RALEIGH, N.C., Jan. 23, 2025 /PRNewswire/ -- Dogwood State Bank (OTC: DSBX) ("Dogwood" or the "Bank") announced today its financial results for the three and twelve months ended December 31, 2024.
Fourth Quarter and Full Year 2024 Highlights
- Adjusted net income (non-GAAP) improved to $6.6 million, or $0.35 per diluted share, in Q4 2024 and improved to $18.7 million, or $1.12 per diluted share, in FY 2024
- Adjusted pre-tax, pre-provision net revenue (non-GAAP) improved to $9.7 million in Q4 2024 and improved to $28.8 million in FY 2024
- Net interest margin expanded to 4.13% in Q4 2024 and expanded to 3.80% in FY 2024
- Adjusted efficiency ratio (non-GAAP) improved to 61.06% in Q4 2024 and improved to 62.76% in FY 2024
- Dogwood completed the acquisition of Community First Bancorporation ("Community First") on August 1, 2024
- Dogwood Small Business Lending was recognized as the 3rd largest North Carolina SBA lender and 29th largest in the nation in the SBA's 2024 fiscal year
"We are proud to close out the year with strong performance, reflecting the hard work, dedication, and innovation of our entire team," commented Steve Jones, Chief Executive Officer. "Our successful acquisition and integration of Community First was transformational for our organization. We delivered exceptional value to our stakeholders, advanced key initiatives, and positioned ourselves for sustained growth in the years ahead. As we move forward, we remain committed to executing our strategy, fostering innovation, and delivering meaningful results for our customers and shareholders, while continuing to focus on building and nurturing strong relationships within our communities.
Q4 2024 Earnings Performance
Dogwood reported GAAP net income in Q4 2024 of $6.2 million, or $0.32 per diluted share, compared to $2.9 million, or $0.20 per diluted share, in Q4 2023. Current quarter GAAP earnings were negatively impacted by merger & acquisition expenses of $595 thousand related to the acquisition of Community First.
Adjusted net income (non-GAAP) in Q4 2024, which excludes the impact of merger & acquisition expenses, increased to $6.6 million, or $0.35 per diluted share, from $2.9 million, or $0.20 per diluted share, in Q4 2023. Adjusted pre-tax, pre-provision net revenue (non-GAAP) in Q4 2024 was $9.7 million, an increase from $5.5 million in Q4 2023.
Net Interest Income
Net interest income was $21.1 million in Q4 2024, an increase from $11.9 million in Q4 2023. The increase was primarily due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin.
Total average interest-earning assets increased to $2.04 billion in Q4 2024 from $1.27 billion in Q4 2023. Average loans increased by $749.8 million. Average investment securities balances increased by $50.8 million.
Net interest margin expanded to 4.13% in Q4 2024 from 3.43% in Q4 2023. Higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.
Provision for Credit Losses and Asset Quality
Provision for credit losses was $1.1 million in Q4 2024, a decrease from $1.6 million in Q4 2023. The allowance for credit losses to total loans was 1.08% as of Q4 2024, compared to 1.09% as of both Q3 2024 and Q4 2023.
Nonperforming loans were 0.33% of total loans as of Q4 2024, compared to 0.18% as of Q3 2024, and 0.15% as of Q4 2023. Annualized net charge offs were 0.13% of average loans in Q4 2024, compared to 0.17% in Q3 2024 and 0.02% in Q4 2024. The vast majority of charge offs recognized in Q4 2024 were related to unguaranteed portions of U.S. Small Business Administration ("SBA") loans.
Non-Interest Income
Non-interest income was $3.7 million in both Q4 2024 and Q4 2023. SBA lending income as well as service charges & debit card income increased over this period, but a $1.2 million gain on the early payoff of $50 million of term FHLB advances in Q4 2023 offset these increases.
SBA lending income rose by $381 thousand due to higher secondary market premiums on sales of guaranteed loans sold in the quarter and higher servicing fee income. The weighted average net premium on SBA loans sold in Q4 2024 was 8.95%, an increase from 8.14% in Q4 2023. Guaranteed balances of SBA loans sold totaled $23.2 million in Q4 2024, which was a decrease from $25.4 million in Q4 2023.
Service charges and debit card income increased by $611 thousand, which was primarily due to the Community First acquisition.
Non-Interest Expense
Non-interest expense was $15.8 million in Q4 2024, an increase from $10.2 million in Q4 2023. Merger & acquisition expenses of $595 thousand were incurred in Q4 2024 related to the Community First acquisition. These one-time expenses were primarily related to the systems conversion and other integration-related costs. Further, amortization of the Community First core deposit intangible, which was recognized in the acquisition, added $599 thousand to expense in the quarter.
Also contributing to the increase in non-interest expense, compensation and benefits grew by $2.5 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth.
Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.
