TC Bancshares(TCBC) - 2022 Q1 - Quarterly Report

Financial Position - Total assets increased by $17.0 million, or 4.5%, to $397.9 million at March 31, 2022, from $380.9 million at December 31, 2021[111]. - Total liabilities were reported at $302.829 million, with total equity at $86.887 million, resulting in total liabilities and equity of $389.716 million[134]. - Total shareholders' equity decreased by $623,000, or 7.2%, to $86.2 million at March 31, 2022, primarily due to a $1.3 million increase in unrealized losses on investment securities[120]. - Non-interest-earning assets totaled $23.348 million, contributing to a total asset base of $389.716 million[134]. Cash and Deposits - Cash and cash equivalents rose by $11.5 million at March 31, 2022, primarily due to a $17.5 million increase in deposits[112]. - Total deposits rose by $17.5 million, or 6.1%, to $306.8 million at March 31, 2022, with non-interest-bearing demand accounts increasing by $4.2 million, or 11.6%[119]. Loans and Allowance for Loan Losses - Total loans increased by $2.2 million, or 0.8%, to $266.5 million at March 31, 2022, with commercial and multi-family real estate loans rising by $5.5 million, or 5.0%[113]. - The allowance for loan losses was $4.2 million, or 1.54% of gross loans, at March 31, 2022, deemed adequate to cover inherent losses in the loan portfolio[116]. - Commercial and industrial loans decreased by $2.4 million, or 15.1%, to $13.5 million at March 31, 2022[114]. - The company had 24 impaired loans totaling $1.4 million at March 31, 2022, down from 27 impaired loans totaling $1.5 million at December 31, 2021[116]. Income and Expenses - Net income for the three months ended March 31, 2022, decreased by $69,000, or 9.0%, to $696,000 compared to the same period in 2021[121]. - Interest income increased by $4,000, or 0.1%, to $3.4 million for the three months ended March 31, 2022, driven by increases in interest on taxable investment securities[122]. - Total interest expense decreased by $156,000, or 48.6%, to $165,000 for the three months ended March 31, 2022, due to lower interest rates on deposit products[123]. - Net interest income increased by $160,000, or 5.3%, to $3.2 million for the three months ended March 31, 2022, with average interest-earning assets rising by $30.7 million, or 9.1%[124]. - Other income decreased by $194,000, or 25.7%, to $562,000 for the three months ended March 31, 2022, primarily due to a decline in gains on the sale of mortgage loans[129]. - Total non-interest expense increased by $52,000, or 9.5%, to $2.8 million for the three months ended March 31, 2022, mainly due to higher salaries and employee benefits[131]. - Income tax expense decreased by $17,000 to $214,000 for the three months ended March 31, 2022, reflecting a decrease in income before taxes[132]. Interest and Capital - The net interest margin for the quarter was 3.53%, down from 3.66% in the previous year, indicating a decrease in profitability from interest-earning assets[134]. - The bank's Tier 1 capital as a percentage of total assets was 16.2% as of March 31, 2022, classifying the bank as "well capitalized" for regulatory purposes[140]. - The average interest-earning assets to average interest-bearing liabilities ratio was 140.86%, indicating a strong liquidity position[134]. - The change in net interest income for the quarter was an increase of $160,000, driven by a volume increase of $269,000 despite a rate decrease of $109,000[136]. Future Outlook - The company anticipates lower levels of interest income going forward if market rates remain low, following the full repayment or forgiveness of PPP loans[108]. - Noninterest expense is expected to increase due to costs associated with operating as a public company following the mutual-to-stock conversion[110]. - The company plans to continue focusing on originating higher yielding commercial real estate and commercial and industrial loans[105]. - The company expects to be impacted by the ongoing COVID-19 pandemic in 2022, with potential effects on various balance sheet and income statement categories[108]. - The bank anticipates sufficient funds to meet current funding commitments while planning to increase core deposits and utilize Federal Home Loan Bank advances as needed[139]. - The bank's liquidity position remains strong, with daily monitoring and no material adverse changes reported during the quarter[137].