FIRST CAPITAL INC
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
FCAP$62.35+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001171843-25-001868
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001104659-26-037802
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 71 current paragraphs.
43 unchanged; 24 reworded; 4 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 39 previous and 38 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 (4)
Current report
General
Current report
(2)Per share data excludes net income attributable to noncontrolling interests.
Current report
Noninterest Expense*.*Noninterest expenses increased $1.7 million for the year ended December 31, 2025 as compared to the same period in 2024. This was primarily due to increases in compensation and benefits and occupancy and equipment expenses of $1.3 million and $472,000, respectively. The increase in compensation and benefits is due to increases in salary and wages associated with annual cost of living and performance related adjustments as well as increases in the cost of Company-provided health insurance benefits. The increase in occupancy and equipment expenses is primarily due to costs associated with snow removal across the Company’s branch network in the first quarter of 2025, as well as losses on the disposal of premises and equipment associated with two of the Bank’s branches, the upgrade of the Company’s call center system, and the demolition of one of the Bank’s branches.
Current report
The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. The Bank is guided by a board-approved Liquidity Management Policy and the Interagency Policy Statement on Funding and Liquidity Risk Management. The Liquidity Management Policy is overseen by the Bank’s Asset Liability Committee (“ALCO”) which is chaired by the Bank’s Chief Financial Officer and comprised of line of business leaders at the Bank and one member of the Bank’s Board of Directors. Management monitors the Bank’s liquidity position on an ongoing basis, and the ALCO meets quarterly to review liquidity metrics and compliance with the Liquidity Management Policy. As directed by the Liquidity Management Policy, the ALCO evaluates a number of liquidity-based ratios including a comparison of liquid assets to total assets, consistent with policy guidelines. The Liquidity Management Policy also outlines required liquidity stress testing and contingency funding planning. Stress scenarios consider, among other factors, utilization of established borrowing lines with the FHLB, the FRB’s Discount Window, and other financial institutions, the issuance of brokered deposits, deposit runoff at various levels of severity, funding of unfunded loan commitments, and scenarios assuming limited access to certain funding sources. Stress testing results, contingency funding plans, and related processes, including periodic testing of borrowing lines and brokered deposit capabilities, are reviewed by the ALCO and reported to the Board of Directors.
Removed paragraphs (4)
Previous report
Provision for Loan Losses*.* Effective January 1, 2023, the Company adopted the FASB ASU 2016-13,Financial Instruments–* Credit Losses (Topic 326)*, as amended, and commonly referred to as the Current Expected Credit Loss model ("CECL"), under the modified retrospective method. The adoption replaced the allowance for loan losses with the ACL on loans on the consolidated balance sheets and replaced the related provision for loan losses with the provision for credit losses on loans on the consolidated statements of income. Upon adoption, the Company recorded an increase in the beginning ACL on loans of $561,000, increasing the ACL on loans as a percentage of loans receivable to 1.29% as compared to 1.20% at December 31, 2022 prior to adoption. In addition, the Company established an ACL related to unfunded loan commitments of $131,000 upon adoption of CECL. The use of the modified retrospective method of adoption resulted in the Company recording a $529,000 reduction (net of tax) in retained earnings as of January 1, 2023.
Previous report
The $40,000 net gain on sale of securities was a result of the Company’s regular evaluation of its entire securities portfolio. During 2023, the Company selected and sold securities available for sale with a market value of $20.6 million and an amortized cost basis of $20.8 million resulting in a net loss of $114,000. The net loss was more than offset by the $157,000 gain on sale of the Company’s VISA Class B stock in September 2023. The strategy for both sales was the enhancement of long-term earnings.
Previous report
Noninterest Expense*.* Noninterest expenses increased $940,000 for 2023 as compared to 2022. This was primarily due to increases in compensation and benefits, data processing expenses, and other expenses of $305,000, $417,000 and $372,000, respectively, when comparing the two periods. The increases were partially offset by decreases of $53,000 and $77,000 in professional fees and occupancy and equipment expenses, respectively. The increase in other expenses was due primarily to increases in FDIC insurance premiums and fraud losses of $203,000 and $163,000, respectively, in addition to general inflationary increases across multiple other expenses. These were partially offset by a $128,000 decrease in expenses, including the payout of loss claims, associated with the Company’s wholly owned captive insurance subsidiary which ceased regular operations in August and was formally dissolved in December 2023.
