Central Plains Bancshares Inc
For the period ended Mar 31, 2025. Filed Jun 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jun 26, 2025
CPBI$20.80+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-03-31; filed 2024-06-21.
0000950170-24-076246
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-03-31; filed 2025-06-26.
0000950170-25-090434
Item 7. 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 106 previous paragraphs and 100 current paragraphs.
63 unchanged; 27 reworded; 9 added; 14 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 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
Total Deposits. Total deposits increased $41.1 million, or 10.9%, to $416.2 million at March 31, 2025 from $375.1 million at March 31, 2024. The increase in deposits reflected increases in NOW, money market, savings accounts and time deposits, which increased by $43.4 million from $308.3 million at March 31, 2024 to $351.7 million at March 31, 2025.
Current report
General. Net income decreased $105,000, or 2.8%, to $3.7 million for the year ended March 31, 2025, compared to $3.8 million for the year ended March 31, 2024.
Current report
Interest income on securities increased $419,000, or 24.3%, to $2.1 million for the year ended March 31, 2025 from $1.7 million for the year ended March 31, 2024, due to a 67 basis point increase in the average yield from 2.95% for the year ended March
Current report
31, 2024 to 3.62% for the year ended March 31, 2025, and by a $757,000 increase in the average balance of securities to $59.2 million for the year ended March 31, 2025 from $58.4 million for the year ended March 31, 2024.
Current report
Non-Interest Expense. Non-interest expense increased $1.8 million, or 14.1%, to $14.4 million for the year ended March 31, 2025 from $12.6 million for the year ended March 31, 2024. Salaries and employee benefits increased $940,000, or 13.5%, to $7.9 million for the year ended March 31, 2025 from $7.0 million for the year ended March 31, 2024, due to our hiring additional lenders. Additionally, the Company implemented the 2024 Equity Incentive Plan on November 26, 2024, and began recognizing expense associated with this plan in December 2024. Other general and administrative expenses increased $622,000, or 31.3%, to $2.6 million for the year ended March 31, 2025 from $2.0 million for the year ended March 31, 2024, due to a combination of increases in insurance, auditing and consulting fees. These additional fees relate to public company filing requirements and further regulatory compliance consulting.
Current report
In March 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-01, “Compensation—Stock Compensation (Topic 718): Scope Applications of Profits Interests and Similar Awards” (ASU 2024-01). ASU 2024-01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S. GAAP. ASU 2024-01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted. Upon adoption, ASU 2024-01 is not expected to have an impact on the Company’s consolidated balance sheets or consolidated statements of income.
Current report
On November 27, 2023, the FASB issued ASU 2023-07, "Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures", intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Provisions in the amendment include: (1) Requirement that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss (collectively referred to as the "significant expense principle"); (2) Requirement that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss; (3) Requirement that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by ASC 280 in interim periods; (4) Clarification that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity's consolidated financial statements; (5) Requirement that a public entity disclose the title and position of the CODM and explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources; and (6) Requirement that a public entity that has a single reportable segment provide all the disclosures by the amendments in the update and all existing segment disclosures in ASC 280.
Current report
The amendments in the update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. For public business entities, amendments in the update should be applied retrospectively to all periods presented in the financial statements, and upon transition the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted this standard effective January 1, 2024, and it did not have a material impact on the consolidated financial statements.
Current report
On December 14, 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments require that all entities disclose on an annual basis the following information about income taxes paid: (1) The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, and (2) The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments also require that all entities disclose the following information: (1) Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (2) Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The ASU is effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company will adopt this ASU for the reporting period beginning April 1, 2025, and does not expect the amendments to have a material impact on the consolidated financial statements.
Removed paragraphs (14)
Previous report
Represents net income divided by average total assets.
Previous report
Represents net income divided by average equity.
Previous report
Represents net interest income as a percent of average interest-earning assets.
Previous report
Represents non-interest expense divided by the sum of net interest income and non-interest income.
Previous report
Total Deposits. Total deposits decreased $15.9 million, or 4.0%, to $375.1 million at March 31, 2024 from $391.0 million at March 31, 2023. This decrease was the result of a dividend of half the net proceeds received as part of the conversion. As of September 30, 2023, prior to the conversion, the Company held a deposit account at the Association of approximately $38.0 million. Subsequent to the conversion, the balance of the deposit account held at the Association was eliminated during consolidation.
