HAWTHORN BANCSHARES, INC.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
HWBK$39.09+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000893847-25-000015
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000893847-25-000036
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 134 current paragraphs.
69 unchanged; 55 reworded; 9 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Consolidated net incomewas $6.1 million, or $0.88 per diluted share, and $11.5 million, or $1.65 per diluted share, for the three and six months ended June 30, 2025, respectively, compared to $4.6 million, or $0.66 per diluted share, and $9.1 million, or $1.29 per diluted share, for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2025, the return on average assets was 1.36% and 1.28%, respectively, the return on average stockholders’ equity was 15.85% and 15.08%, respectively, and the efficiency ratio was 62.3% and 64.43%, respectively.
Current report
(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both thesix months ended June 30, 2025 and 2024. Such adjustments totaled $0.62 million and $0.40 million for thesix months ended June 30, 2025 and 2024, respectively.
Current report
Average interest-earning assets decreased $45.6 million, or 2.6%, to $1.71 billion for the six months ended June 30, 2025 compared to $1.75 billion for the six months ended June 30, 2024, and average interest-bearing liabilities decreased $60.6 million, or 4.7%, to $1.24 billion for the six months ended June 30, 2025 compared to $1.30 billion for the six months ended June 30, 2024.
Current report
Average securities increased $38.6 million, or 21.1%, to $222.0 million for the six months ended June 30, 2025 compared to $183.3 million for the six months ended June 30, 2024. The average yield on securities increased to 3.93% for the six months ended June 30, 2025 compared to 3.29% for the six months ended June 30, 2024. See the Liquidity Management section for further discussion.
Current report
Average interest-bearing deposits decreased $20.0 million, or 1.8%, to $1.12 billion for the six months ended June 30, 2025 compared to $1.14 billion for the six months ended June 30, 2024. The average cost of deposits decreased to 2.40% for the six months ended June 30, 2025 compared to 2.65% for the six months ended June 30, 2024.
Current report
Average borrowings decreased $40.6 million, or 25.8%, to $116.8 million for the six months ended June 30, 2025 compared to $157.4 million for the six months ended June 30, 2024. The average cost of borrowings decreased to 4.51% for the six months ended June 30, 2025 compared to 4.67% for the six months ended June 30, 2024.
Current report
Total non-interest expense increased $0.2 million, or 2.0%, to $12.3 million for the quarter ended June 30, 2025 compared to $12.0 million for the quarter ended June 30, 2024, and increased $0.2 million, or 0.6%, to $24.8 million for the six months ended June 30, 2025 compared to $24.6 million for the six months ended June 30, 2024.
Current report
On June 5, 2025, the Company announced that its Board of Directors approved a new common stock repurchase program under which the Company may repurchase up to $10.0 million of its common stock, which replaced the Company’s prior common stock repurchase program. Pursuant to the repurchase program, management is given discretion to determine the number and pricing of the shares to be repurchased, as well as the timing of any such repurchases. The timing and total amount of stock repurchases will depend on market and other conditions and may be made from time to time in open market purchases or privately negotiated transactions. The program has no termination date, may be suspended or discontinued at any time and does not obligate the Company to acquire any amount of common stock. The Company repurchased 79,777 common shares under its repurchase programs during the first six months of 2025 at an average cost of $27.62 per share totaling $2.2 million. As of June 30, 2025, $9.0 million remained available for share repurchases pursuant to the Company's current repurchase program.
Current report
On June 24, 2025, the Company filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission, which became effective on July 2, 2025. The shelf registration statement is intended to provide us with financial flexibility to raise capital from the offering of up to $150 million of any combination of common stock, preferred stock, debt securities, depositary shares, warrants, purchase contracts, purchase units, subscription rights and units in one or multiple offerings while the shelf registration statement is effective.
Removed paragraphs (4)
Previous report
Consolidated net incomeof $5.4 million, or $0.77 per diluted share, for the first quarter ended March 31, 2025 increased $0.9 million, or 20.8%, compared to $4.5 million, or $0.63 per diluted share, for the first quarter ended March 31, 2024. For the first quarter 2025, the return on average assets was 1.20%, the return on average stockholders’ equity was 14.29%, and the efficiency ratio was 66.6%.
Previous report
(2)Non-accruing loans are included in the average amounts outstanding.
