RED RIVER BANCSHARES INC
For the period ended Mar 31, 2026. Filed May 8, 2026.
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.
Mar 31, 2026 · Filed May 8, 2026
RRBI$103.55-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001071236-25-000090
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001071236-26-000041
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 225 previous paragraphs and 216 current paragraphs.
121 unchanged; 70 reworded; 24 added; 31 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 29 previous and 29 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 (24)
Current report
In the first quarter of 2026, we had record-high quarterly net income and a consistent balance sheet. We increased the quarterly cash dividend paid to shareholders by $0.10 per share, or 66.7%, to $0.25 per share for the first quarter of 2026, compared to $0.15 per share for the prior two quarters.
Current report
•Net income for the first quarter of 2026 was $12.0 million, or $1.81 diluted EPS, an increase of $556,000, or 4.9%, compared to $11.4 million, or $1.73 diluted EPS, for the fourth quarter of 2025. Net income for the first quarter was impacted by approximately $590,000 of periodic items that reduced operating expenses. These operating expense reductions benefited EPS by $0.07.
Current report
•Net interest income increased slightly, and net interest margin FTE was consistent at 3.51% for the first quarter of 2026 and the prior quarter.
Current report
•Assets remained consistent at $3.35 billion as of March 31, 2026 and December 31, 2025.
Current report
•Loans HFI were $2.25 billion as of March 31, 2026 and December 31, 2025. In the first quarter of 2026, new loan originations and construction commitment fundings were offset by payments and payoffs.
Current report
•Deposits totaled $2.95 billion as of March 31, 2026, a decrease of $17.5 million, or 0.6%, compared to $2.96 billion as of December 31, 2025. This decrease was primarily due to the seasonal outflow of funds from public entity customers exceeding increased commercial deposits.
Current report
•We continue to implement our organic expansion plan. The following construction projects are in process:
Current report
◦In the Northwest market, there are two projects in process with the goal of relocating personnel and vacating the Market Street location in Shreveport, Louisiana. In May 2026, we plan to relocate our Northwest market leadership and lenders to our newly constructed Shreveport Commercial and Private Banking Loan and Deposit Production Office Building, which is adjacent to our East Kings banking center. We then plan to relocate the Market Street retail banking center to the nearby American Towers building, which will have a more efficient cost structure.
Current report
◦In the New Orleans market, we have leased and are remodeling a portion of the bottom floor of the Energy Centre Building on Poydras Street. Completion is expected in the third quarter of 2026. Once complete, we plan to relocate the Baronne Street retail banking center and the New Orleans market leadership and lenders to this updated, convenient, and visible location.
Current report
◦In the Acadiana market, we held a ground-breaking ceremony in January 2026 for our second full-service banking center in this market, located on Camellia Boulevard in Lafayette, Louisiana. We expect this location to open early in 2027.
Current report
•In the first quarter of 2026, S&P Global Market Intelligence ranked the Bank 42 nd of the top 50 best deposit franchises in 2025 for banks with assets between $3.0 and $10.0 billion.
Current report
•On April 6, 2026, Jim Nelson was appointed as Market President for the New Orleans market.
Current report
Net interest income for the first quarter of 2026 was $28.4 million, which was $163,000, or 0.6%, higher than the fourth quarter of 2025, due to a $217,000 decrease in interest expense, slightly offset by a $54,000 decrease in interest and dividend income. The decrease in interest expense was primarily due to our lowering of selected deposit rates. The decrease in interest and dividend income was driven by a $119,000 decrease in loan income, which was impacted by two less accrual days in the first quarter of 2026 compared to the prior quarter. Also contributing to this decrease was a $29,000 decrease in securities income, which was impacted by the repricing of variable rate securities as a result of the rate decreases in the fourth quarter of 2025. Income on short-term liquid assets increased $95,000 as a result of higher average balances in these assets, partially offset by the lower rate environment.
Current report
The net interest margin FTE was 3.51% for the first quarter of 2026, which was consistent with the prior quarter. The net interest margin FTE was impacted by a consistent yield on loans, a lower yield on short-term liquid assets and securities, and lower deposit costs. The average rate on new and renewed loans was 6.71% for the first quarter of 2026 and 6.72% for the prior quarter. The yield on short-term liquid assets decreased 23 bps due to the reduction of the target federal funds rate in December. The yield on securities decreased by 2 bps due to repricing of variable rate securities. The cost of deposits decreased 3 bps to 1.47%, compared to 1.50% for the previous quarter, which was driven by our lowering of selected deposit rates.
Current report
The provision for credit losses for the first quarter of 2026 was $750,000 for loans, which was $300,000 higher than the provision for credit losses of $450,000 for the first quarter of 2025. The increase in the first quarter of 2026 was due to continued loan growth, lingering impacts related to inflation and tariffs, geopolitical uncertainty, and greater uncertainty with future labor market trends. The provision in the first quarter of 2025 was related to loan growth, combined with uncertainty regarding tariffs and trade.
Current report
Noninterest income decreased $739,000 to $4.5 million for the three months ended March 31, 2026, compared to $5.3 million for the three months ended March 31, 2025. The decrease in noninterest income was mainly due to lower brokerage income and SBIC income.
Current report
Operating expenses decreased $1.0 million to $17.3 million for the first quarter of 2026, compared to $18.3 million for the fourth quarter of 2025. Thedecrease in operating expenses was mainly due to lower personnel expenses, data processing expense, loan and deposit expenses, and other taxes.
Current report
Data processing expense decreased $336,000 to $377,000 for first quarter of 2026, compared to the prior quarter. This decrease was mainly attributable to receipt of a $389,000 periodic refund from our data processing center in the first quarter of 2026.
Current report
Loan and deposit expenses decreased $212,000 to $103,000 for the first quarter of 2026, compared to the prior quarter. This decrease was primarily attributable to receipt of a $201,000 negotiated, variable rebate from a vendor in the first quarter of 2026.
Current report
Other taxes decreased $23,000 to $560,000 for the first quarter of 2026, compared to the prior quarter. In 2025, Louisiana
Current report
corporate income tax rates were lowered. In order for financial institutions to be included in this benefit, the State of Louisiana bank stock tax calculation was adjusted effective 2026, which resulted in other taxes being lower in the first quarter of 2026.
