false000191460500019146052024-02-152024-02-15

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 15, 2024

 

ECB BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

001-41456

88-1502079

(State or Other Jurisdiction

(Commission

(IRS Employer

of Incorporation or Organization)

File Number)

Identification No.)

 

419 Broadway, Everett, Massachusetts 02149

(Address of principal executive offices) (Zip Code)

 

(617) 387-1110

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ECBK

The Nasdaq Stock Market LLC

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Item 2.02 Results of Operations and Financial Condition

 

 


 

On February 15, 2024, ECB Bancorp, Inc., the holding company for Everett Co-operative Bank, issued a press release announcing its financial results at and for the three months and year ended December 31, 2023.

 

A copy of the press release is included as Exhibit 99.1 to this report and shall not be deemed “filed” for any purpose, nor shall the information or Exhibit 99.1 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

 

 

Item 8.01 Other Events

 

On February 15, 2024, ECB Bancorp, Inc. also announced that its annual meeting of stockholders will be held on June 5, 2024.

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1

 

Press release dated February 15, 2024

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

ECB BANCORP, INC.

Date: February 15, 2024 By: /s/Richard J. O'Neil, Jr.

Richard J. O’Neil, Jr.

President and Chief Executive Officer

 


For Immediate Release

Date: February 15, 2024

 

 

 

Contact:

Richard J. O’Neil, Jr.

 

President and Chief Executive Officer

 

 

Phone:

617-387-1110

Email:

rjoneil@everettbank.com

 

ECB Bancorp, Inc. Reports Fourth Quarter Results

EVERETT, MA, February 15, 2024 - ECB Bancorp, Inc. (NASDAQ-ECBK) (the “Company”), the holding company for Everett Co-operative Bank (the “Bank”), a state-chartered co-operative bank headquartered in Everett, Massachusetts, today reported net income of $789,000, or $0.09 per diluted share for the quarter ended December 31, 2023 compared to $975,000, or $0.12 per diluted share for the quarter ended December 31, 2022, a decrease of $186,000 in net income. For the year ended December 31, 2023, the Company reported net income of $4.5 million, or $0.52 per diluted share as compared to net income of $2.7 million, or $0.32 per diluted share for the year ended December 31, 2022, an increase of $1.7 million in net income.

Richard J. O’Neil, Jr., President and Chief Executive Officer, said, "The rapid increases in short term rates combined with the inverted yield curve continued to place pressure on our net interest margin. Despite these headwinds impacting the entire industry we have continued to grow our balance sheet with strong loan growth supported by steady deposit growth. At the close of the 4th quarter our net charge offs were $1,000 for the full year. With the addition of our branch in Woburn, MA we have enhanced our business development and deposit gathering opportunities. Our on-balance sheet and off-balance sheet liquidity levels continued to strengthen as we exercise our orderly and diligent strategic growth strategy. Despite the net interest margin compression, we continued to return capital to our shareholders through our share buyback program."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for credit losses decreased $873,000, or 12.8%, to $5.9 million for the quarter ended December 31, 2023 from $6.8 million for the quarter ended December 31, 2022. This decrease was primarily due to higher cost of funds. The provision for credit losses decreased $1.0 million, or 90.5%, to $108,000 for the quarter ended December 31, 2023 from $1.1 million for the quarter ended December 31, 2022. The decrease in the provision for credit losses was driven by lower loan growth during the quarter ended December 31, 2023 as compared to the quarter ended December 31, 2022. The combination of these items resulted in an increase of $159,000, or 2.8%, in net interest and dividend income after provision for credit losses for the quarter ended December 31, 2023 as compared to the quarter ended December 31, 2022.

