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Dogwood State Bank Reports Third Quarter 2024 Results and Successful Integration of Community First

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Dogwood State Bank (DSBX) reported Q3 2024 results, highlighting the completion of Community First Bancorporation acquisition on August 1, 2024. Adjusted net income improved to $6.4 million ($0.36 per diluted share) in Q3 2024, up from $3.1 million in Q2 2024. The bank's net interest margin expanded to 3.93%, while SBA lending income increased to $2.8 million. The Community First acquisition added $682.8 million in total assets and $474.1 million in gross loans. However, GAAP earnings showed a net loss of ($4.8) million due to merger expenses and a one-time provision charge on acquired loans.

Dogwood State Bank (DSBX) ha riportato i risultati del terzo trimestre del 2024, evidenziando il completamento dell'acquisizione di Community First Bancorporation avvenuto il 1° agosto 2024. Il reddito netto rettificato è migliorato a 6,4 milioni di dollari (0,36 dollari per azione diluita) nel Q3 2024, in aumento rispetto ai 3,1 milioni di dollari nel Q2 2024. Il margine di interesse netto della banca è aumentato al 3,93%, mentre il reddito da prestiti SBA è salito a 2,8 milioni di dollari. L'acquisizione di Community First ha aggiunto 682,8 milioni di dollari in attivi totali e 474,1 milioni di dollari in prestiti lordi. Tuttavia, gli utili GAAP hanno mostrato una perdita netta di 4,8 milioni di dollari a causa delle spese di fusione e di un'accantonamento una tantum sui prestiti acquisiti.

Dogwood State Bank (DSBX) informó sobre los resultados del tercer trimestre de 2024, destacando la finalización de la adquisición de Community First Bancorporation el 1 de agosto de 2024. El ingreso neto ajustado mejoró a 6.4 millones de dólares (0.36 dólares por acción diluida) en el Q3 de 2024, un aumento desde los 3.1 millones de dólares en el Q2 de 2024. El margen de interés neto del banco se expandió al 3.93%, mientras que los ingresos de préstamos SBA aumentaron a 2.8 millones de dólares. La adquisición de Community First agregó 682.8 millones de dólares en activos totales y 474.1 millones de dólares en préstamos brutos. Sin embargo, las ganancias según GAAP mostraron una pérdida neta de 4.8 millones de dólares debido a los gastos de fusión y un cargo por provisión único en los préstamos adquiridos.

도그우드 주립은행 (DSBX)은 2024년 3분기 실적을 보고하며, 2024년 8월 1일 커뮤니티 퍼스트 뱅코포레이션 인수 완료를 강조했습니다. 조정된 순이익은 2024년 3분기 640만 달러(희석 주당 0.36달러)로 증가하였으며, 이는 2024년 2분기 310만 달러에서 상승한 수치입니다. 은행의 순이자마진은 3.93%로 확장되었고, SBA 대출 수익은 280만 달러로 증가했습니다. 커뮤니티 퍼스트 인수는 총 6억 8280만 달러의 자산과 4억 7410만 달러의 총 대출을 추가했습니다. 그러나 GAAP 기준에서의 수익은 인수 비용과 인수된 대출에 대한 일회성 충당금으로 인해 480만 달러의 순손실을 기록했습니다.

Dogwood State Bank (DSBX) a publié ses résultats pour le troisième trimestre 2024, mettant en avant l'achèvement de l'acquisition de Community First Bancorporation le 1er août 2024. Le revenu net ajusté a augmenté à 6,4 millions de dollars (0,36 dollar par action diluée) au Q3 2024, contre 3,1 millions de dollars au Q2 2024. La marge d'intérêt nette de la banque s'est étendue à 3,93%, tandis que les revenus de prêts SBA ont augmenté à 2,8 millions de dollars. L'acquisition de Community First a ajouté 682,8 millions de dollars d'actifs total et 474,1 millions de dollars de prêts bruts. Cependant, les bénéfices GAAP ont montré une perte nette de 4,8 millions de dollars en raison des frais de fusion et d'une charge de provision unique sur les prêts acquis.

Dogwood State Bank (DSBX) hat die Ergebnisse für das dritte Quartal 2024 veröffentlicht und dabei den Abschluss der Übernahme von Community First Bancorporation am 1. August 2024 hervorgehoben. Das bereinigte Nettoeinkommen stieg im 3. Quartal 2024 auf 6,4 Millionen Dollar (0,36 Dollar pro verwässerter Aktie), nach 3,1 Millionen Dollar im 2. Quartal 2024. Die Nettozinsmarge der Bank erweiterte sich auf 3,93%, während das SBA-Darlehenshonorar auf 2,8 Millionen Dollar anstieg. Die Übernahme von Community First fügte insgesamt 682,8 Millionen Dollar an Vermögenswerten und 474,1 Millionen Dollar an Bruttokrediten hinzu. Allerdings zeigten die GAAP-Ergebnisse einen Nettogewinn von 4,8 Millionen Dollar aufgrund von Übernahmeaufwendungen und einer einmaligen Rückstellungsbelastung für erworbene Kredite.