Current report
Other taxes decreased $52,000 to $560,000 for the three months ended March 31, 2026, compared to the same period prior year. In 2025, Louisiana corporate income tax rates were lowered. In order for financial institutions to be included in this benefit, the State of Louisiana bank stock tax calculation was adjusted effective 2026, which resulted in other taxes being lower in the first quarter of 2026.
Current report
NPAs totaled $4.3 million as of March 31, 2026, an increase of $728,000, or 20.6%, from December 31, 2025, primarily due to an increase in nonaccrual loans and other real estate owned, partially offset by a decrease in past due loans. The ratio of NPAs to assets was 0.13% and 0.11% as of March 31, 2026 and December 31, 2025, respectively.
Current report
Construction Commitments
Removed paragraphs (31)
Previous report
In the third quarter of 2025, we had an improved net interest margin and record-high net income. Loans, deposits, and assets increased slightly. We completed a significant private stock repurchase and increased the quarterly cash dividend by 25.0%.
Previous report
•Net income for the third quarter of 2025 was $10.8 million, or $1.63 diluted EPS, an increase of $605,000, or 5.9%, compared to $10.2 million, or $1.51 diluted EPS, for the second quarter of 2025. Net income for the third quarter was impacted by a $1.1 million increase in net interest income, combined with $253,000 of nonrecurring partnership income.
Previous report
•Net interest income and net interest margin FTE increased for the third quarter of 2025 compared to the prior quarter. Net interest income for the third quarter of 2025 was $26.9 million, which was $1.1 million, or 4.1%, higher than $25.8 million for the prior quarter. Net interest margin FTE increased 7 bps to 3.43% for the third quarter of 2025, compared to 3.36% for the prior quarter. These improvements were the result of higher securities and loan yields, along with an improved earning asset mix.
Previous report
•We participate as a member in JAM FINTOP. During the third quarter of 2025, JAM FINTOP completed the sale of an investment, which led to distributions of capital and income. As a result, other income (loss) for the third quarter included $253,000 of nonrecurring JAM FINTOP partnership income.
Previous report
•As of September 30, 2025, loans HFI were $2.17 billion, which was $34.5 million, or 1.6%, higher than $2.14 billion as of June 30, 2025. In the third quarter of 2025, we experienced solid new loan and commitment activity, combined with funding of loan construction commitments.
Previous report
•As of September 30, 2025, total securities were $764.6 million, which was $67.3 million, or 9.6%, higher than $697.3 million as of June 30, 2025. This increase was due to utilizing securities cash flows, along with other liquid funds, to purchase $78.2 million of securities with an average rate of 4.84%.
Previous report
•Deposits totaled $2.84 billion as of September 30, 2025, an increase of $28.2 million, or 1.0%, compared to $2.81 billion as of June 30, 2025. This increase was driven mainly by higher noninterest-bearing and time deposit activity and balances.
Previous report
•In the third quarter of 2025, the provision for credit losses totaled $650,000, compared to $450,000 for the prior quarter, and we sold all of our OREO. As of September 30, 2025, NPAs were $2.4 million, or 0.08% of assets, and the ACL was $22.8 million, or 1.05% of loans HFI.
Previous report
•On August 7, 2025, we entered into a privately negotiated stock repurchase agreement for the repurchase of 100,000 shares of our common stock at a purchase price of $5.3 million, excluding excise tax. This repurchase was supplemental to our 2025 stock repurchase program.
Previous report
•As of September 30, 2025, capital levels were strong with a stockholders’ equity to assets ratio of 10.93%, a leverage ratio of 12.17%, a risk-based capital ratio of 18.18%, and a book value per share of $53.42.
Previous report
•In the third quarter of 2025, we opened a loan and deposit production office in the Pinhook Tower building in Lafayette, Louisiana.
Previous report
Net interest income for the third quarter of 2025 was $26.9 million, which was $1.1 million, or 4.1%, higher than the second quarter of 2025, due to a $1.4 million increase in interest and dividend income, slightly offset by a $352,000 increase in interest expense. The increase in interest and dividend income was mainly due to higher interest income on loans and securities. Loan income increased $1.1 million due to higher yields on loans, combined with higher average loan balances. Securities income increased $277,000 due to purchasing higher yielding securities, combined with higher average securities balances. The increase in interest expense was due to higher rates on interest-bearing transaction accounts due to public entity deposit pricing competition.
Previous report
The net interest margin FTE increased 7 bps to 3.43% for the third quarter of 2025, compared to 3.36% for the prior quarter. This increase was due to improved yields on securities and loans, partially offset by higher deposit costs. The yield on securities increased 10 bps, primarily due to purchasing $78.2 million of securities with an average rate of 4.84%, which was higher than the current portfolio yield. The yield on loans increased 7 bps due to higher rates on new and renewed loans compared to the existing portfolio, as well as higher average loan balances. The average rate on new and renewed loans was 7.02% for the third quarter of 2025 and 7.14% for the prior quarter. The cost of deposits increased 2 bps to 1.58% for the third quarter of 2025, compared to 1.56% for the previous quarter, which was driven by higher rates on interest-bearing transaction accounts due to public entity deposit pricing competition.
Previous report
September 2025. The decrease in interest expense for the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024, was due to lower rates on total interest-bearing deposits, partially offset by a higher average balance in these deposits.
Previous report
The provision for credit losses for the nine months ended September 30, 2025, was $1.6 million for loans, an increase of $650,000, or 72.2%, from $900,000 for the nine months ended September 30, 2024. The provision for 2024 included $800,000 for loans and $100,000 for unfunded commitments. The increase for the first nine months of 2025 was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment. The provision for the first nine months of 2024 was due to the inflationary environment, changing monetary policy, economic forecasts, and loan growth.
Previous report
Noninterest income increased $307,000 to $5.0 million for the third quarter of 2025 compared, to $4.7 million for the second quarter of 2025. The increase in noninterest income was mainly due to higher other income, brokerage income, and service charges on deposit accounts, partially offset by lower net debit card income and SBIC income.
Previous report
Service charges on deposit accounts increased $105,000 to $1.4 million for the third quarter of 2025, compared to the prior quarter. This increase was mainly due to a larger number of non-sufficient fund transactions and related fee income in the third quarter of 2025.
