YORK, Pa., July 24, 2024 /PRNewswire/ — Traditions Bancorp, Inc. (OTC Pink: TRBK), the parent company of Traditions Bank, reported net income of $1.8 million for the second quarter ended June 30, 2024, compared to $1.4 million in the linked quarter and $1.3 million for the second quarter of 2023. The company reported earnings per share (diluted) of 66 cents for the second quarter ended June 30, 2024, compared to 49 cents in the linked quarter and 47 cents for the second quarter of 2023. Unrealized investment portfolio losses, flowing through Accumulated Other Comprehensive Loss, have decreased to $11.1 million at quarter end compared to $11.5 million in the linked quarter. Book value per common share was $24.19 on June 30, 2024, versus $23.56 in the linked quarter and $22.29 for the second quarter of 2023.
“Traditions Bancorp’s net earnings for the second quarter are improved, and the positive momentum that began earlier this year continues to build despite prolonged economic headwinds,” stated Eugene J. Draganosky, Chair of the Board and Chief Executive Officer. “Mortgage banking income has rebounded for the quarter, with gains on the sale of mortgages bolstering earnings as rising funding costs continue to inhibit net interest income. We remain optimistic and look forward to the normalization of the interest rate yield curve in the future. In the meantime, we have continued to manage expenses, conserve capital, and prudently grow our franchise.”
Quarterly Highlights – Second Quarter 2024 versus Second Quarter 2023
- Loans grew by $20.1 million, or 3%, over 2Q23.
- Over the previous 12 months, deposits increased by $44.3 million, or 6%. Most of this growth was concentrated in brokered deposits, higher-cost time deposits, and money market specials as depositors became more rate-sensitive. Brokered CDs increased from $43.7 million in 2Q23 to $64.7 million at the end of 2Q24, representing 9% of total deposits.
- The cost of deposits increased to 3.08% for 2Q24, up from 3.04% for 1Q24 and 1.87% for 2Q23.
- Net interest margin contracted to 2.99% in 2Q24 compared to 3.31% in 2Q23. This was driven by an increase in the total cost of funds, including borrowings, from 2.15% in 2Q23 to 3.19% in 2Q24.
- Gains on the sale of mortgages were $1.5 million for 2Q24, increasing from $1.0 million in 2Q23 and $1.2 million in 1Q24.
- Mortgage banking revenue has been solid in 2Q24 despite higher-for-longer interest rates caused by stubborn inflation and limited home inventories. The mortgage pipeline increased to $25.8 million from $17.4 million in the linked quarter, up from $15.6 million on June 30, 2023.
- A second-quarter cash dividend of eight cents per common share was declared on July 18, 2024, and is payable on August 12, 2024, to shareholders of record at the close of business on August 2, 2024.
- Net interest income decreased $0.4 million in 2Q24 from 2Q23, or 7%, driven by rising funding costs.
- Other expense decreased by 4%, from $6.4 million in 2Q23 to $6.2 million in 2Q24, primarily due to the expense reduction from the strategic realignment completed in 2023.
- The 2Q24 credit loss provision was a negative $171 thousand.
YTD Highlights – Six Months Ended June 30, 2024, versus Six Months Ended June 30, 2023
- Interest expense growth outpaced interest income due to the rising cost of funds, as net interest income decreased $1.0 million, or 8%, over the six months ended June 30, 2023.
- Gains on sale of mortgages increased by $0.8 million, or 39%, despite a challenging rate environment and limited home inventories within the company’s geographic footprint.
- Other expense decreased by $0.7 million, or 5%, year over year due to the strategic realignment completed in 2023.
- Net interest margin contracted 43 basis points, from 3.38% in 2Q23 to 2.95% in 2Q24, driven by an increased cost of funds.
Credit Quality and Capital Insights
- Nonaccrual loans increased from $3.8 million in 1Q24 to $4.4 million in the current quarter, driven by increased nonaccruals in the residential mortgage loan portfolio, which grew by $0.9 million over the prior quarter. Commercial loan nonaccruals fell by $0.3 million in the current quarter.
- The company reported net charge-offs of $20 thousand in 2Q24 after reporting none in 1Q24.
- Non-performing assets to total assets stood at 0.51% in the current quarter compared to 0.53% in 1Q24 and 0.48% in 2Q23.
- Delinquencies greater than 30 days were 1.05% of total loans as of June 30, 2024, up from 0.85% as of March 31, 2024, and 0.80% as of June 30, 2023.
- The company’s ACL ratio was 0.56% as of June 30, 2024, compared to 0.57% as of March 31, 2024, and 0.53% as of June 30, 2023.
- Traditions Bancorp and Traditions Bank remain well-capitalized.