Net interest and dividend income before provision for credit losses increased $1.2 million, or 4.9% to $24.8 million for the year ended December 31, 2023 from $23.6 million for the year ended December 31, 2022. This increase was driven by an increase in the average balance of net interest earning assets partially offset by a decrease in the net interest rate spread. The provision for credit losses decreased $2.1 million, or 72.7% to $803,000 for the year ended December 31, 2023 from $2.9 million for the year ended December 31, 2022. The decrease in the provision for credit losses was driven by lower loan growth in the year ended December 31, 2023 as compared to the year ended December 31, 2022. The combination of these items resulted in an increase of $3.3 million, or 15.9%, in net interest and dividend income after provision for credit losses for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

NONINTEREST INCOME

Noninterest income increased $29,000, or 12.5%, to $261,000 for the quarter ended December 31, 2023 from $232,000 for the quarter ended December 31, 2022.

Noninterest income decreased $349,000, or 24.9% to $1.1 million for the year ended December 31, 2023 from $1.4 million for the year ended December 31, 2022. The 2022 results benefited from a $430,000 gain recognized into income from a life insurance policy death benefit in the second quarter of 2022. Additional pressure on noninterest income in 2023 resulted from a decrease of $63,000 in net gain on sales of loans due to a lower number of loans sold.

NONINTEREST EXPENSE

Noninterest expense increased $492,000, or 10.8%, to $5.0 million for the quarter ended December 31, 2023 from $4.5 million for the quarter ended December 31, 2022. Significant changes are as follows:

Director compensation increased $98,000, or 93.9%, driven by $83,000 in stock based compensation recorded in the quarter ended December 31, 2023, related to the 2023 Equity Incentive Plan. There were no stock based compensation costs in 2022 related to this plan;

Occupancy and equipment expense increased $54,000, or 28.1%, driven by our new Woburn, MA branch office;
Data processing costs increased $58,000, or 25.7%, driven by both increased core processor operating costs as well as costs related to our new online account opening platform;
Professional fees increased $107,000, or 37.4%, driven by increased costs related to operating as a public company; and
FDIC deposit insurance expense increased $118,000, or 190.3%, driven by both increases in assessment rates charged by the FDIC as well as an increase in our asset size.

 

Noninterest expense increased $447,000, or 2.4%, to $19.1 million for the year ended December 31, 2023 from $18.6 million for the year ended December 31, 2022. Significant changes are as follows:

Salaries and employee benefits increased $1.8 million, or 17.6%, driven by additional staffing to support our strategic plan, merit increases, as well as expenses related to the ESOP which did not exist in the first half of 2022 and expenses related to the 2023 Equity Incentive Plan which did not exist in 2022;
Director compensation increased $152,000, or 35.4%, driven by $103,000 in stock-based compensation recorded in the year ended December 31, 2023, related to the 2023 Equity Incentive Plan. There were no stock-based compensation costs in 2022 related to this plan;
Occupancy and equipment expense increased $188,000, or 25.0%, driven by our new Woburn, MA branch office;
FDIC deposit insurance expense increased $568,000, or 252.4%, driven by both increases in assessment rates charged by the FDIC as well as an increase in our asset size;
Professional fees increased $509,000, or 60.2%, driven by increased costs related to operating as a public company;
Charitable contributions decreased $3.2 million, or 99.5%, driven by a $3.2 million contribution to the Everett Co-operative Bank Charitable Foundation made in the third quarter of 2022 in connection with the Company’s initial public offering; and
Other expenses increased $206,000, or 15.7%, driven by increased costs related to operating as a public company.

INCOME TAXES

We recorded a provision for income tax expense of $266,000 for the quarter ended December 31, 2023, compared to a provision for income tax expense of $383,000 for the quarter ended December 31, 2022, reflecting an effective tax rate of 25.2% and 28.2%, respectively. The lower effective tax rate in the 2023 period was driven by a higher non-taxable income from bank-owned life insurance as a percentage of pre-tax income. We recorded a provision for income taxes of $1.5 million for the year ended December 31, 2023, compared to a provision for income taxes of $776,000 for the year ended December 31, 2022, reflecting effective tax rates of 25.5% and 22.2%, respectively. The lower tax rate in 2022 was driven by non-taxable death benefits received on bank-owned life insurance.