Previous report
Debit card income, net, decreased $229,000 to $852,000 for the third quarter of 2025, compared to the prior quarter. This decrease was mainly due to higher debit card processing expense in the third quarter of 2025.
Previous report
Loan and deposit income decreased $302,000 to $1.3 million for the nine months ended September 30, 2025, compared to the same period prior year. Credit card income, net of expenses, is reported in loan and deposit income. In the second quarter of 2025, we changed our credit card program provider to align with our debit card program provider, which resulted in increased credit card expenses. The nine months ended September 30, 2024 benefited from $201,000 of nonrecurring loan-related fees.
Previous report
Other income increased $204,000 to $470,000 for the nine months ended September 30, 2025, compared to the same period prior year. This increase was primarily due to $253,000 of nonrecurring income from the JAM FINTOP partnership, which resulted from the sale of an investment during the third quarter of 2025.
Previous report
Debit card income, net, increased $50,000 to $2.9 million for the nine months ended September 30, 2025, compared to the same period prior year. For the nine months ended September 30, 2025, debit card expenses were lower due to the new debit card provider contract. The first half of 2024 benefited from $145,000 of nonrecurring income due to the termination of our prior debit card provider contract.
Previous report
Operating expenses increased $522,000 to $17.9 million for the third quarter of 2025, compared to $17.4 million for the second quarter of 2025. Theincrease in operating expenses was mainly due to higher personnel expenses and occupancy and equipment expenses.
Previous report
Occupancy and equipment expenses increased $93,000 to $1.8 million for third quarter of 2025, compared to the prior quarter. This increase was primarily due to $40,000 of nonrecurring expenses related to a new loan and deposit production office in the Acadiana market, as well as renovations to the main office building in the Central Louisiana market.
Previous report
Occupancy and equipment expenses increased $419,000 to$5.4 million for thenine months ended September 30, 2025, compared to the same period prior year. This increase was primarily due to an increase in maintenance expense, a full period of expenses related to our New Orleans market expansion in 2024, expenses related to our Acadiana market expansion in 2025, and nonrecurring expenses related to renovations of a banking center and to the main office building. The same period prior year had $76,000 of nonrecurring expenses related to our new location in the New Orleans market and other 2024 property renovations.
Previous report
Loan and deposit expenses increased $255,000 to $816,000 for the nine months ended September 30, 2025, compared to the same period prior year. In the first quarter of 2025, we received a $173,000 negotiated, variable rebate from a vendor, compared to a $262,000 similar rebate in the same period prior year. Also, for the nine months ended September 30, 2025, there was an increase in loan-related expenses due to the timing of mortgage expenses and higher collections expense.
Previous report
Technology expenses increased $188,000 to $2.5 million for the nine months ended September 30, 2025, compared to the same period prior year. This increase was primarily due to continued software technology enhancements and upgrades, partially offset by lower technology communication expenses from a new vendor relationship.
Previous report
NPAs totaled $2.4 million as of September 30, 2025, a decrease of $832,000, or 25.4%, from $3.3 million as of December 31, 2024. The decrease was primarily due to payoffs and charge-offs of nonaccrual loans and the sale of OREO. As of September 30, 2025, we did not have any OREO. The ratio of NPAs to assets was 0.08% as of September 30, 2025, and 0.10% as of December 31, 2024.
Previous report
(1)The $900,000 provision for credit losses on the consolidated statements of income for the nine months ended September 30, 2024, includes $800,000 for loans and $100,000 for unfunded loan commitments.
Previous report
On May 22, 2025, we entered into a privately negotiated stock repurchase agreement for the purchase of 100,000 shares of our common stock for a total purchase price of approximately $5.1 million, excluding excise tax. This repurchase was supplemental to our 2025 stock repurchase program and did not impact the amount of permitted repurchases thereunder.
Previous report
On August 7, 2025, we entered into a privately negotiated stock repurchase agreement for the purchase of 100,000 shares of our common stock for a total purchase price of approximately $5.3 million, excluding excise tax. This repurchase was supplemental to our 2025 stock repurchase program and did not impact the amount of permitted repurchases thereunder.
Previous report
Construction Commitment
Reworded paragraphs (70)
Previous wording
The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Red River Bancshares, Inc. on a consolidated basis from December 31, 2024 through September 30, 2025, and on our results of operations for the quarters ended September 30, 2025 and June 30, 2025, and for the nine months ended September 30, 2025 and September 30, 2024.
Current wording
The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Red River Bancshares, Inc. on a consolidated basis from December 31, 2025 through March 31, 2026, and on our results of operations for the quarters ended March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and March 31, 2025.
Previous wording
Red River Bancshares, Inc. is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of our commercial and retail customers. Red River Bank operates from a network of 28 banking centers throughout Louisiana and two combined LDPOs, one each in New Orleans, Louisiana and Lafayette, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria MSA; Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes Covington; Acadiana, which includes the Lafayette MSA; and New Orleans.
Current wording
Red River Bancshares, Inc. is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of our commercial and retail customers. Red River Bank operates from a network of 28 banking centers throughout Louisiana and two combined LDPOs, one each in New Orleans, Louisiana and Lafayette, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria MSA; Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes the Slidell-Mandeville-Covington MSA; Acadiana, which includes the Lafayette MSA; and New Orleans, which includes the New Orleans-Metairie MSA.
Previous wording
THIRD QUARTER 2025 FINANCIAL AND OPERATIONAL HIGHLIGHTS
Current wording
FIRST QUARTER 2026 FINANCIAL AND OPERATIONAL HIGHLIGHTS
Previous wording
•For the third quarter of 2025, the return on assets was 1.34%, and the return on equity was 12.62%.
Current wording
•For the first quarter of 2026, the return on assets was 1.44%, and the return on equity was 12.95%.
Previous wording
•On July 24, 2025, our board of directors announced that the cash dividend for the third quarter of 2025 would be $0.15 per common share, which was a 25.0% increase from $0.12 per common share paid for each of the first and second quarters of 2025. In the third quarter of 2025, we paid the quarterly cash dividend of $0.15 per common share.
Current wording
•On February 26, 2026, our board of directors announced that the cash dividend for the first quarter of 2026 would be $0.25 per common share, which was a 66.7% increase from $0.15 per common share paid for each of the third and fourth quarters of 2025. In the first quarter of 2026, we paid the quarterly cash dividend of $0.25 per common share.
