Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| Although I will say, I do think underwriting is substantially better than it has been in my career, which is over 30 years |
| Overall, our commercial portfolio is strong, diverse and performing well |
| Our third quarter performance was solid, but down a bit as you saw, as we continue to navigate through a challenging operating environment |
| Earnings performance ratios were again solid with an annualized return on assets of 1.11% and an annualized return on equity of 11.47% |
| As far as liquidity and capital, our liquidity and capital positions continue to be strong |
| Overall, credit quality metrics remained strong during the quarter, non-performing assets to total assets were 0.19% at September 30, 2023 decreasing by 1 basis point from June 30, 2023 |
| So I mean that is a positive |
| Market interest rates obviously increased pretty significantly in 2022 and we were able to increase rates on assets quicker than liabilities last year, and so we achieved for us peak net interest income and net interest margin in the second half of 2022 and spilled over little bit into the first quarter of 2023 |
| Joseph Turner I mean we feel awfully good about our credit portfolio, John |
| I mean, that's a good shot |
| Hope you're both doing well today |
| In the third quarter, the company declared a $0.40 per share common dividend in addition in our effort to enhance long-term stockholder value, the company continued to repurchase shares of common stock during the quarter |
| Our capital remains substantially above regulatory well-capitalized thresholds, and our tangible common equity ratio was 9.1% at September 30, '23 |
| John Rodis Hope you guys are doing well |
| Total outstanding loan balances modestly grew by about $58 million since the end of 2022 |
| Our liquidity levels are -- continue to be resilient, we have readily available funding sources, totaling about $2.2 billion at the end of September of '23 with about $1.1 billion almost availability at Home Loan Bank |
| In comparing the couple of yield items in there and rates, between the '23 and '22 third quarter periods, the average loan yield increased about 113 basis points, while the average rate on interest-bearing deposits increased about 203 basis points |
| Importantly though the retained earnings component of our stockholder's equity has increased $20.8 million, during the nine months ended September 30, 2023 |
| Thanks, Kelly and good afternoon, everybody |
| Good afternoon, guys |
| Good afternoon |
| So if the cuts are pretty gradual, pretty well balanced, I think, if they're really fast like they were in 2020, that's probably going to sting a little bit |
| Good afternoon, everyone |
| Appreciate that |
| Kelly Polonus Thank you |
| Thank you very much |
| Thank you |
| Thank you |
| Thank you |
| The dividend and stock repurchases combined reduced stockholder -- stockholder's equity by about $10.1 million during the third quarter |
| Statement |
|---|
| The company's net interest income was negatively impacted in the third quarter by high level of competition for deposits across the industry and in our local markets |
| Besides the higher funding costs on deposits, net interest income was also negatively affected by the company's interest rate swaps, as I mentioned and as described in our earnings release |
| If market interest rates remain near with their current levels, the company's interest rate swaps will continue to have a negative impact on net interest income |
| And I'll begin with just a general comment that not maybe unlike others, our net interest income comparisons in the third, and probably the fourth quarters this year will show declines from the same periods in 2022 |
| And then as a reminder, again one of those swaps will terminate March 1, 2024, that interest rate swap itself had a negative impact on net interest income of $2.8 million, and a negative impact on net interest margin of 21 basis points in the third quarter of 2023 |
| During the third quarter, new loan production and general activity was down compared to 2022 as expected |
| We mentioned on our last couple of calls some anticipated headwinds that we would face related to net interest margin |
| But since that time some of our net interest income and margins have come down for rate as we've talked about a little bit last quarter and I'll discuss a little bit today |
| The margin contraction primarily resulted from increasing interest rates on all deposit types during the third quarter and a full quarter's impact from net settlements related to two interest rate swaps |
| As Joe mentioned earlier, net interest margin was 3.43% in the third quarter of '23 compared to 3.96% in the same period in 2022, which was a decrease of about 53 basis points |
| Net interest margin did decline to 3.43% for the third quarter compared to 3.96% for the same period in '22, and 3.56% for the second quarter of '23 |
| So I think in light of that loan growth is going to be pretty tepid |
| Net interest income was $48.1 million for the second quarter of 2023, so we had a decrease in net interest income between Q2 and Q3 this year of about $1.4 million |
| The negative impact of all of the swaps combined in the third quarter of '23 was about $3.5 million |
| Those swaps in particular had a negative impact of $2.7 million in the third quarter of '23 |
| Net interest income for the third quarter of 2023 decreased $6.2 million or approximately 11% to $46.7 million compared to $52.9 million for the third quarter of 2022 |
| Also for the three months ended September 30, '23, the company did record a negative provision for losses on unfunded commitments of $1.2 million compared to a provision expense of $1.3 million for the three months ended September 30, 2022 |
| And so we do see some heightened competition in some ways in some places |
| I guess, I've just -- I've been at it long enough that I'm somewhat skeptical to think that we've just all figured it out |
| I mean, in the history of banking, this seems like, very unusual that we would have net charge-offs this low |
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