Endeavor Bancorp Reports Net Income of $1.4 Million for the First Quarter of 2025; Highlighted by Loan and Deposit Growth and Net Interest Margin Expansion
SAN DIEGO, April 28, 2025 (GLOBE NEWSWIRE) — Endeavor Bancorp (OTCQX: EDVR) (the “Company,” or “Bancorp”), the holding company for Endeavor Bank (the “Bank”), today reported net income of $1.36 million, or $0.32 per diluted share, for the first quarter of 2025, compared to net income of $1.08 million, or $0.25 per diluted share, for the fourth quarter of 2024, and $407,000, or $0.10 per diluted share, for the first quarter of 2024. First Quarter 2025 financial results are unaudited.
Results for the first quarter of 2025 included a $385,000 provision for credit losses, compared to a $374,000 provision for credit losses in the fourth quarter of 2024, and a $450,000 provision for credit losses in the first quarter of 2024. Excluding taxes and loan loss provisions, the Company’s pretax, pre-provision net income increased to $2.33 million in the first quarter of 2025, compared to $1.93 million in the preceding quarter and $1.04 million in the first quarter of 2024.
“Endeavor’s first quarter performance marks a great start to the year, underscoring our continued commitment to delivering value to our shareholders and the businesses we serve,” stated Julie Glance, CFO. “We allocated significant resources toward growing the company and expanding our team in 2024, and our first quarter operating results demonstrate the positive impact of these investments on our earnings. We experienced meaningful growth in both loans and deposits, coupled with continued margin expansion. Net loans increased 4.6% during the quarter and 34.9% year-over-year. Additionally, total deposits grew nicely during the quarter, increasing 4.2% compared to the prior quarter end and 27.2% over the prior year. For a community bank like Endeavor, deposits are the most integral component in keeping our balance sheet healthy and keeping us lending to our business clients. We will continue to focus on deposit gathering in the year ahead, with an emphasis on bringing in full client relationships to grow our core deposit base.”
Income Statement
Strong first quarter earnings were driven by loan growth and earning asset rates. Total interest income on loans and bank deposits and investments was $11.1 million, an increase of $365,000 compared to the preceding quarter, while total interest expenses decreased $130,000 during the same timeframe. Net interest income was $7.0 million in the first quarter of 2025, which was an increase of $495,000, or 7.6% compared to the preceding quarter and a 39.5% increase compared to the first quarter of 2024.
“The 15-basis point increase in our net interest margin during the first quarter of 2025, compared to the prior quarter, was primarily the result of strong loan growth, in addition to improving funding costs,” said Dan Yates, CEO. “In the current rate environment, we continue to actively manage our asset-liability mix to protect our net interest margin, while ensuring competitive loan and deposit pricing across our portfolio.”
The Company’s net interest margin increased 15 basis points to 4.12% in the first quarter of 2025 compared to 3.97% in the fourth quarter of 2024 and increased 44 basis points compared to 3.68% in the first quarter of 2024. The yield on total earning assets remained strong, decreasing only 2 basis points during the first quarter of 2025 to 6.52%, compared to 6.54% in the preceding quarter, and up from 6.23% in the first quarter of 2024. The cost of deposits decreased to 2.58% in the first quarter, compared to 2.76% in the fourth quarter, and unchanged from 2.76% in the first quarter of 2024.
Non-Interest income was $183,000 in the first quarter of 2025, an increase of $23,000 or 14% compared to the fourth quarter of 2024, and a slight increase compared to $151,000 in the first quarter of 2024.
Non-Interest expense was $4.86 million in the first quarter of 2025, an increase of $112,000 compared to the fourth quarter of 2024, and an increase of $725,000 compared to the first quarter of 2024. The higher expenses year-over-year were largely due to strategic investment in staff throughout 2024. “During 2024, Endeavor made significant investments in our team, increasing headcount by over 30%. These investments are now yielding results, as revenue growth driven by our expanded capabilities has more than offset the increase in expenses this quarter. The strong improvement in the efficiency ratio is also evidence that the 2024 additional hires are now fully engaged and productive driving the efficiency ratio from 79.9% in first quarter 2024, to 71.2% in fourth quarter 2024, to 67.6% in first quarter 2025. We have fewer new hires planned for 2025, and as we continue to leverage our expanded team we are well positioned for additional earnings growth throughout the remainder of the year,” said Yates.
