Ottawa Bancorp, Inc. Announces 2025 First Quarter Results and Approval of Stock Repurchase Program
OTTAWA, Ill., April 24, 2025 (GLOBE NEWSWIRE) -- Ottawa Bancorp, Inc. (the “Company”) (OTCQX: OTTW), the holding company for OSB Community Bank (the “Bank”), announced net income of $0.4 million, or $0.19 per basic and diluted common share, for the three months ended March 31, 2025, compared to net income of $0.3 million, or $0.10 per basic and diluted common share, for the three months ended March 31, 2024. The loan portfolio, net of allowance, decreased to $295.1 million as of March 31, 2025 from $301.7 million as of December 31, 2024 as originations were lower than payments and payoffs. Non-performing loans decreased to $4.1 million at March 31, 2025 from $4.8 million at both December 31, 2024. This was due to the substantial resolution of the multi-loan commercial relationship originally identified as impaired in the third quarter of 2022. Thus, the ratio of non-performing loans to gross loans decreased from 1.58% at December 31, 2024 to 1.36% at March 31, 2025.
“We continued to see improvement in our net interest income and net interest margin during the first quarter as our interest expense continued to decline,” said Craig M. Hepner, President and Chief Executive Officer. “Although we continued to see a reduction in our overall loan portfolio during the quarter, we were able to further reduce our reliance on higher-cost wholesale funding while growing organic deposits and strengthening our liquidity position. Asset quality remains strong, and as noted above, during the first quarter, we were able to resolve a significant portion of the troubled commercial loan relationship identified in 2022 which resulted in a substantial reduction in our classified asset balance at quarter-end.”
Mr. Hepner continued, “I am also very pleased to report that the Board of Directors has approved our seventh stock repurchase plan which authorizes the purchase of 120,996 shares, or 5% of our outstanding common stock. This stock repurchase plan will allow the Company to continue to serve as a source of liquidity to our shareholders and further demonstrates the Board’s commitment to maximizing overall shareholder value.”
Comparison of Results of Operations for the Three Months Ended March 31, 2025 and March 31, 2024
Net income for the three months ended March 31, 2025 was $0.4 million compared to $0.3 million for the three months ended March 31, 2024. Total interest and dividend income was $4.1 million for the three months ended March 31, 2025 compared to $3.9 million for the three months ended March 31, 2024 due to an increase in the average yield on interest-earning assets. The yield on interest-earning assets increased by 0.30% to 4.94%. Interest expense remained flat at $1.7 million for the three months ended March 31, 2025 and March 31, 2024 as our average cost of funds decreased to 2.18% from 2.19%. Net interest income after provision for credit losses increased by $0.3 million to $2.5 million for the three months ended March 31, 2025 as compared to $2.2 million for the three months ended March 31, 2024. Total other income was $0.2 million for the three months ended March 31, 2025 compared to $0.3 million for the three months ended March 31, 2024. Total other expenses were $2.2 million for the three months ended March 31, 2025 compared to $2.1 million for the three months ended March 31, 2024.
The multi-loan commercial relationship that was identified in 2022 as being impaired, meaning that it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreements was substantially resolved during the first quarter of 2025. The relationship as of December 31, 2024 had balances of approximately $0.7 million with a specific allocation of $0.2 million. As of March 31, 2025, this relationship has a remaining balance of $0.1 million with no specific allocation. No additional reserves will be required to resolve these impaired loans and we do not anticipate any further losses as we work to resolve the remainder of the relationship.
The Company recorded a recovery of approximately $90 thousand for the three months ended March 31, 2025 to decrease the Allowance for Credit Losses (ACL) position. During the three months ended March 31, 2024, there was a recovery of approximately $37 thousand. The ACL on loans was $4.1 million, or 1.36% of total gross loans, at March 31, 2025 compared to $4.3 million, or 1.40% of gross loans, at March 31, 2024. Net charge-offs during the first quarter of 2025 were approximately $120 thousand compared to net recoveries of $5 thousand during the first quarter of 2024. The current period adjustment to the ACL is the result of the quarterly calculation of Current Expected Credit Losses (CECL). The required reserves on non-performing loans as of March 31, 2025 decreased by $156 thousand from the required reserves as of March 31, 2024.
The Company recorded income tax expense of $0.2 million for the three-month period ended March 31, 2025 as compared to $0.1 million for the three months ended March 31, 2024 as pre-tax income during the three months ended March 31, 2025 was higher as compared to pre-tax income in the three months ended March 31, 2024.
