JD Bancshares, Inc. Reports Financial Results for Three and Twelve-Month Periods Ended December 31, 2023

Published

JENNINGS, LA / ACCESSWIRE / January 25, 2024 / JD Bancshares, Inc. (the "Company"), (OTCQX:JDVB), the parent holding company of JD Bank (the "Bank"), reports its unaudited financial results for the three and twelve-month periods ended December 31, 2023.

The Company reports a net loss for the three-month period ended December 31, 2023 of $(2,213,692) or $(0.65) per share compared to net income of $3,492,852 or $1.02 per share for the linked quarter ended September 30, 2023 and $3,421,668 or $1.00 per common share for the prior year quarter ended December 31, 2022. The results for the current three-month period are impacted by the previously disclosed after-tax loss of $5,196,440 on the sale of $55.0 million of US Treasury securities in November. Pre-tax, pre-provision operating income (PTPPOI) for the current quarter is $3,910,715 compared to $4,154,284 for the linked quarter and $4,645,024 for the comparative prior year quarter. The decline in PTPPOI over the linked quarter is primarily due to increased non-interest expenses and declining non-interest income which more than offset a slight increase in net interest income. The decline in PTPPOI compared to the prior year quarter is due to a decrease in net interest income from increasing funding costs, declining non-interest income and increasing non-interest expenses. PTPPOI excludes taxes, provision for loan losses, recognized origination fees earned from the Paycheck Protection Program (PPP), net gains and losses on the sale of other real estate owned (OREO), losses on the sale of investment securities and other non-recurring items.

For the twelve-month period ended December 31, 2023, net income is $6,580,906 or $1.92 per share compared to $12,095,763 or $3.54 per share for the prior year period ended December 31, 2022. Net income for the current year period is impacted by the after-tax losses realized on the sale of securities in November and March 2023 totaling $6,194,289. Pre-tax, pre-provision operating earnings for the two comparative twelve-month periods increased by 14.35% and are $16,720,270 compared to $14,622,568. The increase is due to a substantial increase in net interest income and partially offset by lower non-interest income and higher non-interest expenses.

Bruce W. Elder, President & CEO commented, "Net income for both the three and twelve-month periods is impacted from the realization of losses on the sale of available for sale securities in March and November. While pre-tax, pre-provision operating income for the twelve-month period was positively impacted by higher interest rates on earning assets, the increased funding costs created a declining trend in the second half of 2023. Redeploying the proceeds of the November securities sale into higher yielding assets should have a positive impact on net income moving into 2024. The level of interest rates continues to adversely affect secondary mortgage opportunities, but as rates begin to stabilize and perhaps decline slightly, we believe that non-interest income should increase in 2024. Overall, we are pleased with the financial results of 2023 and believe management actions taken in the fourth quarter related to investments will better prepare the Company for a successful 2024."

Elder continued "the unwinding of the very circumstances which resulted in our tremendous growth in 2020 and 2021 has resulted in some decline in total assets over the past two years. Although loan growth did not meet our internal expectations for 2023, we have recently completed our hiring plans for the expansion markets of Baton Rouge and the Northshore and are excited about the Company's loan growth prospects as we move into 2024."

Paycheck Protection Program Lending

During 2020 and 2021, the Company made 1,422 PPP loans totaling $110.4 million. As of December 31, 2023, there is one loan for $664,000 that remains outstanding. The remaining PPP borrower has received partial forgiveness from the Small Business Administration (SBA) and is making regular payments on the loan. The Company continues to have the full guarantee of the SBA for this loan.

The Company received origination fees from the SBA for participating in the program. At origination, we recognized as interest income that portion of the fee estimated to be our internal cost of origination. The remainder is amortized over the contractual life of the loan. If the loan is forgiven or repaid early, the remaining unamortized portion is recognized as interest income in the month of repayment. There are no PPP origination fees recognized in the current, linked and prior year comparative three-month periods. There are no origination fees recognized for the twelve-month period ended December 31, 2023 compared to $605,000 for the December 31, 2022 period. The fee recognition has been excluded from the prior year twelve-month PTPPOI calculation.

Asset Quality

Loans past due 30 to 89 days on December 31, 2023 are $4.2 million or 0.61% of the total loans outstanding compared to $1.3 million or 0.19% of the total loan portfolio at September 30, 2023 and $2.3 million or 0.35% of total loans reported at December 31, 2022. Total nonperforming assets, including loans on non-accrual status, OREO and repossessed assets are $12.1 million on December 31, 2023 compared to $13.9 million at September 30, 2023 and $14.3 million at December 31, 2022. Loans on non-accrual status on December 31, 2023 decreased to $10.6 million from $12.9 million on September 30, 2023 and from $13.4 million on December 31, 2022 and OREO increased to $1.5 million from $956,000 and $863,000 on September 30, 2023 and December 31, 2022, respectively. There are no repossessed assets for either 2023 period compared to $37,000 on December 31, 2022. We perform a quarterly evaluation of OREO properties and repossessions and believe the adjusted carrying values are representative of their fair market values, although there is no assurance that the ultimate sales will be equal or greater than the carrying values.

