PB Bankshares(PBBK) - 2025 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2025, the company reported net income of $519,000, an increase of $115,000 compared to $404,000 for the same period in 2024, driven by higher net interest income and a decrease in provision for credit losses [112]. - For the nine months ended September 30, 2025, net income reached $1.6 million, up from $1.1 million in the same period of 2024, reflecting an increase of $541,000 attributed to higher net interest income and noninterest income [113]. - Net income for the three months ended September 30, 2025, increased by $115,000, or 28.5%, to $519,000 compared to $404,000 for the same period in 2024 [133]. - Net income increased by $541,000, or 49.6%, to $1.6 million for the nine months ended September 30, 2025, compared to $1.1 million for the same period in 2024 [159]. Assets and Liabilities - Consolidated assets increased by $5.1 million, or 1.1%, from $451.3 million at December 31, 2024, to $456.4 million at September 30, 2025 [110]. - Total assets increased by $5.1 million, or 1.1%, to $456.4 million at September 30, 2025, from $451.3 million at December 31, 2024 [124]. - Total liabilities increased to $409.58 million at September 30, 2025, from $400.60 million at December 31, 2024 [188]. - The average balance of interest-bearing liabilities increased by $6.0 million to $378.2 million for the nine months ended September 30, 2025, from $372.2 million for the same period in 2024 [166]. Deposits - Deposits rose by $849,000, or 0.2%, from $354.2 million at December 31, 2024, to $355.0 million at September 30, 2025 [110]. - Total deposits increased by $849,000, or 0.2%, to $355.0 million at September 30, 2025, reflecting a rise in money market and interest-bearing demand deposit accounts [130]. - Certificates of deposit due within one year totaled $115.0 million, representing 67.2% of total certificates of deposit and 32.4% of total deposits [198]. Credit Losses and Allowance - The allowance for credit losses at September 30, 2025, reflects the company's estimate of lifetime credit losses expected from its loan portfolio, with potential adjustments based on economic conditions and loan performance [118]. - The allowance for credit losses on loans was $4.5 million, or 1.26%, of loans outstanding at September 30, 2025, compared to $4.4 million, or 1.25%, at December 31, 2024 [145]. - The provision for credit losses on loans increased to $90,000 for the nine months ended September 30, 2025, from $25,000 in the same period of 2024, marking a 260% increase [192]. Income and Expenses - Total interest and dividend income rose by $266,000, or 4.4%, to $6.3 million for the three months ended September 30, 2025, driven by an increase in average interest-earning assets [134]. - Total interest and dividend income increased by $946,000, or 5.4%, to $18.5 million for the nine months ended September 30, 2025, from $17.6 million for the same period in 2024 [160]. - Noninterest expenses increased due to various factors, including salaries, marketing, and merger-related costs, impacting overall profitability [111]. - Total noninterest expenses increased by $722,000, or 9.6%, to $8.3 million for the nine months ended September 30, 2025, from $7.5 million for the same period in 2024 [177]. Interest Income and Margin - Net interest income increased by $551,000, or 19.5%, to $3.4 million for the three months ended September 30, 2025, compared to $2.8 million for the same period in 2024 [143]. - Net interest income increased by $1.5 million, or 17.9%, to $9.7 million for the nine months ended September 30, 2025, compared to $8.2 million for the same period in 2024 [170]. - The net interest margin increased by 40 basis points to 2.97% for the three months ended September 30, 2025, from 2.57% for the same period in 2024 [143]. - The net interest margin improved to 2.90% for the nine months ended September 30, 2025, compared to 2.54% in 2024 [181]. Strategic Initiatives - The company has emphasized expanding its commercial lending infrastructure, particularly in commercial real estate and industrial loan portfolios, to diversify its balance sheet and improve interest income [110]. - The company aims to attract more commercial deposit accounts as part of its growth strategy in the primary market area of Chester and Lancaster Counties [110]. - The company is currently pursuing a merger with Norwood, which may involve significant transaction costs and regulatory approvals that could affect future operations [114]. Liquidity and Capital - As of September 30, 2025, the company's liquidity ratio averaged 14.9%, exceeding the target of 5.0% [195]. - The company monitors its liquidity position daily to ensure it can meet both short and long-term liquidity needs [198]. - The company exceeded all regulatory capital requirements and was considered "well capitalized" as of September 30, 2025 [199]. - The company anticipates sufficient funds to meet current funding commitments, with expectations that a substantial portion of maturing certificates of deposit will be renewed [202].