Previous report
(2)Non-accruing loans are included in the average amounts outstanding.
Previous report
Total non-interest expense decreased $0.1 million, or 0.6%, to $12.5 million for the three months ended March 31, 2025 compared to $12.6 million for the three months ended March 31, 2024.
Reworded paragraphs (55)
Previous wording
Net interest incomeof $15.3 million for the first quarter ended March 31, 2025 increased $0.5 million compared to $14.7 million for the first quarter ended March 31, 2024. Net interest margin, on a fully taxable equivalent ("FTE") basis, was 3.67% for the first quarter 2025, an increase from 3.39% for the first quarter 2024. The change to net interest margin on a fully taxable equivalent basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.
Current wording
Net interest incomewas $16.1 million and $31.4 million for the three and six months ended June 30, 2025 compared to $14.2 million and $28.9 million for the three and six months ended June 30, 2024. Net interest margin, on a fully taxable equivalent ("FTE") basis, was 3.89% and 3.78% for the three and six months ended 2025, compared to 3.33% and 3.36% for the three and six months ended June 30, 2024. The change to net interest margin on a fully taxable equivalent basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.
Previous wording
Non-interest incomewas $3.5 million for the three months ended March 31, 2025 compared to $3.0 million for the three months ended March 31, 2024. These changes are discussed in greater detail under the Non-interest Income and Expense section.
Current wording
Non-interest incomewas $3.5 million and $7.0 million for the three and six months ended June 30, 2025, respectively, compared to $4.0 million and $7.0 million for the three and six months ended June 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.
Previous wording
Non-interest expense was $12.5 million for the three months ended March 31, 2025 compared to $12.6 million for the three months ended March 31, 2024. These changes are discussed in greater detail under the Non-interest Income and Expense section.
Current wording
Non-interest expense was $12.3 million and $24.8 million for the three and six months ended June 30, 2025, respectively, compared to $12.0 million and $24.6 million for the three and six months ended June 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.
Previous wording
Cash and cash equivalents – Cash and cash equivalents increased $51.3 million to $102.3 million as of March 31, 2025 compared to $51.0 million as of December 31, 2024 and increased $58.8 million compared to $43.5 million as of March 31, 2024. See the Liquidity Management sectionfor further discussion.
Current wording
Cash and cash equivalents – Cash and cash equivalents increased $49.3 million to $100.3 million as of June 30, 2025 compared to $51.0 million as of December 31, 2024 and increased $24.5 million compared to $75.8 million as of June 30, 2024. See the Liquidity Management sectionfor further discussion.
Previous wording
Loans – Loans held for investment increased $4.2 million to $1.47 billion as of March 31, 2025 compared to $1.47 billion as of December 31, 2024 and decreased $48.5 million compared to $1.52 billion as of March 31, 2024.
Current wording
Loans – Loans held for investment decreased $3.3 million to $1.46 billion as of June 30, 2025 compared to $1.47 billion as of December 31, 2024 and decreased $35.6 million compared to $1.50 billion as of June 30, 2024.
Previous wording
Asset quality – Non-performing assets totaled $3.1 million, or 0.21% of total loans, at March 31, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024 and $10.5 million, or 0.69% of total loans, at March 31, 2024.
Current wording
Asset quality – Non-performing assets totaled $5.2 million, or 0.35% of total loans, at June 30, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024 and $8.1 million, or 0.54% of total loans, at June 30, 2024.
Previous wording
In the first quarter 2025, the Company had net loan recoveries of $0.02 million, or 0%, of average loans, compared to net loan charge-offs $0.07 million, or 0.02% of average loans, in the prior year quarter.
Current wording
In the second quarter 2025, the Company had net loan charge-offs of $0.05 million, or 0.01%, of average loans, compared to net loan charge-offs $1.98 million, or 0.53% of average loans, in the prior year quarter.
Previous wording
The allowance for credit losses was $21.8 million, or 1.48%, of loans outstanding at March 31, 2025 compared to $22.0 million, or 1.50%, of loans outstanding at December 31, 2024, and $23.7 million, or 1.56% of loans outstanding at March 31, 2024. These changes are discussed in greater detail under the Lending and Credit Management section.
