FB Bancorp, Inc.(FBLA) - 2025 Q1 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements (unaudited) This section presents FB Bancorp, Inc.'s unaudited consolidated financial statements for Q1 2025 and 2024, detailing the company's financial position and performance Consolidated Statements of Financial Condition Total assets increased to $1.238 billion at March 31, 2025, driven by net loan growth and funded by increased deposits, with total stockholders' equity reaching $331.4 million Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | $1,237,774 | $1,220,933 | | Total cash and cash equivalents | $98,575 | $98,845 | | Loans held for investment, net | $764,390 | $750,653 | | Total deposits | $823,445 | $800,742 | | Total Liabilities | $906,365 | $894,678 | | Total Stockholders' Equity | $331,409 | $326,255 | Consolidated Statements of Operations The company reported $705 thousand net income for Q1 2025, a turnaround from a $807 thousand net loss in Q1 2024, driven by increased net interest income and reduced non-interest expenses Quarterly Operating Results (Unaudited) | Metric | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | | :--- | :--- | :--- | | Total interest and dividend income | $16,918 | $15,245 | | Total interest expense | $4,117 | $4,365 | | Net interest income | $12,801 | $10,880 | | Provision for credit losses | $385 | $245 | | Total non-interest income | $4,402 | $4,713 | | Total non-interest expenses | $15,940 | $16,385 | | Net income (loss) | $705 | $(807) | | Earnings (losses) per share | $0.04 | N/A | Consolidated Statements of Comprehensive Income (Loss) Total comprehensive income for Q1 2025 was $4.97 million, a significant improvement from a $3.37 million loss in Q1 2024, primarily due to net income and unrealized gains on securities Comprehensive Income (Loss) Summary (Unaudited) | Component | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | | :--- | :--- | :--- | | Net income (loss) | $705 | $(807) | | Other comprehensive income (loss) | $4,267 | $(2,566) | | Total comprehensive income (loss) | $4,972 | $(3,373) | Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased to $331.4 million at March 31, 2025, from $326.3 million at year-end 2024, primarily due to $5.0 million in total comprehensive income - Total stockholders' equity increased to $331.4 million at March 31, 2025, up from $326.3 million at December 31, 2024[17] - The growth in equity was mainly due to net income of $705 thousand and other comprehensive income (net of tax) of $4.27 million[17] Consolidated Statements of Cash Flows Cash and cash equivalents slightly decreased by $270 thousand in Q1 2025, with operating and financing cash inflows offset by significant outflows from investing activities, primarily for loan growth Cash Flow Summary (Unaudited) | Activity | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash from operating activities | $7,036 | $(10,347) | | Net cash used in investing activities | $(17,136) | $(26,010) | | Net cash from financing activities | $9,830 | $(2,864) | | Net change in cash | $(270) | $(39,221) | Notes to the Unaudited Financial Statements This section provides detailed explanations of accounting policies and breakdowns of financial statement figures, covering investment securities, loan portfolio, deposits, borrowings, capital, and segment information - The company was incorporated on February 29, 2024, and completed its conversion from a mutual to a stock organization on October 22, 2024, raising gross proceeds of $198.4 million[7] - The company has two reportable segments: traditional banking and mortgage banking. For Q1 2025, the traditional banking segment was profitable ($1.8 million profit), while the mortgage banking segment incurred a loss ($1.1 million loss)[105][106] Loan Portfolio Composition (March 31, 2025) | Loan Type | Amount ($ thousands) | % of Total | | :--- | :--- | :--- | | Residential mortgage | $291,028 | 37.7% | | Commercial | $350,706 | 45.4% | | Consumer | $129,974 | 16.8% | | Total Loans | $771,708 | 100.0% | Allowance for Credit Losses (ACL) Activity - Q1 2025 | Metric | Amount ($ thousands) | | :--- | :--- | | Beginning Balance (Jan 1, 2025) | $6,244 | | Charge-offs | $(458) | | Recoveries | $24 | | Provision for Credit Loss | $385 | | Ending Balance (Mar 31, 2025) | $6,195 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operating results, highlighting a return to profitability driven by improved net interest income and reduced expenses, alongside strategic focuses on loan growth, asset quality, and digital banking Business Strategy The company's strategy focuses on building stockholder value through profitable, community-oriented banking, emphasizing prudent loan growth, asset quality, core deposit expansion, and digital banking investments - Continue to grow and diversify