Previous wording
•The 2025 stock repurchase program authorizes us to purchase up to $5.0 million of our outstanding shares of common stock from January 1, 2025 through December 31, 2025. No shares were repurchased on the open market in the first and third quarters of 2025. In the second quarter of 2025, we repurchased 11,748 shares on the open market at an aggregate cost of $656,000, excluding excise tax. As of September 30, 2025, the 2025 stock repurchase program had $4.3 million of available capacity.
Current wording
•The 2026 stock repurchase program authorizes us to purchase up to $10.0 million of our outstanding shares of common stock from January 1, 2026 through December 31, 2026. There was no stock repurchase activity in the first quarter of 2026. As of March 31, 2026, the 2026 stock repurchase program had $10.0 million of available capacity.
Previous wording
Net income for the third quarter of 2025 was $10.8 million, or $1.63 diluted EPS, an increase of $605,000, or 5.9%, compared to $10.2 million, or $1.51 diluted EPS, for the second quarter of 2025. The increase in net income was due to a $1.1 million increase in net interest income and a $307,000 increase in noninterest income, partially offset by a $522,000 increase in operating expenses, a $200,000 increase in the provision for credit losses, and a $47,000 increase in income tax expense. The return on assets for the third quarter of 2025 was 1.34%, compared to 1.30% for the second quarter of 2025. The return on equity was 12.62% for the third quarter of 2025, compared to 12.27% for the second quarter of 2025. Our efficiency ratio for the third quarter of 2025 was 56.06%, compared to 56.87% for the second quarter of 2025.
Current wording
Net income for the first quarter of 2026 was $12.0 million, or $1.81 diluted EPS, an increase of $556,000, or 4.9%, compared to $11.4 million, or $1.73 diluted EPS, for the fourth quarter of 2025. The increase in net income was due to a $1.0 million decrease in operating expenses and a $163,000 increase in net interest income, partially offset by a $416,000 decrease in noninterest income and a $192,000 increase in income tax expense. The return on assets for the first quarter of 2026 was 1.44%, compared to 1.38% for the fourth quarter of 2025. The return on equity was 12.95% for the first quarter of 2026, compared to 12.60% for the fourth quarter of 2025. Our efficiency ratio for the first quarter of 2026 was 52.37%, compared to 54.99% for the fourth quarter of 2025.
Previous wording
Net income for the nine months ended September 30, 2025, was $31.3 million, or $4.65 diluted EPS, an increase of $6.4 million, or 25.8%, compared to $24.9 million, or $3.59 diluted EPS, for the nine months ended September 30, 2024. The increase in net income was due to a $11.7 million increase in net interest income, partially offset by a $2.5 million increase in operating expenses, a $1.7 million increase in income tax expense, a $650,000 increase in the provision for credit losses, and a $431,000 decrease in noninterest income. The return on assets for the nine months ended September 30, 2025, was 1.32%, compared to 1.08% for the nine months ended September 30, 2024. The return on equity was 12.58% for the nine months ended September 30, 2025, compared to 10.86% for the nine months ended September 30, 2024. Our efficiency ratio for the nine months ended September 30, 2025, was 56.15%, compared to 60.84% for the nine months ended September 30, 2024.
Current wording
Net income for the three months ended March 31, 2026, was $12.0 million, or $1.81 diluted EPS, an increase of $1.6 million, or 15.6%, compared to $10.4 million, or $1.52 diluted EPS, for the three months ended March 31, 2025. The increase in net income was due to a $3.8 million increase in net interest income, partially offset by a $739,000 decrease in noninterest income, a $662,000 increase in operating expenses, a $474,000 increase in income tax expense, and a $300,000 increase in the provision for credit losses. The return on assets for the three months ended March 31, 2026, was 1.44%, compared to 1.32% for the three months ended March 31, 2025. The return on equity was 12.95% for the three months ended March 31, 2026, compared to 12.85% for the three months ended March 31, 2025. Our efficiency ratio for the three months ended March 31, 2026, was 52.37%, compared to 55.51% for the three months ended March 31, 2025.
Previous wording
In the first half of 2024, the target range for the federal funds rate was consistent at 5.25%-5.50%. In September of 2024, the FOMC decreased the federal funds rate by 50 bps and then by an additional 50 bps during the fourth quarter of 2024, reducing the target federal funds range to 4.25%-4.50% until September 2025. Late in the third quarter of 2025, the FOMC decreased the federal funds rate by an additional 25 bps, reducing the target range to 4.00%-4.25%. The average effective federal funds rate was 4.30% for the third quarter of 2025, compared to 4.33% for the second quarter of 2025. For the nine months ended September 30, 2025, the average effective federal funds rate was 4.32%, compared to 5.31% for the nine months ended September 30, 2024. Net interest income and net interest margin FTE increased in the third quarter of 2025, compared to the prior quarter. Also, net interest income and net interest margin FTE increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Current wording
In the first half of 2025, the target range for the federal funds rate was consistent at 4.25%-4.50%. In the second half of 2025, the FOMC decreased the federal funds rate by 25 bps in the third quarter and an additional 50 bps in the fourth quarter, reducing the target federal funds range to 3.50%-3.75%. The target range for the federal funds rate was unchanged in the first quarter of 2026. The average effective federal funds rate was 3.64% for the first quarter of 2026, compared to 3.90% for the fourth quarter of 2025, and 4.33% for the first quarter of 2025. Net interest income was slightly higher in the first quarter of 2026, compared to the prior quarter. Net interest margin FTE for the first quarter of 2026 was consistent with the previous quarter. Net interest income and net interest margin FTE increased in the first quarter of 2026 compared to the first quarter of 2025.