Income Taxes
Dogwood had tax expense of $1.8 million in Q4 2024, compared to tax expense of $865 thousand in Q4 2023. The effective tax benefit rate was 22.73% in Q4 2024, which was similar to the effective tax rate of 22.77% in Q4 2023.
Full Year 2024 Earnings Performance
Dogwood reported GAAP net income in 2024 of $5.9 million, or $0.35 per diluted share, compared to net income of $10.6 million, or $0.72 per diluted share, in 2023. GAAP earnings in 2024 were negatively impacted by merger & acquisition expenses and a one-time provision charge on acquired PCD loans, both of which were related to the acquisition of Community First.
Adjusted net income (non-GAAP) in 2024, which excludes the impact of merger & acquisition expenses as well as the provision charge on acquired non-PCD loans, increased to $18.7 million, or $1.12 per diluted share, from $10.6 million, or $0.72 per diluted share, in 2023. Adjusted pre-tax, pre-provision net revenue (non-GAAP) in 2024 was $28.8 million, an increase from $18.8 million in 2023.
Net Interest Income
Net interest income was $63.1 million in 2024, an increase from $42.8 million in 2023. The increase was due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin.
Total average interest-earning assets increased to $1.66 billion in 2024 from $1.22 billion in 2023. Average loans increased by $435.8 million. Average investment securities balances increased by $25.3 million.
Net interest margin expanded to 3.80% in 2024 from 3.52% in 2023. While cost of funds increased by 0.44% over the periods under comparison, higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.
Provision for Credit Losses and Asset Quality
Provision for credit losses was $9.9 million in 2024, an increase from $5.2 million in 2023. The increase in provision expense was primarily due to a one-time provision charge of $5.3 million on acquired non-PCD loans.
Non-Interest Income
Non-interest income was $14.2 million in 2024, an increase from $12.1 million in 2023. This increase was primarily related to SBA lending income as well as service charges and debit card income, partially offset by a $1.2 million gain on the early payoff of term FHLB advances in 2023.
SBA lending income rose by $1.5 million due to higher secondary market premiums on sales of guaranteed loans sold during the year and higher servicing fee income. The weighted average net premium on SBA loans sold in 2024 was 9.39%, an increase from 8.14% in 2023. Guaranteed balances of SBA loans sold totaled $102.7 million in 2024, which was a decrease from $105.1 million in 2023.
Service charges and debit card income increased by $1.1 million, which was primarily due to the Community First acquisition.
Non-Interest Expense
Non-interest expense was $59.8 million in 2024, an increase from $36.1 million in 2023. Merger & acquisition expenses of $11.3 million were incurred in 2024 to complete the Community First acquisition. These one-time expenses included placement agent fees, professional fees, executive change in control payments, vendor termination payments, and other merger-related costs. Further, amortization of the Community First core deposit intangible which was recognized in the acquisition added $1.0 million to expense.
Also contributing to the increase in non-interest expense, compensation and benefits grew by $7.0 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth.
Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.
Income Taxes
Dogwood had tax expense of $1.8 million in 2024, compared to tax expense of $3.0 million in 2023. The effective tax rate was 23.12% in 2024, which was slightly higher than the effective tax rate of 22.12% in 2023.
Community First Acquisition
On August 1, 2024, Dogwood completed the acquisition of Community First in an all-stock transaction. A total of 3.4 million shares of Dogwood voting common stock were issued in the transaction, which equated to total consideration paid of $54.3 million. Dogwood added $682.5 million in total assets, $474.1 million in gross loans, $572.1 million in total deposits, and $53.6 million in shareholders' equity to its balance sheet in the acquisition. As part of the purchase price allocation, $4.8 million in goodwill was recognized at acquisition.
About Dogwood State Bank
Dogwood State Bank is a state-chartered community bank headquartered in Raleigh, North Carolina, with approximately $2.2 billion in total assets. Dogwood provides a wide range of banking products and services through its online offerings and twenty-one branch offices in North Carolina, South Carolina, and Eastern Tennessee. Dogwood also specializes in providing lending services to small businesses through its Dogwood State Bank Small Business Lending division. Dogwood is focused on becoming the bank for businesses, business owners, professionals, and their employees and redefining what it means to Bank Local. By leveraging leadership, investing in technology, and committing to personalized, superior customer service, Dogwood is changing the landscape of community banking.
Forward-Looking Statements
Statements made in this press release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this press release and are based on current expectations and involve a number of assumptions. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the Bank's operations and future prospects include but are not limited to: the expected growth opportunities or cost savings from the proposed merger (the "merger") of Community First and Community First Bank, Inc. with and into the Bank may not be fully realized or may take longer to realize than expected; the businesses of the Bank and Community First may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger may not be obtained; changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of the Bank's loan and securities portfolios; demand for loan products and other financial services in our market areas; inflation; deposit flows; competition; our implementation of new technologies and ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and changes in accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with United States generally accepted accounting principles ("GAAP"). The Bank uses the non-GAAP financial measures discussed herein in its analysis of the Bank's performance. The Bank's management believes that these non-GAAP financial measures enhance comparability of results of operations with prior periods by excluding the impact of items or events that may obscure trends in the Bank's performance. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the Non-GAAP Reconciliation table for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.
