ECB Bancorp(US:ECBK)2025-11-07 21:01Financial Performance - Net income for the three months ended September 30, 2025, was $2.4 million, an increase of $1.3 million, or 115.3%, compared to $1.1 million for the same period in 2024[138] - Net income for the nine months ended September 30, 2025, was $5.2 million, an increase of $2.6 million, or 103.4%, compared to $2.5 million for the same period in 2024[154] - Interest and dividend income increased by $3.3 million, or 19.0%, to $20.4 million for the three months ended September 30, 2025, driven by a $3.3 million increase in interest and fees on loans[139] - Interest and dividend income increased by $7.9 million, or 16.1%, to $57.1 million for the nine months ended September 30, 2025, driven by a $7.7 million increase in interest and fees on loans[155] - Net interest and dividend income increased by $2.2 million, or 34.4%, to $8.5 million, resulting in a net interest margin expansion of 34 basis points to 2.19%[144] - Net interest and dividend income increased by $4.6 million, or 25.0%, to $22.8 million for the nine months ended September 30, 2025, resulting in a net interest margin expansion of 23 basis points to 2.06%[159] Asset and Loan Growth - Total assets increased by $134.5 million, or 9.5%, to $1.55 billion at September 30, 2025, compared to $1.42 billion at December 31, 2024[128] - Total gross loans rose by $170.5 million, or 14.9%, to $1.32 billion at September 30, 2025, from $1.15 billion at December 31, 2024[132] - The average balance of the loan portfolio rose by $181.6 million to $1.30 billion, with an increase in average yield of 26 basis points to 5.53% for the same period[139] - The average balance of the loan portfolio increased by $143.4 million to $1.24 billion for the nine months ended September 30, 2025, with an average yield increase of 24 basis points to 5.43%[155] - The company originated $226.7 million in loans during the nine months ended September 30, 2025, compared to $160.4 million for the year ended December 31, 2024[171] Deposit and Funding - Total deposits increased by $110.1 million, or 11.0%, to $1.11 billion at September 30, 2025, from $998.5 million at December 31, 2024[135] - Core deposits increased by $16.2 million, or 4.1%, to $409.2 million at September 30, 2025, from $393.0 million at December 31, 2024[136] - The average balance of interest-bearing deposits rose by $144.0 million, or 16.4%, to $1.02 billion[141] - Net increases in deposits were $110.1 million for the nine months ended September 30, 2025, compared to $130.3 million for the year ended December 31, 2024[172] - Non-brokered certificates of deposit due within one year totaled $428.9 million, representing 38.7% of total deposits as of September 30, 2025[170] Expenses and Taxation - Total interest expense increased by $1.1 million, or 10.1%, to $12.0 million, with interest expense on deposit accounts rising by $753,000, or 8.6%, to $9.5 million[141] - Total interest expense increased by $3.3 million, or 10.8%, to $34.4 million for the nine months ended September 30, 2025, primarily due to an increase in the average balance of interest-bearing deposits[157] - Noninterest expense increased by $347,000, or 6.9%, to $5.4 million, primarily due to higher salaries and employee benefits[147] - Noninterest expense was $15.5 million for the nine months ended September 30, 2025, a slight increase of $360,000, or 2.4%, compared to $15.2 million for the same period in 2024[161] - Income tax expense increased by $412,000, or 101.7%, to $817,000, with an effective tax rate of 25.1% for the three months ended September 30, 2025[147] - Income tax expense increased by $829,000, or 93.5%, to $1.7 million for the nine months ended September 30, 2025, with an effective tax rate of 24.9%[161] Credit Losses and Allowances - The allowance for credit losses is estimated based on expected lifetime credit losses, requiring significant management judgment[120] - The provision for credit losses was $183,000 for the quarter ended September 30, 2025, compared to $46,000 for the same quarter in 2024, reflecting greater loan growth[145] - Provision for credit losses was $1.3 million for the nine months ended September 30, 2025, compared to $485,000 for the same period in 2024, reflecting greater loan growth[160] Securities and Investments - Investment securities available for sale increased by $24.5 million, or 372.6%, to $31.0 million at September 30, 2025, compared to $6.6 million at December 31, 2024[131] - Average interest-earning assets increased by $188.9 million to $1.50 billion, with a yield increase of 21 basis points to 5.35%[140] - Average interest-earning assets increased by $164.3 million to $1.44 billion for the nine months ended September 30, 2025, with a yield increase of 17 basis points to 5.24%[156] - Total interest-earning assets rose by $7.980 million, with loans contributing $7.690 million and securities adding $606 thousand[166] Capital and Liquidity - Shareholders' equity increased by $1.0 million, or 0.6%, to $169.3 million as of September 30, 2025, from $168.3 million as of December 31, 2024[137] - As of September 30, 2025, the company had outstanding advances of $259.8 million from the Federal Home Loan Bank and unused borrowing capacity of $424.5 million[167] - The company is committed to maintaining a strong liquidity position and anticipates sufficient funds to meet current funding commitments[174] - At September 30, 2025, the company exceeded all regulatory capital requirements and was categorized as well-capitalized[175] Economic Impact - The primary impact of inflation on operations is reflected in increased operating costs, with interest rates having a more significant impact on performance than inflation[176]