Third st Bancshares(US:TCBX)2025-05-06 20:31Financial Performance - For the three months ended March 31, 2025, net interest income increased by $4.7 million, or 12.4%, compared to the same period in 2024, primarily due to increased interest income from loans and investment securities [256]. - The company reported net income of $13.59 million for the three months ended March 31, 2025, representing a 31.1% increase from $10.37 million in the same period in 2024 [254]. - Noninterest income for the three months ended March 31, 2025, was $3.1 million, an increase of 32.6% from $2.34 million in the same period in 2024 [254]. - The net interest margin for the three months ended March 31, 2025, was 3.80%, up from 3.60% for the same period in 2024 [256]. - Noninterest expense increased by $2.2 million, or 8.5%, to $28.1 million for the three months ended March 31, 2025, compared to $25.9 million in the same period of 2024, mainly due to higher salaries and employee benefits [270]. Asset and Loan Portfolio - As of March 31, 2025, the company had total assets of $4.90 billion, total loans of $3.99 billion, total deposits of $4.25 billion, and total shareholders' equity of $479.8 million [248]. - The average loans increased from $3.67 billion for the three months ended March 31, 2024, to $3.98 billion for the same period in 2025, with a diversified growth in real estate and commercial loans [256]. - Total loans increased by $251.6 million, or 0.5%, to $3.99 billion as of March 31, 2025, compared to $3.97 billion as of December 31, 2024 [279]. - The total loan portfolio as of March 31, 2025, was $3,988.0 million, with fixed-rate loans amounting to $885.4 million and floating-rate loans totaling $3,102.6 million [290]. - As of March 31, 2025, total commercial real estate loans amounted to $1,054.1 million, with warehouse/industrial loans representing 30.5% of the total [283]. Credit Quality - The provision for credit losses decreased to $450,000 for the three months ended March 31, 2025, down from $1.6 million in the same period of 2024, reflecting improved asset quality [264]. - Nonperforming assets decreased to $27.3 million as of March 31, 2025, from $28.8 million as of December 31, 2024 [292]. - The ratio of nonaccrual loans to total loans improved to 0.43% as of March 31, 2025, down from 0.67% [292]. - The allowance for credit losses for loans was $40.5 million, or 1.01% of total loans, compared to $40.3 million, or 1.02% as of December 31, 2024 [265]. - The provision for credit losses on loans for the three months ended March 31, 2025 was $550,000, down from $1.86 million for the same period in 2024 [299]. Deposits and Funding - Total deposits as of March 31, 2025 were $4.25 billion, a decrease of $62.0 million, or 1.4%, from $4.31 billion as of December 31, 2024 [308]. - Noninterest-bearing deposits decreased by $153.5 million, or 25.5%, to $448.5 million as of March 31, 2025 [308]. - Total interest-bearing account balances increased by $91.6 million, or 2.5%, to $3.80 billion as of March 31, 2025 [309]. - The total interest-bearing deposits represented 89.4% of total deposits as of March 31, 2025, up from 86.0% as of December 31, 2024 [309]. - The Company had total borrowings of $111.7 million, slightly increasing from $111.6 million as of December 31, 2024 [311]. Regulatory and Compliance - The company completed its conversion from a Texas state savings bank to a Texas banking association on March 13, 2024, with the Texas Department of Banking as its primary state regulator [252]. - The Company maintained compliance with all applicable regulatory capital requirements, classified as "well capitalized" under FDIC regulations [329]. - The effective tax rate increased to 21.7% for the three months ended March 31, 2025, compared to 19.9% for the same period in 2024 [276]. Interest Rate Risk Management - The company manages interest rate risk through its Asset Liability and Investment Committee, which formulates strategies based on various economic factors [344]. - The simulation models indicate that a 200 basis point increase in interest rates could lead to a 0.83% increase in net interest income and a 3.35% decrease in fair value of equity as of December 31, 2024 [347]. - The company does not engage in leveraged derivatives or financial options to manage interest rate risk [343]. - The impact of interest rate changes on net interest income is tested under various scenarios, including stress tests and deposit decay rates [346]. Miscellaneous - The company qualifies as an "emerging growth company" and benefits from reduced reporting requirements until it exceeds $1.235 billion in annual revenues or other specified thresholds [357]. - Goodwill is evaluated for impairment at least annually, with no amortization applied [355].