Previous wording
In 2025, the FOMC kept the federal funds rate consistent through mid-September, with the target federal funds range remaining at 4.25%-4.50%. On each of September 17, 2025 and October 29, 2025, the FOMC lowered the target range of the federal funds rate by 25 bps, resulting in a range of 3.75%-4.00%. The market’s expectation is that the FOMC may lower the target federal funds range by 25 bps in December 2025. In the fourth quarter of 2025, we expect to receive $33.4 million in securities cash flows at 3.72%, which we plan to redeploy at higher yields. We project $84.9 million of fixed rate loans with an average yield of 6.41% to mature and $387.1 million of floating rate loans at 6.62% to reprice. Based on the current rate forecast, we expect the total loan yield to be slightly lower in the fourth quarter of 2025. Additionally, we expect $261.2 million in time deposits at 3.71% to mature, which should reprice at slightly lower yields considering maturity volumes and renewal pricing. Rates on interest-bearing transaction deposits could be adjusted with target federal funds range reductions. We anticipate a slightly lower cost of deposits in the fourth quarter of 2025. As of September 30, 2025, floating rate loans were 17.8% of loans HFI, and floating rate transaction deposits were 8.9% of interest-bearing transaction deposits. Depending on balance sheet activity and the interest rate environment, we expect net interest income and net interest margin FTE to decrease slightly in the fourth quarter of 2025.
Current wording
As of March 31, 2026, the target federal funds range was 3.50%-3.75%. The market’s expectation is that the federal funds range may remain consistent in 2026. During the remainder of 2026, we project $201.4 million of fixed rate loans at 5.87% to mature, which we expect to redeploy into loans with slightly higher rates. We have $463.8 million of floating rate loans at 6.16%, which we expect to remain at a consistent rate. Based on the current rate forecast, we expect the total loan yield to be slightly higher in the second quarter of 2026. We also expect to receive $90.9 million in securities cash flows at 3.66%, which we plan to redeploy into securities at higher yields. We project $515.0 million in time deposits at 3.50% to mature, which may reprice at slightly lower rates considering maturity volumes and renewal pricing. As of March 31, 2026, floating rate loans were 20.6% of loans HFI, and floating rate transaction deposits were 9.2% of interest-bearing transaction deposits. Depending on balance sheet activity and interest rate competition, we expect net interest income and net interest margin FTE to increase slightly in the second quarter of 2026.
Previous wording
(1)Includes average outstanding balances of loans HFS of$3.2 million and$2.5 million for the three months ended September 30, 2025 and June 30, 2025, respectively.
Current wording
(1)Includes average outstanding balances of loans HFS of$2.7 million and$3.3 million for the three months ended March 31, 2026 and December 31, 2025, respectively.
Previous wording
Net interest income for the nine months ended September 30, 2025 was $77.3 million, which was $11.7 million, or 17.8%, higher than $65.6 million for the nine months ended September 30, 2024. Net interest income increased due to a $9.1 million increase in interest and dividend income, combined with a $2.6 million decrease in interest expense.
Current wording
Net interest income for the three months ended March 31, 2026 was $28.4 million, which was $3.8 million, or 15.4%, higher than $24.6 million for the three months ended March 31, 2025. Net interest income increased due to a $3.3 million increase in interest and dividend income, combined with a $457,000 decrease in interest expense.
Previous wording
The increase in interest and dividend income for the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024, was due to higher interest income on loans and securities, partially offset by a decrease in interest income on short-term liquid assets. Loan income increased $7.7 million due to higher rates on new and renewed loans compared to the existing portfolio yield, combined with higher average loan balances. Securities income increased $3.0 million primarily due to purchasing higher yielding securities. Interest income on short-term liquid assets decreased $1.6 million due to the FOMC lowering the federal funds rate during the second half of 2024 and in
Current wording
The increase in interest and dividend income for the three months ended March 31, 2026, when compared to the three months ended March 31, 2025, was due to higher interest income on loans and securities, partially offset by a decrease in interest income on short-term liquid assets. Loan income increased $3.3 million due to higher average loan balances, combined with higher rates on new and renewed loans compared to the existing portfolio yield. Securities income increased $988,000 primarily due to purchasing higher yielding securities, combined with higher average securities balances. Interest income on short-term liquid assets decreased $924,000 due to lower average balances on these assets, combined with the FOMC lowering the federal funds rate in 2025.
Previous wording
Net interest margin FTE increased 42 bps to 3.34% for the nine months ended September 30, 2025, from 2.92% for the nine months ended September 30, 2024, primarily due to higher yields on securities and loans, combined with lower deposit costs. These positive variances were partially offset by a 103 bp decrease to the yield on short-term liquid assets, due to the lower average federal funds rate for the nine months ended September 30, 2025.
Current wording
Net interest margin FTE increased 29 bps to 3.51% for the three months ended March 31, 2026, from 3.22% for the three months ended March 31, 2025, primarily due to higher yields on securities and loans, combined with lower deposit costs. These positive variances were partially offset by a 75 bp decrease to the yield on short-term liquid assets, due to the FOMC lowering the federal funds rate in 2025.
Previous wording
The yield on securities increased 48 bps mainly due to purchasing $41.1 million of securities in the fourth quarter of 2024 and an additional $146.7 million of securities during the nine months ended September 30, 2025, at favorable rates. The yield on loans increased 29 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 17 bps to 1.58% for the nine months ended September 30, 2025, from 1.75% for the nine months ended September 30, 2024, due to a 28 bp decrease in the rate on interest-bearing deposits. Within total interest-bearing deposits, the rate on time deposits and interest-bearing transaction deposits decreased 51 and 16 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2024 in response to the federal funds rate decreases by the FOMC. We also lowered selected time deposit rates in 2025.
Current wording
The yield on securities increased 29 bps mainly due to purchasing $145.3 million of securities in the last nine months of 2025 and an additional $24.7 million of securities in the first quarter of 2026, at favorable rates. The yield on loans increased 19 bps due to higher rates on new and renewed loans compared to the existing portfolio yield. The cost of deposits decreased 14 bps to 1.47% for the three months ended March 31, 2026, from 1.61% for the three months ended March 31, 2025, due to a 22 bp decrease in the rate on interest-bearing deposits. Within total interest-bearing deposits, the rate on time deposits and interest-bearing transaction deposits decreased 34 and 13 bps, respectively. These decreases occurred as we adjusted rates on selected transaction and time deposits during the second half of 2025 in response to the federal funds rate decreases by the FOMC.
Previous wording
The following table presents average balance sheet information, interest income, interest expense, and the corresponding average yields earned and rates paid for the nine months ended September 30, 2025 and 2024:
Current wording
The following table presents average balance sheet information, interest income, interest expense, and the corresponding average yields earned and rates paid for the three months ended March 31, 2026 and 2025:
Previous wording
(1)Includes average outstanding balances of loans HFS of $2.8 million and $2.7 million for the nine months ended September 30, 2025 and 2024, respectively.
