Central Plains Bancshares, Inc.

Previous wording

Management’s discussion and analysis of financial condition and results of operations at December 31, 2024 and March 31, 2024 and for the three and nine months ended December 31, 2024 and 2023 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Current wording

Management’s discussion and analysis of financial condition and results of operations at June 30, 2025 and March 31, 2025 and for the three months ended June 30, 2025 and 2024 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Previous wording

Cash and cash equivalents. Cash and cash equivalents decreased $4.9 million, or 42.0%, to $6.6 million at December 31, 2024 from $11.5 million at March 31, 2024. This decrease was primarily due to an increase in loan funding and construction of two new branch locations, partially offset by an increase in total deposits. We continue to monitor our liquidity position based on alternative uses of available funds and prevailing market conditions.

Current wording

Cash and cash equivalents. Cash and cash equivalents decreased $20.8 million, or 72.4%, to $7.9 million at June 30, 2025 from $28.7 million at March 31, 2025. This decrease was primarily due to an increase in loan funding and a decrease in total deposits. We continue to monitor our liquidity position based on alternative uses of available funds and prevailing market conditions.

Previous wording

Investment Securities Available for Sale. Securities available-for-sale decreased $3.4 million, or 5.5%, to $57.0 million at December 31, 2024 from $60.4 million at March 31, 2024. During the nine-month period, we purchased $3.0 million in securities, received $6.5 million in principal payments, and recorded net premium amortization and discount accretion of $62,000. Additionally, net unrealized gains on the securities portfolio increased by $222,000.

Current wording

Investment Securities Available for Sale. Securities available-for-sale increased $1.7 million, or 2.9%, to $61.1 million at June 30, 2025 from $59.4 million at March 31, 2025. During the three-month period, we purchased $3.4 million in securities and received $2.1 million in principal payments. Additionally, net unrealized losses on the securities portfolio decreased by $400,000.

Previous wording

Loans. Loans increased $24.7 million, or 6.5%, to $404.9 million at December 31, 2024 from $380.2 million at March 31, 2024. This growth was driven by increases across all loan categories, except for commercial non-real estate loans and other consumer loans. The largest increase occurred in agriculture loans, which increased $24.4 million, or 123.9%, to $44.1 million at December 31, 2024, from $19.7 million at March 31, 2024, which was primarily due to additional agriculture lenders hired by the Association.

Current wording

Gross Loans. Loans increased $11.0 million, or 2.7%, to $413.2 million at June 30, 2025 from $402.2 million at March 31, 2025. This growth was driven by increases across all loan categories, except for land development and SIDs and other consumer loans. The largest increase occurred in agriculture loans, which increased $4.9 million, or 11.3%, to $47.7 million at June 30, 2025, from $42.8 million at March 31, 2025, which was primarily due to additional agriculture business sought by the Association.

Previous wording

Premises and Equipment, Net. Premises and equipment increased $4.4 million, or 75.1%, to $10.3 million at December 31, 2024 from $5.9 million at March 31, 2024. The increase is primarily due to the construction of two new branch offices in Lincoln and Hastings, Nebraska. These new branches are expected to enhance our service coverage in these areas and support growth in customer engagement. The projects are on track for completion in the second quarter of 2025.

Current wording

Premises and Equipment, Net. Premises and equipment increased $500,000, or 3.7%, to $13.4 million at June 30, 2025 from $12.9 million at March 31, 2025. The increase is primarily due to the final construction billing of two new branch offices in Lincoln and Hastings, Nebraska. These new branches are expected to enhance our service coverage in these areas and support growth in customer engagement. As of June 30, 2025, both full service locations were open to the public.

Previous wording

Total Deposits. Total deposits increased $19.2 million, or 5.1%, to $394.3 million at December 31, 2024 from $375.1 million at March 31, 2024. The increase was primarily driven by higher balances in time deposits and money market accounts, as the Association offered a competitive certificate of deposit special during the nine-month period ended December 31, 2024. Management continues to actively monitor deposit balances and interest rates to maintain adequate liquidity.

Current wording

Total Deposits. Total deposits decreased $15.6 million, or 3.7%, to $400.6 million at June 30, 2025 from $416.2 million at March 31, 2025. This decrease was primarily driven by funds leaving the Association that were held in a 1031 exchange. Management continues to actively monitor deposit balances and interest rates to maintain adequate liquidity.

Previous wording

Noninterest-bearing deposits increased $922,000, or 1.4%, to $67.8 million at December 31, 2024 from $66.9 million at March 31, 2024. Time certificates of deposit increased $3.4 million, or 3.1%, to $116.8 million from $113.4 million, as long-term customers sought higher-yield deposit options in response to prior increases in market interest rates. Additionally, the Association held $7.3 million in brokered time deposits at December 31, 2024, whereas no brokered time deposits were held at March 31, 2024.

