SOUTHERN MISSOURI BANCORP, INC.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
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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.
Sep 30, 2025 · Filed Nov 7, 2025
SMBC$70.46-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001558370-25-007367
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001104659-25-108374
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 93 previous paragraphs and 82 current paragraphs.
41 unchanged; 31 reworded; 7 added; 20 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 43 previous and 36 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 (7)
Current report
Net income for the first three months of fiscal 2025 was $15.7 million, an increase of $3.2 million, or 25.6% as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and decreases in noninterest expense, partially offset by increases in PCL and income taxes, and decreases in noninterest income. For the three-month period ended September 30, 2025, fully-diluted net income per share available to common stockholders was $1.38, up $0.28, or 25.5%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended September, 2025, was 1.24%, as compared to 1.07% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended September 30, 2025, was 11.3%, as compared to 9.9% in the same period of the prior fiscal year. For the first three months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $5.8 million, or 15.7%, and noninterest expense decreased $790,000, or 3.1%; these items were partially offset by PCL, which increased $2.3 million, or 108.4%, noninterest income, which decreased $601,000, or 8.4%, and provision for income taxes, which increased $413,000, or 12.2%. For more information see “Results of Operations – Comparison of the three- month periods ended September 30, 2025, and 2024”.
Current report
The Company’s noninterest income for the three-month period ended September 30, 2025, was $6.6 million, a decrease of $601,000, or 8.4%, as compared to the same period of the prior fiscal year. In the current period, the decrease was primarily attributable to decreases in loan fees resulting from a refinement of fee recognition in our application of ASC 310-20, Receivables - Nonrefundable Fees and Other Costs, and lower realized gains on sales of loans, partially offset by increases in deposit account charges and related fees, wealth management fees, bank card interchange income, and earnings on bank owned life insurance.
Current report
Noninterest expense for the three-month period ended September 30, 2025, was $25.1 million, a decrease of $790,000, or 3.1%, as compared to the same period of the prior fiscal year. In the current quarter, this decrease in noninterest expense was attributable primarily to lower compensation and benefits, legal and professional fees, and telecommunication expenses. The decrease in compensation and benefits expense was primarily driven by a refinement of expense recognition in our applications of ASC 310-20. Legal and professional fees decreased from the prior-year period, which had included $840,000 of costs related to a performance improvement project designed to enhance the Bank’s operations and revenue performance. By comparison, in the first quarter of fiscal 2026, legal and professional fees included $572,000 of consulting costs associated with the negotiation of a new contract with a key vendor. This decrease was partially offset by higher data processing expenses, deposit insurance premiums, and various minor increases across other expense categories.
Current report
Cash equivalents and time deposits were $124.4 million at September 30, 2025, a decrease of $68.7 million, or 35.6%, as compared to June 30, 2025. This amount was used primarily to fund loan growth. Available for sale securities were $453.9 million at September 30, 2025, down $7.0 million, or 1.5%, as compared to June 30, 2025, as the Company was less active in reinvesting principal payments received.
Current report
Noninterest Income. Noninterest income for the three-month period ended September 30, 2025, was $6.6 million, a decrease of $601,000, or 8.4%, as compared to the same period of the prior fiscal year. The decrease was primarily attributable to lower other loan fees and a decrease in net realized gains on sale of loans driven by a lower volume of SBA production. Other loan fees declined, reflecting a refinement of our fee recognition under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, with a greater portion now recognized in interest income over the life of the loan. These decreases were partially offset by an increase in deposit account charges and related fees, wealth management fees, and other non-interest income. Other non-interest income increased primarily due to the recognition of modest losses on the disposal of fixed assets in the year ago period, attributable to various equipment disposals, with no similar activity in the current quarter.
Current report
Noninterest Expense. Noninterest expense for the three-month period ended September 30, 2025, was $25.1 million, a decrease of $790,000, or 3.1%, as compared to the same period of the prior fiscal year. In the current quarter, this decrease in noninterest expense was attributable primarily to lower compensation and benefits, legal and professional fees, and telecommunication expenses. The decrease in compensation and benefits expense was primarily driven by the aforementioned refinement in the application of ASC 310-20, under which a larger portion of loan origination costs, including related compensation, is being deferred and recognized as a reduction of interest income over the life of the loan. Legal and professional fees decreased from the prior-year period, which had included $840,000 of costs related to a performance improvement project designed to enhance the Bank’s operations and revenue performance. By comparison, the first quarter of fiscal 2026, legal and professional fees included $572,000 of consulting costs associated with the negotiation of a new contract with a key vendor. This net decrease was partially offset by higher data processing costs, deposit insurance premiums, and various minor increases across other expense categories.
Current report
At September 30, 2025, nonperforming assets totaled $ 27.1 million, as compared to $23.7 million at June 30, 2025, and $12.1 million at September 30, 2024. The increase in nonperforming assets, compared to June 30, 2025, primarily reflects an increase in nonperforming loans (NPLs). The increase in NPLs compared to June 30, 2025, was primarily attributable to one commercial relationship consisting of two loans collateralized by commercial real estate and equipment, as well as three unrelated loans secured by one-to-four family residential properties, all of which were placed on nonaccrual status during the first quarter of fiscal 2026.
