hbcp-20240930

美國

證券交易委員會

華盛頓特區20549

表格 10-Q

（標記一）


☒			根據1934年證券交易法第13條或第15(d)條規定的季度報告

截止季度結束日期：2024年9月30日

或者


☐			根據1934年證券交易法第13條或15(d)條的過渡報告

過渡期從至

委託文件編號：001-39866001-34190

家園銀行股份有限公司。

（根據其章程規定的準確名稱）


路易斯安那州			71-1051785
（註冊地或其他組織機構的州或其他轄區）			（聯邦納稅人識別號）
503 Kaliste Saloom路, Lafayette, 路易斯安那州			70508
(主要領導機構的地址)			(郵政編碼)

公司電話號碼，包括區號：（337) 237-1960

不適用

（如果自上次報告起發生過變化，請填寫前名稱、前地址和前財政年度）

根據證券交易所12(b)條款登記的證券:


每個類別的名稱	交易標的	在每個交易所中註冊的名稱
普通股	HBCP	納斯達克股市

用勾號指明註冊人 (1) 在過去 12 個月（或註冊人必須提交此類報告的較短期限）中是否已提交了 1934 年《證券交易法》第 13 或 15 (d) 條要求提交的所有報告，以及 (2) 在過去 90 天內是否遵守了此類申報要求。是的☒ 不 ☐

請在複選框中標註是否在過去的12個月內（或更短的期限內）按照S-t法規的405條規定提交了所需提交的每個互動數據文件。是 ☒ 否 ☐

請在以下選項前打勾表示公司屬於大型快速記錄者、快速記錄者、非快速記錄者、小額報告公司還是新興增長公司。可參考《交易所法規》規則12億.2中對「大型快速記錄者」、「快速記錄者」、「小額報告公司」和「新興增長公司」的定義。

大型加速過濾器

☐

加速過濾器

☒

非加速過濾器

☐

規模較小的申報公司

☐

新興成長型公司

☐

如果是新興成長型公司，請打勾表示註冊人選擇不使用按Exchange行爲第13(a)條規定提供的任何新的或修訂的財務會計準則的延遲過渡期。 ☐

請勾選表示註冊人是否爲殼公司（如《證券交易法》12b-2規定所述）。是 ☐ 否 ☐☒

2024年10月30日，登記人擁有 8,076,080普通股票有$0.01的面值尚未流通。

HOME BANCORP，INC.及其子公司



第一部分 - 財務信息
項目1。	基本報表（未經審計）
	財務狀況合併報表	1
	綜合收益表	2
	綜合收益的合併報表	3
	股東權益變動表	4
	合併現金流量表	6
	未經審計的綜合財務報表註釋	7
項目2。	管理層 's 財務狀況和經營成果討論與分析	32
項目3。	有關市場風險的定量和定性披露	46
項目4。	控制和程序	47
第二部分-其他信息
項目1。	法律訴訟	47
項目1A。	風險因素	47
項目2。	未註冊的股票股權銷售和籌款用途	47
項目3。	對優先證券的違約	47
項目4。	礦山安全披露	48
項目5。	其他信息	48
項目6。	展示資料	48
簽名		49

HOME BANCORP，INC.及其子公司

定義術語詞彙表

以下是在本季度報告表格10-Q中使用的縮略詞、縮寫詞和定義術語清單，包括「項目1. 基本報表」和「項目2. 管理層對財務狀況和經營結果的討論」中使用的內容。術語「我們」、「我們的」或「我們」指的是家庭銀行公司及其合併子公司，除非上下文另有要求。


ACL	–	信用損失備抵金
全部	–	貸款損失備抵金
AOCI	–	累計其他綜合收益
ASC	–	會計準則編纂
ASU	–	會計準則更新
銀行	–	北卡羅來納州Home Bank，該公司的全資子公司
BOLI	–	銀行擁有的人壽保險
bps	–	點子，100 個點子等於 1.0%
BTFP	–	銀行定期資助計劃
C&D	–	建築和土地
C&I	–	商業和工業
CARES法案	–	《冠狀病毒援助、救濟和經濟安全法》
CECL	–	當前的預期信貸損失
公司	–	Home Bancorp, Inc.，路易斯安那州的一家公司，也是北卡羅來納州Home Bank的控股公司
新冠肺炎	–	新型冠狀病毒
CRE	–	商業地產
EPS	–	普通股每股收益
FASB	–	財務會計準則委員會
FHLB	–	聯邦住房貸款銀行
GAAP	–	公認會計原則
LTV	–	按揭成值
NPA (s)	–	不良資產
OCI	–	其他綜合收入
礦石	–	其他房地產
PCD	–	購買的信貸惡化了

購買力平價	–	薪水保護計劃
SBA	–	美國小企業協會
秒	–	美國證券交易委員會
TE	–	應納稅等值物
美國	–	美國

家庭銀行股份有限公司及其子公司

合併財務狀況表


	（未經審計）		（已審計）
（以千美元計）	2024年9月30日		2023 年 12 月 31 日
資產
現金和現金等價物	$	135,877	$	75,831
銀行的計息存款	—		99
可按公允價值出售的投資證券	420,723		433,926
持有至到期的投資證券（公允價值爲美元）1,066 和 $1,066，分別是）	1,065		1,065
持有待售抵押貸款	242		361
貸款，扣除非勞動收入	2,668,286		2,581,638
貸款損失備抵金	(32,278)		(31,537)
貸款總額，扣除非所得收入和貸款損失備抵金	2,636,008		2,550,101
辦公物業和設備，淨額	42,659		41,980
銀行擁有的人壽保險的現金退保價值	48,139		47,321
商譽和核心存款無形資產	85,361		86,372
應計應收利息和其他資產	71,916		83,066
總資產	$	3,441,990	$	3,320,122
負債
存款：
不計息	$	740,854	$	744,424
計息	2,036,633		1,926,200
存款總額	2,777,487		2,670,624
其他借款	140,539		5,539
次級債務，扣除發行成本	54,402		54,241
聯邦住房貸款銀行的短期預付款	—		150,000
聯邦住房貸款銀行的長期預付款	38,410		42,713
應計應付利息和其他負債	37,699		29,561
負債總額	3,048,537		2,952,678
股東權益
優先股，$0.01 面值- 10,000,000 已獲授權的股份；無發行的	—		—
普通股，$0.01 面值- 40,000,000 已獲授權的股份； 8,070,539 和 8,158,281 分別已發行和流通的股份	81		81
額外的實收資本	166,743		165,823
持有的未分配普通股：
員工持股計劃 (ESOP)	(1,428)		(1,696)
表彰和保留計劃 (RRP)	—		(1)
留存收益	251,692		234,619
累計其他綜合虧損	(23,635)		(31,382)
股東權益總額	393,453		367,444
負債和股東權益總額	$	3,441,990	$	3,320,122

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands, except per share data)	2024		2023		2024		2023
Interest Income
Loans, including fees	$	43,711	$	38,490	$	126,277	$	109,518
Investment securities:
Taxable interest	2,604		2,863		7,986		8,772
Tax-exempt interest	73		76		219		295
Other investments and deposits	991		649		2,481		1,679
Total interest income	47,379		42,078		136,963		120,264
Interest Expense
Deposits	13,908		8,181		39,174		16,968
Other borrowings	1,673		53		4,815		161
Subordinated debt expense	844		845		2,533		2,546
Short-term Federal Home Loan Bank advances	252		3,150		798		8,382
Long-term Federal Home Loan Bank advances	320		340		967		797
Total interest expense	16,997		12,569		48,287		28,854
Net interest income	30,382		29,509		88,676		91,410
Provision for loan losses	140		351		1,542		1,676
Net interest income after provision for loan losses	30,242		29,158		87,134		89,734
Noninterest Income
Service fees and charges	1,291		1,277		3,784		3,757
Bank card fees	1,613		1,903		4,939		5,405
Gain on sale of loans, net	195		687		408		770
Income from bank-owned life insurance	281		265		818		778
Loss on sale of securities, net	—		—		—		(249)
Loss on sale of assets, net	(10)		—		(6)		(20)
Other income	322		267		1,053		717
Total noninterest income	3,692		4,399		10,996		11,158
Noninterest Expense
Compensation and benefits	13,058		12,492		38,016		37,532
Occupancy	2,732		2,410		7,789		7,207
Marketing and advertising	382		638		1,333		1,387
Data processing and communication	2,646		2,496		7,715		6,949
Professional services	450		402		1,506		1,225
Forms, printing and supplies	188		195		580		586
Franchise and shares tax	488		542		1,463		1,624
Regulatory fees	493		511		1,471		1,451
Foreclosed assets and ORE, net	62		99		216		(590)
Amortization of acquisition intangible	328		389		1,011		1,224
(Reversal) provision for credit losses on unfunded commitments	—		—		(134)		361
Other expenses	1,431		1,164		3,968		3,281
Total noninterest expense	22,258		21,338		64,934		62,237
Income before income tax expense	11,676		12,219		33,196		38,655
Income tax expense	2,239		2,465		6,442		7,800
Net Income	$	9,437	$	9,754	$	26,754	$	30,855
Earnings per share:
Basic	$	1.19	$	1.22	$	3.36	$	3.84
Diluted	$	1.18	$	1.22	$	3.34	$	3.82
Cash dividends declared per common share	$	0.25	$	0.25	$	0.75	$	0.75

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2024		2023		2024		2023
Net Income	$	9,437	$	9,754	$	26,754	$	30,855
Other Comprehensive Income (Loss)
Unrealized gains (losses) on available for sale investment securities	14,343		(10,218)		11,218		(8,894)
Unrealized (losses) gains on cash flow hedges	(1,606)		183		(1,412)		476
Reclassification adjustment for losses included in net income	—		—		—		249
Tax effect	(2,675)		2,108		(2,059)		1,716
Other comprehensive income (loss), net of taxes	10,062		(7,927)		7,747		(6,453)
Comprehensive Income	$	19,499	$	1,827	$	34,501	$	24,402

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


(dollars in thousands, except per share data)	Common stock		Additional Paid-in capital		Unallocated Common Stock Held by ESOP		Unallocated Common Stock Held by RRP		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, June 30, 2023	$	82	$	164,945	$	(1,875)	$	(3)	$	220,801	$	(37,833)	$	346,117
Net income									9,754				9,754
Other comprehensive loss											(7,927)		(7,927)
Purchase of Company’s common stock at cost, 37,805 shares	(1)		(378)						(856)				(1,235)
Cash dividends declared, $0.25 per share									(2,049)				(2,049)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 2,801 shares	—		71						(1)				70
Exercise of stock options	—		17										17
RRP shares released for allocation			(1)				1						—
ESOP shares released for allocation			264		90								354
Share-based compensation cost			231										231
Balance, September 30, 2023	$	81	$	165,149	$	(1,785)	$	(2)	$	227,649	$	(45,760)	$	345,332
Balance, June 30, 2024	$	81	$	165,918	$	(1,518)	$	—	$	245,046	$	(33,697)	$	375,830
Net income									9,437				9,437
Other comprehensive income											10,062		10,062
Purchase of Company’s common stock at cost, 24,473 shares	—		(245)						(772)				(1,017)
Cash dividends declared, $0.25 per share									(2,018)				(2,018)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 13,168 shares	—		411						(1)				410
Exercise of stock options	—		18										18

ESOP shares released for allocation			327		90								417
Share-based compensation cost			314										314
Balance, September 30, 2024	$	81	$	166,743	$	(1,428)	$	—	$	251,692	$	(23,635)	$	393,453

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - CONTINUED

(Unaudited)


