Press Release – For Immediate Release July 19, 2024 Muncy Columbia Financial Corporation Reports Second Quarter 2024 Earnings Form 8 K

Press Release - For Immediate Release

July 19, 2024

Muncy Columbia Financial Corporation Reports Second Quarter 2024 Earnings

Bloomsburg, PA - Muncy Columbia Financial Corporation ("Corporation") (OTCQX: CCFN), parent company of Journey Bank ("Bank"), has released its unaudited consolidated financial statements for the second quarter of 2024.

Unaudited Financial Information

Net income, as reported under accounting principles generally accepted in the United States of America ("GAAP"), for the quarter ended June 30, 2024 was $4,707,000, or $1.32 per share compared to net income of $1,462,000, or $0.71 per share for the same period in 2023. Net income, as reported under GAAP, for the six months ended June 30, 2024 was $8,743,000, or $2.45 per share compared to $3,402,000, or $1.64 per share for the same period in 2023. Return on average assets and return on average equity were 1.20% and 12.28% for the quarter ended June 30, 2024, as compared to 0.71% and 7.63% for the same period of 2023.

The fully-tax equivalent net interest margin on interest-earning assets and interest-bearing liabilities was 3.36% and 2.32% for the six-month periods ended June 30, 2024 and 2023, respectively.

Total consolidated assets amounted to $1,592,300,000 at June 30, 2024, as compared to $1,573,271,000 at March 31, 2024 and $1,639,779,000 at December 31, 2023. For the quarter ended June 30, 2024, loans receivable, not held for sale, increased by $19,918,000 while available-for-sale debt securities decreased $4,786,000. Total deposits increased $52,127,000 while short term borrowings decreased $36,627,000 during the quarter ended June 30, 2024.

The increase in total deposits during the quarter and six months ended June 30, 2024 was as a result of a strategic initiative to reposition customer repurchase agreements, which are classified as short-term borrowings, into core deposit accounts. The Bank anticipates a continued migration of customer repurchase accounts from short-term borrowings to deposits throughout the remainder of 2024. The execution of this initiative will assist in optimizing the Bank's long-term liquidity needs and balance sheet management strategies.

Total non-performing assets amounted to $7,736,000 or 0.49% of total assets at June 30, 2024, as compared to $7,328,000 or 0.47% of total assets at March 31, 2024.

The Corporation invests in various forms of agency debt including mortgage-backed securities and callable agency debt. The fair value of these securities is influenced by market interest rates, prepayment speeds on mortgage securities, bid to offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the fair market value of these securities may be higher or lower than the Corporation's carrying value at any measurement date. The temporary impact on investment securities will also affect stockholders' equity as these fluctuations are recorded through accumulated other comprehensive income (loss). As of June 30, 2024, the temporary impact of these unrealized losses on the stockholders' equity amounted to a reduction of $16,936,000. The Corporation does not consider its debt securities to be credit impaired since it has both the intent and ability to hold the securities until a recovery of its amortized cost basis, which may be maturity, and the decline in fair value is deemed to be as a result of changes in interest rates and not credit factors.

Total stockholders' equity equated to a book value per share of $44.11 at June 30, 2024 as compared with $43.08 at December 31, 2023. For the six months ended June 30, 2024 cash dividends of $0.88 per share were paid to stockholders as compared to $0.85 for the same period of 2023. The Corporation remains well capitalized, with an equity to assets ratio of 9.90% as of June 30, 2024 and 9.38% at December 31, 2023.

About Muncy Columbia Financial Corporation

Muncy Columbia Financial Corporation ("MCFC") is a registered financial holding company headquartered in Bloomsburg, Pennsylvania. MCFC has one subsidiary bank, Journey Bank, serving individuals, families, nonprofits and business clients throughout Clinton, Columbia, Lycoming, Montour, Northumberland and Sullivan Counties through 22 banking offices.

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties related to integration following the merger; the risk that the anticipated benefits, cost savings and other savings from the merger may not be fully realized or may take longer than expected to realize; potential impairment to the goodwill recorded in connection with the merger; changes in general economic trends, including inflation and changes in interest rates; our ability to manage credit risk; our ability to maintain an adequate level of allowance for credit loss on loans; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; fluctuations in the values of securities held in our securities portfolio, including as a result of changes in interest rates; our ability to successfully manage liquidity risk; adverse developments in borrower industries and, in particular, declines in real estate values; the concentration of large deposits from certain customers who have balances above current FDIC insurance limits; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and any other risks described in the "Risk Factors" sections of reports filed by the Corporation with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements.

