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PCB Bancorp Reports Earnings of $4.7 million for Q1 2024
Q1 2024 Highlights
Net income totaled $4.7 million, or $0.33 per diluted common share; Recorded a provision (reversal) for credit losses of $1.1 million for the current quarter compared with $1.7 million for the previous quarter and $(2.8) million for the year-ago quarter; Allowance for Credit Losses ("ACL") on loans to loans held-for-investment ratio was 1.18% at March 31, 2024 compared with 1.19% at December 31, 2023 and 1.18% at March 31, 2023; Net interest income was $21.0 million for the current quarter compared with $21.9 million for the previous quarter and $22.4 million for the year-ago quarter. Net interest margin was 3.10% for the current quarter compared with 3.40% for the previous quarter and 3.79% for the year-ago quarter; Gain on sale of loans was $1.1 million for the current quarter compared with $803 thousand for the previous quarter and $1.3 million for the year-ago quarter; Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023; Loans held-for-investment were $2.40 billion at March 31, 2024, an increase of $74.5 million, or 3.2%, from $2.32 billion at December 31, 2023, and an increase of $305.5 million, or 14.6%, from $2.09 billion at March 31, 2023; and Total deposits were $2.40 billion at March 31, 2024, an increase of $51.2 million, or 2.2%, from $2.35 billion at December 31, 2023, and an increase of $261.2 million, or 12.2%, from $2.14 billion at March 31, 2023.
"PCB continued to deliver strong first quarter results with momentum in loan and deposit growth stemming from our ongoing focus on relationship banking and strategic expansions, while maintaining very strong credit metrics," said Henry Kim, President and Chief Executive Officer. "Currently, we are successfully undergoing our core system conversion that will enhance operational efficiency, functionality, and customer experience."
"Our first quarter net income of $4.7 million included a total of $1.8 million in non-recurring expenses consisting of core conversion charges of $1.0 million and a SBA recovery demand of $815 thousand. During the quarter loan balance increased 3.1% to $2.4 billion, deposit balance increased 2.2% to $2.4 billion, and we continued to maintain robust ACL to loans ratio of 1.18%, and non-performing assets and classified assets to total assets ratios of 0.17% and 0.27%, respectively. The persistently higher interest rate environment and its effect on our funding costs resulted in further compression in our net interest margin during the quarter. However, we feel that our funding costs have peaked in the first quarter and our net interest margin is at near the bottom."
Mr. Kim added, "As we look ahead for the rest of the year, PCB continues to be well positioned to deliver solid financial results with strong balance sheet growth and maintain sound asset quality with robust capital levels that are above our peers to operate in uncertain economic circumstances."
Financial Highlights (Unaudited)
($ in thousands, except per share data) Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3/31/2024 12/31/2023 % Change 3/31/2023 % Change
------------------------------------------------- ------------------------------------------------- -------------------- ------------------------------------------------- --------------------
Net income $ 4,685 $ 5,908 (20.7)% $ 10,297 (54.5)%
Diluted earnings per common share $ 0.33 $ 0.41 (19.5)% $ 0.70 (52.9)%
Net interest income $ 20,999 $ 21,924 (4.2)% $ 22,414 (6.3)%
Provision (reversal) for credit losses 1,090 1,698 (35.8)% (2,778 ) NM
Noninterest income 2,945 2,503 17.7% 3,021 (2.5)%
Noninterest expense 16,352 14,469 13.0% 13,754 18.9%
Return on average assets (1) 0.67 % 0.89 % 1.69 %
Return on average shareholders' equity (1) 5.39 % 6.82 % 12.46 %
Return on average tangible common equity ("TCE") (1),(2) 6.72 % 8.54 % 15.70 %
Net interest margin (1) 3.10 % 3.40 % 3.79 %
Efficiency ratio (3) 68.29 % 59.23 % 54.08 %
------------------------------------------------------------------------------------------------------------- -------------------- ------------------------------------------------- -------------------- ------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------- -------------------- --------------------
($ in thousands, except per share data) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
------------------------------------------------------------------------------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- ------------------------------------------------- --------------------
Total assets $ 2,854,292 $ 2,789,506 2.3% $ 2,500,524 14.1%
Net loans held-for-investment 2,369,632 2,295,919 3.2% 2,067,748 14.6%
Total deposits 2,402,840 2,351,612 2.2% 2,141,689 12.2%
Book value per common share (4) $ 24.54 $ 24.46 $ 23.56
TCE per common share (2) $ 19.69 $ 19.62 $ 18.72
Tier 1 leverage ratio (consolidated) 12.73 % 13.43 % 13.90 %
Total shareholders' equity to total assets 12.26 % 12.51 % 13.47 %
TCE to total assets (2), (5) 9.84 % 10.03 % 10.71 %
(1) Ratios are presented on an annualized basis. (2) Non-GAAP. See "Non-GAAP Measures" for reconciliation of this measure to its most comparable GAAP measure. (3) Calculated by dividing noninterest expense by the sum of net interest income and noninterest income. (4) Calculated by dividing total shareholders' equity by the number of outstanding common shares.
