Nonperforming assets were $1.2 million, or 0.12% of total assets, at September 30, 2023, compared
to $1.1 million, or 0.11% of total assets, at June 30, 2023 and $0.3 million or 0.03% of total assets, at September 30, 2022.
At
September 30, 2023, the Companys allowance for credit losses was $6.8 million, or 1.24% of total loans, compared to $6.6 million, or 1.27% of total loans, at June 30, 2023, and $5.0 million, or 1.05% of total loans, at
September 30, 2022.
The Company recorded a provision for credit losses of $0.1 in the third quarter of 2023, compared to $0.3 million for the
third quarter of 2022. The provision for credit losses was primarily related to loan growth during the third quarter of 2023 and 2022.
Noninterest income
was $0.9 million for both the third quarter of 2023 and 2022. Although mortgage lending income was largely unchanged, mortgage servicing income generally offset decreases in origination income as market interest rates have increased and
prepayment speeds on serviced mortgage loans have slowed.
Noninterest expense was $5.4 million for the third quarter of 2023 and 2022. Our
efficiency ratio of 74.01% in the third quarter of 2023 was down slightly from 74.82% in the second quarter of 2023, but up from 65.94% in the third quarter of 2022 primarily due to a decrease in total revenue.
Income tax expense was $0.2 million for the third quarter of 2023, compared to $0.4 million for the third quarter of 2022. This decrease was due to
a decline in the level of earnings before taxes and the Companys effective tax rate. The Companys effective tax rate for the third quarter of 2023 was 10.90%, compared to 17.78% in the third quarter of 2022. The Companys effective
income tax rate is principally affected by tax-exempt earnings from the Companys investments in municipal securities and bank-owned life insurance, and the benefits of New Markets Tax Credits.
Total assets were $1.0 billion at September 30, 2023, June 30, 2023, and September 30, 2022. Loans, net of unearned income were
$545.6 million at September 30, 2023, compared to $520.4 million at June 30, 2023 and $474.0 million at September 30, 2022. This increase in loans reflects growth across all major loan categories, except commercial and
industrial loans. Total deposits were $964.6 million at September 30, 2023, compared to $950.7 million at June 30, 2023, and $977.9 million at September 30, 2022. The Company had $46.1 million in brokered deposits
at September 30, 2023, compared to $16.0 million at June 30, 2023 and none at September 30, 2022. The Company had no FHLB advances or other wholesale borrowings outstanding at September 30, 2023, June 30, 2023, or
September 30, 2022.
At September 30, 2023, the Companys consolidated stockholders equity was $61.5 million or $17.59 per
share, compared to $59.8 million, or $17.06 per share, at September 30, 2022. The increase from September 30, 2022 was primarily driven by net earnings of $9.8 million, partially offset by cash dividends paid of
$3.8 million, other comprehensive loss due to the $3.3 million increase in unrealized losses on securities available-for-sale, net of tax, a $0.8 million
one time charge for the cumulative effect to adopt the CECL accounting standard on January 1, 2023, and $0.3 million in repurchases of the Companys common stock. Total unrealized losses on available-for-sale securities increased 7% from $61.0 million on September 30, 2022 to $65.5 million on September 30, 2023, as market rates increased in the latest period. These unrealized
losses do not affect the Banks capital for regulatory capital purposes. At September 30, 2023, the Companys equity to total assets ratio was 5.96%, compared to 5.74% at September 30, 2022. All of the Companys securities
are classified as available-for-sale and not held-to-maturity. Therefore, any changes in
the fair value of the Companys securities portfolio are fully reflected in total equity under generally accepted accounting principles.
The Company
paid cash dividends of $0.27 per share in the third quarter of 2023, an increase of 2% from the same period in 2022. The Companys share repurchases of $0.2 million since December 31, 2022 resulted in 10,108 fewer outstanding common
shares at September 30, 2023. At September 30, 2023, the Banks regulatory capital ratios were well above the minimum amounts required to be well capitalized under current regulatory standards.
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