CCFN Muncy Columbia Financial Corporation (QX)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

February 13, 2024

Date of Report (Date of earliest event reported)

 

MUNCY COLUMBIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Pennsylvania		000-19028		23-2254643
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Ident. No.)

232 East Street, Bloomsburg, Pennsylvania 17815

(Address of principal executive offices) (Zip Code)

(570) 784-4400

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
None		None		None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

Lance O. Diehl, Chief Executive Officer, announced the consolidated financial results for Muncy Columbia Financial Corporation for the fourth quarter 2023. On February 13, 2024, Muncy Columbia Financial Corporation issued a press release titled “Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings” attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

(a) Not applicable

(b) Not applicable

(c) Not applicable

(d) Exhibits.

 

Exhibit Number	Description
99.1	Press Release issued by Muncy Columbia Financial Corporation on February 13, 2024 titled “Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings”
104	Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Date: February 13, 2024	Muncy Columbia Financial Corporation
	By:	/s/ Joseph K. O’Neill, Jr.
	Name:	Joseph K. O’Neill, Jr.
	Title:	Executive Vice President and Chief Financial Officer

 

 

MUNCY COLUMBIA FINANCIAL CORPORATION 8-K

Exhibit 99.1

 

Press Release – For Immediate Release

February 13, 2024

Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings

 

Bloomsburg, PA – Muncy Columbia Financial Corporation (“Corporation”) (OTCQX: CCFN), parent company of Journey Bank (”Bank”), has released its unaudited financial statements for the fourth quarter of 2023.

 

Merger with Muncy Bank Financial, Inc.

 

On April 18, 2023, CCFNB Bancorp, Inc. (“CCFNB”) and Muncy Bank Financial, Inc. (“MBF”) jointly announced the signing of a definitive merger agreement to combine the two companies in a strategic merger of equals. Effective November 11, 2023, the merger was completed. Under the terms of the Merger Agreement, (i) MBF merged with and into CCFNB, with CCFNB being the surviving entity, and (ii) The Muncy Bank & Trust Company merged with and into CCFNB's wholly-owned banking subsidiary, First Columbia Bank & Trust Co. ("First Columbia Bank"), with First Columbia Bank being the surviving bank (the "Mergers"). In connection with the Mergers, CCFNB changed its name to Muncy Columbia Financial Corporation and First Columbia Bank changed its name to Journey Bank.

 

At the effective time of the merger, MBF’s shareholders received a fixed exchange ratio of 0.9259 shares of the Corporation’s common stock for each MBF common share they owned, except to the extent of cash received for fractional shares at $41.47 per share. Total purchase consideration was $55,101,000, including common stock with a fair value of $55,092,000 and cash of $9,000 paid for fractional shares. Holders of MBF common stock prior to the consummation of the merger held approximately 41.7% of the Corporation’s common stock outstanding immediately following the merger.

 

In connection with the acquisition, effective November 11, 2023, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired included gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed included deposits valued at $521.3 million and borrowings valued at $105.5 million. The fair value adjustments made to the acquired assets and liabilities of MBF are considered preliminary at this time and are subject to change as the Corporation finalizes its fair value determinations. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

 

For the year-ended December 31, 2023, the Corporation incurred pre-tax merger-related expenses related to the MBF transaction of $3.0 million, including expenses totaling $1.8 million in the fourth quarter 2023. Merger-related expenses include voluntary severance and similar expenses as well as expenses related to conversion of MBF’s core banking system into the Corporation’s core system and legal and other professional expenses. Also during the fourth quarter 2023, the Corporation recorded a one-time provision for credit losses of $2.9 million for acquired non-Purchase Credit Deteriorated (“PCD”) loans (also known as the “CECL Credit Double Count”).

 

Dividend Declared and Unaudited Financial Information

 

On February 13, 2024, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.44 per share, which represents an increase of $0.01 per share compared to the last quarterly dividend of $0.43 per share. The dividend is payable on March 14, 2024 to shareholders of record as of February 27, 2024. Highlights related to the Corporation’s fourth quarter 2023 unaudited results are presented below.

