Texas munity Bancshares(US:TCBS)2025-08-07 20:06Financial Position - Total assets increased by $625,000, or 0.1%, to $444.1 million at June 30, 2025, from $443.5 million at December 31, 2024[127]. - Cash and cash equivalents decreased by $2.0 million, or 15.0%, to $11.3 million at June 30, 2025, primarily due to stock repurchases and cash dividends paid[129]. - Interest bearing deposits in banks increased by $7.6 million, or 78.4%, to $17.3 million at June 30, 2025, compared to $9.7 million at December 31, 2024[130]. - Net loans and leases receivable increased by $313,000, or 0.1%, to $294.0 million at June 30, 2025, driven by $33.7 million in loan originations[133]. - The loan portfolio consisted of $274.1 million, or 92.2%, in real estate loans at June 30, 2025[134]. - Securities available for sale decreased by $2.0 million, or 2.7%, to $73.2 million at June 30, 2025, with gross unrealized losses decreasing to $5.3 million, or 6.7% of the amortized cost[131]. - Securities held to maturity decreased by $1.8 million, or 8.1%, to $20.3 million at June 30, 2025, with gross unrealized losses of $2.0 million, or 9.8% of the amortized cost[132]. - The company reported a decrease in foreclosed assets of $52,000, or 10.8%, to $428,000 at June 30, 2025[128]. - Total deposits increased by $3.4 million, or 1.0%, to $339.2 million as of June 30, 2025, compared to $335.8 million at December 31, 2024[138]. - Core deposits decreased by $6.0 million, or 2.9%, to $199.9 million at June 30, 2025, while certificates of deposit increased by $9.4 million, or 7.2%, to $139.3 million[138]. Income and Expenses - Net income for the three months ended June 30, 2025, was $678,000, an increase of $330,000, or 94.8%, compared to $348,000 for the same period in 2024[146]. - Interest income on loans increased by $470,000, or 12.4%, to $4.3 million for the three months ended June 30, 2025, driven by an increase in average loan balances of $24.1 million, or 8.7%[148]. - Total shareholders' equity increased by $761,000, or 1.5%, to $52.9 million at June 30, 2025, primarily due to net income of $1.3 million for the six months ended June 30, 2025[140]. - Interest expense decreased by $198,000, or 7.9%, to $2.3 million for the three months ended June 30, 2025, primarily due to a decrease in average interest-bearing liabilities[153]. - Noninterest income increased by $186,000, or 47.3%, to $579,000 for the three months ended June 30, 2025, driven by gains on equity investments and net appreciation of bank-owned life insurance[158]. - Noninterest expense decreased by $81,000, or 2.7%, to $3.0 million for the three months ended June 30, 2025, primarily due to a reduction in salary and employee benefit expenses[161]. - Income tax expense increased by $94,000, or 188.0%, to $144,000 for the three months ended June 30, 2025, due to an increase in net income before taxes of $424,000[163]. - Net income for the six months ended June 30, 2025, was $1.3 million, compared to a net loss of $2.3 million for the same period in 2024, an increase of $3.6 million, or 156.5%[168]. - Noninterest income increased by $4.2 million, or 131.3%, to $1.0 million for the six months ended June 30, 2025, from a noninterest loss of $3.2 million for the six months ended June 30, 2024[181]. - Noninterest expense decreased by $224,000, or 3.7%, to $5.9 million for the six months ended June 30, 2025, from $6.1 million for the six months ended June 30, 2024[184]. - Income tax expense increased by $908,000, or 138.0%, to $250,000 for the six months ended June 30, 2025, from an income tax benefit of $658,000 for the six months ended June 30, 2024[186]. Interest Income and Expense - Interest income for the six months ended June 30, 2025, was $11.1 million, unchanged from the same period in 2024, despite an increase in interest on loans by $1.2 million[169]. - Interest income on loans increased by $1.2 million, or 16.0%, to $8.7 million for the six months ended June 30, 2025, driven by an increase in average loans of $21.1 million, or 7.6%[170]. - Interest income on securities decreased by $436,000, or 17.5%, from $2.5 million for the six months ended June 30, 2024, to $2.0 million for the same period in 2025, due to a decrease in the average balance of securities[171]. - Interest income on restricted investments decreased by $15,000, or 13.8%, from $109,000 for the six months ended June 30, 2024, to $94,000 for the six months ended June 30, 2025, due to a decrease in the average balance of restricted investments by $385,000, or 10.9%[172]. - Interest income on interest-bearing deposits in banks decreased by $262,000, or 54.8%, from $478,000 for the six months ended June 30, 2024, to $216,000 for the six months ended June 30, 2025, primarily due to a decrease in average interest-bearing deposits of $7.7 million, or 44.0%[173]. - Total interest expense decreased by $347,000, or 7.0%, to $4.6 million for the six months ended June 30, 2025, from $5.0 million for the six months ended June 30, 2024, primarily due to a decrease in average interest-bearing liabilities of $13.7 million, or 3.9%[177]. - Net interest income increased by $356,000, or 5.8%, to $6.5 million for the six months ended June 30, 2025, from $6.1 million for the six months ended June 30, 2024, due to an increase in net interest margin of 29 basis points, or 10.1%[179]. Credit Losses and Provisions - Provision for credit losses decreased by $166,000, or 133.9%, resulting in a reversal of provision of $42,000 for the three months ended June 30, 2025, primarily due to adjustments related to $9.0 million in loans[157]. - Provision for credit losses increased by $224,000, or 146.4%, to $71,000 for the six months ended June 30, 2025, from a reversal of provision for credit losses of $153,000 for the six months ended June 30, 2024[180]. - The allowance for credit losses to loans and leases held for investment was 1.09% as of June 30, 2025, with a strategic increase in lending to CRE and municipalities[199]. Regulatory Capital and Risk Management - The community bank leverage ratio was 11.32% at June 30, 2025, indicating that the bank was well capitalized[141]. - Broadstreet Bank exceeded all regulatory capital requirements and was categorized as well-capitalized as of June 30, 2025[200]. - The Bank has a FHLB borrowing capacity of $99.8 million and $8 million in unused credit lines with correspondent banks to manage interest rate risk[202]. - At June 30, 2025, the company had outstanding advances of $49.2 million from the Federal Home Loan Bank of Dallas and unused borrowing capacity of $99.8 million[188]. Interest Rate Sensitivity - A 200 basis point increase in interest rates would result in a 3.82% increase in net interest income, while a 200 basis point decrease would lead to a 1.51% decrease[209]. - The estimated changes in EVE indicate a 0.57% decrease with a 200 basis point increase in interest rates and a 7.57% decrease with a 200 basis point decrease[215]. - The EVE as a percentage of the present value of assets was 13.18% at level interest rates, with significant decreases projected under varying interest rate changes[219]. - The company utilizes a third-party modeling program to evaluate sensitivity to changing interest rates on a quarterly basis[201]. - The Bank entered into interest rate swap agreements totaling a notional amount of $25 million, terminating them in Q1 2025 with a recognized gain of $463,000[198]. Portfolio Diversification - The company continues to diversify its loan portfolio by adding more commercial loans, which typically have shorter maturities and adjustable rates[210].