Magnolia Bancorp Reports Increased Net Loss and Decrease in Total Assets for First Half of 2025

Magnolia Bancorp, Inc. reported a net loss of $66,000 for the six months ended June 30, 2025, compared to a net loss of $24,000 for the same period in 2024. The increase in net loss was attributed to a rise in total non-interest expenses, which increased by $174,000, or 29.6%, to $762,000. This was partially offset by an increase in net interest income, which rose by $122,000, or 22.5%, to $663,000. Interest income for the six months increased by $81,000, or 11.2%, to $806,000, driven primarily by a significant increase in other interest on deposits with other banks and cash equivalents.

In terms of financial position, total assets decreased by $6.9 million, or 15.7%, to $37.1 million as of June 30, 2025, down from $44.0 million at the end of 2024. This decline was mainly due to a $5.8 million decrease in cash and cash equivalents, which fell to $4.2 million, and a $1.4 million reduction in other assets. However, net loans receivable increased slightly by $0.3 million, or 1.1%, to $30.9 million. The company reported a significant increase in loan originations, which rose by $1.6 million, or 365%, compared to the first half of 2024.

Deposits also saw a notable decline, with total interest-bearing deposits decreasing by $12.4 million, or 44.4%, to $15.5 million. Core deposits, defined as deposits excluding certificates of deposit, fell by $10.7 million, or 53.4%, to $9.3 million. This decrease was primarily due to the conversion process, which utilized $7.7 million in deposits to purchase shares of common stock in Magnolia Bancorp, along with $1.4 million refunded to purchasers in an over-subscribed community offering.

Strategically, Magnolia Bancorp completed its conversion from a mutual to a stock form in January 2025, which included the issuance of 833,750 shares of common stock. The company aims to focus on originating fixed-rate one- to four-family residential mortgage loans while also modestly increasing its commercial real estate and multi-family residential loan portfolios. The management anticipates that the recent Federal Reserve rate cuts will lead to a decline in funding costs and an increase in demand for fixed-rate loans.

Looking ahead, Magnolia Bancorp expects to continue its efforts to grow core deposits and maintain strong asset quality through conservative underwriting practices. However, the company also anticipates an increase in non-interest expenses due to the costs associated with being a public company and the need to hire additional personnel. The management remains optimistic about the potential for improved financial performance as market conditions evolve.