 

Net loss, as reported under accounting principles generally accepted in the United States of America (“GAAP”), for the quarter-ended December 31, 2023, was $1,186,000 compared to net income of $2,595,000 for the same period in 2022. Net income, as reported under GAAP, for the year -ended December 31, 2023 was $3,387,000 compared to $9,514,000 for the same period in 2022. Net income for the quarter and year-ended December 31, 2023 was significantly impacted by merger related expenses, as described in further detail in the Merger with Muncy Bank Financial, Inc. section above. Earnings per share, basic and diluted, for the quarters-ended December 31, 2023 and 2022 were ($0.41) and $1.25, respectively. Earnings per share, basic and diluted, for the years-ended December 31, 2023 and 2022 were $1.49 and $4.58, respectively. Return on average assets and return on average equity were (0.35%) and (3.95%) for the quarter-ended December 31, 2023 as compared to 1.00% and 10.45% for the same period of 2022.

 

The fully-tax equivalent net interest margin on interest earning assets and liabilities was 2.34% and 2.55% at December 31, 2023 and 2022, respectively.

 

Total consolidated assets amounted to $1.6 billion at December 31, 2023 as compared to $944.0 million at December 31, 2022. Changes from December 31, 2022 to December 31, 2023 were primarily driven by the Corporation’s merger with Muncy Bank Financial, Inc. on November 11, 2023.

 

 

The Corporation invests in various forms of agency debt including mortgage-backed securities and callable agency debt. The fair value of these securities is influenced by market interest rates, prepayment speeds on mortgage securities, bid to offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the fair market value of these securities may be higher or lower than the Corporation’s carrying value at any measurement date. The temporary impact on investment securities will also affect stockholders’ equity as these fluctuations are recorded through accumulated other comprehensive income (loss). For the year-ended December 31, 2023, the temporary impact of these unrealized losses on the stockholders’ equity amounted to a reduction of $15.0 million. The Corporation does not consider its debt securities to be credit impaired since it has both the intent and ability to hold the securities until a recovery of its amortized cost basis, which may be maturity, and the decline in fair value is deemed to be as a result of increases in interest rates and not credit factors.

 

Total stockholders’ equity equated to a book value per share of $43.08 at December 31, 2023 as compared with $41.34 at December 31, 2022. For the year-ended December 31, 2023 cash dividends of $1.71 per share were paid to stockholders as compared to $1.67 for the same period of 2022. The Corporation remains well capitalized, with an equity to assets ratio of 9.38% as of December 31, 2023 and 9.10% at December 31, 2022.

 

About Muncy Columbia Financial Corporation

 

Muncy Columbia Financial Corporation ("MCFC") is a registered financial holding company headquartered in Bloomsburg, Pennsylvania. MCFC has one subsidiary bank, Journey Bank, serving individuals, families, nonprofits and business clients throughout Clinton, Columbia, Lycoming, Montour, Northumberland and Sullivan Counties through 22 banking offices.

 

Cautionary Note Regarding Forward Looking Statements

 

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties related to integration following the merger; the risk that the anticipated benefits, cost savings and other savings from the merger may not be fully realized or may take longer than expected to realize; potential impairment to the goodwill recorded in connection with the merger; changes in general economic trends, including inflation and changes in interest rates; our ability to manage credit risk; our ability to maintain an adequate level of allowance for credit loss on loans; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; fluctuations in the values of securities held in our securities portfolio, including as a result of changes in interest rates; our ability to successfully manage liquidity risk; adverse developments in borrower industries and, in particular, declines in real estate values; the concentration of large deposits from certain customers who have balances above current FDIC insurance limits; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and any other risks described in the “Risk Factors” sections of reports filed by the Corporation with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements.

 

 

