ECBK ECB Bancorp Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): October 24, 2024

 

ECB BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland	001-41456	88-1502079
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation or Organization)	File Number)	Identification No.)

 

419 Broadway, Everett, Massachusetts 02149

(Address of principal executive offices) (Zip Code)

 

(617) 387-1110

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ECBK	The Nasdaq Stock Market LLC

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition

 

On October 24, 2024, ECB Bancorp, Inc., the holding company for Everett Co-operative Bank, issued a press release announcing its financial results at and for the three and nine months ended September 30, 2024.

 

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1		Press release dated October 24, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURE

 

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.

 

		ECB BANCORP, INC.
Date: October 24, 2024	By:	/s/Brandon N. Lavertu
		Brandon N. Lavertu
		Chief Financial Officer

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For Immediate Release

Date: October 24, 2024

Contact:		Richard J. O’Neil, Jr.
		President and Chief Executive Officer
Phone:		617-387-1110
Email:		rjoneil@everettbank.com

 

ECB Bancorp, Inc. Reports Third Quarter Results

EVERETT, MA, October 24, 2024 - ECB Bancorp, Inc. (NASDAQ-ECBK) (the “Company”), the holding company for Everett Co-operative Bank (the “Bank”), a state-chartered co-operative bank headquartered in Everett, Massachusetts, today reported net income of $1.1 million, or $0.14 per diluted share, for the quarter ended September 30, 2024, compared to $1.3 million, or $0.16 per diluted share, for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported net income of $2.5 million, or $0.30 per diluted share, as compared to net income of $3.7 million, or $0.43 per diluted share, for the nine months ended September 30, 2023.

Richard J. O’Neil, Jr., President and Chief Executive Officer, said, "We remain focused on orderly and diligent balance sheet growth and maintaining strong asset quality. We are committed to thoughtfully managing expenses and are focused on enhancing franchise value every day. The third quarter marks the one-year anniversary of the opening of our Woburn, MA branch. As of September 30th, 2024 our Woburn team has grown deposits to $68 million and we have established many new banking relationships. Our retail and lending teams continue to strengthen our existing relationships and attract new customers to our brand and expanded offerings."

NET INTEREST AND DIVIDEND INCOME

Net interest and dividend income before provision for credit losses was $6.3 million for the quarter ended September 30, 2024, or an increase of $205,000, or 3.4%, from $6.1 million for the quarter ended September 30, 2023. This increase was primarily due to an increase in average interest-earning assets, partially offset by a decrease in net interest margin. The net interest margin for the quarter ended September 30, 2024 was 1.85% as compared to 2.00% for the quarter ended September 30, 2023. The provision for credit losses was $46,000 for the quarter ended September 30, 2024 compared to a benefit of $184,000 for the quarter ended September 30, 2023. The combination of these items resulted in a decrease of $25,000, or 0.4%, in net interest and dividend income after provision for credit losses for the quarter ended September 30, 2024 as compared to the quarter ended September 30, 2023.

 

Net interest and dividend income before provision for credit losses was $18.2 million for the nine months ended September 30, 2024, or a decrease of $646,000, or 3.4%, from $18.9 million for the nine months ended September 30, 2023. This decrease was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. Our net interest margin for the nine months ended September 30, 2024 was 1.83% as compared to 2.18% for the nine months ended September 30, 2023. The provision for credit losses decreased $211,000, to $485,000 for the nine months ended September 30, 2024, from $696,000 for the nine months ended September 30, 2023. The combination of these items resulted in a decrease of $435,000, or 2.4%, in net interest and dividend income after provision for credit losses for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

NONINTEREST INCOME

Noninterest income was $304,000 for the quarter ended September 30, 2024, or a decrease of $18,000, or 5.6%, from $322,000 for the quarter ended September 30, 2023. The decrease was driven by lower income from bank-owned life insurance as the third quarter of 2023 included a $72,000 gain recognized into income from a life insurance policy death benefit. Partially offsetting this decrease were increases in both net gains on sales of loans and customer service fees.

 

Noninterest income was $898,000 for the nine months ended September 30, 2024, or an increase of $107,000, or 13.5%, from $791,000 for the nine months ended September 30, 2023. The increase was driven by increases in net gains on sales of loans and customer service fees.

