blueharbor bank Reports Second Quarter 2023 Net Income

MOORESVILLE, N.C., July 20, 2023 /PRNewswire/ -- blueharbor bank (the "Bank") today reported net income of $1,889,135 and $0.62 per diluted share for the second quarter of 2023, an increase of 18% or $291,144 as compared to $1,597,991 and $0.53 per diluted share for the second quarter of 2022.  For the six months ended June 30, 2023, the Bank reported net income of $3,981,622 and $1.30 per diluted share, an increase of 39% or $1,116,898 as compared to $2,864,724 and $0.94 per diluted share for the same six months in 2022.

The Bank reported total assets of $422.8 million at June 30, 2023, an increase of $16.5 million, or 4%, when compared to $406.4 million at December 31, 2022, and a decrease of $0.3 million, or less than 1%, when compared to June 30, 2022. Gross loans increased $5.8 million, to $341.3 million at June 30, 2023, from $335.5 million at December 31, 2022. When compared to June 30, 2022, gross loans increased $29.8 million, or 10%. Total deposits were $371.4 million at June 30, 2023, an increase of $11.9 million, or 3%, when compared to $359.5 million at December 31, 2022, and a decrease of $8.1 million, or 2% when compared to June 30, 2022.

Asset quality remained very strong with total non-performing assets representing only 0.01% of total assets at June 30, 2023. This ratio is down one basis point from the ratio reported December 31, 2022.

Capital levels also remained very solid at the end of the second quarter with total risk-based capital at 15.2%, both common equity tier 1 and tier 1 to risk-weighted assets of 14.2%, and tier 1 leverage ratio of 12.1%.

Annualized return on average assets (ROA) was 1.82% for the quarter ended June 30, 2023, an increase of 34 basis points over the ROA of 1.48% that was reported for the quarter ended June 30, 2022. When excluding income tax of $540,257 for the second quarter of 2023 and $456,022 for the second quarter of 2022, pre-tax ROA was 2.34% and 1.90%, respectively. Annualized return on equity (ROE) was 16.41% for the quarter ended June 30, 2023, an increase of 19 basis points over the ROE of 16.22% that was reported for the quarter ended June 30, 2022. When excluding income tax, ROE was 21.10% and 20.84% for the quarters ended June 30, 2023, and June 30, 2022, respectively.

Net interest income, a key metric we follow closely, was $3,860,960 for the quarter ending June 30, 2023, an increase of $556,845, or 17%, from the same period in 2022. The change in net interest income was due to loan growth and increase in yield on earning assets, offset partially by an increase in our cost of funds over the past 12 months.

For the Quarter ending June 30, 2023, $8,193 in provision for loan losses was recorded. This is a decrease of $13,930 from the provision for loan losses of $22,123 that was recorded in the quarter ended June 30, 2022.  The decrease in provision was due to lower loan growth during the second quarter of 2023 as compared to the second quarter of 2022. The allowance for loan losses to total loans was 0.95% at June 30, 2023.

Noninterest income was $696,823 for the quarter ended June 30, 2023, a decrease of $16,612 from the $713,435 that was recorded for the quarter ended June 30, 2022. The decrease is due to lower mortgage fees.

Noninterest expense was $2,120,198 for the quarter ended June 30, 2023, compared to $1,941,414 for the quarter ended June 30, 2022. The increase of $178,784 was due to several factors as follows:

• Increase in data processing fees due to a greater number of customers and accounts.
• Professional fees paid for the Current Expected Credit Loss (CECL) model review and for core contract consulting.
• Higher occupancy and furniture and equipment expenses for the new Statesville branch completed in September 2022.

Jim Marshall, President and Chief Executive Officer, commented, "We are pleased with our performance in the second quarter and first half of the year, especially when factoring in industry and economic turmoil. Given the increased pressure on deposit pricing, deposits have grown year to date and our noninterest deposits have remained consistently around 33% of total deposits within the past year.