Current wording

Noninterest-bearing deposits decreased $500,000, or 0.8%, to $64.0 million at June 30, 2025 from $64.5 million at March 31, 2025. Time certificates of deposit increased $3.5 million, or 2.9%, to $126.2 million from $122.7 million, as long-term customers sought higher-yield deposit options in response to prior increases in market interest rates. Additionally, the Association held $7.3 million in brokered time deposits at June 30, 2025 and March 31, 2025.

Previous wording

Borrowings. The Company had no outstanding borrowings at December 31, 2024, and March 31, 2024. While borrowings have been limited in recent periods, the Association has generally utilized the increase in deposits to fund operations. However, management remains prepared to access FHLB advances if necessary to support additional loan funding.

Current wording

Borrowings. Outstanding borrowings increased to $8.5 million at June, 30 2025. We had no outstanding borrowings at March 31, 2025. While borrowings have been limited in recent periods, the Association has generally utilized the increase in deposits to fund operations. However, management remains prepared to access FHLB advances if necessary to support additional loan funding.

Previous wording

Stockholders' Equity. Stockholders' equity increased $3.0 million, or 3.8% to $81.3 million at December 31, 2024 from $78.3 million at March 31, 2024. This increase was primarily driven by net income of $2.8 million, ESOP shares committed to be released of $118,000, a decrease in the unrealized loss position on securities valuations offset by the repurchase of outstanding shares of the Company's common stock repurchase program. The decrease in the unrealized loss position of $176,000, net of the related tax effect, is due to changes in market interest rates during the nine-month period ended December 31, 2024.

Current wording

Stockholders' Equity. Stockholders' equity increased $1.3 million, or 1.6% to $84.6 million at June 30, 2025 from $83.3 million at March 31, 2025. This increase was primarily driven by net income of $988,000, a decrease in the unrealized loss position on securities valuations offset by the repurchase of outstanding shares of the Company's common stock repurchase program. The decrease in the unrealized loss position of $352,000, net of the related tax effect, is due to changes in market interest rates during the three-month period ended June 30, 2025.

Previous wording

On October 22, 2024, the Company adopted a program to repurchase up to 200,000 shares, or 5%, of its then outstanding common stock. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Securities and Exchange Commission and other applicable legal requirements. 190,614 shares remain available to be repurchased under the program as of December 31, 2024. As of December 31, 2024, the Company has repurchased 9,386 shares with a weighted average price of $14.59, for a total value of $137,000.

Current wording

On October 22, 2024, the Company adopted a program to repurchase up to 200,000 shares, or 5%, of its then outstanding common stock. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. Open market purchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Securities and Exchange Commission and other applicable legal requirements. 154,397 shares remain available to be repurchased under the program as of June 30, 2025. During the three months ended June 30, 2025, the Company repurchased 17,464 shares with a weighted average price of $14.74, for a total value of $260,000.

Previous wording

Comparison of Operating Results for the Three and Nine Months Ended December 31, 2024 and 2023

Current wording

Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024

Previous wording

General. For the three months ended December 31, 2024, we had net income of $951,000, compared to net income of $937,000 for the three months ended December 31, 2023. For the nine months ended December 31, 2024, we had net income of $2.8 million, compared to net income of $2.9 million for the nine months ended December 31, 2023.

Current wording

General. For the three months ended June 30, 2025, we had net income of $988,000, compared to net income of $903,000 for the three months ended June 30, 2024.

Previous wording

Interest and Dividend Income. Interest and dividend income increased $805,000, or 14.8%, to $6.2 million for the three months ended December 31, 2024 from $5.4 million for the three months ended December 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 and loan growth.

Current wording

Interest and Dividend Income. Interest and dividend income increased $670,000, or 11.3%, to $6.6 million for the three months ended June 30, 2025 from $5.9 million for the three months ended June 30, 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 and loan growth.

Previous wording

Interest income on loans increased $756,000, or 15.5%, to $5.6 million for the three months ended December 31, 2024 from $4.9 million for the three months ended December 31, 2023. The average balance of loans increased $28.7 million, or 7.8%, to $396.6 million for the three months ended December 31, 2024 from $367.9 million for the three months ended December 31, 2023. The increase was primarily due to our continued focus on growing our loan portfolio consistent with maintaining asset quality. Our yield on loans increased 38 basis points to 5.70% for the three months ended December 31, 2024 from 5.32% for the three months ended December 31, 2023. The increase in yield was due to increases in market interest rates over the period.