The Company recognized a provision for credit losses in the current quarter of $324,000 compared to $533,000 for the prior year quarter. There was a release from the reserve for credit losses of $37,000 for the three-month period ended September 30, 2023. The allowance for credit losses (ACL) is $9.9 million at December 31, 2023 or 1.45% of total loans compared to $9.2 million at December 31, 2022 or 1.37% of total loans. Provision for credit losses for the twelve-months ended December 31, 2023 is $1.3 million compared to $722,000 for the comparative prior year period. The Company recorded net charge-offs of $880,000 in 2023 compared to net recoveries in 2022 of $296,000. In 2022, approximately $488,000 of recoveries were recognized as a result of adjusting a loan accounting process. We believe the current level of our ACL is adequate, but there is no assurance that regulators, increased risks in the loan portfolio or changes in economic conditions will not require future adjustments to the ACL.

Net Interest Income

Net interest income for the current quarter is $11.0 million compared to $10.8 million for the linked quarter and $11.3 million compared to the prior year quarter. The $198,000 increase in current quarter net interest income over the linked results is attributable to higher interest income from loans and deposits with banks and is partially offset by higher funding expenses. The decrease of $233,000 between the current and prior year quarter net interest income is due to a larger increase in funding costs than the increase in interest income.

Average loans outstanding for the current period are $676.1 million compared to $673.6 million for the prior year quarter. Yield on loans averaged 6.13% for the three-month period ended December 31, 2023 compared to 5.47% for the December 31, 2022 period and was primarily responsible for the $1.1 million increase in interest income on loans. The average yield on all other earning assets increased by 55 basis points to 2.92% from 2.37% while the average volume of other earning assets declined from $545.7 million to $480.2 million. The higher yields more than offset the impact of lower volumes resulting in a $292,000 increase in interest income.

Interest expense increased by $1.7 million for the current quarter compared to the prior year quarter and was attributed to higher funding costs for both deposits and borrowings. The average volume of interest-bearing deposits declined by $95.7 million while the cost of those deposits increased by 61 basis points to 0.95%. The impact of higher costs more than offset the lower volume resulting in a $1.1 million increase in interest expenses on deposits. Both the volume and the cost of borrowings increased resulting in a $566,000 increase in interest expense on borrowings.

Net interest income for the year ended December 31, 2023 is $44.1 million reflecting a $3.6 million or 8.90% increase over the $40.5 million reported for the year ended December 31, 2022. Despite a $61.9 million decline in total average earning assets during 2023, the 86-basis point improvement in the yield on those assets to 4.54% resulted in a $7.9 million increase in total interest income. In the second quarter of 2022, we recorded a one-time addition to interest income of $291,000 due to an adjustment in the way our loan system accounted for loan payments applied to loans previously charged-off and in non-accrual status. Total interest expense for 2023 increased by $4.3 million over 2022 as the 52-basis point increase in cost of deposits and borrowings to 0.96% more than offset the $54.0 million decline in interest-bearing liabilities.

The net interest margin for the current quarter is 3.86% and increased by 12 basis points from 3.74% for the prior year quarter. The yield on earning assets for the current quarter is 4.79% compared to 4.08% for Q4 2022. The cost of funds is 0.93% for the current quarter and 0.34% for the prior year quarter. Net interest margin for the twelve-month period ended December 31, 2023 is 3.84% compared to 3.36% for the prior year period. For the two comparative year end periods, the yield on earning assets is 4.54% and 3.68%, respectively, and the cost of funds is 0.70% and 0.32%, respectively. The net interest margin improved during 2023 as the Federal Open Market Committee (FOMC) increased short-term interest rates by 525 basis points beginning in March 2022 to curb inflation. Throughout this interest rate cycle, the Company was able to reprice variable rate loans and earn higher yields on newly originated loans. The Company was able to control funding costs for a period of time but began adjusting rates on interest-bearing deposits and borrowing higher cost money toward the end of the first quarter of 2023. Maintaining current margin levels will depend on our ability to continue to originate quality loans at current market rates and to control interest expenses on deposits and borrowed money.