NONINTEREST EXPENSE

Noninterest expense was $5.0 million for the quarter ended September 30, 2024, or an increase of $200,000, or 4.2%, from $4.8 million for the quarter ended September 30, 2023. Significant changes are as follows:

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Noninterest expense was $15.2 million for nine months ended September 30, 2024, or an increase of $1.2 million, or 8.3%, from $14.0 million for the nine months ended September 30, 2023. Significant changes are as follows:

INCOME TAXES

We recorded a provision for income tax expense of $405,000 for the quarter ended September 30, 2024, compared to a provision for income tax expense of $440,000 for the quarter ended September 30, 2023, reflecting effective tax rates of 26.3% and 24.7%, respectively.

 

We recorded a provision for income tax expense of $887,000 for the nine months ended September 30, 2024, compared to a provision for income tax expense of $1.3 million for the nine months ended September 30, 2023, reflecting effective tax rates of 25.8% and 25.6%, respectively.

BALANCE SHEET

Total assets increased $77.6 million, or 6.1%, to $1.36 billion at September 30, 2024 from $1.28 billion at December 31, 2023.

Total gross loans increased $75.9 million, or 7.2%, to $1.12 billion at September 30, 2024 from $1.05 billion at December 31, 2023.

Deposits increased $76.1 million, or 8.8%, to $944.3 million at September 30, 2024 from $868.2 million at December 31, 2023.

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Total shareholders' equity increased $1.1 million, or 0.7%, to $166.0 million as of September 30, 2024 from $164.9 million as of December 31, 2023. This increase is primarily the result of net income of $2.5 million. Partially offsetting the increase in shareholders' equity was a decrease in accumulated other comprehensive income ("AOCI") of $910,000 and a decrease in additional paid-in capital of $761,000. The decrease in AOCI was driven by a decrease in the fair value of cash flow hedges entered into during the nine months ended September 30, 2024. The decrease in additional paid in capital was driven by $1.8 million in shares repurchased under our share repurchase plan, partially offset by an increase in additional paid in capital of $1.1 million related to stock based compensation and ESOP shares committed to be released. The book value per share increased $0.39 to $18.14 at September 30, 2024 from $17.75 at December 31, 2023.

ASSET QUALITY

Asset quality remains strong. The allowance for credit losses in total and as a percentage of total loans as of September 30, 2024 was $9.0 million and 0.81%, respectively, as compared to $8.6 million and 0.82%, respectively, as of December 31, 2023. For the nine months ended September 30, 2024 and September 30, 2023 the Company recorded net charge offs of $3,000 and $0, respectively. Total non-performing assets were $1.1 million, or 0.08%, of total assets as of September 30, 2024, and $1.2 million, or 0.09% of total assets, as of December 31, 2023.

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Company Profile

ECB Bancorp, Inc. is headquartered in Everett, Massachusetts and is the holding company for Everett Co-operative Bank. The Bank provides financial services to individuals, families, municipalities and businesses through its three full-service branch offices located in Everett, Lynnfield and Woburn, Massachusetts. The Company's common stock is traded on the NASDAQ Capital Market under the symbol "ECBK." For more information, visit the Company's website at www.everettbank.com.

Forward-looking statements

Certain statements herein constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. As a result, actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, the Company's ability to continue to increase loans and deposit growth, legislative and regulatory changes that adversely affect the businesses in which the Company is engaged and changes in the securities market. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise, except as may be required by law.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ECB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

September 30, 2024 (unaudited) and December 31, 2023

(in thousands except share data)

 