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FINANCIAL HIGHLIGHTS (unaudited): |
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|
Selected Financial Data |
Jun 30, 2024 |
Dec 31, 2023 |
Jun 30, 2023 |
|||||
|
Investment securities |
$ |
104,391 |
$ |
111,817 |
$ |
115,056 |
||
|
Loans, net of unearned income |
673,251 |
668,813 |
653,121 |
|||||
|
Allowance for credit losses |
3,747 |
3,730 |
3,472 |
|||||
|
Total assets |
858,589 |
840,073 |
837,661 |
|||||
|
Deposits |
737,875 |
731,051 |
693,599 |
|||||
|
Borrowings |
40,000 |
32,500 |
70,987 |
|||||
|
Shareholders’ equity |
66,582 |
63,786 |
60,791 |
|||||
|
Common book value per common share |
$ |
24.19 |
$ |
23.31 |
$ |
22.29 |
||
|
Tier 1 book value per common share |
$ |
28.23 |
$ |
27.35 |
$ |
26.79 |
||
|
Allowance/loans |
0.56 % |
0.56 % |
0.53 % |
|||||
|
Non-performing assets/total assets |
0.51 % |
0.47 % |
0.48 % |
|||||
|
Tier 1 capital/average assets |
8.98 % |
8.70 % |
8.74 % |
|||||
|
Tier 1 capital/risk-weighted assets |
11.67 % |
11.53 % |
11.12 % |
|||||
|
Total capital/risk-weighted assets |
12.24 % |
12.12 % |
11.66 % |
|||||
|
Common shares outstanding |
2,753 |
2,737 |
2,727 |
|||||
|
Three months ended Jun 30, |
Six months ended Jun 30, |
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|
Selected Operations Data |
2024 |
2023 |
2024 |
2023 |
||||
|
Interest income |
$ |
11,290 |
$ |
9,855 |
$ |
22,171 |
$ |
18,686 |
|
Interest expense |
(5,176) |
(3,296) |
(10,172) |
(5,656) |
||||
|
Net interest income |
6,114 |
6,559 |
11,999 |
13,030 |
||||
|
Provision for credit losses |
171 |
(221) |
38 |
8 |
||||
|
Investment securities gains (losses) |
– |
– |
– |
– |
||||
|
Gains on sale of mortgages |
1,516 |
1,014 |
2,748 |
1,983 |
||||
|
Other income |
616 |
666 |
1,154 |
1,170 |
||||
|
Other expense |
(6,167) |
(6,397) |
(12,011) |
(12,667) |
||||
|
Income before income taxes |
2,250 |
1,621 |
3,928 |
3,524 |
||||
|
Income taxes |
(427) |
(307) |
(745) |
(668) |
||||
|
Net income |
$ |
1,823 |
$ |
1,314 |
$ |
3,183 |
$ |
2,856 |
|
Earnings per common share (basic) |
$ |
0.66 |
$ |
0.47 |
$ |
1.16 |
$ |
1.02 |
|
Earnings per common share (diluted) |
$ |
0.66 |
$ |
0.47 |
$ |
1.15 |
$ |
1.02 |
|
Return on average assets |
0.86 % |
0.64 % |
0.76 % |
0.72 % |
||||
|
Return on average equity |
11.26 % |
8.53 % |
9.89 % |
9.40 % |
||||
|
Net interest margin |
2.99 % |
3.31 % |
2.95 % |
3.38 % |
||||
|
Efficiency ratio |
74.79 % |
77.64 % |
75.54 % |
78.27 % |
||||
|
Net charge-offs(recoveries)/average loans |
0.01 % |
0.01 % |
0.01 % |
-0.04 % |
||||
|
Average common shares |
2,755 |
2,768 |
2,751 |
2,788 |
||||
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS:
This release contains forward-looking statements about Traditions Bancorp, Inc. that are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts. These statements can be identified by the use of forward-looking terminology such as”” “believe””,” “”expect”,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” “anticipate” or similar terminology. Such forward-looking statements include, but are not limited to, discussions of strategy, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives, goals, expectations or consequences; and statements about future performance, operations, products and services of Traditions Bancorp.
Traditions Bancorp cautions readers not to place undue reliance on forward-looking statements and to consider possible events or factors that could cause results or performance to materially differ from those expressed in the forward-looking statements, including, but not limited to: ineffectiveness of the organization’s business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; and deteriorating economic conditions.
Forward-looking statements in this release speak only as of the date of this release and Traditions Bancorp makes no commitment to review or update such statements to reflect changes that occur after the date the forward-looking statement was made.
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SOURCE Traditions Bancorp, Inc.