the loan portfolio, with an emphasis on increasing commercial real estate and commercial loans[117] - The NOLA Lending division will continue originating residential mortgage loans primarily for sale into the secondary market[117] - Focus on attracting and retaining low-cost core deposits, which constituted 59.8% of total deposits at March 31, 2025[117] - Invest in online and fully digital banking platforms (like "Andi") to expand the customer base[117] Comparison of Financial Condition Total assets grew by $16.8 million to $1.24 billion at March 31, 2025, primarily funded by a $22.7 million increase in deposits, supporting loan growth and a $12.0 million reduction in borrowings - Total assets grew by $16.8 million, or 1.4%, to $1.24 billion at March 31, 2025[133] - Net loans held for investment increased by $13.7 million, driven by growth in commercial real estate and residential construction loans[136] - Deposits increased by $22.7 million, with core deposits up $7.7 million and certificates of deposit up $14.9 million[138] - Borrowings were paid down by $12.0 million, or 16.3%, utilizing proceeds from the stock conversion and deposit growth[139] Comparison of Operating Results The company reported $705 thousand net income for Q1 2025, a significant improvement from a $807 thousand net loss in Q1 2024, driven by a $1.9 million increase in net interest income and $445 thousand reduction in non-interest expenses - Net income was $705 thousand in Q1 2025 versus a net loss of $807 thousand in Q1 2024[146] - Net interest income increased by $1.9 million (17.7%) due to higher interest income on loans and a $1.1 million decrease in interest expense on borrowed funds[146][151][153] - Non-interest expense decreased by $445 thousand (2.7%), driven by a $526 thousand reduction in salaries and employee benefits, particularly in the mortgage banking segment[158] - The provision for credit losses was $385 thousand, an increase from $245 thousand in the prior year, primarily due to loan growth[154] Management of Market Risk The company manages interest rate risk by modeling impacts on Economic Value of Equity (EVE) and Net Interest Income (NII), with sensitivities for a 200 basis point rate change remaining within board-approved limits Economic Value of Equity (EVE) Sensitivity (March 31, 2025) | Rate Change (bps) | Estimated % Change in EVE | | :--- | :--- | | +200 | (5.30)% | | +100 | (2.13)% | | -100 | 1.76% | | -200 | 1.29% | Net Interest Income (NII) Sensitivity - Year 1 (March 31, 2025) | Rate Change (bps) | Estimated % Change in NII | | :--- | :--- | | +200 | 2.70% | | +100 | 1.80% | | -100 | (3.50)% | | -200 | (8.20)% | Liquidity and Capital Resources The company maintains strong liquidity through deposits and cash flows, with access to $369 million from FHLB and $153 million from the Federal Reserve, while Fidelity Bank remains well-capitalized with a 20.3% Tier 1 leverage ratio - Primary sources of funds are deposits, loan and security payments, and proceeds from mortgage sales[173] - As of March 31, 2025, the company had additional borrowing capacity of $369 million from the FHLB and $153 million from the Federal Reserve[173] - Fidelity Bank was categorized as well-capitalized with a Tier 1 leverage capital ratio of 20.3% at March 31, 2025[177] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section incorporates by reference the market risk disclosures detailed in the "Management of Market Risk" section of Item 2, Management's Discussion and Analysis - The disclosures regarding market risk are detailed in the "Management of Market Risk" section of the MD&A[181] Item 4. Controls and Procedures Management 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 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[182] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[182][183] Part II - Other Information Item 1. Legal Proceedings The company is not subject to any pending legal proceedings, and its subsidiary's routine legal actions are not expected to materially affect financial condition - The Company has no pending legal proceedings. The Bank's legal actions are considered ordinary and not expected to be material[185] Item 1A. Risk Factors This item is not applicable as the company qualifies as a smaller reporting company - Not applicable, as the Company is a smaller reporting company[186] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This item is not applicable for the reporting period - Not applicable[187] Item 5. Other Information No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter[190] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate documents, compensation plans, and CEO/CFO certifications under the Sarbanes-Oxley Act - The report includes certifications from the Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[191]