Q2 2024 Financial Highlights
August 21, 2024
Summary
For the six months ended June 30, 2024, net income was $3.9 million, an increase of $1.7 million, or 75%, in comparison to the same period in 2023. Controlled loan growth continues in 2024, with loan balances increasing a modest $10 million, or 2%, maintaining higher interest income with continued elevated rates. The higher rates have caused a shift in the deposit mix as management continues to actively manage its cost of funds while balancing the everchanging liquidity needs of our clients. Non-interest income continues to be strong while controlling non-interest expense as planned for 2024.
“Our financial performance remains strong half-way through 2024. Consistent loan growth, sound investments and conscious management of funding costs have continued to support solid net interest income growth. Our non-interest income is growing as we continue to offer products and services of value to our clients, which will soon be enhanced with the successful acquisition of Shatswell MacLeod, an internal audit service provider that took place on August 1, 2024. The Bank is continuing its journey of preparing to be regulatory compliant with FDICIA in anticipation that the Bank’s assets exceed $1 billion in the near future.” said Craig Howie, President and CEO of Atlantic Community Bankers Bank.
Net Interest Income and Balance Sheet
Net interest income, before provision, for six months of 2024 was $11.7 million, an increase of $1.9 million, or 19%, from the same period a year ago. The increase is primarily driven by higher interest rates, complemented with a shorter duration investment portfolio. With sustained higher rates, our (the) cost of funds has also increased in comparison to the prior year with interest expense increasing from $9.9 million for six months of 2023 to $13.3 million in the same period in the current year.
Asset Quality
In the first six months of the year, a provision for credit losses release of $129 thousand was recorded in comparison to expense of $383 thousand in the prior year. This is driven by refined qualitative factors through the CECL methodology that reduced the allowance for credit losses of loans to 1.74%, vs 1.85% in the prior year. The provision for loan losses for the prior period was supported by growth within the loan portfolio. Strong asset quality continues in the portfolio, with no charge-offs and only one loan reported as 30+ days delinquent as of June 30, 2024.
Non-interest income
For the first six months of the year, non-interest income was $4.4 million, flat when compared to the prior year due to 2023 including $277 thousand of escrow release from the 2021 sale of the Bank’s BITS subsidiary. Excluding this onetime escrow release, non-interest income was up $333 thousand or 8%. The Bank continues to see growth in services charges with increased use of products and services by our clients, including foreign exchange wire revenue.
Non-interest expense
For the first six months of the year, non-interest expense was $11.2 million, an increase of $260 thousand, or 2%, from the prior year, driven by higher salaries and benefits as we ensure proper staffing for growth, investments in equipment and systems upgrades, which were partially offset by decreases in other expense. The Bank’s continues to focus on investing in its people and tools that will continue the growth momentum of the Bank all the while focusing on cost control efforts.
