BV Financial, Inc.

Previous wording

Assets. Total assets were $908.3 million at June 30, 2025, a decrease of $3.5 million, or 0.4%, from $911.8 million at December 31, 2024. The decrease was due primarily to the Company utilizing cash to repay $15.0 million in borrowings from the FHLB, offset by an increase in loans.

Current wording

Assets. Total assets were $909.4 million at September 30, 2025, a decrease of $2.4 million, or 0.27%, from $911.8 million at December 31, 2024. The decrease was due primarily to the Company utilizing cash to repay $15.0 million in borrowings from the FHLB, offset by an increase in loans.

Previous wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $14.2 million, or 20.1%, to $56.3 million at June 30, 2025 from $70.5 million at December 31, 2024. The decrease in cash was primarily a result of the pay-off of FHLB borrowings.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $7.0 million, or 9.9%, to $63.5 million at September 30, 2025 from $70.5 million at December 31, 2024. The decrease in cash was primarily a result of the pay-off of FHLB borrowings offset by deposit growth and securities repayments.

Previous wording

Loans. Loans receivable increased $13.8 million, or 1.9%, to $751.6 million at June 30, 2025 from $737.8 million at December 31, 2024. Increases in in owner occupied 1-4 loans, commercial loans and construction loans offset decreases in non-owner occupied 1-4 loans, owner occupied 1-4 junior liens, owner occupied commercial real estate, marine and investor commercial real estate loans.

Current wording

Loans. Loans receivable increased $8.3 million, or 1.1%, to $746.1 million at September 30, 2025 from $737.8 million at December 31, 2024. Increases in in owner occupied 1-4 loans, commercial loans and construction loans offset decreases in investor commercial real estate loans, non-owner occupied 1-4 loans, owner occupied 1-4 junior liens, owner occupied commercial real estate, marine and farm loans.

Previous wording

Allowance for Credit Losses. The allowance for credit losses – loans increased $637,000 to $9.2 million at June 30, 2025 compared to $8.5 million at December 31, 2024. The ratio of our allowance for credit losses to total loans was 1.22% at June 30, 2025 compared to 1.15% at December 31, 2024, while the allowance for credit losses to non-performing loans was 208.6% at June 30, 2025 compared to 212.5% at December 31, 2024.

Current wording

Allowance for Credit Losses. The allowance for credit losses – loans decreased $325,000 to $8.2 million at September 30, 2025 compared to $8.5 million at December 31, 2024. The ratio of our allowance for credit losses to total loans was 1.10% at September 30, 2025 compared to 1.15% at December 31, 2024, while the allowance for credit losses to non-performing loans was 233.5% at September 30, 2025 compared to 212.5% at December 31, 2024.

Previous wording

Securities. Securities available for sale decreased by $1.9 million, or 5.1%, from December 31, 2024 as paydowns in the mortgage-backed securities were not replaced with new purchases. The held-to-maturity portfolio experienced a slight decrease due to paydowns.

Current wording

Securities. Securities available for sale decreased by $2.8 million, or 7.5%, from December 31, 2024 as paydowns and maturities were not fully replaced with new purchases. The held-to-maturity portfolio experienced a slight decrease due to paydowns.

Previous wording

Liabilities. Total liabilities decreased $6.0 million, or 0.8%, to $710.3 million at June 30, 2025 from $716.3 million at December 31, 2024. The decrease was due primarily to the decrease in borrowings, offset by an increase in deposits.

Current wording

Liabilities. Total liabilities increased $2.8 million, or 0.4%, to $719.2 million at September 30, 2025 from $716.3 million at December 31, 2024. The increase was due primarily to the increase in deposits and other liabilities offset by a decrease in borrowings.

