BayFirst Financial Corp.: Form 10-Q for the period ended Sep 30, 2024
Filed with the SEC on Nov 13, 2024 and accepted by EDGAR at Nov 13, 2024, 16:12 ET.
Management's discussion and analysis
As filed, 71,207 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion is an analysis of the results of operations for the three and nine months ended September 30, 2024 and September 30, 2023 and financial condition as of September 30, 2024 and December 31, 2023. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes.
In addition to the historical information contained herein, this Form 10-Q includes "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, weather events, or climate changes, including its effects on the economic environment, its customers and its operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets or global military hostilities; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Overview
The following discussion and analysis presents the financial condition and results of operations on a consolidated basis. However, because the Company conducts all of its material business operations through the Bank, the discussion and analysis relates to activities primarily conducted at the subsidiary level. The following discussion should be read in conjunction with the consolidated financial statements.
As a one-bank holding company, the Company generates most of its revenue from interest on loans and gain-on-sale income derived from the sale of government guaranteed loans into the secondary market. The primary source of funding for its loans is deposits. The Company is dependent on noninterest income, which is derived primarily from net gain on the sales of the guaranteed portion of government guaranteed loans. The largest expenses are interest on those deposits and borrowings, professional fees, loan origination expenses, and salaries and commissions plus related employee benefits. The Company measures its performance through its net interest income after provision for credit losses, return on average assets, and return on average common equity, while maintaining appropriate regulatory leverage and risk-based capital ratios.
Application of Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in accordance with GAAP requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, income and expenses and related disclosure of contingent assets and liabilities. The Company bases those estimates on historical experience and on various other assumptions that are believed to be reasonable under current circumstances, results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may differ from these estimates.
Accounting policies, as described in detail in the notes to the Company’s consolidated financial statements, are an integral part of the Company’s consolidated financial statements. A thorough understanding of these accounting policies is essential when reviewing the Company’s reported results of operations and financial position. Management believes that the critical accounting policies and estimates listed below require the Company to make difficult, subjective or complex judgments about matters that are inherently uncertain. At September 30, 2024, the most critical of these significant accounting policies in understanding the estimates and assumptions involved in preparing the consolidated financial statements were the policies related to the ACL and fair value measurement of government guaranteed loan servicing rights and government guaranteed loans HFI at fair value, which are discussed more fully in the December 31, 2023 Form 10-K.
Changes in these estimates that are likely to occur from period to period, or the use of different estimates that the Company could have reasonably used in the current period, could have a material impact on the Company’s financial position or results of operation.
Further, the Company is an emerging growth company. The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to take advantage of this extended transition period. This means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies do so. This may make the Company’s financial statements not comparable with those of public companies which are neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period because of the potential differences in accounting standards used.
Recent Developments
Fourth Quarter Common Stock Dividend. On October 22, 2024, BayFirst’s Board of Directors declared a fourth quarter 2024 cash dividend of $0.08 per common share, payable December 15, 2024 to common shareholders of record as of December 1, 2024. The Company has continuously paid quarterly common stock cash dividends since 2016.
Fourth Quarter Preferred Series A Stock Dividend. BayFirst’s Board of Directors declared a quarterly cash dividend of $22.50 on the Series A Preferred Stock. The dividend will be payable January 2, 2025 to shareholders of record as of October 15, 2024. The amount and timing of the dividend is in accordance with the terms of the Series A Preferred Stock.
Fourth Quarter Preferred Series B Stock Dividend. BayFirst’s Board of Directors declared a quarterly cash dividend of $20.00 on the Series B Convertible Preferred Stock. The dividend will be payable January 2, 2025 to shareholders of record as of October 15, 2024. The amount and timing of the dividend is in accordance with the terms of the Series B Convertible Preferred Stock.
Fourth Quarter Preferred Series C Stock Dividend. BayFirst’s Board of Directors declared a quarterly cash dividend of $27.50 on the Series C Cumulative Convertible Preferred Stock. The dividend will be payable January 2, 2025 to shareholders of record as of October 15, 2024. The amount and timing of the dividend is in accordance with the terms of the Series C Cumulative Convertible Preferred Stock.
Hurricane Recovery. Hurricane Helene struck the Florida gulf coast on September 26, 2024 and caused widespread damage from Florida to the Carolinas and eastern Tennessee. On October 9, 2024, Hurricane Milton struck the west coast of Florida and tracked across the middle of the state. Both storms caused widespread damage including flooding from storm surge, extreme winds, and substantial rainfall.
The Company maintained uninterrupted digital and telephone access for our customers, and having experienced minimal impact to our branch properties, the Company fully reopened to serve our communities shortly after each storm.
Recovery efforts in many areas continue and the full impacts on people and businesses in the most hard-hit regions are not fully known. At this time, there have been relatively few loan concessions (mostly in the form of loan payment deferrals up to 90 days) for distressed borrowers impacted by the hurricanes. However, the Company continues to assess the impact of the hurricanes on our customers. Where appropriate, we will work constructively with individual borrowers. Management is assessing the impact of both hurricanes to determine if additional provisions are warranted.
Selected Financial Data - Unaudited
(Dollars in thousands, except for share data)
| Income Statement Data: | As of and for the Three Months Ended 9/30/2024 | 6/30/2024 | 9/30/2023 | As of and for the Nine Months Ended 9/30/2024 | 9/30/2023 |
|---|---|---|---|---|---|
| Net interest income | $9,449 | $9,182 | $8,393 | $27,373 | $27,554 |
| Provision for credit losses | 3,122 | 3,000 | 3,001 | 10,180 | 7,708 |
| Noninterest income | 12,272 | 11,653 | 14,679 | 38,193 | 35,064 |
| Noninterest expense | 17,064 | 16,610 | 17,427 | 51,447 | 49,241 |
| Income tax expense | 398 | 349 | 674 | 1,043 | 1,415 |
| Net income from continuing operations | 1,137 | 876 | 1,970 | 2,896 | 4,254 |
| Net loss from discontinued operations | — | (10) | (47) | (69) | (207) |
| Net income | 1,137 | 866 | 1,923 | 2,827 | 4,047 |
| Preferred stock dividends | 385 | 386 | 208 | 1,156 | 624 |
| Net income available to common shareholders | $752 | $480 | $1,715 | $1,671 | $3,423 |
| Balance Sheet Data: | |||||
| Average loans HFI | $1,034,819 | $984,372 | $857,338 | $986,426 | $822,330 |
| Average loans HFI at amortized cost | 948,528 | 902,417 | 789,167 | 900,961 | 764,038 |
| Average total assets | 1,228,040 | 1,178,501 | 1,088,517 | 1,177,785 | 1,041,131 |
| Average common shareholders’ equity | 86,381 | 84,948 | 81,067 | 85,574 | 80,080 |
| Total loans HFI | 1,042,445 | 1,008,314 | 878,447 | 1,042,445 | 878,447 |
| Total loans HFI, excluding government guaranteed loan balances | 885,444 | 844,659 | 687,141 | 885,444 | 687,141 |
| Allowance for credit losses | 14,186 | 13,843 | 13,365 | 14,186 | 13,365 |
| Total assets | 1,245,099 | 1,217,869 | 1,133,979 | 1,245,099 | 1,133,979 |
| Common shareholders’ equity | 86,242 | 84,911 | 82,725 | 86,242 | 82,725 |
| Per Share Data: | |||||
| Basic earnings per common share | $0.18 | $0.12 | $0.42 | $0.40 | $0.84 |
| Diluted earnings per common share | $0.18 | $0.12 | $0.41 | $0.40 | $0.83 |
| Dividends per common share | $0.08 | $0.08 | $0.08 | $0.24 | $0.24 |
| Book value per common share | $20.86 | $20.54 | $20.12 | $20.86 | $20.12 |
| Tangible book value per common share(1) | $20.86 | $20.54 | $20.12 | $20.86 | $20.12 |
| Performance Ratios: | |||||
| Return on average assets(2) | 0.37% | 0.29% | 0.71% | 0.32% | 0.52% |
| Return on average common equity(2) | 3.48% | 2.26% | 8.46% | 2.60% | 5.70% |
| Net interest margin(2) | 3.34% | 3.43% | 3.36% | 3.39% | 3.89% |
| Dividend payout ratio | 43.98% | 68.91% | 19.15% | 59.36% | 28.72% |
| Asset Quality Data: | |||||
| Net charge-offs | $2,757 | $3,261 | $2,234 | $9,670 | $6,375 |
| Net charge-offs/average loans HFI at amortized cost(2) | 1.16% | 1.45% | 1.13% | 1.43% | 1.11% |
| Nonperforming loans(3) | $15,489 | $12,312 | $9,518 | $15,489 | $9,518 |
| Nonperforming loans (excluding government guaranteed balance)(3) | $10,992 | $8,054 | $7,997 | $10,992 | $7,997 |
| Nonperforming loans/total loans HFI(3) | 1.62% | 1.34% | 1.20% | 1.62% | 1.20% |
39
(Dollars in thousands, except for share data)
| As of and for the Three Months Ended 9/30/2024 | 6/30/2024 | 9/30/2023 | As of and for the Nine Months Ended 9/30/2024 | 9/30/2023 | |
|---|---|---|---|---|---|
| Nonperforming loans (excluding gov’t guaranteed balance)/total loans HFI(3) | 1.15% | 0.87% | 1.01% | 1.15% | 1.01% |
| ACL/Total loans HFI at amortized cost | 1.48% | 1.50% | 1.68% | 1.48% | 1.68% |
| Other Data: | |||||
| Full-time equivalent employees | 295 | 302 | 307 | 295 | 307 |
| Banking centers | 12 | 12 | 10 | 12 | 10 |
| (1) See section entitled "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below for a reconciliation to most comparable GAAP equivalent. | |||||
| (2) Annualized | |||||
| (3) Excludes loans measured at fair value |
`GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
Some of the financial measures included in this report are not measures of financial condition or performance recognized by GAAP. These non-GAAP financial measures include tangible common shareholders' equity and tangible book value per common share. The management team uses these non-GAAP financial measures in its analysis of its performance, and they believe that providing this information to financial analysts and investors allows them to evaluate capital adequacy.
