Fifth District Bancorp Q1 2024 10-Q Filed

TL;DR

FDBC filed its Q1 2024 10-Q. Shows retained earnings and fee income. Check it out.

AI Summary

Fifth District Bancorp, Inc. filed its 10-Q for the period ending March 31, 2024. The filing details financial performance, including retained earnings and accumulated other comprehensive income for various periods. It also reports on fee income from deposit services, account maintenance, insufficient funds, ATM, and check cards for the first quarters of 2024 and 2023.

Why It Matters

This filing provides investors with a quarterly update on Fifth District Bancorp's financial health and operational performance, crucial for investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial information.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Indicates the end of the financial quarter being reported.)
• 2023-03-31 — Prior Year Period End Date (Provides a comparative point for financial performance.)
• 2024-01-01 — Fee Income Period Start Date (Marks the beginning of the period for which fee income is reported.)

Key Players & Entities

• Fifth District Bancorp, Inc. (company) — Filer of the 10-Q
• 2024-03-31 (date) — End of reporting period
• 2023-03-31 (date) — Prior year comparative period
• 2024-01-01 (date) — Start of reporting period for fees

FAQ

Key Financial Figures

• $0.01 — he registrant's common stock, par value $0.01 per share, were issued and outstanding

Filing Documents

• fdsb-20240331x10q.htm (10-Q) — 2732KB
• fdsb-20240331xex31d1.htm (EX-31.1) — 12KB
• fdsb-20240331xex31d2.htm (EX-31.2) — 12KB
• fdsb-20240331xex32d1.htm (EX-32.1) — 7KB
• fdsb-20240331xex32d2.htm (EX-32.2) — 6KB
• 0001558370-24-009435.txt ( ) — 12910KB
• fdsb-20240331.xsd (EX-101.SCH) — 37KB
• fdsb-20240331_cal.xml (EX-101.CAL) — 69KB
• fdsb-20240331_def.xml (EX-101.DEF) — 148KB
• fdsb-20240331_lab.xml (EX-101.LAB) — 417KB
• fdsb-20240331_pre.xml (EX-101.PRE) — 308KB
• fdsb-20240331x10q_htm.xml (XML) — 3831KB

– Financial Information

Part I. – Financial Information Item 1.

Financial Statements

Financial Statements 2 Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 2 3 4 5 6

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 41 Item 4.

Controls and Procedures

Controls and Procedures 41

– Other Information

Part II. – Other Information Item 1.

Legal Proceedings

Legal Proceedings 43 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 43 Item 3. Defaults Upon Senior Securities 43 Item 4. Mine Safety Disclosures 43 Item 5. Other Information 43 Item 6. Exhibits 44 Signature Page 45 i Table of Contents EXPLANATORY NOTE Fifth District Bancorp, Inc. (the "Company," "we" or "us") was incorporated on February 15, 2024, to serve as the savings and loan holding company for Fifth District Savings Bank ("Fifth District" or the "Bank") upon the consummation of the Bank's conversion from the mutual form of organization to the stock form of organization. As of March 31, 2024, the conversion had not yet been consummated and the Company had no assets or liabilities and had not conducted any business activities other than organizational activities. Accordingly, the financial statements, related notes, and other financial information included in this report relate primarily to the Bank. The unaudited financial statements and other financial information contained in this report should be read in conjunction with the audited financial statements, and related notes, of the Bank as of and for each of the years ended December 31, 2023 and 2022, contained in the Company's definitive prospectus dated May 10, 2024, as filed with the Securities and Exchange Commission on May 20, 2024. 1 Table of Contents

