NATIONAL BANKSHARES INC
For the period ended Sep 30, 2025. Filed Nov 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 13, 2025
NKSH$39.19-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0000950170-25-107923
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001193125-25-279374
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 150 previous paragraphs and 155 current paragraphs.
108 unchanged; 40 reworded; 6 added; 1 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 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 (6)
Current report
During the third quarter of 2025, the Company leveraged $50,000 in borrowings with a weighted average rate of 3.99% to purchase securities of $49,855 with a weighted average yield of 4.67%. The borrowings were structured to mirror expected cash flow from the securities portfolio over the following year. The strategy is part of the Company's focus on optimizing the net interest margin and earnings, with expectations for a lower interest rate environment in the future.
Current report
Other service charges and fees decreased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024, primarily due to receipt of certain infrequent fee income in 2024.
Current report
Gain on sale of mortgage loans improved when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024, due to increased volume.
Current report
Residential vacancy rates and housing inventory are used to measure the housing market. The housing market directly or indirectly affects all loan classes. Higher vacancy and inventory levels increase credit risk. The residential vacancy rate available as of September
Current report
The Company tracks economic news and data from its market to determine whether additional indicators should be considered in the allowance for credit losses. As of September 30, 2025, management identified local unemployment data for consideration. Historically, local unemployment has been slightly lower than national unemployment, but correlated in movement. However, for the most recent period local unemployment rose higher than national unemployment. The Company added an allocation to account for the change.
Current report
The Company purchased bonds totalling $49,855 during the third quarter of of 2025 as part of a yield optimization strategy.
Removed paragraphs (1)
Previous report
During 2024, the Company recorded expenses associated with its acquisition of FCB, including legal and consulting fees.
Reworded paragraphs (40)
Previous wording
Conversion expense stems from a core system upgrade that will provide greater efficiency and product offerings.
Current wording
Core system conversion expense stems from a core system upgrade that will provide greater efficiency and product offerings.
Previous wording
Key to understanding the Company’s results of operations and financial position is the acquisition of FCB in 2024, the impact of the interest rate environment and the system conversion completed during the second quarter of 2025 that will enhance efficiency and product offerings.
Current wording
Key to understanding the Company’s results of operations and financial position is the acquisition of FCB in 2024, the impact of the interest rate environment and the core system conversion completed during the second quarter of 2025 that will enhance efficiency, product offerings and future growth.
Previous wording
The acquisition of FCB on June 1, 2024 expanded the Company's footprint into desirable markets and increased its growth potential. The acquisition added to the balance sheet $118,743 in loans, $129,717 in deposits and $14,299 in equity. The Company also recorded merger expenses detailed under Non-GAAP above.
Current wording
The acquisition of FCB on June 1, 2024 expanded the Company's footprint into desirable markets and increased its growth potential. The acquisition added to the balance sheet $118,743 in loans, $129,717 in deposits and $14,299 in equity. The Company also recorded merger expenses detailed under Non-GAAP Financial Measures above.
Previous wording
The Federal Reserve's 100 basis point interest rate cut between September and December of 2024 eased deposit pricing pressure beginning in the fourth quarter of 2024 and continued to positively influence results in 2025. The interest rate environment continues at a level that allows adjustable rate loans to reprice higher than their previous rates.
Current wording
The Federal Reserve's interest rate cuts between September 2024 and September of 2025 eased deposit pricing pressure beginning in the fourth quarter of 2024. The interest rate environment continues at a level that allows adjustable rate loans to reprice higher than their previous rates.
Previous wording
The Company completed the system conversion of both the acquired bank and the legacy bank during the second quarter of 2025, with related expenses presented in Conversion Expense on the Consolidated Statements of Income. The system conversion positions the Company for further growth. The following table presents the Company’s key performance indicators for the periods indicated.