Removed paragraphs (20)
Previous report
Net income for the first nine months of fiscal 2025 was $42.8 million, an increase of $6.1 million, or 16.8% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, which were partially offset by increases in noninterest expense, provision for income taxes, and provision for credit losses (PCL). Diluted net income was $3.79 per common share for the first nine months of fiscal 2025, as compared to $3.22 per common share for the same period of the prior fiscal year. For the first nine months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $9.9 million or 9.5%; noninterest income increased $3.6 million or 21.2%, noninterest expense increased $3.5 million, or 4.8%; provision for income taxes increased $2.6 million or 27.0%; and PCL increased $1.3
Previous report
million or 49.0%. During the first nine months of fiscal 2024, the Bank sold bonds with a book value of $30.8 million, realizing a loss of $1.5 million, which was recognized in noninterest income. These proceeds were reinvested into higher yielding fixed rate securities. Recognition of this loss reduced after-tax net income by $1.2 million for the same period in the prior fiscal year. For more information see “Results of Operations – Comparison of the three- month periods ended March 31, 2025 and 2024”.
Previous report
The Company’s noninterest income for the nine-month period ended March 31, 2025, was $20.7 million, an increase of $3.6 million, or 21.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to the absence of a net realized loss on sale of AFS securities and increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, and earnings on bank owned life insurance. These increases were partially offset by lower loan late charges, other noninterest income, and lower loan servicing fees. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.
Previous report
Noninterest expense for the nine-month period ended March 31, 2025, was $76.1 million, an increase of $3.5 million, or 4.8%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time $840,000 expense associated with a performance improvement project that started during the first
Previous report
quarter of fiscal 2025. This expense was fully realized in the September quarter, with travel related reimbursables recognized in the second and third quarters of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. In addition, higher maintenance costs and service agreements were experienced. Increased advertising activity grew marketing expenses compared to the prior period.
Previous report
Cash equivalents and time deposits were a combined $227.1 million at March 31, 2025, an increase of $165.7 million, or 270.0%, as compared to June 30, 2024. The increase was primarily the result of strong deposit generation, reflecting seasonal trends, that outpaced loan growth during the period. AFS securities were $462.9 million at March 31, 2025, up $35.0 million, or 8.2%, as compared to June 30, 2024.
Previous report
Deposits were $4.3 billion at March 31, 2025, an increase of $318.3 million, or 8.1%, as compared to June 30, 2024. The deposit portfolio saw year-to-date increases in certificates of deposit and savings accounts, as customers remained willing to move balances into high yield savings accounts and special rate time deposits in the higher rate environment. Public unit balances totaled $575.8 million at March 31, 2025, a decrease of $18.8 million compared to June 30, 2024, and increased $9.8 million from December 31, 2024, reflecting seasonal trends. Brokered deposits totaled $235.6 million at March 31, 2025, an increase of $61.8 million as compared to June 30, 2024, but a decrease of $18.5 million compared
Previous report
Provision for Credit Losses. The Company recorded a PCL of $932,000 in the three-month period ended March 31, 2025, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $1.3 million provision attributable to the ACL for loan balances outstanding and a $368,000 negative provision attributable to the allowance for off-balance sheet credit exposures. The negative provision attributable to the allowance for off-balance sheet credit exposures was primarily the result of lower loss drivers and qualitative factors. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.11% (annualized) during the current period, as compared to 0.01% for the same period of the prior fiscal year. In the three-month period ended March 31, 2025, $1.1 million of net charge offs were realized, with the increase from prior periods primarily due to a single agricultural relationship with suspected fraudulent activity. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).
Previous report
Noninterest Income. Noninterest income for the three-month period ended March 31, 2025, was $6.7 million, an increase of $1.1 million, or 19.4%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to recognized losses on the sale of AFS securities, which totaled $807,000 in the comparable quarter, as compared to a small gain recognized in the current quarter. Additionally, deposit account charges and related fees increased, partially offset by decreases in loan late charges and loan servicing fees.
Previous report
Noninterest Expense. Noninterest expense for the three-month period ended March 31, 2025, was $25.4 million, an increase of $342,000, or 1.4%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to increases in other noninterest expense, occupancy and equipment, and legal and professional fees. The increase in other noninterest expense was primarily due to card fraud losses and deposit product expenses. Occupancy and equipment expenses increased due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. In addition, higher maintenance costs and service agreements were experienced. Lastly, legal and professional fees were elevated due primarily to an increase in accruals for audit expenses and the remaining expenses associated with the performance improvement project. Partially offsetting these increases from the prior year
Previous report
period were decreases in telecommunication expenses; intangible amortization, as the core deposit intangible recognized in an older merger was fully amortized in the second quarter of fiscal 2025; and advertising expenses.
