Pioneer Bancorp(US:PBFS)2024-05-13 20:06Financial Performance - Net income for the three months ended March 31, 2024, was $4,719 thousand, a decrease of 21.7% compared to $6,024 thousand in the prior year[11]. - Comprehensive income for the three months ended March 31, 2024, was $5,038 thousand, down from $9,995 thousand in the prior year[13]. - For the nine months ended March 31, 2024, net income was $11,330,000, compared to $17,441,000 for the same period in 2023, representing a decrease of approximately 35.5%[18]. - The company reported a basic net earnings per common share of $0.19 for the three months ended March 31, 2024, compared to $0.24 in the same period of 2023[11]. - Net interest income for the three months ended March 31, 2024, was $17,331 thousand, slightly down from $17,516 thousand in the same period of 2023[11]. Asset Growth - Total assets increased to $1,981,834 thousand as of March 31, 2024, up from $1,856,191 thousand as of June 30, 2023, representing a growth of approximately 6.7%[10]. - Net loans receivable rose to $1,312,189 thousand, compared to $1,144,169 thousand in the previous year, marking an increase of about 14.7%[10]. - Total deposits reached $1,648,010 thousand, up from $1,541,851 thousand, reflecting a growth of approximately 6.9%[10]. - As of March 31, 2024, total shareholders' equity increased to $288,956,000 from $266,700,000 as of July 1, 2023, reflecting a growth of about 8.3%[15]. - Cash and cash equivalents at the end of the period increased to $246,541,000 as of March 31, 2024, up from $145,058,000 at the end of the previous year, marking an increase of approximately 70%[18]. Credit Losses and Provisions - The provision for credit losses was $80 thousand for the three months ended March 31, 2024, compared to no provision in the same period of 2023[11]. - The provision for credit losses for the nine months ended March 31, 2024, was $1,950,000, compared to a reversal of $280,000 in the same period of 2023, indicating a shift in credit loss expectations[18]. - The allowance for credit losses on loans was $21,600, down from $22,469 as of June 30, 2023, reflecting a decrease of approximately 4%[61]. - The total allowance for credit losses, including off-balance sheet credit exposures, was $23,103 as of March 31, 2024, compared to $22,469 on June 30, 2023[66]. - The provision for credit losses for the three months ended March 31, 2024, was $258, while charge-offs were $30, resulting in a net increase in the allowance[65]. Non-Interest Income and Expenses - Noninterest income increased to $4,234 thousand for the three months ended March 31, 2024, compared to $3,250 thousand in the same period of 2023, representing a growth of approximately 30.3%[11]. - Total noninterest expense increased to $15,429 thousand for the three months ended March 31, 2024, compared to $13,098 thousand in the same period of 2023, reflecting a rise of approximately 17.8%[11]. - Non-interest income in scope for the nine months ended March 31, 2024, reached $11,294 thousand, compared to $10,093 thousand for the same period in 2023, an increase of 11.9%[158]. Legal Proceedings and Regulatory Matters - The Company has received inquiries from regulatory agencies regarding certain lawsuits, which may lead to investigations and related costs[130]. - The estimated range of possible loss related to legal proceedings is $0 to $54.4 million as of March 31, 2024[110]. - The Bank faces potential monetary penalties up to $30 million from the New York State Department of Financial Services, with $15 million related to ongoing litigation damages[131]. - The Company acknowledged service of a putative class action complaint on January 3, 2024, related to overdraft fees[129]. - The Bank's response to regulatory inquiries includes producing non-privileged documents and cooperating with investigations[131]. Changes in Accounting and Methodologies - The Company adopted the CECL methodology on July 1, 2023, resulting in a net increase to retained earnings of $507,000[30]. - The Company adopted ASU 2022-02 related to Troubled Debt Restructurings, enhancing disclosure requirements for loan refinancings and restructurings[45]. - Effective July 1, 2023, the measurement of Current Expected Credit Losses (CECL) requires an estimate of credit losses expected over the life of an exposure[197]. - The allowance for credit losses on unfunded commitments is determined by estimating future draws and applying expected loss rates on those draws[198]. - Management considers the accounting policy relating to the allowance for credit losses to be a critical accounting estimate due to the uncertainty in evaluating the required level of allowance[200]. Acquisitions and Business Developments - The company completed its conversion to a national bank on April 1, 2024, which will allow it to operate under the name "Pioneer Bank, National Association"[21]. - The Company completed the acquisition of certain assets of Hudson Financial LLC for a total of $2.0 million in cash, with additional contingent consideration of $1.5 million, enhancing its wealth management services[48]. - The company completed a balance sheet repositioning on December 28, 2023, selling $74.5 million of lower-yielding securities, recognizing a pre-tax loss of $5.6 million, and reinvesting proceeds into higher-yielding assets[187]. - The company anticipates that the balance sheet repositioning will have a favorable impact on net income, net interest margin, return on average assets, and return on average equity starting from the quarter ended March 31, 2024[187]. Pension and Employee Benefits - The net periodic pension cost for the three months ended March 31, 2024, was $76 thousand, a decrease from $181 thousand for the same period in 2023[92]. - The Company made no cash contributions to the defined benefit pension plan for the three and nine months ended March 31, 2024, and 2023[93]. - The net periodic post-retirement benefit cost for the three months ended March 31, 2024, was $15,000, a decrease of 16.67% compared to $18,000 for the same period in 2023[96]. - The total compensation expense recognized in connection with the Employee Stock Ownership Plan (ESOP) for the three months ended March 31, 2024, was $122,000, down 12.86% from $140,000 in the same period of 2023[99]. Securities and Derivatives - The estimated fair value of available for sale securities decreased to $296,893 thousand as of March 31, 2024, from $431,667 thousand as of June 30, 2023, a decline of 31.2%[145]. - The total available for sale securities amounted to $296,893,000 as of March 31, 2024, with U.S. Government and agency obligations valued at $271,785,000[139]. - The Bank's derivative liabilities were reported at $17,220,000 as of March 31, 2024[139]. - The fair value of available for sale securities increased from $431,667,000 on June 30, 2023, to $296,893,000 on March 31, 2024[139]. - The estimated fair value of derivatives not designated as hedging instruments showed a net amount of $136 thousand as of March 31, 2024, compared to $684 thousand as of June 30, 2023[86].