– Financial Information

Part I. – Financial Information

Financial Statements

Item 1. Financial Statements FIFTH DISTRICT SAVINGS BANK Balance Sheets (in thousands, except per share amounts) March 31, December 31, 2024 2023 (Unaudited) (Audited) Assets Cash and Due from Banks $ 4,465 $ 4,587 Interest-Bearing Deposits at Other Financial Institutions 32,160 14,719 Total Cash and Cash Equivalents 36,625 19,306 Investment Securities Available-for-Sale, at Fair Value 53,774 67,901 Restricted Stock 888 881 Loans Receivable, Net of Unearned Income 368,102 367,840 Allowance for Credit Losses ( 2,699 ) ( 2,802 ) Loans Receivable, Net 365,403 365,038 Bank Owned Life Insurance 10,415 10,332 Premises and Equipment, Net 12,654 12,475 Accrued Interest Receivable 1,922 1,757 Real Estate Owned 42 42 Deferred Tax Asset, Net 1,983 2,063 Other Assets 1,959 1,002 Total Assets $ 485,665 $ 480,797 Liabilities and Equity Capital Liabilities Deposits Interest-Bearing $ 399,589 389,207 Noninterest-Bearing 797 796 Advances from Borrowers for Taxes, Insurance, and Repairs 3,378 4,352 Short-Term Federal Home Loan Bank Advances — 4,000 Other Liabilities 4,934 4,644 Total Liabilities 408,698 402,999 Equity Capital Retained Earnings 83,639 84,771 Accumulated Other Comprehensive Loss ( 6,672 ) ( 6,973 ) Total Equity Capital 76,967 77,798 Total Liabilities and Equity Capital $ 485,665 $ 480,797 The accompanying notes are an integral part of these financial statements. 2 Table of Contents FIFTH DISTRICT SAVINGS BANK (in thousands) Three Months Ended March 31, 2024 2023 Interest and Dividend Income Loans, Including Fees $ 3,702 $ 3,346 Investment Securities 396 416 Other Interest-Earning Assets 202 173 Total Interest and Dividend Income 4,300 3,935 Interest Expense Deposits 2,247 1,097 Short-Term Federal Home Loan Bank Advances 5

Notes to Financial Statements

Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Unaudited) Description of Business Fifth District Savings Bank (the Bank) is a federally-chartered mutual savings bank which attracts deposits from the general public and uses such deposits primarily to originate loans secured by first mortgages on owner-occupied, family residences. The Bank's primary regulator is the Office of the Comptroller of the Currency (OCC). The Bank's activities are provided to customers of the Bank by branch offices located in the greater New Orleans area; however, loan and deposit customers are found dispersed in a wider geographical area covering southeast Louisiana. The Bank operates as one reporting segment. The Bank has adopted a Plan of Conversion (the Plan) to convert from the mutual form of organization to the stock form of organization and establish a stock holding company, Fifth District Bancorp, Inc. (the Company), as the parent of the Bank. The Plan is subject to the approval of the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, and must be approved by the affirmative vote of at least a majority of the total votes eligible to be cast by the Bank's voting members at a meeting of members. The Company is being organized as a corporation under the laws of the State of Maryland, and, upon completion of the conversion, the Bank will convert to the stock form of ownership and issue all of its outstanding common stock to the Company. Pursuant to the Plan, the Bank will determine the total offering value and number of shares of common stock to be offered for sale by the Company based upon a valuation performed by an independent appraiser. The common stock will be priced at $ 10.00 per share. The Bank's Board of Directors will adopt an employee stock ownership plan which will subscribe 8 % of the sum of the number of shares of common stock sold in the offering and contributed to a charitable f

Notes to Financial Statements

Notes to Financial Statements Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the valuation of the allowance for credit losses, deferred taxes, and fair value of financial instruments. The determination of the adequacy of the allowance for credit losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of estimated losses on loans and unfunded commitments, management obtains independent appraisals for significant collateral. While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination processes, periodically review the estimated losses on loans and may have judgements that differ from management. As a result of such reviews, management may determine to adjust the allowance for credit losses. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near-term. However, the amount of the change that is reasonably possible cannot be estimated. Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include cash on hand, cash items, amounts due from banks, and interest-bearing deposits at other financial institutions with an original maturity of 90 days or less, and federal funds sol