The following presents these non-GAAP financial measures calculated in accordance with GAAP:
Tangible Common Shareholders' Equity and Tangible Book Value Per Common Share (Unaudited)
(Dollars in thousands, except for share data)
| As of September 30, 2024 | June 30, 2024 | September 30, 2023 | |
|---|---|---|---|
| Total shareholders’ equity | $102,293 | $100,962 | $94,165 |
| Less: Preferred stock liquidation preference | (16,051) | (16,051) | (11,440) |
| Total equity available to common shareholders | 86,242 | 84,911 | 82,725 |
| Less: Goodwill | — | — | — |
| Tangible common shareholders' equity | $86,242 | $84,911 | $82,725 |
| Common shares outstanding | 4,134,059 | 4,134,219 | 4,110,650 |
| Tangible book value per common share | $20.86 | $20.54 | $20.12 |
Results of Operations
BayFirst’s operating results depend on its net interest income, which is the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities, consisting primarily of deposits. Net interest income is determined by the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities (“interest rate spread”) and the relative amounts of interest-earning assets and interest-bearing liabilities. The interest rate spread is affected by regulatory, economic, and competitive factors which influence interest rates, loan demand, and deposit flows. In addition, the Company’s operating results can be affected by the level of nonperforming assets, as well as the level of the noninterest income and the noninterest expenses, such as salaries and employee benefits, occupancy and equipment costs, and loan origination expenses as well as income taxes.
The Company is dependent on noninterest income, which is derived primarily from net gain on the sales of the guaranteed portion of government guaranteed loans, as well as fair value adjustments for certain loans which management has elected the fair value option. While the Company retains some of its government guaranteed loans on the balance sheet, the Company may sell both the guaranteed balance of its government guaranteed loans, as well as a percentage of the unguaranteed portions of such loans.
In the second quarter of 2022, the Bank discontinued its primary consumer direct residential mortgage business line. In the third quarter of 2022, management decided to discontinue the nationwide residential lending business. As a result of the discontinuance, the nationwide residential line of business was reclassified as a discontinued operation and reported in the financial statements as such.
Net Income
The Company had net income for the three months ended September 30, 2024 of $1.1 million, or $0.18 per diluted common share, compared to net income for the three months ended September 30, 2023 of $1.9 million, or $0.41 per diluted common share. The decrease in net income was primarily due to a decrease in government guaranteed loan fair value gains of $1.1 million and a decrease in gain on sale of government guaranteed loans of $1.0 million, partially offset by an increase in net interest income of $1.1 million and lower compensation expense of $0.3 million.
For the nine months ended September 30, 2024, net income was $2.8 million, or $0.40 per diluted common share, a decrease from net income of $4.0 million, or $0.83 per diluted common share, for the nine months ended September 30, 2023. The change was primarily due to higher provision for credit losses of $2.5 million, a decrease in government guaranteed fair value gains of $1.1 million, and higher noninterest expense of $2.2 million, partially offset by higher gain on sale of government guaranteed loans of $2.3 million and higher government guaranteed loan packaging fees of $1.3 million.
Net Interest Income
Net interest income from continuing operations was $9.4 million for the three months ended September 30, 2024, an increase from $8.4 million during the three months ended September 30, 2023. The increase was mainly due to an increase in interest income of $3.8 million, partially offset by higher interest expense on deposits.
Net interest margin was 3.34% for the third quarter of 2024, which represented a decrease from 3.36% for the third quarter of 2023.
Net interest income from continuing operations was $27.4 million for the nine months ended September 30, 2024, a decrease from $27.6 million for the nine months ended September 30, 2023. The decrease was mainly due to an increase in interest expense of $11.6 million, partially offset by an increase in interest income, including fees, of $11.4 million.
Net interest margin decreased to 3.39% for the nine months ended September 30, 2024, compared to 3.89% for the nine months ended September 30, 2023.
Average Balance Sheet and Analysis of Net Interest Income
The following table sets forth, for the periods indicated, information regarding: (i) the total dollar amount of interest and dividend income of BayFirst from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest rate spread; (v) net interest margin; and (vi) ratio of average interest-earning assets to average interest-bearing liabilities. Loans in nonaccrual status, for the purposes of the following computations, are included in the average loan balances. FRB,
FHLB, and FNBB restricted equity holdings are included in other interest-earning assets. The Company did not have a significant amount of tax-exempt assets.
(Dollars in thousands)
| Interest-earning assets: | Three Months Ended September 30, 2024 Average Balance | Interest | Yield | 2023 Average Balance | Interest | Yield |
|---|---|---|---|---|---|---|
| Investment securities | $41,092 | $407 | 3.94% | $43,383 | $465 | 4.25% |
| Loans, excluding PPP (1) (2) | 1,032,909 | 20,437 | 7.87 | 841,920 | 15,992 | 7.54 |
| PPP loans | 1,917 | 5 | 1.04 | 15,418 | 40 | 1.03 |
| Other | 50,809 | 593 | 4.64 | 91,749 | 1,123 | 4.86 |
| Total interest-earning assets | 1,126,727 | 21,442 | 7.57 | 992,470 | 17,620 | 7.04 |
| Noninterest-earning assets | 101,313 | 96,047 | ||||
| Total assets | $1,228,040 | $1,088,517 | ||||
| Interest-bearing liabilities: | ||||||
| NOW, MMDA and savings | $681,822 | $7,423 | 4.33 | $633,657 | $6,390 | 4.00 |
| Time deposits | 310,754 | 4,186 | 5.36 | 235,100 | 2,665 | 4.50 |
| Other borrowings | 27,110 | 384 | 5.64 | 15,714 | 172 | 4.34 |
| Total interest-bearing liabilities | 1,019,686 | 11,993 | 4.68 | 884,471 | 9,227 | 4.14 |
| Demand deposits | 94,574 | 100,734 | ||||
| Noninterest-bearing liabilities | 11,348 | 12,600 | ||||
| Shareholders’ equity | 102,432 | 90,712 | ||||
| Total liabilities and shareholders’ equity | $1,228,040 | $1,088,517 | ||||
| Net interest income | $9,449 | $8,393 | ||||
| Interest rate spread | 2.89 | 2.90 | ||||
| Net interest margin (3) | 3.34 | 3.36 | ||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 110.50% | 112.21% | ||||
| (1) Includes nonaccrual loans. | ||||||
| (2) Includes no residential loans held for sale from discontinued operations as of September 30, 2024 or September 30, 2023. | ||||||
| (3) Net interest margin represents net interest income divided by average total interest-earning assets. |
42
(Dollars in thousands)
| Interest-earning assets: | For the Nine Months Ended September 30, 2024 Average Balance | Interest | Yield | 2023 Average Balance | Interest | Yield |
|---|---|---|---|---|---|---|
| Investment securities | $42,069 | $1,277 | 4.05% | $44,888 | $1,398 | 4.16% |
| Loans, excluding PPP (1) (2) | 983,867 | 58,064 | 7.88 | 805,049 | 45,346 | 7.53 |
| PPP loans | 2,602 | 20 | 1.03 | 17,337 | 130 | 1.00 |
| Other | 48,641 | 1,695 | 4.65 | 80,522 | 2,790 | 4.63 |
| Total interest-earning assets | 1,077,179 | 61,056 | 7.57 | 947,796 | 49,664 | 7.01 |
| Noninterest-earning assets | 100,606 | 93,335 | ||||
| Total assets | $1,177,785 | $1,041,131 | ||||
| Interest-bearing liabilities: | ||||||
| NOW, MMDA and savings | $652,481 | $20,886 | 4.28 | $620,237 | $15,598 | 3.36 |
| Time deposits | 283,298 | 11,386 | 5.37 | 186,827 | 5,478 | 3.92 |
| Other borrowings | 34,606 | 1,411 | 5.45 | 30,325 | 1,033 | 4.55 |
| Total interest-bearing liabilities | 970,385 | 33,683 | 4.64 | 837,389 | 22,109 | 3.53 |
| Demand deposits | 93,830 | 101,661 | ||||
| Noninterest-bearing liabilities | 11,945 | 12,383 | ||||
| Shareholders’ equity | 101,625 | 89,698 | ||||
| Total liabilities and shareholders’ equity | $1,177,785 | $1,041,131 | ||||
| Net interest income | $27,373 | $27,555 | ||||
| Interest rate spread | 2.93 | 3.48 | ||||
| Net interest margin (3) | 3.39 | 3.89 | ||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 111.01% | 113.18% | ||||
| (1) Includes nonaccrual loans. | ||||||
| (2) Includes no residential loans held for sale from discontinued operations as of September 30, 2024 and $56 at an average yield of 2.02% as of September 30, 2023. | ||||||
| (3) Net interest margin represents net interest income divided by average total interest-earning assets. |
43
Rate/Volume Analysis
The table below presents the effects of volume and rate changes on interest income and expense for the periods indicated. Changes in volume are changes in the average balance multiplied by the previous period’s average rate. Changes in rate are changes in the average rate multiplied by the average balance from the previous period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances. FRB, FHLB, and FNBB restricted equity holdings are included in other interest-earning assets. The Company did not have a significant amount of tax-exempt assets.
