SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______________ to _______________
Commission File No.
(Exact Name of Registrant as Specified in Its Charter)
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(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
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(Title of Each Class) | (Trading Symbol(s)) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. ⌧ NO ◻
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There were
Texas Community Bancshares, Inc.
Form 10-Q
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Texas Community Bancshares, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
September 30, 2023 and December 31, 2022
(Amounts in thousands, except share and per share data)
| September 30, |
| December 31, | |||
2023 | 2022 | |||||
(unaudited) | ||||||
Assets |
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Cash and due from banks |
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Federal funds sold | | | ||||
Cash and cash equivalents | | | ||||
Interest bearing deposits in banks | | | ||||
Securities available for sale | | | ||||
Securities held to maturity (fair values of $ | | | ||||
Loans receivable, net of allowance for credit losses of $ | | | ||||
Net investment in direct financing leases | | | ||||
Accrued interest receivable | | | ||||
Premises and equipment, net | | | ||||
Bank-owned life insurance | | | ||||
Foreclosed assets | | — | ||||
Restricted investments carried at cost | | | ||||
Core deposit intangible | | | ||||
Deferred income taxes | | | ||||
Financial derivative | | — | ||||
Other assets | | | ||||
$ | | $ | | |||
Liabilities and Shareholders' Equity |
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Liabilities |
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Noninterest bearing | $ | | $ | | ||
Interest bearing | | | ||||
Total deposits | | | ||||
Advances from Federal Home Loan Bank (FHLB) | | | ||||
Accrued expenses and other liabilities | | | ||||
Total liabilities | | | ||||
Shareholders' Equity | ||||||
Preferred stock, $ | ||||||
Common stock, $ | | | ||||
Additional paid in capital | | | ||||
Retained earnings | | | ||||
Accumulated other comprehensive loss | ( | ( | ||||
Unearned Employee Stock Ownership Program (ESOP) shares, at cost | ( | ( | ||||
Treasury stock, at cost ( | ( | — | ||||
Total shareholders' equity | | | ||||
$ | | $ | |
See Notes to Consolidated Financial Statements
1
Texas Community Bancshares, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Three and Nine Months Ended September 30, 2023 and 2022
(Amounts in thousands, except share and per share data)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2023 |
| 2022 |
| 2023 |
| 2022 | ||||||
Interest Income |
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Loans, including fees | $ | | $ | | $ | | $ | | ||||
Debt securities |
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Taxable |
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Non taxable |
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Dividends on restricted investments |
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Federal funds sold |
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Deposits with banks |
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Financial derivative |
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Total interest income |
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Interest Expense |
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Deposits |
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Advances from FHLB |
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Other |
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Total interest expense |
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Net Interest Income |
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Provision for Credit Losses - loans | ( | | | | ||||||||
Provision for Credit Losses - off-balance sheet credit exposures | | — | | — | ||||||||
Provision for Credit Losses |
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Net Interest Income After Provision for Credit Losses |
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Noninterest Income |
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Service charges on deposit accounts |
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Other service charges and fees |
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Net loss on securities transactions |
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Net gain on sale of foreclosed assets |
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Net appreciation on bank-owned life insurance |
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Other income |
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Total noninterest income (loss) |
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Noninterest Expenses |
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Salaries and employee benefits |
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Occupancy and equipment expense |
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Data processing |
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Technology expense |
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Contract services |
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Director fees |
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Other expense |
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Total noninterest expenses |
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Income (Loss) Before Income Taxes |
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Income Tax Expense (Benefit) |
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Net Income (Loss) | $ | | $ | | $ | ( | $ | | ||||
Earnings (loss) per share - basic | $ | $ | $ | ( | $ | |||||||
Earnings (loss) per share - diluted | $ | $ | $ | ( | $ | |||||||
Weighted-average shares outstanding - basic | ||||||||||||
Weighted-average shares outstanding - diluted |
See Notes to Consolidated Financial Statements
2
Texas Community Bancshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
Three and Nine Months Ended September 30, 2023 and 2022
(Amounts in thousands, except share and per share data)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
Net Income (Loss) | $ | | $ | | $ | ( | $ | | ||||
Other items of comprehensive loss | ||||||||||||
Debt Securities | ||||||||||||
Net changes in fair value of available for sale securities, before tax |
| ( |
| ( |
| ( |
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Reclassification adjustment for realized loss on sale of investment securities included in net income (loss), before tax | — | — | | | ||||||||
Net changes in fair value of available for sale securities hedged, before tax |
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Total other items of comprehensive (loss) income, before tax |
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Income tax benefit (expense) related to other items of comprehensive (loss) income |
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Total other items of comprehensive (loss) income, after tax |
