Everett Bank saw its multifamily real estate loans increase by nearly 80 percent during the first six months of 2022, the bank’s final quarters before converting to a stock bank.
Everett Bank’s net loans were $623.97 million, up 20.7 percent from Dec. 31, when the bank had $517.13 million in net loans, according to the bank’s second quarter report filed with the SEC.
The bank had hired senior executives from the former East Boston Savings Bank and Century Bank, which were both acquired in November, and then announced plans in March to convert from a mutual to a stock bank. The conversion was completed on July 27, and the bank’s new parent company, ECB Bancorp Inc., began trading on the Nasdaq Capital Market under the symbol ECBK.
In its final full quarter before the stock conversion, Everett Bank had second quarter earnings of $1.39 million compared to $1.41 million in the second quarter of 2021.
Total assets at the end of June were $781.95 million, up from $666.49 million at the end of 2021.
The loan growth included multifamily real estate loans, which increased by $47.1 million, or 79.2 percent, from Dec. 31 to June 30. One- to four-family residential real estate loans increased $34.9 million, or 13.4 percent, during that period, and commercial real estate loans grew by $17.7 million, or 17.7 percent. The bank also saw its construction loans increase by $7.9 million since the end of 2021, or 11.2 percent.
Plans for the bank’s initial public offering helped drive an increase in deposits. Total deposits were $663.42 million compared to $571.73 million at the end of last year. The bank said in its 10-Q filing that interest-bearing demand deposits increased during that time by $74.5 million, with that growth driven by $75.5 million of subscription funds from prospective investors in the initial public offering. Excluding those funds and certificates of deposit, core deposits increased by $18 million since Dec. 31, or 5.2 percent, to $362.9 million, driven primarily by an increase in money market accounts.
Increases in salaries and employee benefits drove up noninterest expenses year-over-year. The bank had noninterest expenses of $3.58 million in the second quarter, up 25.4 percent from the same quarter last year, when expenses were $2.85 million. Salary and employee benefit expenses increased $523,000, or 29.6 percent. The bank said the increases resulted primarily from additional employees and normal salary increases.
“The recent hires of several executive officers and other seasoned bankers should allow us to implement our growth strategy and will continue to increase our compensation and benefits expense in 2022 and thereafter, which will increase our noninterest expense,” the bank said in its quarterly report.
Everett Bank said its initial public offering resulted in gross proceeds of $89.2 million, with 8,915,247 shares of common stock sold at a price of $10 per share. After expenses related to the offering of approximately $2.5 million, net proceeds were approximately $86.6 million.
About $50 million of the net proceeds from the IPO went to Everett Bank, and $7.3 million went to the bank’s employee stock ownership plan. The company contributed 260,000 shares and $600,000 to the Everett Co-operative Bank Charitable Foundation. The bank said the remaining $29.3 million was retained by the parent company.