(Dollars in thousands)
| Three Months Ended September 30, 2024 vs. September 30, 2023: Interest-earning assets: | Rate | Volume | Total |
|---|---|---|---|
| Investment securities | $(34) | $(24) | $(58) |
| Loans, excluding PPP | 729 | 3,716 | 4,445 |
| PPP loans | — | (35) | (35) |
| Other interest-earning assets | (47) | (483) | (530) |
| Total interest-earning assets | 648 | 3,174 | 3,822 |
| Interest-bearing liabilities: | |||
| NOW, MMDA and savings | 538 | 495 | 1,033 |
| Time deposits | 568 | 953 | 1,521 |
| Other borrowings | 62 | 150 | 212 |
| Total interest-bearing liabilities | 1,168 | 1,598 | 2,766 |
| Net change in net interest income | $(520) | $1,576 | $1,056 |
(Dollars in thousands)
| Nine Months Ended September 30, 2024 vs. September 30, 2023: Interest-earning assets: | Rate | Volume | Total |
|---|---|---|---|
| Investment securities | $(36) | $(85) | $(121) |
| Loans, excluding PPP(1) | 2,212 | 10,506 | 12,718 |
| PPP loans | 3 | (113) | (110) |
| Other interest-earning assets | 13 | (1,108) | (1,095) |
| Total interest-earning assets | 2,192 | 9,200 | 11,392 |
| Interest-bearing liabilities: | |||
| NOW, MMDA, and savings | 4,439 | 849 | 5,288 |
| Time deposits | 2,464 | 3,444 | 5,908 |
| Other borrowings | 220 | 158 | 378 |
| Total interest-bearing liabilities | 7,123 | 4,451 | 11,574 |
| Net change in net interest income | $(4,931) | $4,749 | $(182) |
| (1) Includes no interest income on residential loans held for sale from discontinued operations as of September 30, 2024 and $1 as of September 30, 2023. |
Provision for Credit Losses
The provision for credit losses is charged to operations to adjust the total allowance to a level deemed appropriate by management and is based upon the volume and type of lending the Bank conducts, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to its market area, economic forecasts, and other factors that may affect the ability to collect on the loans in its portfolio.
The Company recorded a provision for credit losses on loans for the three months ended September 30, 2024 of $3.1 million primarily due to net charge-offs and net loan growth. This compared to a provision of $3.0 million for the three months ended September 30, 2023. During the three months ended September 30, 2024, $2.8 million of net charge offs in loans were recorded compared to $2.2 million during the three months ended September 30, 2023.
The Company recorded a provision for credit losses for the nine months ended September 30, 2024 of $10.2 million compared to a $7.7 million provision for the nine months ended September 30, 2023. The increase of $2.5 million in the provision for credit losses expense was primarily due to higher than expected charge-offs resulting in higher provision expense based on ACL model output. During the nine months ended September 30, 2024, net loan charge offs totaled $9.7 million compared to $6.4 million during the nine months ended September 30, 2023.
The Bank developed an express modification program for SBA 7(a) borrowers to help those borrowers who are challenged with larger payments in the higher interest rate environment compared to interest rates at the time the loans were originated. Through September 30, 2024, approximately 400 SBA 7(a) borrowers have been offered loan modification options. These efforts have helped and are expected to continue to help reduce net charge-offs.
The ACL was $14.2 million at September 30, 2024 and $13.4 million at September 30, 2023.
Noninterest Income
The following table presents noninterest income from continuing operations for the three and nine months ended September 30, 2024 and September 30, 2023.
(Dollars in thousands)
| Noninterest income: | For the Three Months Ended September 30, 2024 | 2023 | For the Nine Months Ended September 30, 2024 | 2023 |
|---|---|---|---|---|
| Loan servicing income, net | $918 | $760 | $2,518 | $2,149 |
| Gain on sale of government guaranteed loans, net | 6,143 | 7,139 | 19,827 | 17,576 |
| Service charges and fees | 447 | 408 | 1,343 | 1,166 |
| Government guaranteed loan fair value gain | 3,416 | 4,543 | 9,923 | 11,021 |
| Government guaranteed loan packaging fees | 903 | 1,158 | 3,332 | 2,076 |
| Other noninterest income | 445 | 671 | 1,250 | 1,076 |
| Total noninterest income | $12,272 | $14,679 | $38,193 | $35,064 |
Noninterest income from continuing operations was $12.3 million during the three months ended September 30, 2024, a decrease from $14.7 million during the three months ended September 30, 2023. The decrease was primarily due to decreases in gain on sale of government guaranteed loans of $1.0 million, fair value gains on government guaranteed loans of $1.1 million, government guaranteed loan packaging fees of $0.3 million, and other noninterest income of $0.2 million.
Noninterest income from continuing operations was $38.2 million for the nine months ended September 30, 2024, an increase from $35.1 million for the nine months ended September 30, 2023. The increase was primarily the result of increases in gain on sale of government guaranteed loans of $2.3 million and government guaranteed loan packaging fees of $1.3 million, partially offset by a decrease in fair value gains on government guaranteed loans of $1.1 million. As of September 30, 2024, the Company had $86.4 million of loans held at fair value compared to $84.2 million at September 30, 2023.
Noninterest Expense
The following table presents noninterest expense from continuing operations for the three and nine months ended September 30, 2024 and September 30, 2023.
(Dollars in thousands)
| Noninterest expense: | For the Three Months Ended September 30, 2024 | 2023 | For the Nine Months Ended September 30, 2024 | 2023 |
|---|---|---|---|---|
| Salaries and benefits | $7,878 | $7,912 | $23,712 | $23,527 |
| Bonus, commissions, and incentives | 1,141 | 1,406 | 3,371 | 3,515 |
| Occupancy and equipment | 1,248 | 1,262 | 3,631 | 3,608 |
| Data processing | 1,789 | 1,526 | 4,996 | 4,189 |
| Marketing and business development | 532 | 929 | 1,660 | 2,696 |
| Professional services | 853 | 816 | 3,079 | 2,587 |
| Loan origination and collection | 1,956 | 1,981 | 5,633 | 4,697 |
| Employee recruiting and development | 595 | 543 | 1,741 | 1,667 |
| Regulatory assessments | 309 | 284 | 870 | 615 |
| Director compensation | 143 | 147 | 427 | 438 |
| Liability and fidelity bond insurance | 143 | 148 | 431 | 403 |
| ATM and interchange | 150 | 154 | 432 | 359 |
| Telecommunication | 127 | 90 | 354 | 275 |
| Other noninterest expense | 200 | 229 | 1,110 | 665 |
| Total noninterest expense | $17,064 | $17,427 | $51,447 | $49,241 |
Noninterest expense from continuing operations was $17.1 million during the three months ended September 30, 2024, a decrease from $17.4 million during the three months ended September 30, 2023. The decrease in the third quarter of 2024, as compared to the third quarter of 2023, was primarily due to lower compensation expense of $0.3 million and lower marketing and business development expenses of $0.4 million, partially offset by higher data processing expenses of $0.3 million.