Previous report
On September 24, 2020, the Company filed an automatic shelf registration statement with the SEC. The shelf registration permits the Company to issue up to $35 million of debt and equity securities, of which $35 million remains available, subject to Board authorization and market conditions. While we seek to preserve flexibility with respect to cash requirements, there can be no assurance that market conditions would permit us to sell securities on acceptable terms at any given time or at all.
Reworded paragraphs (24)
Previous wording
Net Income. ** **Net income attributable to the Company was $12.8 million ($3.82 per share diluted; weighted average common shares outstanding of 3,347,341, as adjusted) for the year ended December 31, 2023 compared to $11.9 million ($3.55 per share diluted; weighted average common shares outstanding of 3,355,023, as adjusted) for the year ended December 31, 2022.
Current wording
Net Income. Net income attributable to the Company was $16.4 million ($4.89 per share diluted; weighted average common shares outstanding of 3,347,989, as adjusted) for the year ended December 31, 2025 compared to $11.9 million ($3.57 per share diluted; weighted average common shares outstanding of 3,346,161, as adjusted) for the year ended December 31, 2024.
Previous wording
Net Interest Income. ** Net interest income increased **$2.2 million, or 6.9%, from $32.3 million for 2022 to $34.6 million for 2023 primarily due to increases in the average tax-equivalent yield on interest-earning assets partially offset by increases in the average balance and cost of interest-bearing liabilities.
Current wording
Net Interest Income. Net interest income increased $6.4 million, or 17.8%, from $35.8 million for 2024 to $42.2 million for 2025 primarily due to increases in the average tax-equivalent yield on interest-earning assets, the average balance of interest-earning assets and a decrease in the cost of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities.
Previous wording
Total interest income increased** **$9.7 million for 2023 as compared to 2022. The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets increased from 3.10% in 2022 to 3.96% in 2023, primarily due to the increase in short-term interest rates by the Federal Open Market Committee during 2022 and 2023. Interest on loans increased $8.4 million when comparing the two periods due to an increase in the average balance of loans from $530.2 million in 2022 to $590.6 million in 2023. Interest and dividends on investment securities (including FHLB stock) increased $1.3 million for 2023 compared to 2022 due to an increase in the average balance of investment securities from $495.6 million for 2022 to $506.5 million for 2023 in addition to an increase in the tax-equivalent yield on investment securities from 1.73% in 2022 to 1.95% in 2023. Other interest income increased $6,000 for 2023 as compared to 2022 primarily due to the tax equivalent yield of federal funds sold increasing from 1.24% to 5.07% when comparing the two periods, almost entirely offset by a decrease in the average balance of federal funds sold from $92.0 million for 2022 to $19.5 million for 2023.
Current wording
Total interest income increased $6.4 million for 2025 as compared to 2024. The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets increased from 4.49% in 2024 to 4.85% in 2025. The increase in the yield was primarily due to an increase in the tax-equivalent yield on loans from 6.05% in 2024 to 6.29% in 2025. Interest on loans increased $2.6 million when comparing the two periods due to an increase in the average balance of loans from $634.0 million in 2024 to $651.8 million in 2025. In addition, the Company’s lower yielding securities continue to mature with proceeds being reinvested in higher yielding loans or interest-bearing deposits with other banks. Interest and dividends on investment securities (including FHLB stock) increased $1.9 million for 2025 compared to 2024 due to an increase in the tax-equivalent yield on investment securities from 2.25% in 2024 to 2.80% in 2025, partially offset by a decrease in the average balance of investment securities from $455.1 million for 2024 to $433.8 million for 2025. Other interest income increased $1.9 million for 2025 as compared to 2024 primarily due to an increase in the average balance of interest-bearing deposits with banks from $52.0 million in 2024 to $104.4 million in 2025 partially offset by the yield of interest-bearing deposits with banks decreasing from 5.09% to 4.31% when comparing the two periods.