(dollars in thousands, except per share data)	Common stock		Additional Paid-in capital		Unallocated Common Stock Held by ESOP		Unallocated Common Stock Held by RRP		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2022	$	83	$	164,942	$	(2,053)	$	(7)	$	206,296	$	(39,307)	$	329,954
Cumulative effect of change in accounting principle due the adoption of ASC Topic 326, net of tax									—				—
Net income									30,855				30,855
Other comprehensive loss											(6,453)		(6,453)
Purchase of Company’s common stock at cost, 147,738 shares	(2)		(1,476)						(3,240)				(4,718)
Cash dividends declared, $0.75 per share									(6,185)				(6,185)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 20,259 shares			98						(77)				21
Exercise of stock options	—		102										102
RRP shares released for allocation			(5)				5						—
ESOP shares released for allocation			821		268								1,089
Share-based compensation cost			667										667
Balance, September 30, 2023	$	81	$	165,149	$	(1,785)	$	(2)	$	227,649	$	(45,760)	$	345,332
Balance, December 31, 2023	$	81	$	165,823	$	(1,696)	$	(1)	$	234,619	$	(31,382)	$	367,444
Net income									26,754				26,754
Other comprehensive income											7,747		7,747
Purchase of Company’s common stock at cost, 122,634 shares	—		(1,226)						(3,460)				(4,686)
Cash dividends declared, $0.75 per share									(6,090)				(6,090)
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 34,392 shares			400						(131)				269
Exercise of stock options	—		18										18
RRP shares released for allocation			(1)				1						—
ESOP shares released for allocation			909		268								1,177
Share-based compensation cost			820										820
Balance, September 30, 2024	$	81	$	166,743	$	(1,428)	$	—	$	251,692	$	(23,635)	$	393,453

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended September 30,
(dollars in thousands)	2024		2023
Cash flows from operating activities:
Net income	$	26,754	$	30,855
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,542		1,676
Depreciation	2,674		2,659
Amortization and accretion of purchase accounting valuations and intangibles	2,340		2,807

Federal Home Loan Bank stock dividends	(422)		(391)
Net amortization of discount on investments	222		292
Amortization of subordinated debt issuance cost	161		174
Loss on sale of securities, net	—		249
Gain on loans sold, net	(408)		(770)
Proceeds, including principal payments, from loans held for sale	37,839		12,510
Originations of loans held for sale	(37,426)		(12,749)
Loss on sale of assets, net	6		20
Non-cash compensation	1,997		1,756
Deferred income tax expense	72		31
Decrease (increase) in accrued interest receivable and other assets	1,633		(9,641)
Increase in cash surrender value of bank-owned life insurance	(818)		(778)
Increase in accrued interest payable and other liabilities	6,733		2,469
Net cash provided by operating activities	42,899		31,169
Cash flows from investing activities:
Purchases of securities available for sale	(4,936)		—
Proceeds from maturities, prepayments and calls on securities available for sale	29,135		36,561

Proceeds from sales of securities available for sale	—		13,762
Increase in loans, net	(89,236)		(139,803)
Decrease in interest-bearing deposits in banks	99		250
Proceeds from sale of foreclosed assets	1,879		426
Purchases of office properties and equipment	(3,511)		(1,525)




Proceeds from sale of office properties and equipment	153		4
Purchase of Federal Home Loan Bank stock	(973)		(5,215)
Proceeds from redemption of Federal Home Loan Bank stock	7,335		—
Net cash used in investing activities	(60,055)		(95,540)
Cash flows from financing activities:
Increase (decrease) in deposits, net	106,994		(35,340)
Borrowings on Federal Home Loan Bank advances	795,830		15,695,975
Repayments of Federal Home Loan Bank advances	(950,133)		(15,588,365)
Proceeds from other borrowings	135,000		—

Proceeds from exercise of stock options	18		102
Issuance of stock under incentive plans, net	269		21
Dividends paid to shareholders	(6,090)		(6,185)
Purchase of Company’s common stock	(4,686)		(4,718)
Net cash provided by financing activities	77,202		61,490
Net change in cash and cash equivalents	60,046		(2,881)
Cash and cash equivalents, beginning	75,831		87,401
Cash and cash equivalents, ending	$	135,877	$	84,520
Supplementary cash flow information:
Interest paid on deposits and borrowed funds	$	46,202	$	26,344
Income taxes paid	6,516		11,105

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. Certain reclassifications have been made to prior period balances to conform to the current period presentation. The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2023.

Critical Accounting Policies and Estimates

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when applying critical accounting policies and developing critical accounting estimates are included in its Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes from the critical accounting policies previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. In preparing its financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to prior period balances to conform to the current period presentation.

2. Recent Accounting Pronouncements

Accounting Standards Adopted in 2024

Accounting Standard Update (“ASU”) ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03"). ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain new disclosures for equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for fiscal years and interim periods after December, 15, 2023, though early adoption is permitted. The adoption of ASU 2022-03 did not have a significant impact on our consolidated financial statements.

ASU 2023-01, Leases (Topic 842): Common Control Arrangements: (“ASU 2023-01”) clarifies the accounting for leasehold improvements associated with common control leases to public business entities. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2023-01 did not have a significant impact on our Consolidated Financial Statements.

ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (“ASU 2023-02”) permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The adoption of ASU 2023-02 did not have a significant impact on our Consolidated Financial Statements.

Issued but Not Yet Adopted Accounting Standards

ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative" ("ASU 2023-06") related to disclosure or presentation requirements for various subtopics in the

FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.

ASU No. 2023-07, "Improvements to Reportable Segment Disclosures" ("ASU 2023-07") primarily will require enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and are to be applied on a retrospective basis. We do not expect this update to have a material impact on our consolidated financial statements.

ASU No. 2023-09, "Improvements to Income Tax Disclosures" ("ASU 2023-09") is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We do not expect it to have a material effect on our consolidated financial statements.

3. Investment Securities

The following tables summarize the Company’s available for sale and held to maturity investment securities at September 30, 2024 and December 31, 2023.


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2024
Available for sale:
U.S. agency mortgage-backed	$	296,894	$	201	$	23,514	$	273,581
Collateralized mortgage obligations	77,351		1		1,914		75,438
Municipal bonds	53,568		3		5,801		47,770
U.S. government agency	18,139		—		649		17,490
Corporate bonds	6,984		—		540		6,444
Total available for sale	$	452,936	$	205	$	32,418	$	420,723
Held to maturity:
Municipal bonds	$	1,065	$	1	$	—	$	1,066
Total held to maturity	$	1,065	$	1	$	—	$	1,066


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2023
Available for sale:
U.S. agency mortgage-backed	$	314,569	$	91	$	30,807	$	283,853
Collateralized mortgage obligations	82,764		1		3,503		79,262
Municipal bonds	53,891		4		7,221		46,674
U.S. government agency	19,151		—		1,102		18,049
Corporate bonds	6,982		—		894		6,088
Total available for sale	$	477,357	$	96	$	43,527	$	433,926
Held to maturity:
Municipal bonds	$	1,065	$	1	$	—	$	1,066
Total held to maturity	$	1,065	$	1	$	—	$	1,066

The estimated fair value and amortized cost by contractual maturity of the Company’s investment securities as of September 30, 2024 are shown in the following tables. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. The expected maturity of a security may differ from its contractual maturity because of prepayments or the exercise of call options. Accordingly, actual maturities may differ from contractual maturities. The Company’s investment securities portfolio had an effective duration of 3.7 years and 4.2 years at September 30, 2024 and December 31, 2023, respectively.


(dollars in thousands)	One Year or Less		After One Year through Five Years		After Five Years through Ten Years		After Ten Years		Total
Fair Value
Available for sale:
U.S. agency mortgage-backed	$	3,928	$	83,010	$	65,863	$	120,780	$	273,581
Collateralized mortgage obligations	2,813		55,920		459		16,246		75,438
Municipal bonds	—		5,763		30,647		11,360		47,770
U.S. government agency	4,988		104		12,351		47		17,490
Corporate bonds	—		—		6,444		—		6,444
Total available for sale	$	11,729	$	144,797	$	115,764	$	148,433	$	420,723
Held to maturity:
Municipal bonds	$	—	$	1,066	$	—	$	—	$	1,066
Total held to maturity	$	—	$	1,066	$	—	$	—	$	1,066

(dollars in thousands)	One Year or Less		After One Year through Five Years		After Five Years through Ten Years		After Ten Years		Total
Amortized Cost
Available for sale:
U.S. agency mortgage-backed	$	3,980	$	88,274	$	68,632	$	136,008	$	296,894
Collateralized mortgage obligations	2,851		57,192		474		16,834		77,351
Municipal bonds	—		6,011		34,698		12,859		53,568
U.S. government agency	5,000		105		12,987		47		18,139
Corporate bonds	—		—		6,984		—		6,984
Total available for sale	$	11,831	$	151,582	$	123,775	$	165,748	$	452,936
Held to maturity:
Municipal bonds	$	—	$	1,065	$	—	$	—	$	1,065
Total held to maturity	$	—	$	1,065	$	—	$	—	$	1,065

Management evaluates securities for impairment from credit losses at least quarterly, and more frequently when economic and market conditions warrant such evaluations. Consideration is given to numerous factors including, but not limited to, the extent to which the fair value is less than the amortized cost basis; adverse conditions causing changes in the financial condition of the issuer of the security or underlying loan guarantors; changes to the rating of the security by a rating agency; and the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost, which may extend to maturity.

The Company performs a process to determine whether the decline in the fair value of securities has resulted from credit losses or other factors. This process involves evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, bond credit support, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. If this evaluation indicates the existence of credit losses, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis. If the present value of expected cash flows is less than the amortized cost basis, an ACL is recorded, limited by the amount that the fair value of the security is less than its amortized cost.

The Company's investment securities with unrealized losses, aggregated by type and length of time that individual securities have been in a continuous loss position, are summarized in the following tables.


(dollars in thousands)	Less Than 1 Year				Over 1 Year				Total
September 30, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale:
U.S. agency mortgage-backed	$	4,897	$	41	$	257,112	$	23,473	$	262,009	$	23,514
Collateralized mortgage obligations	—		—		75,376		1,914		75,376		1,914
Municipal bonds	797		1		45,817		5,800		46,614		5,801
U.S. government agency	—		—		17,490		649		17,490		649
Corporate bonds	—		—		6,444		540		6,444		540
Total available for sale	$	5,694	$	42	$	402,239	$	32,376	$	407,933	$	32,418
Held to maturity:
Municipal bonds	$	—	$	—	$	—	$	—	$	—	$	—
Total held to maturity	$	—	$	—	$	—	$	—	$	—	$	—


(dollars in thousands)	Less Than 1 Year				Over 1 Year				Total
December 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale:
U.S. agency mortgage-backed	$	4,033	$	10	$	273,128	$	30,797	$	277,161	$	30,807
Collateralized mortgage obligations	—		—		79,253		3,503		79,253		3,503
Municipal bonds	519		3		44,195		7,218		44,714		7,221
U.S. government agency	3,760		117		14,289		985		18,049		1,102
Corporate bonds	—		—		6,088		894		6,088		894
Total available for sale	$	8,312	$	130	$	416,953	$	43,397	$	425,265	$	43,527
Held to maturity:
Municipal bonds	$	—	$	—	$	—	$	—	$	—	$	—
Total held to maturity	$	—	$	—	$	—	$	—	$	—	$	—

At September 30, 2024, 241 of the Company’s debt securities had unrealized losses totaling 7.4% of the individual securities’ amortized cost basis and 7.1% of the Company’s total amortized cost basis of the investment securities portfolio. At such date, 237 of the 241 securities had been in a continuous loss position for over 12 months. Management has determined that the declines in the fair value of these securities were not attributable to credit losses. As a result, no ACL was recorded for available for sale investment securities at September 30, 2024.

At September 30, 2024, it was determined that no ACL was required for the Company's held-to-maturity investment securities. The Company monitors credit quality of debt securities held-to-maturity through the use of credit ratings. The following tables present the amortized cost of the Company's held-to-maturity securities by credit quality rating at September 30, 2024 and December 31, 2023.


	Credit Ratings
(dollars in thousands)	AAA/AA/A		BBB/BB/B		Total
September 30, 2024
Held to maturity:
Municipal bonds	$	1,065	$	—	$	1,065


	Credit Ratings
(dollars in thousands)	AAA/AA/A		BBB/BB/B		Total
December 31, 2023
Held to maturity:
Municipal bonds	$	1,065	$	—	$	1,065

For the three and nine months ended September 30, 2024, there were no gross gains or losses related to the sale of investment securities. For the three and nine months ended September 30, 2023, the Company recorded gross gains of $0 and $98,000, respectively, and gross losses of $0 and $347,000, respectively, related to the sale of investment securities.