The FOMC began raising short-term interest rates on March 17, 2022 with a 25 basis points increase which moved the Wall Street Journal (WSJ) Prime Rate from 3.25% to 3.50%. There have been ten additional rate hikes, the last of which occurred on July 26, 2023 pushing the WSJ Prime to 8.50%. Although the Consumer Price Index as of early January 2024 is 3.4% and the FOMC's target inflation is 2.0%, many economists believe the lagging effects of the prior rate increases are sufficient to reach their target. The FOMC has signaled that they can see three short-term rate cuts in 2024 but are quick to indicate they will continue to increase rates should the data dictate such action. The Company will continue to explore activities to increase earning asset yields and control interest expense, but the economic uncertainty, geopolitical backdrop and the upcoming election year make it difficult to predict potential outcomes.

Non-Interest Income

Total non-interest income is $(3.8) million for the current three-month period compared to $2.9 million for both the linked and prior year quarters. Service charges and fees associated with deposit accounts are $2.2 million in Q4 and Q3 2023 compared to $2.3 million for the prior year quarter. Interchange revenue from debit card usage is the largest component of service charges and fees and is $1.2 million in both the current and linked quarters and $1.3 million for the Q4 2022. During the fourth quarter of 2022, the Company discontinued charging additional NSF fees on items presented against a customers' deposit accounts multiple times. Although the Company had properly disclosed the possibility of incurring this additional fee, there has been intense regulatory pressure to discontinue this practice. Although we anticipated a reduction in NSF fees going forward, inflation and current economic conditions have resulted in NSF fees of $748,000 and $754,000 for the current and linked quarters compared to $708,000 for the prior year quarter.

The actions of the FOMC beginning in March 2022 have resulted in higher interest rates on home mortgage loan products. The higher interest rate environment over the past 21 months has significantly impacted our mortgage loan origination activities and the gains we recognize on the sale of those originations. The gain on the sale of mortgages for the current quarter is $58,000 compared to $124,000 for Q3 2023 and $98,000 for the prior year quarter. The higher interest rate environment has had a more pronounced impact on the sale of existing homes. There remains an overall housing shortage which is being satisfied by national tract builders who have their own financing arms. As more potential buyers understand that mortgage rates may not return to the low levels seen in recent years, we expect our mortgage related income to begin to increase.

Other non-interest income is $(6.1) million for the current quarter compared to $563,000 for the linked quarter and $580,000 for the prior year quarter. The Company sold US Treasury securities with a par value of $55.0 million which were earning 1.32% and realized a pre-tax loss of $6.6 million. Management believes that repositioning the proceeds to interest-earning cash and deploying those funds into higher yielding loans over time will allow the Company to recapture the loss in less than three years. The securities averaged 48 months remaining until maturity. Revenue from our trust and wealth divisions are the largest components of other non-interest income. Revenue from trust services is $145,000, $137,000 and $203,000 and revenue from wealth activities is $125,000, $111,000 and $82,000 for the three comparative periods, respectively. Other than the loss on securities, there are no other non-recurring, non-operating revenue items attributable to any of the three comparative periods.

Non-interest income for the twelve-month period ended December 31, 2023 was $3.5 million compared to the $11.7 million reported for the comparative 2022 period. Service charges and fees decreased by $284,000 to $8.9 million from $9.2 million. Gains on the sale of originated mortgage loans are $444,000 compared to $839,000 for the prior year and other non-interest income was $(5.8) million compared to $1.7 million for 2022. The decrease in other non-interest income is due to a non-recurring, non-operating loss on the sale of securities during 2023 in the amount of $7.8 million.

Non-Interest Expense

Total non-interest expense is $9.9 million for the quarter ended December 31, 2023 compared to $9.6 million for linked quarter and $9.5 million for the fourth quarter of 2022. Salary and benefits expenses are the largest component of non-interest expenses and are $5.1 million for the current period compared to $5.2 million for the linked quarter and $4.9 million for the prior year quarter. Salary expenses have increased as we rounded out our commercial banking team for expansion into the Baton Rouge and the Northshore markets of Louisiana.

Occupancy expenses are relatively flat over the three comparative periods at $1.4 million per quarter. Data processing expenses are $1.3 million for the quarter ended Q4 2023, $1.4 million for Q3 2023 and $1.2 million for Q4 2022. Advertising and public relations expenses total $440,000 in the current quarter compared to $250,000 in the linked quarter and $401,000 for the prior year quarter. In Q4 of each year we incur promotional expense related to our Christmas Club product and for the current quarter we had additional marketing expenses for two new commercial bankers in the Baton Rouge market. Other non-interest expenses were $1.7 million for the current quarter compared to $1.4 million for the linked quarter and $1.7 million for the prior year quarter. The largest components of other non-interest expenses include professional fees, real estate ad valorem fees, and losses associated with fraud, FDIC insurance premiums, and telecommunication costs. Net losses (gains) on the sale of OREO are $27,000, $3,000 and $(12,000) for the three comparative periods, respectively.

