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MUNCY COLUMBIA FINANCIAL Corp (CCFN)·Q1 2025 Earnings Summary

Executive Summary

  • Solid quarter with EPS of $1.23 (+8.8% YoY) on stronger net interest income and improving net interest margin (NIM 3.83% YTD vs 3.32% YoY), partly offset by higher operating expenses tied to a one-time executive retirement charge .
  • Management announced a $0.50 special one-time cash dividend and continued dividend growth ($0.45 declared for 2Q25), highlighting strong capital and record 2024 earnings as catalysts for shareholder returns .
  • Balance sheet mix shift continued: deposits rose $46.2M sequentially while short-term borrowings fell $40.7M as customer repurchase agreements migrated into core deposits, supporting lower funding costs and NIM expansion .
  • Asset quality weakened sequentially with non-performing assets (NPA) rising to 0.77% of assets (from 0.63%), driven by higher nonaccrual loans; capital ratios remain strong (CET1 15.13%) .

What Went Well and What Went Wrong

  • What Went Well

    • NIM expansion: Fully tax-equivalent NIM (YTD) increased to 3.83% from 3.32% a year ago, supported by lower funding costs and mix optimization .
    • Deposit strategy execution: Deposits +$46.2M QoQ; ongoing migration of customer repurchase agreements into core deposits reduced short-term borrowings by $40.7M QoQ and is expected to complete in 2025, aiding long-term liquidity and NIM .
    • Shareholder returns: Special $0.50 dividend and continued regular dividend increases underscore confidence and capital strength; CEO: “we have both the ability and unique opportunity to return more… while maintaining capital above well-capitalized levels.” .

  • What Went Wrong

    • Higher operating expenses: Total non-interest expense rose to $11.09M (+$1.45M YoY), driven by $1.295M pretax one-time retirement-related expense and higher health insurance costs (+$151k YoY) .
    • Asset quality deterioration: NPA increased to $12.3M (0.77% of assets) from $10.1M (0.63%) QoQ, primarily on higher nonaccrual loans ($12.23M vs $10.05M) .
    • Non-interest income softness: Fell $87k YoY to $2.45M due to prior-year one-time items (debit card incentives; solar grant) lapsing in 1Q25 .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue (S&P basis) ($USD Millions)*$15.34 = 12.623 + 2.715 $15.54 = 12.829 + 2.709 $16.20* (12. “NII after provision” 13.758 + “Non-interest income” 2.445)
EPS ($)$1.42 $1.47 $1.23
Net Interest Income ($M)$12.77 $13.40 $13.87
Non-Interest Income ($M)$2.72 $2.71 $2.45
Provision for Credit Losses ($M)$0.15 $0.57 $0.11
Net Interest Margin (YTD, %)3.40% 3.46% 3.83%
ROA (Annualized, %)1.26% 1.30% 1.10%
ROE (Annualized, %)12.34% 12.30% 10.33%

KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
Total Assets ($MM)$1,607.3 $1,596.0 $1,602.3
Loans, net + HFS ($MM)$1,105.4 $1,117.8 $1,136.0
Total Deposits ($MM)$1,290.5 $1,292.4 $1,338.6
Core Deposits ($MM)$938.9 $943.7 $979.6
CET1 Ratio (%)14.59% 15.13% 15.13%
Leverage Ratio (%)8.82% 9.09% 9.30%
NPA/Assets (%)0.53% 0.63% 0.77%
ACL/Loans (%)0.85% 0.88% 0.87%
Book Value/Share ($)$47.35 $47.11 $48.50
Dividend Declared/Share ($)$0.44 $0.44 $0.45

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Dividend/ShareQ2 2025$0.44 (Q2 2024) $0.45 (declared 5/13/25) Raised
Special Dividend/ShareQ2 2025N/A$0.50 (declared 4/22/25) New one-time
Formal Financial Guidance (revenue, margins, OpEx, tax)2025None disclosedNone disclosedMaintained (no formal guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
Net Interest MarginNIM YTD 3.40% (Q3’24) and 3.46% (FY24) NIM YTD 3.83% amid lower funding costs Improving
Deposit Mix / Repo MigrationActively migrating customer repurchase agreements to deposits (Q3, Q4) Deposits +$46.2M QoQ; project expected to complete in 2025 Positive mix shift
Asset QualityNPA 0.53% → 0.63% (Q3 to Q4) NPA 0.77%; higher nonaccrual loans Deteriorating
Capital & Shareholder ReturnsBook value up; steady dividends (Q3/Q4) Special $0.50 dividend; BVPS $48.50 Shareholder-friendly
Operating ExpensesMerger-related noise in 2023; normalized in 2024 $1.295M one-time retirement expense; higher health insurance Near-term headwind
Securities/AOCIAOCI drag improved in 2024 AOCI loss narrowed ($13.90M → $11.71M) Improving

Management Commentary

  • “We are pleased to recognize and reward our shareholders with this special one-time cash dividend… we have both the ability and unique opportunity to return more through this special dividend while maintaining capital above well-capitalized levels.” — Lance O. Diehl, President & CEO .
  • On deposit strategy and liquidity: management continues executing the strategic repositioning of customer repurchase agreements into core deposits, expects completion in 2025, and views the initiative as supportive of long-term liquidity and balance sheet management .

Q&A Highlights

  • No earnings call transcript was available for Q1 2025; the company’s investor site lists quarterly financials and press releases but no transcript for the period .

Estimates Context

  • S&P Global shows no published Wall Street consensus for Q1 2025 EPS or revenue (limited coverage for CCFN). Actual revenue (S&P basis) for Q1 2025 was $16.20M*; EPS actual was $1.23 (no consensus to compare) .
  • With NIM expanding and funding costs improving, Street models (where they exist) may need to reflect stronger NII trajectory, though rising NPAs could temper forward credit cost assumptions .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • NIM expansion and funding mix shift are the core positive drivers; continued migration of repos into deposits and reduced short-term borrowings should support margin durability through 2025 .
  • One-time retirement expense masked underlying operating leverage; watch for expense normalization in Q2 to validate run-rate profitability .
  • Credit is the main watch item: NPA/Assets rose to 0.77% on higher nonaccruals; track delinquency formation and ACL coverage vs. NPAs in coming quarters .
  • Capital remains robust (CET1 15.13%); special dividend and dividend increase demonstrate confidence and could be a near-term stock support .
  • Sequential loan and deposit growth alongside higher core deposits underpin earnings resilience if asset quality stabilizes .
  • Without active Street coverage, narrative catalysts for the stock near-term are company-driven: dividend actions, sustained NIM expansion, and clarity on asset quality trajectory .

Footnotes:

  • Revenue (S&P basis) approximates net interest income after provision plus non-interest income; Q1 2025 actual $16.203M was derived from 13.758 + 2.445 (USD millions) . Values marked with * were retrieved from S&P Global.