Net Loss

$4.7 million loss

The net loss was driven by a one-time loss on the sale of lower-yielding investment securities ($5.5 million) and additional expenses ($560,000) related to a core processing system upgrade, highlighting a strategic reallocation from legacy assets. " " " "

Non-Interest Expense

Increased to $2.8 million (32% from Q4 2023; 27.7% from Q1 2023)

Expenses rose primarily due to the significant costs associated with the core processing system upgrade, reflecting short-term expense increases for long-term operational savings. " " "

Investment Securities

Decreased by $45.0 million (53.6%)

The company sold a large portion of lower-yielding investment securities to generate $42.6 million in cash, aiming to reinvest in higher-yielding assets and fund share repurchases and debt repayments, resulting in a marked decline versus prior periods. " "

Loans

Decreased by $1.4 million (1%)

Total loans fell modestly due to declines in commercial, industrial, and residential lending, partially offset by growth in construction loans, indicating a cautious credit expansion compared to previous period values. " "

Deposits

Increased by $4.0 million (2.4%)

A steady increase in deposits reflects a stable customer base and improved funding, maintaining a positive trend in liquidity relative to the prior period. "

Borrowings

Increased by $10.0 million (51.8%)

Borrowings surged as the company refinanced and obtained additional advances under the Bank Term Funding Program (BTFP), reflecting an active response to liquidity needs and market pressures compared to prior balances. " "

Net Interest Income

Increased by $142,000 (7.2%)

Gains in net interest income were achieved through higher yields on loans and other interest-earning assets, indicating enhanced asset yield performance over the previous period. " "

Net Interest Margin

Improved from 3.14% to 3.15%

A slight improvement in net interest margin points to modest efficiencies in asset yield relative to funding costs, aligning with the reallocation strategy from lower to higher yielding investments seen in the current period. " "

Non-Performing Assets

Decreased by $332,000 (16.2%)

The reduction in non-performing assets suggests improved credit quality and effective risk management compared to the previous period, which bodes well for future asset quality. " "