Financial Tables
Dogwood State Bank | ||||||||||||
Income Statements | ||||||||||||
Quarter Ended | Twelve Months Ended | |||||||||||
(Dollars in thousands, except per share data) | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | |||||
Net interest income | $ 21,129 | $ 18,157 | $ 12,521 | $ 11,312 | $ 11,900 | $ 63,119 | $ 42,784 | |||||
Provision for credit losses | 1,116 | 5,857 | 2,017 | 921 | 1,638 | 9,911 | 5,164 | |||||
Net interest income after provision | 20,013 | 12,300 | 10,504 | 10,391 | 10,262 | 53,208 | 37,620 | |||||
Non-interest income | ||||||||||||
SBA lending | 2,219 | 2,801 | 2,717 | 2,197 | 1,838 | 9,934 | 8,421 | |||||
Service charges and debit card income | 954 | 811 | 340 | 351 | 343 | 2,456 | 1,399 | |||||
Bank-owned life insurance | 346 | 301 | 219 | 211 | 201 | 1,079 | 751 | |||||
Securities gains (losses), net | 60 | (8) | (6) | 6 | 5 | 52 | 77 | |||||
Gain on payoff of FHLB advances | - | - | - | - | 1,230 | - | 1,230 | |||||
Other | 160 | 293 | 161 | 85 | 93 | 697 | 251 | |||||
Total non-interest income | 3,739 | 4,198 | 3,431 | 2,850 | 3,710 | 14,218 | 12,129 | |||||
Non-interest expense | ||||||||||||
Compensation and benefits | 9,389 | 8,598 | 6,683 | 6,506 | 6,910 | 31,176 | 24,139 | |||||
Occupancy and equipment | 1,166 | 1,025 | 707 | 719 | 634 | 3,617 | 2,403 | |||||
Software | 561 | 497 | 344 | 346 | 343 | 1,748 | 1,375 | |||||
Loan related costs | 570 | 182 | 314 | 290 | 254 | 1,359 | 1,010 | |||||
Data processing | 780 | 648 | 315 | 261 | 245 | 2,004 | 914 | |||||
Professional fees | 157 | 208 | 235 | 225 | 242 | 825 | 971 | |||||
FDIC insurance | 390 | 287 | 204 | 240 | 239 | 1,122 | 734 | |||||
Merger and acquisition expenses | 595 | 9,139 | 562 | 958 | 14 | 11,254 | 14 | |||||
Amortization of other intangible assets | 599 | 408 | 4 | 11 | 18 | 1,022 | 111 | |||||
Other | 1,572 | 1,731 | 1,102 | 1,259 | 1,274 | 5,660 | 4,406 | |||||
Total non-interest expense | 15,779 | 22,723 | 10,470 | 10,815 | 10,173 | 59,787 | 36,077 | |||||
Net income (loss) before income taxes | 7,973 | (6,225) | 3,465 | 2,426 | 3,799 | 7,639 | 13,672 | |||||
Income tax expense (benefit) | 1,812 | (1,445) | 811 | 588 | 865 | 1,766 | 3,024 | |||||
Net income (loss) | $ 6,161 | $ (4,780) | $ 2,654 | $ 1,838 | $ 2,934 | $ 5,873 | $ 10,648 | |||||
Pre-Tax, Pre-Provision Net Revenue (PPNR)(1) | $ 9,089 | $ (368) | $ 5,482 | $ 3,347 | $ 5,437 | $ 17,550 | $ 18,836 | |||||
Adjusted PPNR(1) | 9,684 | 8,771 | 6,044 | 4,305 | 5,451 | 28,804 | 18,850 | |||||
Per Share Data: | ||||||||||||
Earnings per share (EPS) - basic | $ 0.33 | $ (0.28) | $ 0.18 | $ 0.13 | $ 0.20 | $ 0.36 | $ 0.75 | |||||
Adjusted EPS - basic(1) | 0.36 | 0.37 | 0.21 | 0.18 | 0.21 | 1.15 | 0.75 | |||||
Earnings per share - diluted | 0.32 | (0.28) | 0.17 | 0.12 | 0.20 | 0.35 | 0.72 | |||||
Adjusted EPS - diluted(1) | 0.35 | 0.36 | 0.20 | 0.17 | 0.20 | 1.12 | 0.72 | |||||
Performance Ratios: | ||||||||||||
Return on average assets (ROA) | 1.13 % | -0.97 % | 0.71 % | 0.53 % | 0.80 % | 0.33 % | 0.83 % | |||||
Adjusted ROA(1) | 1.22 % | 1.30 % | 0.83 % | 0.74 % | 0.81 % | 1.06 % | 0.83 % | |||||
Return on average equity (ROE) | 10.73 % | -9.07 % | 6.16 % | 4.44 % | 7.15 % | 3.02 % | 6.87 % | |||||
Adjusted ROE(1) | 11.53 % | 12.09 % | 7.16 % | 6.22 % | 7.18 % | 9.58 % | 6.88 % | |||||
