ECB Bancorp(US:ECBK)2023-08-10 16:00Financial Performance - Total assets increased by $133.0 million, or 12.5%, to $1.20 billion at June 30, 2023, from $1.06 billion at December 31, 2022[136]. - Net loans increased by $111.0 million, or 12.5%, to $996.7 million at June 30, 2023, with significant growth in commercial real estate loans, which rose by $39.4 million, or 25.3%[138]. - Interest and dividend income rose by $7.6 million, or 123.9%, to $13.7 million for the three months ended June 30, 2023, driven by a $6.4 million increase in interest and fees on loans[146]. - Net interest and dividend income rose by $1.0 million, or 19.3%, to $6.4 million for the three months ended June 30, 2023, from $5.4 million in the same period of 2022[149]. - Net interest and dividend income increased by $2.5 million, or 24.1%, to $12.8 million for the six months ended June 30, 2023, from $10.3 million for the same period in 2022[164]. Asset and Deposit Growth - Average interest-earning assets increased by $459.4 million to $1.15 billion for the three months ended June 30, 2023, with the yield on these assets rising by 117 basis points to 4.72%[147]. - Deposits increased by $68.8 million, or 9.6%, to $787.0 million at June 30, 2023, primarily due to a $89.0 million increase in certificates of deposit[141]. - Cash and cash equivalents increased by $17.8 million, or 28.7%, to $79.9 million at June 30, 2023, due to increases in deposits and borrowings[137]. - The average balance of interest-bearing deposits increased by $176.7 million, or 34.3%, to $692.0 million for the three months ended June 30, 2023[148]. - The average balance of interest-bearing deposits increased by $172.6 million, or 34.2%, to $676.5 million for the six months ended June 30, 2023, from $503.9 million for the same period in 2022[163]. Interest Expense and Margin - Total interest expense increased by $6.5 million, or 893.4%, to $7.3 million for the three months ended June 30, 2023, compared to $730,000 for the same period in 2022[148]. - The net interest margin decreased by 94 basis points to 2.18% for the three months ended June 30, 2023, from 3.12% for the same period in 2022[150]. - The net interest margin decreased by 82 basis points to 2.28% for the six months ended June 30, 2023, from 3.10% for the same period in 2022[164]. Noninterest Income and Expense - Noninterest income decreased by $450,000, or 65.2%, to $240,000 for the three months ended June 30, 2023, from $690,000 in the same period of 2022[152]. - Noninterest income decreased by $471,000, or 50.1%, to $470,000 for the six months ended June 30, 2023, from $941,000 for the same period in 2022[166]. - Noninterest expense increased by $1.1 million, or 31.6%, to $4.7 million for the three months ended June 30, 2023, compared to $3.6 million for the same period in 2022[152]. - Noninterest expense increased by $2.5 million, or 36.3%, to $9.2 million for the six months ended June 30, 2023, from $6.8 million for the same period in 2022[166]. Credit Losses and Provisions - Provision for credit losses was recorded at $0 for the three months ended June 30, 2023, a decrease of $754,000, or 100%, compared to the same period in 2022[151]. - Provision for credit losses recorded was $879,000 for the six months ended June 30, 2023, an increase of $4,000, or 0.5%, from $875,000 for the same period in 2022[165]. Tax and Regulatory Compliance - Income tax expense increased by $178,000, or 54.8%, to $503,000 for the three months ended June 30, 2023, from $325,000 in the same period of 2022[153]. - The effective tax rate was 26.1% for the three months ended June 30, 2023, compared to 18.9% for the same period in 2022[153]. - The effective tax rate increased to 26.1% for the six months ended June 30, 2023, compared to 22.8% for the same period in 2022[167]. - As of June 30, 2023, the company exceeded all regulatory capital requirements and was categorized as well-capitalized[183]. Liquidity and Funding - Federal Home Loan Bank advances increased by $60.0 million, or 34.5%, to $234.0 million at June 30, 2023, supporting loan growth and enhancing liquidity[143]. - The company is committed to maintaining a strong liquidity position and anticipates sufficient funds to meet current funding commitments[182]. - The company regularly models liquidity stress scenarios to assess potential liquidity outflows and incorporates these into its contingency funding planning[182]. - As of June 30, 2023, the company had outstanding advances of $234.0 million from the Federal Home Loan Bank and unused borrowing capacity of $221.0 million[174]. Inflation 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[184].