Muncy Columbia Financial Corporation

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data) (Unaudited)		June 30, 2024		December 31, 2023
ASSETS
Cash and due from banks		$	18,200			$	14,614
Interest-bearing deposits in other banks			3,276				3,763
Total cash and cash equivalents			21,476				18,377
Interest-bearing time deposits			248				979
Available-for-sale debt securities, at fair value			334,808				413,302
Marketable equity securities, at fair value			1,140				1,295
Restricted investment in bank stocks, at cost			8,064				10,394
Loans held for sale			754				366
Loans receivable			1,100,665				1,068,429
Allowance for credit losses			(9,362	)			(9,302	)
Loans, net			1,091,303				1,059,127
Premises and equipment, net			27,025				27,569
Foreclosed assets held for sale			335				170
Accrued interest receivable			5,077				5,362
Bank-owned life insurance			40,709				40,209
Investment in limited partnerships			5,465				5,828
Deferred tax asset, net			11,517				12,634
Goodwill			25,609				25,609
Other intangible assets, net			11,151				11,895
Other assets			7,619				6,663
TOTAL ASSETS		$	1,592,300			$	1,639,779
LIABILITIES
Interest-bearing deposits		$	1,002,208			$	884,654
Noninterest-bearing deposits			263,419				266,015
Total deposits			1,265,627				1,150,669
Short-term borrowings			89,286				252,532
Long-term borrowings			65,599				70,448
Accrued interest payable			2,299				2,358
Other liabilities			11,848				9,947
TOTAL LIABILITIES			1,434,659				1,485,954
STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share; 15,000,000 shares authorized;
issued 3,838,727 and outstanding 3,574,027 at June 30, 2024;
issued 3,834,976 and outstanding 3,570,276 at December 31, 2023;			4,798				4,794
Additional paid-in capital			83,455				83,343
Retained earnings			96,114				90,514
Accumulated other comprehensive loss			(16,936	)			(15,036	)
Treasury stock, at cost; 264,700 shares at June 30, 2024 and December 31, 2023			(9,790	)			(9,790	)
TOTAL STOCKHOLDERS' EQUITY			157,641				153,825
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,592,300			$	1,639,779

Muncy Columbia Financial Corporation

Consolidated Statements of Income

		For the Three Months Ended		For the Six Months Ended
		June 30,		June 30,
(In Thousands, Except Share and Per Share Data) (Unaudited)		2024		2023		2024		2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans:
Taxable		$	17,741			$	6,298			$	34,997			$	12,232
Tax-exempt			332				215				685				431
Interest and dividends on investment securities:
Taxable			1,020				1,222				2,181				2,430
Tax-exempt			836				134				1,666				263
Dividend and other interest income			204				69				427				136
Federal funds sold			-				1				-				1
Deposits in other banks			62				25				128				85
TOTAL INTEREST AND DIVIDEND INCOME			20,195				7,964				40,084				15,578
INTEREST EXPENSE
Deposits			5,610				780				10,220				1,407
Short-term borrowings			1,427				2,125				3,924				3,911
Long-term borrowings			798				146				1,645				146
TOTAL INTEREST EXPENSE			7,835				3,051				15,789				5,464
NET INTEREST INCOME			12,360				4,913				24,295				10,114
Provision (credit) for credit losses - loans			36				(4	)			137				(422	)
(Credit) provision for credit losses - off balance sheet credit exposures			(7	)			(12	)			(18	)			(3	)
TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES			29				(16	)			119				(425	)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES			12,331				4,929				24,176				10,539
NON-INTEREST INCOME
Service charges and fees			667				514				1,282				1,039
Gain on sale of loans			93				96				169				125
Earnings on bank-owned life insurance			229				113				456				222
Brokerage			192				151				416				279
Trust			204				227				410				418
Losses on marketable equity securities			(38	)			(66	)			(155	)			(147	)
Realized losses on available-for-sale debt securities, net			-				-				(8	)			-
Interchange fees			687				442				1,306				866
Other non-interest income			385				229				1,075				530
TOTAL NON-INTEREST INCOME			2,419				1,706				4,951				3,332
NON-INTEREST EXPENSE
Salaries and employee benefits			4,640				2,440				9,442				5,032
Occupancy			581				320				1,199				643
Furniture and equipment			384				282				790				567
Pennsylvania shares tax			230				131				440				292
Professional fees			319				264				776				522
Director's fees			105				73				239				155
Federal deposit insurance			188				109				408				217
Data processing and telecommunications			904				332				1,824				703
Automated teller machine and interchange			106				(9	)			368				110
Merger-related expenses			201				449				297				449
Amortization of intangibles			549				-				1,098				-
Other non-interest expense			987				466				1,959				984
TOTAL NON-INTEREST EXPENSE			9,194				4,857				18,840				9,674
INCOME BEFORE INCOME TAX PROVISION			5,556				1,778				10,287				4,197
INCOME TAX PROVISION			849				316				1,544				795
NET INCOME		$	4,707			$	1,462			$	8,743			$	3,402
EARNINGS PER SHARE - BASIC AND DILUTED		$	1.32			$	0.71			$	2.45			$	1.64
WEIGHTED AVERAGE SHARES OUTSTANDING			3,572,345				2,079,649				3,571,344				2,079,393