Previous report
General. Net income increased $2.2 million, or 128.4%, to $3.8 million for the year ended March 31, 2024, compared to $1.6 million for the year ended March 31, 2023. This increase was due primarily to $2.9 million in provision for credit losses for the year ended March 31, 2023, while only an $88,000 provision was required for the year ended March 31, 2024. The Association recorded a significant provision for credit losses as the Association recognized a charge-off of $2.4 million in the commercial non-real estate category during 2022.
Previous report
Interest income on securities increased $370,000, or 27.3%, to $1.7 million for the year ended March 31, 2024 from $1.4 million for the year ended March 31, 2023, due to an 86 basis point increase in the average yield from 2.09% for the year ended March 31, 2023 to 2.95% for the year ended March 31, 2024. The increase was offset by a $6.3 million decrease in the average balance of securities to $58.4 million for the year ended March 31, 2024 from $64.7 million for the year ended March 31, 2023. This decrease in the average balance of securities is attributed to paydowns received over the period.
Previous report
Provision for Credit Losses. Effective April 1, 2023, we adopted the CECL accounting methodology. As a result, we now determine periodic estimates of lifetime expected credit losses on loans and unfunded commitments and recognize the expected credit losses as allowances for credit losses. Previously, provisions for loan losses were charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the consolidated financial statements.
Previous report
We had charge-offs of $6,000 and recoveries of $72,000 for the year ended March 31, 2024, compared to charge-offs of $2.5 million and recoveries of $67,000 for the year ended March 31, 2023.
Previous report
Non-Interest Expense. Non-interest expense increased $1.8 million, or 16.3%, to $12.6 million for the year ended March 31, 2024 from $10.8 million for the year ended March 31, 2023. Salaries and employee benefits increased $1.3 million, or 24.0%, to $6.9 million for the year ended March 31, 2024 from $5.6 million for the year ended March 31, 2023, due to the reversal of the executive bonus accrual in November 2022. Executive bonus accruals are calculated monthly based on a forecast of year-end earnings. However, due to a significant provision for credit losses the Association recognized during 2022, it was determined that no executive bonus payouts would occur for the year ending March 31, 2023. Additionally, the Association entered into an Employee Stock Ownership Plan at the closing of the conversion, which resulted in additional ESOP related expenses of $161,000 during the year ended March 31, 2024.
Previous report
Federal deposit insurance premiums increased $70,000, or 40.9%, to $241,000 for the year ended March 31, 2024 from $171,000 for the year ended March 31, 2023, due to a combination of an increase in deposits and an increase in federal deposit insurance premium rates.
Previous report
The Company adopted ASC 326 and all related subsequent amendments thereto effective on April 1, 2023 using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The transition adjustment for the adoption of CECL resulted in an increase in the allowance for credit losses on loans of $299,000, which is presented as a reduction to net loans outstanding, and the establishment of an allowance for credit losses on unfunded loan commitments of $210,000, which is recorded within accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition. The Company recorded a net decrease to retained earnings of $402,000, as of April 1, 2023, for the cumulative effect of adopting CECL, which reflects the transition adjustments noted above, net of the applicable deferred tax assets recorded. Results for reporting periods beginning after April 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with previously applicable accounting standards (“Incurred Loss”).
Previous report
The following table illustrates the impact of ASU 2016-13 adoption:
Previous report
In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the accounting guidance and related disclosures for troubled debt restructurings (TDRs) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and requiring an entity to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The Company adopted the amendments in this update on April 1, 2023, and is applying the amendments prospectively with the exception of the recognition and measurement of existing TDRs for which the entity has elected to apply a modified retrospective transition method.
Reworded paragraphs (27)
Previous wording
This discussion and analysis reflects our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the consolidated financial statements that appear elsewhere in this annual report. You should read the information in this section in conjunction with the business and financial information regarding Central Plains Bancshares provided in this document.
Current wording
This discussion and analysis reflects our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition as of March 31, 2025, and our results of operations for years ended March 31, 2025 and 2024. The information in this section has been derived from the consolidated financial statements that appear elsewhere in this annual report. You should read the information in this section in conjunction with the business and financial information regarding Central Plains Bancshares provided in this document.