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Comprehensive Loss | $ | ( | $ | ( | $ | ( | $ | ( |
See Notes to Consolidated Financial Statements
3
Texas Community Bancshares, Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Unaudited)
Three and Nine Months Ended September 30, 2023 and 2022
(Amounts in thousands, except share and per share data)
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| Accumulated |
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Additional | Other | Unearned | Total | |||||||||||||||||||||
Preferred | Common | Paid In | Retained | Comprehensive | ESOP | Treeasury | Shareholders' | |||||||||||||||||
Three Months Ended September 30, 2023 and 2022 | Stock | Stock | Capital | Earnings | Loss | Shares | Stock | Equity | ||||||||||||||||
Balance at July 1, 2023 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | ||||||||
Net income |
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Stock based compensation expense | — | — | | — | — | — | — | | ||||||||||||||||
Net changes in other comprehensive income (loss), net of tax |
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Cash dividend declared ($ |
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ESOP shares committed to be released, |
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Treasury stock purchased, |
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Balance at September 30, 2023 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | ||||||||
Balance at July 1, 2022 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | — | $ | | ||||||||
Net income |
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Stock based compensation expense | — | — | | — | — | — | — | | ||||||||||||||||
Net changes in other comprehensive income (loss), net of tax |
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ESOP shares committed to be released, |
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Balance at September 30, 2022 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | — | $ | |
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| Accumulated |
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Additional | Other | Unearned | Total | |||||||||||||||||||||
Preferred | Common | Paid In | Retained | Comprehensive | ESOP | Treasury | Shareholders' | |||||||||||||||||
Nine Months Ended September 30, 2023 and 2022 | Stock | Stock | Capital | Earnings | Loss | Shares | Stock | Equity | ||||||||||||||||
Balance at January 1, 2023 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | — | $ | | ||||||||
Cumulative change in accounting principle (adoption of ASC 326) |
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Balance at January 1, 2023 (as adjusted for change in accounting principle) | — | | | | ( | ( | — | | ||||||||||||||||
Net loss |
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Stock based compensation expense | — | — | | — | — | — | — | | ||||||||||||||||
Issuance of restricted stock awards |
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Net changes in other comprehensive income (loss), net of tax |
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Cash dividends declared ($ |
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ESOP shares committed to be released, |
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Treasury stock purchased, |
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Balance at September 30, 2023 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | ||||||||
Balance at January 1, 2022 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | — | $ | | ||||||||
Net income |
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Stock based compensation expense | — | — | | — | — | — | — | | ||||||||||||||||
Net changes in other comprehensive income (loss), net of tax |
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| ( |
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ESOP shares committed to be released, |
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Balance at September 30, 2022 | $ | — | $ | | $ | | $ | | $ | ( | $ | ( | $ | — | $ | |
See Notes to Consolidated Financial Statements
4
Texas Community Bancshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2023 and 2022
(Amounts in thousands, except share and per share data)
Nine Months Ended | ||||||
September 30, | ||||||
| 2023 |
| 2022 | |||
Operating Activities |
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Net (loss) income | $ | ( | $ | | ||
Adjustments to reconcile net income to net cash from operating activities |
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Provision for credit losses - loans | | | ||||
Provision for credit losses - off-balance sheet credit exposures |
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Net (accretion) amortization of securities |
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Depreciation and amortization |
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Net realized loss on sales of securities available for sale |
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Loss on sale of fixed assets |
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Gain on foreclosed assets | ( | ( | ||||
Appreciation on bank-owned life insurance |
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ESOP compensation expense for allocated shares | | | ||||
Stock-based compensation |
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Deferred income tax |
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Loss on fair value adjustment of fair value hedges |
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Net change in |
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Accrued interest receivable |
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Other assets |
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Accrued expenses and other liabilities |
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Net Cash from Operating Activities |
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Investing Activities |
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Net change in interest bearing deposits in banks |
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Activity in available for sale securities | ||||||
Purchases |
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Sales |
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Maturities, prepayments and calls |
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Activity in held to maturity securities |
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Purchases |
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Maturities, prepayments and calls |
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Purchases of restricted investments |
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Loan originations and principal collections, net |
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Net decrease in net investment in direct financing leases |
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Proceeds from sales of OREO and foreclosed assets |
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Purchases of premises and equipment |
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