Previous report
Results of Operations – Comparison of the nine-month periods ended March 31, 2025 and 2024
Previous report
General. Net income for the nine-month period ended March 31, 2025, was $42.8 million, an increase of $6.1 million, or 16.8% as compared to the same period of the prior fiscal year. The Company’s increase in net income was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, provision for income taxes, and PCL.
Previous report
For the nine-month period ended March 31, 2025, fully-diluted net income per share available to common shareholders was $3.79, as compared to $3.22 for the same period of the prior fiscal year, which represented an increase of $0.57, or 17.7%. Our annualized return on average assets for the nine-month period ended March 31, 2025, was 1.19%, as compared to 1.08% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the nine-month period ended March 31, 2025, was 11.2%, as compared to 10.6% in the same period of the prior fiscal year.
Previous report
Net Interest Income. Net interest income for the nine-month period ended March 31, 2025, was $114.3 million, an increase of $9.9 million, or 9.5%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.3% increase in the average balance of interest-earning assets and an increase in the net interest margin to 3.37%, as compared to 3.28% in the same period a year ago. The net interest spread improved seven basis points, to 2.80% at March 31, 2025, as compared to the same period of the prior fiscal year. The increase in the net interest margin was due to a higher interest-earning asset yield and the composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior year. This was partially offset by a higher cost of interest-bearing liabilities as customers remained willing to move balances into high yield savings accounts and special rate time deposits in the higher rate environment.
Previous report
Noninterest Income. Noninterest income for the nine-month period ended March 31, 2025, was $20.7 million, an increase of $3.6 million, or 21.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to the absence of a net realized loss on sale of AFS securities and increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, and earnings on bank owned life insurance. These increases were partially offset by lower loan late charges, other noninterest
Previous report
income, and lower loan servicing fees. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment. Lower loan servicing fees were largely due to a decrease in Small Business Administration loans serviced and reduced origination of residential mortgage servicing rights, caused primarily by a decrease in secondary mortgage originations.
Previous report
Noninterest Expense. Noninterest expense for the nine-month period ended March 31, 2025, was $76.1 million, an increase of $3.5 million, or 4.8%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first fiscal quarter of 2025 and to an increase in accruals for audit expenses. The performance improvement project expense was fully realized in the September quarter, with only modest reimbursables recognized through the third quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. In addition, higher maintenance costs and service agreements were experienced. Increased advertising activity grew marketing expenses compared to the prior period. This was partially offset by decreases in intangible amortization, telecommunication, and data processing expenses. The decrease in intangible amortization was primarily the result of the core deposit intangible recognized in an older merger, which was fully amortized in the second quarter of fiscal 2025.
Previous report
Income Taxes. The income tax provision for the nine-month period ended March 31, 2025, was $12.1 million, an increase of $2.6 million, or 27.0%, as compared to the same period of the prior fiscal year, due primarily to higher pre-tax income. Additionally, during the second quarter of fiscal year 2025, a $380,000 adjustment to tax accruals was recognized, attributable to completed merger and acquisition activity, with no similar adjustment in the prior fiscal year nine month period.
Previous report
At March 31, 2025, the nonperforming assets totaled $ 23.8 million, as compared to $10.6 million at June 30, 2024, and $11.3 million at March 31, 2024. The rise in the nonperforming assets, compared to June 30, 2024, reflects an increase in nonperforming loans, which was partially offset by a reduction in other real estate owned due to property sales. The increase in NPLs was primarily attributable to several commercial relationships added in the third quarter of 2025 and the addition of three unrelated loans collateralized by single-family residential property in the linked quarter. The increase during the third quarter was mostly attributable to loans totaling $10 million primarily secured by two specific-purpose non-owner occupied commercial properties in different states. The loans have some guarantors in common. The properties, now vacant, were originally leased to a single tenant that became insolvent.
Reworded paragraphs (31)
Previous wording
Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (the Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). At March 31, 2025, the Bank operated from its headquarters, 62 full-service branch offices, two limited-service branch offices, and two loan production offices. The Bank owns the office building and related land in which its headquarters are located, and 59 of its other branch offices. The remaining seven branches and offices are either leased or partially owned.
Current wording
Southern Missouri Bancorp, Inc. (Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). At September 30, 2025, the Bank operated from its headquarters, 63 full-service branch offices, two limited-service branch offices, and three loan production offices. The Bank owns the office building and related land in which its headquarters are located, and 60 of its other branch offices. The remaining eight branches and offices are either leased or partially owned.
Previous wording
Management’s discussion and analysis of financial condition and results of operations 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 condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at March 31, 2025, and results of operations for the three-and nine- month periods ended March 31, 2025 and 2024.
Current wording
Management’s discussion and analysis of financial condition and results of operations 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 condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at September 30, 2025, and results of operations for the three-month periods ended September 30, 2025, and 2024.