Previous wording
Management monitors securities for other-than-temporary impairment. If we intend to sell the security or will more likely than not be required to sell the security before recovery of the entire amortized cost basis, then an other-than-temporary impairment has occurred. However, even if we do not intend to sell the security and will not likely be required to sell the security before recovery of its entire amortized cost basis, we must evaluate expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, the credit component of the impairment is recorded as a loss in the statement of income and the non-credit component is recognized through other comprehensive income (loss).
Current wording
Management monitors securities for impairment. If we intend to sell the security or will more likely than not be required to sell the security before recovery of the entire amortized cost basis, then an impairment has occurred. However, even if we do not intend to sell the security and will not likely be required to sell the security before recovery of its entire amortized cost basis, we must evaluate expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, the credit component of the impairment is recorded as a loss in the statement of income and the non-credit component is recognized through other comprehensive income (loss).
Previous wording
The discount rate is determined by matching the anticipated defined pension plan cash flows to the spot rates of a high-quality corporate bond index/yield curve and solving for the single equivalent discount rate which would produce the same present value. This methodology is applied consistently from year to year. The discount rate utilized in 2024 was 5.20%.
Current wording
The discount rate is determined by matching the anticipated defined pension plan cash flows to the spot rates of a high-quality corporate bond index/yield curve and solving for the single equivalent discount rate which would produce the same present value. This methodology is applied consistently from year to year. The discount rate utilized in 2025 was 5.55%.
Previous wording
The weighted average expected long-term rate of return on plan assets is determined based on the current and anticipated future mix of assets in the plan. The assets currently consist of equity securities, U.S. Government and Government-agency debt securities, and real estate investments. The weighted average expected long-term rate of return on plan assets utilized for 2023 was 5.00%. We anticipate using a weighted average expected long-term rate of return on plan assets of 5.40% in 2024.
Current wording
The weighted average expected long-term rate of return on plan assets is determined based on the current and anticipated future mix of assets in the plan. The assets currently consist of equity securities, U.S. Government and Government-agency debt securities, and real estate investments. The weighted average expected long-term rate of return on plan assets utilized for 2024 was 5.40%. We anticipate using a weighted average expected long-term rate of return on plan assets of 5.25% in 2025.
Previous wording
The assumed rate of annual compensation increases of 3.50% in 2024 reflected expected trends in salaries and the employee base.
Current wording
The assumed rate of annual compensation increases of 4.00% in 2025 reflected expected trends in salaries and the employee base.
Previous wording
Total Assets. Total assets increased $25.5 million, or 5.8%, to $463.3 million at March 31, 2024 from $437.8 million at March 31, 2023. The increase was primarily due to a $26.1 million, or 7.5%, increase in net loans.
Current wording
Total Assets. Total assets increased $45.4 million, or 9.8%, to $508.7 million at March 31, 2025 from $463.3 million at March 31, 2024. The increase was primarily due to a $22.4 million, or 6.0%, increase in net loans.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents decreased $5.1 million, or 30.8%, to $11.5 million at March 31, 2024 from $16.6 million at March 31, 2023. This decrease was primarily due to an increase in loan funding and a decrease in interest bearing deposits in other banks, partially offset by cash received in connection with the initial public offering of the Company's common stock. We regularly review our liquidity position based on alternative uses of available funds as well as market conditions.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $17.2 million, or 150.4%, to $28.7 million at March 31, 2025 from $11.5 million at March 31, 2024. This increase was primarily due to proceeds from principal payment on securities and an increase in deposits. We regularly review our liquidity position based on alternative uses of available funds as well as market conditions.
Previous wording
Investment Securities Available for Sale. Securities available-for-sale increased $2.5 million, or 4.3%, to $60.4 million at March 31, 2024 from $57.8 million at March 31, 2023. We purchased $11.6 million in securities, received principal payments of $9.0 million, had net premium amortization and discount accretion of $160,000 and had an increase in the unrealized gain on the securities portfolio of $144,000 during the year ended March 31, 2024.
