Traditions Bancorp, Inc. (TRBK), the parent company of Traditions Bank, has announced a net loss of $0.8 million for the third quarter of 2024, a stark contrast to the net income of $1.8 million reported in the previous quarter and $1.4 million in the same period last year. The company attributes this shift to a combination of merger expenses, totaling $0.6 million, and a strategic decision to set aside $2.1 million in loan loss reserves. As a result, the company reported a loss per share (diluted) of 28 cents for the quarter, compared to earnings per share of 66 cents in the previous quarter and 51 cents in the third quarter of 2023.
Despite the net loss, Traditions Bancorp showcases positive growth in key areas. Loans increased by $10.0 million, or 1.5%, compared to the third quarter of 2023, while deposits saw an increase of $35.3 million, or 5%, over the past 12 months. The majority of this deposit growth originated from brokered deposits, higher-cost time deposits, and money market specials, reflecting the increasing rate sensitivity among depositors.
The company’s mortgage banking division continues to perform well, with quarterly mortgage banking income exceeding expectations. Gains on the sale of mortgages helped offset the pressure of elevated funding costs on net interest income. However, the mortgage pipeline decreased to $18.5 million from $25.8 million in the preceding quarter, reflecting the ongoing impact of higher interest rates and the mortgage lock-in effect on home inventory levels.
Traditions Bancorp remains optimistic about the future, particularly as the yield curve is expected to normalize. The company also emphasizes its commitment to managing expenses, conserving capital, and prudently growing its franchise as it prepares for the completion of its merger with ACNB Corporation. The company declared a cash dividend of eight cents per common share on October 24, 2024, payable on November 18, 2024, to shareholders of record at the close of business on November 8, 2024.
While the third quarter saw a net loss, Traditions Bancorp remains focused on its long-term strategy and its commitment to its customers and shareholders. The company continues to navigate the complex economic landscape with a cautious approach, prioritizing risk management and capital preservation.