Positive
  • Adjusted net income doubled to $6.4 million in Q3 2024 from $3.1 million in Q2 2024
  • Net interest margin expanded to 3.93% from 3.53% in Q2 2024
  • SBA lending income increased to $2.8 million, ranking 3rd largest in North Carolina
  • Improved efficiency ratio to 60.8% from 62.1% in Q2 2024
  • Strategic acquisition added $682.8 million in total assets
Negative
  • GAAP net loss of $4.8 million in Q3 2024
  • Increased provision for credit losses to $5.9 million from $1.1 million in Q3 2023
  • Non-interest expense increased to $22.7 million from $9.1 million in Q3 2023
  • Merger & acquisition expenses of $9.1 million impacted quarterly results
  • Slight increase in nonperforming loans to 0.18% of total loans

RALEIGH, N.C., Oct. 23, 2024 /PRNewswire/ -- Dogwood State Bank (OTC: DSBX) ("Dogwood" or the "Bank") announced today its financial results for the three and nine months ended September 30, 2024.

Third Quarter 2024 Financial Highlights

  • The acquisition of Community First Bancorporation ("Community First") was completed on August 1, 2024.
  • Adjusted net income (non-GAAP) improved to $6.4 million in Q3 2024, compared to $3.1 million in Q2 2024 and $2.9 million in Q3 2023.
  • Adjusted EPS (non-GAAP) increased to $0.36 per diluted share in Q3 2024, compared to $0.20 per share in Q2 2024 and $0.20 per share in Q3 2023.
  • Net interest margin expanded to 3.93% in Q3 2024, compared to 3.53% in Q2 2024 and 3.43% in Q3 2023.
  • SBA lending income rose to $2.8 million in Q3 2024, compared to $2.7 million in Q2 2024 and $2.4 million in Q3 2023. Dogwood was ranked 3rd largest North Carolina SBA lender and 29th largest in the nation in the SBA's most recent fiscal year.
  • Adjusted efficiency ratio (non-GAAP) improved to 60.8% in Q3 2024, compared to 62.1% in Q2 2024 and 65.1% in Q3 2023.

"Dogwood's third quarter 2024 results demonstrate our strong organic growth and operating momentum as well as enhanced earnings power from the Community First acquisition," commented Steve Jones, Chief Executive Officer.  "The combination of these factors contributed to a 106% increase in adjusted net income compared to last quarter and a 79% growth in adjusted EPS over the same periods.  I am also pleased to announce the successful conversion of Community First's customers and systems onto Dogwood's platform this past weekend, officially completing the merger integration process.  Thanks to the hard work and dedication of our employees, we were able to ensure a smooth transition for our customers.  Their commitment has been crucial in making this conversion a success, and we look forward to delivering even greater value as a unified company."

Community First Acquisition

On August 1, 2024, Dogwood completed the acquisition of Community First in an all-stock transaction.  A total of 3.4 million shares of Dogwood voting common stock were issued in the transaction, which equated to total consideration paid of $54.3 million.  Dogwood added $682.8 million in total assets, $474.1 million in gross loans, $572.1 million in total deposits, and $53.6 million in shareholders' equity to its balance sheet in the acquisition.  As part of the purchase price allocation, $4.6 million in goodwill was recognized at acquisition.

Q3 2024 Earnings Performance

Dogwood reported a GAAP net loss in Q3 2024 of ($4.8) million, or ($0.28) per diluted share, compared to net income of $2.9 million, or $0.20 per diluted share, in Q3 2023.  Current quarter GAAP earnings were negatively impacted by merger & acquisition expenses and a one-time provision charge on acquired non-purchased credit deteriorated ("PCD") loans, both of which were related to the acquisition of Community First. 

Adjusted net income (non-GAAP) in Q3 2024, which excludes the impact of merger & acquisition expenses as well as the provision charge on acquired non-PCD loans, increased to $6.4 million, or $0.36 per diluted share, from $2.9 million, or $0.20 per diluted share, in Q3 2023.  Adjusted pre-tax, pre-provision net revenue (non-GAAP) in Q3 2024 was $8.8 million, an increase from $4.9 million in Q3 2023.

Net Interest Income

Net interest income was $18.2 million in Q3 2024, an increase from $11.0 million in Q3 2023.  The increase was primarily due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin.

Total average interest-earning assets increased to $1.96 billion in Q3 2024 from $1.34 billion in Q3 2023. Average loans increased by $562.6 million.  Average investment securities balances increased by $19.7 million.

Net interest margin expanded to 3.93% in Q3 2024 from 3.43% in Q3 2023.  While cost of funds increased by 0.24% over the periods under comparison, higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.

Provision for Credit Losses and Asset Quality

Provision for credit losses was $5.9 million in Q3 2024, an increase from $1.1 million in Q3 2023.  This increase was primarily due to a one-time provision charge of $5.3 million on acquired non-PCD loans.  The allowance for credit losses to total loans was 1.09% as of September 30, 2024, compared to 1.08% as of June 30, 2024 and 1.10% as of September 30, 2023.