BALANCE SHEET

Total assets increased $215.9 million, or 20.3%, from $1.06 billion at December 31, 2022 to $1.28 billion at December 31, 2023.

Total loans increased $155.5 million, or 17.4%, from $893.1 million at December 31, 2022 to $1.05 billion at December 31, 2023.

One-to-four family residential real estate loans increased $54.8 million, from $355.4 million at December 31, 2022 to $410.1 million at December 31, 2023;
Multi-family real estate loans increased $45.4 million, from $242.0 million at December 31, 2022 to $287.4 million at December 31, 2023; and
Commercial real estate loans increased $40.2 million, from $156.2 million at December 31, 2022 to $196.4 million at December 31, 2023.

Cash and cash equivalents increased $56.9 million, or 91.8%, from $62.1 million at December 31, 2022 to $119.0 million at December 31, 2023. The increase in cash and cash equivalents was driven by our focus on maintaining strong levels of liquidity.

Deposits increased $150.1 million, or 20.9%, from $718.1 million at December 31, 2022 to $868.2 million at December 31, 2023.

Certificates of deposit increased $178.7 million, or 55.9%, from $319.8 million at December 31, 2022 to $498.5 million at December 31, 2023.
Savings accounts decreased $10.5 million, or 7.1%, from $148.4 million at December 31, 2022 to $137.8 million at December 31, 2023.

Interest bearing checking accounts decreased $6.8 million, or 23.4%, from $28.9 million at December 31, 2022 to $22.2 million at December 31, 2023.
Demand deposit accounts decreased $6.6 million, or 7.7%, from $84.9 million at December 31, 2022 to $78.3 million at December 31, 2023.
Money market deposit accounts decreased $4.7 million, or 3.5%, from $136.1 million at December 31, 2022 to $131.4 million at December 31, 2023.

FHLB advances increased $60.0 million, or 34.5%, from $174.0 million at December 31, 2022 to $234.0 million at December 31, 2023.

Total shareholders' equity increased $2.2 million, or 1.3%, to $164.9 million as of December 31, 2023 from $162.7 million as of December 31, 2022. This increase is primarily the result of earnings of $4.5 million partially offset by a $677,000 reduction in retained earnings related to the adoption of CECL and a $2.2 million reduction in additional paid-in capital due to share repurchases.

ASSET QUALITY

Asset quality remains strong. The allowance for credit losses in total and as a percentage of total loans as of December 31, 2023 was $8.6 million and 0.82%, respectively, as compared to $7.2 million and 0.81%, respectively, as of December 31, 2022. For the year ended December 31, 2023 the Company recorded net charge offs of $1,000. For the year ended December 31, 2022 the Company recorded net recoveries of $24,000. Total non-performing assets were $1.2 million, or 0.09% of total assets as of December 31, 2023 and $656,000, or 0.06% of total assets as of December 31, 2022.

 

 


Annual Meeting of Stockholders

On February 15, 2024, the Company also announced that its annual meeting of stockholders will be held on June 5, 2024.

 

Company Profile

ECB Bancorp, Inc. is headquartered in Everett, Massachusetts and is the registered bank holding company for Everett Co-operative Bank. The Bank provides financial services to individuals, families, municipalities and businesses through its three full-service branch offices located in Everett, Lynnfield and Woburn, Massachusetts. The Company's common stock is traded on the NASDAQ Capital Market under the symbol "ECBK." For more information, visit the Company's website at www.everettbank.com.

