MINEOLA,
Texas, Feb. 23, 2024 /PRNewswire/ -- Texas
Community Bancshares, Inc. ("Texas Community Bancshares" or the
"Company") (NASDAQ: TCBS), the holding company for Broadstreet
Bank, SSB, today reported a net loss of $733,000 for the year ended December 31, 2023, compared to net income of
$1,754,000 for 2022. Losses per
basic and diluted share for the year ended December 31, 2023 were $(0.24), compared to basic and diluted earnings
per share of $0.58 for
2022.
Texas Community Bancshares' President and Chief Executive
Officer (CEO) Jason Sobel said,
"Texas Community Bancshares 2023 loss was in a year of
extraordinary internal changes, including strategic balance sheet
realignment, retirement of the former CEO, a change in the bank
name, and branch growth. Securities sales of $19.8 million in 2023, resulting in a loss of
$1.4 million, net of tax, and the
origination of more commercial loans are part of a concentrated
effort initiated in 2023 to reshape Broadstreet Bank's balance
sheet to enhance future earnings."
"As we enter into 2024, we believe we are more flexible and
better positioned to capitalize on opportunities with the changes
that were initiated in 2023 and to profitably grow Broadstreet Bank
while creating long-term value for our shareholders."
Income
Net interest income increased $781,000, or 7.6%, to $11.1 million for the year ended December 31, 2023 from $10.3 million for the year ended December 31, 2022. Average net interest-earning
assets increased $49.9 million, or
14.0%, to $405.1 million at
December 31, 2023 from $355.2 million at December
31, 2022. The interest rate spread decreased 43 basis
points, or 15.8%, to 2.27% for the year ended December 31, 2023 from 2.70% for the year ended
December 31, 2022. The net interest
margin decreased 16 basis points, or 5.7%, to 2.73% for the year
ended December 31, 2023 from 2.89%
for the year ended December 31, 2022.
The decrease in the interest rate spread and interest rate margin
was primarily due to the increase in market interest rates, deposit
competition and the inability to reprice assets as quickly as
liabilities.
Non-interest income decreased $1.5
million, or 78.9%, to $352,000
for the year ended December 31, 2023
compared to $1.9 million for the year
ended December 31, 2022. The decrease
was primarily due to a $1.7 million
loss on sales of $19.8 million in
securities as part of the strategy to restructure the balance sheet
to increase interest income and restructure the portfolio. There
was an increase of $175,000 in
wholesale lending fees to $190,000
for the year ended December 31, 2023,
which was the first full year of the program. This program
generates fee income from facilitating the origination of mortgage
loans through the wholesale lender.
Non-interest expense increased $2.2
million, or 22.4%, to $12.0
million for the year ended December
31, 2023 from $9.8 million for
the year ended December 31, 2022.
Salaries and employee benefits increased $1.3 million, or 22.4%. The increase in salaries
and employee benefit expense was due primarily to an increase of
$444,000 in expenses related to the
2022 Equity Incentive Plan that was approved by stockholders on
August 31, 2022. This was the first
full year for the majority of these plan expenses. There was an
extraordinary increase in expense related to the deferred incentive
plan of $664,000, or 241.5%,
primarily due to the termination of the plan as of December 31, 2023. The Company incurred
$206,000 in nonrecurring retirement
and recruitment expenses related to the retirement of the former
CEO. Audit and accounting expenses increased $58,000, FDIC assessments increased $71,000 due primarily to increases in overall
assessment rates and core processing expenses increased
$89,000. Technology, core processing,
contract services and other expenses increased primarily due to
growth, expenses related to the bank name change, and price
increases in all types of services due to inflationary
pressures.
Asset Quality
For the year ended December 31,
2023, the Company recorded a provision for credit losses of
$356,000 compared to $208,000 for the year ended December 31, 2022. The allowance for credit
losses increased, $1.3 million, or
72.2%, to $3.1 million, or 1.09% of
total loans, at December 31, 2023
from $1.8 million, or 0.69% of total
loans, at December 31, 2022. The
increase was due to the implementation of the current expected
credit losses (CECL) methodology to estimate credit losses on
January 1, 2023 resulting in a
deduction, net of tax, from retained earnings of $1.0 million and an increase in average loans of
$33.4 million, or 14.2%. The
net chargeoffs to average outstanding loans for the year ended
December 31, 2023 was 0.02% compared
to 0.01% for the year ended December 31,
2022.
Shareholders' Equity
Shareholders' equity decreased $2.2
million, or 3.9%, to $53.7
million at December 31, 2023
from $55.9 million at December 31, 2022. This decrease was primarily
due to a net loss of $733,000 for the
year ended December 31, 2023
resulting primarily from the loss on the sale of securities of
$1.4 million, net of tax, and a
one-time CECL adjustment of $1.0
million, net of tax. The CECL cumulative effect adjustment
flowed directly through equity instead of being charged as a
provision expense through the consolidated statement of operations.