Nonperforming loans were 0.18% of total loans as of September 30, 2024, compared to 0.17% as of June 30, 2024, and 0.16% as of September 30, 2023.  Annualized net charge offs were 0.17% of average loans in Q3 2024, which was lower than 0.30% in Q3 2023.  The vast majority of charge offs recognized in Q3 2024 were related to unguaranteed portions of U.S. Small Business Administration ("SBA") loans.

Non-Interest Income

Non-interest income was $4.2 million in Q3 2024, an increase from $3.0 million in Q3 2023.  This increase was primarily related to SBA lending income as well as service charges and debit card income.  

SBA lending income rose by $439 thousand due to higher secondary market premiums on sales of guaranteed loans sold in the quarter and higher servicing fee income.  The weighted average net premium on SBA loans sold in Q3 2024 was 9.64%, an increase from 7.72% in Q3 2023.  Guaranteed balances of SBA loans sold totaled $29.3 million in Q3 2024, which was a decrease from $35.2 million in Q3 2023.  

Service charges and debit card income increased by $466 thousand, which was primarily due to the Community First acquisition. 

Non-Interest Expense

Non-interest expense was $22.7 million in Q3 2024, an increase from $9.1 million in Q3 2023.  Merger & acquisition expenses of $9.1 million were incurred in Q3 2024 to complete the Community First acquisition.  These one-time expenses included placement agent fees, professional fees, executive change in control payments, vendor termination payments, and other merger-related costs.  Further, amortization of the Community First core deposit intangible which was recognized in the acquisition added $408 thousand to expense in the quarter.

Also contributing to the increase in non-interest expense, compensation and benefits grew by $2.6 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth, including entering new markets.

Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.  

Income Taxes

Dogwood generated a tax benefit of $1.4 million in Q3 2024, compared to tax expense of $902 thousand in Q3 2023.  The effective tax benefit rate was 23.2% in Q3 2024, which was slightly lower than the effective tax rate of 23.5% in Q3 2023.

Year-to-Date 2024 Earnings Performance

Dogwood reported a GAAP net loss in the first nine months of 2024 ("YTD 2024") of ($288) thousand, or ($0.02) per diluted share, compared to net income of $7.7 million, or $0.52 per diluted share, in the first nine months of 2023 ("YTD 2023").  YTD 2024 GAAP earnings were negatively impacted by merger & acquisition expenses and a one-time provision charge on acquired PCD loans, both of which were related to the acquisition of Community First. 

Adjusted net income (non-GAAP) in Q3 2024, which excludes the impact of merger & acquisition expenses as well as the provision charge on acquired non-PCD loans, increased to $12.0 million, or $0.75 per diluted share, from $7.7 million, or $0.52 per diluted share, in YTD 2023.  Adjusted pre-tax, pre-provision net revenue (non-GAAP) in YTD 2024 was $19.1 million, an increase from $13.4 million in YTD 2023.

Net Interest Income

Net interest income was $42.0 million in YTD 2024, an increase from $30.9 million in YTD 2023.  The increase was due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin. 

Total average interest-earning assets increased to $1.53 billion in YTD 2024 from $1.16 billion in YTD 2023.  Average loans increased by $346.2 million.  Average investment securities balances increased by $18.2 million, and average interest-earning cash balances increased $10.2 million.

Net interest margin expanded to 3.66% in YTD 2024 from 3.56% in YTD 2023.  While cost of funds increased by 0.67% over the periods under comparison, higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.

Provision for Credit Losses and Asset Quality

Provision for credit losses was $8.8 million in YTD 2024, an increase from $3.5 million in YTD 2023. The increase in provision expense was primarily due to a one-time provision charge of $5.3 million on acquired non-PCD loans.

Non-Interest Income

Non-interest income was $10.5 million in YTD 2024, an increase from $8.4 million in YTD 2023.  This increase was primarily related to SBA lending income as well as service charges and debit card income.  

SBA lending income rose by $1.1 million due to higher secondary market premiums on sales of guaranteed loans sold YTD and higher servicing fee income.  The weighted average net premium on SBA loans sold in YTD 2024 was 9.52%, an increase from 8.14% in YTD 2023.  Guaranteed balances of SBA loans sold totaled $79.5 million in YTD 2024, which was relatively consistent with $79.7 million in YTD 2023. 

Service charges and debit card income increased by $446 thousand, which was primarily due to the Community First acquisition. 

Non-Interest Expense

Non-interest expense was $44.0 million in YTD 2024, an increase from $25.9 million in YTD 2023.  Merger & acquisition expenses of $10.7 million were incurred in YTD 2024 to complete the Community First acquisition.  These one-time expenses included placement agent fees, professional fees, executive change in control payments, vendor termination payments, and other merger-related costs.  Further, amortization of the Community First core deposit intangible which was recognized in the acquisition added $408 thousand to expense.

Also contributing to the increase in non-interest expense, compensation and benefits grew by $4.6 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth, including entering new markets.

Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.  

Income Taxes

Dogwood generated a tax benefit of $46 thousand in YTD 2024, compared to tax expense of $2.2 million in YTD 2023.  The effective tax benefit rate was 13.8% in YTD 2024, compared to the effective tax rate of 21.9% in YTD 2023.

About Dogwood State Bank 

Dogwood State Bank is a state-chartered community bank headquartered in Raleigh, North Carolina, with approximately $2.2 billion in total assets.  Dogwood provides a wide range of banking products and services through its online offerings and twenty branch offices in North Carolina, South Carolina, and Eastern Tennessee.  Dogwood also specializes in providing lending services to small businesses through its Dogwood State Bank Small Business Lending division.  Dogwood is focused on becoming the bank for businesses, business owners, professionals, and their employees and redefining what it means to Bank Local.  By leveraging leadership, investing in technology, and committing to personalized, superior customer service, Dogwood is changing the landscape of community banking.

Forward-Looking Statements

Statements made in this press release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this press release and are based on current expectations and involve a number of assumptions. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the Bank's operations and future prospects include but are not limited to: the expected growth opportunities or cost savings from the proposed merger (the "merger") of Community First and Community First Bank, Inc. with and into the Bank may not be fully realized or may take longer to realize than expected; the businesses of the Bank and Community First may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger may not be obtained; changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of the Bank's loan and securities portfolios; demand for loan products and other financial services in our market areas; inflation; deposit flows; competition; our implementation of new technologies and ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and changes in accounting principles, policies and guidelines.  These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with United States generally accepted accounting principles ("GAAP"). The Bank uses the non-GAAP financial measures discussed herein in its analysis of the Bank's performance. The Bank's management believes that these non-GAAP financial measures enhance comparability of results of operations with prior periods by excluding the impact of items or events that may obscure trends in the Bank's performance. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the Non-GAAP Reconciliation table for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

Quarterly Financial Tables

Dogwood State Bank

Income Statements



Quarter Ended


Nine Months Ended

(Dollars in thousands, except per share data)


Sep 30
2024

Jun 30
2024

Mar 31
2024

Dec 31
2023

Sept 30
2023


Sep 30
2024

Sep 30
2023












Net interest income


$        18,157

$        12,521

$        11,312

$        11,900

$        11,005


$        41,990

$        30,884


Provision for credit losses


5,857

2,017

921

1,638

1,063


8,795

3,526



Net interest income after provision


12,300

10,504

10,391

10,262

9,942


33,195

27,358

Non-interest income











SBA lending


2,801

2,717

2,197

1,838

2,362


7,715

6,583


Service charges and debit card income


811

340

351

343

345


1,502

1,056


Bank-owned life insurance


301

219

211

201

187


733

550


Securities gains (losses), net


(8)

(6)

6

5

94


(8)

72


Gain on payoff of FHLB advances


-

-

-

1,230

-


-

-


Other


293

161

85

93

49


537

158



Total non-interest income


4,198

3,431

2,850

3,710

3,037


10,479

8,419

Non-interest expense











Compensation and benefits


8,598

6,683

6,506

6,910

6,003


21,787

17,229


Occupancy and equipment


1,025

707

719

634

590


2,451

1,769


Software


497

344

346

343

346


1,187

1,032


Loan related costs


182

314

290

254

305


786

660


Data processing


648

315

261

245

263


1,224

765


Professional fees


208

235

225

242

250


668

729


FDIC insurance


287

204

240

239

222


731

495


Merger and acquisition expenses


9,139

562

958

14

-


10,659

-


Amortization of other intangible assets


408

4

11

18

24


423

93


Other


1,731

1,102

1,259

1,274

1,137


4,092

3,132



Total non-interest expense


22,723

10,470

10,815

10,173

9,140


44,008

25,904



Net income (loss) before income taxes


(6,225)

3,465

2,426

3,799

3,839


(334)

9,873

Income tax expense (benefit)


(1,445)

811

588

865

902


(46)

2,159



Net income (loss)


$        (4,780)

$          2,654

$          1,838

$          2,934

$          2,937


$           (288)

$          7,714


Pre-Tax, Pre-Provision Net Revenue (PPNR)(1)


$           (368)

$          5,482

$          3,347

$          5,437

$          4,902


$          8,461

$        13,399

Adjusted PPNR(1)


8,771

6,044

4,305

5,451

4,902


19,120

13,399


Per Share Data:











Earnings per share (EPS) - basic


$          (0.28)

$            0.18

$            0.13

$            0.20

$            0.20


$          (0.02)

$            0.55


Adjusted EPS - basic(1)


0.37

0.21

0.18

0.21

0.20


0.77

0.55


Earnings per share - diluted


(0.28)

0.17

0.12

0.20

0.20


(0.02)

0.52


Adjusted EPS - diluted(1)


0.36

0.20

0.17

0.20

0.20


0.75

0.52


Performance Ratios:











Return on average assets (ROA)


-0.97 %

0.71 %

0.53 %

0.80 %

0.87 %


-0.02 %

0.84 %


Adjusted ROA(1)