Current wording
The Company completed the core system conversion of both the acquired bank and the legacy bank during the second quarter of 2025, with related expenses presented in core system conversion expense on the Consolidated Statements of Income. The following table presents the Company’s key performance indicators for the periods indicated:
Previous wording
Net income for the three and six months ended June 30, 2025 increased when compared with the comparable periods of 2024, due to net interest margin expansion and merger related expenses in 2024. The net interest margin as well as key noninterest income and expense items are discussed below.
Current wording
Net income for the three and nine months ended September 30, 2025 increased when compared with the comparable periods of 2024, due to net interest margin expansion and merger related expenses in 2024. The net interest margin as well as key noninterest income and expense items are discussed below.
Previous wording
Included in interest income are loan fees of $113 and $60 for the three months ended June 30, 2025 and 2024, respectively. Also included in interest income is accretion of discounts on acquired loans of $363 and $111 for the three months ended June 30, 2025 and 2024, respectively.
Current wording
Included in interest income are loan fees of $162 and $71 for the three months ended September 30, 2025 and 2024, respectively. Also included in interest income is accretion of discounts on acquired loans of $699 and $369 for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
Included in interest expense is amortization of premium on acquired time deposits of $43 and $57 for the three months ended June 30, 2025 and 2024, respectively.
Current wording
Included in interest expense is amortization of premium on acquired time deposits of $27 and $135 for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
Included in interest income are loan fees of $199 and $115 for the six months ended June 30, 2025 and 2024, respectively. Also included in interest income is accretion of discounts on acquired loans of $615 and $111 for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Included in interest income are loan fees of $361 and $174 for the nine months ended September 30, 2025 and 2024, respectively. Also included in interest income is accretion of discounts on acquired loans of $1,324 and $480 for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Included in interest expense is amortization of premium on acquired time deposits of $101 and $57 for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Included in interest expense is amortization of premium on acquired time deposits of $128 and $193 for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
When the three and six month periods ended June 30, 2025 and 2024 are compared, the yield on earning assets increased and the cost of interest bearing liabilities decreased, improving the net interest margin. The Federal Reserve's interest rate cuts between September and December 2024 immediately reduced expense for deposits with pricing based on the prime interest rate. Current interest rates are still at a level that will allow improved interest income as loans continue to reach repricing dates.
Current wording
When the three and nine months ended September 30, 2025 and 2024 are compared, the yield on earning assets increased and the cost of interest bearing liabilities decreased, improving the net interest margin. The Federal Reserve's interest rate cuts between September 2024 and September 2025 immediately reduced expense for deposits with pricing based on the prime interest rate. Current interest rates are still at a level that will allow improved interest income as loans continue to reach repricing dates.
Previous wording
Service charges on deposit accounts increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024, due to higher levels of deposits.
Current wording
Service charges on deposit accounts increased when the nine months ended September 30, 2025 is compared with the comparable period of 2024, due to higher levels of deposits.
Previous wording
Credit and debit card fees, net, decreased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024, due to higher processing fees.
Current wording
Credit and debit card fees, net, increased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024, due to receipt of an incentive payment and lower processing costs after the core system conversion.
Previous wording
Trust income increased due to higher assets under management, when the three and six months ended June 30, 2025 are compared with the comparable period of 2024.
Current wording
Trust income increased due to higher assets under management, when the three and nine months ended September 30, 2025 are compared with the comparable period of 2024.
Previous wording
BOLI income increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024 due to income from policies acquired from FCB.
Current wording
BOLI income increased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024. BOLI income includes the acquired FCB policies for the full nine months ended September 30, 2025, compared with four months for 2024.
Previous wording
Other income includes revenue from investment and insurance sales, adjustments to partnership basis and other miscellaneous components. Insurance income and a vendor incentive payment account for the increase when the six months ended June 30, 2025 is compared with the comparable period of 2024.
Current wording
Other income includes revenue from investment and insurance sales, adjustments to partnership basis and other miscellaneous components. Insurance income and a vendor incentive payment account for the increase when the nine months ended September 30, 2025 is compared with the comparable period of 2024.