Result of Operations (Unaudited)
Net Interest Income and Net Interest Margin
The following table presents the components of net interest income for the periods indicated:
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
----------------------------------------- ------------------------------------------------- ------------------------------------------------- -------------------- ------------------------------------------------- --------------------
Interest income/expense on
$ 39,251 $ 37,189 5.5% $ 31,229 25.7%
Loans
1,246 1,271 (2.0)% 1,102 13.1%
Investment securities
3,058 2,491 22.8% 2,205 38.7%
Other interest-earning assets
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
43,555 40,951 6.4% 34,536 26.1%
Total interest-earning assets
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
21,967 18,728 17.3% 11,913 84.4%
Interest-bearing deposits
589 299 97.0% 209 181.8%
Borrowings
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
22,556 19,027 18.5% 12,122 86.1%
Total interest-bearing liabilities
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
$ 20,999 $ 21,924 (4.2)% $ 22,414 (6.3)%
Net interest income
==================== ========= ==================== ==================== ========= ==================== ==================== ========= ====================
Average balance of
$ 2,370,027 $ 2,242,457 5.7% $ 2,072,415 14.4%
Loans
140,459 139,227 0.9% 142,079 (1.1)%
Investment securities
217,002 175,336 23.8% 186,809 16.2%
Other interest-earning assets
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
$ 2,727,488 $ 2,557,020 6.7% $ 2,401,303 13.6%
Total interest-earning assets
==================== ========= ==================== ==================== ========= ==================== ==================== ========= ====================
$ 1,827,209 $ 1,650,132 10.7% $ 1,410,812 29.5%
Interest-bearing deposits
42,187 21,000 100.9% 15,811 166.8%
Borrowings
-------------------- --------- -------------------- -------------------- --------- -------------------- -------------------- --------- --------------------
$ 1,869,396 $ 1,671,132 11.9% $ 1,426,623 31.0%
Total interest-bearing liabilities
==================== ========= ==================== ==================== ========= ==================== ==================== ========= ====================
$ 2,412,207 $ 2,249,026 7.3% $ 2,114,198 14.1%
Total funding (1)
Annualized average yield/cost of
6.66 % 6.58 % 6.11 %
Loans
3.57 % 3.62 % 3.15 %
Investment securities
5.67 % 5.64 % 4.79 %
Other interest-earning assets
6.42 % 6.35 % 5.83 %
Total interest-earning assets
4.84 % 4.50 % 3.42 %
Interest-bearing deposits
5.62 % 5.65 % 5.36 %
Borrowings
4.85 % 4.52 % 3.45 %
Total interest-bearing liabilities
3.10 % 3.40 % 3.79 %
Net interest margin
3.76 % 3.36 % 2.33 %
Cost of total funding (1)
Supplementary information
$ 573 $ 806 (28.9)% $ 671 (14.6)%
Net accretion of discount on loans
$ 334 $ 449 (25.6)% $ 175 90.9%
Net amortization of deferred loan fees
(1) Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
Loans. The increase in average yield for the current quarter was primarily due to increases in overall interest rates on loans, partially offset by decreases in accretion of discount on loans and prepayment fees.
