Company: MGNO
Filing Date: 2025-01-03
Form Type: 10-Q/A
Source: 0000927089-25-000009
Chunk: 32

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-01-03
Form: 10-Q/A
Chunk 32
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3, as the demand for our fixed-rate loans declined. We hired an additional loan officer in October 2024, and we expect the demand for our fixed-rate loans will begin to increase as market interest rates decline. Market interest rates for fixed-rate loans currently exceed the average yield on our loan portfolio.

The increased dividends on our FHLB stock were primarily due to an increase in the average yield on this stock to 5.14% in the first nine months of 2024 compared to 4.71% in the first nine months of 2023. In addition, the average outstanding balance increased by $16,000 or 4.9% in the first nine months of 2024 compared to the first nine months of 2023, as we were required to purchase additional FHLB stock in connection with our increase in FHLB advances.

Interest Expense.Total interest expense increased by $205,000 or 238.4% to $291,000 for the nine months ended September 30, 2024 from $86,000 for the nine months ended September 30, 2023. The increase was primarily due to the increase in the average cost of deposits to 1.73% for the first nine months of 2024 from 0.47% for the first nine months of 2023, reflecting the higher market interest rate environment during this period. The higher cost of deposits was partially offset by a $2.2 million or 9.6% decrease in the average outstanding balance of deposits to $20.46 million in the first nine months of 2024 from $22.64 million in the first nine months of 2023. The decrease in average deposits was due to decreases of $1.3 million or 11.9% in the average balance of certificates of deposit and $851,000 or 7.4% in the average balance of core deposits. At September 30, 2024, $9.7 million or 95% of our total certificates of deposit were scheduled to mature within the following 12 months. Approximately 99.5% of our certificates of deposit at September 30, 2024 had a remaining maturity of less than 24 months. We shortened the average maturity of our certificates of deposit in anticipation of market interest rates beginning to decline. If the Federal Reserve Board continues to reduce its federal funds rate and market interest rates on new certificates of deposit decrease from current levels, we expect these rate reductions will eventually result in