Accrued interest receivable on the Company's investment securities was $1,242,000 and $1,563,000 at September 30, 2024 and December 31, 2023, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

At September 30, 2024 and December 31, 2023, the Company had $141,965,000 and $127,172,000, respectively, of securities pledged to secure public deposits. In addition, at September 30, 2024, the Company had $135,000,000 of securities pledged to BTFP borrowings. There were no securities pledged to BTFP borrowings at December 31, 2023,

4. Earnings Per Share

Earnings per common share was computed based on the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income available to common shareholders	$	9,437	$	9,754	$	26,754	$	30,855
Denominator:
Weighted average common shares outstanding	7,922		8,006		7,959		8,045
Effect of dilutive securities:
Restricted stock	23		14		27		17
Stock options	22		19		22		22
Weighted average common shares outstanding – assuming dilution	7,967		8,039		8,008		8,084
Basic earnings per common share	$	1.19	$	1.22	$	3.36	$	3.84
Diluted earnings per common share	$	1.18	$	1.22	$	3.34	$	3.82

Options for 78,584 and 131,180 shares of common stock were not included in the computation of diluted EPS for the three months ended September 30, 2024 and 2023, respectively, because the effect of those shares was anti-dilutive. For the nine months ended September 30, 2024 and 2023, options on 67,235 and 102,493, respectively, shares of common stock were not included in the computation of diluted EPS because the effect of these shares was anti-dilutive.

5. Credit Quality and Allowance for Credit Losses

The Company’s loans, net of unearned income, consisted of the following as of the dates indicated.


(dollars in thousands)	September 30, 2024		December 31, 2023
Real estate loans:
One- to four-family first mortgage	$	502,784	$	433,401
Home equity loans and lines	80,935		68,977
Commercial real estate	1,143,152		1,192,691
Construction and land	329,787		340,724
Multi-family residential	169,443		107,263
Total real estate loans	2,226,101		2,143,056
Other loans:
Commercial and industrial	412,753		405,659
Consumer	29,432		32,923
Total other loans	442,185		438,582
Total loans	$	2,668,286	$	2,581,638

The net discount on the Company’s acquired loans was $2,885,000 and $4,340,000 at September 30, 2024 and December 31, 2023, respectively. In addition, loan balances as of September 30, 2024 and December 31, 2023 are reported net of unearned income of $5,141,000 and $5,321,000, respectively.

Accrued interest receivable on the Company's loans was $12,453,000 and $11,986,000 at September 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of the ACL. Those amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

Allowance for Credit Losses

The ACL, which includes the ALL and the ACL on unfunded lending commitments, and recorded investment in loans as of the dates indicated are as follows.


	September 30, 2024
(dollars in thousands)	Collectively Evaluated		Individually Evaluated		Total
Allowance for credit losses:
One- to four-family first mortgage	$	4,402	$	—	$	4,402
Home equity loans and lines	785		—		785
Commercial real estate	13,271		200		13,471
Construction and land	5,167		—		5,167
Multi-family residential	1,079		—		1,079
Commercial and industrial	6,635		42		6,677
Consumer	697		—		697
Total allowance for loan losses	$	32,036	$	242	$	32,278

Unfunded lending commitments(1)	$	2,460	$	—	$	2,460
Total allowance for credit losses	$	34,496	$	242	$	34,738


	September 30, 2024
(dollars in thousands)	Collectively Evaluated		Individually Evaluated(2)		Total
Loans:
One- to four-family first mortgage	$	502,784	$	—	$	502,784
Home equity loans and lines	80,935		—		80,935
Commercial real estate	1,138,815		4,337		1,143,152
Construction and land	329,787		—		329,787
Multi-family residential	169,443		—		169,443
Commercial and industrial	412,701		52		412,753
Consumer	29,432		—		29,432
Total loans	$	2,663,897	$	4,389	$	2,668,286


	December 31, 2023
(dollars in thousands)	Collectively Evaluated		Individually Evaluated		Total
Allowance for credit losses:
One- to four-family first mortgage	$	3,255	$	—	$	3,255
Home equity loans and lines	688		—		688
Commercial real estate	14,604		201		14,805
Construction and land	5,292		123		5,415
Multi-family residential	474		—		474
Commercial and industrial	6,071		95		6,166
Consumer	734		—		734
Total allowance for loan losses	$	31,118	$	419	$	31,537

Unfunded lending commitments(1)	$	2,594	$	—	$	2,594
Total allowance for credit losses	$	33,712	$	419	$	34,131

	December 31, 2023
(dollars in thousands)	Collectively Evaluated		Individually Evaluated(2)		Total
Loans:
One- to four-family first mortgage	$	433,401	$	—	$	433,401
Home equity loans and lines	68,977		—		68,977
Commercial real estate	1,188,734		3,957		1,192,691
Construction and land	340,577		147		340,724
Multi-family residential	107,263		—		107,263
Commercial and industrial	405,547		112		405,659
Consumer	32,923		—		32,923
Total loans	$	2,577,422	$	4,216	$	2,581,638

(1)The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition.

(2)One PCD loan was individually evaluated at September 30, 2024 and December 31, 2023, respectively.

A summary of activity in the ACL for the nine months ended September 30, 2024 and September 30, 2023 follows.


	Nine Months Ended September 30, 2024
(dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Reversal)		Ending Balance
Allowance for credit losses:
One- to four-family first mortgage	$	3,255	$	—	$	4	$	1,143	$	4,402
Home equity loans and lines	688		—		35		62		785
Commercial real estate	14,805		—		—		(1,334)		13,471
Construction and land	5,415		(123)		—		(125)		5,167
Multi-family residential	474		—		12		593		1,079
Commercial and industrial	6,166		(719)		151		1,079		6,677
Consumer	734		(188)		27		124		697
Total allowance for loan losses	$	31,537	$	(1,030)	$	229	$	1,542	$	32,278

Unfunded lending commitments	$	2,594	$	—	$	—	$	(134)	$	2,460
Total allowance for credit losses	$	34,131	$	(1,030)	$	229	$	1,408	$	34,738


	Nine Months Ended September 30, 2023
(dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Reversal)		Ending Balance
Allowance for credit losses:
One- to four-family first mortgage	$	2,883	$	—	$	43	$	394	$	3,320
Home equity loans and lines	624		—		5		113		742
Commercial real estate	13,814		—		55		546		14,415
Construction and land	4,680		—		—		443		5,123
Multi-family residential	572		—		—		(49)		523
Commercial and industrial	6,024		(86)		165		163		6,266
Consumer	702		(62)		28		66		734
Total allowance for loan losses	$	29,299	$	(148)	$	296	$	1,676	$	31,123

Unfunded lending commitments	$	2,093	$	—	$	—	$	361	$	2,454
Total allowance for credit losses	$	31,392	$	(148)	$	296	$	2,037	$	33,577

Credit Quality

The following tables present the Company’s loan portfolio by credit quality classification and origination year as of September 30, 2024 and December 31, 2023.


	September 30, 2024
	Term Loans by Origination Year
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
One- to four-family first mortgage:
Pass	$	49,873	$	95,784	$	111,876	$	79,276	$	32,353	$	99,400	$	24,832	$	786	$	494,180
Special Mention	—		147		493		186		—		33		—		—		859
Substandard	59		1,040		3,067		657		318		2,604		—		—		7,745
Doubtful	—		—		—		—		—		—		—		—		—
Total one- to four-family first mortgages	$	49,932	$	96,971	$	115,436	$	80,119	$	32,671	$	102,037	$	24,832	$	786	$	502,784
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines:
Pass	$	1,368	$	1,257	$	2,543	$	1,450	$	642	$	3,780	$	69,412	$	277	$	80,729
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		67		—		—		110		29		—		206
Doubtful	—		—		—		—		—		—		—		—		—
Total home equity loans and lines	$	1,368	$	1,257	$	2,610	$	1,450	$	642	$	3,890	$	69,441	$	277	$	80,935
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	102,717	$	129,040	$	298,076	$	222,855	$	160,668	$	184,390	$	23,614	$	3,971	$	1,125,331
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		1,754		2,053		2,804		11,210		—		—		17,821
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate loans	$	102,717	$	129,040	$	299,830	$	224,908	$	163,472	$	195,600	$	23,614	$	3,971	$	1,143,152
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and land:
Pass	$	92,915	$	131,773	$	75,708	$	6,980	$	6,663	$	3,193	$	6,247	$	272	$	323,751
Special Mention	—		—		162		—		145		1		—		—		308
Substandard	—		—		1,844		253		4		25		—		3,602		5,728
Doubtful	—		—		—		—		—		—		—		—		—
Total construction and land loans	$	92,915	$	131,773	$	77,714	$	7,233	$	6,812	$	3,219	$	6,247	$	3,874	$	329,787
Current period gross charge-offs	$	—	$	—	$	123	$	—	$	—	$	—	$	—	$	—	$	123


	September 30, 2024
	Term Loans by Origination Year
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Multi-family residential:
Pass	$	27,342	$	24,655	$	45,458	$	22,574	$	14,675	$	31,022	$	1,433	$	1,354	$	168,513
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		930		—		930
Doubtful	—		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	27,342	$	24,655	$	45,458	$	22,574	$	14,675	$	31,022	$	2,363	$	1,354	$	169,443
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial:
Pass	$	63,440	$	65,063	$	65,955	$	20,059	$	6,946	$	4,996	$	180,739	$	2,190	$	409,388
Special Mention	705		—		143		—		264		136		—		—		1,248
Substandard	1,344		32		88		345		48		35		211		14		2,117
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	65,489	$	65,095	$	66,186	$	20,404	$	7,258	$	5,167	$	180,950	$	2,204	$	412,753
Current period gross charge-offs	$	—	$	17	$	317	$	53	$	—	$	3	$	329	$	—	$	719
Consumer:
Pass	$	4,671	$	3,650	$	2,106	$	421	$	649	$	9,496	$	8,304	$	5	$	29,302
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		5		6		—		119		—		—		130
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer loans	$	4,671	$	3,650	$	2,111	$	427	$	649	$	9,615	$	8,304	$	5	$	29,432
Current period gross charge-offs	$	7	$	32	$	21	$	—	$	10	$	8	$	110	$	—	$	188
Total loans:
Pass	$	342,326	$	451,222	$	601,722	$	353,615	$	222,596	$	336,277	$	314,581	$	8,855	$	2,631,194
Special Mention	705		147		798		186		409		170		—		—		2,415
Substandard	1,403		1,072		6,825		3,314		3,174		14,103		1,170		3,616		34,677
Doubtful	—		—		—		—		—		—		—		—		—
Total loans	$	344,434	$	452,441	$	609,345	$	357,115	$	226,179	$	350,550	$	315,751	$	12,471	$	2,668,286
Current period gross charge-offs	$	7	$	49	$	461	$	53	$	10	$	11	$	439	$	—	$	1,030


	December 31, 2023
	Term Loans by Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
One- to four-family first mortgage:
Pass	$	94,465	$	106,417	$	72,594	$	33,588	$	27,677	$	91,706	$	3,059	$	458	$	429,964
Special Mention	149		497		188		—		—		34		—		—		868
Substandard	—		165		117		306		60		1,921		—		—		2,569
Doubtful	—		—		—		—		—		—		—		—		—
Total one- to four-family first mortgages	$	94,614	$	107,079	$	72,899	$	33,894	$	27,737	$	93,661	$	3,059	$	458	$	433,401
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	12	$	—	$	—	$	12
Home equity loans and lines:
Pass	$	1,864	$	1,652	$	1,231	$	760	$	1,117	$	3,138	$	57,768	$	1,240	$	68,770
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		150		29		28		207
Doubtful	—		—		—		—		—		—		—		—		—
Total home equity loans and lines	$	1,864	$	1,652	$	1,231	$	760	$	1,117	$	3,288	$	57,797	$	1,268	$	68,977
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	161,755	$	292,494	$	252,109	$	184,935	$	137,154	$	104,533	$	44,225	$	855	$	1,178,060
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		16		1,441		2,652		5,490		5,032		—		—		14,631
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate loans	$	161,755	$	292,510	$	253,550	$	187,587	$	142,644	$	109,565	$	44,225	$	855	$	1,192,691
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	29	$	—	$	—	$	29
Construction and land:
Pass	$	121,389	$	150,667	$	33,247	$	6,641	$	7,672	$	4,567	$	5,439	$	—	$	329,622
Special Mention	929		164		4,635		146		—		—		—		—		5,874
Substandard	—		609		528		—		—		44		4,047		—		5,228
Doubtful	—		—		—		—		—		—		—		—		—
Total construction and land loans	$	122,318	$	151,440	$	38,410	$	6,787	$	7,672	$	4,611	$	9,486	$	—	$	340,724
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential:
Pass	$	14,907	$	37,228	$	11,843	$	21,558	$	12,548	$	3,213	$	2,463	$	—	$	103,760
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		3,503		—		—		3,503


