income grew to $40,040,000 in 2022, up from $36,624,000 in 2021, reflecting an increase of 9.9%[453] - Total non-interest expense increased to $44,805,000 in 2022, compared to $38,330,000 in 2021, marking a rise of 16.9%[453] Loan Portfolio and Allowance for Loan Losses - The allowance for loan losses was $4,513,000 as of December 31, 2022, compared to $4,152,000 in 2021, indicating an increase of about 8.7%[519] - The provision for loan losses was $1,264,000 in 2022, down from $2,214,000 in 2021, a decrease of 42.9%[453] - The total recorded investment in loans as of December 31, 2022, was $450,332,000, compared to $428,747,000 in 2021, indicating growth in the loan portfolio[550] - The total impaired loans as of December 31, 2022, amounted to $2,126,000, a decrease from $3,071,000 as of December 31, 2021[538] - The Company identified one troubled debt restructuring (TDR) loan amounting to $902,000 as of December 31, 2022, with $812,000 guaranteed[536] - Non-accrual loans totaled $2,466,000 as of December 31, 2022, an increase from $2,188,000 in 2021[535] Capital and Regulatory Compliance - The Bank's total capital to risk-weighted assets ratio was 20.21%, significantly exceeding the required minimum of 10.5% under Basel III[593] - The Common Equity Tier 1 (CET1) capital to risk-weighted assets ratio for Tectonic Financial, Inc. was 14.80% as of December 31, 2022, well above the required minimum of 7.0%[593] - The Company’s regulatory capital ratios are in excess of the capital conservation buffer and the levels established for "well capitalized" institutions under the Basel III Rules as of December 31, 2022[592] Assets and Liabilities - The total liabilities of Tectonic Financial, Inc. were $516.04 million as of December 31, 2022, compared to $500.22 million in 2021, reflecting an increase of approximately 3.2%[451] - Cash and cash equivalents at the end of 2022 were $42,155,000, down from $45,992,000 at the end of 2021, a decrease of 6.0%[461] - The total amortized cost of securities held to maturity as of December 31, 2022, was $25.262 million, with a fair value of $26.482 million[511] - The estimated fair value of available-for-sale securities was $20,633,000, down from an amortized cost of $23,630,000, indicating a decline in value[518] Regulatory and Reporting - Tectonic Financial, Inc. is classified as an "emerging growth company" and may take advantage of reduced regulatory and reporting requirements until annual gross revenues exceed $1.07 billion[296] - The company has opted to present only two years of audited financial statements as permitted under the JOBS Act[295] - The Company reported no uncertain tax positions recognized in the financial statements[494] Miscellaneous - The Company has established a measurement system for monitoring net interest rate sensitivity, which is managed by the Bank's Asset Liability Committee[437] - The Company provides investment advisory services, with fees based on a percentage of assets under management, recognized ratably over the service period[503] - The Company maintains cash in bank deposit accounts, which may exceed federally insured limits, but has not experienced losses in such accounts[469] - The Company had no foreclosed assets reported in its consolidated balance sheets as of December 31, 2022, and had $1.1 million in foreclosed assets at December 31, 2021[488]