Previous wording
During the first nine months of fiscal 2025, total assets increased by $372.2 million. The increase was primarily attributable to an increase in net loans receivable, cash equivalents, and available for sale (AFS) securities. Loans, net of the ACL, increased $171.3 million; cash equivalents increased by $166.0 million; and AFS securities increased $35.0 million. Liabilities increased $332.1 million, primarily attributable to an increase in deposits of $318.3 million. Equity increased $40.0 million, attributable primarily to earnings retained after cash dividends paid, in combination with a $3.5 million reduction in accumulated other comprehensive losses (AOCL) due to the market value of the Company’s investments appreciating as a result of the decrease in market interest rates. For more information, see “Comparison of Financial Condition at March 31, 2025 and June 30, 2024.”
Current wording
During the first three months of fiscal 2026, total assets increased by $16.7 million. The increase was primarily attributable to an increase in net loans receivable, partially offset by decreases in cash and cash equivalents, and AFS securities. Loans, net of the ACL, increased $90.7 million; cash equivalents decreased by $68.7 million; and AFS securities decreased $7.0 million. Liabilities increased $1.2 million, primarily attributable to an increase in securities sold under agreements to repurchase of $5.0 million, partially offset by decreases in accounts payable and other liabilities of $2.1 million, FHLB advances of $2.0 million, and deposits of $878,000. Equity increased $15.5 million, attributable primarily to earnings retained after cash dividends paid, in combination with a $3.0 million reduction in
Previous wording
Interest rates during the first nine months of fiscal 2025 remained volatile and moved lower at the shorter end and mid-point of the curve due to Federal Open Market Committee (FOMC) federal funds rate cuts totaling 100 basis points during the fiscal year. Market expectations are for further reductions in the federal funds rate over the next year, while there are concerns that economic conditions could keep inflation somewhat elevated and above the FOMC target range due to recent tariff announcements. Yields at the mid-point of the curve decreased at the end of the period, but as stated previously, have been volatile and above year end 2024 levels through most of the fiscal year. The yield curve uninverted, with a 30 basis point positive slope between the two-year and ten-year treasury rates. At March 31, 2025, as compared to June 30, 2024, the yield on two-year treasuries decreased from 4.72% to 3.86%; the yield on five-year treasuries decreased from 4.33% to 3.91%; the yield on ten-year treasuries decreased from 4.34% to 4.16%; and the yield on 30-year treasuries increased from 4.50% to 4.52%.
Current wording
Interest rates during the first three months of fiscal 2026 remained relatively stable and moved lower at the shorter end and mid-point of the curve due to Federal Open Market Committee (FOMC) approved a federal funds rate cut of 25 basis points in September 2025. Market expectations are for further reductions in the federal funds rate over the next year, while there are concerns that economic conditions could keep inflation somewhat elevated and above the FOMC target range, which has led to some steepening of the yield curve. At September 30, 2025, the yield curve had a 56 basis point positive slope between the two-year and ten-year treasury rates.
Previous wording
As compared to the first nine months of the prior fiscal year, our average yield on earning assets increased by 33 basis points, primarily attributable to increased yields on loans receivable, as loans renewed and new loans were originated at higher market rates. Our cost of interest-bearing liabilities increased by 26 basis points, as certificates of deposit and savings balances increased to higher market rates. Special deposit rates and some brokered CD funding was utilized to increase balance sheet liquidity in the first nine months of fiscal 2025 to support loan growth and AFS security purchases. Due to average earning assets repricing higher than interest-bearing liabilities, the net interest spread increased seven basis points to 2.80% and the net interest margin increased by nine basis points to 3.37% during the first nine-months of fiscal 2025, as compared to the same period in fiscal 2024. The increase in the net interest margin was due primarily to the increase in net interest spread and a greater composition of higher yielding assets, primarily loans, and a lower balance of lower yielding cash and cash equivalents, compared to the prior fiscal year period. In addition, net interest income benefitted from a 6.3% increase in average earnings assets, compared to the prior fiscal year period. The 100 basis points of federal funds rate cuts, from September 2024 to December 2024, a higher percentage of variable rate deposits compared to the prior fiscal year, and relatively stable price competition for deposits have eased the pressure on interest expense, while loans repriced to higher market rates, and allowed the net interest spread and net interest margin to expand in the fiscal 2025 period.
Current wording
As compared to the first three months of the prior fiscal year, our average yield on earning assets increased by one basis point, primarily attributable to increased yields on loans receivable, as loans renewed and new loans were originated at higher market rates, partially offset by decreased yields on AFS securities, and a higher percentage of earning assets in securities and cash. The cost of interest-bearing liabilities decreased by 28 basis points due primarily to lower market rates. Due to average earning assets repricing slightly higher, and interest-bearing liabilities repricing lower, the net interest spread increased 29 basis points to 3.02% and the net interest margin increased by 23 basis points to 3.57% during the first three-months of fiscal 2026, as compared to the same period in fiscal 2025. The increase in the net interest margin was due primarily to the increase in net interest spread, partially offset by a lower composition of higher yielding assets, primarily loans, and a higher balance of lower yielding cash and cash equivalents, compared to the prior fiscal year period. In addition, net interest income benefitted from an 8.1% increase in average earnings assets, compared to the prior fiscal year period. The combination of a higher percentage of variable rate deposits compared to the prior fiscal year and lower rates, easing the pressure on interest expense, and loans repricing to higher market rates, has allowed the net interest spread and net interest margin to expand in the fiscal 2026 period.