1.30 %

0.83 %

0.74 %

0.81 %

0.87 %


0.99 %

0.84 %


Return on average equity (ROE)


-9.07 %

6.16 %

4.44 %

7.15 %

7.32 %


-0.21 %

6.77 %


Adjusted ROE(1)


12.09 %

7.16 %

6.22 %

7.18 %

7.32 %


8.77 %

6.77 %


Return on tangible common equity (ROTCE)(1)


-9.93 %

6.42 %

4.63 %

7.48 %

7.66 %


-0.22 %

7.10 %


Adjusted ROTCE(1)


13.24 %

7.46 %

6.50 %

7.51 %

7.66 %


9.32 %

7.10 %


Net interest margin


3.93 %

3.53 %

3.41 %

3.42 %

3.43 %


3.66 %

3.57 %


Efficiency ratio


101.65 %

65.63 %

76.37 %

65.17 %

65.09 %


83.87 %

65.91 %


Adjusted efficiency ratio(1)


60.76 %

62.11 %

69.60 %

65.08 %

65.09 %


63.56 %

65.91 %


(1) Denotes a non-GAAP measure.  Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly 

comparable GAAP measure.  "Adjusted" items exclude the impact of merger and acquisition expenses.

 

Dogwood State Bank







Balance Sheets









Ending Balance

(In thousands, except per share data)


Sep 30
2024

Jun 30
2024

Mar 31
2024

Dec 31
2023

Sept 30
2023

Assets







Cash and due from banks


$              7,622

$              2,514

$              2,353

$              5,191

$              5,261

Interest-earning deposits with banks


146,732

59,073

91,365

123,474

220,206


Total cash and cash equivalents


154,354

61,587

93,718

128,665

225,467

Investment securities available for sale


95,290

58,989

55,984

49,244

40,887

Investment securities held to maturity


73,144

74,404

76,119

77,557

78,614

Marketable equity securities


335

329

336

329

324


Total investment securities


168,769

133,722

132,439

127,130

119,825

Loans held for sale


7,924

11,030

8,146

15,274

20,329

Loans


1,757,828

1,236,722

1,148,899

1,095,339

1,036,636

Less allowance for credit losses


(19,143)

(13,349)

(12,344)

(11,943)

(11,385)


Loans, net


1,738,685

1,223,373

1,136,555

1,083,396

1,025,251

Bank-owned life insurance


44,743

27,888

27,669

27,458

27,257

Premises and equipment, net


35,378

19,713

18,838

18,707

19,522

SBA servicing asset


5,026

4,568

4,373

3,967

3,913

Goodwill


11,603

7,016

7,016

7,016

7,016

Other intangible assets, net


11,972

-

4

15

33

Other assets


36,274

21,854

19,750

20,060

19,845



Total assets


$      2,214,728

$      1,510,751

$      1,448,508

$      1,431,688

$      1,468,458

Liabilities and Shareholders' Equity







Deposits:








Noninterest-bearing


$         483,908

$         379,465

$         302,705

$         291,910

$         390,018


Interest-bearing


1,357,439

872,430

913,914

902,369

844,914




Total deposits


1,841,347

1,251,895

1,216,619

1,194,279

1,234,932

FHLB advances


101,686

60,000

40,000

50,000

50,000

Subordinated debt


9,627

-

-

-

-

Lease obligations


10,491

10,726

10,959

11,187

11,416

Other liabilities


26,503

13,162

11,459

11,719

12,012



Total liabilities


1,989,654

1,335,783

1,279,037

1,267,185

1,308,360

Shareholders' equity








Common stock ($1 par value)


18,980

15,541

15,020

14,710

14,695


Additional paid-in capital


187,813

137,431

135,077

132,373

132,113


Retained earnings


22,118

26,897

24,244

22,406

19,473


Accumulated other comprehensive loss


(3,837)

(4,901)

(4,870)

(4,986)

(6,183)



Total shareholders' equity


225,074

174,968

169,471

164,503

160,098



Total liabilities and shareholders' equity


$      2,214,728

$      1,510,751

$      1,448,508

$      1,431,688

$      1,468,458








Per Share Information:








Shares outstanding


18,980

15,541

15,020

14,710

14,695


Book value per share


$              11.86

$              11.26

$              11.28

$              11.18

$              10.89


Tangible book value per share(1)


$              10.62

$              10.81

$              10.82

$              10.71

$              10.42











Capital Ratios:








Tier 1 leverage


10.56 %

12.14 %

11.75 %

11.05 %

11.72 %


Common equity Tier 1 capital


10.66 %

12.64 %

13.12 %

13.47 %

13.97 %


Tier 1 risk-based capital


10.66 %

12.64 %

13.12 %

13.47 %

13.97 %


Total risk-based capital


12.30 %

13.81 %

14.29 %

14.65 %

15.08 %


Tangible common equity(1)


9.20 %

11.17 %

11.27 %

11.05 %

10.47 %


(1) Denotes a non-GAAP measure.  Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure.  