The following table presents a composition of total loans by interest rate type accompanied with the weighted-average contractual rates as of the dates indicated:
3/31/2024 12/31/2023 3/31/2023
----------------------------------------- ----------------------------------------- -----------------------------------------
% to Total Weighted- % to Total Weighted- % to Total Weighted-
Loans Average Loans Average Loans Average
Contractual Contractual Contractual
Rate Rate Rate
---------- ----------- ---------- ----------- ---------- -----------
Fixed rate loans 20.0% 4.92% 21.2% 4.86% 23.4% 4.64%
Hybrid rate loans 38.6% 5.01% 39.0% 4.93% 39.0% 4.51%
Variable rate loans 41.4% 8.46% 39.8% 8.51% 37.6% 8.26%
Investment Securities. The decrease in average yield for the current quarter compared with the previous quarter was primarily due to a decrease in average balance of net unrealized losses on investment securities. The increase for the current quarter compared with the year-ago quarter was primarily due to higher yield on newly purchased investment securities.
Other Interest-Earning Assets. The increase in average yield for the current quarter was primarily due to increases in interest rate on cash held at the Federal Reserve Bank and dividends received on Federal Home Loan Bank stock.
Interest-Bearing Deposits. The increase in average cost for the current quarter was primarily due to an increase in market rates.
Provision (Reversal) for Credit Losses
The following table presents a composition of provision (reversal) for credit losses for the periods indicated:
Three Months Ended
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
--------------------------------------------------------------------------- ------------------------- --------------------------------------------- -------- ----------------------------- --------
Provision (reversal) for credit losses on loans $ 922 $ 1,935 (52.4)% $ (2,417 ) (138.1)%
Provision (reversal) for credit losses on off-balance sheet credit exposure 168 (237 ) (170.9)% (361 ) NM
-------------------- ----- -------------------- ----- -------------------- -------------------- ------ ---
$ 1,090 $ 1,698 (35.8)% $ (2,778 ) (139.2)%
Total provision (reversal) for credit losses
==================== ===== ==================== ===== ==================== ==================== ====== ===
The provision for credit losses on loans for the current quarter was primarily due to an increase in loan held-for-investment.
Noninterest Income
The following table presents the components of noninterest income for the periods indicated:
Three Months Ended
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
------------------------------------ ------------------------- ------------------------- -------- ------------------------- --------
Gain on sale of loans $ 1,078 $ 803 34.2% $ 1,309 (17.6)%
Service charges and fees on deposits 378 391 (3.3)% 344 9.9%
Loan servicing income 919 751 22.4% 860 6.9%
Bank-owned life insurance income 228 202 12.9% 180 26.7%
Other income 342 356 (3.9)% 328 4.3%
-------------------- ----- -------------------- ----- -------------------- -----
$ 2,945 $ 2,503 17.7% $ 3,021 (2.5)%
Total noninterest income
==================== ===== ==================== ===== ==================== =====
Gain on Sale of Loans. The following table presents information on gain on sale of loans for the periods indicated:
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
------------------------- ------------------------------ ------------------------------ -------------------- ------------------------------ --------------------
Gain on sale of SBA loans
$ 19,414 $ 20,751 (6.4)% $ 27,133 (28.4)%
Sold loan balance
1,596 1,250 27.7% 2,041 (21.8)%
Premium received
1,078 803 34.2% 1,309 (17.6)%
Gain recognized
Loan Servicing Income. The following table presents information on loan servicing income for the periods indicated:
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
--------------------------------- ----------------------------------------------- ----------------------------------------------- -------------------- ----------------------------------------------- --------------------
Loan servicing income
$ 1,293 $ 1,290 0.2% $ 1,284 0.7%
Servicing income received
(374 ) (539 ) (30.6)% (424 ) (11.8)%
Servicing assets amortization
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
$ 919 $ 751 22.4% $ 860 6.9%
Loan servicing income
==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Underlying loans at end of period $ 540,039 $ 532,231 1.5% $ 540,502 (0.1)%
The Company services SBA loans and certain residential property loans sold to the secondary market.