Previous wording

Deposits. Total deposits increased $7.4 million, or 1.1%, to $658.9 million at June 30, 2025 from $651.5 million at December 31, 2024. Interest-bearing deposits increased $2.6 million, or 0.5%, to $524.4 million at June 30, 2025 from $521.8 million at December 31, 2024, primarily due to increases in money market accounts and certificates of deposit, offset by a decrease in interest-bearing checking accounts. Noninterest bearing deposits increased $4.8 million, or 3.7%, to $134.5 million at June 30, 2025 from $129.7 million at December 31, 2024.

Current wording

Deposits. Total deposits increased $12.3 million, or 1.9% to $663.8 million at September 30, 2025 from $651.5 million at December 31, 2024. Interest-bearing deposits increased $7.3 million, or 1.4%, to $529.0 million at September 30, 2025 from $521.8 million at December 31, 2024. Noninterest bearing deposits increased $5.0 million, or 3.9%, to $134.7 million at September 30, 2025 from $129.7 million at December 31, 2024.

Previous wording

Stockholders’ Equity. Stockholders’ equity increased $2.5 million, or 1.3%, to $198.0 million at June 30, 2025 from $195.5 million at December 31, 2024 as net income and the decrease in the accumulative other comprehensive loss was partially offset by $4.3 million in stock repurchases during the period.

Current wording

Stockholders’ Equity. Stockholders’ equity decreased $5.3 million, or 2.7%, to $190.2 million at September 30, 2025 from $195.5 million at December 31, 2024 a due to $17.7 million in stock repurchases offset by net income, a decrease in the accumulative other comprehensive loss and the impact of equity compensation plans.

Previous wording

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

Current wording

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

Previous wording

Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Average balances exclude loans held for sale, if applicable. Net deferred loan origination fees totaled $2.3 million and $2.0 million at June 30, 2025 and 2024, respectively.

Current wording

Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Average balances exclude loans held for sale, if applicable. Net deferred loan origination fees totaled $2.3 million and $2.1 million at September 30, 2025 and 2024, respectively.

Previous wording

The following table sets forth the effects of changing rates and volumes on our net interest income for the six months ended June 30, 2025 and 2024. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by current rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and volume.

Current wording

The following table sets forth the effects of changing rates and volumes on our net interest income for the nine months ended September 30, 2025 and 2024. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by current rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and volume.

Previous wording

Net Income. Net income was $2.9, million or $0.29 per diluted share, for the three months ended June 30, 2025 compared to $3.4 million, or $0.32 per diluted share, for the three months ended June 30, 2024. Net income was $5.0 million, or $0.50 per diluted share, for the six months ended June 30, 2025 compared to $6.0, million or $0.52 per diluted share, for the six months ended June 30, 2024. The decreases were due to higher provisions for credit losses and compensation expenses, offset by higher net interest income.

Current wording

Net Income. Net income was $3.7 million or $0.41 per diluted share for the three months ended September 30, 2025 compared to $3.8 million or $0.35 per diluted share for the three months ended September 30, 2024. Net income was $8.7 million or $0.88 per diluted share for the nine months ended September 30, 2025 compared to $9.8 million or $0.91 per diluted share for the nine months ended September 30, 2024. The decreases were due to higher compensation expenses and smaller credits to the provision for credit losses offsetting higher net interest and other income.

Previous wording

Interest Income. Interest income increased $649,000, or 5.6%, to $12.3 million for the three months ended June 30, 2025 from $11.6 million for the three months ended June 30, 2024. The increase was due primarily to an increase in interest income on loans, partially offset by a decrease in other interest income on cash and cash equivalents. Interest income on loans increased $1.1 million, or 11.4%, to $11.3 million for the three months ended June 30, 2025 from $10.2 million for the three months ended June 30, 2024 due to increases in the average balance and average yield on loans. The average balance of loans increased $46.7 million, or 6.6%, to $752.2 million for the three months ended June 30, 2025 from $705.5 million for the three months ended June 30, 2024. The weighted average yield on loans increased 25 basis points to 6.04% for the three months ended June 30, 2025 compared to 5.79% for the three months ended June 30, 2024, as variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment. Interest income on cash and cash equivalents decreased $481,000 to $562,000 for the three months ended June 30, 2025 from $1.0 million for the three months ended June 30, 2024 primarily due to a decrease in average balance of $25.6 million.