Current wording

Interest income on loans increased $591,000, or 11.1%, to $5.9 million for the three months ended June 30, 2025 from $5.3 million for the three months ended June 30, 2024. The average balance of loans increased $25.2 million, or 6.7%, to $403.6 million for the three months ended June 30, 2025 from $378.4 million for the three months ended June 30, 2024. The increase was primarily due to our continued focus on growing our loan portfolio consistent with maintaining asset quality. Our yield on loans increased 24 basis points to 5.85% for the three months ended June 30, 2025 from 5.61% for the three months ended June 30, 2024. The increase in yield was due to increases in market interest rates over the period.

Previous wording

Interest Expense. Interest expense increased $421,000, or 24.9%, to $2.1 million for the three months ended December 31, 2024 compared to $1.7 million for the three months ended December 31, 2023, due to higher costs of interest-bearing liabilities.

Current wording

Interest Expense. Interest expense increased $145,000, or 7.5%, to $2.1 million for the three months ended June 30, 2025 compared to $1.9 million for the three months ended June 30, 2024, due to an increase in total interest bearing deposits.

Previous wording

Net Interest Income. Net interest income before provision for credit losses increased $384,000, or 10.2%, to $4.1 million for the three months ended December 31, 2024 compared to $3.7 million for the three months ended December 31, 2023.

Current wording

Net Interest Income. Net interest income before provision for credit losses increased $523,000, or 13.2%, to $4.5 million for the three months ended June 30, 2025 compared to $4.0 million for the three months ended June 30, 2024.

Previous wording

Our interest rate spread decreased three basis points to 2.78% for the three months ended December 31, 2024, compared to 2.81% for the three months ended December 31, 2023, and our net interest margin increased eight basis points to 3.55% for the three months ended December 31, 2024 compared to 3.47% for the three months ended December 31, 2023.

Current wording

Our interest rate spread increased 28 basis points to 3.05% for the three months ended June 30, 2025, compared to 2.77% for the three months ended June 30, 2024, and our net interest margin increased 22 basis points to 3.75% for the three months ended June 30, 2025 compared to 3.53% for the three months ended June 30, 2024.

Previous wording

Provision for Credit Losses. During the three months ended December 31, 2024, we recorded a provision for credit losses of $57,000. During the three months ended December 31, 2023, we recorded a provision for credit losses of $191,000.

Current wording

Provision for Credit Losses. During the three months ended June 30, 2025, we recorded a reversal of provision for credit losses of $3,000 and $5,000 for the three months ended June 30, 2024.

Previous wording

During the nine months ended December 31, 2024, we recorded a provision for credit losses of $56,000. During the nine months ended December 31, 2023, we recorded a provision for credit losses of $99,000. 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.

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

Noninterest expense increased $248,000, or 7.5% to $3.5 million for the three months ended December 31, 2024 from $3.3 million for the three months ended December 31, 2023. Other general and administrative expenses increased $180,000, or 38.3%, to $650,000 for the three months ended December 31, 2024 from $470,000 for the three months ended December 31, 2023, due to a combination of increases in insurance, auditing and consulting fees. These additional fees relate to public filing requirements and further regulatory compliance consulting.

Current wording

Noninterest expense increased $446,000, or 12.8% to $3.9 million for the three months ended June 30, 2025 from $3.5 million for the three months ended June 30, 2024. Other general and administrative expenses increased $59,000, or 8.0%, to $792,000 for the three months ended June 30, 2025 from $733,000 for the three months ended June 30, 2024, due to a combination of increases in insurance, auditing and consulting fees. These additional fees relate to public filing requirements and further regulatory compliance consulting.

Previous wording

Noninterest expense increased $1.4 million, or 15.5% to $10.5 million for the nine months ended December 31, 2024 from $9.1 million for the nine months ended December 31, 2023. Salaries and employee benefits expense increased $638,000, or 12.5%, to $5.7 million for the nine months ended December 31, 2024 from $5.1 million for the nine months ended December 31, 2023, due to additional lenders hired by the Association. 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 $713,000, or 56.1%, to $2.0 million for the nine months ended December 31, 2024 from $1.3 million for the nine months ended December 31, 2023, due to a combination of increases in insurance, auditing and consulting fees. These additional fees relate to public filing requirements and further regulatory compliance consulting.

Current wording

Additionally, the Company implemented the 2024 Equity Incentive Plan on November 26, 2024, and began recognizing expense associated with this plan. Due to the implementation of the equity incentive plan, salaries and employee benefits expenses increased $185,000 during the three months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Income Tax Expense. We recognized income tax expense of $240,000 for the three months ended December 31, 2024 and income tax expense of $218,000 for the three months ended December 31, 2023, respectively, resulting in effective rates of 20.2% for the three months ended December 31, 2024 and 18.9% for the three months ended December 31, 2023.