	December 31, 2023
	Term Loans by Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Doubtful	—		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	14,907	$	37,228	$	11,843	$	21,558	$	12,548	$	6,716	$	2,463	$	—	$	107,263
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial:
Pass	$	73,674	$	79,886	$	30,412	$	10,674	$	4,954	$	3,386	$	191,946	$	7,800	$	402,732
Special Mention	—		784		—		264		—		138		—		—		1,186
Substandard	1,389		38		54		7		2		100		129		22		1,741
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	75,063	$	80,708	$	30,466	$	10,945	$	4,956	$	3,624	$	192,075	$	7,822	$	405,659
Current period gross charge-offs	$	—	$	—	$	—	$	124	$	7	$	—	$	124	$	—	$	255
Consumer:
Pass	$	5,941	$	5,734	$	872	$	887	$	359	$	10,698	$	8,068	$	75	$	32,634
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		13		7		—		7		262		—		—		289
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer loans	$	5,941	$	5,747	$	879	$	887	$	366	$	10,960	$	8,068	$	75	$	32,923
Current period gross charge-offs	$	3	$	34	$	3	$	6	$	—	$	4	$	125	$	—	$	175
Total loans:
Pass	$	473,995	$	674,078	$	402,308	$	259,043	$	191,481	$	221,241	$	312,968	$	10,428	$	2,545,542
Special Mention	1,078		1,445		4,823		410		—		172		—		—		7,928
Substandard	1,389		841		2,147		2,965		5,559		11,012		4,205		50		28,168
Doubtful	—		—		—		—		—		—		—		—		—
Total loans	$	476,462	$	676,364	$	409,278	$	262,418	$	197,040	$	232,425	$	317,173	$	10,478	$	2,581,638
Current period gross charge-offs	$	3	$	34	$	3	$	130	$	7	$	45	$	249	$	—	$	471

The above classifications follow regulatory guidelines and can generally be described as follows:

•Pass loans are of satisfactory quality.

•Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values.

•Substandard loans have an existing specific and well-defined weakness that may include poor liquidity and deterioration of financial performance. Such loans may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.

•Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable.

In addition, residential loans are classified using an inter-agency regulatory methodology that incorporates, among other factors, the extent of delinquencies and loan-to-value ratios. These classifications were the most current available as of the dates indicated and were generally updated within the quarter.

Age analysis of past due loans as of the dates indicated are as follows.


	September 30, 2024
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans



























Real estate loans:
One- to four-family first mortgage	$	2,986	$	1,164	$	6,220	$	10,370	$	492,414	$	502,784
Home equity loans and lines	297		—		51		348		80,587		80,935
Commercial real estate	9,965		—		1,116		11,081		1,132,071		1,143,152
Construction and land	666		—		2,083		2,749		327,038		329,787
Multi-family residential	—		—		—		—		169,443		169,443
Total real estate loans	13,914		1,164		9,470		24,548		2,201,553		2,226,101
Other loans:
Commercial and industrial	156		336		617		1,109		411,644		412,753
Consumer	205		20		8		233		29,199		29,432
Total other loans	361		356		625		1,342		440,843		442,185
Total loans	$	14,275	$	1,520	$	10,095	$	25,890	$	2,642,396	$	2,668,286


	December 31, 2023
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans



























Real estate loans:
One- to four-family first mortgage	$	4,410	$	1,475	$	798	$	6,683	$	426,718	$	433,401
Home equity loans and lines	162		1		35		198		68,779		68,977
Commercial real estate	112		3,414		—		3,526		1,189,165		1,192,691
Construction and land	432		1		1,151		1,584		339,140		340,724
Multi-family residential	—		—		—		—		107,263		107,263
Total real estate loans	5,116		4,891		1,984		11,991		2,131,065		2,143,056
Other loans:
Commercial and industrial	596		11		221		828		404,831		405,659
Consumer	416		143		55		614		32,309		32,923
Total other loans	1,012		154		276		1,442		437,140		438,582
Total loans	$	6,128	$	5,045	$	2,260	$	13,433	$	2,568,205	$	2,581,638

There were $34,000 and $0 of loans greater than 90 days past due and accruing at September 30, 2024 and December 31, 2023, respectively.

The following tables summarize information pertaining to nonaccrual loans as of dates indicated.


	September 30, 2024
(dollars in thousands)		With Related Allowance		Without Related Allowance		Total
Nonaccrual loans(1):
One- to four-family first mortgage		$	7,750	$	—	$	7,750
Home equity loans and lines		208		—		208
Commercial real estate		4,011		3,053		7,064
Construction and land		2,127		—		2,127
Multi-family residential		—		—		—
Commercial and industrial		777		—		777
Consumer		129		—		129
Total		$	15,002	$	3,053	$	18,055

	December 31, 2023
(dollars in thousands)		With Related Allowance		Without Related Allowance		Total
Nonaccrual loans(1):
One- to four-family first mortgage		$	1,600	$	—	$	1,600
Home equity loans and lines		208		—		208
Commercial real estate		2,655		2,548		5,203
Construction and land		1,181		—		1,181
Multi-family residential		—		—		—
Commercial and industrial		331		—		331
Consumer		291		—		291
Total		$	6,266	$	2,548	$	8,814

(1)Nonaccrual acquired loans include PCD loans of $1,284,000 and $1,410,000 at September 30, 2024 and December 31, 2023, respectively.

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. All payments received while on nonaccrual status are applied against the principal balance of nonaccrual loans. The Company does not recognize interest income while loans are on nonaccrual status.

Collateral Dependent Loans

The Company held loans that were individually evaluated for credit losses at September 30, 2024 and December 31, 2023 for which the repayment, on the basis of our assessment at the reporting date, is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The ACL for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the types of collateral that secure collateral dependent loans:

•One- to four-family first mortgages are primarily secured by first liens on residential real estate.

•Home equity loans and lines are primarily secured by first and junior liens on residential real estate.

•Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotels and restaurants.

•Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land.

•Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment.

The tables below summarize collateral dependent loans and the related ACL at September 30, 2024 and December 31, 2023.


	September 30, 2024
(dollars in thousands)	Loans		ACL
One- to four-family first mortgage	$	—	$	—
Home equity loans and lines	—		—
Commercial real estate	4,337		200
Construction and land	—		—
Multi-family residential	—		—
Commercial and industrial	52		42
Consumer	—		—
Total	$	4,389	$	242

	December 31, 2023
(dollars in thousands)	Loans		ACL
One- to four-family first mortgage	$	—	$	—
Home equity loans and lines	—		—
Commercial real estate	3,957		201
Construction and land	147		123
Multi-family residential	—		—
Commercial and industrial	112		95
Consumer	—		—
Total	$	4,216	$	419

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, term extension, an other-than-insignificant payment delay, interest only for a specified period of time, an interest rate reduction, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-off. The balance of loan modifications, segregated by type of modification, to borrowers experiencing financial difficulty are set forth in the tables below for the periods indicated.

Three Months Ended September 30, 2024

(dollars in thousands)

Payment Deferral

Principal Forgiveness

Term Extension

Interest Rate Reduction

Combination Term Extension and Principal Forgiveness

Combination Term Extension and Interest Rate Reduction

Percent of Total Class of Loans

One-to four-family first mortgage

—

Home equity loans and lines

—

Commercial real estate

—

Construction and land

—

Multi-family residential

—

Commercial and industrial

—

Consumer

—

Total

—

Three Months Ended September 30, 2023

(dollars in thousands)

Payment Deferral

Principal Forgiveness

Term Extension

Interest Rate Reduction

Combination Term Extension and Principal Forgiveness

Combination Term Extension and Interest Rate Reduction

Percent of Total Class of Loans

One-to four-family first mortgage

—

Home equity loans and lines

—

Commercial real estate

—

Construction and land

—

Multi-family residential

—

Commercial and industrial

—

Consumer

—

Total

—


	Nine Months Ended September 30, 2024
(dollars in thousands)	Payment Deferral		Principal Forgiveness		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Percent of Total Class of Loans
One-to four-family first mortgage	$	—	$	—	$	639	$	—	$	—	$	—	0.1	%
Home equity loans and lines	—		—		—		—		—		—		—
Commercial real estate	—		—		1,028		—		—		—		0.1
Construction and land	—		—		27		—		—		—		—
Multi-family residential	—		—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—
Total	$	—	$	—	$	1,694	$	—	$	—	$	—	0.1	%


	Nine Months Ended September 30, 2023
(dollars in thousands)	Payment Deferral		Principal Forgiveness		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Percent of Total Class of Loans
One-to four-family first mortgage	$	—	$	—	$	1,060	$	—	$	—	$	—	0.3	%
Home equity loans and lines	—		—		—		—		—		—		—
Commercial real estate	283		—		1,129		—		—		—		0.1
Construction and land	—		—		32		—		—		—		—
Multi-family residential	—		—		—		—		—		—		—
Commercial and industrial	—		—		1,569		—		—		—		0.4
Consumer	—		—		—		—		—		—		—
Total	$	283	$	—	$	3,790	$	—	$	—	$	—	0.2	%

During the nine months ended September 30, 2024 and 2023, no loan experienced a default subsequent to being granted a payment deferral or term extension. Default is defined as movement to past due 90 days, foreclosure or charge-off, whichever occurs first.

The following table details the financial impacts of loan modifications made to borrowers experiencing financial difficulty for the periods presented.


	Nine Months Ended September 30, 2024		Nine months ended September 30, 2023
	Minimum Term Extensions (in months)	Maximum Term Extensions (in months)	Payment Deferral (dollars in thousands)		Minimum Term Extensions (in months)	Maximum Term Extensions (in months)
One-to four-family first mortgage	12	96	$	—	12	24
Home equity loans and lines	0	0	—		0	0
Commercial real estate	12	12	9		0	12
Construction and land	12	12	—		12	12
Multi-family residential	0	0	—		0	0
Commercial and industrial	0	0	—		10	10
Consumer	0	0	—		0	0

The table below reflects the performance of loans that have been modified in the last 12 months.


(dollars in thousands)	30-89 Days Past Due		90+ Days Past Due		Nonaccrual		Current		Total
September 30, 2024
One-to four-family first mortgage	$	208	$	—	$	—	$	431	$	639
Home equity loans and lines	—		—		—		53		53
Commercial real estate	1,028		—		—		—		1,028
Construction and land	27		—		—		—		27
Multi-family residential	—		—		—		—		—
Commercial and industrial	—		—		—		—		—
Consumer	—		—		—		—		—
Total	$	1,263	$	—	$	—	$	484	$	1,747

The loan modifications reported in the table above did not significantly impact the Company's allowance for loan losses during 2024.

Foreclosed Assets and ORE

Foreclosed assets and ORE include real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE totaled $267,000 and $1,575,000 at September 30, 2024 and December 31, 2023, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

The carrying amount of foreclosed residential real estate properties held at September 30, 2024 and December 31, 2023 totaled $267,000 and $115,000, respectively. Loans secured by single family residential real estate that were in the process of foreclosure at September 30, 2024 and December 31, 2023 totaled $4,862,000 and $517,000, respectively.

6. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

The Company’s existing credit derivatives result from loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company occasionally enters into credit risk participation agreements with counterparty banks to accept a portion of the credit risk related to interest rate swaps. The agreements, which are typically executed in conjunction with a participation in a loan with the same customer, allow customers to execute an interest rate swap with one bank while allowing for the distribution of the credit risk among participating members. Collateral used to support the credit risk for the underlying lending relationship is also available to offset the risk of credit risk participations and customer derivative positions.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. As part of its efforts to accomplish this objective, the Company entered into certain interest rate swap agreements as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable rate liabilities.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate liabilities. During the next twelve months, the Company estimates that an additional $1,500,000 will be reclassified as additional interest expense.

Non-designated Hedges

Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings through other income.

Fair Values of Derivative Instruments

The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statement of Financial Condition as of September 30, 2024 and December 31, 2023.