Previous wording
We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we will utilize brokered funding and short- and long-term FHLB borrowings. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model.
Current wording
We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we may utilize brokered funding and short- and long-term FHLB borrowings. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model.
Previous wording
The Company experienced balance sheet growth in the first nine months of fiscal 2025, with total assets of $5.0 billion at March 31, 2025, reflecting an increase of $372.2 million, or 8.1%, as compared to June 30, 2024. Growth primarily reflected an increase in net loans receivable, cash equivalents, and available for sale (AFS) securities.
Current wording
The Company experienced balance sheet growth in the first three months of fiscal 2026, with total assets of $5.0 billion at September 30, 2025, reflecting an increase of $16.7 million, or 0.3%, as compared to June 30, 2025. Growth primarily resulted from an increase in net loans receivable, which was partially offset by a decrease in cash equivalents and time deposits and available for sale securities.
Previous wording
Loans, net of the allowance for credit losses (ACL), were $4.0 billion at March 31, 2025, an increase of $171.3 million, or 4.5%, as compared to June 30, 2024. Gross loans increased by $173.7 million, while the ACL attributable to outstanding loan balances increased $2.4 million, or 4.6%, as compared to June 30, 2024. The increase in loan balances was attributable to growth in 1-4 family residential, commercial and industrial, construction and land development, multi-family real estate, agriculture real estate, owner occupied commercial real estate, and agricultural production loan balances. This was somewhat offset by a decrease in consumer loans, loans secured by non-owner occupied commercial real estate, and other loan balances.
Current wording
Loans, net of the allowance for credit losses (ACL), were $4.1 billion at September 30, 2025, increasing by $90.7 million, or 2.2%, as compared to June 30, 2025. The Company noted growth in both the real estate and non-real estate portfolios. Real estate loan growth was primarily driven by increases in non-owner occupied commercial real estate, 1-4 residential real estate, and multi-family real estate loan balances. This was somewhat offset by a decrease in construction and land development loans, due to projects completed and transitioned to permanent financing, generally provided by the Company. In the non-real estate portfolio, growth was driven by seasonal agricultural production loan draws and modest growth in commercial and industrial loan balances.
Previous wording
Loans anticipated to fund in the next 90 days totaled $163.3 million at March 31, 2025, as compared to $157.1 million at June 30, 2024, and $117.2 million at March 31, 2024.
Current wording
Loans anticipated to fund in the next 90 days totaled $194.5 million at September 30, 2025, as compared to $224.1 million at June 30, 2025, and $168.0 million at September 30, 2024.
Previous wording
The Bank’s concentration in non-owner occupied commercial real estate loans is estimated at 304.0% of Tier 1 capital and ACL on March 31, 2025, as compared to 317.5% as of June 30, 2024, with these loans representing 40.4% of total loans at March 31, 2025. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, retail stand-alone, and strip centers are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner-occupied office property types included 31 loans totaling $23.9 million, or 0.59% of gross loans at March 31, 2025, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and the individual segments closely.
Current wording
The Bank’s concentration in non-owner occupied commercial real estate loans is estimated at 295.7% of Tier 1 capital and ACL at September 30, 2025, as compared to 301.9% as of June 30, 2025, with these loans representing 39.3% of total loans at September 30, 2025. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, strip centers, retail stand-alone, and storage units are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner occupied office property types included 34 loans totaling $20.5 million, or 0.49% of total loans at September 30, 2025, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and its individual segments closely.
Previous wording
to December 31, 2024. The average loan-to-deposit ratio for the third quarter of fiscal 2025 was 94.2%, as compared to 96.3% for the quarter ended June 30, 2024, and 92.7% for the same period of the prior fiscal year.
Current wording
Deposits were $4.3 billion at September 30, 2025, a decrease of $878,000, as compared to June 30, 2025. The deposit portfolio declined primarily in certificates of deposit and NOW accounts, as the Bank was less aggressive on deposit pricing given its excess funding position. This was partially offset by increases in savings and money market deposit accounts. The decrease in certificates of deposit was largely driven by a $33.2 million reduction in brokered certificates compared to June 30, 2025. Brokered deposits totaled $220.5 million at September 30, 2025, a decrease of $14.6 million from June 30, 2025. Short-term brokered money market deposit accounts were utilized to partially replace the outflow of brokered certificates of deposit. Public unit balances totaled $537.4 million at September 30, 2025, a decrease of $13.5 million compared to June 30, 2025, due to expected seasonal decreases in these accounts. Compared to the same quarter a year ago, nonmaturity accounts increased $150.3 million, or 6.0%, and non-brokered certificates of deposits increased $150.7 million, or 12.0%. The average loan-to-deposit ratio for the first quarter of fiscal 2026 was 96.3%, as compared to 94.5% for the quarter ended June 30, 2025, and 98.5% for the same quarter a year ago.
Previous wording
FHLB advances were $104.1 million at March 31, 2025, an increase of $2.0 million, or 2.0%, as compared to June 30, 2024.
