Endeavor Bank Reports Net Income of $900,000 for the 2nd Quarter of 2023; Results Highlighted by Strong Interest Income and Net Interest Margin Expansion.

SAN DIEGO: Endeavor Bancorp (OTCQX: EDVR) (the "Company," or "Bancorp"), the holding company for Endeavor Bank (the "Bank"), today announced net income of $900,000, or $0.22 per diluted share, for the second quarter of 2023, nearly unchanged compared to $899,000, or $0.22 per diluted share, for the first quarter of 2023. In the second quarter of 2022, the Company recorded a $2.51 million one-time deferred tax credit, resulting in net income of $3.23 million, or $0.79 per diluted share. Excluding the non-recurring tax-credit in 2022, net income for the second quarter of 2022 was $720,000. The 2023 financial results are unaudited.

The second quarter 2023 net income results included a $272,000 provision for credit losses, compared to a $292,000 provision expense during the first quarter, and a $275,000 provision in the second quarter of 2022. Excluding PPP fee income and loan loss provisions, the Company's core pretax, pre-PPP, pre-provision earnings were $1.53 million in the second quarter of 2023, compared to $1.58 million in the preceding quarter and $889,000 in the second quarter a year ago. This represents a 72.0% increase year-over-year in adjusted core pretax earnings.

"The impact of rising interest rates and strong deposit competition continues to place pressure on our net interest margin (NIM), which measures the difference between what the bank pays on deposits and the interest earned on loans, investments and cash," said Julie Glance, CFO. "However, we experienced a three basis point increase in NIM in the second quarter compared to the first quarter 2023. While deposit costs continue to increase, our earning assets are growing and repricing at a faster pace, as the loan portfolio is comprised of over 52.6% variable rate loans, with 28.6% of total loans repricing within 30 days."

Net interest margin increased to 3.85% for the second quarter of 2023, compared to 3.82% for the first quarter of 2023. The interest income on loans and bank deposits and investments increased $753,000 over the first quarter, while total interest expenses increased $457,000, increasing net interest income by $296,000. "We anticipate interest earned on assets to out-pace funding costs into the next two quarters as new loan production is primarily floating rate," said Glance.

The Company's annualized return on average equity for the second quarter of 2023 was 8.99% compared to 9.35% for the first quarter of 2023. The annualized return on average assets for...

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