Calvin B. Taylor Bankshares, Inc. (OTCQX:TYCB), the parent company of Calvin B. Taylor Bank, has reported robust financial results for the third quarter of 2024, demonstrating resilience and strategic growth in a challenging economic landscape.
The company posted a net income of $3.7 million for Q3 2024, translating to $1.37 per share. This marks a significant improvement from the second quarter’s $2.8 million, or $1.03 per share. Year-to-date net income reached $9.5 million, or $3.47 per share.
The Return on Average Assets (ROAA) saw a notable increase to 1.59% in Q3 2024, up from 1.29% in Q2 2024. This improvement reflects the company’s enhanced operational efficiency and asset utilization.
A notable achievement for the quarter was the significant growth in deposits, which increased by $56.0 million, or 7.1%, compared to June 30, 2024, and by $98.5 million, or 13.2%, since December 31, 2023. This growth was primarily fueled by an increase of $26.7 million, or 11.1%, in noninterest-bearing deposits and a rise of $29.3 million, or 5.4%, in interest-bearing deposits.
The company’s success in gathering low-cost deposits has bolstered its liquidity position, particularly as the local tourism economy enters its off-season.
In the third quarter of 2024, the net interest margin experienced a notable expansion, rising from 3.48% in Q2 to 3.58%, driven by two key factors. The financial performance benefited from an 8 basis point increase in the average yield of total interest-earning assets, which contributed to enhanced revenue generation. Simultaneously, the bank achieved a reduction in total funding costs by 3 basis points, primarily accomplished through higher average balances in noninterest-bearing deposits. These strategic improvements collectively supported the quarter-over-quarter growth in net interest margin, reflecting the institution’s effective asset management and funding strategies.
The efficiency ratio improved to 46.6% in Q3 2024, compared to 50.6% in Q2 2024, indicating stronger operating leverage.
Calvin B. Taylor Bankshares is in the final stages of a core banking system upgrade, scheduled for completion in Q4 2024. This upgrade aims to enhance customer experience with additional functions and features while creating operational efficiencies across various banking functions.
The company is also expanding its physical presence with a new branch opening in Cape Charles, VA, demonstrating its commitment to strategic growth.
The loan portfolio grew by $17.8 million (3.1%) since December 31, 2023[1]. Loan yields increased from 4.93% in Q3 2023 to 5.38% in Q3 2024, reflecting the impact of higher interest rates on new loan originations and variable-rate loans.
Credit quality remains strong, with past due loans at a low 0.64% of total loans as of September 30, 2024. The allowance for credit losses stood at 0.63% of total loans, unchanged from the previous quarter.
President and CEO Raymond M. Thompson emphasized the company’s focus on disciplined lending and transitioning lower-yielding assets to higher-yielding ones to improve net interest income and operating margin.
As Calvin B. Taylor Bankshares navigates the evolving financial landscape, its strong Q3 2024 performance and strategic initiatives appear to position the bank for continued growth and stability in the coming quarters.