 

Dogwood State Bank







Asset Quality Measures









Quarter Ended

(Dollars in thousands)


Sep 30
2024

Jun 30
2024

Mar 31
2024

Dec 31
2023

Sept 30
2023

Nonperforming Assets:








Non-accrual loans


$         3,234

$         2,069

$         1,938

$         1,670

$         1,684


Loans 90 days or more past due and accruing


-

-

-

-

-


Other real estate owned


104

-

-

-

-



Total nonperforming assets


$         3,338

$         2,069

$         1,938

$         1,670

$         1,684








Asset Quality Ratios:








Nonperforming loans/loans


0.18 %

0.17 %

0.17 %

0.15 %

0.16 %


Nonperforming assets/total assets


0.15 %

0.14 %

0.13 %

0.12 %

0.11 %


Nonperforming assets/loans and other real estate owned


0.19 %

0.17 %

0.17 %

0.15 %

0.16 %


Loans 30 days or more past due/loans (excludes non-accruals)


0.30 %

0.21 %

0.41 %

0.23 %

0.05 %








Allowance for Credit Losses (ACL):








ACL on Loans:








Balance, beginning of period


$       13,349

$       12,344

$       11,943

$       11,385

$       11,204


Reclass of Day 1 ACL from loan fair value discount on acquired PCD loans


658

-

-

-

-


Loans charged off


(738)

(987)

(288)

(81)

(792)


Recoveries of loans previously charged off


79

11

9

40

29



Net loans charged off


(659)

(976)

(279)

(41)

(763)


Provision for credit losses


5,795

1,981

680

599

944


Balance, end of period


$       19,143

$       13,349

$       12,344

$       11,943

$       11,385









ACL on Off-Balance Sheet Credit Exposures:








Balance, beginning of period


$         2,336

$         2,300

$         2,059

$         1,020

$             901


Reserve on acquired unfunded loan commitments


197

-

-

-

-


Provision for credit losses


62

36

241

1,039

119


Balance, end of period


$         2,595

$         2,336

$         2,300

$         2,059

$         1,020








Allowance for Credit Losses Ratios:








Allowance for credit losses/loans


1.09 %

1.08 %

1.07 %

1.09 %

1.10 %


Allowance for credit losses/nonperforming loans


591.93 %

645.19 %

636.95 %

715.15 %

676.07 %


Net charge-offs/average loans (annualized)


0.17 %

0.33 %

0.10 %

0.02 %

0.30 %

 

Dogwood State Bank



















Net Interest Margin Analysis








































Quarter Ended



September 30, 2024


June 30, 2024


September 30, 2023

(Dollars in thousands)


Average Balance


Income/ Expense


Yield/ Rate


Average Balance


Income/ Expense


Yield/ Rate


Average Balance


Income/ Expense


Yield/ Rate

Interest-Earning Assets:




















Loans


$    1,585,101


$    27,589


6.92 %


$    1,192,611


$    19,547


6.59 %


$    1,022,537


$    15,959


6.19 %


Investment securities


152,851


1,361


3.54 %


133,164


1,066


3.22 %


119,534


840


2.79 %


Interest-earning deposits with banks


100,616


1,272


5.03 %


99,729


1,259


5.08 %


131,977


1,710


5.14 %



Total interest-earning assets


1,838,568


30,222


6.54 %


1,425,504


21,872


6.17 %


1,274,048


18,509


5.76 %

Non interest-earning assets


116,334






68,849






65,619







Total assets


$    1,954,902






$    1,494,353






$    1,339,667
























Interest-Bearing Liabilities:




















Interest-bearing demand


$        165,104


$          531


1.28 %


$        117,889


$          285


0.97 %


$        109,731


$          254


0.92 %


Savings and money market


696,594


6,502


3.71 %


606,729


6,239


4.14 %


448,059


4,199


3.72 %


Time


319,104


3,846


4.79 %


187,206


2,206


4.74 %


225,987


2,489


4.37 %



Total interest-bearing deposits


1,180,802


10,879


3.67 %


911,824


8,730


3.85 %


783,777


6,942


3.51 %


FHLB advances


76,176


979


5.11 %


41,099


552


5.40 %


50,435


505


3.97 %


Subordinated debt


6,630


139


8.34 %


-


-


0.00 %


-


-


0.00 %


Lease obligations


10,353


68


2.61 %


10,851


69


2.56 %


10,606


59


2.21 %



Total interest-bearing liabilities


1,273,961


12,065


3.77 %


963,774


9,351


3.90 %


844,818


7,506


3.52 %

Non-interest bearing deposits


451,987






343,732






326,827





Other liabilities


19,280






13,491






8,813





Shareholders' equity


209,674






173,356






159,209







Total liabilities and shareholders' equity


$    1,954,902






$    1,494,353






$    1,339,667





Net interest income and interest rate spread




$    18,157


2.77 %




$    12,521


2.27 %




$    11,005


2.24 %

Net interest margin






3.93 %






3.53 %






3.43 %




















Cost of funds






2.78 %






2.88 %






2.54 %

Cost of deposits






2.65 %






2.80 %






2.48 %





























Nine Months Ended



September 30, 2024


September 30, 2023

(Dollars in thousands)