Previous wording
Total interest expense increased $7.4 million, from $1.6 million for 2022 to $9.0 million for 2023, due to increases in the average cost of interest-bearing liabilities from 0.20% for 2022 to 1.11% for 2023 and in the average balance of interest-bearing liabilities from $802.8 million for 2022 to $809.2 million for 2023. The Company’s average balance of interest-bearing deposits decreased from $802.8 million for 2022 to $794.4 million for 2023 while the average cost of interest-bearing deposits increased from 0.20% for 2022 to 1.04% for 2023. The Company had average outstanding advances from the FHLB of $6.1 million with an average rate of 5.59% and average outstanding borrowings under the FRB’s BTFP of $8.6 million with an average rate of 5.05% during 2023. The Company’s total average outstanding balance of borrowings during 2023 was $14.7 million with an average rate of 5.27%. There were no outstanding borrowed funds during 2022. As a result of the changes in interest-earning assets and interest-bearing liabilities, the interest rate spread (tax equivalent basis) decreased from 2.90% for 2022 to 2.85% for 2023. For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2023 and 2022 are shown in the schedule captioned “Rate/Volume Analysis” included herein.
Current wording
Total interest expense was $14.7 million for 2025 and 2024. Increases in the average balance of interest-bearing liabilities from $850.0 million for 2024 to $886.0 million for 2025 were offset by a decrease in the average cost of interest-bearing liabilities from 1.73% for 2024 to 1.66% for 2025. The Company’s average balance of interest-bearing deposits increased from $820.4 million for 2024 to $886.0 million for 2025 in addition to the average cost of interest-bearing deposits increasing from 1.61% for 2024 to 1.66% for 2025. The Company’s average balance of outstanding advances from the FHLB decreased from $1.7 million at an average rate of 5.70% for 2024 to the Company having no outstanding advances for 2025. The Company’s average outstanding borrowings under the Federal Reserve Bank’s BTFP decreased from $27.9 million at an average rate of 4.85% for 2024 to having no outstanding borrowings for 2025. For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2025 and 2024 are shown in the schedule captioned “Rate/Volume Analysis” included herein.
Previous wording
Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $950,000 for 2022 to $1.1 million for 2023 primarily due to loan growth and increased net charge-offs. Total loans outstanding increased $57.7 million during 2023 in addition to the $75.3 increase in 2022. The Bank recognized net charge-offs of $469,000 for 2023 compared to $261,000 for 2022. In addition, nonperforming loans increased from $1.3 million at December 31, 2022 to $1.8 million at December 31, 2023.
Current wording
Provision for Credit Losses*.*Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses decreased from $1.4 million for 2024 to $1.1 million for 2025. The decrease primarily reflected a lower incremental change in estimated lifetime expected credit losses under the Bank’s ACL methodology for loans and unfunded commitments compared to prior year. The Bank recognized net charge-offs of $317,000 for 2025 compared to $173,000 for 2024. In addition, nonperforming loans remained unchanged at $4.4 million at December 31, 2025 and 2024.
Previous wording
Noninterest Income*.* Noninterest income decreased $295,000 for 2023 as compared to 2022 primarily due to decreases in gains on the sale of loans and commission and fee income of $412,000 and $370,000, respectively. These were partially offset by increases in ATM and debit card fees and service charges on deposit accounts of $144,000 and $70,000, respectively, in addition to a decrease of $207,000 in the unrealized loss on equity securities. In addition, the Company recognized a $40,000 net gain on sale of securities during 2023 compared to no such gain during 2022.
Current wording
Noninterest Income*.*Noninterest income increased $809,000 for 2025 as compared to 2024 primarily due to the Company recognizing a $149,000 gain on equity securities for 2025 compared to a $374,000 loss on equity securities for 2024. In addition, the Company recognized a $238,000 increase in gains on sale of loans as well as an increase of $73,000 in ATM and debit card fee income when comparing the two periods. These increases were partially offset by the Company recognizing a net $94,000 loss on sale of available for sale securities during 2025 compared to a net $32,000 gain on sale of available for sale securities during 2024.