Non-interest expenses for the twelve-month period ended December 31, 2023 are $38.9 million, reflecting a $1.9 million increase compared to $37.0 million for the prior year. Increases in salary and employee benefits, data processing, occupancy, FDIC insurance premiums and professional fees were partially offset by decreases in advertising and public relations, debit card and other fraud losses and miscellaneous non-interest expenses. Net losses on the sale of OREO for the current and prior twelve-month periods are $31,000 and $30,000, respectively. Other non-recurring, non-operating expense includes a $153,000 reimbursement of NSF fees to customers with multiple representments of the same item in 2023 and the $283,000 loss on the sale of a former bank branch in 2022.

For the quarter ended December 31, 2023, we recognized an income tax benefit of $804,000 compared to income tax expenses of $695,000 for the linked quarter and $702,000 for prior year quarter. The effective tax rates for the linked and prior year quarters are 16.60% and 17.03%, respectively. Income tax expense for the twelve months ended December 31, 2023 is $862,000 with an effective rate of 11.58% compared to $2.4 million and 16.49% for the prior year twelve-month period. The decrease in effective tax rate is primarily due to the large tax benefit derived from securities sales.

Balance Sheet

Although total assets rounded to $1.2 billion at both December 31, 2023 and 2022, there is a $47.0 million reduction in total assets year over year. The decline was attributable to an outflow of deposits and partially offset by an increase in borrowed funds and equity capital. Deposits accumulated during the past several years from pandemic related stimulus and insurance proceeds related to hurricanes have declined as stimulus has ended, inflation has increased the cost of living, insurance proceeds have been used to effectuate hurricane repairs and funds have moved to higher interest earning alternatives. Equity capital increased due to net income plus increases in the fair market value of available for sale securities less dividends paid to shareholders.

The largest change to the total assets is a $77.8 million decrease in the investment portfolio. The decline is comprised of $97.3 million in securities sales and principal repayments and is partially offset by $19.5 million in fair market increases on available for sale securities. Two asset categories experienced increases during the year as total cash increased by $26.2 million to $74.5 million and gross loans held for investment increased by $13.7 million to $685.6 million.

Total deposits declined by $116.1 million during the year to close at $1.1 billion. Deposit account types experiencing declines include interest-bearing demand ($72.1 million), noninterest-bearing demand ($27.4 million) and savings accounts ($3.9 million). Time deposit balances increased by $42.5 million over the course of the year and comprise 14.07% of total deposits, up from 8.93% as of December 31, 2022. Between December 31, 2019 and December 31, 2021, total deposits grew by $429.3 million due to government sponsored pandemic stimulus and insurance proceeds related to hurricane damage sustained in southwest Louisiana. The decline in deposits is due to various reasons as previously discussed. Despite the deposit outflows over the two years, deposit levels remain 33.13% higher than those of December 31, 2019.

Other borrowings increased by $50.1 million from $29.8 million at December 31, 2022 to $79.9 million at December 31, 2023. The increase is due to the Bank's participation in the Federal Reserve Bank's Bank Term Lending Facility. The Bank borrowed two tranches of term funds at different points in the year totaling $50.0 million. The blended cost of those funds is 4.80% for 2023. The Company has $30.0 million in subordinated debt outstanding at a rate of 3.75%. Accrued expenses and other liabilities increased by $1.7 million to $6.3 million at December 31, 2023.

Stockholders' equity increased by $17.3 million to $74.4 million at December 31, 2023 from $57.1 million at December 31, 2022. The increase is due to an increase in the value of available for sale securities, net of associated tax benefits, of $15.4 million, net income of $6.6 million and partially offset by $3.7 million in dividends paid to shareholders and $1.2 million in one-time expenses to implement the Current Expected Credit Losses (CECL) methodology. The tangible equity to assets ratio increased to 5.93% at December 31, 2023 from 4.30% at December 31, 2022 due to the higher level of equity capital. There were 3,419,560 common shares outstanding at December 31, 2023 and 3,420,560 shares outstanding at December 31, 2022. The decrease in shares issued and outstanding results from the forfeiture of 1,000 shares issued in 2022 under the long-term equity incentive plan (the "Plan"). No shares were issued pursuant to the Plan in 2023. Tangible book value per common share increased to $20.52 at December 31, 2023 compared to $15.47 at December 31, 2022.

Key Performance Ratios

Return on average assets (ROA) is (0.74)% for the current quarter compared to 1.16% for the linked quarter and 1.10% for prior year quarter. Return on average equity (ROE) is (16.03)%, 21.43% and 27.65% for the three comparative quarters, respectively. ROA and ROE for the twelve-month periods ended December 31, 2023 and 2022 were 0.55% and 0.95%, and 10.79% and 16.37%, respectively. ROA for the current quarter and ROE for the 2023 twelve month-period are negatively impacted by the realized losses on the sale of securities during the year.