Previous wording
Noninterest expense increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024. Salaries and employee benefits, which include payroll taxes, health insurance, contributions to the employee stock ownership plan and employee 401(k), pension expense, incentives and salary continuation increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024, reflecting the addition of FCB employees.
Current wording
Noninterest expense increased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024. Salaries and employee benefits, which include payroll taxes, health insurance, contributions to the employee stock ownership plan and employee 401(k), pension expense, incentives and salary continuation increased when the three month period ended September 30, 2025 is compared with the comparable period of 2024 due to normal merit increases. The increase in salaries and employee benefits when the nine month period ended September 30, 2025 is compared with the comparable period of 2024 reflects the addition of FCB employees.
Previous wording
Occupancy, furniture and fixtures expense increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024 due to additional assets acquired from FCB and higher maintenance costs.
Current wording
Occupancy, furniture and fixtures expense increased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024 due to additional assets acquired from FCB, higher maintenance costs, and the opening of the Roanoke branch.
Previous wording
Data processing expense decreased when the three months ended June 30, 2025 are compared with the comparable period of 2024, reflecting savings from the system conversion. Data processing expense increased when the six months ended June 30, 2025 is compared with the comparable period of 2024 due to the expense of maintaining the legacy system for FCB until system conversion in May 2025.
Current wording
Data processing expense decreased when the three months ended September 30, 2025 are compared with the comparable period of 2024, reflecting savings from the core system conversion.
Previous wording
FDIC assessment increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024 due to a larger assessment base.
Current wording
FDIC assessment increased when the nine months ended September 30, 2025 are compared with the comparable periods of 2024 due to a larger assessment base.
Previous wording
Professional services include legal, audit and consulting expenses, which increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024 due to higher legal expense.
Current wording
Professional services include legal, audit and consulting expenses, which increased when the three and nine months ended September 30, 2025 are compared with the comparable periods of 2024 due to higher legal and audit expense.
Previous wording
Conversion expense primarily includes payments made to the former core system vendor to exit the contracts as well as other expenses associated with the conversion.
Current wording
Core system conversion expense primarily includes payments made to the former core system vendor to exit the contracts as well as other expenses associated with the core system conversion.
Previous wording
Other operating expenses increased when the three and six months ended June 30, 2025 are compared with the comparable periods of 2024. The category of other operating expenses includes expense for marketing and business development, supplies, non-service pension cost and charitable donations, among others. Included in various categories of noninterest expense are expenses to manage cybersecurity risk. The cost of these measures was $100 for the three months ended June 30, 2025 and $94 for the three months ended June 30, 2024. For the six months ended June 30, 2025, total cybersecurity expense was $141 compared to $184 for the six months ended June 30, 2024. The Company places high priority on cybersecurity. The decrease in expense reflects renegotiation of contracts and licensing.
Current wording
Other operating expenses increased when the nine months ended September 30, 2025 are compared with the comparable period of 2024. The category of other operating expenses includes expense for marketing and business development, supplies, non-service pension cost and charitable donations, among others. Included in various categories of noninterest expense are expenses to manage cybersecurity risk. The cost of these measures was $114 for the three months ended September 30, 2025 and $92 for the three months ended September 30, 2024. For the nine months ended September 30, 2025, total cybersecurity expense was $255 compared to $276 for the nine months ended September 30, 2024. The Company places high priority on cybersecurity. The decrease in expense when the nine month period ended September 30, 2025 is compared with the comparable period of 2024 resulted from renegotiation of contracts and licensing.
Previous wording
The Company’s income tax expense was $362 for the three months ended June 30, 2025 compared to an income tax benefit of $178 for the same period in 2024.The Company's income tax expense was $1,028 for the six months ended June 30, 2025 and effective tax rate was 15.69%. For the six months ended June 30, 2024, the Company’s income tax expense was $341 and effective tax rate was 15.44%. A large portion of merger related expense was not tax deductible, impacting the Company’s effective tax rate for 2024.