	September 30, 2024
	Derivative Assets(1)				Derivative Liabilities(1)
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps - variable rate liabilities	$	60,000	$	2,524	$	20,000	$	36

Derivatives not designated as hedging instruments:
Interest rate contracts	$	9,000	$	439	$	9,000	$	493
Risk participation agreements	—		—		11,613		2

Netting adjustments			—				—


Net derivative amounts			$	2,963			$	531


	December 31, 2023
	Derivative Assets(1)				Derivative Liabilities(1)
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps - variable rate liabilities	$	60,000	$	3,914	$	—	$	—

Derivatives not designated as hedging instruments:
Risk participation agreements	—		—		11,797		3

Netting adjustments			—				—


Net derivative amounts			$	3,914			$	3

(1)Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition.

At September 30, 2024 and December 31, 2023, accumulated unrealized gains, net of taxes, on derivative instruments totaled $1,813,000 and $2,928,000, respectively.

Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income and the Consolidated Statements of Income

The tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income and the Consolidated Statements of Income as of September 30, 2024 and September 30, 2023.


	Three Months Ended September 30, 2024
	Amount of Loss Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	(987)	$	(987)	Interest income	$	619	$	619


	Nine Months Ended September 30, 2024

	Amount of Gain Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	418	$	418	Interest income	$	1,830	$	1,830


	Three Months Ended September 30, 2023
	Amount of Gain Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	785	$	785	Interest income	$	602	$	602


	Nine Months Ended September 30, 2023
	Amount of Gain Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	2,047	$	2,047	Interest income	$	1,571	$	1,571

Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements of Income as of September 30, 2024 and September 30, 2023.


(dollars in thousands)	Location of (Loss) Income Recognized on Non-designated Hedges	Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
Effects of non-designated hedges
Interest rate contracts	Other noninterest expense	$	(25)	$	(54)
Risk participation agreements	Other noninterest income	$	(1)	$	1

(dollars in thousands)	Location of Income Recognized on Non-designated Hedges	Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Effects of non-designated hedges
Risk participation agreements	Other noninterest income	$	6	$	8

Derivative fee income from non-designated hedges totaled $0 and $175,000 for the three and nine months ended September 30, 2024, respectively. There was no derivative fee income from non-designated hedges for the three and nine months ended September 30, 2023.

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision to the effect that, if the Company (either) defaults (or is capable of being declared in default) on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with certain of its derivative counterparties that contain a provision to the effect that, if the Company fails to maintain its status as a well or adequately capitalized institution, then the Company could be required to post additional collateral.

As of September 30, 2024, there were no derivatives with credit-risk-related contingent features in a net liability position. Such derivatives are measured at fair value, which includes accrued interest but excludes any adjustment for nonperformance risk. If the Company had breached any provisions at September 30, 2024, it would not have been required to settle any obligations under the agreements since the termination value was $0.

7. Long-term Debt and Borrowings

Subordinated Debt

On June 30, 2022, the Company issued $55,000,000 in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes (the "Notes") due 2032. The Notes were issued at a price equal to 100% of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75% per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The carrying value of subordinated debt was $54,402,000 and $54,241,000 at September 30, 2024 and December 31, 2023, respectively. The subordinated debt was recorded net of issuance costs which is being amortized using the straight-line method over five years.

Other Borrowings

On March 12, 2023, the Federal Reserve Board created the BTFP, which offers loans to banks with a term up to one year with no prepayment penalty. The loans are secured by pledging qualifying securities and are valued at par for collateral. In January 2024, the Bank participated in the BTFP and had an outstanding debt of $135,000,000 at September 30, 2024 with a fixed rate of 4.76%. The average balance of other borrowings, which included the BTFP loan was $140,539,000 for the third quarter of 2024, an increase of $135,000,000 compared to the third quarter of 2023.

Federal Home Loan Bank Advances

The average balance of total FHLB advances was $56,743,000 for the third quarter of 2024, a decrease of $216,344,000 compared to the third quarter of 2023.

The Company had short-term FHLB advances in the amount of $0 as of September 30, 2024 compared to $150,000,000 as of December 31, 2023. At September 30, 2024 and December 31, 2023, the Company had $38,410,000 and $42,713,000 in long-term FHLB advances, respectively, and $1,147,306,000 and $1,020,494,000 in additional FHLB advances available, respectively.

The following table summarizes long-term FHLB advances as of September 30, 2024 and December 31, 2023.


	September 30, 2024				December 31, 2023
(dollars in thousands)	Amount		Weighted Average Rate		Amount		Weighted Average Rate
Fixed rate advances maturing in:
2024	$	13	2.26	%	$	4,076	1.71	%
2025	35,234		3.49		35,375		3.48
2026	3,163		1.56		3,262		1.58
Total FHLB advances	$	38,410	3.33	%	$	42,713	3.17	%

8. Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company groups assets and liabilities measured or disclosed at fair value in three levels as required by ASC 820, Fair Value Measurements and Disclosures. Under this guidance, fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels used to measure fair value are as follows:

•Level 1 – Quoted prices in active markets for identical assets or liabilities.

•Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities quarterly.

Recurring Basis

Investment Securities Available for Sale

Fair values of investment securities available for sale are primarily measured using information from a third-party pricing service. This pricing service provides pricing information by utilizing pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities bids, offers and other reference data from market research publications. If quoted prices are available in an active market, investment securities are classified as Level 1 measurements. If quoted prices are not available in an active market, fair values are estimated primarily by the use of pricing models. Level 2 investment securities are primarily comprised of mortgage-backed securities issued by government agencies and U.S. government-sponsored enterprises. In certain cases, where there is limited or less transparent information provided by the Company’s third-party pricing service, fair value is estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes. Investment securities are classified within Level 3 when little or no market activity supports the fair value.

Management primarily identifies investment securities which may have traded in illiquid or inactive markets, by identifying instances of a significant decrease in the volume and frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Investment securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant unobservable inputs. For example, management may use quoted prices for similar investment securities in the absence of a liquid and active market for the investment securities being valued. As of September 30, 2024, management did not make adjustments to prices provided by the third-party pricing service as a result of illiquid or inactive markets.

Derivative Assets and Liabilities

Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition. The fair value of these derivative financial instruments is obtained from a third-party pricing service that uses widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following tables present the balances of assets measured for fair value on a recurring basis as of September 30, 2024 and December 31, 2023.


(dollars in thousands)	September 30, 2024		Level 1		Level 2		Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed	$	273,581	$	—	$	273,581	$	—
Collateralized mortgage obligations	75,438		—		75,438		—
Municipal bonds	47,770		—		47,770		—
U.S. government agency	17,490		—		17,490		—
Corporate bonds	6,444		—		6,444		—
Total	$	420,723	$	—	$	420,723	$	—

Derivative assets	$	2,963	$	—	$	2,963	$	—
Total	$	423,686	$	—	$	423,686	$	—

Liabilities
Derivative liabilities	$	531	$	—	$	531	$	—


(dollars in thousands)	December 31, 2023		Level 1		Level 2		Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed	$	283,853	$	—	$	283,853	$	—
Collateralized mortgage obligations	79,262		—		79,262		—
Municipal bonds	46,674		—		46,674		—
U.S. government agency	18,049		—		18,049		—
Corporate bonds	6,088		—		6,088		—
Total	$	433,926	$	—	$	433,926	$	—

Derivative assets	$	3,914	$	—	$	3,914	$	—
Total	$	437,840	$	—	$	437,840	$	—

Liabilities
Derivative liabilities	$	3	$	—	$	3	$	—

Nonrecurring Basis

The Company records loans individually evaluated for credit losses at fair value on a nonrecurring basis. Fair value is measured at the fair value of the collateral for collateral-dependent loans. For non-collateral-dependent loans, fair value is measured by present valuing expected future cash flows. Loans individually evaluated are classified as Level 3 assets when measured using appraisals from third parties of the collateral less any prior liens and when there is no observable market price.

Foreclosed assets and ORE are also recorded at fair value on a nonrecurring basis. Foreclosed assets are initially recorded at fair value less estimated costs to sell. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. The fair value of foreclosed assets and ORE is based on property appraisals and an analysis of similar properties available. As such, the Company classifies foreclosed and ORE assets as Level 3 assets.

The Company has segregated all financial assets that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date as reflected in the table below.


			Fair Value Measurements Using
(dollars in thousands)	September 30, 2024		Level 1		Level 2		Level 3
Assets
Loans individually evaluated	$	4,147	$	—	$	—	$	4,147
Foreclosed assets and ORE	267		—		—		267
Total	$	4,414	$	—	$	—	$	4,414

			Fair Value Measurements Using
(dollars in thousands)	December 31, 2023		Level 1		Level 2		Level 3
Assets
Loans individually evaluated	$	3,797	$	—	$	—	$	3,797
Foreclosed assets and ORE	1,575		—		—		1,575
Total	$	5,372	$	—	$	—	$	5,372

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets.

(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Inputs

Range of Discounts

Weighted Average Discount

September 30, 2024

Loans individually evaluated

4,147

Third party appraisals and discounted cash flows

Collateral values, market discounts and estimated costs to sell

0% - 80%

Foreclosed assets and ORE

267

Third party appraisals, sales contracts, broker price opinions

Collateral values, market discounts and estimated costs to sell

0% - 55%

29%

(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Inputs

Range of
Discounts

Weighted Average Discount

December 31, 2023

Loans individually evaluated

3,797

Third party appraisals and discounted cash flows

Collateral values, market discounts and estimated costs to sell

0% - 89%

10%

Foreclosed assets and ORE

1,575

Third party appraisals, sales contracts, broker price opinions

Collateral values, market discounts and estimated costs to sell

31% - 71%

62%

ASC 820, Fair Value Measurements and Disclosures, requires the disclosure of each class of financial instruments for which it is practicable to estimate. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statements. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates included herein are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the fair value of assets and liabilities that are not required to be recorded or disclosed at fair value like premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Methods and assumptions used to estimate fair value of each class of financial instruments for which it is practicable to estimate fair value are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. The Company classifies this debt in Level 2 of the fair value table. There have been no other material changes from the fair value estimate methods and assumptions previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The following table presents estimated fair values of the Company’s financial instruments as of the dates indicated.


			Fair Value Measurements at September 30, 2024
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	135,877	$	135,877	$	135,877	$	—	$	—

Investment securities available for sale	420,723		420,723		—		420,723		—
Investment securities held to maturity	1,065		1,066		—		1,066		—
Mortgage loans held for sale	242		242		—		242		—
Loans, net	2,636,008		2,581,466		—		2,577,319		4,147
Cash surrender value of BOLI	48,139		48,139		48,139		—		—
Derivative assets(1)	2,963		2,963		—		2,963		—
Financial Liabilities
Deposits	$	2,777,487	$	2,775,298	$	2,053,186	$	722,112	$	—
Other borrowings	140,539		140,539		—		140,539		—
Subordinated debt, net of issuance cost	54,402		54,402		—		54,402		—

Long-term FHLB advances	38,410		38,411		—		38,411		—
Derivative liabilities(1)	531		531		—		531		—

			Fair Value Measurements at December 31, 2023
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	75,831	$	75,831	$	75,831	$	—	$	—
Interest-bearing deposits in banks	99		99		99		—		—
Investment securities available for sale	433,926		433,926		—		433,926		—
Investment securities held to maturity	1,065		1,066		—		1,066		—
Mortgage loans held for sale	361		361		—		361		—
Loans, net	2,550,101		2,381,863		—		2,378,066		3,797
Cash surrender value of BOLI	47,321		47,321		47,321		—		—
Derivative assets(1)	3,914		3,914		—		3,914		—
Financial Liabilities
Deposits	$	2,670,624	$	2,665,590	$	2,025,890	$	639,700	$	—
Other borrowings	5,539		5,498		—		5,498		—
Subordinated debt, net of issuance cost	54,241		50,865		—		50,865		—
Short-term FHLB advances	150,000		150,000		150,000		—		—
Long-term FHLB advances	42,713		41,792		—		41,792		—
Derivative liabilities(1)	3		3		—		3		—


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2023 through September 30, 2024 and on its results of operations for the three and nine months ended September 30, 2024 and 2023. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Forward-Looking Statements

To the extent that statements in this Form 10-Q relate to future plans, objectives, financial results or performance of the Company or Bank, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the current economic environment, are generally identified by the use of words such as “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions, or by future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly”. The Company’s or the Bank’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Certain risks, uncertainties and other factors, including those set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2023 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, may cause actual results to differ materially from the results discussed in the forward-looking statements appearing in this discussion and analysis and may include factors such as, but not limited to, our lending activities, our use of municipal deposits as a source of funds, credit quality and risk, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic and market conditions in the markets we operate in or generally in the United States, funds availability, accounting estimates and risk management processes, legislative and regulatory changes, the fair values of our acquired assets and our investment securities portfolio, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

EXECUTIVE OVERVIEW

The Company reported net income for the third quarter of 2024 of $9.4 million, or $1.18 diluted EPS, down $317,000 compared to the third quarter of 2023. Net income for the third quarter of 2023 totaled $9.8 million, or $1.22 diluted EPS. For the nine months ended September 30, 2024, the Company reported net income $26.8 million, or $3.34 diluted EPS, down $4.1 million from $30.9 million, or $3.82 diluted EPS, reported for the nine months ended September 30, 2023.