Comparison of Financial Condition at March 31, 2025 and December 31, 2024
Total consolidated assets as of March 31, 2025 were $351.7 million, a decrease of $2.0 million, or 0.54%, from $353.7 million at December 31, 2024. The decrease was due primarily to a decrease of $6.6 million in the net loan portfolio, a $0.2 million decrease in loans held for sale, a $0.1 million decrease in furniture, fixtures and equipment, a $0.1 decrease in accrued interest receivable, a decrease of $0.3 million in deferred tax assets and a decrease in other assets of $0.6 million. These decreases were partially offset by an increase of $4.0 million in cash and cash equivalents, a $1.1 million increase in securities available for sale and an increase of $0.9 million in federal fund sold.
Cash and cash equivalents increased $4.0 million, or 31.9%, to $16.5 million at March 31, 2025 from $12.5 million at December 31, 2024. The increase in cash and cash equivalents was primarily the result of cash provided by operating activities of $1.9 and cash provided by investing activities of $5.3 million exceeding cash used in financing activities of $3.2 million.
Securities available for sale increased $1.1 million, or 6.7%, to $17.9 million at December 31, 2025 from $16.8 million at December 31, 2024 as a result of purchases and market value fluctuations during the first three months ended March 31, 2025 exceeding calls, payments and maturities.
Net loans decreased $6.6 million, or 2.2%, to $295.1 million at March 31, 2025 compared to $301.7 million at December 31, 2024 primarily due to a decrease of $3.7 million in one-to-four family loans, a decrease of $5.5 million in multi-family loans and a decrease of $0.5 million in consumer loans. These decreases were partially offset by an increase of $2.9 million in non-residential real estate loans. The allowance for credit losses on loans decreased by $0.2 million at March 31, 2025.
Total deposits increased $0.4 million, or 0.15%, to $283.2 million at March 31, 2025 from $282.8 million at December 31, 2024. During the three months ended March 31, 2025 non-interest bearing checking increased by $3.4 million, interest bearing checking accounts increased by $3.0 million, money market accounts increased $1.7 million, and savings accounts increased by 0.7 million. Offsetting these increases was an $8.4 million decrease in certificate of deposit account balances.
FHLB advances decreased $3.3 million, or 14.6%, to $19.0 million at March 31, 2025 compared to $22.3 million at December 31, 2024.
Stockholders’ equity remained at $40.2 million at March 31, 2025 as compared to $40.2 million at December 31, 2024. Net income was $0.4 million for the three months ended March 31, 2025. There were $0.3 million in cash dividends paid during the first quarter and a $0.6 million adjustment to increase the maximum cash obligation related to ESOP shares. In addition, there was a $0.5 million increase in other comprehensive income due to an increase in fair value of securities available for sale during the first quarter.
Approval of Stock Repurchase Program
The Company also announced today that the Company’s Board of Directors has approved a stock repurchase program authorizing the purchase of up to 120,996 shares, or 5%, of the Company’s outstanding common stock. Stock repurchases will be conducted through open market purchases, which will include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. Repurchases will be made from time to time depending on market conditions and other factors. The Company’s stock repurchase program will terminate upon the completion of the purchase of up to 120,996 shares or April 23, 2026 if not all shares have been purchased by that date.
About Ottawa Bancorp, Inc.
Ottawa Bancorp, Inc. is the holding company for OSB Community Bank which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificates of deposit, and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial, and construction loans as well as auto loans and home equity lines of credit. OSB Community Bank was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit .
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, market disruptions, our ability to pay future dividends and if so at what level, our ability to receive any required regulatory approval or non-objection for the payment of dividends from the Bank to the Company or from the Company to stockholders, and our efforts to maximize stockholder value, including our ability to execute any capital management strategies, such as the repurchase of shares of the Company’s common stock, and our ability to execute any controlled growth and balance sheet strategies designed to lower the cost of funds and enhance earnings and liquidity. Ottawa Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under applicable law.