Return on tangible common equity (ROTCE)(1) | 11.96 % | -9.93 % | 6.42 % | 4.63 % | 7.48 % | 3.25 % | 7.20 % | |||||
Adjusted ROTCE(1) | 12.85 % | 13.24 % | 7.46 % | 6.50 % | 7.51 % | 10.32 % | 7.21 % | |||||
Net interest margin | 4.13 % | 3.93 % | 3.53 % | 3.41 % | 3.42 % | 3.80 % | 3.52 % | |||||
Efficiency ratio | 63.45 % | 101.65 % | 65.63 % | 76.37 % | 65.17 % | 77.31 % | 65.70 % | |||||
Adjusted efficiency ratio(1) | 61.06 % | 60.76 % | 62.11 % | 69.60 % | 65.08 % | 62.76 % | 65.67 % | |||||
(1) Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly | ||||||||||||
comparable GAAP measure. "Adjusted" items exclude the impact of merger and acquisition expenses. | ||||||||||||
Dogwood State Bank | ||||||||
Balance Sheets | ||||||||
Ending Balance | ||||||||
(In thousands, except per share data) | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |||
Assets | ||||||||
Cash and due from banks | $ 10,582 | $ 7,622 | $ 2,514 | $ 2,353 | $ 5,191 | |||
Interest-earning deposits with banks | 75,612 | 146,732 | 59,073 | 91,365 | 123,474 | |||
Total cash and cash equivalents | 86,194 | 154,354 | 61,587 | 93,718 | 128,665 | |||
Investment securities available for sale | 99,411 | 95,290 | 58,989 | 55,984 | 49,244 | |||
Investment securities held to maturity | 71,952 | 73,144 | 74,404 | 76,119 | 77,557 | |||
Marketable equity securities | 395 | 335 | 329 | 336 | 329 | |||
Total investment securities | 171,758 | 168,769 | 133,722 | 132,439 | 127,130 | |||
Loans held for sale | 6,733 | 7,924 | 11,030 | 8,146 | 15,274 | |||
Loans | 1,819,796 | 1,757,828 | 1,236,722 | 1,148,899 | 1,095,339 | |||
Less allowance for credit losses | (19,698) | (19,143) | (13,349) | (12,344) | (11,943) | |||
Loans, net | 1,800,098 | 1,738,685 | 1,223,373 | 1,136,555 | 1,083,396 | |||
Bank-owned life insurance | 45,089 | 44,743 | 27,888 | 27,669 | 27,458 | |||
Premises and equipment, net | 37,180 | 35,378 | 19,713 | 18,838 | 18,707 | |||
SBA servicing asset | 4,982 | 5,026 | 4,568 | 4,373 | 3,967 | |||
Goodwill | 11,771 | 11,771 | 7,016 | 7,016 | 7,016 | |||
Other intangible assets, net | 11,374 | 11,972 | - | 4 | 15 | |||
Other assets | 35,991 | 36,274 | 21,854 | 19,750 | 20,060 | |||
Total assets | $ 2,211,170 | $ 2,214,896 | $ 1,510,751 | $ 1,448,508 | $ 1,431,688 | |||
Liabilities and Shareholders' Equity | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ 474,458 | $ 483,908 | $ 379,465 | $ 302,705 | $ 291,910 | |||
Interest-bearing | 1,334,937 | 1,357,439 | 872,430 | 913,914 | 902,369 | |||
Total deposits | 1,809,395 | 1,841,347 | 1,251,895 | 1,216,619 | 1,194,279 | |||
FHLB advances | 130,164 | 101,686 | 60,000 | 40,000 | 50,000 | |||
Subordinated debt | 9,708 | 9,627 | - | - | - | |||
Lease obligations | 12,258 | 10,491 | 10,726 | 10,959 | 11,187 | |||
Other liabilities | 19,456 | 26,503 | 13,162 | 11,459 | 11,719 | |||
Total liabilities | 1,980,981 | 1,989,654 | 1,335,783 | 1,279,037 | 1,267,185 | |||
Shareholders' equity | ||||||||
Common stock ($1 par value) | 18,976 | 18,980 | 15,541 | 15,020 | 14,710 | |||
Additional paid-in capital | 188,175 | 187,981 | 137,431 | 135,077 | 132,373 | |||
Retained earnings | 28,280 | 22,118 | 26,897 | 24,244 | 22,406 | |||
Accumulated other comprehensive loss | (5,242) | (3,837) | (4,901) | (4,870) | (4,986) | |||
