ECBK ECB Bancorp Inc

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): July 25, 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

 

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On July 25, 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 and six months ended June 30, 2024.

 

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1		Press release dated July 25, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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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: July 25, 2024 By: /s/Brandon N. Lavertu

Brandon N. Lavertu

Chief Financial Officer

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For Immediate Release

Date: July 25, 2024

Contact:		Richard J. O’Neil, Jr.
		President and Chief Executive Officer
Phone:		617-387-1110
Email:		rjoneil@everettbank.com

 

ECB Bancorp, Inc. Reports Second Quarter Results

EVERETT, MA, July 25, 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 $791,000, or $0.09 per diluted share, for the quarter ended June 30, 2024, compared to $1.4 million, or $0.17 per diluted share, for the quarter ended June 30, 2023, a decrease of $634,000 in net income. For the six months ended June 30, 2024, the Company reported net income of $1.4 million, or $0.17 per diluted share, as compared to net income of $2.3 million, or $0.27 per diluted share, for the six months ended June 30, 2023, a decrease of $914,000 in net income.

Richard J. O’Neil, Jr., President and Chief Executive Officer, said, "Our second quarter results indicate positive movement across our major asset classes. In an environment of increasing economic uncertainty our continuing attention to, and focus on, our customers, expenses, credit and responsible growth continue to be our guiding principles."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for credit losses was $6.0 million for the quarter ended June 30, 2024, a decrease of $386,000, or 6.0%, from $6.4 million for the quarter ended June 30, 2023. This decrease was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. Our net interest margin for the quarter ended June 30, 2024 was 1.82% as compared to 2.18% for the quarter ended June 30, 2023. The provision for credit losses increased to $292,000 for the quarter ended June 30, 2024 from $0 for the quarter ended June 30, 2023. The provision for credit losses for the quarter ended June 30, 2024 was driven by loan growth. The $0 provision for credit losses for the quarter ended June 30, 2023 included a provision for loan losses, offset by a benefit to the provision for off balance sheet commitments. The combination of these items resulted in a decrease of $678,000, or 10.6%, in net interest and dividend income after provision for credit losses for the quarter ended June 30, 2024 as compared to the quarter ended June 30, 2023.

 

Net interest and dividend income before provision for credit losses was $11.9 million for the six months ended June 30, 2024, a decrease of $852,000, or 6.7%, from $12.8 million for the six months ended June 30, 2023. This decrease was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. Our net interest margin for the six months ended June 30, 2024 was 1.83% as compared to 2.28% for the six months ended June 30, 2023. The provision for credit losses decreased $441,000, to $438,000 for the six months ended June 30, 2024, from $879,000 for the six months ended June 30, 2023. The decrease in the provision for credit losses was driven by lower loan growth during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The combination of these items resulted in a decrease of $411,000, or 3.5%, in net interest and dividend income after provision for credit losses for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

NONINTEREST INCOME

Noninterest income increased $49,000, or 20.4%, to $289,000 for the quarter ended June 30, 2024 from $240,000 for the quarter ended June 30, 2023. The increase was driven by increases in income from bank-owned life insurance, net gains on sales of loans and customer service fees.

 

Noninterest income increased $124,000, or 26.4%, to $594,000 for the six months ended June 30, 2024 from $470,000 for the six months ended June 30, 2023. The increase was driven by increases in net gains on sales of loans, income from bank-owned life insurance and customer service fees.

NONINTEREST EXPENSE

Noninterest expense increased $236,000, or 5.0%, to $4.9 million for the quarter ended June 30, 2024 from $4.7 million for the quarter ended June 30, 2023. Significant changes are as follows:

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Noninterest expense increased $968,000, or 10.5%, to $10.2 million for six months ended June 30, 2024 from $9.2 million for the six months ended June 30, 2023. Significant changes are as follows:

INCOME TAXES

We recorded a provision for income tax expense of $272,000 for the quarter ended June 30, 2024, compared to a provision for income tax expense of $503,000 for the quarter ended June 30, 2023, reflecting effective tax rates of 25.6% and 26.1%, respectively.

 

We recorded a provision for income tax expense of $482,000 for the six months ended June 30, 2024, compared to a provision for income tax expense of $823,000 for the six months ended June 30, 2023, reflecting effective tax rates of 25.4% and 26.1%, respectively.

BALANCE SHEET

Total assets increased $55.6 million, or 4.3%, to $1.34 billion at June 30, 2024 from $1.28 billion at December 31, 2023.

Total net loans increased $63.1 million, or 6.1%, to $1.10 billion at June 30, 2024 from $1.04 billion at December 31, 2023.

Cash and cash equivalents decreased $7.6 million, or 6.4%, to $111.4 million at June 30, 2024 from $119.0 million at December 31, 2023. The decrease in cash and cash equivalents was driven by loan growth.

Deposits increased $64.6 million, or 7.4%, to $932.8 million at June 30, 2024 from $868.2 million at December 31, 2023.

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FHLB advances decreased $10.0 million, or 4.3%, to $224.0 million at June 30, 2024 from $234.0 million at December 31, 2023.

