MUNCY COLUMBIA FINANCIAL Corp 8-K, filed Feb 13, 2024
MUNCY COLUMBIA FINANCIAL Corp (CCFN)
About this 8-K
MUNCY COLUMBIA FINANCIAL Corp filed this 8-K on February 13, 2024.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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CURRENT REPORT
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Lance O. Diehl, Chief Executive Officer, announced the consolidated financial results for Muncy Columbia Financial Corporation for the fourth quarter 2023. On February 13, 2024, Muncy Columbia Financial Corporation issued a press release titled “Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings” attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits.
| Exhibit Number | Description |
| 99.1 | Press Release issued by Muncy Columbia Financial Corporation on February 13, 2024 titled “Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings” |
| 104 | Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
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, hereunto duly authorized.
| Date: February 13, 2024 | Muncy Columbia Financial Corporation | ||
| By: | /s/ Joseph K. O’Neill, Jr. | ||
| Name: | Joseph K. O’Neill, Jr. | ||
| Title: | Executive Vice President and Chief Financial Officer | ||
MUNCY COLUMBIA FINANCIAL CORPORATION 8-K
Exhibit 99.1
Press Release – For Immediate Release
February 13, 2024
Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings
Bloomsburg, PA – Muncy Columbia Financial Corporation (“Corporation”) (OTCQX: CCFN), parent company of Journey Bank (”Bank”), has released its unaudited financial statements for the fourth quarter of 2023.
Merger with Muncy Bank Financial, Inc.
On April 18, 2023, CCFNB Bancorp, Inc. (“CCFNB”) and Muncy Bank Financial, Inc. (“MBF”) jointly announced the signing of a definitive merger agreement to combine the two companies in a strategic merger of equals. Effective November 11, 2023, the merger was completed. Under the terms of the Merger Agreement, (i) MBF merged with and into CCFNB, with CCFNB being the surviving entity, and (ii) The Muncy Bank & Trust Company merged with and into CCFNB's wholly-owned banking subsidiary, First Columbia Bank & Trust Co. ("First Columbia Bank"), with First Columbia Bank being the surviving bank (the "Mergers"). In connection with the Mergers, CCFNB changed its name to Muncy Columbia Financial Corporation and First Columbia Bank changed its name to Journey Bank.
At the effective time of the merger, MBF’s shareholders received a fixed exchange ratio of 0.9259 shares of the Corporation’s common stock for each MBF common share they owned, except to the extent of cash received for fractional shares at $41.47 per share. Total purchase consideration was $55,101,000, including common stock with a fair value of $55,092,000 and cash of $9,000 paid for fractional shares. Holders of MBF common stock prior to the consummation of the merger held approximately 41.7% of the Corporation’s common stock outstanding immediately following the merger.
In connection with the acquisition, effective November 11, 2023, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired included gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed included deposits valued at $521.3 million and borrowings valued at $105.5 million. The fair value adjustments made to the acquired assets and liabilities of MBF are considered preliminary at this time and are subject to change as the Corporation finalizes its fair value determinations. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.
For the year-ended December 31, 2023, the Corporation incurred pre-tax merger-related expenses related to the MBF transaction of $3.0 million, including expenses totaling $1.8 million in the fourth quarter 2023. Merger-related expenses include voluntary severance and similar expenses as well as expenses related to conversion of MBF’s core banking system into the Corporation’s core system and legal and other professional expenses. Also during the fourth quarter 2023, the Corporation recorded a one-time provision for credit losses of $2.9 million for acquired non-Purchase Credit Deteriorated (“PCD”) loans (also known as the “CECL Credit Double Count”).
Dividend Declared and Unaudited Financial Information
On February 13, 2024, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.44 per share, which represents an increase of $0.01 per share compared to the last quarterly dividend of $0.43 per share. The dividend is payable on March 14, 2024 to shareholders of record as of February 27, 2024. Highlights related to the Corporation’s fourth quarter 2023 unaudited results are presented below.