Current wording
The allowance for credit losses was $21.6 million, or 1.47%, of loans outstanding at June 30, 2025 compared to $22.0 million, or 1.50%, of loans outstanding at December 31, 2024, and $22.0 million, or 1.47% of loans outstanding at June 30, 2024. These changes are discussed in greater detail under the Lending and Credit Management section.
Previous wording
Deposits – Total deposits increased $10.7 million to $1.54 billion as of March 31, 2025 compared to $1.53 billion as of December 31, 2024, and increased $16.0 million compared to $1.53 billion as of March 31, 2024.
Current wording
Deposits – Total deposits decreased $15.2 million to $1.52 billion as of June 30, 2025 compared to $1.53 billion as of December 31, 2024, and decreased $32.3 million compared to $1.55 billion as of June 30, 2024.
Previous wording
Federal Home Loan Bank ("FHLB") advances and other borrowings– Total FHLB advances and other borrowings increased $42.6 million to $124.1 million as of March 31, 2025, compared to $81.5 million as of December 31, 2024, and increased $15.1 million compared to $109.0 million as of March 31, 2024.
Current wording
Federal Home Loan Bank ("FHLB") advances and other borrowings– Total FHLB advances and other borrowings increased $58.6 million to $140.1 million as of June 30, 2025, compared to $81.5 million as of December 31, 2024, and increased $41.0 million compared to $99.1 million as of June 30, 2024.
Previous wording
Capital – The Company maintains its “well capitalized” regulatory capital position. At March 31, 2025, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.94%; tier 1 capital to risk-weighted assets 13.69%; tier 1 leverage 11.64%; and common equity to assets 8.15%.
Current wording
Capital – The Company maintains its “well capitalized” regulatory capital position. At June 30, 2025, capital ratios were as follows: total risk-based capital to risk-weighted assets 15.12%; tier 1 capital to risk-weighted assets 13.87%; tier 1 leverage 11.87%; and common equity to assets 8.35%.
Previous wording
Net interest income is the largest source of revenue resulting from the Company’s lending, investing, borrowing, and deposit gathering activities. It is affected both by changes in the level of interest rates and changes in the amounts and mix of interest-earning assets and interest-bearing liabilities. The following table presents average balance sheet data, net interest income, average yields of earning assets, average costs of interest-bearing liabilities, net interest spread and net interest margin on a FTE basis for each of the three month periods ended March 31, 2025 and 2024, respectively. The average balances used in this table and other statistical data were calculated using average daily balances.
Current wording
Net interest income is the largest source of revenue resulting from the Company’s lending, investing, borrowing, and deposit gathering activities. It is affected both by changes in the level of interest rates and changes in the amounts and mix of interest-earning assets and interest-bearing liabilities. The following table presents average balance sheet data, net interest income, average yields of earning assets, average costs of interest-bearing liabilities, net interest spread and net interest margin on a FTE basis for each of the three and six month periods ended June 30, 2025 and 2024, respectively. The average balances used in this table and other statistical data were calculated using average daily balances.
Previous wording
(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three months ended March 31, 2025 and 2024. Such adjustments totaled $0.24 million and $0.20 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three months ended June 30, 2025 and 2024. Such adjustments totaled $0.38 million and $0.20 million for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
The following table summarizes the changes in net interest income on a FTE basis, by major category of interest earning assets and interest-bearing liabilities, identifying changes related to volumes and rates for the three months ended March 31, 2025 compared to the three months ending ended March 31, 2024, respectively. The change in interest due to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of change in each.
Current wording
The following table summarizes the changes in net interest income on a FTE basis, by major category of interest earning assets and interest-bearing liabilities, identifying changes related to volumes and rates for the three and six months ended June 30, 2025 compared to the three and six months ending ended June 30, 2024, respectively. The change in interest due to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of change in each.
Previous wording
(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for the three months ended March 31, 2025 and 2024, respectively. Such adjustments totaled $0.24 million for the three months ended March 31, 2025 compared to $0.20 million for the three months ended March 31, 2024.
Current wording
(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for the three and six months ended June 30, 2025 and 2024, respectively. Such adjustments totaled $0.38 million and$0.62 million for the three and six months ended June 30, 2025, respectively, compared to $0.20 million and $0.40 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Financial results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 reflected an increase in net interest income on a FTE basis, of $0.6 million, or 3.9%. Measured as a percentage of average earning assets, the net interest margin (expressed on a FTE basis) increased to 3.67% for the three months ended March 31, 2025 compared to 3.39% for the three months ended March 31, 2024.
