1895 Bancorp of Wisconsin, Inc. (BCOW): BCG Matrix [11-2024 Updated]

In the dynamic landscape of banking, understanding the strategic position of 1895 Bancorp of Wisconsin, Inc. (BCOW) is crucial for investors and stakeholders alike. Utilizing the Boston Consulting Group Matrix, we can categorize BCOW’s business segments into Stars, Cash Cows, Dogs, and Question Marks, offering a clear view of its financial health and growth prospects as of 2024. Dive into the analysis below to uncover how BCOW navigates its challenges and opportunities in the current market environment.

Background of 1895 Bancorp of Wisconsin, Inc. (BCOW)

1895 Bancorp of Wisconsin, Inc. is a Maryland corporation that serves as the stock holding company for PyraMax Bank, FSB. The company was formed as part of a mutual-to-stock conversion from 1895 Bancorp of Wisconsin, MHC, which was completed on July 14, 2021. This conversion involved the merger of 1895 Bancorp of Wisconsin, MHC with Old 1895 Bancorp, followed by the merger of Old 1895 Bancorp with New 1895 Bancorp. As a result, public stockholders of Old 1895 Bancorp received shares of New 1895 Bancorp common stock, effectively transitioning the institution to a fully public stock holding company.

Headquartered in Greenfield, Wisconsin, PyraMax Bank operates as a full-service financial institution, offering a comprehensive range of financial services. These include commercial, residential, and consumer loans, as well as deposit services aimed at individual customers and small businesses within the metropolitan Milwaukee area. The bank faces competition from various financial and nonfinancial institutions providing similar products.

As of September 30, 2024, the company reported total assets of approximately $564.5 million, a slight increase compared to $557.6 million at the end of 2023. The bank's total stockholders' equity stood at $73.2 million, reflecting a modest increase from $72.8 million at year-end 2023. The institution has undergone several operational adjustments and strategic initiatives to enhance its financial performance in a competitive market.

1895 Bancorp is subject to regulatory oversight and periodic examinations by relevant regulatory bodies, ensuring compliance with financial regulations and maintaining adequate capital levels. The company continues to adapt its services and strategies to meet the evolving needs of its customers and the financial landscape.

1895 Bancorp of Wisconsin, Inc. (BCOW) - BCG Matrix: Stars

Positive net cash provided by operating activities in 2024

Net cash provided by operating activities was $342,000 for the nine months ended September 30, 2024, compared to cash used in operating activities of $324,000 for the same period in 2023.

Significant proceeds from the sale of mortgage loans held for sale

Proceeds from the sales of mortgage loans held for sale amounted to $17.6 million during the first nine months of 2024, compared to $8.8 million for the same period in 2023.

Improvement in comprehensive income due to unrealized gains on securities

The company recorded unrealized holding gains of $2.9 million for the three months ended September 30, 2024, compared to unrealized losses of $2.4 million for the same period in 2023.

Strong capital adequacy ratios indicating financial stability

As of September 30, 2024, the Common Equity Tier 1 ratio was 14.9%, Tier 1 ratio was 14.9%, and Total capital ratio was 16.0%, all exceeding the well-capitalized thresholds.

1895 Bancorp of Wisconsin, Inc. (BCOW) - BCG Matrix: Cash Cows

Consistent revenue generation from core banking operations

For the nine months ended September 30, 2024, 1895 Bancorp of Wisconsin, Inc. reported net interest income of $9.2 million, reflecting a decrease of 0.3% compared to the same period in 2023. The interest and dividend income increased to $18.3 million, up from $15.1 million, a rise of 21.2% year-over-year.

Stable noninterest income streams from service charges and fees

Noninterest income for the nine months ended September 30, 2024, was $2.6 million, an increase from $306,000 during the same period in 2023. This increase was primarily attributed to a $184,000 rise in net gain on the sale of loans and a $439,000 increase in unrealized gains on marketable equity securities.

Historical performance shows resilience despite recent losses

1895 Bancorp recorded a net loss of $981,000 for the nine months ended September 30, 2024, a significant reduction from the $4.5 million loss reported in the same period in 2023. The decrease in net loss was primarily due to a $2.3 million increase in noninterest income.