		September 30, 2024				December 31, 2023
ASSETS
Cash and due from banks		$	4,783			$	3,786
Short-term investments			114,847				115,250
Total cash and cash equivalents			119,630				119,036
Interest-bearing time deposits			200				—
Investments in available-for-sale securities (at fair value)			4,163				5,003
Investments in held-to-maturity securities, at amortized cost (fair values of $72,841 at September 30,    2024 and $70,590 at December 31, 2023)			77,233				76,979
Loans held-for-sale			703				—
Loans, net of allowance for credit losses of $9,068 at September 30, 2024    and $8,591 at December 31, 2023			1,114,943				1,039,789
Federal Home Loan Bank stock, at cost			9,850				9,892
Premises and equipment, net			3,587				3,754
Accrued interest receivable			4,164				3,766
Deferred tax asset, net			5,592				4,767
Bank-owned life insurance			14,826				14,472
Other assets			3,063				2,877
Total assets		$	1,357,954			$	1,280,335
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing		$	74,059			$	78,342
Interest-bearing			870,266				789,872
Total deposits			944,325				868,214
Federal Home Loan Bank advances			234,000				234,000
Other liabilities			13,580				13,220
Total liabilities			1,191,905				1,115,434
Shareholders' Equity:
Preferred Stock, par value $0.01; Authorized: 1,000,000 shares; Issued and outstanding: 0 shares and 0 shares, respectively			—				—
Common Stock, par value $0.01; Authorized: 30,000,000 shares; Issued and outstanding: 9,152,280 shares and 9,291,810 shares, respectively			92				93
Additional paid-in capital			86,670				87,431
Retained earnings			86,399				83,854
Accumulated other comprehensive (loss) income			(781	)			129
Unearned compensation - ESOP			(6,331	)			(6,606	)
Total stockholders' equity			166,049				164,901
Total liabilities and stockholders' equity		$	1,357,954			$	1,280,335
Shareholders' Equity Ratios
Book value per common share		$	18.14			$	17.75
Regulatory Capital Ratios (Everett Co-operative Bank)
Total capital to risk weighted assets			16.80	%			17.30	%
Tier 1 capital to risk weighted assets			15.72	%			16.22	%
Tier 1 capital to average assets			10.67	%			11.31	%

 

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ECB Bancorp, Inc. and Subsidiary

Consolidated Statements of Income

(unaudited)

(in thousands except share data)

 

		Three months ended								Nine months ended
		September 30,								September 30,
		2024				2023				2024				2023
Interest and dividend income:
Interest and fees on loans		$	14,849			$	12,313			$	42,468			$	35,362
Interest and dividends on securities			803				723				2,346				1,950
Other interest income			1,503				1,130				4,420				2,567
Total interest and dividend income			17,155				14,166				49,234				39,879
Interest expense:
Interest on deposits			8,795				5,843				24,479				14,815
Interest on Federal Home Loan Bank advances			2,069				2,237				6,550				6,213
Total interest expense			10,864				8,080				31,029				21,028
Net interest and dividend income			6,291				6,086				18,205				18,851
Provision (benefit) for credit losses			46				(184	)			485				696
Net interest and dividend income after provision (benefit) for credit losses			6,245				6,270				17,720				18,155
Noninterest income:
Customer service fees			142				123				426				375
Income from bank-owned life insurance			119				175				353				372
Net gain on sales of loans			27				9				80				13
Other income			16				15				39				31
Total noninterest income			304				322				898				791
Noninterest expense:
Salaries and employee benefits			3,202				2,914				9,643				8,623
Director compensation			209				139				626				379
Occupancy and equipment expense			250				243				788				695
Data processing			288				275				883				810
Computer software and licensing			109				111				318				282
Advertising and promotions			159				201				396				576
Professional fees			240				304				831				962
Federal Deposit Insurance Corporation deposit insurance			189				206				561				613
Other expense			365				418				1,140				1,076
Total noninterest expense			5,011				4,811				15,186				14,016
Income before income tax expense			1,538				1,781				3,432				4,930
Income tax expense			405				440				887				1,263
Net income		$	1,133			$	1,341			$	2,545			$	3,667
Share data:
Weighted average shares outstanding, basic			8,240,602				8,486,577				8,268,550				8,485,936
Weighted average shares outstanding, diluted			8,343,736				8,486,577				8,354,170				8,485,936
Basic earnings per share		$	0.14			$	0.16			$	0.31			$	0.43
Diluted earnings per share		$	0.14			$	0.16			$	0.30			$	0.43

 

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v3.24.3

Document and Entity Information	Oct. 24, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 24, 2024
Securities Act File Number	001-41456
Entity Registrant Name	ECB BANCORP, INC.
Entity Central Index Key	0001914605
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	88-1502079
Entity Address, Address Line One	419 Broadway
Entity Address, City or Town	Everett
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02149
City Area Code	617
Local Phone Number	387-1110
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ECBK
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

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