Muncy Columbia Financial Corporation

Consolidated Balance Sheets

		December 31,
(In Thousands, Except Share and Per Share Data) (Unaudited)		2023				2022
ASSETS
Cash and due from banks		$	14,614			$	9,750
Interest-bearing deposits in other banks			3,763				3,333
Federal funds sold			—				1
Total cash and cash equivalents			18,377				13,084
Interest-bearing time deposits			979				—
Available-for-sale debt securities, at fair value			413,302				341,051
Marketable equity securities, at fair value			1,295				1,077
Restricted investment in bank stocks, at cost			10,394				3,223
Loans held for sale			366				4,568
Loans receivable			1,068,429				527,729
Allowance for credit losses			(9,302	)			(7,279	)
Loans, net			1,059,127				520,450
Premises and equipment, net			27,569				12,514
Foreclosed assets held for sale			170				—
Accrued interest receivable			5,362				2,222
Bank-owned life insurance			40,209				21,859
Investment in limited partnerships			5,828				3,745
Deferred tax asset, net			12,634				8,377
Goodwill			25,609				7,937
Core deposit intangible, net			11,895				—
Other assets			6,663				3,907
TOTAL ASSETS		$	1,639,779			$	944,014
LIABILITIES
Interest-bearing deposits		$	884,654			$	500,480
Noninterest-bearing deposits			266,015				181,845
Total deposits			1,150,669				682,325
Short-term borrowings			252,532				171,741
Long-term borrowings			70,448				24
Accrued interest payable			2,358				187
Other liabilities			9,947				3,795
TOTAL LIABILITIES			1,485,954				858,072
STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share; 15,000,000 shares authorized;
issued 3,834,976 and outstanding 3,570,276 at December 31, 2023;
issued 2,343,835 and outstanding 2,079,135 at December 31, 2022			4,794				2,930
Additional paid-in capital			83,343				30,030
Retained earnings			90,514				90,156
Accumulated other comprehensive loss			(15,036	)			(27,384	)
Treasury stock, at cost; 264,700 shares at December 31, 2023 and 2022			(9,790	)			(9,790	)
TOTAL STOCKHOLDERS' EQUITY			153,825				85,942
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,639,779			$	944,014

 

 

Muncy Columbia Financial Corporation

Consolidated Statements of Income

 

		For the Three Months Ended								For the Year Ended
		December 31,								December 31,
(In Thousands, Except Share and Per Share Data) (Unaudited)		2023				2022				2023				2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans:
Taxable		$	12,024			$	5,571			$	30,885			$	20,604
Tax-exempt			295				215				969				675
Interest and dividends on investment securities:
Taxable			1,389				1,234				5,030				4,321
Tax-exempt			519				92				917				185
Dividend and other interest income			96				54				318				198
Federal funds sold			—				5				1				20
Deposits in other banks			58				123				227				385
TOTAL INTEREST AND DIVIDEND INCOME			14,381				7,294				38,347				26,388
INTEREST EXPENSE
Deposits			2,665				484				4,964				1,773
Short-term borrowings			2,871				1,356				9,119				2,286
Long-term borrowings			588				1				1,002				2
TOTAL INTEREST EXPENSE			6,124				1,841				15,085				4,061
NET INTEREST INCOME			8,257				5,453				23,262				22,327
Provision (credit) for credit losses - loans			3,148				(450	)			2,554				(1,810	)
(Credit) provision for credit losses - off balance sheet credit exposures			(34	)			—				(33	)			—
TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES			3,114				(450	)			2,521				(1,810	)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES			5,143				5,903				20,741				24,137
NON-INTEREST INCOME
Service charges and fees			578				541				2,094				2,117
Gain on sale of loans			83				47				276				478
Earnings on bank-owned life insurance			168				332				503				652
Brokerage			211				149				636				597
Trust			272				240				885				845
(Gains) losses on marketable equity securities			146				22				(119	)			(37	)
Realized losses on available-for-sale debt securities, net			—				—				—				(1,236	)
Interchange fees			545				435				1,839				1,720
Other non-interest income			264				242				1,007				935
TOTAL NON-INTEREST INCOME			2,267				2,008				7,121				6,071
NON-INTEREST EXPENSE
Salaries and employee benefits			4,311				2,527				11,618				10,406
Occupancy			422				469				1,391				1,476
Furniture and equipment			524				486				2,070				1,757
Pennsylvania shares tax			131				(109	)			365				412
Professional fees			653				476				1,638				1,390
Director's fees			99				76				326				314
Federal deposit insurance			151				67				478				262
Telecommunications			80				77				323				351
Automated teller machine and interchange			119				132				340				338
Merger-related expenses			1,822				—				3,028				—
Other non-interest expense			851				837				2,533				2,362
TOTAL NON-INTEREST EXPENSE			9,163				5,038				24,110				19,068
(LOSS) INCOME BEFORE INCOME TAX PROVISION			(1,753	)			2,873				3,752				11,140
INCOME TAX (CREDIT) PROVISION			(567	)			278				365				1,626
NET (LOSS) INCOME		$	(1,186	)		$	2,595			$	3,387			$	9,514
(LOSS) EARNINGS PER SHARE - BASIC AND DILUTED		$	(0.41	)		$	1.25			$	1.49			$	4.58
WEIGHTED AVERAGE SHARES OUTSTANDING			2,873,775				2,078,705				2,279,808				2,078,218