| Ottawa Bancorp, Inc. & Subsidiary | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| March 31, 2025 and December 31, 2024 | |||||||||||
| (Unaudited) | |||||||||||
| March 31, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Cash and due from banks | $ | 14,424,496 | $ | 9,863,824 | |||||||
| Interest bearing deposits | 2,079,797 | 2,651,481 | |||||||||
| Total cash and cash equivalents | 16,504,293 | 12,515,305 | |||||||||
| Federal funds sold | 5,433,000 | 4,493,000 | |||||||||
| Securities available-for-sale, at fair value | 17,944,899 | 16,821,297 | |||||||||
| Loans, net of allowance for credit losses of $4,066,885 and $4,276,409 | |||||||||||
| at March 31, 2025 and December 31, 2024, respectively | 295,126,036 | 301,741,977 | |||||||||
| Loans held for sale | - | 232,000 | |||||||||
| Premises and equipment, net | 5,943,682 | 6,005,515 | |||||||||
| Accrued interest receivable | 1,970,572 | 2,108,565 | |||||||||
| Deferred tax assets, net | 2,222,252 | 2,553,346 | |||||||||
| Cash surrender value of life insurance | 528,202 | 528,129 | |||||||||
| Goodwill | 649,869 | 649,869 | |||||||||
| Other assets | 5,425,999 | 6,002,358 | |||||||||
| Total assets | $ | 351,748,804 | $ | 353,651,361 | |||||||
| Liabilities and stockholders’ equity | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Non-interest bearing | $ | 26,044,253 | $ | 22,663,274 | |||||||
| Interest bearing | 257,196,977 | 260,276,358 | |||||||||
| Total deposits | 283,241,230 | 282,939,632 | |||||||||
| Accrued interest payable | 598,388 | 853,122 | |||||||||
| FHLB advances | 19,000,000 | 22,250,000 | |||||||||
| Long term debt | 1,346,347 | 1,380,988 | |||||||||
| Allowance for credit losses on off-balance sheet credit exposures | 76,629 | 79,199 | |||||||||
| Other liabilities | 5,006,107 | 4,365,113 | |||||||||
| Total liabilities | 309,268,701 | 311,868,054 | |||||||||
| Commitments and contingencies | |||||||||||
| ESOP Repurchase Obligation | 2,230,729 | 1,583,522 | |||||||||
| Stockholders' Equity | |||||||||||
| Common stock, $.01 par value, 12,000,000 shares authorized; 2,419,911 and | |||||||||||
| 2,419,911 shares issued at March 31, 2025 and December 31, 2024, respectively | 24,199 | 24,199 | |||||||||
| Additional paid-in-capital | 22,898,558 | 22,898,558 | |||||||||
| Retained earnings | 21,676,498 | 21,503,222 | |||||||||
| Unallocated ESOP shares | (358,737 | ) | (358,737 | ) | |||||||
| Unallocated management recognition plan shares | (59,003 | ) | (70,193 | ) | |||||||
| Accumulated other comprehensive loss | (1,701,412 | ) | (2,213,742 | ) | |||||||
| 42,480,103 | 41,783,307 | ||||||||||
| Less: | |||||||||||
| ESOP Owned Shares | (2,230,729 | ) | (1,583,522 | ) | |||||||
| Total stockholders' equity | 40,249,374 | 40,199,785 | |||||||||
| Total liabilities and stockholders' equity | $ | 351,748,804 | $ | 353,651,361 | |||||||
| Ottawa Bancorp, Inc. & Subsidiary | ||||||||
| Consolidated Statements of Operations | ||||||||
| Three Months Ended March 31, 2025 and 2024 | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Interest and dividend income: | ||||||||
| Interest and fees on loans | $ | 3,791,161 | $ | 3,702,917 | ||||
| Securities: | ||||||||
| Residential mortgage-backed and related securities | 103,299 | 78,672 | ||||||
| State and municipal securities | 19,027 | 18,601 | ||||||
| Dividends on non-marketable equity securities | 28,500 | 37,715 | ||||||
| Interest-bearing deposits | 192,522 | 63,541 | ||||||
| Total interest and dividend income | 4,134,509 | 3,901,446 | ||||||
| Interest expense: | ||||||||
| Deposits | 1,518,972 | 1,520,888 | ||||||
| Borrowings | 169,420 | 218,041 | ||||||
| Total interest expense | 1,688,392 | 1,738,929 | ||||||
| Net interest income | 2,446,117 | 2,162,517 | ||||||
| Recovery of credit losses - loans | (89,898 | ) | (37,143 | ) | ||||
| Recovery of credit losses – off-balance sheet credit exposures | (2,570 | ) | (12,709 | ) | ||||