Noninterest expense was $51.4 million during the nine months ended September 30, 2024, an increase from $49.2 million for the nine months ended September 30, 2023. The increase was the result of increases in data processing expense of $0.8 million, loan origination and collection expense of $0.9 million, professional services expenses of $0.5 million, and other noninterest expenses of $0.6 million. The increases were partially offset by a decrease in marketing and business development expenses of $1.0 million.
Income Taxes
Income tax expense from continuing operations was $398 thousand for the three months ended September 30, 2024, a decrease from income tax expense of $674 thousand for the three months ended September 30, 2023. There was no income tax expense from discontinued operations for the three months ended September 30, 2024, compared to income tax benefit of $15 thousand for the three months ended September 30, 2023.
Income tax expense from continuing operations was $1.0 million for the nine months ended September 30, 2024, a decrease from income tax expense of $1.4 million for the nine months ended September 30, 2023. The decrease was primarily due to the decrease in pre-tax earnings from continuing operations. Income tax benefit from discontinued operations was $23 thousand for the nine months ended September 30, 2024, from income tax benefit of $68 thousand for the nine months ended September 30, 2023.
At September 30, 2024, the Company had $1.4 million of federal net operating loss carryforward and $0.3 million of state net operating loss carryforward. The net operating loss carryforwards do not expire. At September 30, 2023, the Company had $2.7 million of federal net operating loss carryforward and $0.4 million of state net operating loss carryforward.
The effective income tax rate was 26.51% for the nine months ended September 30, 2024 and 24.97% for the nine months ended September 30, 2023.
Financial Condition
Investment Securities
The following table presents the fair value of the Company's investment securities portfolio classified as available for sale as of September 30, 2024 and December 31, 2023.
(Dollars in thousands)
| Investment securities available for sale: | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Asset-backed securities | $5,327 | $7,933 |
| Mortgage-backed securities: | ||
| U.S. Government-sponsored enterprises | 7,478 | 3,236 |
| Collateralized mortgage obligations: | ||
| U.S. Government-sponsored enterprises | 16,287 | 17,098 |
| Corporate bonds | 8,892 | 11,308 |
| Total investment securities available for sale | $37,984 | $39,575 |
The net unrealized loss on the investment securities AFS at September 30, 2024, was $3.1 million compared with a net unrealized loss on investment securities AFS of $4.0 million at December 31, 2023. The change in unrealized loss on investment securities AFS from December 31, 2023 to September 30, 2024 was primarily due to the change in the interest rate environment.
The following table presents the amortized cost of the Company's investment securities portfolio classified as held to maturity as of September 30, 2024 and December 31, 2023.
(Dollars in thousands)
| Investment securities held to maturity: Mortgage-backed securities: | September 30, 2024 | December 31, 2023 |
|---|---|---|
| U.S. Government-sponsored enterprises | $— | $1 |
| Corporate bonds | 2,500 | 2,500 |
| Total investment securities held to maturity | $2,500 | $2,501 |
There was a $13 thousand ACL on the corporate bonds HTM as of September 30, 2024 and a $17 thousand ACL on the corporate bonds HTM as of December 31, 2023. The net unrealized loss on the investment securities HTM at September 30, 2024, was $179 thousand compared with a net unrealized loss on investment securities HTM of $238 thousand at December 31, 2023.
No investment securities were pledged as of September 30, 2024 or December 31, 2023, and there were no sales of investment securities during the three or nine months ended September 30, 2024 or three or nine months ended September 30, 2023.
The investment securities available for sale presented in the following tables are reported at amortized cost and by contractual maturity as of September 30, 2024 and December 31, 2023. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below.
(Dollars in thousands)
| September 30, 2024 One year or less Amortized Cost | Average Yield | One to five years Amortized Cost | Average Yield | Five to ten years Amortized Cost | Average Yield | After ten years Amortized Cost | Average Yield | |
|---|---|---|---|---|---|---|---|---|
| Asset-backed securities | $— | —% | $— | —% | $2,051 | 5.31% | $3,327 | 6.34% |
| Mortgage-backed securities: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | 4,461 | 4.63 | 3,394 | 1.25 |
| Collateralized mortgage obligations: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 19,039 | 1.80 |
| Corporate bonds | — | — | 8,832 | 5.96 | — | — | — | — |
| Total investment securities available for sale | $— | —% | $8,832 | 5.96% | $6,512 | 4.84% | $25,760 | 2.31% |
(Dollars in thousands)
| December 31, 2023 One year or less Amortized Cost | Average Yield | One to five years Amortized Cost | Average Yield | Five to ten years Amortized Cost | Average Yield | After ten years Amortized Cost | Average Yield | |
|---|---|---|---|---|---|---|---|---|
| Asset-backed securities | $— | —% | $— | —% | $— | —% | $8,041 | 6.25% |
| Mortgage-backed securities: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 3,842 | 1.58 |
| Collateralized mortgage obligations: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 20,382 | 1.82 |
| Corporate bonds | — | — | 11,332 | 6.23 | — | — | — | — |
| Total investment securities available for sale | $— | —% | $11,332 | 6.23% | $— | —% | $32,265 | 2.90% |
The investment securities held to maturity presented in the following tables are reported at amortized cost and by contractual maturity as of September 30, 2024 and December 31, 2023. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities receive monthly principal payments, which are not reflected below.
(Dollars in thousands)
| September 30, 2024 One year or less Amortized Cost | Average Yield | One to five years Amortized Cost | Average Yield | Five to ten years Amortized Cost | Average Yield | After ten years Amortized Cost | Average Yield | |
|---|---|---|---|---|---|---|---|---|
| Corporate bonds | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
| Total investment securities held to maturity | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
48
(Dollars in thousands)
| Mortgage-backed securities: | December 31, 2023 One year or less Amortized Cost | Average Yield | One to five years Amortized Cost | Average Yield | Five to ten years Amortized Cost | Average Yield | After ten years Amortized Cost | Average Yield |
|---|---|---|---|---|---|---|---|---|
| U.S. Government-sponsored enterprises | $— | —% | $— | —% | $— | —% | $1 | 4.30% |
| Corporate bonds | — | — | 1,500 | 4.38 | 1,000 | 4.38 | — | — |
| Total investment securities held to maturity | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $1 | 4.30% |
Loan Portfolio Composition
The Company offers a variety of products designed to meet the credit needs of our borrowers. Our lending activities primarily consist of government guaranteed, commercial real estate, commercial business, residential mortgage, and consumer loans. Senior management and loan officers have continued to develop new sources of loan referrals, particularly among centers of local influence and real estate professionals, and have also enjoyed repeat business from loyal customers in the markets the Bank serves. The Bank has no concentration of credit in any industry that represents 10% or more of its loan portfolio. Additionally, the loan portfolio is well-diversified across major loan types with a low concentration of non owner-occupied commercial real estate loans which makes up 6% of the total portfolio. The following table sets forth the composition of its loan portfolio, including LHFS as of the dates indicated.
(Dollars in thousands)
| September 30, 2024 Amount | % of Total | December 31, 2023 Amount | % of Total | |
|---|---|---|---|---|
| Government guaranteed loans, held for sale | $595 | $— | ||
| Loans HFI: | ||||
| Government guaranteed loans HFI, at fair value | $86,441 | $91,508 | ||
| Loans HFI, at amortized cost: | ||||
| Residential real estate | 321,740 | 34.1% | 264,126 | 32.5% |
| Commercial real estate | 292,026 | 31.0 | 293,595 | 36.2 |
| Construction and land | 33,784 | 3.6 | 26,272 | 3.2 |
| Commercial and industrial | 200,212 | 21.3 | 177,566 | 21.9 |
| Commercial and industrial – PPP | 1,656 | 0.2 | 3,202 | 0.4 |
| Consumer and other | 92,546 | 9.8 | 47,287 | 5.8 |
| Loans HFI, at amortized cost, gross | 941,964 | 100.0% | 812,048 | 100.0% |
| Discount on government guaranteed loans sold | (7,880) | (7,040) | ||
| Premium on loans purchased, net | 3,860 | 4,503 | ||
| Deferred loan costs, net | 18,060 | 14,707 | ||
| Allowance for credit losses | (14,186) | (13,497) | ||
| Loans HFI, at amortized cost, net | 941,818 | 810,721 | ||
| Total loans HFI, net | $1,028,259 | $902,229 |
During the nine months ended September 30, 2024, the Bank originated approximately $218.8 million in loans through conventional lending channels and $323.6 million in loans through its government guaranteed lending function. In addition, the Bank sold guaranteed loan balances of $290.8 million.