Forward-looking statements

Certain statements herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, the Company's ability to continue to increase loans and deposit growth, legislative and regulatory changes that adversely affect the businesses in which the Company is engaged and changes in the securities market. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise, except as may be required by law.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

ECB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

December 31, 2023 (unaudited) and December 31, 2022

(in thousands except share data)

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

3,786

 

 

$

3,123

 

Short-term investments

 

 

115,250

 

 

 

58,927

 

Total cash and cash equivalents

 

 

119,036

 

 

 

62,050

 

Interest-bearing time deposits

 

 

 

 

 

300

 

Investments in available-for-sale securities (at fair value)

 

 

5,003

 

 

 

5,001

 

Investments in held-to-maturity securities, at cost (fair values of $70,590 at December 31,
    2023 (unaudited) and $69,707 at December 31, 2022)

 

 

76,979

 

 

 

77,591

 

Loans, net of allowance for credit losses of $8,591 as of December 31, 2023 (unaudited) and
   $7,200 as of December 31, 2022

 

 

1,039,789

 

 

 

885,674

 

Federal Home Loan Bank stock, at cost

 

 

9,892

 

 

 

7,293

 

Premises and equipment, net

 

 

3,754

 

 

 

3,698

 

Accrued interest receivable

 

 

3,766

 

 

 

2,632

 

Deferred tax asset, net

 

 

4,767

 

 

 

4,344

 

Bank-owned life insurance

 

 

14,472

 

 

 

14,067

 

Other assets

 

 

2,877

 

 

 

1,812

 

Total assets

 

$

1,280,335

 

 

$

1,064,462

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing

 

$

78,342

 

 

$

84,903

 

Interest-bearing

 

 

789,872

 

 

 

633,246

 

Total deposits

 

 

868,214

 

 

 

718,149

 

Federal Home Loan Bank advances

 

 

234,000

 

 

 

174,000

 

Other liabilities

 

 

13,220

 

 

 

9,583

 

Total liabilities

 

 

1,115,434

 

 

 

901,732

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

Preferred Stock, par value $0.01; Authorized: 1,000,000 shares; Issued and outstanding: 0 shares and 0 shares, respectively

 

 

 

 

 

 

Common Stock, par value $0.01; Authorized: 30,000,000 shares; Issued and outstanding: 9,291,810 shares and 9,175,247 shares, respectively

 

 

93

 

 

 

92

 

Additional paid-in capital

 

 

87,431

 

 

 

89,286

 

Retained earnings

 

 

83,855

 

 

 

80,076

 

Accumulated other comprehensive income

 

 

128

 

 

 

249

 

Unallocated common shares held by the Employee Stock Ownership Plan

 

 

(6,606

)

 

 

(6,973

)

Total shareholders' equity

 

 

164,901

 

 

 

162,730

 

Total liabilities and shareholders' equity

 

$

1,280,335

 

 

$

1,064,462

 

 

 

 

 

 

 

 

Shareholders' Equity Ratios

 

 

 

 

 

 

Book value per common share

 

$

17.75

 

 

$

17.74

 

 

 

 

 

 

 

 

Regulatory Capital Ratios (Everett Co-operative Bank)

 

 

 

 

 

 

Total capital to risk weighted assets

 

 

17.30

%

 

 

16.40

%

Tier 1 capital to risk weighted assets

 

 

16.22

%

 

 

15.49

%

Tier 1 capital to average assets

 

 

11.31

%

 

 

13.89

%

 


ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

(unaudited)

(in thousands except share data)

 

 

 

Three months ended

 

 

Year ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

12,969

 

 

$

8,859

 

 

$

48,330

 

 

$

26,954

 

Interest and dividends on securities

 

 

751

 

 

 

466

 

 

 

2,701

 

 

 

1,488

 

Other interest income

 

 

1,178

 

 

 

360

 

 

 

3,745

 

 

 

715

 

Total interest and dividend income

 

 

14,898

 

 

 

9,685

 

 

 

54,776

 

 

 

29,157

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

6,599

 

 

 

2,234

 

 

 

21,413

 

 

 

4,566

 

Interest on Federal Home Loan Bank advances

 

 

2,360

 

 

 

638

 

 

 

8,573

 

 

 

948

 

Interest on Federal Funds purchased

 

 

-

 

 

 

1

 

 

 

-

 

 

 

1

 

Total interest expense

 

