8-K
ECB Bancorp, Inc. /MD/ (ECBK)
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): February 5, 2025
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. ☐
Item 2.02 Results of Operations and Financial Condition
On February 5, 2025, ECB Bancorp, Inc., the holding company for Everett Co-operative Bank, issued a press release announcing its financial results at and for the three months and year ended December 31, 2024.
Item 8.01 Other Events
On February 5, 2025, ECB Bancorp, Inc. also announced that its annual meeting of stockholders will be held on May 21, 2025.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press release dated February 5, 2025 |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: February 5, 2025 | By: | /s/Brandon N. Lavertu |
| Brandon N. Lavertu | ||
| Executive Vice President and Chief Financial Officer |
EX-99.1
Exhibit 99.1
For Immediate Release
Date: February 5, 2025
| Contact: | Richard J. O’Neil, Jr. |
|---|---|
| President and Chief Executive Officer | |
| Phone: | 617-387-1110 |
| Email: | rjoneil@everettbank.com |
ECB Bancorp, Inc. Reports Fourth Quarter and Year End Results
EVERETT, MA, February 5, 2025 - 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 $1.4 million, or $0.17 per diluted share, for the quarter ended December 31, 2024, compared to $789,000, or $0.09 per diluted share, for the quarter ended December 31, 2023. For the year ended December 31, 2024, the Company reported net income of $4.0 million, or $0.48 per diluted share, as compared to net income of $4.5 million, or $0.52 per diluted share, for the year ended December 31, 2023.
Richard J. O’Neil, Jr., President and Chief Executive Officer, said, "With just over two years as a public company, we continue to enhance our franchise value through orderly and diligent balance sheet growth and expense control. At year's end, our deposit growth of $130.3 million (15.0%) has outpaced our loan growth of $96.7 million (9.3%) as we continue to grow assets and enhance our liquidity position. This year saw an increase in our tangible book value per share from $17.75 to $18.50 which was aided by the implementation of our stock repurchase program. As we progressed through this initial stock repurchase program, we have maintained our standing as a “well capitalized” institution as we continue to execute our strategic plan."
NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income before provision for credit losses was $6.8 million for the quarter ended December 31, 2024, compared to $5.9 million for the quarter ended December 31, 2023, representing an increase of $844,000, or 14.2%. This increase was primarily due to increases in yields on interest-earning assets that outpaced increases in the cost of interest-bearing liabilities. The resulting net interest margin expanded by five basis points to 1.94% for the quarter ended December 31, 2024 as compared to 1.89% for the quarter ended December 31, 2023. The provision for credit losses was a benefit of $(311,000) for the quarter ended December 31, 2024 compared to provision expense of $108,000 for the quarter ended December 31, 2023. The combination of these items resulted in net interest and dividend income after provision for credit losses of $7.1 million for the quarter ended December 31, 2024, as compared to $5.8 million for the quarter ended December 31, 2023, or an increase of $1.3 million, or 21.7%.
Net interest and dividend income before provision for credit losses was $25.0 million for the year ended December 31, 2024, compared to $24.8 million for the year ended December 31, 2023, or an increase of $198,000, or 0.8%. The net interest margin for the year ended December 31, 2024 was 1.86% as compared to 2.11% for the year ended December 31, 2023. The decrease in the net interest margin was driven by increases in the cost of interest-bearing liabilities that were higher than increases in yields on interest-earning assets during 2024. The provision for credit losses was $174,000 for the year ended December 31, 2024, as compared to $803,000 for the year ended December 31, 2023. The combination of these items resulted in net interest and dividend income after provision for credit losses of $24.8 million for the year ended December 31, 2024, as compared to $24.0 million for the year ended December 31, 2023, or an increase of $827,000, or 3.4%.
NONINTEREST INCOME
Noninterest income was $327,000 for the quarter ended December 31, 2024, as compared to $261,000 for the quarter ended December 31, 2023, or an increase of $66,000, or 25.3%. The increase was primarily due to increases in net gains on sales of loans.