Current wording

Income Tax Expense. We recognized income tax expense of $241,000 for the three months ended June 30, 2025 and income tax expense of $207,000 for the three months ended June 30, 2024, respectively, resulting in effective rates of 19.6% for the three months ended June 30, 2025 and 18.7% for the three months ended June 30, 2024.

Previous wording

The table above indicates that at December 31, 2024, we would have experienced a 0.77% decrease in NII in the event of a gradual, one-year 200 basis point increase in market interest rates, and a 0.20% 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 June 30, 2025, we would have experienced a 0.50% decrease in NII in the event of a gradual, one-year 200 basis point increase in market interest rates, and a 0.69% increase 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 December 31, 2024, we would have experienced a 0.75% decrease in MVE in the event of an instantaneous parallel 200 basis point increase in the market interest rates and a 14.73% 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 June 30, 2025, we would have experienced a 0.32% decrease in MVE in the event of an instantaneous parallel 200 basis point increase in the market interest rates and a 15.81% 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 $40.5 million at December 31, 2024. The FHLB has sole discretion to deny additional advances. 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. Additionally, the Association had the capacity to borrow $5.0 million from a private bankers’ bank at December 31, 2024.

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 $32.5 million at June 30, 2025. The FHLB has sole discretion to deny additional advances. 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. Additionally, the Association had the capacity to borrow $4.5 million from a private bankers’ bank at June 30, 2025.

Previous wording

For the nine months ended December 31, 2024, cash flows from operating, investing, and financing activities resulted in a net decrease in cash and cash equivalents of $4.8 million. Net cash provided by operating activities amounted to $2.4 million, primarily due to net income of $2.8 million, depreciation of $389,000, and changes of other assets of $381,000, partially offset by changes in accrued interest payable of $227,000, changes in accrued interest receivable of $610,000 and changes in accrued expenses and other liabilities of $646,000. Net cash used in investing activities amounted to $26.0 million, primarily due to a net increase in loans of $24.7 million and the purchase of available-for-sale investment securities of $3.0 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $6.5 million. Net cash provided by financing activities amounted to $18.8 million, primarily due to an increase in deposits of $19.2 million.

Current wording

For the three months ended June 30, 2025, cash flows from operating, investing, and financing activities resulted in a net decrease in cash and cash equivalents of $20.8 million. Net cash used in operating activities amounted to $96,000, primarily due to a change of $1.5 million in accounts payable, accrued expenses and other liabilities and a change of $333,000 in accrued interest payable, partially offset by net income of $1.0 million, depreciation of $195,000, stock based compensation of $185,000 and changes of other assets of $157,000. Net cash used in investing activities amounted to $13.0 million, primarily due to a net increase in loans of $11.0 million and the purchase of available-for-sale investment securities of $3.4 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $2.1 million. Net cash used in financing activities amounted to $7.7 million, primarily due to a decrease in deposits of $15.6 million, partially offset by proceeds from short term FHLB advances of $8.0 million.

Previous wording

For the nine months ended December 31, 2023, cash flows from operating, investing, and financing activities resulted in a net decrease in cash and cash equivalents of $4.9 million. Net cash provided by operating activities amounted to $4.2 million, primarily due to net income of $2.9 million. Net cash used in investing activities amounted to $21.4 million, primarily due to a net increase in loans of $22.0 million and the purchase of available-for-sale investment securities of $6.0 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $7.0 million. Net cash provided by financing activities amounted to $12.3 million, primarily due to the proceeds from the issuance of common stock. For further information, see the statements of cash flows contained in the consolidated financial statements in Part 1, Item 1 of this Quarterly Report.

Current wording

For the three months ended June 30, 2024, cash flows from operating, investing, and financing activities resulted in a net decrease in cash and cash equivalents of $5.9 million. Net cash provided by operating activities amounted to $505,000, primarily due to net income of $903,000 and changes of other assets of $413,000, partially offset by changes in accrued expenses and other liabilities of $981,000. Net cash used in investing activities amounted to $9.6 million, primarily due to a net increase in loans of $9.3 million and the purchase of available-for-sale investment securities of $1.9 million, partially offset by proceeds from paydowns of available-for-sale investment securities of $2.1 million. Net cash provided by financing activities amounted to $3.2 million, primarily due to an increase in short-term FHLB advances and an increase in deposits. For further information, see the statements of cash flows contained in the consolidated financial statements in Part 1, Item 1 of this Quarterly Report.