		At or 3 Months Ended (Unaudited)
(Dollars in Thousands, Except Per Share Data)		6/30/2024		3/31/2024		12/31/2023		9/30/2023		6/30/2023
Operating Highlights
Net income (loss)		$	4,707			$	4,036			$	(1,186	)		$	1,171			$	1,462
Net interest income			12,360				11,935				8,257				4,891				4,913
Provision (credit) for credit losses			29				90				3,114				(168	)			(16	)
Non-interest income			2,419				2,532				2,267				1,522				1,706
Non-interest expense			9,194				9,646				9,163				5,273				4,857
Balance Sheet Highlights
Total assets		$	1,592,300			$	1,573,271			$	1,639,779			$	957,580			$	960,080
Loans, net and loans held for sale			1,092,057				1,072,010				1,059,493				556,862				544,593
Goodwill and other intangibles, net			36,760				36,955				37,504				7,937				7,937
Total deposits
Noninterest-bearing		$	263,419			$	263,954			$	266,015			$	165,888			$	175,521
Savings			199,626				203,002				204,968				155,750				157,833
NOW			346,000				298,122				251,953				146,944				152,358
Money Market			117,770				112,190				103,602				41,521				44,341
Time Deposits			338,812				336,232				324,131				130,472				128,430
Total interest-bearing deposits			1,002,208				949,546				884,654				474,687				482,962
Core deposits*			926,815				877,268				826,538				510,103				530,053
Selected Ratios
Fully tax-equivalent net interest margin (YTD)			3.36	%			3.32	%			2.34	%			2.29	%			2.32	%
Annualized return on average assets			1.20	%			1.02	%			-0.35	%			0.63	%			0.71	%
Annualized return on average equity			12.28	%			10.52	%			-3.95	%			6.78	%			7.63	%
Capital Ratios - Journey Bank**
Common equity tier I capital ratio			14.06	%			13.95	%			13.52	%			18.80	%			18.96	%
Tier 1 capital ratio			14.06	%			13.95	%			13.52	%			18.80	%			18.96	%
Total risk-based capital ratio			15.03	%			14.94	%			14.49	%			19.91	%			20.11	%
Leverage ratio			8.68	%			8.40	%			8.03	%			10.58	%			10.65	%
Asset Quality Ratios
Non-performing assets		$	7,736			$	7,328			$	4,475			$	2,659			$	2,562
Allowance for credit losses - loans			9,362				9,351				9,302				6,094				6,278
Allowance for credit losses to total loans			0.85	%			0.87	%			0.87	%			1.09	%			1.14	%
Allowance for credit losses to non-performing assets			121.02	%			127.61	%			207.87	%			244.81	%			245.04	%
Per Share Data
Earnings (loss) per share		$	1.32			$	1.13			$	(0.41	)		$	0.56			$	0.71
Dividend declared per share			0.44				0.44				0.43				0.43				0.43
Book value			44.11				43.35				43.08				42.50				43.44
Common stock price:
Bid		$	32.10			$	30.50			$	34.50			$	34.59			$	37.57
Ask			34.75				32.00				37.17				35.00				43.00
Weighted average common shares			3,572,345				3,570,342				2,873,775				2,080,109				2,079,649

* Core deposits are defined as total deposits less time deposits

** Capital ratios for the most recent period are estimated

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