 

 

		At or 3 Months Ended (Unaudited)
(Dollars in Thousands, Except Per Share Data)		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Operating Highlights
Net (loss) income		$	(1,186	)		$	1,171			$	1,462			$	1,940			$	2,595
Net interest income			8,257				4,891				4,913				5,201				5,453
Provision (credit) for credit losses			3,114				(168	)			(16	)			(409	)			(450	)
Non-interest income			2,267				1,522				1,706				1,626				2,008
Non-interest expense			9,163				5,273				4,857				4,817				5,038
Balance Sheet Highlights
Total assets		$	1,639,779			$	957,580			$	960,080			$	955,030			$	944,014
Loans, net and loans held for sale			1,059,493				556,862				544,593				535,843				525,018
Intangibles			37,504				7,937				7,937				7,937				7,937
Total deposits
Noninterest-bearing		$	266,015			$	165,888			$	175,521			$	178,438			$	181,845
Savings			204,968				155,750				157,833				166,231				171,462
NOW			251,953				146,944				152,358				151,191				152,656
Money Market			103,602				41,521				44,341				51,846				51,850
Time Deposits			324,131				130,472				128,430				127,670				124,512
Total interest-bearing deposits			884,654				474,687				482,962				496,938				500,480
Core deposits*			826,538				510,103				530,053				547,706				557,813
Selected Ratios
Fully tax-equivalent net interest margin (YTD)			2.34	%			2.29	%			2.32	%			2.41	%			2.55	%
Annualized return on average assets			-0.35	%			0.63	%			0.71	%			0.82	%			1.00	%
Annualized return on average equity			-3.95	%			6.78	%			7.63	%			8.94	%			10.45	%
Capital Ratios - Journey Bank
Common equity tier I capital ratio			13.52	%			18.80	%			18.96	%			18.94	%			18.88	%
Tier 1 capital ratio			13.52	%			18.80	%			18.96	%			18.94	%			18.88	%
Total risk-based capital ratio			14.49	%			19.91	%			20.11	%			20.10	%			20.13	%
Leverage ratio			8.03	%			10.58	%			10.65	%			10.62	%			10.52	%
Asset Quality Ratios
Non-performing assets		$	4,475			$	2,659			$	2,562			$	2,808			$	2,654
Allowance for credit losses - loans			9,302				6,094				6,278				6,288				7,279
Allowance for credit losses to total loans			0.87	%			1.09	%			1.14	%			1.16	%			1.37	%
Allowance for credit losses to non-performing assets			207.87	%			244.81	%			245.04	%			223.91	%			274.33	%
Per Share Data
(Loss) earnings per share		$	(0.41	)		$	0.56			$	0.71			$	0.93			$	1.25
Dividend declared per share			0.43				0.43				0.43				0.42				0.42
Book value			43.08				42.50				43.44				44.52				41.34
Common stock price:
Bid		$	34.50			$	34.59			$	37.57			$	40.05			$	45.00
Ask			37.17				35.00				43.00				42.50				51.00
Weighted average common shares			2,873,775				2,080,109				2,079,649				2,079,135				2,078,705

 

* Core deposits are defined as total deposits less time deposits

 

v3.24.0.1

Cover	Feb. 13, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 13, 2024
Entity File Number	000-19028
Entity Registrant Name	MUNCY COLUMBIA FINANCIAL CORPORATION
Entity Central Index Key	0000731122
Entity Tax Identification Number	23-2254643
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	232 East Street
Entity Address, City or Town	Bloomsburg,
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	232 East Street, Bloomsburg, Pennsylvania 17815
City Area Code	(570)
Local Phone Number	784-4400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	None
Trading Symbol	None
Entity Emerging Growth Company	false
Entity Information, Former Legal or Registered Name	N/A

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