Texas munity Bancshares(US:TCBS)2024-03-27 21:29Financial Performance - The company reported a net loss of $733,000 for the year ended December 31, 2023, compared to net income of $1.754 million in 2022, largely due to a loss on the sale of securities and a one-time CECL adjustment[247]. - Net loss for the year ended December 31, 2023, was $733,000, a decrease of $2.5 million, or 138.9%, compared to net income of $1.8 million in 2022[257]. - The company reported a net loss of $733,000 for 2023, compared to a net income of $1,754,000 in 2022[323]. - Noninterest income decreased by $1.5 million, or 78.9%, to $352,000 for the year ended December 31, 2023, primarily due to a $1.7 million loss on the sale of securities[268]. - Noninterest expenses increased to $11,997 million in 2023, up from $9,766 million in 2022, marking a rise of 22.5%[317]. Asset and Deposit Growth - Total assets increased to $452.0 million as of December 31, 2023, compared to $417.3 million in 2022, reflecting a growth of 8.3%[233]. - Total deposits rose to $317.2 million in 2023, up from $296.1 million in 2022, indicating a growth of 7.5%[233]. - Deposits increased by $21.1 million, or 7.1%, to $317.2 million at December 31, 2023, with core deposits decreasing by $8.2 million, or 4.0%[245]. - Cash and cash equivalents increased to $13,060 million in 2023 from $8,927 million in 2022, a growth of 46.5%[315]. Loan Portfolio - One-to-four family residential mortgage loans amounted to $172.2 million, representing 60.8% of total loans as of December 31, 2023[217]. - Commercial real estate loans reached $41.8 million, or 14.8% of total loans, while construction and land loans were $37.5 million, or 13.3% of total loans as of December 31, 2023[219]. - Net loans and leases receivable increased by $28.6 million, or 11.4%, to $279.9 million at December 31, 2023, with total loan originations of $114.3 million during the year[244]. - The company plans to prudently increase commercial real estate lending and construction and land lending to diversify its loan portfolio and income sources[219]. Credit Losses and Allowance - The allowance for credit losses increased from $1.8 million at December 31, 2022, to $2.8 million upon the adoption of the CECL methodology on January 1, 2023[225]. - The allowance for credit losses as a percentage of total loans increased to 1.09% in 2023 from 0.69% in 2022, reflecting heightened credit risk management[236]. - Provision for credit losses on loans was $329 million in 2023, compared to $208 million in 2022, representing a 58.7% increase[317]. - The provision for credit losses increased by $148,000, or 71.2%, in 2023 compared to the previous year[257]. Interest Income and Expense - Net interest income rose to $11.064 million in 2023, up from $10.283 million in 2022, while noninterest income decreased significantly to $352,000 from $1.868 million[236]. - Interest income increased by $6.4 million, or 50.8%, to $19.0 million for the year ended December 31, 2023, from $12.6 million in 2022[258]. - Interest expense increased by $5.6 million, or 243.5%, to $7.9 million for the year ended December 31, 2023, primarily due to a 157 basis points increase in average yield on interest-bearing liabilities[264]. - Net interest income after provision for credit losses rose to $10,708 million in 2023, up from $10,075 million in 2022, an increase of 6.3%[317]. Capital and Regulatory Compliance - Total shareholders' equity decreased by $2.2 million, or 3.9%, to $53.7 million at December 31, 2023, impacted by the net loss and share repurchases[247]. - The community bank leverage ratio was 10.76% at December 31, 2023, exceeding the required minimum of 9.0% to be considered "well capitalized"[248]. - As of December 31, 2023, Broadstreet Bank exceeded all regulatory capital requirements and was categorized as well-capitalized[302]. Market Expansion and Branch Openings - The company opened a new branch in Tyler and a loan production office in Canton in February 2024 to support market expansion[219]. - The Company opened two new branches in Lindale and Tyler in January and February 2024, respectively, as part of its market expansion strategy[405]. Interest Rate Risk Management - The company has implemented strategies to manage interest rate risk, including maintaining high liquidity and diversifying the investment securities portfolio[277]. - In the event of a 200 basis point increase in interest rates, net interest income would decrease by 2.27%[279]. - An instantaneous 200 basis point increase in interest rates would lead to an 11.19% decrease in the net economic value of equity (EVE)[284]. Securities and Investments - The total gross unrealized losses on the securities portfolio amounted to $9.8 million, or 7.8% of the $126.5 million portfolio, representing 16.5% of Tier 1 capital[296]. - The company anticipates $43.4 million in incoming cash flow from the securities portfolio over the next 24 months, with $21.9 million expected in 2024 and $21.5 million in 2025[296]. - The weighted average life of the securities portfolio is 5.2 years, with gross unrealized losses on AFS securities at $7.2 million, or 7.2% of the AFS portfolio[296]. Stock and Shareholder Activities - A quarterly cash dividend of $0.04 per share was declared on February 28, 2024, payable on or about March 28, 2024[406]. - The Company purchased 11,000 shares of common stock at an average price of $14.03 as part of its Stock Repurchase Plan[407]. - Treasury stock consists of 174,842 shares as of December 31, 2023, with no treasury shares reported at December 31, 2022[387].