Current wording
Financial results for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, reflected an increase in net interest income on an FTE basis, of $2.2 million, or 15.0%, and financial results for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 reflected an increase in net interest income on an FTE basis, of $2.7 million, or 9.3%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 3.89% for the quarter ended June 30, 2025 compared to 3.33% for the quarter ended June 30, 2024, and increased to 3.78% for the six months ended June 30, 2025 compared to 3.36% for the six months ended June 30, 2024.
Previous wording
Average interest-earning assets decreased $58.6 million, or 3.3%, to $1.72 billion for the quarter ended March 31, 2025 compared to $1.77 billion for the quarter ended March 31, 2024, and average interest-bearing liabilities decreased $55.2 million, or 4.2%, to $1.26 billion for the quarter ended March 31, 2025 compared to $1.31 billion for the quarter ended March 31, 2024.
Current wording
Average interest-earning assets decreased $32.6 million, or 1.9%, to $1.70 billion for the quarter ended June 30, 2025 compared to $1.74 billion for the quarter ended June 30, 2024, and average interest-bearing liabilities decreased $65.8 million, or 5.1%, to $1.22 billion for the quarter ended June 30, 2025 compared to $1.29 billion for the quarter ended June 30, 2024.
Previous wording
Total interest income (expressed on a FTE basis) was $23.7 million for the three months ended March 31, 2025 compared to $24.3 million for the three months ended March 31, 2024. The Company’s rates earned on interest earning assets were 5.60% for the three months ended March 31, 2025 compared to 5.50% for the three months ended March 31, 2024.
Current wording
Total interest income (expressed on an FTE basis) was $24.3 million and $48.0 million for the three and six months ended June 30, 2025, respectively compared to $23.8 million and $48.0 million for the three and six months ended June 30, 2024, respectively. The Company’s rates earned on interest earning assets were 5.72% and 5.66% for the three and six months ended June 30, 2025, respectively, compared to 5.50% for both the three and six months ended June 30, 2024.
Previous wording
Interest income on loans held for investment was $21.3 million for the three months ended March 31, 2025 compared to $21.8 million for the three months ended March 31, 2024.
Current wording
Interest income on loans held for investment was $21.7 million and $42.9 million for the three and six months ended June 30, 2025, respectively, compared to $21.6 million and $43.4 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Average loans outstanding decreased $59.3 million, or 3.9%, to $1.47 billion for the quarter ended March 31, 2025 compared to $1.52 billion for the quarter ended March 31, 2024. The average yield on loans increased to 5.89% for the quarter ended March 31, 2025 compared to 5.75% for the quarter ended March 31, 2024. See the Lending and Credit Management section for further discussion of changes in the composition of the lending portfolio.
Current wording
Average loans outstanding decreased $59.2 million, or 3.9%, to $1.46 billion for the six months ended June 30, 2025 compared to $1.52 billion for the six months ended June 30, 2024. The average yield on loans increased to 5.93% for the six months ended June 30, 2025 compared to 5.75% for the six months ended June 30, 2024. See the Lending and Credit Management section for further discussion of changes in the composition of the lending portfolio.
Previous wording
Interest income on available-for-sale securitieswas $2.1 million for the three months ended March 31, 2025 compared to $1.5 million for the three months ended March 31, 2024.
Current wording
Interest income on available-for-sale securitieswas $2.3 million and $4.3 million for the three and six months ended June 30, 2025, respectively, compared to $1.5 million and $3.0 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Average securities increased $37.8 million, or 20.5%, to $222.3 million for the quarter ended March 31, 2025 compared to $184.5 million for the quarter ended March 31, 2024. The average yield on securities increased to 3.76% for the quarter ended March 31, 2025 compared to 3.22% for the quarter ended March 31, 2024. See the Liquidity Management section for further discussion.
Current wording
Average securities increased $39.5 million, or 21.7%, to $221.7 million for the quarter ended June 30, 2025 compared to $182.2 million for the quarter ended June 30, 2024. The average yield on securities increased to 4.09% for the quarter ended June 30, 2025 compared to 3.35% for the quarter ended June 30, 2024.