Current wording
(1)Includes average outstanding balances of loans HFS of $2.7 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
The provision for credit losses for the third quarter of 2025 was $650,000 for loans, which was $200,000 higher than the provision for credit losses from the prior quarter. This higher provision was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment. The provision in the second quarter of 2025 was due to loan growth, combined with uncertainty regarding tariffs and trade. We will continue to evaluate future provision needs in relation to current economic situations, loan growth, trends in asset quality, forecasted information, and other conditions influencing loss expectations.
Current wording
The provision for credit losses for the first quarter of 2026 was $750,000 for loans, which was consistent with the prior quarter. The provision for credit losses in the first quarter of 2026 was due to continued loan growth, lingering impacts related to inflation and tariffs, geopolitical uncertainty, and greater uncertainty with future labor market trends. The provision in the fourth quarter of 2025 was primarily driven by loan growth, lingering impacts related to inflation and tariffs, and greater uncertainty with future unemployment. We will continue to evaluate future provision needs in relation to current economic situations, loan growth, trends in asset quality, forecasted information, and other conditions influencing loss expectations.
Previous wording
Noninterest income decreased $431,000 to $15.0 million for the nine months ended September 30, 2025, compared to $15.4 million for the nine months ended September 30, 2024. The decrease in noninterest income was mainly due to lower SBIC income and loan and deposit income, partially offset by higher brokerage income, other income, and net debit card income.
Current wording
Noninterest income decreased $416,000 to $4.5 million for the first quarter of 2026, compared to $4.9 million for the fourth quarter of 2025. The decrease in noninterest income was mainly due to lower brokerage income and other income, partially offset by higher SBIC income.
Previous wording
Brokerage income increased $142,000 to $1.1 million for the third quarter of 2025, compared to the prior quarter. The higher income in the third quarter of 2025 was due to increased investing activity by clients. Assets under management were $1.29 billion as of September 30, 2025, and $1.19 billion as of June 30, 2025.
Current wording
Brokerage income decreased $348,000 to $939,000 for the first quarter of 2026, compared to the prior quarter. The lower income in the first quarter of 2026 was due to decreased investing activity by clients. Assets under management were $1.35 billion as of March 31, 2026, and $1.33 billion as of December 31, 2025.
Previous wording
Other income increased $332,000 to $378,000 for the third quarter of 2025, compared to the prior quarter. We participate as a member in JAM FINTOP. During the third quarter of 2025, JAM FINTOP completed the sale of an investment, which led to distributions of capital and income. As a result, other income for the third quarter included $253,000 of nonrecurring JAM FINTOP partnership income.
Current wording
Other income decreased $106,000 to $83,000 for the first quarter of 2026, compared to the prior quarter. We participate as a member in JAM FINTOP. The fourth quarter of 2025 included $127,000 of nonrecurring JAM FINTOP partnership income, following the sale of an investment and subsequent distribution. Similar income was not recognized in the first quarter of 2026.
Previous wording
The SBIC partnerships reported a loss of $75,000 in the third quarter of 2025, compared to $47,000 of income in the previous quarter. This $122,000 decrease was mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. We expect SBIC income to be lower in future quarters.
Current wording
The SBIC partnerships reported a loss of $105,000 in the first quarter of 2026, compared to a loss of $197,000 in the previous quarter. These losses were mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. We expect SBIC income to fluctuate in future quarters.
Previous wording
Brokerage income increased $579,000 to $3.4 million for the nine months ended September 30, 2025, compared to the same period prior year, due to increased investing activity by clients. Assets under management were $1.29 billion and $1.13 billion as of September 30, 2025 and 2024, respectively.
Current wording
Brokerage income decreased $386,000 to $939,000 for the three months ended March 31, 2026, compared to the same period prior year, mainly due to decreased investing activity by clients. Also, the first quarter of 2025 included $107,000 in incentive income related to a prior year investment group broker-dealer partner conversion. Assets under management were $1.35 billion and $1.14 billion as of March 31, 2026 and 2025, respectively.
Previous wording
SBIC income decreased $855,000 to $252,000 for the nine months ended September 30, 2025, compared to the same period prior year. This decrease was mainly due to fund value adjustments as an SBIC fund continues its wind-down phase. For the nine months ended September 30, 2024, we received $114,000 of distribution payments, in addition to normal income.
Current wording
SBIC partnerships reported a loss of $105,000 for the three months ended March 31, 2026, compared to $280,000 of income for the same period prior year. This variance was mainly due to fund value adjustments as an SBIC fund entered its wind-down phase in mid-2025.
Previous wording
Personnel expenses increased $295,000 to $10.5 million for the third quarter of 2025, compared to the prior quarter. This increase was primarily due to higher personnel-related accruals. As of September 30, 2025 and June 30, 2025, we had 377 and 374 total employees, respectively.
Current wording
Personnel expenses decreased $437,000 to $10.5 million for the first quarter of 2026, compared to the prior quarter. This decrease was primarily due to lower personnel-related accruals and lower revenue-based commissions. We had 375 total employees as of March 31, 2026 and December 31, 2025.
Previous wording
Operating expenses increased $2.5 million to $51.8 million for the nine months ended September 30, 2025, compared to $49.3 million for the nine months ended September 30, 2024. Theincrease in operating expenses was mainly due to higher personnel expenses, occupancy and equipment expenses, loan and deposit expenses, technology expenses, and data processing expense.
Current wording
Operating expenses increased $662,000 to $17.3 million for the three months ended March 31, 2026, compared to $16.6 million for the three months ended March 31, 2025. Theincrease in operating expenses was mainly due to higher personnel expenses and data processing expense, partially offset by lower other taxes.
Previous wording
Personnel expenses increased $1.9 million to$30.8 million for thenine months ended September 30, 2025, compared to the same period prior year. This increase was primarily due to an increase in headcount, increased revenue-based commission compensation, annual raises, and higher personnel-related accruals. As of September 30, 2025 and 2024, we had 377 and 366 total employees, respectively.
