CERTAIN INFORMATION ABOUT EFBI
Managements Discussion and Analysis of Financial Condition of EFBI at September 30, 2023 and December 31, 2022
Total Assets. Total assets were $175.8 million at September 30, 2023, an increase of $2.0 million, or 1.2%, over the
$173.7 million at December 31, 2022. The increase was primarily due to an increase in loans, net of allowance for credit losses of $7.1 million, and an increase in loans held for sale of $2.3 million, offset by a decrease in cash
and cash equivalents of $3.0 million, a decrease in interest bearing time deposits in other banks of $3.5 million, and a decrease in US treasuries of $2.2 million.
Net Loans. Net loans totaled $139.2 million at September 30, 2023, as compared to $132.1 million at December 31,
2022, an increase of $7.1 million or 5.4%. During the nine months ended September 30, 2023, we originated $72.4 million of loans, $53.3 million of which were one- to four-family residential
real estate loans, and sold $29.8 million of loans in the secondary market. During the nine months ended September 30, 2023, one- to four-family residential real estate loans increased
$5.8 million, or 7.5%, to $83.3 million, multi-family loans decreased $349,000, or 38.6%, to $555,000, commercial real estate loans and land loans increased $3.7 million, or 13.2%, to $31.6 million, construction loans increased
$1.2 million, or 6.7%, to $19.5 million, home equity and other consumer loans decreased $328,000, or 4.3% to $7.3 million, and commercial loans decreased $807,000, or 9.0% to $8.2 million. Management continues to emphasize the
origination of high-quality loans for retention in the loan portfolio.
Deposits. Deposits increased by $2.1 million, or 1.6%,
to $135.0 million at September 30, 2023 from $132.8 million at December 31, 2022. Our core deposits, which are all deposits other than certificates of deposit, decreased $10.9 million, or 12.1%, to $79.6 million at
September 30, 2023 from $90.5 million at December 31, 2022. Certificates of deposit increased $13.1 million, or 30.9%, to $55.4 million at September 30, 2023 from $42.3 million at December 31, 2022. During the
nine months ended September 30, 2023, the deposit base was impacted by the rising interest rate environment as customers were retained and attracted by higher interest earning certificates of deposit.
Shareholders Equity. Shareholders equity decreased $346,000, or 1.3%, to $26.3 million at September 30, 2023 from
$26.6 million at December 31, 2022. The decrease resulted primarily from the implementation of the Financial Accounting Standards Board (FASB) ASU 2016-13, a current expected credit loss
model (CECL), which resulted in a $376,000 contribution to the allowance for credit losses, a repurchase of common stock of $27,000, and dividends paid of $322,000, offset by expense of $85,000 related to the ESOP shares committed to be
released, expense of $205,000 related to stock-based compensation, and net income of $89,000 during the nine months ended September 30, 2023.
Managements Discussion and Analysis of Results of Operation of EFBI for the Three Months Ended September 30, 2023 and September 30, 2022
General. Our net income for the three months ended September 30, 2023 was $30,000, compared to a net income of $268,000
for the three months ended September 30, 2022, a decrease of $238,000, or 88.8%. The decrease was largely driven by a $563,000 increase in total interest expense, offset by a $358,000 increase in total interest and dividend income, and a
$63,000 reduction in provision for income taxes.
Interest Income. Total interest income increased $358,000, or 25.6%, to
$1.8 million for the three months ended September 30, 2023 from $1.4 million for the three months ended September 30, 2022. This increase was primarily attributable to a $340,000 increase in interest on loans, and an increase of
$31,000 in dividend income on Federal Home Loan Bank stock. The average balance of interest-earning assets increased $6.5 million for the three months ended September 30, 2023, or 4.3%, from the average balance for the three months ended
September 30, 2022, while the average yield on interest-earning assets increased by 75 basis points to 4.39% for the three months ended September 30, 2023 from 3.64% for the three months ended September 30, 2022.
26