 

8,959

 

 

 

2,873

 

 

 

29,986

 

 

 

5,515

 

Net interest and dividend income

 

 

5,939

 

 

 

6,812

 

 

 

24,790

 

 

 

23,642

 

Provision for credit losses

 

 

108

 

 

 

1,140

 

 

 

803

 

 

 

2,940

 

Net interest and dividend income after provision for credit losses

 

 

5,831

 

 

 

5,672

 

 

 

23,987

 

 

 

20,702

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

138

 

 

 

120

 

 

 

508

 

 

 

446

 

Income from bank-owned life insurance

 

 

106

 

 

 

97

 

 

 

479

 

 

 

828

 

Net gain on sales of loans

 

 

8

 

 

 

-

 

 

 

21

 

 

 

84

 

Other income

 

 

9

 

 

 

15

 

 

 

44

 

 

 

43

 

Total noninterest income

 

 

261

 

 

 

232

 

 

 

1,052

 

 

 

1,401

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,056

 

 

 

2,968

 

 

 

11,679

 

 

 

9,928

 

Director compensation

 

 

202

 

 

 

104

 

 

 

581

 

 

 

429

 

Occupancy and equipment expense

 

 

246

 

 

 

192

 

 

 

941

 

 

 

753

 

Data processing

 

 

284

 

 

 

226

 

 

 

1,093

 

 

 

850

 

Computer software and licensing fees

 

 

69

 

 

 

79

 

 

 

286

 

 

 

259

 

Advertising and promotions

 

 

218

 

 

 

241

 

 

 

794

 

 

 

752

 

Professional fees

 

 

393

 

 

 

286

 

 

 

1,355

 

 

 

846

 

Federal Deposit Insurance Corporation deposit insurance

 

 

180

 

 

 

62

 

 

 

793

 

 

 

225

 

Charitable contribution

 

 

1

 

 

 

7

 

 

 

17

 

 

 

3,256

 

Other expense

 

 

388

 

 

 

380

 

 

 

1,515

 

 

 

1,309

 

Total noninterest expense

 

 

5,037

 

 

 

4,545

 

 

 

19,054

 

 

 

18,607

 

Income before income tax expense

 

 

1,055

 

 

 

1,359

 

 

 

5,985

 

 

 

3,496

 

Income tax expense

 

 

266

 

 

 

383

 

 

 

1,529

 

 

 

776

 

Net income

 

$

789

 

 

$

976

 

 

$

4,456

 

 

$

2,720

 

Share data:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, basic

 

 

8,406,925

 

 

 

8,463,823

 

 

 

8,466,021

 

 

 

8,456,218

 

Weighted average shares outstanding, diluted

 

 

8,433,257

 

 

 

8,463,823

 

 

 

8,523,705

 

 

 

8,456,218

 

Basic earnings per share

 

$

0.09

 

 

$

0.12

 

 

$

0.53

 

 

$

0.32

 

Diluted earnings per share

 

$

0.09

 

 

$

0.12

 

 

$

0.52

 

 

$

0.32

 

 


v3.24.0.1
Document and Entity Information
Feb. 15, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Feb. 15, 2024
Securities Act File Number 001-41456
Entity Registrant Name ECB BANCORP, INC.
Entity Central Index Key 0001914605
Entity Incorporation, State or Country Code MD
Entity Tax Identification Number 88-1502079
Entity Address, Address Line One 419 Broadway
Entity Address, City or Town Everett
Entity Address, State or Province MA
Entity Address, Postal Zip Code 02149
City Area Code 617
Local Phone Number 387-1110
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol ECBK
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false

ECB Bancorp (NASDAQ:ECBK)
Historical Stock Chart
From Sep 2024 to Oct 2024 Click Here for more ECB Bancorp Charts.
ECB Bancorp (NASDAQ:ECBK)
Historical Stock Chart
From Oct 2023 to Oct 2024 Click Here for more ECB Bancorp Charts.