Key components of the Company’s performance during the three and nine months ended September 30, 2024 include:

•Assets increased $121.9 million, or 3.7%, from December 31, 2023 to $3.4 billion at September 30, 2024.

•Total loans were $2.7 billion at September 30, 2024, up $86.6 million, or 3.4%, from December 31, 2023.

•During the three and nine months ended September 30, 2024, the Company provisioned $140,000 and $1.5 million, respectively, to the allowance for loan losses, primarily due to loan growth and net charge-offs. During the three and nine months ended September 30, 2023, the Company provisioned $351,000 and $1.7 million, respectively, to the allowance for loan losses.

•The ALL totaled $32.3 million, or 1.21% of total loans, at September 30, 2024 compared to $31.5 million, or 1.22% of total loans, at December 31, 2023. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $34.7 million, or 1.30% of total loans, at September 30, 2024 compared to $34.1 million, or 1.32% of total loans, at December 31, 2023.

•Nonperforming assets increased $8.0 million, or 76.7%, from $10.4 million, or 0.31% of total assets, at December 31, 2023 to $18.4 million, or 0.53% of total assets, at September 30, 2024. The increase in nonperforming assets was primarily due to four loan relationships being downgraded to substandard during the 2024 period.

•Total deposits amounted to $2.8 billion at September 30, 2024, an increase of $106.9 million, or 4.0%, from December 31, 2023.

•The net interest margin was 3.71% and 3.67% for the three and nine months ended September 30, 2024, respectively, down 4 bps and down 28 bps from the three and nine months ended September 30, 2023, respectively.

•The average rate paid on total interest-bearing deposits was 2.78% for the third quarter of 2024, which was up 94 bps from the third quarter of 2023. For the nine months ended September 30, 2024, the average rate paid on total interest-bearing deposits was 2.66%, up 134 bps from the nine months ended September 30, 2023.

•Total interest expense for the third quarter of 2024 was up $4.4 million, or 35.2%, compared to the third quarter of 2023 primarily due to the rising interest rate environment and the higher cost of deposits. For the nine months ended September 30, 2024, total interest expense was up $19.4 million, or 67.3%, from the comparable period in 2023.

•Noninterest income for the third quarter of 2024 was down $707,000, or 16.1%, compared to the third quarter of 2023, primarily due to a decrease in gain on sale of loans (down $492,000) and a decrease in bank card fees (down $290,000), which were partially offset with an increase in other income (up $55,000). For the nine months ended September 30, 2024, noninterest income was down $162,000, or 1.5%, from the comparable period in 2023 primarily due to a decrease bank card fees (down $466,000) and a decrease in gain on sale of loans (down $362,000), which were partially offset with an increase in other income (up $336,000) and the absence of net loss on sale of securities totaling $249,000 during the first quarter of 2023.

•Noninterest expense for the third quarter of 2024 was up $920,000, or 4.3%, compared to the third quarter of 2023, primarily due to increases in compensation and benefits (up $566,000), data processing and communication (up $150,000), occupancy (up $322,000), and other expenses (up $267,000), which were partially offset with a decrease in marketing and advertising (down $256,000). For the nine months ended September 30, 2024, noninterest expense was up $2.7 million, or 4.3%, from the comparable period in 2023 primarily due to the absence of a recovery of a previous loss on a foreclosed asset that occurred in the first quarter of 2023 in the amount of $739,000, increases in data processing and communication expense (up $766,000), other noninterest expense (up $687,000), occupancy (up $582,000) and compensation and benefits (up $484,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $495,000).

FINANCIAL CONDITION

Loans, Allowance for Credit Losses and Asset Quality

Loans

Total loans at September 30, 2024 were $2.7 billion, up $86.6 million, or 3.4%, from December 31, 2023.

The following table summarizes the composition of the Company’s loan portfolio as of the dates indicated.


(dollars in thousands)	September 30, 2024		December 31, 2023		Increase/(Decrease)
Real estate loans:
One-to four-family first mortgage	$	502,784	$	433,401	$	69,383	16.0	%
Home equity loans and lines	80,935		68,977		11,958		17.3
Commercial real estate	1,143,152		1,192,691		(49,539)		(4.2)
Construction and land	329,787		340,724		(10,937)		(3.2)
Multi-family residential	169,443		107,263		62,180		58.0
Total real estate loans	2,226,101		2,143,056		83,045		3.9	%
Other loans:
Commercial and industrial	412,753		405,659		7,094		1.7
Consumer	29,432		32,923		(3,491)		(10.6)
Total other loans	442,185		438,582		3,603		0.8
Total loans	$	2,668,286	$	2,581,638	$	86,648	3.4	%

Allowance for Credit Losses

The ACL which equals the sum of the ALL and the ACL on unfunded lending commitments, is established through provisions for credit losses. Management recalculates the ACL at least quarterly to reassess the estimate of credit losses for the total portfolio at the relevant reporting date. Under ASC Topic 326, the ACL is measured on a pool basis when similar risk characteristics exist. For each pool of loans, management also evaluates and applies qualitative adjustments to the calculated ACL based on several factors, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of nonperforming assets,

changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.

The ACL policy described above is supplemented by periodic reviews and validations performed by independent loan reviewers. The results of the reviews are reported to the Audit Committee of the Board of Directors. The establishment of the ACL is significantly affected by management judgment. There is likelihood that different amounts would be reported under different conditions or assumptions. Federal regulatory agencies, as an integral part of their examination process, periodically review our ACL. Such agencies may require management to make additional provisions for estimated losses based upon judgments different from those of management.

We continue to monitor and modify our ACL as conditions warrant. No assurance can be given that our level of ACL will cover all of the losses on our loans or that future adjustments to the ACL will not be necessary if economic and other conditions differ substantially from the assumptions used by management to determine the current level of the ACL.

At September 30, 2024, the ALL totaled $32.3 million, or 1.21% of total loans, up $741,000 from $31.5 million, or 1.22% of total loans, at December 31, 2023. During the nine months ended September 30, 2024, the Company provisioned $1.5 million of the allowance loan losses primarily due to loan growth and net charge-offs. Net loan charge-offs totaled $801,000 for the nine months ended September 30, 2024.

Asset Quality

One of management’s key objectives has been, and continues to be, maintaining a high level of asset quality. In addition to maintaining credit standards for new loan originations, we proactively monitor loans and collection and workout processes of delinquent or problem loans. When a borrower fails to make a scheduled payment, we attempt to cure the deficiency by making personal contact with the borrower. Initial contacts are generally made within 10 days after the date payment is due. In most cases, deficiencies are promptly resolved. If the delinquency continues, late charges are assessed and additional efforts are made to collect the deficiency. All loans which are designated as “special mention,” classified or which are delinquent 90 days or more are reported to the Board of Directors of the Bank monthly. For loans where the collection of principal or interest payments is doubtful, the accrual of interest income ceases. It is our policy, with certain limited exceptions, to discontinue accruing interest and reverse any interest accrued on any loan which is 90 days or more past due. On occasion, this action may be taken earlier if the financial condition of the borrower raises significant concern with regard to their ability to service the debt in accordance with the terms of the loan agreement. Interest income is not accrued on these loans until the borrower’s financial condition and payment record demonstrate an ability to service the debt.

Under our allowance policy, credit losses are measured on a pool basis when similar risk characteristics exist. Loans that do not share similar risk characteristics are individually evaluated for credit losses and are excluded from the pooled loan analysis. At least quarterly, management evaluates the loan portfolio to determine which loans should be individually evaluated for credit losses. Management's evaluation involves an analysis of larger (i.e., loans with balances of $500,000 or greater) commercial real estate loans, multi-family residential loans, construction and land loans and commercial and industrial loans. Third party property valuations are obtained at the time of origination for real estate secured loans. When a determination is made that a loan has deteriorated to the point of becoming a problem loan, updated valuations may be ordered to determine if a short-fall exists, which may lead to a recommendation for partial charge off or appropriate allowance allocation. Property valuations are ordered through, and are reviewed by, an appraisal officer at the Bank. The Company typically orders an “as is” valuation for collateral property if a loan is in a criticized loan classification. Loans individually evaluated for credit losses are reported to the Board of Directors monthly.

At September 30, 2024 and December 31, 2023, loans identified as credit deteriorated loans and individually evaluated for expected losses were $4.4 million and $4.2 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.


	September 30, 2024
(dollars in thousands)	Recorded investment		Allowance for Loan Losses		Allowance to Total Loans
Loans Individually Evaluated
One- to four-family first mortgage	$	—	$	—	—	%
Home equity loans and lines	—		—		—
Commercial real estate	4,337		200		4.61


Construction and land	—		—		—
Multi-family residential	—		—		—
Commercial and industrial	52		42		80.77
Consumer	—		—		—
Total	$	4,389	$	242	5.51	%

	December 31, 2023
(dollars in thousands)	Recorded investment		Allowance for Loan Losses		Allowance to Total Loans
Loans Individually Evaluated
One- to four-family first mortgage	$	—	$	—	—	%
Home equity loans and lines	—		—		—
Commercial real estate	3,957		201		5.08
Construction and land	147		123		83.67
Multi-family residential	—		—		—
Commercial and industrial	112		95		84.82
Consumer	—		—		—
Total	$	4,216	$	419	9.94	%

Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets. We have incorporated an internal asset classification system, substantially consistent with Federal banking regulations, as a part of our credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

At September 30, 2024 and December 31, 2023, loans classified as substandard totaled $34.7 million and $28.2 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements. The $6.5 million, or 23.1%, increase in substandard loans at September 30, 2024 compared to December 31, 2023 was primarily due to four credit relationships being downgraded, partially offset by loan payoffs and improvements in other classified loans.

The following tables provide a summary of loans classified as special mention and substandard as of the dates indicated.


(dollars in thousands)	September 30, 2024		December 31, 2023		Increase/(Decrease)
Special Mention Loans
One- to four-family first mortgage	$	859	$	868	$	(9)	(1.0)	%
Home equity loans and lines	—		—		—		—
Commercial real estate	—		—		—		—
Construction and land	308		5,874		(5,566)		(94.8)
Multi-family residential	—		—		—		—
Commercial and industrial	1,248		1,186		62		5.2
Consumer	—		—		—		—


Total special mention loans	$	2,415	$	7,928	$	(5,513)	(69.5)	%


(dollars in thousands)	September 30, 2024		December 31, 2023		Increase/(Decrease)
Substandard Loans
One- to four-family first mortgage	$	7,745	$	2,569	$	5,176	201.5	%
Home equity loans and lines	206		207		(1)		(0.5)
Commercial real estate	17,821		14,631		3,190		21.8
Construction and land	5,728		5,228		500		9.6
Multi-family residential	930		3,503		(2,573)		(73.5)
Commercial and industrial	2,117		1,741		376		21.6
Consumer	130		289		(159)		(55.0)
Total substandard loans	$	34,677	$	28,168	$	6,509	23.1	%

Total nonperforming loans increased by $9.3 million, or 105.2%, to $18.1 million at September 30, 2024, compared to $8.8 million at December 31, 2023. The primary reason for the increase was one loan relationship with an aggregate outstanding balance of $4.7 million at September 30, 2024 that became nonperforming during the first quarter of 2024. This relationship is secured by 17 residential units in eight investment properties in New Orleans with an aggregate loan-to-value ratio of approximately 65%. We have commenced foreclosure proceedings on this relationship and do not expect any loss. There were also additional smaller loan balances downgraded to nonperforming during the period, but we do not anticipate any losses associated with these loans.