Previous wording
Total interest expense was $8.2 million for the three months ended March 31, 2025 compared to $9.3 million for the three months ended March 31, 2024. The Company’s rates paid on interest bearing liabilities were 2.64% for the three months ended March 31, 2025 compared to 2.85% for the three months ended March 31, 2024. See the Liquidity Management section for further discussion.
Current wording
Total interest expense was $7.8 million and $15.9 million for the three and six months ended June 30, 2025, respectively, compared to $9.4 million and $18.7 million for the three and six months ended June 30, 2024, respectively. The Company’s rates paid on interest bearing liabilities were 2.55% and 2.60% for the three and six months ended June 30, 2025, respectively, compared to 2.94% and 2.89% for the three and six months ended June 30, 2024, respectively. See the Liquidity Management section for further discussion.
Previous wording
Interest expense on deposits was $6.8 million for the three months ended March 31, 2025 compared to $7.5 million for the three months ended March 31, 2024.
Current wording
Interest expense on deposits was $6.5 million and $13.3 million for the three and six months ended June 30, 2025, respectively, compared to $7.6 million and $15.0 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Average interest-bearing deposits decreased $19.6 million, or 1.7%, to $1.13 billion for the quarter ended March 31, 2025 compared to $1.15 billion for the quarter ended March 31, 2024. The average cost of deposits decreased to 2.44% for the quarter ended March 31, 2025 compared to 2.61% for the quarter ended March 31, 2024.
Current wording
Average interest-bearing deposits decreased $20.2 million, or 1.8%, to $1.11 billion for the quarter ended June 30, 2025 compared to $1.13 billion for the quarter ended June 30, 2024. The average cost of deposits decreased to 2.35% for the quarter ended June 30, 2025 compared to 2.69% for the quarter ended June 30, 2024.
Previous wording
Interest expense on borrowings was $1.4 million for the three months ended March 31, 2025 compared to $1.8 million for the three months ended March 31, 2024.
Current wording
Interest expense on borrowings was $1.3 million and $2.6 million for the three and six months ended June 30, 2025, respectively, compared to $1.8 million and $3.7 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Average borrowings decreased $35.5 million, or 22.1%, to $125.0 million for the quarter ended March 31, 2025 compared to $160.6 million for the quarter ended March 31, 2024. The average cost of borrowings decreased to 4.38% for the quarter ended March 31, 2025 compared to 4.61% for the quarter ended March 31, 2024.
Current wording
Average borrowings decreased $45.6 million, or 29.5%, to $108.7 million for the quarter ended June 30, 2025 compared to $154.3 million for the quarter ended June 30, 2024. The average cost of borrowings decreased to 4.65% for the quarter ended June 30, 2025 compared to 4.73% for the quarter ended June 30, 2024.
Previous wording
Total non-interest income increased $0.4 million, or 14.7%, to $3.5 million for the three months ended March 31, 2025 compared to $3.0 million for the three months ended March 31, 2024. The increase was primarily due to earnings on bank-owned life insurance, offset by a decrease on gains on sales of mortgage loans during the current quarter.
Current wording
Total non-interest income decreased $0.5 million, or 11.3%, to $3.5 million for the quarter ended June 30, 2025 compared to $4.0 million for the quarter ended June 30, 2024, and remained unchanged at $7.0 million for the six months ended June 30, 2025 and June 30, 2024. Compared to the prior year quarter, the decrease was primarily due to lower gains on sales of mortgage loans and lower net gains on sales of other real estate owned, offset by increases in earnings on bank-owned life insurance and an increase in service charges and other fees.
Previous wording
Earnings on bank-owned life insurance increased to $0.5 million for the three months ended March 31, 2025 compared to $0.1 million for the three months ended March 31, 2024. The Company purchased $35.0 million in bank-owned life insurance policies in the first quarter of 2024. The earnings generated from these polices are primarily derived from the investment returns on the cash value component.
Current wording
Earnings on bank-owned life insurancewas $0.5 million for both quarters ended June 30, 2025 and June 30, 2024, and increased to $1.0 million for the six months ended June 30, 2025 compared to $0.6 million for the six months ended June 30, 2024. The Company purchased $35.0 million in bank-owned life insurance policies in the first quarter of 2024. The earnings generated from these polices are primarily derived from the investment returns on the cash value component.