Net loss, as reported under accounting principles generally accepted in the United States of America (“GAAP”), for the quarter-ended December 31, 2023, was $1,186,000 compared to net income of $2,595,000 for the same period in 2022. Net income, as reported under GAAP, for the year -ended December 31, 2023 was $3,387,000 compared to $9,514,000 for the same period in 2022. Net income for the quarter and year-ended December 31, 2023 was significantly impacted by merger related expenses, as described in further detail in the Merger with Muncy Bank Financial, Inc. section above. Earnings per share, basic and diluted, for the quarters-ended December 31, 2023 and 2022 were ($0.41) and $1.25, respectively. Earnings per share, basic and diluted, for the years-ended December 31, 2023 and 2022 were $1.49 and $4.58, respectively. Return on average assets and return on average equity were (0.35%) and (3.95%) for the quarter-ended December 31, 2023 as compared to 1.00% and 10.45% for the same period of 2022.
The fully-tax equivalent net interest margin on interest earning assets and liabilities was 2.34% and 2.55% at December 31, 2023 and 2022, respectively.
Total consolidated assets amounted to $1.6 billion at December 31, 2023 as compared to $944.0 million at December 31, 2022. Changes from December 31, 2022 to December 31, 2023 were primarily driven by the Corporation’s merger with Muncy Bank Financial, Inc. on November 11, 2023.
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The Corporation invests in various forms of agency debt including mortgage-backed securities and callable agency debt. The fair value of these securities is influenced by market interest rates, prepayment speeds on mortgage securities, bid to offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the fair market value of these securities may be higher or lower than the Corporation’s carrying value at any measurement date. The temporary impact on investment securities will also affect stockholders’ equity as these fluctuations are recorded through accumulated other comprehensive income (loss). For the year-ended December 31, 2023, the temporary impact of these unrealized losses on the stockholders’ equity amounted to a reduction of $15.0 million. The Corporation does not consider its debt securities to be credit impaired since it has both the intent and ability to hold the securities until a recovery of its amortized cost basis, which may be maturity, and the decline in fair value is deemed to be as a result of increases in interest rates and not credit factors.
Total stockholders’ equity equated to a book value per share of $43.08 at December 31, 2023 as compared with $41.34 at December 31, 2022. For the year-ended December 31, 2023 cash dividends of $1.71 per share were paid to stockholders as compared to $1.67 for the same period of 2022. The Corporation remains well capitalized, with an equity to assets ratio of 9.38% as of December 31, 2023 and 9.10% at December 31, 2022.
About Muncy Columbia Financial Corporation
Muncy Columbia Financial Corporation ("MCFC") is a registered financial holding company headquartered in Bloomsburg, Pennsylvania. MCFC has one subsidiary bank, Journey Bank, serving individuals, families, nonprofits and business clients throughout Clinton, Columbia, Lycoming, Montour, Northumberland and Sullivan Counties through 22 banking offices.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties related to integration following the merger; the risk that the anticipated benefits, cost savings and other savings from the merger may not be fully realized or may take longer than expected to realize; potential impairment to the goodwill recorded in connection with the merger; changes in general economic trends, including inflation and changes in interest rates; our ability to manage credit risk; our ability to maintain an adequate level of allowance for credit loss on loans; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; fluctuations in the values of securities held in our securities portfolio, including as a result of changes in interest rates; our ability to successfully manage liquidity risk; adverse developments in borrower industries and, in particular, declines in real estate values; the concentration of large deposits from certain customers who have balances above current FDIC insurance limits; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and any other risks described in the “Risk Factors” sections of reports filed by the Corporation with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements.