Noninterest Expense
The following table presents the components of noninterest expense for the periods indicated:
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
-------------------------------- -------------------------- -------------------------- -------- -------------------------- --------
Salaries and employee benefits $ 9,218 $ 8,397 9.8% $ 8,928 3.2%
Occupancy and equipment 2,358 2,145 9.9% 1,896 24.4%
Professional fees 1,084 898 20.7% 732 48.1%
Marketing and business promotion 319 772 (58.7)% 372 (14.2)%
Data processing 402 393 2.3% 412 (2.4)%
Director fees and expenses 232 207 12.1% 180 28.9%
Regulatory assessments 298 285 4.6% 155 92.3%
Other expense 2,441 1,372 77.9% 1,079 126.2%
-------------------- ------ -------------------- ------ -------------------- ------
$ 16,352 $ 14,469 13.0% $ 13,754 18.9%
Total noninterest expense
==================== ====== ==================== ====== ==================== ======
Salaries and Employee Benefits. The increase for the current quarter compared with the previous quarter was primarily due to increases in vacation accrual and other employee benefits. The increase for the current quarter compared with the year-ago quarter was primarily due to increases in salaries and incentives tied to sales of SBA loans originated at loan production offices, partially offset by decreases in bonus and vacation accruals. The number of full-time equivalent employees was 272, 270 and 276 as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively.
Occupancy and Equipment. The increase for the current quarter was primarily due to an expansion of headquarters location in the second half of 2023 and the preparation of a relocation of a regional office and two branches into one location in Orange County, California.
Professional Fees. The increase for the current quarter was primarily due to increases in professional fees related to a core system conversion that was completed in April 2024.
Marketing and Business Promotion. The decrease for the current quarter compared with the previous quarter was primarily due to the Company's 20th anniversary celebration during the previous quarter.
Other Expense. The increase for the current quarter was primarily due to a termination charge for the legacy core system of $508 thousand and an expense of $815 thousand for a reimbursement for an SBA loan guarantee previously paid by the SBA on a loan originated in 2014 that subsequently defaulted and was ultimately determined to be ineligible for the SBA guaranty. The Company retained the legal services of a law firm specializing on matters equivalent to our recovery demand for SBA to reconsider all the evidences in order for us to recoup it ranging from partial to full amount.
Balance Sheet (Unaudited)
Total assets were $2.85 billion at March 31, 2024, an increase of $64.8 million, or 2.3%, from $2.79 billion at December 31, 2023, and an increase of $353.8 million, or 14.1%, from $2.50 billion at March 31, 2023. The increase for the current quarter was primarily due to increases in loans held-for-investment.