Previous wording
Income Tax Expense. ** **Income tax expense decreased $72,000 for 2023 as compared to 2022 resulting in an effective tax rate of 14.9% for 2023, compared to 16.3% for 2022. The decrease in the effective tax rate for 2023 is primarily due to increased benefits of investments in tax credit entities during the year. See Note 12 of the accompanying Notes to Consolidated Financial Statements for additional details on the Company’s income tax expense.
Current wording
Income Tax Expense. Income tax expense increased $1.3 million for 2025 as compared to 2024 resulting in an effective tax rate of 17.7% for 2025, compared to 15.6% for 2024. See Note 12 of the accompanying Notes to Consolidated Financial Statements for additional details on the Company’s income tax expense.
Previous wording
Total interest income increased** **$6.9 million for 2024 as compared to 2023. The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets increased from 3.96% in 2023 to 4.49% in 2024. The increase in the yield was primarily due to an increase in the tax-equivalent yield on loans from 5.66% 2023 to 6.05% in 2024. Interest on loans increased $4.9 million when comparing the two periods due to an increase in the average balance of loans from $590.6 million in 2023 to $634.0 million in 2024. In addition, the Company’s lower yielding securities continue to mature with proceeds being reinvested in higher yielding loans or federal funds sold. Interest and dividends on investment securities (including FHLB stock) increased $567,000 for 2024 compared to 2023 due to an increase in the tax-equivalent yield on investment securities from 1.95% in 2023 to 2.25% in 2024, partially offset by a decrease in the average balance of investment securities from $506.5 million for 2023 to $455.1 million for 2024. Other interest income increased $1.4 million for 2024 as compared to 2023 primarily due to an increase in the average balance of federal funds sold from $19.5 million in 2023 to $45.6 million in 2024 in addition to, the tax equivalent yield of federal funds sold increasing from 5.07% to 5.17% when comparing the two periods.
Current wording
Total interest income increased $6.9 million for 2024 as compared to 2023. The increase was primarily due to an increase in the tax-equivalent yield on interest-earning assets from 3.96% in 2023 to 4.49% in 2024. The increase in the yield was primarily due to an increase in the tax-equivalent yield on loans from 5.66% in 2023 to 6.05% in 2024. Interest on loans increased $4.9 million when comparing the two periods due to an increase in the average balance of loans from $590.6 million in 2023 to $634.0 million in 2024. In addition, the Company’s lower yielding securities continue to mature with proceeds being reinvested in higher yielding loans or federal funds sold. Interest and dividends on investment securities (including FHLB stock) increased $567,000 for 2024 compared to 2023 due to an increase in the tax-equivalent yield on investment securities from 1.95% in 2023 to 2.25% in 2024, partially offset by a decrease in the average balance of investment securities from $506.5 million for 2023 to $455.1 million for 2024. Other interest income increased $1.4 million for 2024 as compared to 2023 primarily due to an increase in the average balance of federal funds sold from $19.5 million in 2023 to $45.6 million in 2024 in addition to the tax-equivalent yield of federal funds sold increasing from 5.07% to 5.17% when comparing the two periods.
Previous wording
Total interest expense increased $5.7 million, from $9.0 million for 2023 to $14.7 million for 2024, due to increases in the average cost of interest-bearing liabilities from 1.11% for 2023 to 1.73% for 2024 and in the average balance of interest-bearing liabilities from $809.2 million for 2023 to $850.0 million for 2024. The Company’s average balance of interest-bearing deposits increased from $794.4 million for 2023 to $820.4 million for 2024 in addition to the average cost of interest-bearing deposits increasing from 1.04% for 2023 to 1.61% for 2024. The Company’s average balance of outstanding advances from the FHLB decreased from $6.1 million for 2023 to $1.7 million for 2024, partially offset by an increase in the average rate on outstanding advances from the FHLB from 5.59% for 2023 to 5.70% for 2024. The Company’s average outstanding borrowings under the Federal Reserve Bank’s BTFP increased from $8.6 million for 2023 to $27.9 million for 2024, partially offset by a decrease in the average rate on outstanding borrowings under the Federal Reserve Bank’s BTFP from 5.05% for 2023 to 4.85% for 2024. For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2024 and 2023 are shown in the schedule captioned “Rate/Volume Analysis” included herein.