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Muncy Columbia Financial Corporation
Consolidated Balance Sheets
| December 31, | ||||||||
| (In Thousands, Except Share and Per Share Data) (Unaudited) | 2023 | 2022 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 14,614 | $ | 9,750 | ||||
| Interest-bearing deposits in other banks | 3,763 | 3,333 | ||||||
| Federal funds sold | — | 1 | ||||||
| Total cash and cash equivalents | 18,377 | 13,084 | ||||||
| Interest-bearing time deposits | 979 | — | ||||||
| Available-for-sale debt securities, at fair value | 413,302 | 341,051 | ||||||
| Marketable equity securities, at fair value | 1,295 | 1,077 | ||||||
| Restricted investment in bank stocks, at cost | 10,394 | 3,223 | ||||||
| Loans held for sale | 366 | 4,568 | ||||||
| Loans receivable | 1,068,429 | 527,729 | ||||||
| Allowance for credit losses | (9,302 | ) | (7,279 | ) | ||||
| Loans, net | 1,059,127 | 520,450 | ||||||
| Premises and equipment, net | 27,569 | 12,514 | ||||||
| Foreclosed assets held for sale | 170 | — | ||||||
| Accrued interest receivable | 5,362 | 2,222 | ||||||
| Bank-owned life insurance | 40,209 | 21,859 | ||||||
| Investment in limited partnerships | 5,828 | 3,745 | ||||||
| Deferred tax asset, net | 12,634 | 8,377 | ||||||
| Goodwill | 25,609 | 7,937 | ||||||
| Core deposit intangible, net | 11,895 | — | ||||||
| Other assets | 6,663 | 3,907 | ||||||
| TOTAL ASSETS | $ | 1,639,779 | $ | 944,014 | ||||
| LIABILITIES | ||||||||
| Interest-bearing deposits | $ | 884,654 | $ | 500,480 | ||||
| Noninterest-bearing deposits | 266,015 | 181,845 | ||||||
| Total deposits | 1,150,669 | 682,325 | ||||||
| Short-term borrowings | 252,532 | 171,741 | ||||||
| Long-term borrowings | 70,448 | 24 | ||||||
| Accrued interest payable | 2,358 | 187 | ||||||
| Other liabilities | 9,947 | 3,795 | ||||||
| TOTAL LIABILITIES | 1,485,954 | 858,072 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, par value $1.25 per share; 15,000,000 shares authorized; | ||||||||
| issued 3,834,976 and outstanding 3,570,276 at December 31, 2023; | ||||||||
| issued 2,343,835 and outstanding 2,079,135 at December 31, 2022 | 4,794 | 2,930 | ||||||
| Additional paid-in capital | 83,343 | 30,030 | ||||||
| Retained earnings | 90,514 | 90,156 | ||||||
| Accumulated other comprehensive loss | (15,036 | ) | (27,384 | ) | ||||
| Treasury stock, at cost; 264,700 shares at December 31, 2023 and 2022 | (9,790 | ) | (9,790 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 153,825 | 85,942 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,639,779 | $ | 944,014 | ||||
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Muncy Columbia Financial Corporation
Consolidated Statements of Income
| For the Three Months Ended | For the Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (In Thousands, Except Share and Per Share Data) (Unaudited) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||
| Interest and fees on loans: | ||||||||||||||||
| Taxable | $ | 12,024 | $ | 5,571 | $ | 30,885 | $ | 20,604 | ||||||||
| Tax-exempt | 295 | 215 | 969 | 675 | ||||||||||||
| Interest and dividends on investment securities: | ||||||||||||||||
| Taxable | 1,389 | 1,234 | 5,030 | 4,321 | ||||||||||||
| Tax-exempt | 519 | 92 | 917 | 185 | ||||||||||||
| Dividend and other interest income | 96 | 54 | 318 | 198 | ||||||||||||