Notes to Financial Statements

Notes to Financial Statements unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of equity capital, net of the related deferred tax effect. Debt securities that are classified as trading are acquired and held principally for the purpose of selling in the near term. These securities are carried at estimated fair value by a third-party pricing service with any unrealized gains or losses included in net income and reported in non-interest income in the statements of income. The Bank held no trading securities as of March 31, 2024 and December 31, 2023. Gains and losses realized on sales of debt securities, determined using the adjusted cost basis of the specific securities sold, are included in non-interest income in the statements of income. Dividend and interest income, including amortization of premium and accretion of discount arising at acquisition, from all categories of investment securities are included in interest income in the statements of operations. Restricted Stock Restricted stock is stock from the Federal Home Loan Bank (FHLB) and First National Bankers Bank (FNBB), which is restricted as to its marketability. Because no ready market exists for these investments and they have no quoted market value, the Bank's investment in these stocks is carried at cost. A determination as to whether there has been an impairment of a restricted stock investment is performed on an annual basis and includes a review of the current financial condition of the issuer. Allowance for Credit Losses - Investment Securities Available-for-Sale For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Bank has the intent to sell the security, the security is written down to fair value, and the entire loss is record

Notes to Financial Statements

Notes to Financial Statements Loans Receivable Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs. Accrued interest receivable related to loans totaled approximately $ 1,767,000 and $ 1,589,000 at March 31, 2024, and December 31, 2023, respectively, and was reported in accrued interest receivable on the balance sheets. Interest income is accrued on the unpaid principal balance as earned using the interest method over the life of the loan. Loan origination and commitment fees and certain direct loan origination costs are deferred and amortized as an adjustment to the related loan's yield using the effective interest method over the contractual life of the loan. The accrual of interest is generally discontinued when a loan becomes 90 days past due, is not well collateralized and in the process of collection, or when management believes, after considering economic and business conditions and collection efforts, that the principal or interest will not be collectible in the normal course of business. Past due status is based on contractual terms of the loan. A loan is considered to be past due when a scheduled payment has not been received 30 days after the contractual due date. All accrued interest is reversed against interest income when a loan is placed on nonaccrual status. Interest received on such loans is accounted for using the cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, there is a sustained period of repayment performance, and future payments are reasonably assured. Allowance for Credit Losses - Loans R

Notes to Financial Statements

Notes to Financial Statements The Bank has identified and calculates the allowance for credit losses for each of the following portfolio segments: Loan Pool Risk Characteristics One-to-Four Family Mortgages This category consists of loans secured by residential real estate. The performance of these loans may be adversely affected by, among other factors, local residential real estate market conditions, the interest rate environment, and inflation. Construction Loans This category consists of loans to finance the ground-up construction and/or improvement of residential and vacant lot loans. The performance of construction loans is generally dependent upon the successful completion of improvements and/or land development for the end user. The successful completion of planned improvements and development may be adversely affected by changes in the estimated property value upon completion of construction, projected costs, and other conditions leading to project delays. Home Equity Loans/ Lines of Credit This category consists of loans secured by first and junior liens on residential real estate. The performance of these loans may be adversely affected by, among other factors, local residential real estate market conditions, the interest rate environment, and inflation. Commercial Loans This category consists of purchased business loans made to various practitioners and other professionals. These loans are often originally secured by blanket UCC-1 filings. When the loan is purchased, the Bank purchases 100 % of the loan and remits 97 % of the loan balance to the seller and the seller establishes a reserve deposit account with the Bank equal to 3 % of the loan balance. If a loan becomes delinquent, the Bank withdraws payment from the reserve deposit account. If a loan becomes 90 days delinquent, the seller typically replaces the delinquent loan with a performing loan of equal or greater balance (although this is not a contractual obligation of the seller). T

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