Current wording
The Company’s income tax expense was $961 for the three months ended September 30, 2025 compared to an expense of $550 for the same period in 2024.The Company's income tax expense was $1,989 for the nine months ended September 30, 2025 and effective tax rate was 16.67%. For the nine months ended September 30, 2024, the Company’s income tax expense was $891 and effective tax rate was 16.39%.
Previous wording
The Company’s risk analysis as of June 30, 2025 determined an ACLL of $10,422, or 1.03% of loans net of deferred fees and costs. This compares with an allowance of $10,262 as of December 31, 2024, or 1.04% of loans. To determine the appropriate level of the ACLL, the Company considers credit risk for individually evaluated loans and for groups of loans evaluated collectively.
Current wording
The Company’s risk analysis as of September 30, 2025 determined an ACLL of $10,579, or 1.04% of loans net of deferred fees and costs. This compares with an allowance of $10,262 as of December 31, 2024, or 1.04% of loans. To determine the appropriate level of the ACLL, the Company considers credit risk for individually evaluated loans and for groups of loans evaluated collectively.
Previous wording
As of June 30, 2025, individually evaluated loans were $10,849. Three individually evaluated loans were collateral dependent but were adequately collateralized and did not result in an individual allocation. The remaining individually evaluated loans were measured using the discounted cash flow method, resulting in an allocation of $141.
Current wording
As of September 30, 2025, individually evaluated loans were $10,699. Three individually evaluated loans were collateral dependent but were adequately collateralized and did not result in an individual allocation. The remaining individually evaluated loans were measured using the discounted cash flow method, resulting in an allocation of $90.
Previous wording
Collectively evaluated loans totaled $1,000,286, with an ACLL of $10,281 as of June 30, 2025. As of December 31, 2024, collectively evaluated loans totaled $978,092, with an allowance of $10,182.
Current wording
Collectively evaluated loans totaled $1,006,246, with an ACLL of $10,489 as of September 30, 2025. As of December 31, 2024, collectively evaluated loans totaled $978,092, with an allowance of $10,182.
Previous wording
Higher bankruptcy filings indicate heightened credit risk and increase the ACLL, while lower bankruptcy filings have a beneficial impact on credit risk. Compared with data available as of December 31, 2024, business and personal bankruptcies filings decreased.
Current wording
Higher bankruptcy filings indicate heightened credit risk and increase the ACLL, while lower bankruptcy filings have a beneficial impact on credit risk. Compared with data available as of December 31, 2024, business and personal bankruptcies filings increased.
Previous wording
Residential vacancy rates and housing inventory impact the Company’s residential construction customers and the consumer real estate market. Higher levels increase credit risk. The residential vacancy rate available as of June 30, 2025 increased compared to the data incorporated into the December 31, 2024 calculation, resulting in a higher allocation. Housing inventory increased when June 30, 2025 is compared with December 31, 2024, resulting in a higher allocation.
Current wording
30, 2025 increased compared to the data incorporated into the December 31, 2024 calculation, resulting in a higher allocation. Housing inventory increased when September 30, 2025 is compared with December 31, 2024, resulting in a higher allocation.
Previous wording
Accruing past due loans are analyzed at the class level and compared with previous levels. Increases in past due loans indicate heightened credit risk. Accruing loans past due 30-89 days were 0.50% of total loans as of June 30, 2025, an increase from 0.30% as of December 31, 2024. The increase is primarily due to certain loans awaiting renewal. Management expects the renewals to be approved and removed them from the allocation population.
Current wording
Accruing past due loans are analyzed at the class level and compared with previous levels. Increases in past due loans indicate heightened credit risk. Accruing loans past due 30-89 days were 0.27% of total loans as of September 30, 2025, decreased from 0.30% as of December 31, 2024.
Previous wording
The competitive, legal and regulatory environments were evaluated for changes that would affect credit risk. Higher competition for loans increases credit risk, while lower competition decreases credit risk. Competition remained at similar levels to those at December 31, 2024. The legal and regulatory environments also remain in a similar posture to December 31, 2024.