Current wording
Personnel expenses increased $494,000 to $10.5 million for the three months ended March 31, 2026, compared to the same period prior year. This increase was primarily due to annual raises effective April 2025 and higher personnel-related accruals in the first quarter of 2026. As of March 31, 2026 and 2025, we had 375 total employees.
Previous wording
Data processing expense increased $84,000 to $1.7 million for the nine months ended September 30, 2025, compared to the same period prior year. This increase was due to new expenses and $31,000 of nonrecurring implementation fees related to our first quarter 2025 online, mobile banking, and bill payment system upgrades. This increase was partially offset by the receipt of a $447,000 periodic refund from our data processing center in the first quarter of 2025, compared to a $284,000 similar refund in the same period prior year.
Current wording
Data processing expense increased $89,000 to $377,000 for the three months ended March 31, 2026, compared to the same period prior year. The first quarter of 2026 included receipt of a $389,000 periodic refund from our data processing center compared to a $447,000 similar refund in the same period prior year. The first quarter of 2026 also included a full period of expenses related to online banking, mobile banking, and bill payment system upgrades completed in 2025.
Previous wording
For the quarters ended September 30, 2025 and June 30, 2025, income tax expense totaled $2.6 million and $2.5 million, respectively. The slight increase in income tax expense was due to the increase in pre-tax income during the third quarter of 2025. Our effective income tax rates for the quarters ended September 30, 2025 and June 30, 2025, were 19.2% and 19.8%, respectively.
Current wording
For the quarters ended March 31, 2026 and December 31, 2025, income tax expense totaled $3.0 million and $2.8 million, respectively. The increase in income tax expense was due to the increase in pre-tax income. Our effective income tax rates for the quarters ended March 31, 2026 and December 31, 2025, were 19.9% and 19.6%, respectively.
Previous wording
For the nine months ended September 30, 2025 and 2024, income tax expense totaled $7.6 million and $5.9 million, respectively. The increase in income tax expense was primarily due to the increase in pre-tax income. Our effective income tax rates for the nine months ended September 30, 2025 and 2024, were 19.5% and 19.2%, respectively.
Current wording
For the three months ended March 31, 2026 and 2025, income tax expense totaled $3.0 million and $2.5 million, respectively. The increase in income tax expense was primarily due to the increase in pre-tax income. Our effective income tax rates for the three months ended March 31, 2026 and 2025, were 19.9% and 19.4%, respectively.
Previous wording
As of September 30, 2025, assets were $3.21 billion, which was $64.8 million, or 2.1%, higher than $3.15 billion as of December 31, 2024. Total deposits increased $33.7 million, or 1.2%, to $2.84 billion as of September 30, 2025, from $2.81 billion as of December 31, 2024. Cash and cash equivalents decreased $107.9 million, or 40.1%, to $161.1 million and were 5.01% of assets as of September 30, 2025. Total securities increased $79.7 million, or 11.6%, to $764.6 million and were 23.79% of assets as of September 30, 2025. Loans HFI increased $98.1 million, or 4.7%, to $2.17 billion as of September 30, 2025. As of September 30, 2025, and December 31, 2024, we had no borrowings. Stockholders’ equity increased $31.6 million during the first nine months of 2025 to $351.3 million as of September 30, 2025. As of September 30, 2025, the loans HFI to deposits ratio was 76.55%, compared to 73.97% as of December 31, 2024, and the noninterest-bearing deposits to total deposits ratio was 32.37%, compared to 30.89% as of December 31, 2024.
Current wording
As of March 31, 2026, total assets were $3.35 billion, which was consistent with December 31, 2025. Cash and cash equivalents decreased $2.9 million, or 1.3%, to $210.5 million and were 6.3% of assets as of March 31, 2026. Total securities decreased $10.6 million, or 1.4%, to $762.4 million and were 22.8% of assets as of March 31, 2026. Loans HFI increased $5.9 million, or 0.3%, to $2.25 billion as of March 31, 2026. Total deposits decreased $17.5 million, or 0.6%, to $2.95 billion as of March 31, 2026, from $2.96 billion as of December 31, 2025. As of March 31, 2026, and December 31, 2025, we had no borrowings. Stockholders’ equity increased $8.2 million during the first three months of 2026 to $373.3 million as of March 31, 2026. As of March 31, 2026, the loans HFI to deposits ratio was 76.53%, compared to 75.88% as of December 31, 2025, and the noninterest-bearing deposits to total deposits ratio was 31.11%, compared to 30.84% as of December 31, 2025.
Previous wording
Interest-bearing deposits in other banks were the third-largest component of earning assets as of September 30, 2025. Excess liquidity that is not being deployed into loans or securities is placed in these accounts. As of September 30, 2025, interest-bearing deposits in other banks were $127.4 million and 4.0% of assets, a decrease of $111.0 million, or 46.6%, compared to $238.4 million and 7.6% of assets as of December 31, 2024. This decrease was primarily due to funding loan and securities growth, which exceeded deposit growth during the nine months ended September 30, 2025.
Current wording
Interest-bearing deposits in other banks were the third-largest component of earning assets as of March 31, 2026. Excess liquidity that is not being deployed into loans or securities is placed in these accounts. As of March 31, 2026, interest-bearing deposits in other banks were $173.8 million and 5.2% of assets, a decrease of $13.9 million, or 7.4%, compared to $187.7 million and 5.6% of assets as of December 31, 2025. This decrease was due to a reduction in customer deposit balances and the funding of loans during the first quarter of 2026.
Previous wording
Our securities portfolio is the second-largest component of earning assets and provides a significant source of revenue. Securities are classified as AFS, HTM, and equity securities. As of September 30, 2025, our total securities portfolio was 23.8% of assets. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring unnecessary interest rate and credit risk, and complement our lending activities. We may invest in various types of liquid assets that are permissible under governing regulations and approved by our investment policy, which include U.S. Treasury obligations, U.S. government agency obligations, certificates of deposit of insured domestic banks, mortgage-backed and mortgage-related securities, corporate notes having an investment rating of “A” or better, municipal bonds, and certain equity securities.
Current wording
Our securities portfolio is the second-largest component of earning assets and provides a significant source of revenue. Securities are classified as AFS, HTM, and equity securities. As of March 31, 2026, our total securities portfolio was 22.8% of assets. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring unnecessary interest rate and credit risk, and complement our lending activities. We may invest in various types of liquid assets that are permissible under governing regulations and approved by our investment policy, which include U.S. Treasury obligations, U.S. government agency obligations, certificates of deposit of insured domestic banks, mortgage-backed and mortgage-related securities, corporate notes having an investment rating of “A” or better, municipal bonds, and certain equity securities.