About JD Bancshares, Inc.

JD Bancshares, Inc. is the bank holding company of JD Bank, a state-chartered bank headquartered in Jennings, Louisiana. JD Bank has been serving the citizens of south Louisiana since 1947 and offers a variety of personal and commercial lending and deposit products through both physical and digital delivery channels. The Bank also offers both trust and investment services. JD Bank operates through 22 full-service branch offices and two Loan Production/Deposit Production offices located along the Interstate 10/12 corridor from Lake Charles to Mandeville, Louisiana. JD Bancshares, Inc. may be accessed on its website at jdbank.com.

JD Bancshares, Inc. (OTCQX: JDVB) trades on the OTCQX Best Market. Companies meet high financial standards, follow best practice corporate governance, demonstrate compliance with U.S. securities laws, and have a professional third-party sponsor introduction. Investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on otcmarkets.com.

Forward-Looking Statements

Statements contained in this release, which are not historical facts, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors which include the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, the effects of competition, and including without limitation to other factors that could cause actual results to differ materially as discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.

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(OTCQX: JDVB)

CONTACT:

JD Bancshares, Inc.Bruce Elder (CEO) 337-246-5399Paul Brummett (CFO) 337-246-5395Website: www.jdbank.com

JD BANCSHARES, INC. AND SUBSIDIARIESJENNINGS, LOUISIANA

CONSOLIDATED BALANCE SHEETS(UNAUDITED)

ActualDec 2023 ActualDec 2022 $ Variance % Variance
Assets
Cash and due from banks 29,553,368 26,434,524 3,118,844 11.8
Interest bearing deposits with banks 44,981,870 21,855,505 23,126,365 105.8
Investment Securities - Taxable 243,375,614 321,185,999 (77,810,385) (24.2)
Investment Securities - Tax-exempt 126,485,908 131,488,014 (5,002,106) (3.8)
Mortgage loans held for sale - 549,984 (549,984) (100.0)
Loans, net of unearned income 685,618,017 671,942,133 13,675,884 2.0
Less: Allowance for credit losses (9,907,722) (9,208,070) (699,652) 7.6
Premises and equipment, net 21,668,586 22,692,381 (1,023,795) (4.5)
Accrued interest receivable 4,908,323 4,985,487 (77,164) (1.5)
Other real estate 1,513,964 863,101 650,863 75.4
Other assets 40,271,967 42,656,191 (2,384,224) (5.6)
Total Assets 1,188,469,895 1,235,445,249 (46,975,354) (3.8)
Liabilities
Non-Interest Bearing Deposits 254,516,587 281,921,238 (27,404,651) (9.7)
Interest bearing demand deposits 311,708,545 383,786,414 (72,077,869) (18.8)
Savings and Money Market Deposits 317,061,228 376,093,240 (59,032,012) (15.7)
Time Deposits - Retail 144,650,491 102,193,314 42,457,177 41.5
Total Deposits 1,027,936,851 1,143,994,206 (116,057,355) (10.1)
Accrued expenses and other liabilities 6,267,474 4,590,785 1,676,689 36.5
Other Borrowings 79,906,591 29,764,526 50,142,065 168.5
Total Liabilities 1,114,110,916 1,178,349,517 (64,238,601) (5.5)
Equity
Common stock 21,372,250 21,378,500 (6,250) (0.0)
3,419,560 shares outstanding at 12.31.23
3,420,560 shares outstanding at 12.31.22
Capital surplus 10,294,678 10,312,636 (17,958) (0.2)
Retained earnings 78,562,644 76,844,905 1,717,739 2.2
Accumulated other comprehensive income (loss) (35,506,973) (50,873,123) 15,366,150 (30.2)
Less: Treasury stock, at cost (363,620) (567,186) 203,566 (35.9)
Total Equity 74,358,979 57,095,732 17,263,247 30.2
Total Liabilities & Equity 1,188,469,895 1,235,445,249 (46,975,354) (3.8)

