PB Bankshares(PBBK) - 2023 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2023, was $409,000, an increase of $164,000 from $245,000 for the same period in 2022[129] - Total interest and dividend income increased by $1.6 million, or 56.9%, to $4.4 million for the three months ended March 31, 2023, driven by a 130 basis points increase in the average yield on interest-earning assets[152] - Net interest income increased by $845,000, or 38.4%, to $3.0 million for the three months ended March 31, 2023, primarily due to increases in interest income on loans and cash equivalents[160] - Noninterest income increased by $16,000, or 13.1%, to $138,000 for the three months ended March 31, 2023, compared to $122,000 for the same period in 2022[166] - Noninterest expenses rose by $533,000, or 27.6%, to $2.5 million for the three months ended March 31, 2023, from $1.9 million in the same period of 2022[168] - Income tax expense increased by $71,000, to $126,000 for the three months ended March 31, 2023, with effective tax rates of 23.6% compared to 18.3% in 2022[169] Asset and Liability Management - Total assets increased by $6.5 million, or 1.7%, to $393.1 million as of March 31, 2023, from $386.5 million at December 31, 2022[127] - Deposits rose by $5.9 million, or 2.1%, to $295.4 million at March 31, 2023, compared to $289.5 million at December 31, 2022[127] - Cash and cash equivalents rose by $17.8 million to $35.0 million at March 31, 2023, from $17.2 million at December 31, 2022[143] - Debt securities available-for-sale decreased by $17.5 million to $34.5 million at March 31, 2023, from $52.0 million at December 31, 2022[143] - Stockholders' equity increased by $304,000, or 0.7%, to $46.3 million at March 31, 2023, due to an increase in net income and a decrease in accumulated other comprehensive loss[150] Loan and Credit Quality - Gross loans increased by $8.1 million to $313.6 million at March 31, 2023, from $305.4 million at December 31, 2022, driven by growth in the commercial real estate portfolio[143] - Net loans receivable increased by $8.0 million, or 2.6%, to $308.8 million at March 31, 2023, primarily due to increases in the commercial real estate portfolio[144] - The allowance for credit losses is based on management's estimates of lifetime credit losses expected from the loan portfolio[134] - The provision for credit losses was $183,000 for the three months ended March 31, 2023, compared to $90,000 for the same period in 2022, driven by loan growth[163] - The allowance for credit losses increased by $854,000, or 27.2%, to $4.09 million at the end of Q1 2023 compared to $3.24 million at the end of Q1 2022[182] - The provision for credit losses rose by $93,000, or 103.3%, to $183,000 for Q1 2023 from $90,000 in Q1 2022, attributed to loan growth and the adoption of the Current Expected Credit Losses accounting standard[183] - Non-performing loans decreased to $824,000, or 0.26% of total loans, from $1.0 million, or 0.34% at the end of 2022[180] - Total non-performing assets were $824,000, consistent with non-performing loans, indicating stable asset quality[180] Interest Rate and Yield - Interest expense increased by $740,000, or 126.7%, to $1.3 million for the three months ended March 31, 2023, due to rising interest rates[157] - Average yield on loans increased by 93 basis points to 5.05% for the three months ended March 31, 2023, reflecting a higher interest rate environment[153] - The net interest margin increased by 60 basis points to 3.26% for the three months ended March 31, 2023, compared to 2.66% for the same period in 2022[160] - The change in net interest income was an increase of $845,000, driven by both volume and rate changes[176] Capital and Liquidity - The liquidity ratio averaged 12.0% for Q1 2023, significantly above the target of 5.0%[186] - The company maintained a strong capital position, exceeding all regulatory capital requirements and classified as "well capitalized"[190] - The company did not borrow against its credit lines during the three months ended March 31, 2023, reflecting a strong liquidity position[186] - Commitments to originate loans stood at $45.3 million, with unused lines of credit totaling $11.3 million as of March 31, 2023[191] Strategic Initiatives - The company has developed a commercial lending infrastructure to diversify its balance sheet and improve interest income[127] - The company emphasizes attracting commercial deposit accounts to strengthen its balance sheet[127] - Total interest-earning assets increased to $379,618,000 with a net interest income of $3,045,000 for the three months ended March 31, 2023[172] - Total deposits increased by $5.9 million, or 2.1%, to $295.4 million at March 31, 2023, reflecting a $11.7 million increase in interest-bearing demand deposits[147] - The company had no real estate owned as of March 31, 2023, indicating effective management of non-performing assets[178] - Total noninterest expenses included significant increases in Directors' fees by $46,000 and FDIC insurance premiums by $18,000[168]