A significant portion of the annual board compensation will be paid in the second quarter of 2025 in contrast to 2024 in which the compensation was $312,000 in the first quarter. Adjusting the first quarter 2025 net income for the timing of board compensation and the annual expense for a contract negotiation, net income would have been reduced to $1.2 million in first quarter 2025.
The Company’s annualized return on average equity for the first quarter of 2025 was 11.68%, compared to 9.35% in the fourth quarter of 2024 and 3.79% in the first quarter of 2024. The annualized return on average assets for the first quarter of 2025 was 0.79% compared to 0.65% in the fourth quarter of 2024 and 0.29% in the first quarter of 2024.
Balance Sheet
Total assets increased by $26.2 million, or 3.9%, during the first quarter of 2025 to $704.6 million at March 31, 2025, compared to $678.3 million at December 31, 2024, and increased $138.7 million, or 24.5%, compared to March 31, 2024. Balance sheet liquidity remains strong with cash balances of $80.9 million, which represents 11.5% of total assets as of March 31, 2025. The Company’s bond portfolio increased $609,000 during the first quarter of 2025 to $26.4 million as of March 31, 2025, representing 3.7% of total assets. Total available borrowing capacity through the Federal Home Loan Bank and the Federal Reserve discount window totaled $210.0 million as of quarter end.
“Our results for the first quarter emphasized the effort of our strong, experienced team, and our commitment to expanding our brand of business banking, which includes growing both sides of the balance sheet while maintaining strong credit quality,” said Steve Sefton, President. “Loan growth and new loan originations remained strong during the first quarter of 2025, as we continue to seek out high quality lending opportunities in our markets.”
Total loans outstanding increased $26.0 million, or 4.6%, during the first quarter of 2025 to $597.8 million at March 31, 2025, compared to $571.8 million three months earlier, and increased $154.6 million, or 34.9%, when compared to $443.2 million a year earlier. Total non-performing loans decreased to 0.40% of the total loan portfolio as of March 31, 2025, compared to 0.46% in the prior quarter. The Company had no net charge offs during the first quarter of 2025, or in the prior quarter.
Total deposits increased $24.9 million, or 4.1%, during the quarter to $626.2 million at March 31, 2025, compared to $601.2 million three months earlier, and increased $134.0 million, up 27.2% when compared to $492.2 million a year earlier. The loan to deposit ratio was 95.5% at March 31, 2025, compared to 95.1% at December 31, 2024, and 90.1% as of March 31, 2024.
As a result of its participation in a reciprocal deposit placement network, the Bank accepted “reciprocal” deposits from other institutions, enabling the Bank to offer customers FDIC insurance on accounts in excess of the typical $250,000 FDIC insurance limit. Although the reciprocal deposits maintained through the network are core deposits seeking FDIC insurance, the FDIC rules indicate that reciprocal deposits aggregating over 20% of total liabilities are classified as deposits obtained by or through a deposit broker. The total reciprocal deposits reported as brokered deposits were $82.6 million at March 31, 2025, and $113.7 million as of December 31, 2024. To support strong loan growth, the Company is utilizing a conservative amount of wholesale deposits. As of March 31, 2025, total wholesale deposits, excluding the reciprocal deposits, was $60.2 million, representing 8.9% of total deposits compared to $60.7 million, or 10.1% of total deposits as of December 31, 2024.
Shareholders’ equity was $47.7 million at March 31, 2025, compared to $46.0 million at December 31, 2024, and $42.5 million at March 31, 2024. Tangible book value per share increased to $13.49 at March 31, 2025, compared to $13.20 three months earlier and $12.64 a year earlier.
Capital
The Bank’s Tier 1 leverage ratio was 10.57% as of March 31, 2025, compared to 10.90% at December 31, 2024. The Tier 1 risk-based capital ratio was 10.47% as of March 31, 2025, compared to 10.71% on December 31, 2024, and the Total risk-based capital ratio was 11.65% compared to 11.90% three months earlier, all of which were well above regulatory minimums.