Current wording

Interest Income. Interest income increased $377,000, or 3.10%, to $12.5 million for the three months ended September 30, 2025 from $12.2 million for the three months ended September 30, 2024. The increase was due primarily to an increase in interest income on loans, partially offset by a decrease in other interest income on cash and cash equivalents. Interest income on loans increased $1.0 million, or 9.5%, to $11.5 million for the three months ended September 30, 2025 from $10.5 million for the three months ended September 30, 2024 due to increases in the average balance and average yield on loans. The average balance of loans increased $52.9 million, or 7.7%, to $743.1 million for the three months ended September 30, 2025 from $690.2 million for the three months ended September 30, 2024. The weighted average yield on loans increased 10 basis points to 6.15% for the three months ended September 30, 2025 compared to 6.05% for the three months ended September 30, 2024, as variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment. Interest income on cash and cash equivalents decreased $559,000 to $633,000 for the three months ended September 30, 2025 from $1.2 million for the three months ended September 30, 2024 primarily due to a decrease in average balance of $28.5 million.

Previous wording

Interest income increased $1.5 million, or 6.7%, to $24.1 million for the six months ended June 30, 2025 from $22.6 million for the six months ended June 30, 2024. The increase was due primarily to an increase in interest income on loans, partially offset by a decrease in other interest income on cash and cash equivalents. Interest income on loans increased $2.1 million, or 10.6%, to $22.1 million for the six months ended June 30, 2025 from $19.9 million for the six months ended June 30, 2024 due to increases in the average balance and average yield on loans. The average balance of loans increased $39.0 million, or 5.5%, to $746.0 million for the six months ended June 30, 2025 from $706.9 million for the six months ended June 30, 2024. The weighted average yield on loans increased 43 basis points to 5.97% for the six months ended June 30, 2025 compared to 5.54% for the six months ended June 30, 2024, as variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment. Interest income on cash and cash equivalents decreased $562,000 to $1.3 million for the six months ended June 30, 2025 from $1.9 million for the six months ended June 30, 2024 primarily due to a decrease in average balance of $10.8 million and a 73 basis point decrease in the yield.

Current wording

Interest income increased $1.9 million, or 5.5%, to $36.7 million for the nine months ended September 30, 2025 from $34.8 million for the nine months ended September 30, 2024. The increase was due primarily to an increase in interest income on loans, partially offset by a decrease in other interest income on cash and cash equivalents. Interest income on loans increased $3.1 million, or 10.2%, to $33.6 million for the nine months ended September 30, 2025 from $30.5 million for the nine months ended September 30, 2024 due to increases in the average balance and average yield on loans. The average balance of loans increased $43.7 million, or 6.2%, to $745.0 million for the nine months ended September 30, 2025 from $701.3 million for the nine months ended September 30, 2024. The weighted average yield on loans increased 24 basis points to 6.03% for the nine months ended September 30, 2025 compared to 5.79% for the nine months ended September 30, 2024, as variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment. Interest income on cash and cash equivalents decreased $1.1 million to $1.9 million for the nine months ended September 30, 2025 from $3.1 million for the nine months ended September 30, 2024 primarily due to a decrease in average balance of $16.7 million and a 97 basis point decrease in the yield.

Previous wording

Interest Expense. Interest expense increased $402,000 or 14.8% to $3.1 million for the three months ended June 30, 2025 from $2.7 million at June 30, 2024. Interest expense on deposits increased $380,000 for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Interest Expense. Interest expense increased $330,000 or 11.6% to $3.2 million for the three months ended September 30, 2025 from $2.8 million at September 30, 2024. Interest expense on deposits increased $331,000 for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

The increase in interest expense on deposits was due to a 22 basis point increase in the average rate, as well as a $21.9 million increase in the average balance of interest-bearing deposits to $520.5 million for the three months ended June 30, 2025 from $498.5 million for the three months ended June 30, 2024. The average rate on interest-bearing deposits was 2.02% for the three months ended June 30, 2025 compared to 1.80% for the three months ended June 30, 2024 as rates paid increased and depositors moved money into higher-cost certificates of deposit and money market accounts.