Total shareholders' equity increased $1.6 million, or 0.9%, to $166.5 million as of June 30, 2024 from $164.9 million as of December 31, 2023. This increase is primarily the result of earnings of $1.4 million and an increase of $427,000 in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by an increase in the fair value of cash flow hedges entered into during the six months ended June 30, 2024. Partially offsetting these increases to shareholders' equity was a decrease in additional paid-in capital of $457,000. This decrease was driven by $1.2 million in shares repurchased under our share repurchase plan, partially offset by an increase in additional paid in capital of $699,000 related to stock based compensation and ESOP shares committed to be released. Our book value per share increased $0.34 to $18.09 at June 30, 2024 from $17.75 at December 31, 2023.

ASSET QUALITY

Asset quality remains strong. The allowance for credit losses in total and as a percentage of total loans as of June 30, 2024 was $9.0 million and 0.81%, respectively, as compared to $8.6 million and 0.82%, respectively, as of December 31, 2023. For the six months ended June 30, 2024 and June 30, 2023 the Company recorded net charge offs of $3,000 and $0, respectively. Total non-performing assets were $1.2 million, or 0.09%, of total assets as of June 30, 2024 and $1.2 million, or 0.09% of total assets, as of December 31, 2023.

 

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Company Profile

ECB Bancorp, Inc. is headquartered in Everett, Massachusetts and is the 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ECB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

June 30, 2024 (unaudited) and December 31, 2023

(in thousands except share data)

 

		June 30, 2024				December 31, 2023
ASSETS
Cash and due from banks		$	2,783			$	3,786
Short-term investments			108,659				115,250
Total cash and cash equivalents			111,442				119,036
Investments in available-for-sale securities (at fair value)			—				5,003
Investments in held-to-maturity securities, at cost (fair values of $74,047 at June 30,    2024 (unaudited) and $70,590 at December 31, 2023)			80,458				76,979
Loans held-for-sale			624				—
Loans, net of allowance for credit losses of $9,025 at June 30, 2024 (unaudited)    and $8,591 at December 31, 2023			1,102,886				1,039,789
Federal Home Loan Bank stock, at cost			9,600				9,892
Premises and equipment, net			3,663				3,754
Accrued interest receivable			4,211				3,766
Deferred tax asset, net			4,604				4,767
Bank-owned life insurance			14,706				14,472
Other assets			3,744				2,877
Total assets		$	1,335,938			$	1,280,335
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing		$	77,801			$	78,342
Interest-bearing			854,976				789,872
Total deposits			932,777				868,214
Federal Home Loan Bank advances			224,000				234,000
Other liabilities			12,697				13,220
Total liabilities			1,169,474				1,115,434
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: 9,200,219 shares and 9,291,810 shares, respectively			92				93
Additional paid-in capital			86,974				87,431
Retained earnings			85,266				83,854
Accumulated other comprehensive income			556				129
Unallocated common shares held by the Employee Stock Ownership Plan			(6,424	)			(6,606	)
Total shareholders' equity			166,464				164,901
Total liabilities and shareholders' equity		$	1,335,938			$	1,280,335
Shareholders' Equity Ratios
Book value per common share		$	18.09			$	17.75
Regulatory Capital Ratios (Everett Co-operative Bank)
Total capital to risk weighted assets			16.94	%			17.30	%
Tier 1 capital to risk weighted assets			15.85	%			16.22	%
Tier 1 capital to average assets			10.78	%			11.31	%

 

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ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

(unaudited)

(in thousands except share data)

 

		Three months ended								Six months ended
		June 30,								June 30,
		2024				2023				2024				2023
Interest and dividend income:
Interest and fees on loans		$	14,174			$	12,122			$	27,619			$	23,049
Interest and dividends on securities			779				667				1,543				1,227
Other interest income			1,433				862				2,917				1,437
Total interest and dividend income			16,386				13,651				32,079				25,713
Interest expense:
Interest on deposits			8,159				5,055				15,684				8,973
Interest on Federal Home Loan Bank advances			2,214				2,197				4,482				3,975
Total interest expense			10,373				7,252				20,166				12,948
Net interest and dividend income			6,013				6,399				11,913				12,765
Provision for credit losses			292				-				438				879
Net interest and dividend income after provision for credit losses			5,721				6,399				11,475				11,886
Noninterest income:
Customer service fees			143				130				284				251
Income from bank-owned life insurance			117				99				234				197
Net gain on sales of loans			19				5				54				5
Other income			10				6				22				17
Total noninterest income			289				240				594				470
Noninterest expense:
Salaries and employee benefits			3,130				2,823				6,441				5,709
Director compensation			209				119				416				240
Occupancy and equipment expense			263				248				538				452
Data processing			285				293				596				535
Computer software and licensing			75				71				160				128
Advertising and promotions			106				208				237				376
Professional fees			231				295				591				658
Federal Deposit Insurance Corporation deposit insurance			194				282				372				407
Other expense			454				372				824				702
Total noninterest expense			4,947				4,711				10,175				9,207
Income before income tax expense			1,063				1,928				1,894				3,149
Income tax expense			272				503				482				823
Net income		$	791			$	1,425			$	1,412			$	2,326
Share data:
Weighted average shares outstanding, basic			8,265,579				8,490,128				8,282,677				8,485,610
Weighted average shares outstanding, diluted			8,342,516				8,490,128				8,358,818				8,485,610
Basic earnings per share		$	0.10			$	0.17			$	0.17			$	0.27
Diluted earnings per share		$	0.09			$	0.17			$	0.17			$	0.27

 

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v3.24.2

Document and Entity Information	Jul. 25, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 25, 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

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