Total shareholders' equity | 230,189 | 225,242 | 174,968 | 169,471 | 164,503 | |||
Total liabilities and shareholders' equity | $ 2,211,170 | $ 2,214,896 | $ 1,510,751 | $ 1,448,508 | $ 1,431,688 | |||
Per Share Information: | ||||||||
Shares outstanding | 18,976 | 18,980 | 15,541 | 15,020 | 14,710 | |||
Book value per share | $ 12.13 | $ 11.87 | $ 11.26 | $ 11.28 | $ 11.18 | |||
Tangible book value per share(1) | $ 10.91 | $ 10.62 | $ 10.81 | $ 10.82 | $ 10.71 | |||
Capital Ratios: | ||||||||
Tier 1 leverage | 9.83 % | 10.58 % | 12.14 % | 11.75 % | 11.05 % | |||
Common equity Tier 1 capital | 10.70 % | 10.70 % | 12.64 % | 13.12 % | 13.47 % | |||
Tier 1 risk-based capital | 10.70 % | 10.70 % | 12.64 % | 13.12 % | 13.47 % | |||
Total risk-based capital | 12.32 % | 12.34 % | 13.81 % | 14.29 % | 14.65 % | |||
Tangible common equity(1) | 9.46 % | 9.20 % | 11.17 % | 11.27 % | 11.05 % | |||
(1) Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure. | ||||||||
Dogwood State Bank | ||||||||
Asset Quality Measures | ||||||||
Quarter Ended | ||||||||
(Dollars in thousands) | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |||
Nonperforming Assets: | ||||||||
Non-accrual loans | $ 5,582 | $ 3,234 | $ 2,069 | $ 1,938 | $ 1,670 | |||
Loans 90 days or more past due and accruing | 338 | - | - | - | - | |||
Other real estate owned | 104 | 104 | - | - | - | |||
Total nonperforming assets | $ 6,024 | $ 3,338 | $ 2,069 | $ 1,938 | $ 1,670 | |||
Asset Quality Ratios: | ||||||||
Nonperforming loans/loans | 0.33 % | 0.18 % | 0.17 % | 0.17 % | 0.15 % | |||
Nonperforming assets/total assets | 0.27 % | 0.15 % | 0.14 % | 0.13 % | 0.12 % | |||
Nonperforming assets/loans and other real estate owned | 0.33 % | 0.19 % | 0.17 % | 0.17 % | 0.15 % | |||
Loans 30 days or more past due/loans (excludes non-accruals) | 0.67 % | 0.29 % | 0.21 % | 0.41 % | 0.23 % | |||
Allowance for Credit Losses (ACL): | ||||||||
ACL on Loans: | ||||||||
Balance, beginning of period | $ 19,143 | $ 13,349 | $ 12,344 | $ 11,943 | $ 11,385 | |||
Reclass of Day 1 ACL from loan fair value discount on acquired PCD loans | - | 658 | - | - | - | |||
Loans charged off | (614) | (738) | (987) | (288) | (81) | |||
Recoveries of loans previously charged off | 29 | 79 | 11 | 9 | 40 | |||
Net loans charged off | (585) | (659) | (976) | (279) | (41) | |||
Provision for credit losses | 1,140 | 5,795 | 1,981 | 680 | 599 | |||
Balance, end of period | $ 19,698 | $ 19,143 | $ 13,349 | $ 12,344 | $ 11,943 | |||
ACL on Off-Balance Sheet Credit Exposures: | ||||||||
Balance, beginning of period | $ 2,595 | $ 2,336 | $ 2,300 | $ 2,059 | $ 1,020 | |||
Reserve on acquired unfunded loan commitments | - | 197 | - | - | - | |||
Provision for credit losses | (24) | 62 | 36 | 241 | 1,039 | |||
Balance, end of period | $ 2,571 | $ 2,595 | $ 2,336 | $ 2,300 | $ 2,059 | |||
Allowance for Credit Losses Ratios: | ||||||||
Allowance for credit losses/loans | 1.08 % | 1.09 % | 1.08 % | 1.07 % | 1.09 % | |||
Allowance for credit losses/nonperforming loans | 332.74 % | 591.93 % | 645.19 % | 636.95 % | 715.15 % | |||
Net charge-offs/average loans (annualized) | 0.13 % | 0.17 % | 0.33 % | 0.10 % | 0.02 % | |||
Dogwood State Bank | ||||||||||||||||||||
