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Oxford Bank Corporation Reports Third Quarter Earnings for 2024
OXFORD, Mich.
,
Nov. 5, 2024
/PRNewswire/ — Oxford Bank Corporation (“the Company”) (OTC Bulletin Board: OXBC), the holding company for Oxford Bank (“the Bank”), announced its operating results for the third quarter that ended on
September 30, 2024.
The Company’s quarterly consolidated earnings for the three months ended
September 30, 2024
were $2.75 million, or
$1.12 per weighted average share. This is a decrease from
$3.15 million, or
$1.28 per share in the same period the previous year. However, earnings improved by
$0.49 million compared to the second quarter of 2024, which reported a net income of
$2.26 million. Year-to-date earnings for the first three quarters of 2024 totaled
$8.29 million, or
$3.37 per share, down from
$9.70 million or
$3.98 per share in 2023.
President and CEO, David Lamb, stated, “As we expected, our quarter-over-quarter earnings have improved, with our Return on Average Assets (ROAA) remaining steady as our balance sheet size grew slightly. The year-over-year earnings decrease mainly reflects tighter margins due to increased market deposit costs. We’ve seen our Allowance for Credit Losses (ACL) provision normalize, and a drop in wholesale funding is due to positive deposit activity. We are pleased with our earnings metrics and believe we can maintain a strong margin, even in a potentially falling rate environment.”
Total Assets of the Company were
$870.50 million
as of September 30, 2024, up from
$794.34 million
on September 30, 2023. “Our balance sheet has grown year-over-year thanks to both deposit and loan growth. Core deposits remain stable, allowing us to decrease the Bank’s reliance on wholesale funding even further in Q3. We’re normalizing the investment portfolio while maintaining liquidity with cash and marketable investments,” CEO Lamb reported.
Net loans as of the end of the third quarter 2024 totalled
$590.04 million, compared to
$521.67 million at the same time last year. This reflects an increase of
$68.37 million, or about 13%. Key drivers included a rise in traditional commercial loans by
$49.0 million and an increase in Oxford Commercial Finance (“OCF”) of
$20.0 million. The CEO noted the lending environment remains challenging, yet they are focused on disciplined pricing and overall relationship management.
Total deposits rose to
$747.81 million
as of September 30, 2024, compared with
$692.11 million
on September 30, 2023. The Bank recorded a Net Interest Margin (“NIM”) of 4.63% for the first nine months of 2024, down from 4.85% for the same period in 2023. Lamb remarked, “We are pleased with our deposit stickiness and client relationships, which remain the foundation for our low-cost funding mix, helping maintain margin amid fierce competition.”
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Oxford Bank Reports Solid Third-Quarter Results Amid High-Interest Rates
Company Maintains Strong Net Interest Margin Despite Economic Challenges
The Bank has observed a year-over-year reduction in non-performing assets (NPAs). Most of the remaining NPAs can be traced to a single loan relationship experiencing delays due to licensing issues. Thankfully, the borrower is stabilizing, and the Bank is well-collateralized. The amicable relationship between the bank and the borrower indicates a low likelihood of significant loss. According to reports, while the Bank expects strong performance from its credit portfolio, there has been some fluctuation in earnings and provision balances due to the new Allowance for Credit Loss model introduced in 2023. In fact, this led to an increase in ACL expense during the second quarter, although it normalized in the third quarter. CEO David P. Lamb noted, “Aside from the one non-performing asset affecting our asset quality metrics, our loan book is performing excellently. We anticipate only modest losses from the loan portfolio that are in line with or better than industry averages. I credit this success to our Risk and Business Banking teams, who are skilled in early problem identification and management. Our strategy features a balanced mix of industries and geographic areas that help mitigate concentration risk while utilizing SBA and other government guarantee programs to support local business growth.”
As of September 30, 2024, the Company’s total shareholders’ equity stood at $96.68 million, translating to a book value per share of $39.22. This marks an increase from $79.43 million or $32.35 per share one year prior. This year-over-year equity increase reflects retained earnings growth and a reduction in unrealized losses on the Bank’s investment portfolio. The subsidiary Bank’s Tier 1 capital totaled $94.5 million, comprising 13.8% of risk-weighted assets, compared to $84.3 million, or 13.7% of risk-weighted assets, one year earlier on September 30, 2023.
CEO David P. Lamb expressed that the company’s results compare favorably to industry standards. He stated, “With three-quarters of the year behind us, we’ve had a relatively strong year despite navigating a high-interest rate environment and seeking areas for improvement. While we acknowledge that our margin cannot be sustained indefinitely, we do not consider declines in net income as acceptable. We are focused on enhancing our performance in any environment. Our strategy, prioritizing relationship banking with small and mid-size businesses while integrating technology for added value, remains unchanged, though our approach is ever-evolving. We are committed to delivering value for life and believe our strategy will secure long-term success for our stakeholders.”
Oxford Bank, a subsidiary of Oxford Bank Corporation, is the oldest commercial bank in Oakland County. The bank operates seven full-service offices across Clarkston, Davison, Dryden, Lake Orion, Oakland Township, Ortonville, and Oxford, Michigan. Additionally, it has Customer Experience Centers in Ann Arbor, Macomb, and Rochester Hills, Michigan. Oxford Bank also features business banking centers in Phoenix, AZ, Wixom, downtown Oxford, and Flint, Michigan. Since its inception in 1884, the Bank has remained under local ownership and management. For further details on Oxford Bank and its financial services, please visit www.oxfordbank.bank.
Forward-looking statements discussed in this release are based on current expectations and involve risks and uncertainties. Terms such as “will likely result,” “are expected to,” and “estimate” indicate forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Various factors, including interest rate fluctuations, economic changes, and competitive pressures, could cause actual results to differ. The Bank intends to present its perspective as of the report date and does not assume an obligation to update these statements.
|
Contact: |
David P. Lamb, Chairman, President & CEO |
|
Phone: |
(248) 628-2533 |
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Fax: |
(248) 969-7230 |
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SOURCE Oxford Bank Corporation
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