Noninterest income was $1.2 million for the year ended December 31, 2024, as compared to $1.1 million for the year ended December 31, 2023, or an increase of $174,000, or 16.5%. The increase was primarily due to increases in net gains on sales of loans.
NONINTEREST EXPENSE
Noninterest expense was $5.5 million for the quarter ended December 31, 2024, as compared to $5.0 million for the quarter ended December 31, 2023, or an increase of $444,000, or 8.8%. Significant changes are as follows:
Salaries and employee benefits increased $363,000, or 11.9%, driven by increases in employee bonuses, commissions and stock based benefits;
Computer software and licensing fees increased $33,000, or 35.5%, driven by implementation costs associated with new cash management products for business customers; and
Advertising and promotions decreased $63,000, or 28.9%, as we have streamlined our advertising efforts.
Noninterest expense was $20.7 million for year ended December 31, 2024, as compared to $19.1 million for the year ended December 31, 2023, or an increase of $1.6 million, or 8.5%. Significant changes are as follows:
- Salaries and employee benefits increased $1.4 million, or 11.8%, driven by $974,000 in stock based compensation recorded during the year ended December 31, 2024, related to the 2023 Equity Incentive Plan, as compared to $165,000 in stock based compensation recorded during the year ended December 31, 2023. The employee stock awards were granted in the fourth quarter of 2023;
- Director compensation increased $253,000, or 43.5%, driven by $332,000 in stock-based compensation recorded in the year ended December 31, 2024, as compared to $103,000 in stock-based compensation costs recorded during the year ended December 31, 2023. The director stock awards were granted at the end of the third quarter of 2023; and
- Advertising and promotions decreased $243,000, or 30.6%, as we have streamlined our advertising efforts.
INCOME TAXES
We recorded a provision for income tax expense of $493,000 for the quarter ended December 31, 2024, compared to a provision for income tax expense of $266,000 for the quarter ended December 31, 2023, reflecting effective tax rates of 25.4% and 25.2%, respectively.
We recorded a provision for income tax expense of $1.4 million for the year ended December 31, 2024, compared to a provision for income tax expense of $1.5 million for the year ended December 31, 2023, reflecting effective tax rates of 25.7% and 25.5%, respectively.
BALANCE SHEET
Total assets increased $137.8 million, or 10.8%, to $1.42 billion at December 31, 2024 from $1.28 billion at December 31, 2023.
Cash and cash equivalents increased $38.6 million, or 32.4%, to $157.6 million at December 31, 2024 from $119.0 million at December 31, 2023, as a result of deposit growth outpacing loan growth.
Total gross loans increased $97.2 million, or 9.3%, to $1.15 billion at December 31, 2024 from $1.05 billion at December 31, 2023.
- Multi-family real estate loans increased $56.6 million, or 19.7%, to $344.0 million at December 31, 2024, from $287.4 million at December 31, 2023.
- Commercial real estate loans increased $32.6 million, or 16.6%, to $229.0 million at December 31, 2024, from $196.4 million at December 31, 2023.
- Residential real estate loans increased $12.7 million, or 3.1%, to $422.8 million at December 31, 2024, from $410.1 million at December 31, 2023.
- Home equity lines of credit increased $11.8 million, or 35.4%, to $45.2 million at December 31, 2024, from $33.4 million at December 31, 2023.
- Commercial loans increased $4.6 million, or 50.2%, to $13.8 million at December 31, 2024, from $9.2 million at December 31, 2023.
- Construction loans decreased $21.1 million, or 18.8%, to $90.9 million at December 31, 2024, from $112.0 million at December 31, 2023.
Other assets increased $3.9 million, or 137.1%, to $6.8 million at December 31, 2024, from $2.9 million at December 31, 2023, driven by a $3.4 million investment in a low income housing tax credit fund.
Deposits increased $130.3 million, or 15.0%, to $998.5 million at December 31, 2024, from $868.2 million at December 31, 2023.