Average Balance


Income/ Expense


Yield/ Rate


Average Balance


Income/ Expense


Yield/ Rate

Interest-Earning Assets:














Loans


$    1,302,139


$    65,251


6.69 %


$        955,929


$    42,691


5.97 %


Investment securities


139,138


3,456


3.32 %


120,923


2,468


2.73 %


Interest-earning deposits with banks


93,078


3,507


5.03 %


82,880


2,980


4.81 %



Total interest-earning assets


1,534,355


72,214


6.29 %


1,159,732


48,139


5.55 %

Non interest-earning assets


84,036






63,575







Total assets


$    1,618,391






$    1,223,307


















Interest-Bearing Liabilities:














Interest-bearing demand


$        135,874


$      1,108


1.09 %


$        107,793


$          644


0.80 %


Savings and money market


635,106


18,852


3.96 %


392,687


9,079


3.09 %


Time


226,099


8,019


4.74 %


204,047


5,820


3.81 %



Total interest-bearing deposits


997,079


27,979


3.75 %


704,527


15,543


2.95 %


FHLB advances


48,278


1,899


5.25 %


46,667


1,540


4.41 %


Subordinated debt


2,137


139


8.69 %


-


-


-


Lease obligation


10,851


207


2.55 %


9,904


172


2.32 %



Total interest-bearing liabilities


1,058,345


30,224


3.81 %


761,098


17,255


3.03 %

Non-interest bearing deposits


361,743






302,112





Other liabilities


15,018






7,709





Shareholders' equity


183,285






152,388







Total liabilities and shareholders' equity


$    1,618,391






$    1,223,307





Net interest income and interest rate spread




$    41,990


2.47 %




$    30,884


2.52 %

Net interest margin






3.66 %






3.56 %














Cost of funds






2.84 %






2.17 %

Cost of deposits






3.69 %






2.06 %

 

Dogwood State Bank

Non-GAAP Reconciliation 



Quarter Ended


Nine Months Ended

(In thousands, except per share data)


Sep 30
2024

Jun 30
2024

Mar 31
2024

Dec 31
2023

Sept 30
2023


Sep 30
2024

Sep 30
2023











Net income and EPS:











Net income (loss) (GAAP)


$          (4,780)

$             2,654

$             1,838

$             2,934

$             2,937


$              (288)

$             7,714



Adjust for provision on acquired non-PCD loans, net of tax


4,111

-

-

-

-


4,111

-



Adjust for merger and acquisition expenses, net of tax


7,039

433

738

11

-


8,210

-


Adjusted net income (non-GAAP)


$             6,369

$             3,087

$             2,576

$             2,945

$             2,937


$          12,032

$             7,714












Weighted average common shares outstanding












Basic


17,301

14,905

14,377

14,329

14,329


15,529

14,092



Diluted


17,810

15,480

15,075

15,039

15,026


16,094

14,783












EPS (GAAP)












Basic 


$             (0.28)

$               0.18

$               0.13

$               0.20

$               0.20


$             (0.02)

$               0.55



Diluted


(0.28)

0.17

0.12

0.20

0.20


(0.02)

0.52












Adjusted EPS (non-GAAP)












Basic 


$               0.37

$               0.21

$               0.18

$               0.21

$               0.20


$               0.77

$               0.55



Diluted


0.36

0.20

0.17

0.20

0.20


0.75

0.52











PPNR:











Net income (loss) (GAAP)


$          (4,780)

$             2,654

$             1,838

$             2,934

$             2,937


$              (288)

$             7,714


Add:












Provision for credit losses


5,857

2,017

921

1,638

1,063


8,795

3,526



Income tax expense (benefit)


(1,445)

811

588

865

902


(46)

2,159


PPNR (non-GAAP)


(368)

5,482

3,347

5,437

4,902


8,461

13,399



Add: merger and acquisition expenses


9,139

562

958

14

-


10,659

-


Adjusted PPNR (non-GAAP)


$             8,771

$             6,044

$             4,305

$             5,451

$             4,902


$          19,120

$          13,399











ROA:











Net income (loss) (GAAP)


$          (4,780)

$             2,654

$             1,838

$             2,934

$             2,937


$              (288)

$             7,714


Adjusted net income (non-GAAP)


6,369

3,087

2,576

2,945

2,937


12,032

7,714












Average assets


1,954,902

1,494,353

1,402,220

1,448,929

1,339,667


1,618,391

1,223,307












ROA


-0.97 %

0.71 %

0.53 %

0.80 %

0.87 %


-0.02 %

0.84 %


Adjusted ROA (non-GAAP)


1.30 %

0.83 %

0.74 %

0.81 %

0.87 %


0.99 %

0.84 %











ROE and ROTCE:











Net income (loss) (GAAP)


$          (4,780)

$             2,654

$             1,838

$             2,934

$             2,937


$              (288)