Current wording
Total interest expense increased $5.7 million, from $9.0 million for 2023 to $14.7 million for 2024, due to increases in the average cost of interest-bearing liabilities from 1.11% for 2023 to 1.73% for 2024 and in the average balance of interest-bearing liabilities from $809.2 million for 2023 to $850.0 million for 2024. The Company’s average balance of interest-bearing deposits increased from $794.4 million for 2023 to $820.4 million for 2024 in addition to the average cost of interest-bearing deposits increasing from 1.04% for 2023 to 1.61% for 2024. The Company’s average outstanding borrowings from the FHLB decreased from $6.1 million for 2023 to $1.7 million for 2024, partially offset by an increase in the average rate on outstanding advances from the FHLB from 5.59% for 2023 to 5.70% for 2024. The Company’s average outstanding borrowings under the Federal Reserve Bank’s BTFP increased from $8.6 million for $27.9 million for 2024, partially offset by a decrease in the average rate on outstanding borrowings under the Federal Reserve Bank’s BTFP from 5.05% for 2023 to 4.85% for 2024. For further information, see “Average Balances and Yields” below. The changes in interest income and interest expense resulting from changes in volume and changes in rates for 2024 and 2023 are shown in the schedule captioned “Rate/Volume Analysis” included herein.
Previous wording
Provision for Credit Losses*.*Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $1.1 million for 2023 to $1.4 million for 2024 primarily due to loan growth, an increase in nonperforming assets during the year, as well as management’s consideration of macroeconomic uncertainty. The Bank recognized net charge-offs of $173,000 for 2024 compared to $469,000 for 2023. In addition, nonperforming loans increased from $1.8 million at December 31, 2023 to $4.4 million at December 31, 2024. The increase was primarily due to the nonaccrual classification of two commercial loan relationships totaling $2.6 million. Loans in these relationships are secured by a variety of real estate and business assets.
Current wording
Provision for Loan Losses*.*Based on management’s analysis of the ACL on loans and unfunded loan commitments, the provision for credit losses increased from $1.1 million for 2023 to $1.4 million for 2024 primarily due to loan growth, an increase in nonperforming assets during the year, as well as management’s consideration of the macroeconomic uncertainty. The Bank recognized net charge-offs of $173,000 for 2024 compared to $469,000 for 2023. In addition, nonperforming loans increased from $1.8 million at December 31, 2023 to $4.4 million at December 31, 2024. The increase was primarily due to the nonaccrual classification of two commercial loan relationships totaling $2.6 million. Loans in these relationships are secured by a variety of real estate and business assets.
Previous wording
Noninterest Expense*.* Noninterest expenses increased $1.8 million for 2024 as compared to 2023. This was primarily due to increases in professional fees, compensation and benefits, and other expenses of $663,000, $536,000 and $260,000, respectively, when comparing the two periods. The increase in professional fees is primarily due to increased costs associated with the Company’s annual audit and fees being accrued for the Company’s ongoing core contract negotiations. The increase in compensation and benefits is due to standard increases in salary and wages as well as increases in the cost of Company-provided health insurance benefits. The increase in other expenses included a $90,000 increase in the Company’s support of local communities through sponsorships and donations, a $64,000 increase in check and debit card fraud losses, $30,000 in increased dues and subscriptions, and $25,000 in increased expenses related to employee training and education.
Current wording
Noninterest Expense*.*Noninterest expenses increased $1.8 million for 2024 as compared to 2023. This was primarily due to increases in professional fees, compensation and benefits, and other expenses of $663,000, $536,000 and $260,000, respectively, when comparing the two periods. The increase in professional fees is primarily due to increased costs associated with the Company’s annual audit and fees being accrued for the Company’s ongoing core contract negotiations. The increase in compensation and benefits is due to standard increases in salary and wages as well as increases in the cost of Company-provided health insurance benefits. The increase in other expenses included a $90,000 increase in the Company’s support of local communities through partnerships and donations, a $64,000 increase in check and debit card fraud losses, $30,000 in increased dues and subscriptions, and $25,000 in increased expenses related to employee training and education.
Previous wording
Total assets increased** **from $1.16 billion at December 31, 2023 to $1.19 billion at December 31, 2024 primarily due to increases in total cash and cash equivalents and net loans receivable partially offset by a decrease in securities available for sale.