A bank’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by Federal bank regulators which can order the establishment of additional general or specific loss allowances. The Federal banking agencies have adopted an interagency policy statement on the allowance for loan and lease losses. The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines. Generally, the policy statement recommends that institutions have effective systems and controls to identify, monitor and address asset quality problems; that management analyze all significant factors that affect the collectability of the portfolio in a reasonable manner; and that management establish acceptable allowance evaluation processes that meet the objectives set forth in the policy statement. Management maintains, based on current and forecasted information, an ACL that reflects a current estimate of expected credit losses for the estimated life of the loan portfolio at reporting periods subsequent to the adoption date. For all reporting periods, actual losses are uncertain and dependent upon future events and, as such, further additions to the level of ACL may become necessary.

The following table sets forth the composition of the Company’s nonperforming assets as of the dates indicated.


	September 30, 2024						December 31, 2023
(dollars in thousands)	Originated		Acquired(1)		Total		Originated		Acquired(1)		Total
Nonaccrual loans:
Real estate loans:
One- to four-family first mortgage	$	6,188	$	1,562	$	7,750	$	528	$	1,072	$	1,600
Home equity loans and lines	173		35		208		143		65		208
Commercial real estate	4,752		2,312		7,064		2,691		2,512		5,203
Construction and land	2,096		31		2,127		1,136		45		1,181
Multi-family residential	—		—		—		—		—		—
Other loans:
Commercial and industrial	414		363		777		298		33		331
Consumer	118		11		129		227		64		291
Total nonaccrual loans	13,741		4,314		18,055		5,023		3,791		8,814
Accruing loans 90 days or more past due	34		—		34		—		—		—


Total nonperforming loans	13,775	4,314	18,089		5,023	3,791	8,814
Foreclosed assets and ORE	—	267	267		1,495	80	1,575
Total nonperforming assets	13,775	4,581	18,356		6,518	3,871	10,389



Nonperforming loans to total loans			0.68	%			0.34	%
Nonperforming loans to total assets			0.53	%			0.27	%
Nonperforming assets to total assets			0.53	%			0.31	%

(1)Nonaccrual acquired loans include PCD loans of $1.3 million and $1.4 million at September 30, 2024 and December 31, 2023, respectively.

Foreclosed assets and ORE includes real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE are classified as such until sold or disposed. Foreclosed assets are recorded at fair value less estimated selling costs based on third party property valuations which are obtained at the time the asset is repossessed and periodically until the property is liquidated. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. Foreclosed assets and ORE holding costs are charged to expense. Gains and losses on the sale of foreclosed assets and ORE are charged to operations, as incurred. Costs associated with acquiring and improving a foreclosed property or ORE are capitalized to the extent that the carrying value does not exceed fair value less estimated selling costs.

Investment Securities

The Company’s investment securities portfolio totaled $421.8 million as of September 30, 2024, a decrease of $13.2 million, or 3.0%, from December 31, 2023. During the third quarters of 2024 and 2023, the Company had no gains or losses related to the sale of available-for-sale investment securities. At September 30, 2024, the Company had a net unrealized loss on its available for sale investment securities portfolio of $32.2 million, compared to a net unrealized loss of $43.4 million at December 31, 2023. The Company’s investment securities portfolio had an effective duration of 3.7 years and 4.2 years at September 30, 2024 and December 31, 2023, respectively.

The following table summarizes activity in the Company’s investment securities portfolio during the nine months ended September 30, 2024.


(dollars in thousands)	Available for Sale		Held to Maturity
Balance, December 31, 2023	$	433,926	$	1,065
Purchases	4,936		—
Sales	—		—
Principal maturities, prepayments and calls	(29,135)		—
Amortization of premiums and accretion of discounts	(222)		—
Increase in market value	11,218		—
Balance, September 30, 2024	$	420,723	$	1,065

Funding Sources

Deposits

Deposits totaled $2.8 billion at September 30, 2024, an increase of $106.9 million, or 4.0%, compared to December 31, 2023. The following table summarizes the changes in the Company’s deposits from December 31, 2023 to September 30, 2024.


(dollars in thousands)	September 30, 2024		December 31, 2023		Increase/(Decrease)
Demand deposit	$	740,854	$	744,424	$	(3,570)	(0.5)	%
Savings	215,815		231,624		(15,809)		(6.8)
Money market	452,456		408,024		44,432		10.9
NOW	644,061		641,818		2,243		0.3
Certificates of deposit	724,301		644,734		79,567		12.3
Total deposits	$	2,777,487	$	2,670,624	$	106,863	4.0	%

The average rate paid on interest-bearing deposits was 2.78% for the third quarter of 2024, up 94 bps compared to the third quarter of 2023. At September 30, 2024, certificates of deposit maturing within the next 12 months totaled $680.8 million.

We obtain most of our deposits from individuals, small businesses and public funds in our market areas. The following table presents our deposits per customer type for the periods indicated.


	September 30, 2024	December 31, 2023
Individuals	52%	53%
Small businesses	38	38
Public funds	7	7
Broker	3	2
Total	100%	100%

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $818.7 million at September 30, 2024 and $748.6 million at December 31, 2023. Public funds in excess of the FDIC insurance limits are fully collateralized.

Subordinated Debt

On June 30, 2022, the Company issued $55.0 million in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes due 2032. The Notes were issued at a price equal to 100% of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75% per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The carrying value of subordinated debt was $54.4 million and $54.2 million at September 30, 2024 and December 31, 2023, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.

Other Borrowings

On March 12, 2023, the Federal Reserve Board created the BTFP, which offers loans to banks with a term up to one year with no prepayment penalty. The loans are secured by pledging qualifying securities and are valued at par for collateral. In 2024, the Bank participated in the BTFP and had an outstanding debt of $135.0 million at September 30, 2024. The average balance of other borrowings, which included the BTFP loan was $140.5 million for the third quarter of 2024, up $135.0 million compared to the third quarter of 2023.

Federal Home Loan Bank Advances

The average balance of total FHLB advances was $56.7 million for the third quarter of 2024, down $216.3 million compared to the third quarter of 2023. For the nine months ended September 30, 2024, the average balance of total FHLB advances was $58.3 million, down $195.7 million compared to the nine months ended September 30, 2023. We reduced our FHLB advances in 2024 primarily due to our increased utilization of BTFP loans as an alternative source of funds.

The Company had no short-term FHLB advances as of September 30, 2024 compared to $150.0 million as of December 31, 2023. At September 30, 2024 and December 31, 2023, the Company had $38.4 million and $42.7 million in long-term FHLB advances, respectively, and $1.1 billion and $1.0 billion in additional FHLB advances available, respectively.

Shareholders’ Equity

Total shareholders’ equity increased $26.0 million, or 7.1%, from $367.4 million at December 31, 2023 to $393.5 million at September 30, 2024. Shareholders' equity increased primarily due to net income of $26.8 million and a decrease in accumulated other comprehensive loss on available for sale investment securities, which were partially offset by cash dividends and share repurchases during the nine months ended September 30, 2024.

At September 30, 2024, the Company and the Bank had regulatory capital amounts that were well in excess of regulatory requirements. The following table presents actual and required capital ratios for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of September 30, 2024 based on the required capital levels as of January 1, 2019 when the Basel III Capital Rules were fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.


	Actual				Minimum Capital Required – Basel III Fully Phased-In				To Be Well Capitalized Under Prompt Corrective Action Provisions
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Company:
Tier 1 risk-based capital	331,727		11.91		236,806		8.50		N/A		N/A
Total risk-based capital	420,670		15.10		292,526		10.50		N/A		N/A
Tier 1 leverage capital	331,727		9.99		132,789		4.00		N/A		N/A

Bank:
Common equity Tier 1 capital (to risk-weighted assets)	$	374,749	13.49	%	$	194,392	7.00	%	$	180,507	6.50	%
Tier 1 risk-based capital	374,749		13.49		236,048		8.50		222,163		8.00
Total risk-based capital	409,290		14.74		291,588		10.50		277,703		10.00
Tier 1 leverage capital	374,749		11.32		132,441		4.00		165,551		5.00

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

Liquidity Management

Liquidity management encompasses our ability to ensure that funds are available to meet the cash flow requirements of depositors and borrowers, while also ensuring adequate cash flow exists to meet the Company’s needs, including operating, strategic and capital. The Company develops its liquidity management strategies as part of its overall asset/liability management process. Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturity of loans, investment securities and other investments, and other funds provided from operations. While scheduled payments from the amortization of loans and investment securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan prepayments can be greatly influenced by general interest rates, economic conditions and competition. The Company also maintains excess funds in short-term, interest-bearing assets that provide additional liquidity.

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At September 30, 2024, certificates of deposit maturing within the next 12 months totaled $680.8 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges

residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the nine months ended September 30, 2024, the average balance of outstanding FHLB advances was $58.3 million. At September 30, 2024, the Company had $38.4 million in total outstanding FHLB advances.

The following table summarizes the Company's primary and secondary sources of liquidity which were available at September 30, 2024.


(dollars in thousands)	September 30, 2024
Cash and cash equivalents	$	135,877
Unencumbered investment securities, amortized cost	59,838
FHLB advance availability	1,147,306
Amounts available from unsecured lines of credit	55,000

Federal Reserve discount window availability	500
Total primary and secondary sources of available liquidity	$	1,398,521

Asset/Liability Management

The objective of asset/liability management is to implement strategies for the funding and deployment of the Company’s financial resources that are expected to maximize soundness and profitability over time at acceptable levels of risk. Interest rate sensitivity is the potential impact of changing rate environments on both net interest income and cash flows. The Company measures its interest rate sensitivity over the near term primarily by running net interest income simulations. Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the change in its net interest income over a range of interest rate scenarios. Based on the Company’s interest rate risk model, the table below sets forth the results of immediate and sustained changes in interest rates as of September 30, 2024.


Shift in Interest Rates (in bps)						% Change in Projected Net Interest Income


+200						1.7%
+100						1.0%
-100						(1.5)%
-200						(3.4)%

The actual impact of changes in interest rates will depend on many factors. These factors include the Company’s ability to achieve expected growth in earning assets and maintain a desired mix of earning assets and interest-bearing liabilities, the actual timing of asset and liability repricing, the magnitude of interest rate changes and corresponding movement in interest rate spreads and the level of success of asset/liability management strategies.

The Company periodically has entered into interest rate swap agreements as part of its interest rate risk management strategy. The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. During 2024 and 2023, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 6 of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.

To meet the financing needs of its customers, the Company issues financial instruments which represent conditional obligations that are not recognized, wholly or in part, in the statements of financial condition. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments expose the Company to varying degrees of credit and interest rate risk in much the same way as funded loans. The same credit policies are used in these commitments as for on-balance sheet instruments. At both September 30, 2024 and December 31, 2023, the Company's allowance for credit losses on unfunded commitments totaled $2.5 million.

The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and undisbursed construction loans as of the periods indicated.


	Contract Amount
(dollars in thousands)	September 30, 2024		December 31, 2023
Standby letters of credit	$	7,133	$	7,289
Available portion of lines of credit	505,051		368,398
Undisbursed portion of loans in process	73,877		221,997
Commitments to originate loans	150,273		127,076

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements.

Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.

The Company is subject to certain claims and litigation arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on the financial condition or results of operations of the Company.

RESULTS OF OPERATIONS

Net income for the third quarter of 2024 was $9.4 million, down $317,000 compared to the third quarter of 2023. Diluted EPS for the third quarter of 2024 was $1.18, down $0.04 compared to the third quarter of 2023.

Net income for the nine months ended September 30, 2024 was $26.8 million, down $4.1 million, compared to the nine months ended September 30, 2023. Diluted EPS for the nine months ended September 30, 2024 was $3.34, down $0.48 compared to the nine months ended September 30, 2023.

During the three and nine months ended September 30, 2024, the Company provisioned $140,000 and $1.5 million, respectively, to the allowance for loan losses primarily due to loan growth and net charge-offs. During the three and nine months ended September 30, 2023, the Company provisioned $351,000 and $1.7 million, respectively, to the allowance for loan losses primarily due to loan growth.

Net Interest Income

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 2.80% and 2.99% for the quarters ended September 30, 2024 and 2023, respectively, and 2.80% and 3.33% for the nine months ended September 30, 2024 and 2023, respectively.

Net interest income totaled $30.4 million for the third quarter of 2024, up $873,000, or 3.0%, compared to the third quarter of 2023. For the nine months ended September 30, 2024, net interest income totaled $88.7 million, down $2.7 million, or 3.0%, compared to the nine months ended September 30, 2023.