Loan Maturity/Rate Sensitivity
The following table shows the contractual maturities of our loans at September 30, 2024. Loan balances in this table include loans HFI at fair value, loans HFI at amortized cost, discount on retained balances of loans sold, premium and discount on loans purchased, and deferred loan costs, net.
(Dollars in thousands)
| Real estate: | Due in One Year or Less | Due After One Year to Five Years | Due After Five Years to 15 Years | Due After 15 Years | Total |
|---|---|---|---|---|---|
| Residential | $2,046 | $823 | $14,919 | $304,534 | $322,322 |
| Commercial | 6,393 | 988 | 53,154 | 253,979 | 314,514 |
| Construction and land | 8,783 | 2,208 | 7,278 | 15,516 | 33,785 |
| Commercial and industrial | 8,456 | 39,908 | 215,129 | 11,345 | 274,838 |
| Commercial and industrial - PPP | 1,523 | 133 | — | — | 1,656 |
| Consumer and other | 2,781 | 25,695 | 24,776 | 42,078 | 95,330 |
| Total loans HFI | $29,982 | $69,755 | $315,256 | $627,452 | $1,042,445 |
The following table shows the loans with contractual maturities of greater than one year that have fixed or adjustable interest rates at September 30, 2024.
(Dollars in thousands)
| Real estate: | Fixed Interest Rate | Adjustable Interest Rate |
|---|---|---|
| Residential | $74,081 | $246,195 |
| Commercial | 4,378 | 303,743 |
| Construction and land | — | 25,002 |
| Commercial and industrial | 14,228 | 252,154 |
| Commercial and industrial - PPP | 133 | — |
| Consumer and other | 80,092 | 12,457 |
| Total loans HFI | $172,912 | $839,551 |
Credit Risk
The Bank’s primary business is making commercial, consumer, and real estate loans. This activity inevitably has risks for potential credit losses, the magnitude of which depends on a variety of economic factors affecting borrowers, which are beyond its control. The Bank has developed policies and procedures for evaluating the overall quality of its credit portfolio and the timely identification of potential problem loans. Management’s judgment as to the adequacy of the allowance is based upon a number of assumptions about the economic environment that it believes impacts credit quality as of the balance sheet date that it believes to be reasonable, but which may or may not prove accurate. Thus, there can be no assurance that charge-offs in future periods will not exceed the ACL, or that additional increases in the ACL will not be required.
Allowance for Credit Losses. In accordance with changes in generally accepted accounting principles, the Company adopted the new credit loss accounting standard known as CECL on January 1, 2023. At the time of adoption, the ACL for loans increased by $3.1 million to 1.73% of loans, the reserve on unfunded commitments increased $213 thousand, and an $18 thousand reserve was established for held to maturity investment securities. These one-time increases resulted in an after tax decrease to capital of $2.5 million, with no impact to earnings. Under CECL, the ACL is based on expected credit losses rather than on incurred losses.
The Bank must maintain an adequate ACL based on a comprehensive methodology that assesses the probable losses inherent in its loan portfolio. The Bank maintains an ACL based on a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans, asset classifications, change in volume and mix of loans, collateral value, historical loss experience, size and complexity of individual credits, and economic conditions. In addition to this, the Company uses reasonable and supportable forecasts that are developed with internal and external data. These are updated quarterly by management and utilize data from the FOMC’s median forecasts of change in national GDP and of national unemployment. Provisions for credit losses are provided on both a specific and general basis. Specific allowances are provided for individual loans that do not share similar risk characteristics with instruments evaluated using a collective (pooled) basis. General valuation allowances are determined by loan pools with a further evaluation of various quantitative and qualitative factors noted above.
The Bank periodically reviews the assumptions and formulates methodologies by which changes are made to the specific and general valuation ACL in an effort to refine such allowances in light of the current status of the factors described above.
All nonaccrual loans and modifications to loans for borrowers experiencing financial difficulty are reviewed to determine if the loans share the same risk characteristics as the pooled loans. If the loan does not share the same risk characteristics, the loan is evaluated individually for credit losses. Specific allocation of reserves for individually evaluated loans considers the value of the collateral, the financial condition of the borrower, and industry and current economic trends. The Bank reviews the collateral value, cash flow, and other support on each individually evaluated credit. Any deficiency outlined by a real estate collateral evaluation analysis, or cash flow shortfall, is accounted for through a specific allocation for the loan.
Nonperforming Assets. At September 30, 2024, the Company had $12.5 million in nonperforming assets, excluding government guaranteed loan balances, and the ACL represented 1.48% of total loans HFI at amortized cost. At September 30, 2023, the Company had $8.4 million in nonperforming assets, excluding government guaranteed loan balances, and their ACL represented 1.68% of total loans HFI at amortized cost. Total loans HFI at September 30, 2024 and September 30, 2023 included government guaranteed loans and loans measured at fair value, which had no reserves allocated to them. ACL as a percentage of loans HFI at amortized cost, not including government guaranteed loan balances, was 1.70% at September 30, 2024, compared to 2.03% at September 30, 2023.
The following table sets forth certain information on nonaccrual loans, loans 90 days or more past due, and foreclosed assets, the ratio of such loans and foreclosed assets to total assets as of the dates indicated, and certain other related information.
(Dollars in thousands)
| September 30, 2024 | September 30, 2023 | December 31, 2023 | |
|---|---|---|---|
| Nonperforming loans (government guaranteed balances), at amortized cost, gross | $4,497 | $1,521 | $1,424 |
| Nonperforming loans (unguaranteed balances), at amortized cost, gross | 10,992 | 7,997 | 8,264 |
| Total nonperforming loans, at amortized cost, gross | 15,489 | 9,518 | 9,688 |
| Nonperforming loans (government guaranteed balances), at fair value | 24 | 96 | — |
| Nonperforming loans (unguaranteed balances), at fair value | 1,535 | 363 | 648 |
| Total nonperforming loans, at fair value | 1,559 | 459 | 648 |
| Repossessed assets | 94 | — | — |
| Total nonperforming assets, gross | $17,142 | $9,977 | $10,336 |
| Nonperforming loans as a percentage of total loans HFI(1) | 1.62% | 1.20% | 1.18% |
| Nonperforming loans (excluding government guaranteed balances) to total loans HFI(1) | 1.15% | 1.01% | 1.00% |
| Nonperforming assets as a percentage of total assets | 1.38% | 0.88% | 0.92% |
| Nonperforming assets (excluding government guaranteed balances) to total assets | 0.88% | 0.71% | 0.74% |
| ACL to nonperforming loans(1) | 91.59% | 128.60% | 139.32% |
| ACL to nonperforming loans (excluding government guaranteed balances)(1) | 129.06% | 152.29% | 163.32% |
(1) Excludes loans measured at fair value
The following table sets forth information with respect to activity in the ACL for loans for the periods shown:
(Dollars in thousands)
| At and for the Three Months Ended September 30, 2024 | 2023 | At and for the Nine Months Ended September 30, 2024 | 2023 | |
|---|---|---|---|---|
| Allowance at beginning of period | $13,843 | $12,598 | $13,497 | $9,046 |
| Impact of adopting ASC 326 | — | — | — | 3,107 |
| Charge-offs: | ||||
| Residential real estate | (20) | — | (20) | — |
| Commercial real estate | — | (108) | (60) | (108) |
| Commercial and industrial | (2,375) | (1,542) | (7,898) | (4,660) |
| Consumer and other | (550) | (875) | (2,299) | (2,214) |
| Total charge-offs | (2,945) | (2,525) | (10,277) | (6,982) |
| Recoveries: | ||||
| Commercial real estate | 2 | 75 | 6 | 77 |
| Commercial and industrial | 111 | 114 | 352 | 303 |
| Consumer and other | 75 | 93 | 249 | 219 |
| Total recoveries | 188 | 290 | 607 | 607 |
| Net charge-offs | (2,757) | (2,235) | (9,670) | (6,375) |
| Provision for credit losses on loans | 3,100 | 3,002 | 10,359 | 7,587 |
| Allowance at end of period | $14,186 | $13,365 | $14,186 | $13,365 |
| Net charge-offs to average loans HFI at amortized cost | 1.16% | 1.13% | 1.43% | 1.11% |
| Allowance as a percent of total loans HFI at amortized cost | 1.48% | 1.68% | 1.48% | 1.68% |
| Allowance as a percent of loans HFI at amortized cost, not including government guaranteed loans | 1.70% | 2.03% | 1.70% | 2.03% |
| Allowance as a percent of nonperforming loans at amortized cost, gross | 91.59% | 140.42% | 91.59% | 140.42% |
| Total loans HFI | $1,042,445 | $878,447 | $1,042,445 | $878,447 |
| Average loans HFI at amortized cost | $948,528 | $789,167 | $900,961 | $764,038 |
| Nonperforming loans (including government guaranteed balances) at amortized cost, gross | $15,489 | $9,518 | $15,489 | $9,518 |
| Nonperforming loans (excluding government guaranteed balances) at amortized cost, gross | $10,992 | $7,997 | $10,992 | $7,997 |
| Guaranteed balance of government guaranteed loans | $157,001 | $191,306 | $157,001 | $191,306 |
52
The following table details net charge-offs to average loans outstanding by loan category for the three months ended September 30, 2024 and September 30, 2023.
