Executive Summary

Q4 2023 showed mixed performance: total revenue was roughly flat sequentially at $3.39M, with a net loss of $0.33M driven by elevated interest expense and noninterest expense seasonality .
FY 2023 reflected an intentional balance-sheet realignment: $19.8M of securities sold (loss $1.7M pre-tax; $1.4M net of tax) and increased commercial loan origination; the year posted a net loss of $0.73M and EPS of $(0.24) .
Deposit competition and higher funding costs compressed spread and NIM despite higher asset yields; FY NIM fell to 2.73% from 2.89% YoY .
CEO highlighted 2023 strategy as positioning the bank for improved flexibility and long-term earnings, citing a pivot to higher-yield assets and branch expansion (Tyler in Q1’24), a potential positive catalyst as execution becomes visible in 2024 .

What Went Well and What Went Wrong

What Went Well

Balance sheet repositioning executed: $19.8M of AFS securities sold to reprice the portfolio toward higher yields; added commercial lending, and hedge program via a $25M fair-value swap on AFS securities .
Net interest income grew YoY: FY 2023 net interest income rose to $11.06M (from $10.28M) on higher asset yields and loan growth .
Loan growth and capital strength: Net loans rose to $279.93M (+11.4% YoY); CBLR of 10.76% and “well-capitalized” status maintained .

Quote: “Securities sales of $19.8 million in 2023… and the origination of more commercial loans are part of a concentrated effort… to reshape Broadstreet Bank’s balance sheet to enhance future earnings” — CEO Jason Sobel .

What Went Wrong

Higher funding costs and deposit mix shift: average deposit cost and FHLB advance costs rose materially, compressing spread/NIM (e.g., Q3 spread 2.33% vs 2.98% prior-year quarter) .
Noninterest expense increased: FY noninterest expense rose to $12.0M (+22.4% YoY), including retirement-related, plan termination, and name-change costs .
Securities losses weighed on earnings: realized AFS loss of $1.7M (pre-tax) as part of repricing strategy; FY net loss $(0.73)M .

Financial Results

Revenue and EPS versus prior quarters (oldest → newest)

Metric	Q2 2023	Q3 2023	Q4 2023
Total Revenue ($USD Millions)	$3.16 (=Net Interest $2.65 + Noninterest $0.51)	$3.44 (=Net Interest $2.84 + Noninterest $0.59)	$3.39 (=Net Interest $2.94 + Noninterest $0.46; FY–9M)
EPS (Basic/Diluted, $USD)	$0.05	$0.15	$(0.11) (=FY $(0.24) – 9M $(0.13))
Net Income Margin %	5.1% (= $0.16M / $3.16M)	13.3% (= $0.46M / $3.44M)	-9.8% (= -$0.33M / $3.39M; FY–9M)

Notes:

Total revenue computed as net interest income + noninterest income (community-bank convention).
Q4 values derived from FY 2023 minus 9M 2023 (press release and 10-Q).

FY results and YoY comparison

Metric	FY 2022	FY 2023
Net Interest Income ($USD Millions)	$10.28	$11.06
Noninterest Income ($USD Millions)	$1.87	$0.35
Noninterest Expense ($USD Millions)	$9.77	$12.00
Net (Loss) / Income ($USD Millions)	$1.75	$(0.73)
NIM (%)	2.89%	2.73%

Segment/portfolio mix (as of Dec 31, 2023)

Loans ($USD Millions)	Amount	% of Total
1–4 Family Residential	$172.21	60.8%
Commercial Real Estate	$41.79	14.8%
Construction & Land	$37.53	13.3%
Multi-Family	$9.26	3.3%
Farmland	$8.32	2.9%
Commercial	$6.90	2.4%
Consumer & Other	$6.88	2.4%
Total Loans	$283.03	100%

Key KPIs (as of Dec 31, 2023)

KPI	Value
Total Assets ($USD Millions)	$452.04
Total Deposits ($USD Millions)	$317.24
Net Loans ($USD Millions)	$279.93
Allowance for Credit Losses (% loans)	1.09%
Nonperforming Assets / Total Assets (%)	0.30%
CBLR (%)	10.76%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Net Interest Income	FY/Qtr	Not provided	Not provided	Maintained (no formal guidance)
Margins (Spread/NIM)	FY/Qtr	Not provided	Not provided	Maintained (no formal guidance)
OpEx	FY/Qtr	Not provided	Not provided	Maintained (no formal guidance); noted one-time items in 2023
Tax rate	FY/Qtr	Not provided	Not provided	Maintained (no formal guidance)
Dividends	FY	Paid $0.37M in 2023	No forward guidance	Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q4 2023 earnings call transcript was found; themes based on press release and filings.

Topic	Previous Mentions (Q2 & Q3 2023)	Current Period (Q4/FY 2023)	Trend
Balance-sheet realignment	Sold $17.0M AFS in Jan; losses of $1.7M; diversify to higher-yield CMOs, bank sub debt; initiated $25M AFS hedge	Sold $19.8M AFS over 2023; CEO reiterates strategy	Continuing pivot
Deposit competition/costs	Deposit cost up; shift into CDs and MMDA; brokered deposits $12M	Average deposit cost and FHLB costs elevated; FY NIM down	Elevated funding costs
Credit quality/CECL	CECL adopted Jan 1; allowance increased; provision higher	Allowance 1.09% of loans; coverage ratios improved	Strengthened reserves
Expansion/branches	Purchased Tyler building; Lindale build; LPO Canton	Tyler branch opened Q1 2024; Lindale new building	Executing growth
Risk management/hedging	$25M fair-value swap on AFS	Swaps remain effective; fair value gain recognized	Enhanced toolkit

Management Commentary

“2023 loss was in a year of extraordinary internal changes, including strategic balance sheet realignment, retirement of the former CEO, a change in the bank name, and branch growth.” — Jason Sobel, CEO .
“We believe we are more flexible and better positioned to capitalize on opportunities… and to profitably grow Broadstreet Bank while creating long-term value for our shareholders.” .

Q&A Highlights

No Q4 2023 earnings call transcript was available; therefore, no Q&A details to report [ListDocuments: earnings-call-transcript returned none].

Estimates Context

Wall Street consensus (S&P Global) for Q4 2023 EPS and revenue was unavailable due to a data access limit at the time of this analysis; as a result, comparisons to estimates could not be completed. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

Funding-cost pressure remains the critical swing factor; deposit repricing and FHLB advances drove spread/NIM compression despite higher asset yields .
Strategic portfolio repositioning is largely complete, with securities losses already recognized; higher-yield assets, increased commercial originations, and hedging should progressively support net interest income .
Reserve strength and stable asset quality provide downside protection: allowance at 1.09% and NPAs at 0.30% of assets .
Near-term earnings cadence: Q3 profit ($0.46M) followed by Q4 loss ($0.33M) reflects seasonality and expense timing; monitoring Q1’24 run-rate as Tyler branch and Lindale facility normalizes operations is key .
Deposit mix and pricing are pivotal: continued focus on core deposits and reduced reliance on brokered/fixed-rate CDs may stabilize costs as market rates level off .
Operational catalysts: branch expansion and commercial loan growth in a growing regional market (Tyler, Lindale, Canton) can drive medium-term balance-sheet scale and revenue diversification .
Risk: macro-rate path and competitive deposit environment; upside: execution on higher-yield asset strategy and cost containment post-2023 one-time charges .

Sources: Company 8-K and press release (Feb 23, 2024) ; Q2 2023 10-Q ; Q3 2023 10-Q ; FY 2023 10-K (Mar 27, 2024) .

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