Current wording
Total assets increased from $1.19 billion at December 31, 2024 to $1.27 billion at December 31, 2025 primarily due to increases in total cash and cash equivalents, securities available for sale and net loans receivable.
Previous wording
Net loans receivable (excluding loans held for sale) increased $16.8 million* *from $614.4 million at December 31, 2023 to $631.2 million at December 31, 2024. Increases in commercial real estate, 1-4 family residential mortgage, and home equity and second mortgage loans of $16.1 million, $5.5 million, and $4.5 million were partially offset by decreases in commercial business loans and multifamily residential loans of $5.5 million and $3.1 million, respectively. The Bank continued to sell the majority of newly originated fixed-rate residential mortgage loans in the secondary market. The Bank originated $32.8 million in residential mortgages for sale in the secondary market during 2024 compared to $31.6 million in 2023. Of the total originations in 2024, $6.7 million paid off existing loans in the Bank’s portfolio. Originating mortgage loans for sale in the secondary market allows the Bank to better manage its interest rate risk, while offering a full line of mortgage products to prospective customers.
Current wording
Net loans receivable (excluding loans held for sale) increased $22.9 million from $631.2 million at December 31, 2024 to $654.1 million at December 31, 2025. Increases in multifamily residential, commercial real estate, and home equity and second mortgage loans of $32.7 million, $22.3 million, and $4.9 million were partially offset by decreases in other construction, development and land loans of $34.6 million. The Bank continued to sell the majority of newly originated fixed-rate residential mortgage loans in the secondary market. The Bank originated $41.8 million in residential mortgages for sale in the secondary market during 2025 compared to $32.8 million in 2024. Of the total originations in 2025, $13.4 million paid off existing loans in the Bank’s portfolio. Originating mortgage loans for sale in the secondary market allows the Bank to better manage its interest rate risk, while offering a full line of mortgage products to prospective customers.
Previous wording
Securities available for sale, at fair value, consisting primarily of U.S. agency mortgage-backed securities and collateralized mortgage obligations, U.S. agency notes and bonds, Treasury notes and bonds and municipal obligations, decreased** **from $437.3 million at December 31, 2023 to $389.2 million at December 31, 2024. Principal repayments of $28.1 million, maturities of $63.0 million and sales of $19.2 million during 2024 were only partially offset by purchases of $61.7 million of securities. There was also an unrealized gain of $1.6 million on the securities available for sale portfolio during 2024 due primarily to stabilizing market rates during the year. The Bank invests excess cash in securities that provide liquidity, yield and low credit risk. Accordingly, we purchase mortgage-backed securities to provide cash flow for loan demand and deposit changes, we purchase U.S Treasury and federal agency notes for short-term yield and low risk, and municipals are purchased to improve our tax equivalent yield focusing on longer term profitability.
Current wording
Securities available for sale, at fair value, consisting primarily of U.S. agency mortgage-backed securities and collateralized mortgage obligations, U.S. agency notes and bonds, Treasury notes and bonds and municipal obligations, increased from $389.2 million at December 31, 2024 to $417.2 million at December 31, 2025. Purchases of $137.9 million were partially offset by principal repayments of $38.8 million, maturities of $67.1 million and sales of $17.9 million during 2025. There was also an unrealized gain of $14.6 million on the securities available for sale portfolio during 2025 due primarily to decreasing market rates during the year. The Bank invests excess cash in securities that provide liquidity, yield and low credit risk. Accordingly, we purchase mortgage-backed securities to provide cash flow for loan demand and deposit changes, we purchase U.S Treasury and federal agency notes for short-term yield and low risk, and municipals are purchased to improve our tax equivalent yield focusing on longer term profitability.
Previous wording
Cash and cash equivalents increased** **from $38.7 million at December 31, 2023 to $105.9 million at December 31, 2024, primarily due to inflows from available for sale security proceeds and deposit increases.
Current wording
Cash and cash equivalents increased from $105.9 million at December 31, 2024 to $137.3 million at December 31, 2025, primarily due to deposit account increases.
