Tectonic Financial, Inc. reported significant growth in its financial performance for the third quarter and the nine months ended September 30, 2024, compared to the same periods in 2023. Total assets increased by $170.2 million, or 25.1%, reaching $847.5 million, while total deposits rose by $159.2 million, or 30.2%, to $686.1 million. Shareholders’ equity also saw a 5.5% increase, amounting to $112.8 million.

For the third quarter of 2024, interest income surged to $16.8 million, up from $11.7 million in Q3 2023, contributing to a net interest income of $8.4 million, a 27.5% increase year-over-year. The net interest margin, however, decreased slightly to 4.25% from 4.43%. The increase in net interest income was attributed to higher loan volumes and yields, with average loans rising by 30% to $642.5 million.

Net income for Q3 2024 was $4.7 million, reflecting an increase of 11% from $4.2 million in Q3 2023. However, net income for the nine months ended September 30, 2024, decreased to $10.9 million from $11.9 million in the prior year, primarily due to a $2.5 million increase in the provision for credit losses and a $4.2 million rise in non-interest expenses.

The company’s provision for credit losses for the third quarter was $606,000, significantly higher than $38,000 in the same quarter last year. For the nine-month period, the provision totaled $3.2 million, compared to $732,000 in 2023. This increase reflects the company's adoption of the current expected credit loss (CECL) methodology, which resulted in a cumulative-effect adjustment of $1.4 million.

Non-interest income for Q3 2024 was $11.2 million, a 10.4% increase from $10.1 million in Q3 2023, driven by higher advisory and trust income. However, total non-interest income for the nine months decreased slightly to $32.4 million from $30.3 million in the previous year.

The company’s loan portfolio expanded significantly, with total loans increasing to $620.8 million, up from $501.1 million at the end of 2023. SBA loans now comprise 61.8% of total loans, reflecting a strategic focus on this segment. Non-accrual loans increased to $14.4 million, representing 1.70% of total assets, compared to $2.4 million at the end of 2023.

Overall, Tectonic Financial, Inc. demonstrated robust growth in assets and deposits, alongside a strategic emphasis on increasing its loan portfolio, despite facing challenges related to credit loss provisions and rising non-interest expenses.