First munity Bancshares(US:FCBC)2024-05-03 21:09Financial Performance - Net income for the first quarter of 2024 was $12.85 million, an increase of $1.06 million or 9.02% compared to the same quarter in 2023[112] - Net interest income increased by $2.22 million, driven by improved net interest margin of 4.47%, which is an increase of 12 basis points year-over-year[113] - Noninterest income increased by approximately $676 thousand, or 7.88%, primarily due to higher interchange income[113] - Noninterest expense rose by $2.57 million, or 12.36%, mainly due to salaries, employee benefits, and the addition of Surrey branches and staff[113] - Total stockholders' equity increased by $3.65 million, or 0.73%, to $506.94 million as of March 31, 2024, driven by net income of $12.85 million[157] Loan and Asset Management - Interest and fees on loans rose by $5.79 million compared to the same quarter in 2023, attributed to both increased yield and average balance[113] - Average loans increased by $155.35 million, contributing to a tax-effected increase in interest on loans of $5.80 million[118] - Total loans as of March 31, 2024, decreased by $52.47 million, or 2.04%, compared to December 31, 2023, with the largest decrease in commercial loans at $34.68 million, or 2.09%[136] - Non-performing loans to total loans slightly increased to 0.78% compared to the same quarter in 2023[113] - Total consumer real estate loans decreased by $11.37 million, or 1.44%, primarily due to a decrease in single family owner occupied loans of $8.33 million, or 1.20%[136] Credit Quality - The allowance for credit losses to total loans was 1.41% at March 31, 2024, unchanged from December 31, 2023[113] - The provision for credit losses decreased by $731 thousand, with a provision of $1.01 million recorded in Q1 2024 compared to $1.97 million in Q1 2023[122] - The ACL decreased by $1.01 million during the first three months of 2024, offset by net charge-offs of $1.74 million[149] - Nonperforming assets increased by $369 thousand, or 1.88%, from December 31, 2023, with total nonperforming loans at $19.647 million as of March 31, 2024[139] Capital and Liquidity - Consolidated assets totaled $3.24 billion as of March 31, 2024[113] - As of March 31, 2024, the company's cash reserves totaled $19.76 million and short-term investment securities amounted to $22.12 million, providing adequate working capital for the next twelve months[155] - Unencumbered cash as of March 31, 2024, was $248.91 million, with unused borrowing capacity from the FHLB at $402.00 million and available credit from the FRB Discount Window at $25.54 million[156] - Common equity Tier 1 ratio as of March 31, 2024, was 15.21%, up from 14.69% as of December 31, 2023, reflecting a decrease in risk-weighted assets[158] Market Conditions and Interest Rates - A 200 basis point increase in interest rates would result in a $2.73 million, or 2.0%, increase in net interest income for the twelve-month period ending March 31, 2024[164] - The Federal Open Market Committee set the benchmark federal funds rate to a range of 525 to 550 basis points as of March 31, 2024[163] - Management believes that interest rates have a greater impact on financial performance than inflation, which is primarily affecting operating costs[165] Regulatory Compliance - The company continues to meet all capital adequacy requirements and is classified as well-capitalized under the regulatory framework for prompt corrective action[158] - The company has discontinued originating LIBOR-based variable rate loans since 2018, now using U.S. Treasury rates as an alternative reference[167]