JD BANCSHARES, INC. AND SUBSIDIARIESJENNINGS, LOUISIANA

CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

QTDActualDec 2023 QTDActualSep 2023 $ Variance % Variance QTDActualDec 2022 $ Variance % Variance
Interest Income
Interest on Loans 10,440,818 10,054,185 386,633 3.8 9,295,379 1,145,439 12.3
Mortgage Loans Held For Sale 2,961 8,213 (5,252) (63.9) 7,729 (4,768) (61.7)
Interest on deposits with banks 590,396 317,052 273,344 86.2 260,862 329,534 126.3
Investment Securities - Taxable 1,934,003 1,933,021 982 0.1 1,937,881 (3,878) (0.2)
Investment Securities - Tax-exempt 780,155 781,796 (1,641) (0.2) 809,529 (29,374) (3.6)
Total Interest Income 13,748,333 13,094,267 654,066 5.0 12,311,380 1,436,953 11.7
Interest Expense
Interest bearing demand deposits 337,696 333,127 4,569 1.4 220,006 117,690 53.5
Savings and Money Market Deposits 500,957 507,377 (6,420) (1.3) 325,950 175,007 53.7
Time Deposits - Retail 993,721 720,298 273,423 38.0 182,799 810,922 443.6
Total Interest Expense on Deposits 1,832,374 1,560,802 271,572 17.4 728,755 1,103,619 151.4
Interest on other borrowings 882,759 698,643 184,116 26.4 316,366 566,393 179.0
Total Interest Expense 2,715,133 2,259,445 455,688 20.2 1,045,121 1,670,012 159.8
Net Interest Income 11,033,200 10,834,822 198,378 1.8 11,266,259 (233,059) (2.1)
Provision for credit losses 323,650 (36,920) 360,570 (976.6) 533,000 (209,350) (39.3)
Net In. Inc. After Prov. for Credit Losses 10,709,550 10,871,742 (162,192) (1.5) 10,733,259 (23,709) (0.2)
Non Interest Income
Service charges and fees 2,200,116 2,224,841 (24,725) (1.1) 2,253,309 (53,193) (2.4)
Mortgage loan and related fees 58,068 123,787 (65,719) (53.1) 97,928 (39,860) (40.7)
Other noninterest income (6,090,200) 562,600 (6,652,800) (1,182.5) 580,365 (6,670,565) (1,149.4)
Total Non Interest Income (3,832,016) 2,911,228 (6,743,244) (231.6) 2,931,602 (6,763,618) (230.7)
Non Interest Expense
Salaries and employee benefits 5,069,563 5,156,945 (87,382) (1.7) 4,867,737 201,826 4.15
Occupancy 1,409,802 1,390,439 19,363 1.4 1,367,330 42,472 3.1
Advertising and public relations 439,775 250,061 189,714 75.9 400,555 39,220 9.8
Data Processing 1,285,919 1,366,432 (80,513) (5.9) 1,216,896 69,023 5.7
Other noninterest expense 1,690,183 1,430,952 259,231 18.1 1,688,367 1,816 0.1
Total Non Interest Expense 9,895,242 9,594,829 300,413 3.1 9,540,885 354,357 3.7
Income Before Taxes (3,017,708) 4,188,141 (7,205,849) (172.1) 4,123,976 (7,141,684) (173.2)
Income taxes (804,016) 695,289 (1,499,305) (215.6) 702,308 (1,506,324) (214.5)
Net Income (2,213,692) 3,492,852 (5,706,544) (163.4) 3,421,668 (5,635,360) (164.7)
Per common share data:
Earnings $(0.65)$1.02 $1.00
Weighted average number of shares outstanding 3,419,560 3,419,560 3,414,370

Note: Some items may have been reclassified from prior presentations

JD BANCSHARES, INC. AND SUBSIDIARIESJENNINGS, LOUISIANA

CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

YTDActualDec 2023 YTDActualDec 2022 $ Variance % Variance
Interest Income
Interest on Loans 40,000,208 34,202,175 5,798,033 17.0
Mortgage Loans Held For Sale 28,187 35,584 (7,397) (20.8)
Interest on deposits with banks 1,363,862 736,455 627,407 85.2
Investment Securities - Taxable 7,805,878 6,278,441 1,527,437 24.3
Investment Securities - Tax-exempt 3,143,562 3,219,465 (75,903) (2.4)
Total Interest Income 52,341,697 44,472,120 7,869,577 17.7
Interest Expense
Interest bearing demand deposits 1,242,384 851,903 390,481 45.8
Savings and Money Market Deposits 1,937,680 988,669 949,011 96.0
Time Deposits - Retail 2,607,684 810,995 1,796,689 221.5
Total Interest Expense on Deposits 5,787,748 2,651,567 3,136,181 118.3
FHLB Advances 36,522 - 36,522 -
Interest on other borrowings 2,400,526 1,309,850 1,090,676 83.3
Total Interest Expense 8,224,796 3,961,417 4,263,379 107.6
Net Interest Income 44,116,901 40,510,703 3,606,198 8.9
Provision for credit losses 1,252,399 722,000 530,399 73.5
Net In. Inc. After Prov. for Credit Losses 42,864,502 39,788,703 3,075,799 7.7
Non Interest Income
Service charges and fees 8,870,553 9,154,181 (283,628) (3.1)
Mortgage loan and related fees 443,682 839,341 (395,659) (47.1)
Other noninterest income (5,785,936) 1,718,176 (7,504,112) (436.7)
Total Non Interest Income 3,528,299 11,711,698 (8,183,399) (69.9)
Non Interest Expense
Salaries and employee benefits 20,447,925 19,000,090 1,447,835 7.6
Occupancy 5,545,088 5,151,139 393,949 7.6
Advertising and public relations 1,344,578 1,519,603 (175,025) (11.5)
Data Processing 5,199,378 4,534,272 665,106 14.7
Other noninterest expense 6,413,332 6,811,100 (397,768) (5.8)
Total Non Interest Expense 38,950,301 37,016,204 1,934,097 5.2
Income Before Taxes 7,442,500 14,484,197 (7,041,697) (48.6)
Income taxes 861,594 2,388,434 (1,526,840) (63.9)
Net Income 6,580,906 12,095,763 (5,514,857) (45.6)
Per common share data:
Earnings $1.92 $3.54
Weighted average number of shares outstanding 3,420,056 3,416,143

