Dogwood State Bank (OTCQX: DSBX) ("Dogwood") announced on Tuesday, July 30, its financial results for the three and six months ended June 30, 2024 as it prepares to close its previously announced acquisition of Community First Bancorporation and Community First Bank, Inc. ("Community First")  on Thursday, Aug.t 1, 2024.

Second Quarter 2024 Financial Highlights include: 

• Net income grew to $2.7 million in Q2 2024 from $1.8 million in Q1 2024 and $2.0 million in Q2 2023. Dogwood incurred merger and acquisition expenses of $562 thousand in Q2 2024 and $958 thousand in Q1 2024 related to the acquisition of Community First.
• Net income, after adjusting for merger and acquisition expenses (non-GAAP), improved to $3.1 million in Q2 2024 from $2.6 million in Q1 2024 and $2.0 million in Q2 2023.
• Net interest margin increased to 3.53% in Q2 2024 from 3.41% in Q1 2024 and 3.50% in Q2 2023.
• SBA lending income rose to $2.7 million in Q2 2024 from $2.2 million in Q1 2024 and $2.2 million in Q2 2023.
• Loans held for investment grew by $87.8 million in Q2 2024 and by $240.5 million over the past twelve months.
• Deposits grew by $35.3 million in Q2 2024 and by $185.6 million over the past twelve months.

"This week marks a pivotal moment as we prepare for the successful completion of our acquisition of Community First," commented Steve Jones, Chief Executive Officer in a press release.  "We look forward to welcoming our new customers, employees, and shareholders to the Dogwood family.  We believe this strategic transaction will position Dogwood for enhanced earnings growth and long-term value creation." 

Mr. Jones continued, "Our second quarter results reflect Dogwood's strong operating momentum heading into the Community First acquisition.  We achieved robust loan and core deposit growth, meaningfully expanded our net interest margin, and grew SBA lending income on a higher volume of SBA loan sales and improved secondary market premiums."

Regarding the Community First Acquisition: 

On Jan. 31, 2024, Dogwood entered into a merger agreement to acquire Community First in an all-stock transaction.  Under the terms of the merger agreement, each outstanding share of Community First common stock will be exchanged for 0.5875 shares of Dogwood voting common stock, and each outstanding share of Community First preferred stock will be exchanged for 64.7719 shares of Dogwood voting common stock.  A total of 3.4 million shares of Dogwood voting common stock will be issued in the acquisition of Community First.

As of June 30, 2024, on a pro forma basis reflecting the acquisition of Community First, Dogwood had approximately $2.2 billion in assets, $1.7 billion in loans, and $1.8 billion in deposits.  In Q2 2024, the Bank incurred pre-tax merger and acquisition expenses of $562 thousand. For the first half of 2024, merger and acquisition expenses totaled $1.5 million.

The merger was completed on Aug. 1, 2024 with the company expressing excitement on their website stating: 

“On August 1st, we officially reached legal closure for the acquisition of Dogwood State Bank and Community First Bank. 

We are thrilled to welcome the Community First Bank customers and employees to Dogwood State Bank as we officially become one! This marks an exciting new chapter for both organizations. Together, we’re building a stronger, brighter future for our communities.” 

The company continued to express that same sentiment on social media sharing on their LinkedIn page: 

“We are thrilled to welcome the Community First Bank customers and employees to Dogwood State Bank as we officially become one! This marks an exciting new chapter for both organizations. Together, we’re building a stronger, brighter future for our communities. Please join us in celebrating this exciting milestone!” 

You can find the  full Second Quarter 2024 earnings report here.