Financial Position - Total assets increased by $3.8 million, or 0.7%, to $531.1 million at March 31, 2025, compared to $527.3 million at December 31, 2024[160] - Cash and cash equivalents decreased by $7.8 million, or 20.6%, to $30.1 million at March 31, 2025, primarily due to the purchase of investments and origination of commercial loans[161] - Loans receivable, net, increased by $9.0 million, or 2.5%, to $376.3 million at March 31, 2025, with loan originations totaling $17.8 million during the period[163] - Deposits increased by $2.9 million, or 0.7%, to $394.4 million at March 31, 2025, with certificates of deposit increasing by $601,000, or 0.25%[164] - Total stockholders' equity increased by $1.5 million, or 1.2%, to $127.3 million at March 31, 2025, primarily due to a decline in accumulated other comprehensive loss[167] Income and Earnings - Net income for the three months ended March 31, 2025, was $78,000, an increase of $1.2 million, or 106.9%, compared to a net loss of $1.1 million for the same period in 2024[171] - Interest income increased by $909,000, contributing to the rise in net income, alongside a $1.2 million increase in non-interest income[171] - Interest and dividend income increased by $909,000, or 21.0%, to $5.2 million for the three months ended March 31, 2025, compared to $4.3 million for the same period in 2024[172] - Noninterest income totaled $262,000 for the three months ended March 31, 2025, an increase of $1.2 million, or 129.2%, from a loss of $897,000 in the same period in 2024[180] - Net interest income increased by $889,000, or 43.4%, to $2.9 million, reflecting an increase in the interest rate spread to 1.91%[176] Interest Rate and Risk Management - The net interest margin improved to 2.41% for the three months ended March 31, 2025, compared to 1.81% for the same period in 2024[170] - Average interest-earning assets increased to $494.7 million, with a net interest income of $2.937 million for the three months ended March 31, 2025[169] - The company adopted the CECL methodology for the allowance for credit losses effective January 1, 2023, estimating lifetime credit losses in loans[156] - Average loans receivable, net, increased by $5.3 million, or 1.5%, with an average yield on loans rising to 4.40% for the three months ended March 31, 2025, from 4.06% in 2024[173] - The average balance of investment securities available-for-sale increased by $28.3 million, or 42.7%, to $94.6 million, with the average yield rising to 3.86% from 2.39%[174] Non-Performing Loans and Expenses - Total non-performing loans were $758,000 at March 31, 2025, compared to $753,000 at March 31, 2024[179] - Noninterest expense increased by $416,000, or 15.5%, to $3.1 million, primarily due to a $258,000 increase in salaries and employee benefits[181] - The provision for income taxes increased by $322,000, or 107.0%, to $21,000, due to a $1.5 million increase in pretax income[182] Capital and Commitments - At March 31, 2025, the Bank was categorized as well-capitalized under applicable bank regulatory capital guidelines[191] - The Bank had $24.6 million of outstanding commitments to originate loans, including $9.9 million for construction loans and $14.2 million for home equity lines of credit[192] Interest Rate Sensitivity - As of March 31, 2025, a 200 basis point increase in market interest rates would result in a 27.48% decrease in EVE, while a 200 basis point decrease would lead to a 19.34% increase in EVE[200] - The estimated net interest income for Year 1 at a 200 basis point increase in interest rates is projected to be $10,749, reflecting a 15.70% decrease from the current level[202] - Conversely, a 200 basis point decrease in interest rates would increase net interest income to $13,325, representing a 4.50% increase[203] - The EVE ratio at the current level is 23.51%[200] - The estimated EVE at a 400 basis point increase in interest rates would be $56,785, showing a decrease of 49.22%[200] - The estimated EVE at a 400 basis point decrease in interest rates would be $144,080, indicating an increase of 28.86%[200] - The company acknowledges that the methodologies used for measuring interest rate risk have inherent shortcomings, which may not accurately reflect actual market conditions[204] - The calculations for EVE and net interest income may not represent the fair values of financial instruments, as changes in market rates can affect the fair values of loans, deposits, and borrowings[205] - The board of directors has established policy limits within which all estimated changes in net interest income are presented[201] - The company incorporates quantitative and qualitative disclosures about market risk in its management discussion and analysis[206]
Fifth District Bancorp, Inc.(FDSB) - 2025 Q1 - Quarterly Report