(Dollars in thousands)
| Three Months Ended September 30, 2024 Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | Three Months Ended September 30, 2023 Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | |
|---|---|---|---|---|---|---|
| Residential real estate | $(20) | $301,296 | (0.03)% | $8 | $228,539 | 0.01% |
| Commercial real estate | 2 | 350,518 | — | (33) | 306,299 | (0.04) |
| Commercial and industrial | (2,264) | 202,850 | (4.46) | (1,428) | 199,677 | (2.86) |
| Commercial and industrial - PPP | — | 1,917 | — | — | 15,418 | — |
| Consumer and other | (475) | 91,954 | (2.07) | (782) | 39,234 | (7.97) |
| Total loans HFI at amortized cost | $(2,757) | $948,535 | (1.16)% | $(2,235) | $789,167 | (1.13)% |
The following table details net charge-offs to average loans outstanding by loan category for the nine months ended September 30, 2024 and September 30, 2023.
(Dollars in thousands)
| Nine Months Ended September 30, 2024 Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | Nine Months Ended September 30, 2023 Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | |
|---|---|---|---|---|---|---|
| Residential real estate | $(20) | $282,908 | (0.01)% | $8 | $209,934 | 0.01% |
| Commercial real estate | (54) | 340,933 | (0.02) | (31) | 282,470 | (0.01) |
| Commercial and industrial | (7,546) | 200,378 | (5.02) | (4,357) | 217,253 | (2.67) |
| Commercial and industrial - PPP | — | 2,602 | — | — | 17,337 | — |
| Consumer and other | (2,050) | 74,183 | (3.68) | (1,995) | 37,044 | (7.18) |
| Total loans HFI, at amortized cost | $(9,670) | $901,004 | (1.43)% | $(6,375) | $764,038 | (1.11)% |
SBA and Other Government Guaranteed Loans
The following table sets forth, for the periods indicated, information regarding the SBA and other government guaranteed lending activity, excluding PPP loans.
(Dollars in thousands)
| Government Guaranteed, Excluding PPP | At and for the Nine Months Ended September 30, 2024 | 2023 |
|---|---|---|
| Number of loans originated | 1,965 | 1,968 |
| Amount of loans originated | $323,591 | $402,528 |
| Average loan size originated | $165 | $205 |
| Government guaranteed loan balances sold | $290,820 | $316,333 |
| Government unguaranteed loan balances sold | $— | $10,937 |
| Total government guaranteed loan balances: | ||
| Guaranteed portion of government guaranteed loan balances | $155,345 | $176,062 |
| Unguaranteed portion of government guaranteed loan balances | $239,810 | $197,657 |
| Total government guaranteed loans | $395,155 | $373,719 |
| Government guaranteed loans serviced for others | $1,009,797 | $825,723 |
53
The Bank makes government guaranteed loans throughout the United States. The following table sets forth, at the dates indicated, information regarding the geographic disbursement of its government guaranteed loan portfolio. The “All Other” category includes states with less than 5% in any period presented.
(Dollars in thousands)
| September 30, 2024 Amount | % of Total | 2023 Amount | % of Total | |
|---|---|---|---|---|
| Florida | $121,223 | 31% | $131,928 | 35% |
| California | 47,653 | 12 | 45,121 | 12 |
| Tennessee | 28,622 | 7 | 28,395 | 8 |
| Texas | 31,253 | 8 | 23,710 | 6 |
| All Other | 166,404 | 42 | 144,565 | 39 |
| Total government guaranteed loans, excluding PPP loans | $395,155 | 100% | $373,719 | 100% |
Deposits
General. In addition to deposits, sources of funds available for lending and for other purposes include loan repayments and proceeds from the sales of loans. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows are influenced significantly by general interest rates and market conditions. Borrowings, as well as available lines of credit, may be used on a short-term basis to compensate for reductions in other sources, such as deposits at less than projected levels.
Deposits. Deposits are sourced principally from within its primary service area of Pinellas, Hillsborough, Manatee, Pasco, and Sarasota Counties, Florida. The Bank offers a wide selection of deposit instruments including demand deposit accounts, NOW accounts, money-market accounts, regular savings accounts, time deposit accounts, and retirement savings plans (such as IRA accounts).
Time deposit rates are set to encourage longer maturities as cost and market conditions will allow. Deposit account terms vary, with the primary differences being the minimum balance required, the time period the funds must remain on deposit, and the interest rate.
The Bank emphasizes commercial banking relationships in an effort to increase demand deposits as a percentage of total deposits. Deposit interest rates are set by management at least monthly or more often if conditions require it, based on a review of loan demand, recent cash flows and a survey of rates among competitors.
Brokered deposits. At times, the Bank has brokered time deposit and non-maturity deposit relationships available to diversify its funding sources. Brokered deposits offer several benefits relative to other funding sources, such as: maturity structures which cannot be duplicated in the current retail market, deposit gathering outside the market of the existing deposit base, the unsecured nature of these liabilities, and the ability to quickly generate funds. The Bank’s internal policy limits the use of brokered deposits as a funding source to no more than 15% of total assets. The Company's ability to accept or renew brokered deposits is contingent upon the Bank maintaining a capital level of "well capitalized." At September 30, 2024 and December 31, 2023, the Company had $76.9 million and $30.0 million, respectively, of brokered deposits.
The amount of each of the following categories of deposits, at the dates indicated, are as follows:
(Dollars in thousands)
| September 30, 2024 | December 31, 2023 | |||
|---|---|---|---|---|
| Noninterest-bearing deposits | $95,995 | 8.6% | $93,708 | 9.5% |
| Interest-bearing transaction accounts | 247,923 | 22.3 | 259,422 | 26.3 |
| Money market accounts | 438,193 | 39.4 | 355,946 | 36.2 |
| Savings | 17,104 | 1.5 | 17,054 | 1.7 |
| Subtotal | 799,215 | 71.8 | 726,130 | 73.7 |
| Total time deposits | 312,981 | 28.2 | 259,008 | 26.3 |
| Total deposits | $1,112,196 | 100.0% | $985,138 | 100.0% |
54
At September 30, 2024, the Company held approximately $241.5 million of deposits that exceeded the FDIC insurance limit which was 22% of total deposits.
The following table provides information on the maturity distribution of the time deposits exceeding the FDIC insurance limit of $250 thousand as of September 30, 2024.
(Dollars in thousands)
| Three months or less | $35,555 |
| Over three months through six months | 8,081 |
| Over six months through 12 months | 78,985 |
| Over 12 months | 52,393 |
| Total time deposits over $250 | $175,014 |
Deposits increased $127.1 million or 12.90% during the nine months ended September 30, 2024, with growth in all categories of deposits.
Other Borrowings
At September 30, 2024, the Company had $10.0 million of borrowings at 5.07% from the FHLB and no borrowings from the FRB. There was $10.0 million of borrowings at 5.57% from the FHLB and no borrowings from the FRB at December 31, 2023.
The Bank is a member of the FHLB of Atlanta, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB short-term borrowings bear interest at variable rates set by the FHLB. Any advances that the bank were to obtain would be secured by a blanket lien on $331.9 million of real estate-related loans as of September 30, 2024. Based on this collateral and the Company's holdings of FHLB stock, the Company was eligible to borrow up to $170.7 million from the FHLB at September 30, 2024.
In addition, the Bank has a line of credit with the Federal Reserve Bank of Atlanta which was secured by $60.8 million of commercial loans as of September 30, 2024. FRB short-term borrowings bear interest at variable rates based on the FOMC's target range for the federal funds rate. Based on this collateral, the Company was eligible to borrow up to $43.0 million from the FRB at September 30, 2024.