Certificates of deposit increased $107.0 million, or 21.5%, to $605.5 million at December 31, 2024 from $498.5 million at December 31, 2023.
Money market deposit accounts increased $53.2 million, or 40.5%, to $184.6 million at December 31, 2024 from $131.4 million at December 31, 2023.
Demand deposit accounts increased $6.6 million, or 8.4%, to $85.0 million at December 31, 2024 from $78.3 million at December 31, 2023.
Savings accounts decreased $34.9 million, or 25.3%, to $102.9 million at December 31, 2024 from $137.8 million at December 31, 2023.
Interest-bearing checking accounts decreased $1.6 million, or 7.3%, to $20.5 million at December 31, 2024 from $22.2 million at December 31, 2023.
Total shareholders' equity increased $3.4 million, or 2.0%, to $168.3 million as of December 31, 2024 from $164.9 million as of December 31, 2023. This increase is primarily the result of net income of $4.0 million and a $1.5 million increase in additional paid-in capital related to stock-based compensation. Partially offsetting this was a decrease in additional paid-in capital of $2.7 million related to shares repurchased under our share repurchase plan. The book value per share increased $0.75 to $18.50 at December 31, 2024 from $17.75 at December 31, 2023.
ASSET QUALITY
Asset quality remains strong. The allowance for credit losses on loans in total and as a percentage of total gross loans as of December 31, 2024 was $8.9 million and 0.78%, respectively, as compared to $8.6 million and 0.82%, respectively, as of December 31, 2023. For the years ended December 31, 2024 and December 31, 2023, the Company recorded net charge offs of $3,000 and $1,000, respectively. Total non-performing assets were $2.0 million, or 0.14%, of total assets as of December 31, 2024, and $1.2 million, or 0.09% of total assets, as of December 31, 2023.
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.
ECB Bancorp, Inc. and Subsidiary
Consolidated Balance Sheets
December 31, 2024 (unaudited) and December 31, 2023
(in thousands except share data)
| December 31, 2023 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Cash and due from banks | 5,828 | $ | 3,786 | ||
| Short-term investments | 151,789 | 115,250 | |||
| Total cash and cash equivalents | 157,617 | 119,036 | |||
| Interest-bearing time deposits | 100 | — | |||
| Investments in available-for-sale securities (at fair value) | 6,564 | 5,003 | |||
| Investments in held-to-maturity securities, at amortized cost (fair values of 67,505 at December 31, 2024 and 70,590 at December 31, 2023) | 73,215 | 76,979 | |||
| Loans, net of allowance for credit losses of 8,884 at December 31, 2024 and 8,591 at December 31, 2023 | 1,136,449 | 1,039,789 | |||
| Federal Home Loan Bank stock, at cost | 10,000 | 9,892 | |||
| Premises and equipment, net | 3,512 | 3,754 | |||
| Accrued interest receivable | 4,015 | 3,766 | |||
| Deferred tax asset, net | 4,914 | 4,767 | |||
| Bank-owned life insurance | 14,945 | 14,472 | |||
| Other assets | 6,822 | 2,877 | |||
| Total assets | 1,418,153 | $ | 1,280,335 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Deposits: | |||||
| Noninterest-bearing | 84,958 | $ | 78,342 | ||
| Interest-bearing | 913,575 | 789,872 | |||
| Total deposits | 998,533 | 868,214 | |||
| Federal Home Loan Bank advances | 234,000 | 234,000 | |||
| Other liabilities | 17,352 | 13,220 | |||
| Total liabilities | 1,249,885 | 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: 9,095,833 shares and 9,291,810 shares, respectively | 91 | 93 | |||
| Additional paid-in capital | 86,189 | 87,431 | |||
| Retained earnings | 87,845 | 83,854 | |||
| Accumulated other comprehensive income | 382 | 129 | |||
| Unearned compensation - ESOP | (6,239 | ) | (6,606 | ) | |
| Total stockholders' equity | 168,268 | 164,901 | |||
| Total liabilities and stockholders' equity | 1,418,153 | $ | 1,280,335 | ||
| Book value per common share | 18.50 | $ | 17.75 | ||
| Regulatory Capital Ratios (Everett Co-operative Bank) | |||||
| Total capital to risk weighted assets | 16.58 | % | 17.30 | % | |
| Tier 1 capital to risk weighted assets | 15.56 | % | 16.22 | % | |
| Tier 1 capital to average assets | 10.47 | % | 11.31 | % |
All values are in US Dollars.
