First Seacoast Bancorp(US:FSEA)2025-05-09 12:30PART I. FINANCIAL INFORMATION Consolidated Financial Statements This section presents the unaudited consolidated financial statements for First Seacoast Bancorp, Inc. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, including balance sheets, statements of loss, comprehensive loss, changes in stockholders' equity, and cash flows, along with detailed notes Consolidated Balance Sheets Total assets increased to $592.6 million at March 31, 2025, from $580.8 million at December 31, 2024, primarily driven by a $9.6 million increase in net loans, while stockholders' equity slightly decreased Consolidated Balance Sheet Highlights (Unaudited) | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Net loans | $445,106 | $435,481 | | Securities available-for-sale | $123,497 | $120,217 | | Total assets | $592,643 | $580,780 | | Liabilities & Equity | | | | Total deposits | $454,134 | $454,208 | | Advances from FHLB | $63,388 | $52,268 | | Total liabilities | $531,417 | $518,730 | | Total stockholders' equity | $61,226 | $62,050 | Consolidated Statements of Loss The company reported a net loss of $603,000 for the three months ended March 31, 2025, a significant improvement from the $1.15 million net loss in the same period of 2024, driven by a 10% increase in net interest income Consolidated Statements of Loss Highlights (Unaudited) | (Dollars in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net interest and dividend income | $3,179 | $2,891 | | Provision (release) for credit losses | $— | $(20) | | Total non-interest income | $351 | $297 | | Total non-interest expense | $4,162 | $3,998 | | Net loss | $(603) | $(1,152) | | Loss per share (Basic & Diluted) | $(0.14) | $(0.24) | Notes to Consolidated Financial Statements The notes provide detailed disclosures on significant accounting policies, including the adoption of ASU 2023-07 for segment reporting, and detail the composition of financial instruments, employee benefits, stock compensation, leases, regulatory capital, and fair value measurements - The company operates as a single reportable segment, "Banking Services," as all activities are interrelated and assessed as a single unit by the Chief Operating Decision Maker (CODM)3233 - As of March 31, 2025, the company had 107 securities in an unrealized loss position totaling $10.3 million, which management attributes to noncredit-related factors like interest rate changes, with no allowance for credit losses recorded43 - The Allowance for Credit Losses (ACL) on loans was $3.5 million as of March 31, 2025, calculated using the Weighted Average Remaining Maturity (WARM) model with a forecast period of six quarters5256 - The Bank is categorized as "well capitalized" under regulatory frameworks, exceeding all minimum capital requirements as of March 31, 2025112 - Subsequent to the quarter end, on April 29, 2025, the company purchased $10.0 million of three-year brokered deposits at a rate of 4.35% to support securities growth147 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting a reduced net loss in Q1 2025 compared to Q1 2024, driven by higher net interest income, and covers changes in the balance sheet, operating results, liquidity sources, and capital adequacy Comparison of Financial Condition (Mar 31, 2025 vs. Dec 31, 2024) Total assets grew by $11.9 million (2.0%) to $592.6 million, driven by a $9.6 million increase in net loans and a $3.3 million rise in available-for-sale securities, funded by an $11.1 million increase in FHLB borrowings - Net loans increased by $9.6 million (2.2%) to $445.1 million, with growth across most loan categories, particularly commercial real estate and acquisition, development, and land loans160161 - Available-for-sale securities increased by $3.3 million (2.7%) to $123.5 million, resulting from $6.9 million in purchases offset by $3.6 million in principal payments158 - Total borrowings from the FHLB increased by $11.1 million (21.3%) to $63.4 million to support investment and loan growth167 - The company had no non-performing loans or foreclosed assets at March 31, 2025171 Comparison of Operating Results (Q1 2025 vs. Q1 2024) The net loss for Q1 2025 was $603,000, a 47.7% improvement from a $1.2 million loss in Q1 2024, primarily due to a $288,000 increase in net interest income, as the yield on interest-earning assets rose faster than the cost of funds Key Operating Results Comparison | (Dollars in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $3,179 | $2,891 | | Provision (Release) for Credit Losses | $— | $(20) | | Non-Interest Income | $351 | $297 | | Non-Interest Expense | $4,162 | $3,998 | | Net Loss | $(603) | $(1,152) | - Net interest margin increased to 2.23% from 2.07% year-over-year, driven by a higher average yield on interest-earning assets177185 - Interest expense on borrowings decreased by $495,000 (43.1%) due to a lower average balance of borrowings, as the company utilized brokered deposits for funding176 - Non-interest expense rose by $164,000 (4.1%), primarily due to a $118,000 increase in salaries and benefits and a $133,000 increase in occupancy expense related to a 2024 sale-leaseback transaction180 Liquidity and Capital Resources The company maintains a strong liquidity position with primary funding from deposits, loan and security cash flows, and FHLB/FRB borrowings, and remains well-capitalized, exceeding all regulatory requirements - Uninsured deposits were estimated at $111.4 million, or 24.5% of total deposits, as of March 31, 2025189 Available Borrowing Capacity (as of March 31, 2025) | Source | Available Capacity | | :--- | :--- | | FHLB | $88.8 million | | FRB (BIC Program) | $38.5 million | | Correspondent Bank (Fed Funds) | $2.0 million | - First Seacoast Bank exceeded all regulatory capital requirements and is considered well-capitalized as of March 31, 2025195 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, managed by the Asset/Liability Management Committee (ALCO), with the Net Portfolio Value (NPV) simulation showing a 20.9% decrease in a +200 basis point rate shock scenario, slightly exceeding the policy limit - The company's main market risk is interest rate risk, arising from the mismatch in maturities between its longer-term assets (loans) and shorter-term liabilities (deposits)196 Net Portfolio Value (NPV) Sensitivity Analysis (as of March 31, 2025) | Basis Point Change | NPV Dollar Change (in thousands) | NPV Percent Change | Policy Limit | | :--- | :--- | :--- | :--- | | +400 bp | $(32,208) | (43.5)% | (40.0)% | | +300 bp | $(23,506) | (31.8)% | (30.0)% | | +200 bp | $(15,462) | (20.9)% | (20.0)% | | +100 bp | $(6,944) | (9.4)% | N/A | | -100 bp | $4,811 | 6.5% | N/A | - The NPV sensitivity exceeded policy limits for rate increases of +200, +300, and +400 basis points, primarily due to deposit migration to more interest-sensitive accounts201 Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period205 - No material changes to the company's internal control over financial reporting occurred during the quarter ended March 31, 2025207 PART II. OTHER INFORMATION Legal Proceedings The company is periodically involved in various claims and lawsuits incidental to its business, but as of March 31, 2025, management believes there are no pending legal proceedings that would have a material adverse effect on its financial condition, results of operations, or cash flows - As of March 31, 2025, the company was not a party to any material pending legal proceedings210 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities During the first quarter of 2025, the company repurchased 54,816 shares of its common stock under its publicly announced stock repurchase program, which expires on December 3, 2025, with no sales of unregistered securities during the quarter Share Repurchases for Q1 2025 | Period | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | Jan 2025 | 13,257 | $10.00 | | Feb 2025 | 30,838 | $10.65 | | Mar 2025 | 10,721 | $10.99 | | Total | 54,816 | N/A | - As of March 31, 2025, 278,538 shares remained available for repurchase under the authorized program, which expires on December 3, 2025211 Other Information For the three months ended March 31, 2025, no directors or executive officers of the company adopted or terminated any Rule 10b5-1 trading plans or any non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during Q1 2025215