Credit quality continues to perform nicely given the interest rate and inflationary pressures. Our commercial loan underwriting process includes global debt coverages that are also stressed to include a rising interest environment. So, we look at all the customer's debt and their ability to service it and not just our loan. On the consumer side, primarily home equity lines of credit (HELOCs), we regularly pull soft credit scores and that latest average score for all such customers was 773. We have seen very little migration downward or evidence of stress within that subset of credit. Considering the environment, we continue to be pleased with our results. We have always said we would take what the market gives us and will not compromise credit standards to reach lofty growth."

blueharbor bank is headquartered in Mooresville with a branch in Statesville and loan production offices in Belmont and Morehead City.  blueharbor bank's website is www.blueharborbank.com and our common stock is quoted on the OTCQX Market under the symbol "BLHK."

Summary Selected Financial Data Schedule attached below.

Forward-Looking Statement:
This press release contains forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management's current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. As such, actual results and outcomes may materially differ from what may be expressed or forecast in such forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit levels, loan demand and asset quality, including real estate and other collateral values; changes in banking regulations and accounting principles, policies or guidelines; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. blueharbor bank takes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this press release.

 

Summary Selected Financial Data
	(Unaudited)		(Audited)		(Unaudited)
	June 30,		December 31,		June 30,
Balance Sheet Data:	2023		2022		2022
Total Assets	$  422,820,175		$  406,356,659		$  423,107,177
Total Gross Loans	341,277,760		335,496,493		311,438,503
Allowance for Loan Losses	3,237,206		3,171,448		3,061,110
Total Deposits	371,365,080		359,486,348		379,462,059
Total Shareholders' Equity	46,694,327		42,490,336		39,458,208
	(Unaudited)				(Unaudited)
	Three Months Ended				Sixs Months Ended
	June 30,				June 30,
Earnings and Per Share Data:	2023		2022		2023		2022
Interest Income	$       4,917,190		$       3,426,386		$       9,514,078		$  6,519,085
Interest Expense	1,056,230		122,271		1,564,862		259,647
Net Interest Income	3,860,960		3,304,115		7,949,216		6,259,438
Provision for Loan Losses	8,193		22,123		49,138		173,357
Net Interest Income after
Provision for Loan Losses	3,852,767		3,281,992		7,900,078		6,086,081
Noninterest Income	696,823		713,435		1,398,311		1,404,331
Noninterest Expense	2,120,198		1,941,414		4,174,711		3,807,378
Net Income before Taxes	2,429,392		2,054,013		5,123,678		3,683,034
Income Taxes	540,257		456,022		1,142,056		818,310
Net Income	$       1,889,135		$       1,597,991		$       3,981,622		$  2,864,724
Basic Income per Share	$                0.64		$                0.55		$                1.36		$            0.98
Diluted Income per Share	$                0.62		$                0.53		$                1.30		$            0.94
Annualized Performance Ratios:
Return on average assets	1.82 %		1.48 %		1.95 %		1.33 %
Return on average equity	16.41 %		16.22 %		17.86 %		14.47 %
Efficiency ratio	46.5 %		48.3 %		44.7 %		49.7 %
Overhead ratio	36.9 %		37.2 %		34.9 %		38.4 %
Net Interest Margin	3.97 %		3.26 %		4.15 %		3.10 %
Cost of Funds	1.77 %		0.19 %		1.35 %		0.20 %
	(Unaudited)		(Unaudited)
	June 30,		June 30,
	2023		2022
Financial Ratios:
Book Value	$              15.75		$              13.46
Nonperforming Assets to Total Assets Ratio	0.01 %		0.02 %
Loan to Deposit Ratio	91.9 %		93.3 %
Tier 1 Leverage Ratio	12.1 %		9.7 %
Common Equity Tier 1 Risk-Based Capital Ratio	14.2 %		12.7 %
Tier 1 Risk-Based Capital Ratio	14.2 %		12.7 %
Total Risk-Based Capital Ratio	15.2 %		13.6 %

 

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SOURCE blueharbor bank