Previous wording
Total deposits increased $41.2 million** **to $1.07 billion at December 31, 2024. During 2024, time deposits increased $74.3 million. This increase was partially offset by decreases in noninterest-bearing demand deposits, savings accounts and interest-bearing demand deposit accounts (including money market accounts) of $7.5 million, $14.9 million and $10.6 million, respectively. Included in time deposits at December 31, 2024 were $20.2 million in brokered deposits. The Company had no outstanding brokered deposits at December 31, 2023.
Current wording
Total deposits increased $56.6 million to $1.12 billion at December 31, 2025. During 2025, time deposits and non-interest bearing deposits increased $37.5 million and $22.1 million, respectively. These increases were partially offset by decreases in interest-bearing demand deposit accounts (including money market accounts) of $2.9 million.
Previous wording
At December 31, 2024, the Company had no outstanding borrowed funds compared to $21.5 million in borrowings outstanding from the FRB under the BTFP at December 31, 2023. During the year ended December 31, 2024, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB and the BTFP in order to meet daily liquidity requirements and to fund growth in earning assets.
Current wording
At December 31, 2025 and 2024, the Company had no outstanding borrowed funds. During the year ended December 31, 2024, the Company utilized a series of short-term fixed-rate bullet and variable rate advances from the FHLB and the BTFP in order to meet daily liquidity requirements and to fund growth in earning assets.
Previous wording
Total stockholders’ equity attributable to the Company increased $9.4 million from $105.2 million at December 31, 2023 to $114.6 million at December 31, 2024. This increase is primarily the result of the $8.2 million increase in retained net income and a $1.0 million decrease in the net unrealized loss on available for sale securities. The decrease in the net unrealized loss on available for sale securities during 2024 is primarily due to decreases in market interest rates. As of December 31, 2024, the Company had repurchased 126,746 shares of the 240,467 shares authorized by the Board of Directors under the current stock repurchase program which was announced in August 2008 and 455,280 shares since the original repurchase program began in 2001.
Current wording
Total stockholders’ equity attributable to the Company increased $23.2 million from $114.6 million at December 31, 2024 to $137.8 million at December 31, 2025. This increase is primarily the result of the $12.3 million increase in retained net income and an $11.3 million decrease in the net unrealized loss on available for sale securities. The decrease in the net unrealized loss on available for sale securities during 2025 is primarily due to decreases in market interest rates. As of December 31, 2025, the Company had repurchased 140,478 shares of the 240,467 shares authorized by the Board of Directors under the current stock repurchase program which was announced in August 2008 and 469,012 shares since the original repurchase program began in 2001.
Previous wording
Liquidity refers to the ability of a financial institution to generate sufficient cash flow to fund current loan demand, meet deposit withdrawals and pay operating expenses. The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At December 31, 2024, the Bank had cash and cash equivalents of $105.9 million and securities available-for-sale with a fair value of $389.2 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, the FRB’s Discount Window through the pledging of additional eligible collateral securities, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions.
Current wording
Liquidity refers to the ability of a financial institution to generate sufficient cash flow to fund current loan demand, meet deposit withdrawals and pay operating expenses. The Bank’s primary sources of funds are customer deposits, proceeds from loan repayments, maturing securities and borrowings from the FHLB or FRB. While loan repayments and maturities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, general economic conditions and competition. At December 31, 2025, the Bank had cash and cash equivalents of $137.3 million and securities available-for-sale with a fair value of $417.2 million. If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB, the FRB’s Discount Window through the pledging of additional eligible collateral securities, collateral eligible for repurchase agreements and unsecured federal funds purchased lines of credit with other financial institutions.
Previous wording
The Bank must maintain an adequate level of liquidity to ensure the availability of sufficient funds to support loan growth and deposit withdrawals, to satisfy financial commitments and to take advantage of investment opportunities. At December 31, 2024, the Bank had total commitments to extend credit of $154.9 million. See Note 16 in the accompanying Notes to Consolidated Financial Statements. At December 31, 2024, the Bank had certificates of deposit scheduled to mature within one year of $188.2 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature.
Current wording
At December 31, 2025, the Bank had total commitments to extend credit of $180.3 million. See Note 16 in the accompanying Notes to Consolidated Financial Statements. At December 31, 2025, the Bank had certificates of deposit scheduled to mature within one year of $222.0 million. Historically, the Bank has been able to retain a significant amount of its deposits as they mature.