Current wording
Investment Securities Available for Sale. Securities available-for-sale decreased $1.0 million, or 1.6%, to $59.4 million at March 31, 2025 from $60.4 million at March 31, 2024. We purchased $6.2 million in securities, received principal payments of $8.3 million, had net premium amortization and discount accretion of $71,000 and had a decrease in the unrealized loss on the securities portfolio of $1.2 million during the year ended March 31, 2025.
Previous wording
Gross Loans. Gross loans held for investment increased $26.5 million, or 7.5%, to $380.2 million at March 31, 2024 from $353.7 million at March 31, 2023. We experienced increases in all loan categories except for construction real estate loans. The largest increase was in commercial real estate loans, which increased $20.9 million, or 20.4%, to $123.3 million from $102.4 at March 31, 2023.
Current wording
Gross Loans. Gross loans held for investment increased $22.0 million, or 5.8%, to $402.2 million at March 31, 2025 from $380.2 million at March 31, 2024. We experienced increases in two loan categories, residential real estate and agriculture loans. The largest increase was in agriculture loans, which increased $23.1 million, or 117.50%, to $42.8 million from $19.7 at March 31, 2024.
Previous wording
Non-interest bearing deposits decreased $6.3 million, or 8.7%, to $66.9 million at March 31, 2024 from $73.2 million at March 31, 2023. Time certificates of deposit and individual retirement accounts increased $27.8 million, or 32.5%, to $113.4 million at March 31, 2024 from $85.6 million at March 31, 2023, as we believe that long-term customers have sought higher-yield deposits as a result of recent increases in market interest rates. We also had brokered deposits of $8.1 million at March 31, 2023 that are included in the $85.6 million total.
Current wording
Non-interest bearing deposits decreased $2.4 million, or 3.6%, to $64.5 million at March 31, 2025 from $66.9 million at March 31, 2024. We believe that long-term customers have continued to seek higher-yield deposits in the current market interest rate environment. We also had brokered deposits of $7.3 million at March 31, 2025 that are included in the $94.1 million total under other time deposits.
Previous wording
Total Equity. Total equity increased $39.6 million, or 102.4% to $78.3 million at March 31, 2024 from $38.7 million at March 31, 2023. This increase in total equity is the result of the net proceeds of the stock offering, less unallocated shares of the ESOP. Net income of $3.8 million for the period ended March 31, 2024 and other comprehensive income of $34,000, was offset by a reduction in equity of $402,000 resulting from increasing our allowance for credit losses in connection with our adopting the CECL accounting methodology effective April 1, 2023.
Current wording
Total Equity. Total equity increased $5.0 million, or 6.5% to $83.3 million at March 31, 2025 from $78.3 million at March 31, 2024. This increase in total equity is the result of net income of $3.7 million for the period ended March 31, 2025 and other comprehensive income of $1.4 million.
Previous wording
Interest and Dividend Income. Interest and dividend income increased $4.9 million, or 29.9%, to $21.0 million for the year ended March 31, 2024 from $16.1 million for the year ended March 31, 2023. The increase was due primarily to an increase in interest income on loans, which is our primary source of interest income, due to increases in market interest rates.
Current wording
Interest and Dividend Income. Interest and dividend income increased $3.7 million, or 17.8%, to $24.7 million for the year ended March 31, 2025 from $21.0 million for the year ended March 31, 2024. The increase was due primarily to an increase in interest income on loans, which is our primary source of interest income, due to increases in market interest rates.
Previous wording
Interest income on loans increased $4.3 million, or 29.3%, to $19.0 million for the year ended March 31, 2024 from $14.7 million for the year ended March 31, 2023. The average balance of loans increased $21.2 million, or 6.2%, to $362.0 million for the year ended March 31, 2024 from $340.8 million for the year ended March 31, 2023. The increase is due to our continued focus on growing our loan portfolio consistent with maintaining asset quality. Our yield on loans increased 94 basis points to 5.24% for the year ended March 31, 2024 from 4.30% for the year ended March 31, 2023. The increase in yield was due to increases in market interest rates.
Current wording
Interest income on loans increased $3.2 million, or 17.3%, to $22.2 million for the year ended March 31, 2025 from $19.0 million for the year ended March 31, 2024. The average balance of loans and loan balances increased $29.3 million, or 8.1%, to $391.3 million for the year ended March 31, 2025 from $362.0 million for the year ended March 31, 2024. The increase is due to our continued focus on growing our loan portfolio consistent with maintaining asset quality. Our yield on loans increased 44 basis points to 5.68% for the year ended March 31, 2025 from 5.24% for the year ended March 31, 2024. The increase in yield was due to increases in market interest rates.