Established customer base in the local market providing steady deposits

As of September 30, 2024, total deposits decreased by $8.4 million or 2.1%, totaling $395.3 million. Notably, the average balance of noninterest-bearing checking accounts decreased by $7.2 million or 9.3%, while certificates of deposit increased by $60.7 million or 57.9%.

1895 Bancorp of Wisconsin, Inc. (BCOW) - BCG Matrix: Dogs

Continued net losses impacting overall profitability

For the nine months ended September 30, 2024, 1895 Bancorp reported a net loss of $981,000, a significant improvement compared to a net loss of $4.5 million for the same period in 2023. For the third quarter of 2024, the net loss was $159,000, down from $3.6 million in the third quarter of 2023.

Declining equity value due to unrealized losses on certain securities

The net unrealized loss on available-for-sale securities stood at $7.1 million as of September 30, 2024. The available-for-sale securities decreased by $9.3 million, or 8.5%, to $100.3 million at the same date. Additionally, the total stockholders’ equity was $73.2 million as of September 30, 2024.

High noninterest expenses relative to income, affecting margins

Noninterest expenses increased by $577,000, or 15.6%, to $4.3 million for the three months ended September 30, 2024, compared to $3.7 million for the same period in 2023. The increase was attributed mainly to a $281,000 rise in salaries and benefits expense. The total noninterest expense for the nine months ended September 30, 2024, reached $13.1 million, up from $12.8 million in the prior year.

Limited growth in loan origination compared to prior periods

Loans held for investment increased by $3.0 million, or 0.8%, to $401.6 million at September 30, 2024. However, this growth is minimal when compared to the overall market dynamics. The average amount of loans outstanding increased by $24.4 million, from $375.8 million in the first nine months of 2023 to $400.2 million in 2024.

1895 Bancorp of Wisconsin, Inc. (BCOW) - BCG Matrix: Question Marks

Uncertainty surrounding the future of mortgage loan sales strategy

The net loss for the nine months ended September 30, 2024, was $981,000, a significant improvement from a net loss of $4.5 million for the same period in 2023. The origination of mortgage loans held for sale increased to $17.1 million in 2024, compared to $8.9 million in 2023, indicating potential growth in this area.

Potential for growth in commercial lending but dependent on market conditions

Loans held for investment increased to $401.6 million as of September 30, 2024, up from $398.6 million at the end of 2023, driven by a $2.4 million increase in commercial loans. However, this growth is contingent upon favorable market conditions and competition within the lending sector.

Need for improvement in asset management to mitigate interest rate risks

The average balance of interest-bearing deposits increased by $31.8 million from the first nine months of 2023 to the same period in 2024, contributing to a 118 basis point rise in interest expense. Interest expense on deposits reached $9.0 million in the nine months ended September 30, 2024, a 55.2% increase compared to the previous year. This highlights the need for more effective asset management strategies to counteract rising interest rates.

Exploration of new revenue streams necessary to enhance financial performance

Noninterest income for the nine months ended September 30, 2024, increased to $2.6 million, up from $306,000 in the same timeframe in 2023. The increase was primarily due to a net gain on the sale of loans, which rose to $325,000, compared to $141,000 in 2023. This indicates a need to explore additional revenue sources to sustain and improve financial performance.

In summary, the analysis of 1895 Bancorp of Wisconsin, Inc. (BCOW) through the BCG Matrix reveals a complex financial landscape. The company exhibits strong Stars with positive cash flow and capital stability, while its Cash Cows demonstrate consistent revenue from core operations. However, the Dogs highlight challenges with net losses and rising expenses, and the Question Marks reflect uncertainties in growth strategies and market conditions. Addressing these areas will be crucial for BCOW to enhance its overall financial health and capitalize on potential opportunities.

Updated on 16 Nov 2024

Resources:

1. 1895 Bancorp of Wisconsin, Inc. (BCOW) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of 1895 Bancorp of Wisconsin, Inc. (BCOW)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View 1895 Bancorp of Wisconsin, Inc. (BCOW)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.