Loans
The following table presents a composition of total loans (includes both loans held-for-sale and loans held-for-investment) as of the dates indicated:
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
---------------------------------- ------------------------------ ------------------------------ -------------------- ------------------------------ --------------------
Commercial real estate:
$ 874,300 $ 855,270 2.2% $ 780,282 12.0%
Commercial property
578,903 558,772 3.6% 521,965 10.9%
Business property
131,742 132,500 (0.6)% 127,012 3.7%
Multifamily
29,212 24,843 17.6% 15,930 83.4%
Construction
-------------------- ---------- -------------------- ---------- -------------------- ----------
1,614,157 1,571,385 2.7% 1,445,189 11.7%
Total commercial real estate
Commercial and industrial 371,934 342,002 8.8% 267,674 39.0%
Consumer:
389,888 389,420 0.1% 356,967 9.2%
Residential mortgage
21,985 20,645 6.5% 22,612 (2.8)%
Other consumer
-------------------- ---------- -------------------- ---------- -------------------- ----------
411,873 410,065 0.4% 379,579 8.5%
Total consumer
-------------------- ---------- -------------------- ---------- -------------------- ----------
2,397,964 2,323,452 3.2% 2,092,442 14.6%
Loans held-for-investment
3,256 5,155 (36.8)% 14,352 (77.3)%
Loans held-for-sale
-------------------- ---------- -------------------- ---------- -------------------- ----------
$ 2,401,220 $ 2,328,607 3.1% $ 2,106,794 14.0%
Total loans
==================== ========== ==================== ========== ==================== ==========
SBA loans included in:
$ 148,316 $ 145,603 1.9% $ 144,106 2.9%
Loans held-for-investment
$ 3,256 $ 5,155 (36.8)% $ 14,352 (77.3)%
Loans held-for-sale
The increase in loans held-for-investment for the current quarter was primarily due to new funding and advances on lines of credit of $468.6 million, partially offset by pay-downs and pay-offs of $393.9 million. The decrease in loans held-for-sale for the current quarter was primarily due to sales of $19.4 million, and pay-downs and pay-offs of $1.6 million, partially offset by new funding of $19.1 million.
The following table presents a composition of off-balance sheet credit exposure as of the dates indicated:
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
--------------------------------------------- --------------------------- --------------------------- --------------- --------------------------- --------
Commercial property $ 8,687 $ 11,634 (25.3)% $ 6,811 27.5%
Business property 10,196 9,899 3.0% 12,307 (17.2)%
Multifamily 1,800 1,800 --% 4,500 (60.0)%
Construction 22,895 23,739 (3.6)% 16,563 38.2%
Commercial and industrial 384,034 351,025 9.4% 279,543 37.4%
Other consumer 992 3,421 (71.0)% 399 148.6%
-------------------- ------- -------------------- ------- -------------------- -------
428,604 401,518 6.7% 320,123 33.9%
Total commitments to extend credit
6,558 6,583 (0.4)% 5,400 21.4%
Letters of credit
-------------------- ------- -------------------- ------- -------------------- -------
$ 435,162 $ 408,101 6.6% $ 325,523 33.7%
Total off-balance sheet credit exposure
==================== ======= ==================== ======= ==================== =======
Credit Quality
The following table presents a summary of non-performing loans and assets, and classified assets as of the dates indicated:
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
----------------------------------------------------------------------------------------- ------------------------------------------------------ ------------------------------------------------------ -------------------- ------------------------------------------------------ --------------------
Nonaccrual loans
Commercial real estate:
$ 932 $ 958 (2.7)% $ -- NM
Commercial property
3,455 2,865 20.6% 2,904 19.0%
Business property
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
4,387 3,823 14.8% 2,904 51.1%
Total commercial real estate
Commercial and industrial 111 68 63.2% 11 909.1%
Consumer:
436 -- NM -- NM
Residential mortgage
6 25 (76.0)% 45 (86.7)%
Other consumer
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
442 25 1,668.0% 45 882.2%
Total consumer
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
Total nonaccrual loans held-for-investment 4,940 3,916 26.1% 2,960 66.9%
Loans past due 90 days or more and still accruing -- -- --% -- --%
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
Non-performing loans ("NPLs") 4,940 3,916 26.1% 2,960 66.9%
Other real estate owned ("OREO") -- 2,558 (100.0)% -- --%
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 4,940 $ 6,474 (23.7)% $ 2,960 66.9%
Non-performing assets ("NPAs")
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ====================
Loans past due and still accruing
$ 3,412 $ 1,394 144.8% $ 779 338.0%
Past due 30 to 59 days
1,103 34 3,144.1% 13 8,384.6%
Past due 60 to 89 days
-- -- --% -- --%
Past due 90 days or more
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 4,515 $ 1,428 216.2% $ 792 470.1%
Total loans past due and still accruing
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ====================
Special mention loans $ 1,101 $ 5,156 (78.6)% $ 5,527 (80.1)%
Classified assets
$ 7,771 $ 7,000 11.0% $ 6,060 28.2%
Classified loans held-for-investment
-- 2,558 (100.0)% -- --%
OREO
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 7,771 $ 9,558 (18.7)% $ 6,060 28.2%
Classified assets
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ====================
NPLs to loans held-for-investment 0.21 % 0.17 % 0.14 %
NPAs to total assets 0.17 % 0.23 % 0.12 %
Classified assets to total assets 0.27 % 0.34 % 0.24 %
During the previous quarter, the Company recognized an OREO of $2.6 million by transferring a SBA 7(a) loan, of which its guaranteed portion was previously sold. The Company's exposure was 25% of the OREO and the SBA was entitled to 75% of the sale price upon the sale of property. The Company sold the property and recognized a gain of $13 thousand during the current quarter.