Current wording
FHLB advances were $102.0 million at September 30, 2025, a decrease of $2.0 million, or 2.0%, from June 30, 2025, due to maturing advances which were not renewed. For the quarter ended September 30, 2025, the Company continued to have no FHLB overnight borrowings at the end of the period.
Previous wording
The Company’s stockholders’ equity was $528.8 million at March 31, 2025, an increase of $40.0 million, or 8.2%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $3.5 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $14.0 million at March 31, 2025, compared $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.
Current wording
The Company’s stockholders’ equity was $560.2 million at September 30, 2025, an increase of $15.5 million, or 2.9%, as compared to June 30, 2025. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a decrease AOCL as the market value of the Company’s investments appreciated due to decreases in market interest rates. The AOCL decreased from $11.4 million at June 30, 2025, to $8.4 million at September 30, 2025. The Company does not hold any securities classified as held-to-maturity. The increase in stockholders’ equity was partially offset by $447,000 utilized for repurchases of 8,145 shares of the Company’s common stock during the first fiscal quarter of fiscal 2026 at an average price of $54.84 per share.
Previous wording
Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Nine- Month Periods Ended
Current wording
Average Balance Sheet, Interest, and Average Yields and Rates for the Three-Month Periods Ended
Previous wording
The tables below present certain information regarding our financial condition and net interest income for the three- and nine- month periods ended March 31, 2025 and 2024. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.
Current wording
The table below presents certain information regarding our financial condition and net interest income for the three-month periods ended September 30, 2025, and 2024. The table presents the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.
Previous wording
The following tables set forth the effects of changing rates and volumes on the Company’s net interest income for the three- and nine- month periods ended March 31, 2025, compared to the three- and nine- month periods ended March 31, 2024. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).
Current wording
The following table sets forth the effects of changing rates and volumes on the Company’s net interest income for the three-month periods ended September 30, 2025, compared to the three-month periods ended September 30, 2024. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).
Previous wording
General. Net income for the three-month period ended March 31, 2025, was $15.7 million, an increase of $4.4 million or 38.7%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, income taxes, and PCL.
Current wording
General. Net income for the three-month period ended September 30, 2025, was $15.7 million, an increase of $3.2 million or 25.6%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and decreases in noninterest expense, partially offset by increases in PCL and income taxes, and decreases in noninterest income.
Previous wording
For the three-month period ended March 31, 2025, fully-diluted net income per share available to common shareholders was $1.39, up $0.40, or 40.4%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended March 31, 2025, was 1.27%, as compared to 0.97% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended March 31, 2025, was 12.1%, as compared to 9.5% in the same period of the prior fiscal year.
Current wording
For the three-month period ended September 30, 2025, fully-diluted net income per share available to common stockholders was $1.38, up $0.28, or 25.5%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended September, 2025, was 1.24%, as compared to 1.07% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended September 30, 2025, was 11.3%, as compared to 9.9% in the same period of the prior fiscal year.
Previous wording
Net Interest Income. Net interest income for the three-month period ended March 31, 2025, was $39.5 million, an increase of $5.0 million, or 14.4%, as compared to the same period of the prior fiscal year. The increase was attributable to an increase of 24 basis points in the net interest margin, from 3.15% to 3.39%, and a 6.2% increase in the average balance of interest-earning assets in the current three-month period compared to the same period a year ago. The primary driver of the net interest margin expansion, compared to the year ago period, was the yield on interest-earning assets increasing 17 basis points, while the cost of interest-bearing liabilities decreased 11 basis points.
Current wording
Net Interest Income. Net interest income for the three-month period ended September 30, 2025, was $42.4 million, an increase of $5.8 million, or 15.7%, as compared to the same period of the prior fiscal year. The increase was attributable to an 8.1% increase in the average balance of interest-earning assets in the current three-month period, as compared to the same period a year ago, and a 23 basis point increase in net interest margin, from 3.34% to 3.57%, as the cost of interest-bearing liabilities decreased by 28 basis points, and the yield earned on interest earning assets increased by one basis point.
Previous wording
Loan discount accretion and deposit premium amortization related to the Company’s November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $1.5 million in net interest income for the three-month period ended March 31, 2025, as compared to $1.2 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed 13 basis points to net interest margin in the three-month period ended March 31, 2025, as compared to an 11-basis point contribution for the same period of the prior fiscal year, and as compared to a nine-basis point contribution in the three-month period ended December 31, 2024, when net interest margin was 3.36%.
Current wording
Loan discount accretion and liability premium amortization related to the November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $876,000 in net interest income
Previous wording
Loan discount accretion and deposit premium amortization related to the Company’s November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust, resulted in $3.5 million in net interest income for the nine-month period ended March 31, 2025, as compared to $4.4 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed 10 basis points to net interest margin in the nine-month period ended March 31, 2025, as compared to a 14-basis point contribution for the same period of the prior fiscal year.
