SALEM – MidSouthern Bancorp, Inc. (OTCQX: MSVB), the parent company of MidSouthern Savings Bank, FSB, announced today its financial results for the third quarter ending September 30, 2024. The Company reported a net income of $460,000, or $0.17 per diluted share, a slight increase from $440,000, or $0.17 per diluted share, in the same quarter of 2023.
For the nine months ending September 30, 2024, net income totaled $827,000, or $0.30 per diluted share, down from $1.2 million, or $0.44 per diluted share, in the previous year’s comparable period.
Income Statement Highlights
Net interest income after provision for credit losses decreased by $53,000, or 2.6%, to $2.0 million for the third quarter, primarily due to a decline in the average balances of interest-earning assets. Total interest income also fell by $117,000, or 4.3%, despite higher yields from loans and investment securities.
The average yield on interest-earning assets increased to 4.40% for the quarter, up from 3.99% the previous year. Conversely, total interest expense decreased significantly by $155,000, or 19.6%, due to a lower average balance of interest-bearing liabilities.
Despite these challenges, the net interest rate spread improved to 2.93%, while the net interest margin rose to 3.31%, reflecting better conditions than in the prior year.
Noninterest Income and Expenses
Noninterest income increased slightly by $7,000 in the third quarter, while it decreased by $191,000 in the first nine months of 2024, largely due to a net loss on investment securities. Noninterest expenses decreased by $101,000 in the third quarter, attributed to lower professional fees and reduced director compensation.
Balance Sheet Review
As of September 30, 2024, total assets stood at $231.1 million, down from $269.0 million at the end of 2023. The decline was primarily due to reduced investment securities and net loans, which decreased by $9.5 million. Total liabilities also fell to $193.9 million, driven by lower deposit balances.
Credit Quality
The Company reported a significant decrease in non-performing loans, which fell to $223,000, representing 0.2% of total loans. This improvement reflects the Company’s ongoing focus on credit quality.
Capital Position and Future Outlook
MidSouthern Bancorp maintains a strong capital position, with a Community Bank Leverage Ratio of 17.8%, well above the required minimum. Shareholders’ equity increased to $37.2 million, bolstered by net income and other comprehensive income.
Looking ahead, the Company is progressing with its proposed purchase and assumption transaction with Beacon Credit Union. Pending regulatory approvals, closure is expected in the first quarter of 2025. Shareholders may anticipate a cash distribution between $15.00 and $17.00 per share, although this is subject to various factors.
MidSouthern Bancorp’s financial stability and proactive management strategies position it well as it navigates the evolving economic landscape