Allowance for Credit Losses
The following table presents activities in ACL for the periods indicated:
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands) 3/31/2024 12/31/2023 % Change 3/31/2023 % Change
------------------------------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ -------------------- ------------------------------------------------------ --------------------
ACL on loans
$ 27,533 $ 25,599 7.6% $ 24,942 10.4%
Balance at beginning of period
-- -- NM 1,067 NM
Impact of ASC 326 adoption
(185 ) (13 ) 1,323.1% -- NM
Charge-offs
62 12 416.7% 1,102 (94.4)%
Recoveries
922 1,935 (52.4)% (2,417 ) NM
Provision (reversal) for credit losses on loans
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 28,332 $ 27,533 2.9% $ 24,694 14.7%
Balance at end of period
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ====================
1.18 % 1.19 % 1.18 %
Percentage to loans held-for-investment at end of period
ACL on off-balance sheet credit exposure
$ 1,277 $ 1,514 (15.7)% $ 299 327.1%
Balance at beginning of period
-- -- NM 1,607 NM
Impact of ASC 326 adoption
168 (237 ) NM (361 ) NM
Provision (reversal) for credit losses on off-balance sheet credit exposure
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 1,445 $ 1,277 13.2% $ 1,545 (6.5)%
Balance at end of period
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ====================
On January 1, 2023, the Company adopted the provisions of ASC 326 through the application of the modified retrospective transition approach. The initial adjustment to the ACL reflects the expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2023, as well as management's current expectation of future economic conditions. The Company recorded a net decrease of $1.9 million to the beginning balance of retained earnings as of January 1, 2023 for the cumulative effect adjustment, reflecting an initial adjustment to the ACL on loans of $1.1 million and the ACL on off-balance sheet credit exposures of $1.6 million, net of related deferred tax assets arising from temporary differences of $788 thousand.
Investment Securities
Total investment securities were $138.2 million at March 31, 2024, a decrease of $5.2 million, or 3.6%, from $143.3 million at December 31, 2023, and a decrease of $6.5 million, or 4.5%, from $144.7 million at March 31, 2023. The decrease for the current quarter was primarily due to a fair value decrease of $1.6 million, principal pay-downs of $3.5 million and net premium amortization of $41 thousand.
Deposits
The following table presents the Company's deposit mix as of the dates indicated:
3/31/2024 12/31/2023 3/31/2023
---------------------------------------------------------------------- ---------------------------------------------------------------------- ----------------------------------------------------------------------
($ in thousands) Amount % to Amount % to Amount % to
Total Total Total
--------------------------------------------------------- ------------------------------ -------------------- ------------------------------ -------------------- ------------------------------ --------------------
Noninterest-bearing demand deposits $ 538,380 22.4% $ 594,673 25.3% $ 653,970 30.5%
Interest-bearing deposits
6,153 0.3% 6,846 0.3% 7,584 0.4%
Savings
16,232 0.7% 16,825 0.7% 15,696 0.7%
NOW
461,221 19.0% 397,531 16.8% 436,906 20.3%
Retail money market accounts