Net Interest Margin Analysis | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||||||||||||||||
(Dollars in thousands) | Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||
Interest-Earning Assets: | ||||||||||||||||||||
Loans | $ 1,772,350 | $ 30,524 | 6.85 % | $ 1,585,101 | $ 27,589 | 6.92 % | $ 1,022,537 | $ 15,959 | 6.19 % | |||||||||||
Investment securities | 170,307 | 1,635 | 3.82 % | 152,851 | 1,361 | 3.54 % | 119,534 | 840 | 2.79 % | |||||||||||
Interest-earning deposits with banks | 93,153 | 1,005 | 4.29 % | 100,616 | 1,272 | 5.03 % | 131,977 | 1,710 | 5.14 % | |||||||||||
Total interest-earning assets | 2,035,810 | 33,164 | 6.48 % | 1,838,568 | 30,222 | 6.54 % | 1,274,048 | 18,509 | 5.76 % | |||||||||||
Non interest-earning assets | 129,999 | 116,334 | 65,619 | |||||||||||||||||
Total assets | $ 2,165,809 | $ 1,954,902 | $ 1,339,667 | |||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||
Interest-bearing demand | $ 175,373 | $ 468 | 1.06 % | $ 165,104 | $ 531 | 1.28 % | $ 109,731 | $ 254 | 0.92 % | |||||||||||
Savings and money market | 759,932 | 6,006 | 3.14 % | 696,594 | 6,502 | 3.71 % | 448,059 | 4,199 | 3.72 % | |||||||||||
Time | 395,409 | 4,489 | 4.52 % | 319,104 | 3,846 | 4.79 % | 225,987 | 2,489 | 4.37 % | |||||||||||
Total interest-bearing deposits | 1,330,714 | 10,963 | 3.28 % | 1,180,802 | 10,879 | 3.67 % | 783,777 | 6,942 | 3.51 % | |||||||||||
FHLB advances | 68,177 | 797 | 4.65 % | 76,176 | 979 | 5.11 % | 50,435 | 505 | 3.97 % | |||||||||||
Subordinated debt | 9,659 | 209 | 8.61 % | 6,630 | 139 | 0.00 % | - | - | 0.00 % | |||||||||||
Lease obligations | 10,404 | 66 | 2.52 % | 10,353 | 68 | 2.61 % | 10,606 | 59 | 2.21 % | |||||||||||
Total interest-bearing liabilities | 1,418,954 | 12,035 | 3.37 % | 1,273,961 | 12,065 | 3.77 % | 844,818 | 7,506 | 3.52 % | |||||||||||
Non-interest bearing deposits | 496,016 | 451,987 | 326,827 | |||||||||||||||||
Other liabilities | 22,497 | 19,280 | 8,813 | |||||||||||||||||
Shareholders' equity | 228,342 | 209,674 | 159,209 | |||||||||||||||||
Total liabilities and shareholders' equity | $ 2,165,809 | $ 1,954,902 | $ 1,339,667 | |||||||||||||||||
Net interest income and interest rate spread | $ 21,129 | 3.11 % | $ 18,157 | 2.77 % | $ 11,005 | 2.24 % | ||||||||||||||
Net interest margin | 4.13 % | 3.93 % | 3.43 % | |||||||||||||||||
Cost of funds | 2.50 % | 2.78 % | 2.54 % | |||||||||||||||||
Cost of deposits | 2.39 % | 2.65 % | 2.48 % | |||||||||||||||||
Twelve Months Ended | ||||||||||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||||||||
(Dollars in thousands) | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
Interest-Earning Assets: | ||||||||||||||||||||
Loans | $ 1,420,334 | $ 95,775 | 6.74 % | $ 984,510 | $ 59,618 | 6.06 % | ||||||||||||||
Investment securities | 146,973 | 5,091 | 3.46 % | 121,632 | 3,405 | 2.80 % | ||||||||||||||
Interest-earning deposits with banks | 93,097 | 4,512 | 4.85 % | 109,396 | 5,480 | 5.01 % | ||||||||||||||
Total interest-earning assets | 1,660,404 | 105,378 | 6.35 % | 1,215,538 | 68,503 | 5.64 % | ||||||||||||||
Non interest-earning assets | 95,589 | 64,638 | ||||||||||||||||||
Total assets | $ 1,755,993 | $ 1,280,176 | ||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||
Interest-bearing demand | 145,803 | $ 1,576 | 1.08 % | $ 114,956 | $ 1,037 | 0.90 % | ||||||||||||||
