Company: MGNO
Filing Date: 2025-01-03
Form Type: 10-Q/A
Source: 0000927089-25-000009
Chunk: 31

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-01-03
Form: 10-Q/A
Chunk 31
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 $232,700 in net interest income, which was partially offset by decreases of $54,000 in total noninterest expense and $39,000 in income tax expense. With the high level of interest rates in recent periods, our cost of funds increased and the demand for our fixed-rate loans decreased, resulting in declines in our net interest income and a net loss in the three and nine months ended September 30, 2024. On September 18, 2024, the Federal Reserve Board decreased its federal funds rate by 0.50%, which was the first decrease in four years. Additional rate reductions in the coming months by the Federal Reserve Board are widely expected by the market. We expect these rate reductions will eventually result in declines in our cost of funds and improvement in our net interest income. We also expect the demand for our fixed-rate loans will begin to increase as market interest rates decline. However, we expect our total non-interest expenses to increase following the conversion due to our need to hire additional lending and accounting personnel and the increased expenses associated with being a public company.

Interest Income.Interest income decreased by $28,000 or 2.5% to $1.09 million in the first nine months of 2024 from $1.12 million in the first nine months of 2023. The decrease in interest income was due to a decrease of $40,000 or 36.4% in other interest on deposits with other banks and cash equivalents, as we used a portion of our excess liquidity to fund deposit outflows. This decrease was partially offset by increases of $10,000 or 1.0% in interest on loans and $2,000 or 18.2% in dividends on FHLB stock.

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The increased interest on loans was due to an increase in the average yield to 4.23% in the first nine months of 2024 compared to 4.05% in the first nine months of 2023, as the average yield on new loan originations exceeded the average yield on repayments of older loans. The increase in the average loan yield was mostly offset by a decrease of $1.1 million or 3.3% in the average loan balance in the first nine months of 2024 compared to the first nine months of 2023. Our total loan originations decreased by $684,000 or 49.8% from $1.4 million in the first nine months of 202