Part I - Financial Information Financial Statements Unaudited interim consolidated financial statements for the period ended March 31, 2025 are presented Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total cash and cash equivalents | $629,217 | $410,739 | | Total securities | $775,132 | $659,305 | | Loans, net | $297,526 | $308,773 | | Total assets | $1,726,860 | $1,401,124 | | Total deposits | $1,568,392 | $1,249,935 | | Total liabilities | $1,575,355 | $1,256,878 | | Total stockholders' equity | $151,505 | $144,246 | Consolidated Income Statement Highlights (unaudited) | Account | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net interest income | $13,848 | $8,792 | | Total noninterest income | $695 | $1,648 | | Total noninterest expenses | $7,571 | $5,741 | | Net income | $5,607 | $3,917 | | Earnings per common share, basic and diluted | $0.85 | $0.86 | Consolidated Cash Flow Highlights (unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,109 | $3,471 | | Net cash (used in) provided by investing activities | ($103,088) | $2,325 | | Net cash provided by financing activities | $318,457 | $23,742 | | Net increase in cash and cash equivalents | $218,478 | $29,538 | Management's Discussion and Analysis of Financial Condition and Results of Operations Net income grew 43.1% in Q1 2025, driven by higher net interest income from a cyclical influx of political deposits Q1 2025 Highlights The company reported strong Q1 2025 growth with net income of $5.6 million and total assets reaching $1.7 billion Q1 2025 Financial Performance vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $5.6 million | $3.9 million | | Earnings Per Share | $0.85 | $0.86 | | Net Interest Income | $13.8 million | $8.8 million | | Return on Average Equity | 15.39% | 18.33% | | Return on Average Assets | 1.43% | 1.39% | Balance Sheet and Capital Highlights (as of March 31, 2025) | Metric | Value | Compared to Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $1.7 billion | $1.4 billion | | Total Deposits | $1.6 billion | $1.2 billion | | Book Value Per Share | $23.09 | $21.98 | | Bank Tier 1 Risk-Based Capital Ratio | 36.93% | 31.76% | Significant Factors Impacting Our Business Performance is driven by interest rate sensitivity, cyclical political deposits, and regional economic conditions - The business is significantly impacted by federal election cycles, which cause large fluctuations in deposit levels from political organizations; a post-election surge in Q1 2025 led to three accounts holding $472.0 million, or 30.1% of total deposits139141 - Net interest income is highly correlated to short-term interest rates due to high levels of liquid assets; higher rates generally increase net interest income, while falling rates would have an adverse effect138 - As of March 31, 2025, an estimated 74.6% of total deposits were uninsured by the FDIC; the company offers clients access to additional FDIC insurance through the ICS® network to manage this risk149150 Results of Operations Q1 2025 net income rose 43.1% to $5.6 million, driven by higher net interest income despite rising expenses Comparison of Results of Operations (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $13,848 | $8,792 | $5,056 | 57.5% | | Noninterest income | $695 | $1,648 | ($953) | (57.8%) | | Noninterest expense | $7,571 | $5,741 | $1,830 | 31.9% | | Net income | $5,607 | $3,917 | $1,690 | 43.1% | - The increase in net interest income was primarily driven by a $5.3 billion increase in volume of interest-earning assets, particularly interest-bearing deposits in other banks, which was funded by the influx of political deposits174 - Noninterest income decreased significantly due to a $989 thousand drop in deposit placement services income, as average One-Way Sell® deposit balances fell from $259.7 million in Q1 2024 to $63.5 million in Q1 2025188194 - Noninterest expense rose by $1.8 million, driven by a $923 thousand increase in salaries and benefits (from higher headcount) and a $428 thousand increase in professional services (legal and consulting for public company operations)197198199 Financial Condition Total assets grew 23.2% to $1.73 billion, fueled by a deposit increase, while the loan portfolio slightly decreased Securities Portfolio Composition (Carrying Value) | Security Type | March 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | U.S. government treasuries | $437,950 | $320,976 | 36.4% | | Corporate bonds | $104,431 | $101,444 | 2.9% | | State and municipal securities | $216,423 | $220,120 | (1.7%) | | Total securities | $774,780 | $658,982 | 17.6% | Loan Portfolio Composition | Loan Type | March 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Commercial real estate | $51,982 | $53,480 | (2.8%) | | Commercial | $18,555 | $27,883 | (33.5%) | | Residential real estate, closed-end | $211,936 | $210,730 | 0.6% | | Total loans | $302,002 | $313,287 | (3.6%) | Deposit Composition | Deposit Type | March 31, 2025 (in thousands) | Dec 31, 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Noninterest-bearing | $1,243,170 | $913,379 | 36.1% | | Savings, interest-bearing and money market | $313,969 | $324,845 | (3.3%) | | Total deposits | $1,568,392 | $1,249,935 | 25.5% | - A significant deposit outflow of approximately $506.5 million occurred on April 15, 2025, from political organization accounts, which the company funded using cash reserves at the Federal Reserve92267 Liquidity and Capital Management The company maintains a strong liquidity position and robust capital levels, remaining 'well capitalized' by all measures - The company's liquidity ratio was 89.14% as of March 31, 2025, up from 85.13% at year-end 2024; primary liquidity is held as cash at the Federal Reserve, which stood at $620.3 million281 - The company utilizes the ICS® network to manage liquidity and deposit levels; as of March 31, 2025, $93.2 million in deposits were placed off-balance sheet as One-Way Sell® deposits281292 Bank Regulatory Capital Ratios | Ratio | March 31, 2025 | Well Capitalized Requirement | | :--- | :--- | :--- | | Total risk-based capital ratio | 38.12% | 10.00% | | Tier 1 risk-based capital ratio | 36.93% | 8.00% | | Tier 1 leverage ratio | 9.07% | 5.00% | Quantitative and Qualitative Disclosures About Market Risk The company is asset-sensitive, with net interest income expected to increase by 12.04% with a +100 bps rate shift - The company is asset-sensitive, with a one-year cumulative gap of $847.3 million as of March 31, 2025, indicating that assets reprice faster than liabilities294 Net Interest Income (NII) Sensitivity Analysis (as of March 31, 2025) | Rate Change Scenario (Immediate Shift) | % Change in NII (12-Month Horizon) | | :--- | :--- | | +200 bps | +24.10% | | +100 bps | +12.04% | | -100 bps | (12.16%) | | -200 bps | (24.49%) | Controls and Procedures Disclosure controls and procedures were deemed effective with no material changes to internal controls in Q1 2025 - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025302 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls303 Part II - Other Information Legal Proceedings The company is not party to any material legal or regulatory proceedings - The company is not presently party to any material legal proceedings305 Risk Factors No material changes to risk factors were reported since the 2024 Annual Report - No material changes in risk factors were reported since the last Annual Report on Form 10-K306 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period - None307 Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - None308 Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable309 Other Information No directors or officers entered into, modified, or terminated Rule 10b5-1 trading plans in Q1 2025 - No directors or executive officers adopted, modified, or terminated Rule 10b5-1 trading plans during the quarter310 Exhibits This section lists required CEO and CFO certifications filed with the Form 10-Q Filed Exhibits | Number | Description | | :--- | :--- | | 31.1 | CEO Certification (Section 302 of Sarbanes-Oxley) | | 31.2 | CFO Certification (Section 302 of Sarbanes-Oxley) | | 32.1 | CEO and CFO Certification (Section 906 of Sarbanes-Oxley) |
Chain Bridge Bancorp, Inc.(CBNA) - 2025 Q1 - Quarterly Report