Previous wording
Gain on sales of mortgage loans decreased to $0.1 million for the three months ended March 31, 2025 compared to $0.3 million for the three months ended March 31, 2024. The Company sold mortgage loans totaling $1.2 million for the three months ended March 31, 2025 compared to $15.1 million for the three months ended March 31, 2024.
Current wording
Gain on sales of mortgage loans decreased to $0.1 million for the quarter ended June 30, 2025 compared to $0.4 million for the quarter ended June 30, 2024, and decreased to $0.2 million for the six months ended June 30, 2025 compared to $0.7 million for the six months ended June 30, 2024. The Company sold mortgage loans totaling $1.7 million and $2.9 million for the three and six months ended June 30, 2025, respectively, compared to $21.7 million and $38.0 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Occupancy expense increased $0.1 million, or 15.0%, to $0.9 million for the three months ended March 31, 2025 compared to $0.8 million for the three months ended March 31, 2024. The increase primarily resulted from the opening of two new branch locations and one new operations facility.
Current wording
Occupancy expense increased $0.2 million, or 33.8%, to $0.9 million for the quarter ended June 30, 2025 compared to $0.7 million for the quarter ended June 30, 2024, and increased $0.4 million, or 23.8%, to $1.9 million for the six months ended June 30, 2025 compared to $1.5 million for the six months ended June 30, 2024. The increase primarily resulted from the opening of two new branch locations and one new operations facility.
Previous wording
Legal, examination and professional fees decreased $0.3 million, or 40.1%, to $0.5 million for the three months ended March 31, 2025 compared to $0.8 million for the three months ended March 31, 2024. The decrease was primarily due to the costs from a settlement agreement from terminating a contract related to a digital account opening project in the prior year quarter.
Current wording
Legal, examination and professional fees decreased $0.1 million, or 16.4%, to $0.4 million for the quarter ended June 30, 2025 compared to $0.5 million for the quarter ended June 30, 2024, and decreased $0.4 million, or 31.0%, to $0.9 million for the six months ended June 30, 2025 compared to $1.3 million for the six months ended June 30, 2024. The decrease was primarily due to the costs from a settlement agreement from terminating a contract related to a digital account opening project in the prior year quarter.
Previous wording
Advertising and promotion decreased $0.1 million, or 39.2%, to $0.2 million for the three months ended March 31, 2025 compared to $0.3 million for the three months ended March 31, 2024. The Company is utilizing internal marketing resources whereas, in the prior year quarter, external resources were used.
Current wording
Advertising and promotion decreased $0.05 million, or 18.8%, to $0.2 million for the quarter ended June 30, 2025 compared to $0.3 million for the quarter ended June 30, 2024, and decreased $0.2 million, or 29.0%, to $0.4 million for the six months ended June 30, 2025 compared to $0.5 million for the six months ended June 30, 2024. The Company is utilizing internal marketing resources whereas, in the prior year quarter, external resources were used.
Previous wording
Postage, printing and supplies increased $0.1 million, or 76.0%, to $0.3 million for the three months ended March 31, 2025 compared to $0.2 million for the three months ended March 31, 2024. The increase was primarily a result of customer mailings related to an account consolidation project.
Current wording
Postage, printing and supplies increased $0.2 million, or 80.0%, to $0.3 million for the quarter ended June 30, 2025 compared to $0.2 million for the quarter ended June 30, 2024, and increased $0.3 million, or 78.2%, to $0.6 million for the six months ended June 30, 2025 compared to $0.4 million for the six months ended June 30, 2024. The increase was primarily a result of customer mailings related to an account consolidation project.
Previous wording
Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements was 18.4% for the three months ended March 31, 2025 compared to 17.8% for the three months ended March 31, 2024. The effective tax rate for each of the three months ended March 31, 2025 and 2024 was lower than the U.S. federal statutory rate of 21% primarily due to tax-free revenues.
Current wording
Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements was consistent at 18.3% for both the three and six months ended June 30, 2025, respectively, compared to 18.2% and 18.0% for the three and six months ended June 30, 2024, respectively. The effective tax rate for each of the three and six months ended June 30, 2025 and 2024 was lower than the U.S. federal statutory rate of 21% primarily due to tax-free revenues.