Savings and money market | 666,483 | 24,858 | 3.73 % | 436,020 | 14,831 | 3.40 % | ||||||||||||||
Time | 268,658 | 12,508 | 4.66 % | 197,264 | 7,781 | 3.94 % | ||||||||||||||
Total interest-bearing deposits | 1,080,944 | 38,942 | 3.60 % | 748,240 | 23,649 | 3.16 % | ||||||||||||||
FHLB advances | 53,280 | 2,696 | 5.06 % | 42,069 | 1,831 | 4.35 % | ||||||||||||||
Subordinated debt | 3,504 | 348 | 9.93 % | - | - | - | ||||||||||||||
Lease obligation | 11,262 | 273 | 2.42 % | 10,260 | 240 | 2.34 % | ||||||||||||||
Total interest-bearing liabilities | 1,148,990 | 42,259 | 3.68 % | 800,569 | 25,720 | 3.21 % | ||||||||||||||
Non-interest bearing deposits | 395,495 | 315,963 | ||||||||||||||||||
Other liabilities | 16,898 | 8,657 | ||||||||||||||||||
Shareholders' equity | 194,610 | 154,987 | ||||||||||||||||||
Total liabilities and shareholders' equity | $ 1,755,993 | $ 1,280,176 | ||||||||||||||||||
Net interest income and interest rate spread | $ 63,119 | 2.67 % | $ 42,783 | 2.42 % | ||||||||||||||||
Net interest margin | 3.80 % | 3.52 % | ||||||||||||||||||
Cost of funds | 2.74 % | 2.30 % | ||||||||||||||||||
Cost of deposits | 2.64 % | 2.22 % | ||||||||||||||||||
Dogwood State Bank | |||||||||||
Non-GAAP Reconciliation | |||||||||||
Quarter Ended | Twelve Months Ended | ||||||||||
(In thousands, except per share data) | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | ||||
Net income and EPS: | |||||||||||
Net income (loss) (GAAP) | $ 6,161 | $ (4,780) | $ 2,654 | $ 1,838 | $ 2,934 | $ 5,873 | $ 10,648 | ||||
Adjust for provision on acquired non-PCD loans, net of tax | - | 4,111 | - | - | - | 4,111 | - | ||||
Adjust for merger and acquisition expenses, net of tax | 458 | 7,039 | 433 | 738 | 11 | 8,668 | 11 | ||||
Adjusted net income (non-GAAP) | $ 6,619 | $ 6,369 | $ 3,087 | $ 2,576 | $ 2,945 | $ 18,651 | $ 10,659 | ||||
Weighted average common shares outstanding | |||||||||||
Basic | 18,488 | 17,301 | 14,905 | 14,377 | 14,329 | 16,275 | 14,152 | ||||
Diluted | 18,978 | 17,810 | 15,480 | 15,075 | 15,039 | 16,726 | 14,839 | ||||
EPS (GAAP) | |||||||||||
Basic | $ 0.33 | $ (0.28) | $ 0.18 | $ 0.13 | $ 0.20 | $ 0.36 | $ 0.75 | ||||
Diluted | 0.32 | (0.28) | 0.17 | 0.12 | 0.20 | 0.35 | 0.72 | ||||
Adjusted EPS (non-GAAP) | |||||||||||
Basic | $ 0.36 | $ 0.37 | $ 0.21 | $ 0.18 | $ 0.21 | $ 1.15 | $ 0.75 | ||||
Diluted | 0.35 | 0.36 | 0.20 | 0.17 | 0.20 | 1.12 | 0.72 | ||||
PPNR: | |||||||||||
Net income (loss) (GAAP) | $ 6,161 | $ (4,780) | $ 2,654 | $ 1,838 | $ 2,934 | $ 5,873 | $ 10,648 | ||||
Add: | |||||||||||
Provision for credit losses | 1,116 | 5,857 | 2,017 | 921 | 1,638 | 9,911 | 5,164 | ||||
Income tax expense (benefit) | 1,812 | (1,445) | 811 | 588 | 865 | 1,766 | 3,024 | ||||
PPNR (non-GAAP) | 9,089 | (368) | 5,482 | 3,347 | 5,437 | 17,550 | 18,836 | ||||
Add: merger and acquisition expenses | 595 | 9,139 | 562 | 958 | 14 | 11,254 | 14 | ||||
Adjusted PPNR (non-GAAP) | $ 9,684 | $ 8,771 | $ 6,044 | $ 4,305 | $ 5,451 | $ 28,804 | $ 18,850 | ||||
ROA: | |||||||||||
Net income (loss) (GAAP) | $ 6,161 | $ (4,780) | $ 2,654 | $ 1,838 | $ 2,934 | $ 5,873 | $ 10,648 | ||||
Adjusted net income (non-GAAP) | 6,619 | 6,369 | 3,087 | 2,576 | 2,945 | 18,651 | 10,659 | ||||
