Company: MGNO
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000927089-25-000061
Chunk: 2

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 2
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RISK FACTORS

You should carefully consider the following risk factors, in addition to all other information in this prospectus, in evaluating an investment in the shares of common stock.

Risks Related to Our Profitability

We had a net loss for 2024 and 2022

We had a net loss of $6,000 for the year ended December 31, 2022 and a net loss of $100,000 for the year ended December 31, 2024. Our net loss in 2024 represented a $186,000 decline when compared to our net income of $86,000 for 2023, primarily due to a substantial decline of $255,000 or 19.0% in net interest income in 2024 compared to 2023. Our total interest expense increased by $230,000 or 143.8% in 2024 due to higher rates paid on our deposits and borrowings, while our total interest income decreased by $25,000 or 1.7% in 2024 from 2023.

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We might not return to sustained profitability in the near future.

Because of declines in our net interest income and reduced demand for our fixed-rate loans, we currently expect to incur a net loss for at least the first half of 2025. We cannot provide any assurance as to how soon we will be able to return to sustained profitability.

We believe we will need to hire additional loan officers and grow our loan portfolio before we can return to sustained profitability, which will take time and increase our non-interest expense in the short term.

Our total loan originations decreased by $1.3 million or 44.8% in 2024 from 2023, as the demand for our fixed-rate loans declined as market interest rates increased. In addition, our previous chief loan officer resigned in May 2023. There can be no assurance that we will be able to hire additional qualified loan officers in the near future. In addition, the hiring of additional loan officers will increase our non-interest expense, and the increased expense may not be fully offset by increased interest income on new loans until the new loan officers produce sufficient loan originations.

Our loan portfolio has declined in recent years, and there can be no assurance that we will achieve our plans to grow in size, which would adversely affect our ability to return to profitability.

Our net loans receivable have decreased in recent periods to $30.6 million at December 31, 2024 compared to