Previous wording
Interest Expense. Interest expense increased $3.8 million, or 136.8%, to $6.5 million for the year ended March 31, 2024 compared to $2.7 million for the year ended March 31, 2023, due primarily to increases in the average balance and higher costs of interest-bearing liabilities.
Current wording
Interest Expense. Interest expense increased $1.7 million, or 26.6%, to $8.2 million for the year ended March 31, 2025 compared to $6.5 million for the year ended March 31, 2024, due primarily to increases in the average balance and higher costs of interest-bearing liabilities.
Previous wording
Interest expense on deposits increased $4.0 million, or 168.4%, to $6.4 million for the year ended March 31, 2024 compared to $2.4 million for the year ended March 31, 2023. The increase was due to a 143 basis point increase in the average cost of deposits to 2.24% for the year ended March 31, 2024 from 0.81% for the year ended March 31, 2023. The increase in the average cost of deposits was due to the higher interest rate environment and an increase in the average balances of certificates of deposit of $46.5 million to $86.8 million for the year ended March 31, 2024 from $40.3 million for the year ended March 31, 2023.
Current wording
Interest expense on deposits increased $1.7 million, or 27.1%, to $8.1 million for the year ended March 31, 2025 compared to $6.4 million for the year ended March 31, 2024. The increase was due to a 32 basis point increase in the average cost of deposits to 2.56% for the year ended March 31, 2025 from 2.24% for the year ended March 31, 2024. The increase in the average cost of deposits was due to the higher interest rate environment and an increase in the average balances of certificates of deposit, NOW accounts, savings accounts and money market accounts. The average balances of certificates of deposit increased $15.0 million, or 17.2% to $101.8 million for the year ended March 31, 2025 from $86.8 million for the year ended March 31, 2024. The average balances of NOW accounts increased $9.6 million, or 8.1% to $128.5 million for the year ended March 31, 2025 from $118.9 million for the year ended March 31, 2024. The average balances of savings accounts increased $1.4 million, or 3.5% to $42.9 million for the year ended March 31, 2025 from $41.5 million for the year ended March 31, 2024. The average balances of money market accounts increased $5.7 million, or 26.4% to $27.5 million for the year ended March 31, 2025 from $21.8 million for the year ended March 31, 2024.
Previous wording
Interest expense on FHLB borrowings decreased $257,000, or 71.0%, to $105,000 for the year ended March 31, 2024 compared to $362,000 for the year ended March 31, 2023. The decrease was due to a decrease in the average balance of borrowings of $9.5 million, or 83.1%, to $2.0 million for the year ended March 31, 2024 compared to $11.5 million for the year ended March 31, 2023.
Current wording
Interest expense on FHLB borrowings decreased $6,000, or 5.7%, to $99,000 for the year ended March 31, 2025 compared to $105,000 for the year ended March 31, 2024. The decrease was due to a decrease in the average balance of borrowings of $199,000, or 10.2%, to $1.8 million for the year ended March 31, 2025 compared to $2.0 million for the year ended March 31, 2024.
Previous wording
Net Interest Income. Net interest income increased $3.9 million, or 36.7%, to $14.4 million for the year ended March 31, 2024 compared to $10.5 million for the year ended March 31, 2023.
Current wording
Net Interest Income. Net interest income increased $1.9 million, or 13.2%, to $16.3 million for the year ended March 31, 2025 compared to $14.4 million for the year ended March 31, 2024.
Previous wording
Our interest rate spread decreased 43 basis points to 2.61% for the year ended March 31, 2024, compared to 3.04% for the year ended March 31, 2023, and our net interest margin increased nine basis points to 3.36% for the year ended March 31, 2024 compared to 3.27% for the year ended March 31, 2023.
Current wording
Our interest rate spread increased 15 basis points to 2.76% for the year ended March 31, 2025, compared to 2.61% for the year ended March 31, 2024, and our net interest margin increased 20 basis points to 3.56% for the year ended March 31, 2025 compared to 3.36% for the year ended March 31, 2024.
