Fidelity Bank, operating under FB Bancorp, Inc., reported significant financial developments in its recent 10-Q filing for the quarter ending June 30, 2024. Total assets increased to $1.171 billion, up from $1.125 billion at the end of 2023, primarily driven by a rise in loans held for investment, which grew to $717.1 million from $659.5 million. This increase reflects a strategic focus on expanding the loan portfolio, particularly in residential and commercial real estate.

For the three months ended June 30, 2024, total interest and dividend income rose to $15.9 million, a 20.8% increase from $13.2 million in the same period of 2023. This growth was attributed to a higher average balance of loans held for investment, which increased by 18.6%. However, total interest expense surged to $4.9 million, up 142.4% from $2.0 million, reflecting rising costs associated with interest-bearing deposits and borrowings. Consequently, net interest income slightly decreased to $10.9 million from $11.1 million year-over-year.

Fidelity Bank's net income for the three months ended June 30, 2024, was $849,000, a notable recovery from a loss of $338,000 in the same quarter of 2023. For the six-month period, net income improved to $42,000 from a loss of $109,000, indicating a positive shift in profitability. Non-interest income also saw an increase, reaching $7.3 million for the quarter, up from $5.4 million, driven by gains from mortgage loan sales.

The bank's total non-interest expenses decreased slightly to $16.8 million from $17.0 million, aided by a reduction in salaries and employee benefits due to workforce downsizing, which eliminated approximately $1.4 million in annual payroll expenses. This strategic decision was made in response to challenges in the secondary mortgage market.

Fidelity Bank's capital ratios remain robust, with a Tier 1 leverage capital of $166.4 million, representing 14.5% of adjusted assets, well above regulatory requirements. However, the bank's non-performing loans increased to $9.8 million, or 1.35% of total loans, up from $4.6 million a year earlier, indicating rising credit risk.

Overall, Fidelity Bank's performance reflects a strategic focus on loan growth and cost management, while navigating challenges in the mortgage banking sector. The bank continues to monitor its liquidity and capital adequacy to support ongoing operations and potential future growth.