| Net interest income after recovery of credit losses | 2,538,585 | 2,212,369 | ||||||
| Other income: | ||||||||
| Gain on sale of loans | 21,239 | 18,610 | ||||||
| Loan origination and servicing income | 126,894 | 132,826 | ||||||
| Net Origination (amortization) of mortgage servicing rights | (37,808 | ) | (23,174 | ) | ||||
| Customer service fees | 113,760 | 105,125 | ||||||
| Increase in cash surrender value of life insurance | 74 | 12,547 | ||||||
| Other | - | 6,929 | ||||||
| Total other income | 224,159 | 252,863 | ||||||
| Other expenses: | ||||||||
| Salaries and employee benefits | 1,207,957 | 1,181,559 | ||||||
| Directors’ fees | 45,000 | 40,000 | ||||||
| Occupancy | 160,128 | 157,021 | ||||||
| Deposit insurance premium | 45,000 | 41,800 | ||||||
| Legal and professional services | 82,844 | 118,047 | ||||||
| Data processing | 301,461 | 321,927 | ||||||
| Loan expense | 63,529 | 64,452 | ||||||
| Other | 244,326 | 184,199 | ||||||
| Total other expenses | 2,150,245 | 2,109 005 | ||||||
| Income before income tax | 612,499 | 356,227 | ||||||
| Income tax expense | 176,977 | 90,602 | ||||||
| Net income | $ | 435,522 | $ | 265,625 | ||||
| Basic earnings per share | $ | 0.19 | $ | 0.10 | ||||
| Diluted earnings per share | $ | 0.19 | $ | 0.10 | ||||
| Dividends per share | $ | 0.11 | $ | 0.11 | ||||
| Ottawa Bancorp, Inc. & Subsidiary | ||||||
| Selected Financial Data and Ratios | ||||||
| (Unaudited) | ||||||
| At or for the | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| 2025 | 2024 | |||||
| Performance Ratios: | ||||||
| Return on average assets (5) | 0.49 | % | 0.30 | % | ||
| Return on average stockholders' equity (5) | 4.34 | 2.54 | ||||
| Average stockholders' equity to average assets | 11.36 | 11.70 | ||||
| Stockholders' equity to total assets at end of period | 11.44 | 11.61 | ||||
| Net interest rate spread (1) (5) | 2.76 | 2.45 | ||||
| Net interest margin (2) (5) | 2.93 | 2.63 | ||||
| Other expense to average assets | 0.61 | 0.59 | ||||
| Efficiency ratio (3) | 80.49 | 87.33 | ||||
| Dividend payout ratio | 61.50 | 106.19 | ||||
| At or for the | At or for the | |||||||
| Three Months Ended | Twelve Months Ended | |||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Regulatory Capital Ratios (4): | ||||||||
| Total risk-based capital (to risk-weighted assets) | 17.51 | % | 18.17 | % | ||||
| Tier 1 core capital (to risk-weighted assets) | 16.26 | 16.92 | ||||||
| Common equity Tier 1 (to risk-weighted assets) | 16.26 | 16.92 | ||||||
| Tier 1 leverage (to adjusted total assets) | 11.47 | 12.06 | ||||||
| Asset Quality Ratios: | ||||||||
| Net charge-offs to average gross loans outstanding | 0.04 | 0.01 | ||||||
| Allowance for credit losses on loans to gross loans outstanding | 1.36 | 1.41 | ||||||
| Non-performing loans to gross loans (6) | 1.36 | 1.58 | ||||||
| Non-performing assets to total assets (6) | 1.16 | 1.37 | ||||||
| Other Data: | ||||||||
| Book Value per common share | $ | 16.63 | $ | 16.61 | ||||
| Tangible Book Value per common share (7) | $ | 16.36 | $ | 16.34 | ||||
| Number of full-service offices | 3 | 3 | ||||||
| (1) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of funds on average interest-bearing liabilities. | ||||||||
| (2) Represents net interest income as a percent of average interest-earning assets. | ||||||||
| (3) Represents total other expenses divided by the sum of net interest income and total other income. | ||||||||
| (4) Ratios are for OSB Community Bank. | ||||||||
| (5) Annualized. | ||||||||
| (6) Non-performing assets consist of non-performing loans, foreclosed real estate and other foreclosed assets. Non-performing loans consist of all loans 90 days or more past due and all loans no longer accruing interest. | ||||||||
| (7) Non-GAAP measure. Excludes goodwill and core deposit intangible. | ||||||||
Contact:
Craig Hepner
President and Chief Executive Officer
(815) 366-5437