Previous wording
We recorded a provision for credit losses of $88,000 for the year ended March 31, 2024 compared to a provision for loan losses of $2.9 million for the year ended March 31, 2023. In addition, we recognized a reduction in beginning retained earnings of $402,000 related to an increase in our allowance for credit losses in connection with our adoption of CECL. Our allowance for credit losses was $5.9 million at March 31, 2024 compared to an allowance for loan losses of $5.4 million at March 31, 2023. The ratio of our allowance for credit/loan losses to total loans was 1.54% at March 31, 2024 compared to 1.53% at March 31, 2023.
Current wording
Provision for Credit Losses. We recorded a provision for credit losses of $200,000 for the year ended March 31, 2025 compared to a provision for credit losses of $88,000 for the year ended March 31, 2024. Our allowance for credit losses was $5.4 million at March 31, 2025 compared to an allowance for credit losses of $5.9 million at March 31, 2024. The ratio of our allowance for credit losses to total loans was 1.35% at March 31, 2025 compared to 1.54% at March 31, 2024.
Previous wording
To the best of our knowledge, we have recorded all lifetime expected credit losses on loans and unfunded commitments at March 31, 2024. However, future changes could result in material increases in our provision for credit losses. In addition, the OCC, as an integral part of its examination process, will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.
Current wording
We will continue to assess and evaluate the estimated future credit loss impact of current market conditions in subsequent reporting periods, which will be highly dependent on credit quality, macroeconomic forecasts and conditions, as well as the composition of our loan and available-for-sale securities portfolios. In addition, the OCC, as an integral part of its examination process, will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.
Previous wording
Non-Interest Income. Non-interest income increased $575,000, or 25.2%, due to our increase in loan sales during fiscal year 2024, to $2.9 million for the year ended March 31, 2024 compared to $2.3 million for the year ended March 31, 2023. Service charges on deposit accounts increased $97,000, or 14.4%, to $769,000 for the year ended March 31, 2024 compared to $672,000 for the year ended March 31, 2023, primarily due to increases in overdraft income and debit card usage. Other income increased $296,000, or 177.2%, to $463,000 for the year ended March 31, 2024 compared to $167,000 for the year ended March 31, 2023, due primarily to the recovery of loans previously written off on the books of an acquired institution. Gain on sale of loans increased $98,000, or 101.0%, to $195,000 for the year ended March 31, 2024 from $97,000 for the year ended March 31, 2023.
Current wording
Non-Interest Income. Non-interest income decreased $243,000, or 8.5%, to $2.6 million for the year ended March 31, 2025 compared to $2.9 million for the year ended March 31, 2024. Service charges on deposit accounts increased $143,000, or 18.6%, to $912,000 for the year ended March 31, 2025 compared to $769,000 for the year ended March 31, 2024, primarily due to increases in overdraft income and debit card usage. Other income decreased $385,000, or 83.2%, to $78,000 for the year ended March 31, 2025 compared to $463,000 for the year ended March 31, 2024, due primarily to the recovery of loans previously written off on the books of an acquired institution for year ending March 31, 2024. Gain on sale of loans increased $20,000, or 10.3%, to $215,000 for the year ended March 31, 2025 from $195,000 for the year ended March 31, 2024.
Previous wording
Income Tax Expense. Income tax expense increased $560,000, or 176.7%, to $877,000 for the year ended March 31, 2024 from $317,000 for the year ended March 31, 2023. The effective tax rate for the years ended March 31, 2024 and 2023 were 18.9% and 16.2%, respectively. The most significant difference between our effective tax rate and statutory rates results from investment partnership tax credits.
Current wording
Income Tax Expense. Income tax expense decreased $8,000, or 0.9%, to $869,000 for the year ended March 31, 2025 from $877,000 for the year ended March 31, 2024. The effective tax rate for the years ended March 31, 2025 and 2024 were 19.2% and 18.9%, respectively. The most significant difference between our effective tax rate and statutory rates results from investment partnership tax credits.
Previous wording
The table above indicates that at March 31, 2024, we would have experienced a 1.27% decrease in NII in the event of a gradual, one-year 200 basis point increase in market interest rates, and a 0.61% increase in NII in the event of a gradual, one-year 200 basis point decrease in market interest rates.