| Federal funds sold | — | 5 | 1 | 20 | ||||||||||||
| Deposits in other banks | 58 | 123 | 227 | 385 | ||||||||||||
| TOTAL INTEREST AND DIVIDEND INCOME | 14,381 | 7,294 | 38,347 | 26,388 | ||||||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Deposits | 2,665 | 484 | 4,964 | 1,773 | ||||||||||||
| Short-term borrowings | 2,871 | 1,356 | 9,119 | 2,286 | ||||||||||||
| Long-term borrowings | 588 | 1 | 1,002 | 2 | ||||||||||||
| TOTAL INTEREST EXPENSE | 6,124 | 1,841 | 15,085 | 4,061 | ||||||||||||
| NET INTEREST INCOME | 8,257 | 5,453 | 23,262 | 22,327 | ||||||||||||
| Provision (credit) for credit losses - loans | 3,148 | (450 | ) | 2,554 | (1,810 | ) | ||||||||||
| (Credit) provision for credit losses - off balance sheet credit exposures | (34 | ) | — | (33 | ) | — | ||||||||||
| TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES | 3,114 | (450 | ) | 2,521 | (1,810 | ) | ||||||||||
| NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES | 5,143 | 5,903 | 20,741 | 24,137 | ||||||||||||
| NON-INTEREST INCOME | ||||||||||||||||
| Service charges and fees | 578 | 541 | 2,094 | 2,117 | ||||||||||||
| Gain on sale of loans | 83 | 47 | 276 | 478 | ||||||||||||
| Earnings on bank-owned life insurance | 168 | 332 | 503 | 652 | ||||||||||||
| Brokerage | 211 | 149 | 636 | 597 | ||||||||||||
| Trust | 272 | 240 | 885 | 845 | ||||||||||||
| (Gains) losses on marketable equity securities | 146 | 22 | (119 | ) | (37 | ) | ||||||||||
| Realized losses on available-for-sale debt securities, net | — | — | — | (1,236 | ) | |||||||||||
| Interchange fees | 545 | 435 | 1,839 | 1,720 | ||||||||||||
| Other non-interest income | 264 | 242 | 1,007 | 935 | ||||||||||||
| TOTAL NON-INTEREST INCOME | 2,267 | 2,008 | 7,121 | 6,071 | ||||||||||||
| NON-INTEREST EXPENSE | ||||||||||||||||
| Salaries and employee benefits | 4,311 | 2,527 | 11,618 | 10,406 | ||||||||||||
| Occupancy | 422 | 469 | 1,391 | 1,476 | ||||||||||||
| Furniture and equipment | 524 | 486 | 2,070 | 1,757 | ||||||||||||
| Pennsylvania shares tax | 131 | (109 | ) | 365 | 412 | |||||||||||
| Professional fees | 653 | 476 | 1,638 | 1,390 | ||||||||||||
| Director's fees | 99 | 76 | 326 | 314 | ||||||||||||
| Federal deposit insurance | 151 | 67 | 478 | 262 | ||||||||||||
| Telecommunications | 80 | 77 | 323 | 351 | ||||||||||||
| Automated teller machine and interchange | 119 | 132 | 340 | 338 | ||||||||||||
| Merger-related expenses | 1,822 | — | 3,028 | — | ||||||||||||
| Other non-interest expense | 851 | 837 | 2,533 | 2,362 | ||||||||||||
| TOTAL NON-INTEREST EXPENSE | 9,163 | 5,038 | 24,110 | 19,068 | ||||||||||||
| (LOSS) INCOME BEFORE INCOME TAX PROVISION | (1,753 | ) | 2,873 | 3,752 | 11,140 | |||||||||||
| INCOME TAX (CREDIT) PROVISION | (567 | ) | 278 | 365 | 1,626 | |||||||||||
| NET (LOSS) INCOME | $ | (1,186 | ) | $ | 2,595 | $ | 3,387 | $ | 9,514 | |||||||
| (LOSS) EARNINGS PER SHARE - BASIC AND DILUTED | $ | (0.41 | ) | $ | 1.25 | $ | 1.49 | $ | 4.58 | |||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 2,873,775 | 2,078,705 | 2,279,808 | 2,078,218 | ||||||||||||
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| At or 3 Months Ended (Unaudited) | ||||||||||||||||||||
| (Dollars in Thousands, Except Per Share Data) | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||||||
| Operating Highlights | ||||||||||||||||||||
| Net (loss) income | $ | (1,186 | ) | $ | 1,171 | $ | 1,462 | $ | 1,940 | $ | 2,595 | |||||||||