Current wording
The competitive, legal and regulatory environments were evaluated for changes that would affect credit risk. Higher competition for loans is deemed to increase credit risk, while lower competition is deemed to decrease credit risk. Prior allocations for the competitive and regulatory environments were evaluated and management determined that a sufficient period of time had passed so as to conclude that the impact is now integrated to loss rates, reducing the allocation. The legal environment remains in a similar posture to December 31, 2024, and no allocation was provided.
Previous wording
The unallocated surplus as of June 30, 2025 was $10, or 0.10% in excess of the calculated requirement. The unallocated surplus at December 31, 2024 was $50, or 0.49% in excess of the calculated requirement. The surplus provides some mitigation of uncertainty about events that may exist at the reporting date but that are not known to the Company and may impact credit risk.
Current wording
The unallocated surplus as of September 30, 2025 was $47, or 0.45% in excess of the calculated requirement. The unallocated surplus at December 31, 2024 was $50, or 0.49% in excess of the calculated requirement. The surplus provides some mitigation of uncertainty about events that may exist at the reporting date but that are not known to the Company and may impact credit risk.
Previous wording
The ACL on unfunded commitments was $241, or 0.14 % of unfunded commitments as of June 30, 2025. The ACL on unfunded commitments was $251, or 0.14% as of December 31, 2024.
Current wording
The ACL on unfunded commitments was $288, or 0.16 % of unfunded commitments as of September 30, 2025. The ACL on unfunded commitments was $251, or 0.14% as of December 31, 2024.
Previous wording
The provision for credit losses represents charges to earnings necessary to maintain an adequate allowance. The adequacy of the ACLL is reviewed quarterly and adjustments are made as determined necessary. The Company recorded a provision for credit losses on loans of $322 and a recovery of credit losses on unfunded commitments of $10 for the six months ended June 30, 2025, compared with a provision for credit losses on loans of $1,307 and a recovery of $15 for unfunded commitments for the six months ended June 30, 2024. For the three month period ended June 30, 2025, the Company recorded a provision for credit losses on loans of $45 and a recovery of credit losses on unfunded commitments of $9. For the three month period ended June 30, 2024, the Company recorded a provision for credit losses on loans of $1,302, which included $1,290 for loans acquired on June 1, 2024.
Current wording
The provision for credit losses represents charges to earnings necessary to maintain an adequate allowance. The adequacy of the ACLL is reviewed quarterly and adjustments are made as determined necessary. The Company recorded a provision for credit losses on loans of $581 and a provision for credit losses on unfunded commitments of $36 for the nine months ended September 30, 2025, compared with a provision for credit losses on loans of $1,312 and a recovery of $25 for unfunded commitments for the nine months ended September 30, 2024. For the three month period ended September 30, 2025, the Company recorded a provision for credit losses on loans of $259 and a provision for credit losses on unfunded commitments of $47. For the three month period ended September 30, 2024, the Company recorded a provision for credit losses on loans of $5 and a recovery of credit losses on unfunded commitments of $10.
Previous wording
The Company reviews each modification to determine whether the borrower is experiencing financial difficulty, including indicators of default, bankruptcy, going concern, insufficient projected cash flows and inability to obtain financing from other sources.
Current wording
The Company reviews each modification to determine whether the borrower is experiencing financial difficulty, including indicators of default, bankruptcy, going concern, insufficient projected cash flows and inability to obtain financing from other sources. Please refer to Note 3: Loans and Allowance for Credit Losses in Part I, Item 1 of this report for more information on loans modified for borrowers experiencing financial difficulty.
Previous wording
During the three and six months ended June 30, 2025 and 2024, the Company modified loans in the normal course of business for borrowers who were not experiencing financial difficulty. During the three months ended June 30, 2025, the Company modified 173 loans totaling $17,750. During the six months ended June 30, 2025, the Company modified 368 loans totaling $41,855. During the three and six months ended June 30, 2024, the Company provided 216 modifications to loans totaling $21,704 and 432 modifications totaling $43,936.