Previous wording
Interest earned on the loan portfolio is a primary source of interest income for the Company. Net loans represented 76.9% of total assets as of March 31, 2025 compared to 79.1% as of December 31, 2024.
Current wording
Interest earned on the loan portfolio is a primary source of interest income for the Company. Net loans represented 76.8% of total assets as of June 30, 2025 compared to 79.1% as of December 31, 2024.
Previous wording
General reserves are recorded for collectively analyzed loans using a consistent methodology. Two different models are used for calculating the general reserve. The Discounted Cash Flow model considers quantitative peer group historic loss experience, forecasts over the estimated life of the loan pools, industry data, and qualitative or environmental factors, such as: lending policies and procedures; economic conditions; the nature, volume and terms of the portfolio; lending staff and management; past due loans; the loan review system; collateral values; concentrations of credit; and external factors. The Remaining Life model applies a long-term average loss rate calculated using peer data that is adjusted for qualitative or environmental factors such as those previously noted. The model used depends on the loan portfolio segment. Management believes, but there can be no assurance, that these procedures keep management informed of potential problem loans. At March 31, 2025 and December 31, 2024, the ACL on loans included a qualitative adjustment of approximately $10.9 million and $11.2 million, respectively.
Current wording
General reserves are recorded for collectively analyzed loans using a consistent methodology. Two different models are used for calculating the general reserve. The Discounted Cash Flow model considers quantitative peer group historic loss experience, forecasts over the estimated life of the loan pools, industry data, and qualitative or environmental factors, such as: lending policies and procedures; economic conditions; the nature, volume and terms of the portfolio; lending staff and management; past due loans; the loan review system; collateral values; concentrations of credit; and external factors. The Remaining Life model applies a long-term average loss rate calculated using peer data that is adjusted for qualitative or environmental factors such as those previously noted. The model used depends on the loan portfolio segment. Management believes, but there can be no assurance, that these procedures keep management informed of potential problem loans. At June 30, 2025 and December 31, 2024, the ACL on loans included a qualitative adjustment of approximately $10.0 million and $11.2 million, respectively.
Previous wording
Total non-performing assets were $3.1 million, or 0.21% of total loans, at March 31, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024.
Current wording
Total non-performing assets were $5.2 million, or 0.35% of total loans, at June 30, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024.
Previous wording
Total non-accrual loans at March 31, 2025 decreased $0.1 million, or 3.7%, to $2.4 million compared to $2.5 million at December 31, 2024. There were $0.02 million in loans past due 90 days and still accruing interest at March 31, 2025 compared to $0.21 million at December 31, 2024. Other real estate and repossessed assets were $0.7 million and $1.4 million at March 31, 2025 and December 31, 2024, respectively. There were no non-accrual loans added to other real estate owned and repossessed assets during the three months ended March 31, 2025 and 2024.
Current wording
Total non-accrual loans at June 30, 2025 decreased $0.3 million, or 11.1%, to $2.3 million compared to $2.5 million at December 31, 2024. There were $0.51 million in loans past due 90 days and still accruing interest at June 30, 2025 compared to $0.21 million at December 31, 2024. Other real estate and repossessed assets were $2.4 million and $1.4 million at June 30, 2025 and December 31, 2024, respectively. There were no non-accrual loans added to other real estate owned and repossessed assets during the six months ended June 30, 2025 and 2024.
Previous wording
The allowance for credit losses was $21.8 million, or 1.48%, of loans outstanding at March 31, 2025 compared to $22.0 million, or 1.50%, of loans outstanding at December 31, 2024. The ratio of the allowance for credit losses to non-performing loans was 885.01% at March 31, 2025, compared to 802.48% at December 31, 2024.
Current wording
The allowance for credit losses was $21.6 million, or 1.47%, of loans outstanding at June 30, 2025 compared to $22.0 million, or 1.50%, of loans outstanding at December 31, 2024. The ratio of the allowance for credit losses to non-performing loans was 781.24% at June 30, 2025, compared to 802.48% at December 31, 2024.
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Current report — wording carried from elsewhere
Average loans outstanding decreased $59.0 million, or 3.9%, to $1.45 billion for the quarter ended June 30, 2025 compared to $1.51 billion for the quarter ended June 30, 2024. The average yield on loans increased to 5.98% for the quarter ended June 30, 2025 compared to 5.75% for the quarter ended June 30, 2024.