Current wording
for the three-month period ended September 30, 2025, as compared to $959,000 in net interest income for the same period a year ago. Combined, this component of net interest income contributed seven basis points to net interest margin in the three-month period ended September 30, 2025, as compared to a nine-basis point contribution for the same period of the prior fiscal year.
Previous wording
Provision for Credit Losses. The PCL for the nine-month period ended March 31, 2025, was a charge of $4.0 million, as compared to $2.7 million in the same period of the prior fiscal year. The current period PCL was the result of a $3.8 million provision attributable to the ACL for loan balances outstanding and a $201,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of five basis points (annualized) during the current period, compared to five basis points during the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).
Current wording
Provision for Credit Losses. The Company recorded a PCL of $4.5 million in the three-month period ended September 30, 2025, as compared to a PCL of $2.2 million in the same period of the prior fiscal year. The current period PCL was the result of a $4.1 million provision attributable to the ACL for loan balances outstanding and a $359,000 provision attributable to the allowance for off-balance sheet credit exposures. The factors considered when estimating a required ACL and PCL for loan balances outstanding is detailed below under “Allowance for Credit Loss Activity” and the PCL for off-balance sheet credit exposure was primarily attributable to an increase in unfunded balances and an increase in required reserves for pooled loans.
Previous wording
Income Taxes. The income tax provision for the three-month period ended March 31, 2025, was $4.1 million, an increase of 45.9% as compared to the same period of the prior fiscal year, primarily due to the increase in net income before income taxes. The effective tax rate was 20.9%, as compared to 20.1% in the same quarter of the prior fiscal year. The increase in the effective tax rate is primarily attributable to a reduction in total tax-exempt income, which also constituted a smaller proportion of pre-tax income compared to the same period in the prior fiscal year.
Current wording
Income Taxes. The income tax provision for the three-month period ended September 30, 2025, was $3.8 million, an increase of 12.2%, as compared to the same period of the prior fiscal year, primarily due to the increase in net income before income taxes. The effective tax rate for the quarter was 19.5%, compared to 21.3% in the same quarter of the prior fiscal year. The lower rate was due to the absence of merger-related tax accrual adjustments that elevated the same period of the prior fiscal year’s rate, combined with the impact of lower state tax rates and a revised apportionment methodology, in the current period. The current quarter also benefited from the recognition of tax credits under the proportional amortization method in accordance with ASC 2023-02.
Previous wording
Although the Company maintains its ACL at a level that it considers sufficient to provide for losses, there can be no assurance that future losses will not exceed internal estimates. In addition, the amount of the ACL is subject to review by regulatory agencies, which can order the Company to record additional allowances. The required ACL has been estimated based upon the guidelines in ASC Topic 326, Financial Instruments – Credit Losses.
Current wording
Although the Company maintains its ACL at a level that it considers sufficient to provide for losses, there can be no assurance that future losses will not exceed internal estimates. In addition, the amount of the ACL is subject to review by
Previous wording
The following table summarizes changes in the ACL over the three- and nine- month periods ended March 31, 2025 and 2024:
Current wording
The following table summarizes changes in the ACL over the three-month periods ended September 30, 2025, and 2024:
Previous wording
Our ACL at March 31, 2025, totaled $54.9 million, representing 1.37% of gross loans and 250% of nonperforming loans, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans at June 30, 2024. The Company has estimated its expected credit losses as of March 31, 2025, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, although the Federal Reserve has reduced short-term rates somewhat during this fiscal year. Qualitative adjustments in the Company’s ACL model were increased compared to June 30, 2024, due to various factors that are relevant in determining expected collectability of credit. Additionally, a provision for credit loss was required due to loan net charge offs and to provide reserves for overdrafts in the third quarter of fiscal year 2025.
Current wording
The ACL at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans and 200% of nonperforming loans, as compared to an ACL of $51.6 million, representing 1.26% of gross loans and 224% of nonperforming loans at June 30, 2025. The Company has estimated its expected credit losses as of September 30, 2025, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant economic uncertainty despite recent reductions in short-term interest rates as labor market conditions soften, while inflation remains above target. The increase in the ACL was primarily attributable to management’s assessment of reserve adequacy amid an evolving economic environment, additions to individually reviewed loans, loan growth, and slightly higher reserves required for pooled loans. This was partially offset by net charge-offs, which reduced the overall
Previous wording
At March 31, 2025, the Company had accrued within other liabilities an allowance for off-balance sheet credit exposures of $3.5 million, as compared to $3.3 million at June 30, 2024. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $201,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an expected increase in credit utilization based on historical usage of these off-balance sheet credit exposures.
Current wording
required reserves for individually evaluated loans. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.36% (annualized) during the current quarter, as compared to 0.01% for the same quarter of the prior fiscal year. In the three-month period ended September 30, 2025, net charge offs were $3.7 million, which was primarily attributable to a $2.8 million charge-off associated with a special-purpose CRE relationship, which was reserved for in the prior fiscal year. At September 30, 2025, the Company had accrued within other liabilities an allowance for off-balance sheet credit exposures of $4.3 million, as compared to $3.9 million at June 30, 2025. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $359,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an increase in unfunded balances and an increase in required reserves for pooled loans.