Current wording
During the three and nine months ended September 30, 2025 and 2024, the Company modified loans in the normal course of business for borrowers who were not experiencing financial difficulty. During the three months ended September 30, 2025, the Company modified 46 loans totaling $13,884. During the nine months ended September 30, 2025, the Company modified 414 loans totaling $55,739. During the three and nine months ended September 30, 2024, the Company provided 205 modifications to loans totaling $42,969 and 637 modifications totaling $86,905, respectively.
Previous wording
The Company’s depositors within its market area are diverse, including individuals, businesses and municipalities. The Company does not have any brokered deposits. Depositors are insured up to the FDIC maximum of $250 thousand. Municipal deposits, which account for approximately 24% of the Company’s deposits, have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 24% are uninsured.
Current wording
The Company’s depositors within its market area are diverse, including individuals, businesses and municipalities. The Company does not have any brokered deposits. Depositors are insured up to the FDIC maximum of $250 thousand. Municipal deposits, which account for approximately 21% of the Company’s deposits, have additional security from bonds pledged as collateral, in accordance with state regulation. Of the Company’s non-municipal deposits, approximately 20% are uninsured.
Previous wording
As of June 30, 2025, the Company had $292,916 of borrowing capacity from the FHLB and the Company had $173,226 of available capacity at the Federal Reserve Bank discount window. As of June 30, 2025, the Company did not have purchased deposits, discount window borrowings or short-term borrowings.
Current wording
As of September 30, 2025, the Company had $260,395 of borrowing capacity from the FHLB and the Company had $188,090 of available capacity at the Federal Reserve Bank discount window. As of September 30, 2025, the Company had $40,000 in FHLB borrowings with terms of one year or less and $10 million in Federal Reserve Discount Window borrowings with a term of less than three months.
Previous wording
The Company utilizes several other strategies to maintain sufficient liquidity. Loan and deposit growth are managed to keep the loan to deposit ratio within the Company’s internally-set target range. As of June 30, 2025, the loan to deposit ratio was 62.09%. The investment strategy takes into consideration the term of the investment, and securities in the available for sale portfolio are laddered based upon projected funding needs.
Current wording
The Company utilizes several other strategies to maintain sufficient liquidity. Loan and deposit growth are managed to keep the loan to deposit ratio within the Company’s internally-set target range. As of September 30, 2025, the loan to deposit ratio was 65.07%.
Previous wording
The Company sells mortgages on the secondary market. Our agreement with the purchaser provides for strict underwriting and documentation requirements. Violation of the representations and warranties of the agreement would entitle the purchaser to recourse provisions. The Company has determined that its risk in this area is not significant because of the low volume of secondary market mortgage loans and high underwriting standards. The Company estimates a potential loss reserve for recourse provisions that is not material as of June 30, 2025. To date, no recourse provisions have been invoked. If funds were needed, the Company would access the same sources as noted above for funding lines and letters of credit. There were no material changes in off-balance sheet arrangements during the three and six months ended June 30, 2025.
Current wording
The Company sells mortgages on the secondary market. Our agreements with the purchasers provide for strict underwriting and documentation requirements. Violation of the representations and warranties of the agreement would entitle the purchaser to recourse provisions. The Company has determined that its risk in this area is not significant because of the low volume of secondary market mortgage loans and high underwriting standards. The Company estimates a potential loss reserve for recourse provisions that is not material as of September 30, 2025. To date, no recourse provisions have been invoked. If funds were needed, the Company would access the same sources as noted above for funding lines and letters of credit. There were no material changes in off-balance sheet arrangements during the three and nine months ended September 30, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The investment strategy takes into consideration the term of the investment, and securities in the available for sale portfolio are laddered based upon projected funding needs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Please refer to Note 3: Loans and Allowance for Credit Losses in Part I, Item 1 of this report for more information on loans modified for borrowers experiencing financial difficulty.