OXFORD, Mich., May 7, 2024 /PRNewswire/ — Oxford Bank Corporation (“the Company”) (OTC Bulletin Board: OXBC), the holding company for Oxford Bank (“the Bank”), today announced operating results for the first quarter ended March 31, 2024.
The Company’s quarterly consolidated earnings for the three months ended March 31, 2024, were $3.28 million, or $1.34 per weighted average share, compared to $3.42 million, or $1.41 per weighted average share for the same period one year ago. President and CEO, David Lamb, commented “We are pleased to continue reporting consistent earnings this quarter given continued economic uncertainty. While the prolonged higher interest rate environment has impacted our interest expense, our liquidity and asset sensitive balance sheet has greatly offset this effect to date. Our lending businesses continue to originate well-structured loans while we maintain a strong liquidity position and credit metrics. Both our commercial finance and conventional business banking team have reasonably strong pipelines, so we expect continued growth in those portfolios.
Total Assets of the Company were $883.21 million as of March 31, 2024, compared to $819.86 million at March 31, 2023. “The balance sheet has grown considerably year-over-year with the main driver the continued execution of our strategy to put some excess liquidity towards funding commercial loans. This has decreased our total cash and investments some, but the core of our deposit portfolio has remained resilient as our primary funding source. The investment portfolio duration remains at roughly two years and will also provide consistent cash flow through 2024 given the ladder strategy executed when core deposits increased rapidly during the pandemic. Given the composition of the investment portfolio being heavily weighted in relatively short US Treasury Bonds, the Company does not carry significant levels of unrealized losses” reported CEO David Lamb.
Net loans at first quarter-end 2024 were $556.18 million, compared to $459.90 million at the end of the first quarter 2023, an increase of $96.28 million or roughly 21%. The main drivers of the year-over-year change were the increase in traditional commercial loans of $39.6 million as well as the growth in Oxford Commercial Finance (“OCF”) of $45.2 million and roughly $11.5 million in consumer / home equity loans and SBA loans. CEO Lamb noted, “Our lending activity remains strong but controlled to drive the targeted growth seen in both conventional business lending and our commercial finance loan portfolios. The industry-wide lending environment remains fluid given the impact of rates and other economic forces. Going forward, the diversity of products that we can offer, and the complimentary nature of traditional lending and commercial finance, may provide us an advantage given our ability to serve a large range of clients. As we have noted in the past, the commercial finance business is counter cyclical which should balance changes in conventional commercial lending activity. There is no question that the critical element is our teams continuing to find and win new relationships at appropriate yields and relevant depository relationships. I have a high level of confidence in our team to continue their past successes.”
Total deposits were $770.97 million as of March 31, 2024, an increase from the $726.38 million at March 31, 2023. The Bank’s consistent loan and deposit activity in the quarter resulted in a Net Interest Margin (“NIM”) of 5.12% for the first quarter of 2024 compared to 5.04% for the same period of 2023. Lamb continued, “We have been very pleased with the stickiness of our deposits and the strength of our client relationships. With no current exposure to borrowings or wholesale funding, we believe that we are well positioned to weather a longer “rates-up” environment on the liability side of our balance sheet. However, as we have all seen in our industry, there is, and will continue to be, economic and competitive pressure on our deposit portfolio. The increases experienced in the first quarter are predominately due to some seasonality of the portfolio and also the increase in a couple of larger deposit clients. The core of the portfolio has remained mostly flat.” He added “Even with some elevated interest expense through 2023 and into 2024, our NIM is very strong driven by a comparatively low cost of funds that has complimented our balance sheet and loan origination strategy. However, we also believe that further margin expansion is not likely with our current balance sheet composition given the more consistent rate environment over the past two quarters and pressures of continued higher interest expense in 2024. Inevitably, like many of…
Read More: OXFORD BANK CORPORATION ANNOUNCES FIRST QUARTER 2024 OPERATING RESULTS