Average assets | 2,165,809 | 1,954,902 | 1,494,353 | 1,402,220 | 1,448,929 | 1,755,993 | 1,280,176 | ||||
ROA | 1.13 % | -0.97 % | 0.71 % | 0.53 % | 0.80 % | 0.33 % | 0.83 % | ||||
Adjusted ROA (non-GAAP) | 1.22 % | 1.30 % | 0.83 % | 0.74 % | 0.81 % | 1.06 % | 0.83 % | ||||
ROE and ROTCE: | |||||||||||
Net income (loss) (GAAP) | $ 6,161 | $ (4,780) | $ 2,654 | $ 1,838 | $ 2,934 | $ 5,873 | $ 10,648 | ||||
Adjusted net income (non-GAAP) | 6,619 | 6,369 | 3,087 | 2,576 | 2,945 | 18,651 | 10,659 | ||||
Average shareholders' equity (GAAP) | 228,342 | 209,674 | 173,356 | 166,534 | 162,703 | 194,610 | 154,987 | ||||
Less: average goodwill and other intangible assets, net | 23,426 | 18,234 | 7,018 | 7,027 | 7,041 | 13,964 | 7,080 | ||||
Average tangible common equity (non-GAAP) | 204,916 | 191,440 | 166,338 | 159,507 | 155,662 | 180,646 | 147,907 | ||||
ROE | 10.73 % | -9.07 % | 6.16 % | 4.44 % | 7.15 % | 3.02 % | 6.87 % | ||||
Adjusted ROE (non-GAAP) | 11.53 % | 12.09 % | 7.16 % | 6.22 % | 7.18 % | 9.58 % | 6.88 % | ||||
ROTCE (non-GAAP) | 11.96 % | -9.93 % | 6.42 % | 4.63 % | 7.48 % | 3.25 % | 7.20 % | ||||
Adjusted ROTCE (non-GAAP) | 12.85 % | 13.24 % | 7.46 % | 6.50 % | 7.51 % | 10.32 % | 7.21 % | ||||
Efficiency Ratio: | |||||||||||
Non-interest expense (GAAP) | $ 15,779 | $ 22,723 | $ 10,470 | $ 10,815 | $ 10,173 | $ 59,787 | $ 36,077 | ||||
Less: merger and acquisition expenses | 595 | 9,139 | 562 | 958 | 14 | 11,254 | 14 | ||||
Adjusted non-interest expense (non-GAAP) | 15,184 | 13,584 | 9,908 | 9,857 | 10,159 | 48,533 | 36,063 | ||||
Net interest income | 21,129 | 18,157 | 12,521 | 11,312 | 11,900 | 63,119 | 42,784 | ||||
Non-interest income | 3,739 | 4,198 | 3,431 | 2,850 | 3,710 | 14,218 | 12,129 | ||||
Total revenue | 24,868 | 22,355 | 15,952 | 14,162 | 15,610 | 77,337 | 54,913 | ||||
Efficiency ratio (non-interest expense / total revenue) | 63.45 % | 101.65 % | 65.63 % | 76.37 % | 65.17 % | 77.31 % | 65.70 % | ||||
Adjusted efficiency ratio (non-GAAP) | 61.06 % | 60.76 % | 62.11 % | 69.60 % | 65.08 % | 62.76 % | 65.67 % | ||||
Tangible Book Value per Share and Tangible Common Equity Ratio: | |||||||||||
Shareholders' equity (GAAP) | $ 230,189 | $ 225,242 | $ 174,968 | $ 169,471 | $ 164,503 | $ 230,189 | $ 164,503 | ||||
Less: goodwill and other intangible assets, net | 23,145 | 23,743 | 7,016 | 7,020 | 7,031 | 23,145 | 7,031 | ||||
Tangible common equity (non-GAAP) | 207,044 | 201,499 | 167,952 | 162,451 | 157,472 | 207,044 | 157,472 | ||||
Common shares outstanding | 18,976 | 18,980 | 15,541 | 15,020 | 14,710 | 18,976 | 14,710 | ||||
Book value per share | $ 12.13 | $ 11.87 | $ 11.26 | $ 11.28 | $ 11.18 | $ 12.13 | $ 11.18 | ||||
Tangible book value per share (non-GAAP) | 10.91 | 10.62 | 10.81 | 10.82 | 10.71 | 10.91 | 10.71 | ||||
Total assets (GAAP) | $ 2,211,170 | $ 2,214,896 | $ 1,510,751 | $ 1,448,508 | $ 1,431,688 | $ 2,211,170 | $ 1,431,688 | ||||
Less: goodwill and other intangible assets, net | 23,145 | 23,743 | 7,016 | 7,020 | 7,031 | 23,145 | 7,031 | ||||
Tangible assets (non-GAAP) | 2,188,025 | 2,191,153 | 1,503,735 | 1,441,488 | 1,424,657 | 2,188,025 | 1,424,657 | ||||
Tangible common equity to tangible assets (non-GAAP) | 9.46 % | 9.20 % | 11.17 % | 11.27 % | 11.05 % | 9.46 % | 11.05 % | ||||
SOURCE Dogwood State Bank