The Company has $6.0 million of Subordinated Debentures (the “Debentures”) that mature June 30, 2031 and are redeemable after 5 years which is June 30, 2026. The Debentures carry interest at a fixed rate of 4.50% per annum for the initial 5 years of term and carry interest at a floating rate for the final 5 years of term after June 30, 2026. Under the debt agreements, the floating rates are based on a SOFR benchmark plus 3.78% per annum. The balance of Subordinated Debentures outstanding at the Company, net of offering costs, amounted to $6.0 million and $5.9 million at September 30, 2024 and December 31, 2023, respectively.
The Company has a term note with quarterly principal and interest payments with interest at Prime (8.50% at September 30, 2024). The note matures on March 10, 2029 and the balance of the note was $2.0 million and $2.4 million at September 30, 2024 and December 31, 2023, respectively. The note is secured by 100% of the stock of the Company and requires the Company to comply with certain loan covenants during the term of the note. As of September 30, 2024, the Company was in compliance with all financial debt covenants.
Capital Resources
Shareholders' equity is influenced primarily by earnings, dividends, the Company's sales and repurchases of its common and preferred stock, and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized gains or losses, net of taxes, on available for sale investment securities.
Shareholders' equity was $102.3 million at September 30, 2024 as compared to $100.7 million at December 31, 2023. The increase was primarily due to net income of $2.8 million and a decrease in other comprehensive loss of $0.7 million, partially offset by common stock dividends of $1.0 million and preferred stock dividends of $1.2 million.
The Company strives to maintain an adequate capital base to support its activities in a safe and sound manner while at the same time attempting to maximize shareholder value. Management assesses capital adequacy against the risk inherent in the balance sheet, recognizing that unexpected loss is the common denominator of risk and that common equity has the greatest capacity to absorb unexpected loss.
The Bank is subject to regulatory capital requirements imposed by various regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by banking regulators that, if undertaken, could have a direct material effect on BayFirst’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.
At September 30, 2024 and December 31, 2023, the Bank's capital ratios were in excess of the requirement to be "well capitalized" under the regulatory guidelines.
As of the dates indicated, the Bank met all capital adequacy requirements to which it is subject. The Bank’s actual capital amounts and percentages were as shown in the table below:
(Dollars in thousands)
| As of September 30, 2024 | Actual Amount | Percent | Minimum(1) Amount | Percent | Well Capitalized(2) Amount | Percent |
|---|---|---|---|---|---|---|
| Total Capital (to risk-weighted assets) | $115,123 | 11.39% | $80,848 | 8.00% | $101,059 | 10.00% |
| Tier 1 Capital (to risk-weighted assets) | 102,479 | 10.14 | 60,636 | 6.00 | 80,848 | 8.00 |
| Common Equity Tier 1 Capital (to risk-weighted assets) | 102,479 | 10.14 | 45,477 | 4.50 | 65,689 | 6.50 |
| Tier 1 Capital (to total assets) | 102,479 | 8.41 | 48,768 | 4.00 | 60,960 | 5.00 |
| As of December 31, 2023 | ||||||
| Total Capital (to risk-weighted assets) | 114,256 | 13.03 | 70,169 | 8.00 | 87,711 | 10.00 |
| Tier 1 Capital (to risk-weighted assets) | 103,274 | 11.77 | 52,627 | 6.00 | 70,169 | 8.00 |
| Common Equity Tier 1 Capital (to risk-weighted assets) | 103,274 | 11.77 | 39,470 | 4.50 | 57,012 | 6.50 |
| Tier 1 Capital (to total assets) | 103,274 | 9.38 | 44,024 | 4.00 | 55,030 | 5.00 |
(1) Minimum to be considered “adequately capitalized” under Basel III Capital Adequacy.
(2) Minimum to be considered “well capitalized” under Prompt Corrective Actions Provisions.
Off-Balance Sheet Arrangements
The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business. These financial instruments primarily include unfunded loan commitments, unfunded lines of credit, and standby letters of credit. The Bank uses these financial instruments to meet the financing needs of its customers. These financial instruments involve, to varying degrees, elements of credit, interest rate, and liquidity risk. These do not present unusual risks and management does not anticipate any accounting losses that would have a material effect on the Bank.
A summary of the amounts of the Bank’s financial instruments, with off-balance sheet risk as of the dates indicated, was as follows:
(Dollars in thousands)
| September 30, 2024 | December 31, 2023 | |
|---|---|---|
| Unfunded loan commitments | $79,412 | $7,392 |
| Unused lines of credit | 200,109 | 178,440 |
| Standby letters of credit | 211 | 186 |
| Total | $279,732 | $186,018 |
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on management’s credit evaluation of the customer.
Standby letters-of-credit are conditional lending commitments that the Bank issues to guarantee the performance of a customer to a third party and to support private borrowing arrangements. Essentially, letters of credit have expiration dates within one year of the issue date. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending credit. The Bank may hold collateral supporting those commitments.
In general, loan commitments and letters of credit are made on the same terms, including with respect to collateral, as outstanding loans. Each customer’s creditworthiness and the collateral required are evaluated on a case-by-case basis.
The Company maintains an ACL for its off-balance sheet loan commitments which is calculated by loan type using estimated line utilization rates based on historical usage. Loss rates for outstanding loans is applied to the estimated utilization rates to calculate the ACL for off-balance sheet loan commitments. At September 30, 2024 and December 31, 2023, ACL for off-balance sheet loan commitments totaled $664 thousand and $839 thousand, respectively.
Contractual Obligations
In the ordinary course of its operations, the Company enters into certain contractual obligations. Total contractual obligations at September 30, 2024 were $333.3 million, an increase from $280.7 million at December 31, 2023. The increase was primarily due to an increase in time deposits of $54.0 million.
The following tables present our contractual obligations as of September 30, 2024 and December 31, 2023.
(Dollars in thousands)
| Contractual Obligations as of September 30, 2024 Less than One Year | One to Three Years | Three to Five Years | Over Five Years | Total | |
|---|---|---|---|---|---|
| Operating lease obligations | $833 | $1,517 | $— | $— | $2,350 |
| Short-term borrowings | 10,000 | — | — | — | 10,000 |
| Long-term borrowings | 456 | 912 | 680 | — | 2,048 |
| Subordinated notes | — | — | — | 5,954 | 5,954 |
| Time deposits | 241,397 | 69,388 | 2,196 | — | 312,981 |
| Total | $252,686 | $71,817 | $2,876 | $5,954 | $333,333 |
| Contractual Obligations as of December 31, 2023 | |||||
| (Dollars in thousands) | Less than One Year | One to Three Years | Three to Five Years | Over Five Years | Total |
| Operating lease obligations | $1,105 | $1,861 | $413 | $— | $3,379 |
| Short-term borrowings | 10,000 | — | — | — | 10,000 |
| Long-term borrowings | 456 | 912 | 912 | 109 | 2,389 |
| Subordinated notes | — | — | — | 5,949 | 5,949 |
| Time deposits | 173,887 | 84,552 | 569 | — | 259,008 |
| Total | $185,448 | $87,325 | $1,894 | $6,058 | $280,725 |
Liquidity
Liquidity management is the process by which the Bank manages the flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost to take advantage of earnings enhancement opportunities. These financial commitments include withdrawals by depositors, credit commitments to borrowers, expenses of the operations, and capital expenditures. The Bank generally maintains a minimum liquidity ratio of liquid assets to total assets of at least 7.0%. Liquid assets include cash and due from banks, federal funds sold, interest-bearing deposits with banks and unencumbered investment securities available for sale. The on-balance sheet liquidity ratio at September 30, 2024 was 8.62%, as compared to 9.33% at December 31, 2023.
For the first nine months of 2024, the Bank paid dividends of $2.80 million to BayFirst in order to meet liquidity needs to make interest payments on its debt obligations, dividends on shares of its preferred stock and common stock, and payment of operating expenses. As of September 30, 2024, BayFirst Financial Corp. held $489 thousand in cash and cash equivalents.
The Company expects that all the liquidity needs, including the contractual commitments can be met by currently available liquid assets and cash flows. In the event any unforeseen demand or commitments were to occur, the Company could access the borrowing capacity with the FHLB or FRB, or lines of credit with other financial institutions. The Company does not rely on investment securities as the main source of liquidity and does not foresee the need to sell investment securities for cash flow purposes. In addition, the Company has the ability to obtain wholesale deposits as another source of liquidity. The Company expects that the currently available liquid assets and the ability to borrow from the FHLB, FRB, and other financial institutions would be sufficient to satisfy the liquidity needs without any material adverse effect on the Company’s liquidity.