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.71% and 3.75% for the quarters ended September 30, 2024 and 2023, respectively. For the same periods, the average loan yield was 6.43% and 5.95%, respectively. The net interest margin for the nine months ended September 30, 2024 and 2023 was 3.67% and 3.95%, respectively. For the same periods, the average loan yield was 6.30% and 5.82%, respectively.

Acquired loan discount accretion included in interest income totaled $452,000 and $634,000 for the quarters ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, acquired loan discount accretion included in interest income totaled $1.5 million and $1.9 million, respectively.

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average monthly balances during the indicated periods. Taxable equivalent yields are calculated using a marginal tax rate of 21%.


	Three Months Ended September 30,
	2024						2023
(dollars in thousands)	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
Interest-earning assets:
Loans receivable(1)	$	2,668,672	$	43,711	6.43	%	$	2,538,218	$	38,490	5.95	%
Investment securities
Taxable	437,785		2,604		2.38		478,380		2,863		2.39
Tax-exempt (TE)	16,239		73		2.26		16,839		76		2.28
Total investment securities	454,024		2,677		2.38		495,219		2,939		2.39
Other interest-earning assets	79,668		991		4.95		54,015		649		4.77
Total interest-earning assets (TE)	3,202,364		$	47,379	5.82		3,087,452		$	42,078	5.36
Noninterest-earning assets	202,719						193,641
Total assets	$	3,405,083					$	3,281,093
Interest-bearing liabilities:
Deposits:
Savings, checking and money market	$	1,266,465	$	5,571	1.75	%	$	1,256,885	$	3,791	1.20	%
Certificates of deposit	722,717		8,337		4.59		511,754		4,390		3.40
Total interest-bearing deposits	1,989,182		13,908		2.78		1,768,639		8,181		1.84
Other borrowings	140,539		1,673		4.74		5,539		53		3.80
Subordinated debt	54,374		844		6.21		54,159		845		6.24
Short-term FHLB advances	18,301		252		5.39		230,222		3,150		5.35
Long term FHLB advances	38,442		320		5.33		42,865		340		3.17
Total interest-bearing liabilities	2,240,838		$	16,997	3.02		2,101,424		$	12,569	2.37
Noninterest-bearing liabilities	779,727						829,233
Total liabilities	3,020,565						2,930,657
Shareholders’ equity	384,518						350,436
Total liabilities and shareholders' equity	$	3,405,083					$	3,281,093
Net interest-earning assets	$	961,526					$	986,028
Net interest spread (TE)			$	30,382	2.80	%			$	29,509	2.99	%
Net interest margin (TE)					3.71	%					3.75	%

(1)Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process.


	Nine Months Ended September 30,
	2024						2023
(dollars in thousands)	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
Interest-earning assets:
Loans receivable(1)	$	2,641,414	$	126,277	6.30	%	$	2,489,374	$	109,518	5.82	%
Investment securities
Taxable	447,048		7,986		2.38		492,027		8,772		2.38
Tax-exempt (TE)	16,285		219		2.27		20,314		295		2.45
Total investment securities	463,333		8,205		2.38		512,341		9,067		2.38
Other interest-earning assets	62,771		2,481		5.28		53,245		1,679		4.22
Total interest-earning assets (TE)	3,167,518		$	136,963	5.71		3,054,960		$	120,264	5.21
Noninterest-earning assets	201,339						195,644
Total assets	$	3,368,857					$	3,250,604
Interest-bearing liabilities:
Deposits:
Savings, checking and money market	$	1,265,420	$	15,479	1.63	%	$	1,301,767	$	8,863	0.91	%
Certificates of deposit	698,675		23,695		4.53		423,418		8,105		2.56
Total interest-bearing deposits	1,964,095		39,174		2.66		1,725,185		16,968		1.32
Other borrowings	135,727		4,815		4.74		5,577		161		3.86
Subordinated debt	54,322		2,533		6.22		54,100		2,546		6.27
Short-term FHLB advances	19,360		798		5.42		217,391		8,382		5.08
Long term FHLB advances	38,949		967		3.31		36,603		797		2.90
Total interest-bearing liabilities	2,212,453		$	48,287	2.91		2,038,856		$	28,854	1.88
Noninterest-bearing liabilities	780,234						865,654
Total liabilities	2,992,687						2,904,510
Shareholders’ equity	376,170						346,094
Total liabilities and shareholders' equity	$	3,368,857					$	3,250,604
Net interest-earning assets	$	955,065					$	1,016,104
Net interest spread (TE)			$	88,676	2.80	%			$	91,410	3.33	%
Net interest margin (TE)					3.67	%					3.95	%

(1)Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process.

The following table displays the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. The table distinguishes between (i) changes attributable to volume (changes in average volume between periods times prior year rate), (ii) changes attributable to rate (changes in average rate between periods times prior year volume) and (iii) total increase (decrease).


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024 Compared to 2023						2024 Compared to 2023
	Change Attributable To						Change Attributable To
(dollars in thousands)	Rate		Volume		Increase/ (Decrease)		Rate		Volume		Increase/ (Decrease)
Interest income:
Loans receivable	$	3,184	$	2,037	$	5,221	$	8,778	$	7,981	$	16,759
Investment securities	(17)		(245)		(262)		(287)		(575)		(862)
Other interest-earning assets	29		313		342		422		380		802
Total interest income	3,196		2,105		5,301		8,913		7,786		16,699
Interest expense:
Savings, checking and money market accounts	1,497		283		1,780		4,328		2,288		6,616
Certificates of deposit	1,833		2,114		3,947		7,959		7,631		15,590
Other borrowings	170		1,450		1,620		1,701		2,953		4,654
Subordinated debt	(4)		3		(1)		(12)		(1)		(13)
FHLB advances	(3)		(2,915)		(2,918)		(2,348)		(5,066)		(7,414)
Total interest expense	3,493		935		4,428		11,628		7,805		19,433
Increase in net interest income	$	(297)	$	1,170	$	873	$	(2,715)	$	(19)	$	(2,734)

Noninterest Income

Noninterest income for the third quarter of 2024 totaled $3.7 million, down $707,000, or 16.1%, from $4.4 million earned for the same period in 2023. Noninterest income for the nine months ended September 30, 2024 totaled $11.0 million, down $162,000, or 1.5%, from $11.2 million earned for the same period in 2023.

Gains on the sale of loans for the third quarter of 2024 were down $492,000, or 71.6%, from the comparable period in 2023. For the nine months ended September 30, 2024, gains on the sale of loans were down $362,000, or 47.0%, from the comparable period in 2023 due to a decrease in mortgage loan sales.

There were no gains or losses related to the sale of investment securities for the three and nine months ended September 30, 2024 or for the three months ended September 30, 2023. The Company recorded a net loss of $249,000 related to the sale of investment securities for the nine months ended September 30, 2023.

Other income for the third quarter of 2024 was up $55,000, or 20.6%, from the comparable period in 2023. For the nine months ended September 30, 2024, other income was up $336,000, or 46.9%, from the comparable period in 2023, primarily due to the increase in derivative fee income during 2024.

Income from bank card fees for the three and nine months ended September 30, 2024 was down $290,000, or 15.2% and down $466,000, or 8.6%, respectively from the comparable period in 2023 primarily due to variations in transaction volumes by our cardholders.

Noninterest Expense

Noninterest expense for the third quarter of 2024 totaled $22.3 million, up $920,000, or 4.3%, from the third quarter of 2023. Noninterest expense increased over the comparable quarters primarily due to increases in compensation and benefits (up $566,000, primarily due to increases in salaries), occupancy expenses (up $322,000), and other noninterest expense (up $267,000), which were partially offset by marketing and advertising (down $256,000).

Noninterest expense for the nine months ended September 30, 2024 totaled $64.9 million, up $2.7 million, or 4.3%, from the same period in 2023. The increase in noninterest expense for the nine months ended September 30, 2024 related primarily to the absence of a recovery of a previous loss on a foreclosed asset in the first quarter of 2023 in the amount of $739,000, increases in data processing and communication expense (up $766,000, primarily due to increases in cost of maintenance contracts), other noninterest expense (up $687,000), occupancy expense (up $582,000), and compensation and benefits (up $484,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (a difference of $495,000).

Income Taxes

Income tax expense for the three and nine months ended September 30, 2024 totaled $2.2 million and $6.4 million, respectively, compared to $2.5 million and $7.8 million for the three and nine months ended September 30, 2023, respectively. Income tax expense decreased over the prior comparable quarter primarily due to decreased taxable earnings. The Company's effective tax rates for the third quarters of 2024 and 2023 were 19.2% and 20.2%, respectively. For the nine months ended September 30, 2024 and 2023, the Company's effective tax rates were 19.4% and 20.2%, respectively.

CRITICAL ACCOUNTING ESTIMATES

SEC guidance requires disclosure of “critical accounting estimates.” The SEC defines “critical accounting estimates” as those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.

We follow financial accounting and reporting policies that are in accordance with accounting principles generally accepted in the United States. Our accounting policies are discussed in detail in Note 1 - Basis of Presentation in the accompanying notes to the consolidated financial statements included elsewhere in this report and in our 2023 Annual Report on Form 10-K. Not all significant accounting policies require management to make difficult, subjective or complex judgments. However, management believes the policy noted below meets the SEC’s definition of a critical accounting policy.

Allowance for Credit Losses

Management considers the policies related to the allowance for credit losses as the most critical to the financial statement presentation. The total allowance for credit losses includes activity related to allowances calculated in accordance with Accounting Standards Codification 326, Credit Losses. The allowance for credit losses is established through a provision for credit losses charged to current earnings. The amount maintained in the allowance reflects management’s continuing evaluation of the credit losses expected to be recognized over the life of the loans in our portfolio. The allowance for credit losses on loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. For purposes of determining the allowance for credit losses, the loan portfolio is segregated by product types in order to recognize differing risk profiles among categories. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of nonperforming assets, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.


Item 3.			Quantitative and Qualitative Disclosures About Market Risk.

Quantitative and qualitative disclosures about market risk are presented in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2023, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset/Liability Management and Market Risk”. Additional information at September 30, 2024 is included herein under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Asset/Liability Management”.


Item 4.			Controls and Procedures.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the third quarter of 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.			Legal Proceedings.

Not applicable.


Item 1A.			Risk Factors.

There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission.


Item 2.			Unregistered Sales of Equity Securities and the Use of Proceeds.

(a) Not applicable.

(b) Not applicable.

(c) The Company’s purchases of its common stock made during the quarter ended September 30, 2024 consisted of stock repurchases under the Company’s approved plans and are set forth in the following table.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plan or Programs(1)
July 1 – July 31, 2024	20,000	$	38.49	20,000	318,285
August 1 – August 31, 2024	4,473	38.53		4,473	313,812
September 1 – September 30, 2024	—	—		—	313,812
Total	24,473	$	38.50	24,473	313,812

(1)On October 18, 2023, the Company announced the approval of a new repurchase program (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, the Company may purchase up to an additional 405,000 shares, or approximately 5% of the Company’s outstanding common stock.


Item 3.			Defaults Upon Senior Securities.

(a) Not applicable.

(b) Not applicable.


Item 4.			Mine Safety Disclosures.

Not applicable.


Item 5.			Other Information.

(a) Not applicable.

(b) Not applicable.

(c) During the fiscal quarter ended September 30, 2024, none of our directors or executive officers adopted, terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.


Item 6.			Exhibits and Financial Statement Schedules.

No.

Description

Location

4.1

Indenture, dated June 30, 2022, by and between Home Bancorp, Inc. and UMB Bank, National Association, as trustee.

(incorporated by reference from the like-numbered exhibit included in Home Bancorp’s Current Report on Form 8-K, dated as of June 30, 2022 and filed July 1, 2022 (SEC File No. 001-34190))

31.1

Rule 13(a)-14(a) Certification of the Chief Executive Officer

Filed herewith

31.2

Rule 13(a)-14(a) Certification of the Chief Financial Officer

Filed herewith

32.0

Section 1350 Certification

Filed herewith

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definitions Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HOME BANCORP, INC.

November 1, 2024

By:

/s/ John W. Bordelon

John W. Bordelon

Chairman of the Board, President and Chief Executive Officer

November 1, 2024

By:

/s/ David T. Kirkley

David T. Kirkley

Senior Executive Vice President and Chief Financial Officer

November 1, 2024

By:

/s/ Mary H. Hopkins

Mary H. Hopkins

Home Bank, N. A. Senior Vice President and Director of Financial Management