| Net interest income | 8,257 | 4,891 | 4,913 | 5,201 | 5,453 | |||||||||||||||
| Provision (credit) for credit losses | 3,114 | (168 | ) | (16 | ) | (409 | ) | (450 | ) | |||||||||||
| Non-interest income | 2,267 | 1,522 | 1,706 | 1,626 | 2,008 | |||||||||||||||
| Non-interest expense | 9,163 | 5,273 | 4,857 | 4,817 | 5,038 | |||||||||||||||
| Balance Sheet Highlights | ||||||||||||||||||||
| Total assets | $ | 1,639,779 | $ | 957,580 | $ | 960,080 | $ | 955,030 | $ | 944,014 | ||||||||||
| Loans, net and loans held for sale | 1,059,493 | 556,862 | 544,593 | 535,843 | 525,018 | |||||||||||||||
| Intangibles | 37,504 | 7,937 | 7,937 | 7,937 | 7,937 | |||||||||||||||
| Total deposits | ||||||||||||||||||||
| Noninterest-bearing | $ | 266,015 | $ | 165,888 | $ | 175,521 | $ | 178,438 | $ | 181,845 | ||||||||||
| Savings | 204,968 | 155,750 | 157,833 | 166,231 | 171,462 | |||||||||||||||
| NOW | 251,953 | 146,944 | 152,358 | 151,191 | 152,656 | |||||||||||||||
| Money Market | 103,602 | 41,521 | 44,341 | 51,846 | 51,850 | |||||||||||||||
| Time Deposits | 324,131 | 130,472 | 128,430 | 127,670 | 124,512 | |||||||||||||||
| Total interest-bearing deposits | 884,654 | 474,687 | 482,962 | 496,938 | 500,480 | |||||||||||||||
| Core deposits* | 826,538 | 510,103 | 530,053 | 547,706 | 557,813 | |||||||||||||||
| Selected Ratios | ||||||||||||||||||||
| Fully tax-equivalent net interest margin (YTD) | 2.34 | % | 2.29 | % | 2.32 | % | 2.41 | % | 2.55 | % | ||||||||||
| Annualized return on average assets | -0.35 | % | 0.63 | % | 0.71 | % | 0.82 | % | 1.00 | % | ||||||||||
| Annualized return on average equity | -3.95 | % | 6.78 | % | 7.63 | % | 8.94 | % | 10.45 | % | ||||||||||
| Capital Ratios - Journey Bank | ||||||||||||||||||||
| Common equity tier I capital ratio | 13.52 | % | 18.80 | % | 18.96 | % | 18.94 | % | 18.88 | % | ||||||||||
| Tier 1 capital ratio | 13.52 | % | 18.80 | % | 18.96 | % | 18.94 | % | 18.88 | % | ||||||||||
| Total risk-based capital ratio | 14.49 | % | 19.91 | % | 20.11 | % | 20.10 | % | 20.13 | % | ||||||||||
| Leverage ratio | 8.03 | % | 10.58 | % | 10.65 | % | 10.62 | % | 10.52 | % | ||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Non-performing assets | $ | 4,475 | $ | 2,659 | $ | 2,562 | $ | 2,808 | $ | 2,654 | ||||||||||
| Allowance for credit losses - loans | 9,302 | 6,094 | 6,278 | 6,288 | 7,279 | |||||||||||||||
| Allowance for credit losses to total loans | 0.87 | % | 1.09 | % | 1.14 | % | 1.16 | % | 1.37 | % | ||||||||||
| Allowance for credit losses to non-performing assets | 207.87 | % | 244.81 | % | 245.04 | % | 223.91 | % | 274.33 | % | ||||||||||
| Per Share Data | ||||||||||||||||||||
| (Loss) earnings per share | $ | (0.41 | ) | $ | 0.56 | $ | 0.71 | $ | 0.93 | $ | 1.25 | |||||||||
| Dividend declared per share | 0.43 | 0.43 | 0.43 | 0.42 | 0.42 | |||||||||||||||
| Book value | 43.08 | 42.50 | 43.44 | 44.52 | 41.34 | |||||||||||||||
| Common stock price: | ||||||||||||||||||||
| Bid | $ | 34.50 | $ | 34.59 | $ | 37.57 | $ | 40.05 | $ | 45.00 | ||||||||||
| Ask | 37.17 | 35.00 | 43.00 | 42.50 | 51.00 | |||||||||||||||
| Weighted average common shares | 2,873,775 | 2,080,109 | 2,079,649 | 2,079,135 | 2,078,705 | |||||||||||||||
* Core deposits are defined as total deposits less time deposits
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