#United States #Raleigh #financial results #Dogwood State Bank #Community First

Dogwood State Bank's Strong Financial Performance in 2024

Dogwood State Bank (OTC: DSBX), headquartered in Raleigh, North Carolina, has unveiled its financial performance for the fourth quarter and the full year ending December 31, 2024. The Bank reports a significant improvement in adjusted net income, reflecting the successful execution of its growth strategy, including the recently completed acquisition of Community First Bancorporation.

Key Financial Highlights

In the fourth quarter of 2024, Dogwood recorded an adjusted net income of $6.6 million, translating to $0.35 per diluted share. This marks a considerable increase from $2.9 million, or $0.20 per share, in the same quarter of the previous year. For the full year 2024, adjusted net income rose to $18.7 million, or $1.12 per diluted share, compared to $10.6 million, or $0.72 per share, in 2023. The Bank's adjusted pre-tax, pre-provision net revenue also saw robust growth, reaching $9.7 million in Q4 and $28.8 million for the entire year, highlighting its operational resilience amid market fluctuations.

The net interest margin expanded significantly, rising to 4.13% in the fourth quarter and 3.80% for the year, demonstrating effective asset management and favorable lending conditions. Dogwood's adjusted efficiency ratio improved to 61.06% in Q4, showcasing the Bank's ongoing commitment to cost management.

Successful Acquisition of Community First

A pivotal milestone for Dogwood in 2024 was the acquisition of Community First Bancorporation, finalized on August 1, 2024. The transaction expanded Dogwood's total assets by $682.5 million, gross loans by $474.1 million, and total deposits by $572.1 million. This strategic move positions the Bank for sustained growth and increases its lending capabilities in the small business sector, where it has already been recognized as one of the largest SBA lenders in North Carolina.

Steve Jones, CEO of Dogwood State Bank, expressed pride in the Bank's performance: "Our successful acquisition and integration of Community First was transformational for our organization. We delivered exceptional value to our stakeholders and advanced key initiatives, ensuring a robust foundation for sustained growth in the upcoming years."

Q4 2024 Earnings Performance

Despite facing merger-related expenses of $595 thousand during the fourth quarter, the overall results reflect strong underlying performance. The Bank's GAAP net income for Q4 2024 totaled $6.2 million ($0.32 per diluted share), significantly improving from $2.9 million in the same period of 2023.

Moreover, Dogwood's net interest income surged to $21.1 million in Q4 2024, up from $11.9 million in Q4 2023. This substantial jump is attributed to a marked increase in interest-earning assets, which soared to $2.04 billion in Q4, representing a $749.8 million increase in average loans compared to the previous year.

Credit Quality and Non-Interest Income

The Bank exhibited strong credit quality, with a slight decrease in the provision for credit losses to $1.1 million in Q4 2024. Nonperforming loans increased slightly to 0.33% of total loans, but this remains a manageable figure within the context of the Bank's overall growth strategy.

Non-interest income remained stable at $3.7 million for both Q4 2024 and Q4 2023. The Bank navigated several challenges, including a one-time gain on early loan payoffs in the previous year, while continuing to enhance SBA lending income through improved secondary market premiums.

Conclusion

In summary, Dogwood State Bank's 2024 performance underscores its capacity for growth and resilience in a competitive landscape. With the successful integration of Community First, the Bank is well-positioned to pursue future opportunities, maintain strong customer relationships, and deliver value to its shareholders. Looking ahead, Dogwood remains committed to fostering innovation and growing its offerings to better serve the needs of its communities.

As Dogwood State Bank proceeds into 2025, stakeholders can expect a diligent effort in leveraging technology, enhancing customer service, and expanding its community banking model.