Previous wording
At March 31, 2025, the Company had loans of $48.8 million, or 1.21% of total loans, adversely classified ($48.8 million classified “substandard”; none classified “doubtful”), as compared to loans of $40.9 million, or 1.06% of total loans, adversely classified ($40.9 million classified “substandard”; none classified “doubtful”) at June 30, 2024, and $43.3 million, or 1.15% of total loans, adversely classified ($43.3 million classified “substandard”; none classified “doubtful”), at March 31, 2024. Classified loans were generally comprised of loans secured by commercial and residential real estate, and other commercial purpose collateral. All loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $22.0 million at March 31, 2025. The Company’s total past due loans increased from $9.2 million at June 30, 2024, to $24.4 million at March 31, 2025. Total past due loans were $8.6 million at March 31, 2024. See Note 4 – “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements. For additional information on the increase in substandard loans, see “Non-Performing Assets” within Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
At September 30, 2025, the Company had loans of $55.1 million, or 1.31% of total loans, adversely classified ($54.5 million classified “substandard”; $603,000 classified “doubtful”), as compared to loans of $49.6 million, or 1.21% of total loans, adversely classified ($49.6 million classified “substandard”; none classified “doubtful”) at June 30, 2025, and $40.4 million, or 1.02% of total loans, adversely classified ($40.4 million classified “substandard”; none classified “doubtful”), at September 30, 2024. Classified loans were generally comprised of loans secured by commercial and residential real estate, and other commercial purpose collateral. All loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $22.5 million at September 30, 2025. The Company’s total past due loans increased from $25.6 million at June 30, 2025, to $29.3 million at September 30, 2025. Total past due loans were $13.4 million at September 30, 2024. See Note 4 – “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements. For additional information on the increase in substandard loans, see “Non-Performing Assets” within Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
The Company adopted ASU No. 2022-02 in fiscal 2025, which eliminated the accounting guidance for TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. At March 31, 2025, modifications to borrowers experiencing financial difficulty totaled $24.9 million, of which $1.6 million was considered nonperforming and included in the nonaccrual loan total above. The remaining $23.3 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, these loans were subject to classification as modifications due to term extensions, with only $897,000 being due to payment delay, given to borrowers experiencing financial difficulty at March 31, 2025. At June 30, 2024, these modifications totaled $25.5 million, of which $895,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.6 million in modifications at June 30, 2024, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.
Current wording
At September 30, 2025, modifications to borrowers experiencing financial difficulty totaled $28.7 million, of which $1.6 million was considered nonperforming and included in the nonaccrual loan total above. The remaining $27.1 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, $25.5 million of these loans were subject to classification as modifications due to interest rate reductions, $1.7 million due to term extensions, and $1.5 million due to payment delays, given to borrowers experiencing financial difficulty at September 30, 2025. At June 30, 2025, these modifications totaled $28.2 million, of which $1.6 million was considered
Previous wording
At March 31, 2025, the Company had outstanding commitments and approvals to extend credit of approximately $901.4 million (including $602.4 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At March 31, 2025, the Bank had pledged $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $863.8 million, of which $104.1 million was advanced, while $506,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. The Bank has the ability to pledge other assets, including, for example, additional unpledged real estate loans held by the Bank or the Bank’s REIT, and the unpledged securities in the Bank’s portfolio, which could provide additional collateral for additional borrowings. In total, FHLB borrowings are generally limited to 45% of Bank assets, or approximately $2.2 billion, subject to available collateral. Also, at March 31, 2025, the Bank had pledged a total of $377.1 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $324.6 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at March 31, 2025. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.
Current wording
At September 30, 2025, the Company had outstanding commitments and approvals to extend credit of approximately $984.7 million (including $623.2 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At September 30, 2025, the Bank had pledged $1.6 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $899.7 million, of which $102.1 million was advanced, while $621,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. In total, FHLB borrowings are generally limited to 45% of Bank assets, or approximately $2.2 billion, subject to available collateral. Also, at September 30, 2025, the Bank had pledged a total of $419.7 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $368.1 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at September 30, 2025. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.
Previous wording
The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Company and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Company
Current wording
The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Company and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Company and Bank’s regulators could require adjustments to regulatory capital not reflected in the consolidated financial statements.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
accumulated other comprehensive losses (AOCL) due to the market value of the Company’s investments appreciating as a result of the decrease in market interest rates, partially offset by the purchase of treasury stock totaling $446,000. For more information, see “Comparison of Financial Condition at September 30, 2025, and June 30, 2025.”
Current report — wording carried from elsewhere
regulatory agencies, which can order the Company to record additional allowances. The required ACL has been estimated based upon the guidelines in ASC Topic 326, Financial Instruments – Credit Losses.
Current report — wording carried from elsewhere
nonperforming and included in the nonaccrual loan total above. The remaining $26.6 million in modifications at June 30, 2025, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
and Bank’s regulators could require adjustments to regulatory capital not reflected in the consolidated financial statements.