Note: Some items may have been reclassified from prior presentations

JD BANCSHARES, INC. AND SUBSIDIARIESMargin Analysis Compare

Average Yield and Rate Average Funds Interest Income/Expense
QTDActualDec 2023 QTDActualDec 2022 Change QTDActualDec 2023 QTDActualDec 2022 Change QTDActualDec 2023 QTDActualDec 2022 Change
Earning Assets
Loans 6.13 5.47 0.66 676,135,026 673,648,814 2,486,212 10,440,818 9,295,379 1,145,439
Mortgage loans held for sale 8.04 6.12 1.92 147,305 504,835 (357,530) 2,961 7,729 (4,768)
Deposits with banks 6.61 4.12 2.49 35,424,053 25,146,127 10,277,926 590,396 260,862 329,534
Investment securities - taxable 2.43 2.00 0.43 317,930,937 388,281,819 (70,350,882) 1,934,003 1,937,881 (3,878)
Investment securities - tax-exempt 3.12 3.11 0.01 126,648,759 131,796,919 (5,148,160) 780,155 809,529 (29,374)
Total Earning Assets 4.79 4.08 0.71 1,156,286,079 1,219,378,514 (63,092,435) 13,748,333 12,311,381 1,436,952
Interest bearing liabilities
Interest bearing demand 0.43 0.23 0.20 310,674,038 374,021,824 (63,347,786) 337,696 220,006 117,690
Savings and Money Market 0.62 0.33 0.29 322,767,841 386,683,300 (63,915,459) 500,957 325,950 175,007
Time deposits - Retail 2.96 0.71 2.25 133,079,112 101,531,576 31,547,536 993,721 182,799 810,922
Total interest bearing deposits 0.95 0.34 0.61 766,520,991 862,236,700 (95,715,709) 1,832,374 728,755 1,103,619
Other borrowings 4.59 4.16 0.43 75,342,368 29,759,059 45,583,309 882,759 316,366 566,393
Total borrowed funds 4.59 4.16 0.43 75,342,368 29,759,059 45,583,309 882,759 316,366 566,393
Total interest-bearing liabilities 1.28 0.46 0.82 841,863,359 891,995,759 (50,132,400) 2,715,132 1,045,121 1,670,011
Net interest rate spread 3.52 3.62 (0.10) 11,033,201 11,266,260 (233,059)
Effect of non-interest bearing deposits (0.35) (0.12) (0.23) 275,018,493 288,756,438 (13,737,945)
Cost of funds 0.93 0.34 0.59
Net interest margin 3.86 3.74 0.12