$             7,714


Adjusted net income (non-GAAP)


6,369

3,087

2,576

2,945

2,937


12,032

7,714













Average shareholders' equity (GAAP)


209,674

173,356

166,534

162,703

159,209


183,285

152,388



Less: average goodwill and other intangible assets, net


18,234

7,018

7,027

7,041

7,063


10,786

7,093


Average tangible common equity (non-GAAP)


191,440

166,338

159,507

155,662

152,146


172,499

145,295












ROE


-9.07 %

6.16 %

4.44 %

7.15 %

7.32 %


-0.21 %

6.77 %


Adjusted ROE (non-GAAP)


12.09 %

7.16 %

6.22 %

7.18 %

7.32 %


8.77 %

6.77 %


ROTCE (non-GAAP)


-9.93 %

6.42 %

4.63 %

7.48 %

7.66 %


-0.22 %

7.10 %


Adjusted ROTCE (non-GAAP)


13.24 %

7.46 %

6.50 %

7.51 %

7.66 %


9.32 %

7.10 %











Efficiency Ratio:











Non-interest expense (GAAP)


$          22,723

$          10,470

$          10,815

$          10,173

$             9,140


$          44,008

$          25,904



Less: merger and acquisition expenses


9,139

562

958

14

-


10,659

-


Adjusted non-interest expense (non-GAAP)


13,584

9,908

9,857

10,159

9,140


33,349

25,904












Net interest income


18,157

12,521

11,312

11,900

11,005


41,990

30,884


Non-interest income


4,198

3,431

2,850

3,710

3,037


10,479

8,419


Total revenue


22,355

15,952

14,162

15,610

14,042


52,469

39,303












Efficiency ratio (non-interest expense / total revenue)


101.65 %

65.63 %

76.37 %

65.17 %

65.09 %


83.87 %

65.91 %


Adjusted efficiency ratio (non-GAAP)


60.76 %

62.11 %

69.60 %

65.08 %

65.09 %


63.56 %

65.91 %











Tangible Book Value per Share and Tangible Common Equity Ratio:











Shareholders' equity (GAAP)


$        225,074

$        174,968

$        169,471

$        164,503

$        160,098


$        225,074

$        160,098



Less: goodwill and other intangible assets, net


23,575

7,016

7,020

7,031

7,049


23,575

7,049


Tangible common equity (non-GAAP)


201,499

167,952

162,451

157,472

153,049


201,499

153,049












Common shares outstanding


18,980

15,541

15,020

14,710

14,695


18,980

14,695












Book value per share


$             11.86

$             11.26

$             11.28

$             11.18

$             10.89


$             11.86

$             10.89


Tangible book value per share (non-GAAP)


10.62

10.81

10.82

10.71

10.42


10.62

10.42












Total assets (GAAP)


$    2,214,728

$    1,510,751

$    1,448,508

$    1,431,688

$    1,468,458


$    2,214,728

$    1,468,458



Less: goodwill and other intangible assets, net


23,575

7,016

7,020

7,031

7,049


23,575

7,049


Tangible assets (non-GAAP)


2,191,153

1,503,735

1,441,488

1,424,657

1,461,409


2,191,153

1,461,409












Tangible common equity to tangible assets (non-GAAP)


9.20 %

11.17 %

11.27 %

11.05 %

10.47 %


9.20 %

10.47 %

 

Cision View original content:https://www.prnewswire.com/news-releases/dogwood-state-bank-reports-third-quarter-2024-results-and-successful-integration-of-community-first-302285150.html

SOURCE Dogwood State Bank

FAQ

What was Dogwood State Bank's (DSBX) adjusted earnings per share in Q3 2024?

Dogwood State Bank's adjusted earnings per share was $0.36 in Q3 2024, up from $0.20 in Q2 2024.

When did Dogwood State Bank (DSBX) complete the Community First acquisition?

Dogwood State Bank completed the acquisition of Community First Bancorporation on August 1, 2024.

What was DSBX's net interest margin in Q3 2024?

Dogwood State Bank's net interest margin was 3.93% in Q3 2024, up from 3.53% in Q2 2024.

How much did the Community First acquisition add to DSBX's total assets?

The Community First acquisition added $682.8 million in total assets to Dogwood State Bank.

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DOGWOOD STATE BK RLGH NC

OTC:DSBX

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DSBX Latest News

Jul 30, 2024
Dogwood State Bank Reports Higher Second Quarter 2024 Earnings Reflecting Strong Operating Momentum Heading into Community First Acquisition
Jun 24, 2024
Dogwood State Bank and Community First Bancorporation Announce Receipt of Regulatory Approvals for Merger
May 22, 2024
SHAREHOLDERS OF DOGWOOD STATE BANK AND COMMUNITY FIRST BANCORPORATION APPROVE MERGER
May 22, 2024
SHAREHOLDERS OF DOGWOOD STATE BANK AND COMMUNITY FIRST BANCORPORATION APPROVE MERGER
Feb 1, 2024
Dogwood State Bank to Acquire Community First Bancorporation

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