The Company also repurchased 174,842 shares of its common stock for
a decrease of $2.2 million and paid
dividends totaling $368,000,
partially offset by a decrease in the net other comprehensive loss
of $1.4 million, an increase in
equity of $193,000 for the 2023
funding of the Broadstreet Bank leveraged ESOP with the release of
14,844 additional ESOP shares to participants and $528,000 related to the partial vesting of the
2022 Equity Incentive Plan for the year ended December 31, 2023. At December 31, 2023, the unallocated ESOP contra
equity account was $2.2 million.
Broadstreet Bank's community bank leverage ratio for December 31, 2023 was 10.76% compared to 12.31%
at December 31, 2022. At December 31, 2023, Broadstreet Bank was
considered well-capitalized under applicable regulations.
|
|
|
|
|
|
|
|
|
At
December 31,
|
|
|
2023
|
|
2022
|
|
|
(In
thousands)
|
|
|
|
(Unaudited)
|
Selected Financial
Condition Data:
|
|
|
|
|
|
|
Total assets
|
|
$
|
452,044
|
|
$
|
417,346
|
Cash and cash
equivalents
|
|
|
13,060
|
|
|
8,927
|
Interest bearing
deposits in banks
|
|
|
12,298
|
|
|
2,055
|
Securities available
for sale
|
|
|
93,327
|
|
|
107,153
|
Securities held to
maturity
|
|
|
26,020
|
|
|
27,827
|
Loans and leases
receivable, net
|
|
|
279,932
|
|
|
251,338
|
Premises and equipment,
net
|
|
|
11,609
|
|
|
6,299
|
Bank owned life
insurance
|
|
|
6,238
|
|
|
6,125
|
Foreclosed
assets
|
|
|
162
|
|
|
—
|
Restricted investments
carried at cost
|
|
|
3,909
|
|
|
2,805
|
Core deposit
intangible
|
|
|
265
|
|
|
397
|
Total
deposits
|
|
|
317,241
|
|
|
296,077
|
Advances from the
Federal Home Loan Bank
|
|
|
76,896
|
|
|
62,494
|
Total shareholders'
equity
|
|
|
53,689
|
|
|
55,870
|
|
|
|
|
|
|
|
|
|
For the Years Ended
December 31,
|
|
|
2023
|
|
2022
|
|
|
(In
thousands)
|
|
|
|
(Unaudited)
|
Selected Operating
Data:
|
|
|
|
|
|
|
Interest
income
|
|
$
|
18,978
|
|
|
12,566
|
Interest
expense
|
|
|
7,914
|
|
|
2,283
|
Net interest
income
|
|
|
11,064
|
|
|
10,283
|
Provision for credit
losses
|
|
|
356
|
|
|
208
|
Net interest income
after provision for credit losses
|
|
|
10,708
|
|
|
10,075
|
Noninterest
income
|
|
|
352
|
|
|
1,868
|
Noninterest
expense
|
|
|
11,997
|
|
|
9,766
|
(Loss) income before
income taxes
|
|
|
(937)
|
|
|
2,177
|
Income tax (benefit)
expense
|
|
|
(204)
|
|
|
423
|
Net (loss)
income
|
|
$
|
(733)
|
|
$
|
1,754
|
About Texas Community Bancshares, Inc.
Texas Community Bancshares, Inc. is the holding company for
Broadstreet Bank, SSB (the "Bank"). Broadstreet Bank, SSB changed
its name from Mineola Community Bank, SSB on December 4, 2023. It operates in Texas in Wood, Smith
and Van Zandt counties with the
home office being located in Mineola,
Texas. During 2023, the Bank opened a loan production office
in Canton, Texas. In the first
quarter of 2024, the Bank opened an additional branch in
Tyler, Texas and a new building
for the Lindale branch bringing
the Bank's operations to seven full-service locations and one loan
production office. Texas Community Bancshares is traded on the
NASDAQ Capital Market Exchange under the symbol "TCBS."
Statement About Forward-Looking Statements
Statements contained in this news release that are not
historical facts may constitute forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995 and such forward-looking statements are subject to significant
risks and uncertainties. The Company intends such forward-looking
statements to be covered by the safe harbor provisions contained in
the Act. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain.
Factors which could have a material adverse effect on the Company's
operations and future prospects include, but are not limited to,
general and local economic conditions; changes in market interest
rates, deposit flows, demand for loans, and real estate values;
competition; competitive products and pricing; the ability of the
Company's customers to make scheduled loan payments; loan
delinquency rates and trends; the Company's ability to manage the
risks involved in its business; the Company's ability to control
costs and expenses; inflation, and market and monetary
fluctuations; changes in federal and state legislation and
regulations applicable to the Company's business; and other factors
that may be disclosed in the Company's periodic reports as filed
with the Securities and Exchange Commission. These risks and
uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such
statements. The Company assumes no obligation to update any
forward-looking statements except as may be required by applicable
law or regulation.
View original
content:https://www.prnewswire.com/news-releases/texas-community-bancshares-inc-reports-unaudited-financial-results-for-the-year-ended-december-31-2023-302070159.html
SOURCE Texas Community Bancshares, Inc.