Current wording
The table above indicates that at March 31, 2025, we would have experienced a 0.77% increase in NII in the event of a gradual, one-year 200 basis point increase in market interest rates, and a 0.79% decrease in NII in the event of a gradual, one-year 200 basis point decrease in market interest rates.
Previous wording
The table above indicates that at March 31, 2024, we would have experienced a 2.47% decrease in MVE in the event of an instantaneous parallel 200 basis point increase in the market interest rates and a 15.40% decrease in MVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Current wording
The table above indicates that at March 31, 2025, we would have experienced a 3.35% increase in MVE in the event of an instantaneous parallel 200 basis point increase in the market interest rates and a 13.87% decrease in MVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Previous wording
Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB. The Association had remaining availability for FHLB borrowings of approximately $40.1 million at March 31, 2024. The FHLB has sole discretion to deny additional advances. Additionally, the Association had the capacity to borrow $5.0 million from a private bankers’ bank at March 31, 2024. We could significantly increase our borrowing capacity from the FHLB Topeka if we pledged additional assets as security. We also have the ability to participate in the Federal Reserve Board's Bank Term Funding Program if needed.
Current wording
Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB. The Association had remaining availability for FHLB borrowings of approximately $40.5 million at March 31, 2025. The FHLB has sole discretion to deny additional advances. Additionally, the Association had the capacity to borrow $5.0 million from a private bankers’ bank at March 31, 2025. We could significantly increase our borrowing capacity from the FHLB Topeka if we pledged additional assets as security. We also have the ability to participate in the Federal Reserve Board's Bank Term Funding Program if needed.
Previous wording
For the year ended March 31, 2023, cash flows from operating, investing, and financing activities resulted in a net decrease in cash and cash equivalents of $2.4 million. Net cash provided by operating activities amounted to $4.5 million. Net cash used in investing activities amounted to $32.9 million, primarily due to a net increase in loans of $44.6 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $11.9 million. Net cash provided by financing activities amounted to $26.0 million, primarily due to a net increase in deposits of $26.0 million. For further information, see the statements of cash flows contained in the consolidated financial statements.
Current wording
For the year ended March 31, 2025, cash flows from operating, investing, and financing activities resulted in a net increase in cash and cash equivalents of $17.2 million. Net cash provided by operating activities amounted to $4.5 million, primarily due to net income of $3.7 million. Net cash used in investing activities amounted to $27.9 million, primarily due to a net increase in loans of $22.6 million and the purchase of available-for-sale investment securities of $6.2 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $8.3 million. Net cash provided by financing activities amounted to $40.7 million, consisting primarily of the activity in deposit accounts.
Previous wording
Off-Balance Sheet Arrangements. At March 31, 2024, we had $41.7 million of unfunded loan commitments, $8.0 million of which represents the balance of remaining funds to be disbursed on construction loans in process. Certificates of deposit (excluding retirement account deposits) that are scheduled to mature in less than one year from March 31, 2024 totaled $92.2 million at March 31, 2024. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Topeka advances or our private bankers’ bank line of credit or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Current wording
Off-Balance Sheet Arrangements. At March 31, 2025, we had $45.0 million of unfunded loan commitments, $12.8 million of which represents the balance of remaining funds to be disbursed on construction loans in process. Certificates of deposit (excluding retirement account deposits) that are scheduled to mature in less than one year from March 31, 2025 totaled $86.7 million at March 31, 2025. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Topeka advances or our private bankers’ bank line of credit or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The following tables set forth selected historical financial and other data at the dates and for the fiscal years presented. The information at and for the fiscal years ended March 31, 2025 and 2024 is derived in part from, and should be read together with, the audited consolidated financial statements and related notes included in this Annual Report on Form 10-K.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Represents the difference between the weighted average yield on interesting-earning assets and the weighted average cost of interest-bearing liabilities.
Previous report — wording carried elsewhere
In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” also known as Current Expected Credit Losses, or CECL. ASU 2016-13 was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date to enhance the decision-making process. The CECL model utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity securities, and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. For available for-sale securities where fair value is less than cost, credit-related impairment, if any, will be recognized in an allowance for credit losses and adjusted each period for changes in expected credit risk. This model replaced the previous existing impairment models, which generally required that a loss be incurred before it is recognized.