Previous wording
Securities AFS and securities HTM are debt securities. Total debt securities on the consolidated balance sheets were $761.5 million as of September 30, 2025, an increase of $79.6 million, or 11.7%, from $681.9 million as of December 31, 2024.
Current wording
Securities AFS and securities HTM are debt securities. Total debt securities on the consolidated balance sheets were $759.3 million as of March 31, 2026, a decrease of $10.6 million, or 1.4%, from $769.9 million as of December 31, 2025.
Previous wording
Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of September 30, 2025, the estimated fair value of securities AFS was $636.7 million. The carrying values of our securities AFS are adjusted for unrealized gain or loss, and any unrealized gain or loss is reported on an after-tax basis as a component of AOCI in stockholders’ equity. The net unrealized loss on securities AFS decreased $16.2 million for the nine months ended September 30, 2025, resulting in a net unrealized loss of $47.0 million as of September 30, 2025, compared to a net unrealized loss of $63.2 million as of December 31, 2024.
Current wording
Securities AFS are held for indefinite periods of time and are carried at estimated fair value. As of March 31, 2026, the estimated fair value of securities AFS was $638.7 million. The carrying values of our securities AFS are adjusted for unrealized gain or loss, and any unrealized gain or loss is reported on an after-tax basis as a component of AOCI in stockholders’ equity. The net unrealized loss on securities AFS increased $3.2 million for the three months ended
Previous wording
Securities HTM, which we have the intent and ability to hold until maturity, are carried at amortized cost. As of September 30, 2025, the amortized cost of securities HTM was $124.9 million. Securities HTM had an unrealized loss of $18.0 million as of September 30, 2025, compared to an unrealized loss of $22.8 million as of December 31, 2024.
Current wording
Securities HTM, which we have the intent and ability to hold until maturity, are carried at amortized cost. As of March 31, 2026, the amortized cost of securities HTM was $120.6 million. Securities HTM had an unrealized loss of $18.7 million as of March 31, 2026, compared to an unrealized loss of $18.2 million as of December 31, 2025.
Previous wording
Investment activity for the nine months ended September 30, 2025, included $146.7 million of securities purchased, partially offset by $83.5 million in maturities, principal repayments, and calls. There were no sales of securities AFS, and there were no purchases or sales of securities HTM for the same period.
Current wording
Investment activity for the three months ended March 31, 2026, included $32.1 million in maturities, principal repayments, and calls, partially offset by $24.7 million of securities purchased. There were no sales of securities AFS, and there were no purchases or sales of securities HTM for the same period.
Previous wording
The securities portfolio tax-equivalent yield was 2.84% for the nine months ended September 30, 2025, compared to 2.36% for the nine months ended September 30, 2024. The increase in yield was primarily due to reinvesting lower yielding securities cash flows received between September 30, 2024 and September 30, 2025, as well as other liquid funds, into higher yielding securities.
Current wording
The securities portfolio tax-equivalent yield was 3.00% for the three months ended March 31, 2026, compared to 2.73% for the three months ended March 31, 2025. The increase in yield was primarily due to reinvesting lower yielding securities cash flows received between March 31, 2025 and March 31, 2026, as well as other liquid funds, into higher yielding securities.
Previous wording
The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly pay downs on mortgage-backed securities may cause the average lives of the securities to be much different than the stated contractual maturity. During a period of rising interest rates, fixed rate mortgage-backed securities are not likely to experience heavy prepayments of principal, and consequently, the average lives of these securities are typically lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated average lives of these securities. As of September 30, 2025, the average life of our securities portfolio was 6.2 years with an estimated effective duration of 4.3 years. As of December 31, 2024, the average life of our securities portfolio was 7.0 years with an estimated effective duration of 4.9 years.
Current wording
The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and collateralized mortgage obligations are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly pay downs on mortgage-backed securities may cause the average lives of the securities to be much different than the stated contractual maturity. During a period of rising interest rates, fixed rate mortgage-backed securities are not likely to experience heavy prepayments of principal, and consequently, the average lives of these securities are typically lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated average lives of these securities. As of March 31, 2026 and December 31, 2025, the average life of our securities portfolio was 6.1 years with an estimated effective duration of 4.2 years.
Previous wording
Equity securities are an investment in a CRA mutual fund, consisting primarily of bonds. Equity securities are carried at fair value on the consolidated balance sheets with periodic changes in value recorded through the consolidated statements of income. As of September 30, 2025, equity securities had a fair value of $3.0 million with a recognized gain of $82,000 for the nine months ended September 30, 2025. As of December 31, 2024, equity securities had a fair value of $2.9 million with a recognized loss of $28,000 for the year ended December 31, 2024.
Current wording
Equity securities are an investment in a CRA mutual fund, consisting primarily of bonds. Equity securities are carried at fair value on the consolidated balance sheets with periodic changes in value recorded through the consolidated statements of income. As of March 31, 2026, equity securities had a fair value of $3.0 million with a recognized loss of $19,000 for the three months ended March 31, 2026. As of December 31, 2025, equity securities had a fair value of $3.0 million with a recognized gain of $94,000 for the year ended December 31, 2025.
Showing the first 40 of 70 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
March 31, 2026, resulting in a net unrealized loss of $46.4 million as of March 31, 2026, compared to a net unrealized loss of $43.2 million as of December 31, 2025.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
September 30, 2025 and $372,000 as of December 31, 2024. Within the health care sector, loans to nursing and residential care facilities were 4.1% of loans HFI as of September 30, 2025, and 4.4% as of December 31, 2024. Loans to physician and dental practices were 3.4% of loans HFI as of September 30, 2025 and December 31, 2024.
Previous report — wording carried elsewhere
December 31, 2024. Interest-bearing deposits decreased by $18.8 million, or 1.0%, to $1.92 billion as of September 30, 2025.
Previous report — wording carried elsewhere
2025, compared to average total loans for the twelve months ended December 31, 2024. The increase in average total loans was primarily due to the increase in real estate and commercial and industrial activity.