Previous wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company requires funds to pay any dividends to its shareholders and to repurchase any shares of its common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the banking regulators, cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At December 31, 2024, the Company (on an unconsolidated basis) had liquid assets of $2.9 million.
Current wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company requires funds to pay any dividends to its shareholders and to repurchase any shares of its common stock. The Company’s primary source of income is dividends received from the Bank. The amount of dividends the Bank may declare and pay to the Company in any calendar year, without the receipt of prior approval from the banking regulators, cannot exceed net income for that year to date plus retained net income (as defined) for the preceding two calendar years. At December 31, 2025, the Company (on an unconsolidated basis) had liquid assets of $2.3 million.
Previous wording
The Bank is required to maintain specific amounts of capital pursuant to regulations. As previously mentioned in this report, in 2020 the Bank elected to opt in to the CBLR framework. As of December 31, 2024 the Bank was in compliance with all regulatory capital requirements which were effective as of such date with a CBLR of 10.57%. See Note 18 in the accompanying Notes to Consolidated Financial Statements.
Current wording
The Bank is required to maintain specific amounts of capital pursuant to regulations. As previously mentioned in this report, in 2020 the Bank elected to opt in to the CBLR framework. As of December 31, 2025 the Bank was in compliance with all regulatory capital requirements which were effective as of such date with a CBLR of 11.01%. See Note 18 in the accompanying Notes to Consolidated Financial Statements.
Previous wording
At December 31, 2024 and 2023, the Company’s simulated exposure to an increase in interest rates shows that an immediate and sustained increase in rates of 1.00%, 2.00% or 3.00% would increase the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. At December 31, 2024, an immediate and sustained decrease in rates of 1.00%, 2.00% or 3.00% would decrease the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. At December 31, 2023, an immediate and sustained decrease in rates of 2.00% and 3.00% would decrease the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. At December 31, 2023, an immediate and sustained decrease in rates of 1.00% would increase the Company’s net interest income over a one year horizon compared to a flat rates scenario. During the year ended December 31, 2024, management evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits.
Current wording
At December 31, 2025 and 2024, the Company’s simulated exposure to an increase in interest rates shows that an immediate and sustained increase in rates of 1.00%, 2.00% or 3.00% would increase the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. At December 31, 2025 and 2024, an immediate and sustained decrease in rates of 1.00%, 2.00% or 3.00% would decrease the Company’s net interest income over a one year horizon compared to a flat interest rate scenario. During the year ended December 31, 2025, management evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits.
Previous wording
The previous tables indicate that at December 31, 2024 the Company would expect an increase in its EVE in the event of a sudden and sustained 100, 200 and 300 basis point increase in prevailing interest rates and a decrease in its EVE in the event of a sudden and sustained 100, 200 and 300 basis point decrease in prevailing interest rates. At December 31, 2023, the Company would expect decreases in its EVE in the event of sudden and sustained 200 and 300 basis points increases in prevailing interest rates as well as a sudden and sustained decrease of 100, 200 and 300 basis points in prevailing interest rates, while it would expect an increase in its EVE in the event of a sudden and sustained 100 basis point increase in prevailing interest rates. As previously mentioned in this report, during the year ended December 31, 2023, the Company evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits.
Current wording
The previous tables indicate that at December 31, 2025 the Company would expect decreases in its EVE in the event of sudden and sustained 200 and 300 basis point increases in prevailing interest rates as well as a sudden and sustained decreases of 100, 200 and 300 basis points in prevailing interest rates, while it would expect an increase in its EVE in the event of a sudden and sustained 100 basis point increase in prevailing interest rates. At December 31, 2024, the Company would expect an increase in its EVE in the event of sudden and sustained 100, 200 and 300 basis points increases in prevailing interest rates and a decrease in its EVE in the event of sudden and sustained 100, 200 and 300 basis point decreases in prevailing interest rates. During the year ended December 31, 2025, management evaluated and adjusted deposit rate betas and key interest rate index ties in its scenarios to better reflect the current interest rate environment and increased competitive pressure for deposits.