About Endeavor Bancorp
Endeavor Bancorp, the holding company for Endeavor Bank, is primarily owned and operated by Southern Californians for Southern California businesses and their owners. The bank’s focus is local: local decision-making, local board, local founders, local owners, and relationships with local clients in Southern California.
Headquartered in downtown San Diego in the Symphony Towers building, the Bank also operates a loan production and executive administration office in Carlsbad and a branch office in La Mesa. Endeavor Bank provides traditional business banking services across a broad spectrum of industries and specialties. Unique to the bank is its consultative banking approach that partners our business clients with Endeavor Bank’s senior management. Together, we build strategies and provide resources that solve problems, plan for the future, and help clients’ efforts to grow revenues and profits. Endeavor Bancorp trades on the OTCQX® Best Market under the symbol “EDVR.” Visit www.endeavor.bank for more information.
Endeavor Bank is rated by Bauer Financial as Five-Star “Superior” for strong financial performance, the top rating given by the independent bank rating firm. DepositAccounts.com awarded Endeavor Bank an A rating.
EDVR Shareholders
With many of our shareholders transferring their EDVR shares to their brokerage companies, along with ongoing trading taking place, Bancorp may not have the most current shareholder contact information. If you are an EDVR shareholder and would like to receive information via a more timely method, please complete the Shareholder Communication Preference Form on our website: https://www.bankendeavor.com/investor-relations so we can keep you updated on EDVR news, and invite you to various shareholder networking events throughout the year.
Forward-Looking Statements
This press release includes “forward-looking statements,” as such term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the current beliefs of the Company’s directors and executive officers (collectively, “Management”), as well as assumptions made by and information currently available to the Company’s Management. All statements regarding the Company’s business strategy and plans and objectives of Management of the Company for future operations, are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar meaning, as they relate to the Company or the Company’s Management, are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s expectations (“cautionary statements”) are loan losses, rapid and unanticipated deposit withdrawals, unavailability of sources of liquidity, additional regulatory requirements that may be imposed on community banks or banks generally, changes in interest rates, loss of key personnel, lower lending limits and capital than competitors, regulatory restrictions and oversight of the Company, the secure and effective implementation of technology, risks related to the local and national economy, the effect on customers, collateral value and property insurance markets of the recent wildfires in the Los Angeles metropolitan area and similar events in the future, changes in real estate values, the Company’s implementation of its business plans and management of growth, loan performance, interest rates, and regulatory matters, the effects of trade, monetary and fiscal policies, inflation, and changes in accounting policies and practices. Based upon changing conditions, if any one or more of these risks or uncertainties materialize, or if any underlying assumptions prove incorrect, actual results may vary materially from those described as anticipated, believed, estimated, expected, or intended. The Company does not intend to update these forward-looking statements.