ECB Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(unaudited)
(in thousands except share data)
| Three months ended | Year ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| Interest and dividend income: | |||||||||
| Interest and fees on loans | $ | 15,384 | $ | 12,969 | $ | 57,852 | $ | 48,330 | |
| Interest and dividends on securities | 840 | 751 | 3,186 | 2,701 | |||||
| Interest on short term investments | 1,587 | 1,178 | 6,007 | 3,745 | |||||
| Total interest and dividend income | 17,811 | 14,898 | 67,045 | 54,776 | |||||
| Interest expense: | |||||||||
| Interest on deposits | 8,956 | 6,599 | 33,435 | 21,413 | |||||
| Interest on Federal Home Loan Bank advances | 2,072 | 2,360 | 8,622 | 8,573 | |||||
| Total interest expense | 11,028 | 8,959 | 42,057 | 29,986 | |||||
| Net interest and dividend income | 6,783 | 5,939 | 24,988 | 24,790 | |||||
| (Benefit) provision for credit losses | (311 | ) | 108 | 174 | 803 | ||||
| Net interest and dividend income after (benefit) provision for credit losses | 7,094 | 5,831 | 24,814 | 23,987 | |||||
| Noninterest income: | |||||||||
| Customer service fees | 150 | 138 | 577 | 516 | |||||
| Income from bank-owned life insurance | 119 | 106 | 473 | 479 | |||||
| Net gain on sales of loans | 39 | 8 | 119 | 21 | |||||
| Other income | 19 | 9 | 57 | 36 | |||||
| Total noninterest income | 327 | 261 | 1,226 | 1,052 | |||||
| Noninterest expense: | |||||||||
| Salaries and employee benefits | 3,419 | 3,056 | 13,062 | 11,679 | |||||
| Director compensation | 210 | 202 | 834 | 581 | |||||
| Occupancy and equipment expense | 245 | 246 | 1,033 | 941 | |||||
| Data processing | 314 | 284 | 1,198 | 1,093 | |||||
| Computer software and licensing | 126 | 93 | 443 | 375 | |||||
| Advertising and promotions | 155 | 218 | 551 | 794 | |||||
| Professional fees | 427 | 393 | 1,258 | 1,355 | |||||
| Federal Deposit Insurance Corporation deposit insurance | 191 | 180 | 752 | 793 | |||||
| Other expense | 394 | 365 | 1,538 | 1,443 | |||||
| Total noninterest expense | 5,481 | 5,037 | 20,669 | 19,054 | |||||
| Income before income tax expense | 1,940 | 1,055 | 5,371 | 5,985 | |||||
| Income tax expense | 493 | 266 | 1,380 | 1,529 | |||||
| Net income | $ | 1,447 | $ | 789 | $ | 3,991 | $ | 4,456 | |
| Share data: | |||||||||
| Weighted average shares outstanding, basic | 8,224,033 | 8,406,925 | 8,257,014 | 8,466,021 | |||||
| Weighted average shares outstanding, diluted | 8,375,643 | 8,433,257 | 8,345,737 | 8,523,705 | |||||
| Basic earnings per share | $ | 0.18 | $ | 0.09 | $ | 0.48 | $ | 0.53 | |
| Diluted earnings per share | $ | 0.17 | $ | 0.09 | $ | 0.48 | $ | 0.52 |