JD BANCSHARES, INC. AND SUBSIDIARIESMargin Analysis Compare

Average Yield and Rate Average Funds Interest Income/Expense
YTDActualDec 2023 YTDActualDec 2022 Change YTDActualDec 2023 YTDActualDec 2022 Change YTDActualDec 2023 YTDActualDec 2022 Change
Earning Assets
Loans 5.95 5.18 0.77 672,751,806 649,309,434 23,442,372 40,000,209 34,202,175 5,798,033
PPP fees - 0.09 (0.09) - - - - - -
Loans with fees 5.95 5.27 0.68 672,751,806 649,309,434 23,442,372 40,000,209 34,202,175 5,798,033
Mortgage loans held for sale 7.64 4.90 2.74 369,009 726,499 (357,490) 28,187 35,584 (7,397)
Deposits with banks 6.07 1.08 4.99 22,473,309 68,194,035 (45,720,726) 1,363,862 736,455 627,407
Investment securities - taxable 2.25 1.64 0.61 347,025,491 382,434,419 (35,408,928) 7,805,878 6,278,441 1,527,438
Investment securities - tax-exempt 3.11 3.09 0.02 128,046,513 131,912,664 (3,866,151) 3,143,562 3,219,465 (75,904)
Total Earning Assets 4.54 3.68 0.86 1,170,666,128 1,232,577,050 (61,910,922) 52,341,698 44,472,121 7,869,577
Interest bearing liabilities
Interest bearing demand 0.38 0.23 0.15 325,748,018 368,005,127 (42,257,109) 1,242,384 851,903 390,481
Savings and Money Market 0.54 0.25 0.29 356,546,099 403,127,597 (46,581,498) 1,937,680 988,669 949,011
Time deposits - Retail 2.19 0.75 1.44 119,183,119 107,601,836 11,581,283 2,607,684 810,995 1,796,689
Total interest bearing deposits 0.72 0.36 0.36 801,477,236 878,734,560 (77,257,324) 5,787,748 2,651,567 3,136,181
Federal home Loan Bank advances 5.22 - 5.22 690,411 - 690,411 36,522 - 36,522
Other borrowings 4.46 4.23 0.23 53,112,033 30,509,532 22,602,501 2,400,526 1,309,850 1,090,676
Total borrowed funds 4.47 4.23 0.24 53,802,444 30,509,532 23,292,912 2,437,048 1,309,850 1,127,198
Total interest-bearing liabilities 0.96 0.44 0.52 855,279,680 909,244,092 (53,964,412) 8,224,797 3,961,417 4,263,379
Net interest rate spread 3.58 3.24 0.34 44,116,901 40,510,704 3,606,197
Effect of non-interest bearing deposits (0.26) (0.12) (0.14) 274,433,451 290,499,301 (16,065,849)
Cost of funds 0.70 0.32 0.38
Net interest margin 3.84 3.36 0.48

JD BANCSHARES, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

Financial Ratios

For the Twelve For the Twelve
For the Qtr For the Qtr For the Qtr Months Months
Ended Ended Ended Ended Ended
December 31,2023 September 30,2023 December 31,2022 December 31,2023 December 31, 2022
Performance Ratios
Return on Average Assets (ROA) -0.74% 1.16% 1.10% 0.55% 0.95%
ROA based on Pre-tax, pre-provision operating income 1.32% 1.38% 1.49% 1.40% 1.14%
Return on Average Equity (ROE) -16.03% 21.43% 27.65% 10.79% 16.37%
ROE based on Pre-tax, pre-provision operating income 28.33% 25.49% 37.53% 27.41% 19.79%
Earnings per Share $(0.65)$1.02 $1.00 $1.92 $3.54
Net Interest Margin 3.87% 3.75% 3.74% 3.84% 3.36%
Efficiency Ratio ** 70.56% 68.74% 66.28% 68.83% 69.53%
Non-Interest Income as a % of Avg. Assets** 0.92% 0.96% 0.94% 0.95% 0.89%
Non-Interest Expense as a % of Avg. Assets** 3.32% 3.18% 3.07% 3.24% 2.87%
As of As of
December 31, 2023 December 31, 2022
Bank Level Capital Ratios:
Tier 1 Leverage Ratio 10.67% (Est.) 10.04%
Common Equity Tier 1 Ratio 16.41% (Est.) 15.45%
Tier 1 Risk-Based Capital Ratio 16.41% (Est.) 15.45%
Total Risk-Based Capital Ratio 17.65% (Est.) 16.55%
Company:
Tangible Equity / Total Assets 5.93% 4.30%
Tangible Book Value per Share $20.52 $15.47

Reconcilement of GAAP to Pre-tax, Pre-Provision Operating Income:

For the Twelve For the Twelve
For the Qtr For the Qtr For the Qtr Months Months
Ended Ended Ended Ended Ended
December 31,2023 September 30,2023 December 31,2022 December 31,2023 December 31,2022
Net Income (GAAP) $(2,213,692)$3,492,852 $3,421,668 $6,580,906 $12,095,763
Provision for Loan Lossess 323,650 (36,920) 533,000 1,252,399 722,000
Net (Gain) Loss on OREO 27,001 3,063 (11,952) 31,086 30,034
Net (Gain) Loss on Securities 6,577,772 - - 7,840,872 -
Non-recurring Revenue - - - - (291,127)
Non-recurring Expenses - - - 153,413 282,961
Nonrecurring Revenue - PPP origination fees - - - - (605,497)
Income Tax Expense (804,016) 695,289 702,308 861,594 2,388,434
Pre-tax, Pre-Provision Operating Income $3,910,715 $4,154,284 $4,645,024 $16,720,270 $14,622,568

** Non-recurring items are eliminated for this ratio

SOURCE: JD Bancshares, Inc.

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