A description of BayFirst’s and the Bank’s debt obligations is set forth above under the heading “Other Borrowings.”
Market risk
As filed, 6,696 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Market Risk and Interest Rate Sensitivity
Market risk is the risk of loss from adverse changes in market prices and rates. Market risk arises primarily from interest-rate risk inherent in lending and deposit taking activities. To that end, the Company actively monitors and manages its interest-rate risk exposure. The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on- and off-balance sheet transactions are aggregated, and the resulting net positions are identified. Disclosures about the fair value of financial instruments, which reflect changes in market prices and rates, should also be considered.
The objective in managing interest-rate risk is to minimize the adverse impact of changes in interest rates on net interest income and capital, while adjusting the asset-liability structure to obtain the maximum yield-cost spread on that structure. The Company relies primarily on its asset-liability structure to control interest rate risk. A sudden or substantial change in interest rates may impact its earnings, to the extent that the interest rates borne by assets and liabilities do not change at the same rate, to the same extent, or on the same basis.
The Company established a comprehensive interest rate risk management policy which is administered by management’s Asset-Liability Committee. The policy establishes risk limits, which are quantitative measures of the percentage change in net interest income (net interest income at risk) and the fair value of equity capital (economic value of equity at risk) resulting from a hypothetical change in interest rates for maturities from one day to 30 years. Management measures the potential adverse impacts that changing interest rates may have on its short-term earnings, long-term value, and liquidity with computer-generated simulation analysis. The simulation model is designed to capture call features and interest rate caps and floors embedded in investment and loan contracts. As with any method of analyzing interest rate risk, there are certain shortcomings inherent in the interest rate modeling methodology used. When interest rates change, actual movements in different categories of interest-earning assets and interest-bearing liabilities, loan prepayments, and withdrawals of time and other deposits, may deviate significantly from the assumptions used in modeling. The methodology does not measure the impact that higher rates may have on borrowers’ ability to service their debts, or the impact of rate changes on demand for loan and deposit products.
To minimize the potential for adverse effects of changes in interest rates on the results of the operations, the Company monitors assets and liabilities to better match the maturities and repricing terms of the interest-earning assets and interest-bearing liabilities. To do this, the Company (i) emphasizes the origination of adjustable-rate and variable-rate loans to be HFI; (ii) maintains a stable core deposit base; and (iii) maintains a significant portion of liquid assets (cash, interest-bearing deposits with other banks, and available for sale investment securities).
Management regularly reviews its exposure to changes in interest rates. Among the factors they consider are changes in the mix of interest-earning assets and interest-bearing liabilities, interest rate spreads and repricing periods. ALCO reviews, on at least a quarterly basis, its interest rate risk position.
The interest rate risk position is measured and monitored at the Bank using net interest income simulation models and economic value of equity sensitivity analysis that captures both short-term and long-term interest-rate risk exposure.
Modeling the sensitivity of net interest income and the economic value of equity to changes in market interest rates is highly dependent on numerous assumptions incorporated into the modeling process. The models used for these measurements rely on estimates of the potential impact that changes in interest rates may have on the value and prepayment speeds on all components of its loan and investment portfolios, as well as embedded options and cash flows of other assets and liabilities. Balance sheet growth assumptions are also included in the simulation modeling process. The analysis provides a framework as to what the overall sensitivity position is as of the most recent reported position and the impact that potential changes in interest rates may have on net interest income and the economic value of its equity.
Net interest income simulation involves forecasting net interest income under a variety of interest rate scenarios including instantaneous shocks.
The estimated impact on the net interest income as of September 30, 2024 and December 31, 2023, assuming immediate parallel moves in interest rates, is presented in the table below.
| Change in rates | September 30, 2024 Following 12 months | Following 24 months | December 31, 2023 Following 12 months | Following 24 months |
|---|---|---|---|---|
| +400 basis points | 10.0% | 8.9% | 14.7% | 12.8% |
| +300 basis points | 9.8 | 9.7 | 12.7 | 12.1 |
| +200 basis points | 6.0 | 6.1 | 7.6 | 7.4 |
| +100 basis points | 1.9 | 2.4 | 2.5 | 2.6 |
| -100 basis points | (3.9) | (4.3) | (4.5) | (4.5) |
| -200 basis points | (8.1) | (9.0) | (9.1) | (9.1) |
Management strategies may impact future reporting periods, as the actual results may differ from simulated results due to the timing, magnitude, and frequency of interest rate changes, the difference between actual experience and the characteristics assumed, as well as changes in market conditions. Market-based prepayment speeds are factored into the analysis for loan and investment securities portfolios. Rate sensitivity for transactional deposit accounts is modeled based on both historical experience and external industry studies.
The Company uses economic value of equity sensitivity analysis to understand the impact of interest rate changes on long-term cash flows, income, and capital. Economic value of equity is based on discounting the cash flows for all balance sheet instruments under different interest rate scenarios.
The table below presents the change in the economic value of equity as of September 30, 2024 and December 31, 2023, assuming immediate parallel shifts in interest rates.
| Change in rates | September 30, 2024 | December 31, 2023 |
|---|---|---|
| +400 basis points | (6.6)% | (6.3)% |
| +300 basis points | (3.1) | (4.1) |
| +200 basis points | (2.2) | (3.3) |
| +100 basis points | (1.9) | (2.7) |
| -100 basis points | (1.1) | 0.2 |
| -200 basis points | (2.7) | (0.3) |
Controls and procedures
As filed, 1,420 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Evaluation of Disclosure Controls and Procedures
An evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act), was carried out under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer as of September 30, 2024, the last day of the period covered by this Quarterly Report. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of September 30, 2024, in ensuring that the information required to be disclosed in the reports the Company files or submits under the Exchange Act is (i) accumulated and communicated to management (including the
Company’s Chief Executive Officer and Chief Financial Officer) as appropriate to allow timely decisions regarding required disclosures, and (ii) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Risk factors
As filed, 2,034 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
In addition to the other information set forth in this report, you should carefully consider the factors discussed under "Part I--Item 1A--Risk Factors" in the Company's Form 10-K for the year ended December 31, 2023. These factors could materially and adversely affect the Company's business, financial condition, liquidity, results of operations and capital position, and could cause its actual results to differ materially from its historical results or the results contemplated by the forward-looking statements contained in this report.
The development and use of artificial intelligence by us or others, or our inability to effectively and timely implement its use, may adversely affect the Company.
The use of artificial intelligence in the banking industry is developing and growing. Customer demand may cause us and others to offer products or services incorporating artificial intelligence. As with many developing technologies, artificial intelligence presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. Our future success will depend, in part, upon our ability to invest in and use appropriate technology, which may include artificial intelligence. To effectively make such investments, we may need to expend significant financial, human, and other resources. However, we may not be able to implement artificial intelligence in an effective or timely way, thus adversely impacting our operations. This may also adversely impact our ability to compete with financial institutions which have greater resources to invest in such technological improvements. Ultimately, any artificial intelligence we develop or use may be flawed. If our use of artificial intelligence, or its use by third parties with which we do business or otherwise interact, is deficient, biased, or inaccurate, or compromises customer privacy or implicates other ethics issues, we could be subject to competitive harm, potential legal liability, and brand or reputational harm.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2024-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Income tax | 3 months2024-07-01 to 2024-09-30 | $398.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2024-01-01 to 2024-09-30 | $1.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2024-07-01 to 2024-09-30 | $1.1m | us-gaap:NetIncomeLoss |
| Net income | 9 months2024-01-01 to 2024-09-30 | $2.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2024-07-01 to 2024-09-30 | $0.18 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2024-01-01 to 2024-09-30 | $0.40 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2024-07-01 to 2024-09-30 | $0.18 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2024-01-01 to 2024-09-30 | $0.40 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2024-07-01 to 2024-09-30 | 4,134,169 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2024-01-01 to 2024-09-30 | 4,133,082 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2024-01-01 to 2024-09-30 | $293.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months2024-01-01 to 2024-09-30 | $1.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months2024-01-01 to 2024-09-30 | $993.0k | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months2024-01-01 to 2024-09-30 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | At period end2024-09-30 | $64.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | At period end2024-09-30 | $1.25bn | us-gaap:Assets |
| Total liabilities | At period end2024-09-30 | $1.14bn | us-gaap:Liabilities |
| Shareholders' equity | At period end2024-09-30 | $102.3m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001649739-24-000286. Last ingested by Listed: Nov 3, 2026, 10:04 ET. Listed shows no prices and gives no investment advice.