| SELECTED FINANCIAL DATA | |||||||||||
| (In thousands of dollars, except for ratios and per share amounts) | |||||||||||
| Unaudited | |||||||||||
| Three Months Ended | |||||||||||
| March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||||
| (Consolidated) | (Consolidated) | (Consolidated) | |||||||||
| SUMMARY OF OPERATIONS | |||||||||||
| Interest income | $ | 11,119 | $ | 10,754 | $ | 8,516 | |||||
| Interest expense | 4,106 | 4,236 | 3,488 | ||||||||
| Net interest income | 7,013 | 6,518 | 5,029 | ||||||||
| Provision for credit losses | 385 | 374 | 450 | ||||||||
| Net interest income after loss provision | 6,628 | 6,144 | 4,580 | ||||||||
| Non-interest income | 183 | 160 | 151 | ||||||||
| Non-interest expense | 4,864 | 4,752 | 4,139 | ||||||||
| Income before tax | 1,947 | 1,552 | 591 | ||||||||
| Federal income tax expense | 372 | 296 | 117 | ||||||||
| State income tax expense | 214 | 171 | 66 | ||||||||
| Net income | $ | 1,361 | $ | 1,084 | $ | 407 | |||||
| Core pretax earnings* | $ | 2,332 | $ | 1,926 | $ | 1,041 | |||||
| *excludes taxes and provision for loan losses | |||||||||||
| PER COMMON SHARE DATA | |||||||||||
| Number of shares outstanding (000s)* | 3,503 | 3,494 | 3,422 | ||||||||
| *Adjusted for May 2024 Stock Dividend | |||||||||||
| Earnings per share, basic | $ | 0.39 | $ | 0.31 | $ | 0.12 | |||||
| Earnings per share, diluted | $ | 0.32 | $ | 0.25 | $ | 0.10 | |||||
| Book Value per share | $ | 13.61 | $ | 13.17 | $ | 12.43 | |||||
| BALANCE SHEET DATA | |||||||||||
| Assets | $ | 704,564 | $ | 678,332 | $ | 565,881 | |||||
| Investments securities | 26,385 | 25,777 | 13,432 | ||||||||
| Total loans, net of unearned income | 597,846 | 571,817 | 443,203 | ||||||||
| Total deposits | 626,165 | 601,219 | 492,169 | ||||||||
| Borrowings | 26,721 | 26,697 | 27,090 | ||||||||
| Shareholders’ equity | 47,667 | 46,009 | 42,526 | ||||||||
| Loan to Deposit ratio | 95.48 | % | 95.11 | % | 90.05 | % | |||||
| Wholesale Deposits to Total Deposits | 8.90 | % | 10.10 | % | |||||||
| AVERAGE BALANCE SHEET DATA | |||||||||||
| Average assets | $ | 697,617 | $ | 660,748 | $ | 557,691 | |||||
| Average total loans, net of unearned income | 589,037 | 549,340 | 434,999 | ||||||||
| Average total deposits | 618,844 | 582,583 | 514,445 | ||||||||
| Average shareholders’ equity | 47,256 | 46,117 | 43,247 | ||||||||
| ASSET QUALITY RATIOS | |||||||||||
| Net (charge-offs) recoveries | $ | – | $ | – | $ | – | |||||
| Net (charge-offs) recoveries to average loans | 0.00 | % | 0.00 | % | 0.74 | % | |||||
| Non-performing loans as a % of loans | 0.40 | % | 0.46 | % | 0.07 | % | |||||
| Non-performing assets as a % of assets | 0.34 | % | 0.38 | % | 0.05 | % | |||||
| Allowance for loan losses as a % of total loans | 1.36 | % | 1.37 | % | 1.45 | % | |||||
| Non-performing assets as a % of allowance for loan losses | 29.60 | % | 33.27 | % | 4.66 | % | |||||
| FINANCIAL RATIOSSTATISTICS | |||||||||||
| Annualized return on average equity | 11.68 | % | 9.35 | % | 3.79 | % | |||||
| Annualized return on average assets | 0.79 | % | 0.65 | % | 0.29 | % | |||||
| Net interest margin | 4.12 | % | 3.97 | % | 3.68 | % | |||||
| Efficiency ratio | 67.59 | % | 71.17 | % | 79.91 | % | |||||
| CAPITAL RATIOS | |||||||||||
| Tier 1 leverage ratio — Bank | 10.57 | % | 10.90 | % | 12.18 | % | |||||
| Common equity tier 1 ratio — Bank | 10.47 | % | 10.71 | % | 12.49 | % | |||||
| Tier 1 risk-based capital ratio — Bank | 10.47 | % | 10.71 | % | 12.49 | % | |||||
| Total risk-based capital ratio –Bank | 11.65 | % | 11.90 | % | 13.69 | % | |||||
| TCE/TA * | 6.77 | % | 6.78 | % | 7.52 | % | |||||
| Tangible Book Value per Share | $ | 13.49 | $ | 13.20 | $ | 12.64 | |||||
| *Non-GAAP financial measure. | |||||||||||
| Unaudited financials 2025 | |||||||||||
Endeavor Bancorp Contact Information:
(858) 230.5185
Dan Yates, CEO
dyates@bankendeavor.com
(858) 230.4243
Steve Sefton, President
ssefton@bankendeavor.com
