Company: MGNO
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000927089-25-000061
Chunk: 3

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 3
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 $32.0 million at December 31, 2023 and $33.5 million at December 31, 2022. We believe we need to reverse this trend of negative growth in order to return to sustained profitability, but there can be no assurance that we will be able to achieve our plans to grow in size. Continued decreases in our loan portfolio will reduce the interest income on our loan portfolio, which will make it more difficult to have net interest income which exceeds our total non-interest expense. During 2024, our net interest income of $1.1 million was less than our total non-interest expense of $1.2 million, which resulted in a pre-tax loss and a net loss for the period.

The cost of additional finance and accounting systems, procedures, compliance and controls needed to satisfy our new public company reporting requirements will increase our expenses.

Upon completion of the conversion, we will become a public reporting company. We expect that the obligations of being a public company, including the substantial public reporting obligations, will require significant expenditures and place additional demands on our management team, which could divert our management’s attention from our operations. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a stand-alone public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. The Sarbanes-Oxley Act of 2002 requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we would expect to file with the Securities and Exchange Commission. Any failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and stock price.

We expect we will need to hire additional accounting personnel following completion of the conversion, which will increase our expenses.

We believe we will need to hire additional compliance, accounting and financial staff with appropriate public company experience and technical knowledge, and we may not be able to do so in a timely fashion. As a result, we may need to continue to rely on outside consultants to provide these services until qualified personnel are hired. In connection with the preparation of this prospectus, we engaged an outside accountant to assist in the preparation of our financial statements and the tables included in this prospectus. The fees paid to such outside consultant during the year ended December 31, 2024 totaled $154,000, with the fees treated as a deferred conversion expense. The accounting costs incurred following completion of