Current wording

The increase in interest expense on deposits was due to a 13 basis point increase in the average rate, as well as a $35.2 million increase in the average balance of interest-bearing deposits to $56.0 million for the three months ended September 30, 2025 from $490.8 million for the three months ended September 30, 2024. The average rate on interest-bearing deposits was 2.05% for the three months ended September 30, 2025 compared to 1.92% for the three months ended September 30, 2024 as rates paid increased and depositors moved money into higher-cost certificates of deposit and money market accounts.

Previous wording

Interest expense on FHLB advances for the three months ended June 30, 2025 was $23,000 compared to no expenses for the three months ended June 30, 2024 due to borrowings outstanding at the beginning of the quarter that were fully paid off in April 2025.

Current wording

There were no interest expenses on FHLB advances for the three months ended September 30, 2025 or for the three months ended September 30,2024.

Previous wording

Interest expense increased $599,000, or 10.4%, to $6.3 million for the six months ended June 30, 2025 from $5.7 million at June 30, 2024. Interest expense on deposits increased $995,000 for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, due to both higher volumes of interest bearing deposits and higher rates paid on these deposits.

Current wording

Interest expense increased $930,000, or 10.8%, to $9.5 million for the nine months ended September 30, 2025 from $8.6 million at September 30, 2024. Interest expense on deposits increased $1.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to both higher volumes of interest bearing deposits and higher rates paid on these deposits.

Previous wording

The increase in interest expense on deposits was due to a 40 basis point increase in the average rate, as well as a $26.4 million increase in the average balance of interest-bearing deposits to $521.7 million for the six monthes ended June 30, 2025 from $495.3 million for the six months ended June 30, 2024. The average rate on interest-bearing deposits was 2.02% for the three months ended June 30, 2025 compared to 1.62% for the three months ended June 30, 2024 as rates paid increased and depositors moved money into higher-cost certificates of deposit and money market accounts.

Current wording

The increase in interest expense on deposits was due to a 25 basis point increase in the average rate, as well as a $29.4 million increase in the average balance of interest-bearing deposits to $523.1 million for the nine months ended September 30, 2025 from $493.8 million for the nine months ended September 30, 2024. The average rate on interest-bearing deposits was 2.03% for the nine months ended September 30, 2025 compared to 1.78% for the nine months ended September 30, 2024 as rates paid increased and depositors moved money into higher-cost certificates of deposit and money market accounts.

Previous wording

Interest expense on subordinated debentures decreased $590,000, or 38.8%, to $931,000 for the six months ended June 30, 2025 compared to $1.5 million for the six months ended June 30, 2024. The decrease was due to the pay-off in the first quarter of 2024 of $3.0 million in junior subordinated debt assumed in a prior acquisition and the concurrent write-off of the purchase accounting adjustment on that debt.

Current wording

Interest expense on subordinated debentures decreased $590,000, or 29.7%, to $1.4 million for the nine months ended September 30, 2025 compared to $2.0 million for the nine months ended September 30, 2024. The decrease was due to the pay-off in the first quarter of 2024 of $3.0 million in junior subordinated debt assumed in a prior acquisition and the concurrent write-off of the purchase accounting adjustment on that debt.

Previous wording

Net Interest Income. Net interest income was $9.2 million for the three months ended June 30, 2025 compared to $8.9 million for the three months ended June 30, 2024.The net interest margin for the three months ended June 30, 2025 was 4.36% compared to 4.33% for the three months ended June 30, 2024. The increase in net interest income was due to higher average balances of interest earning assets and higher yields on these assets offset by a higher average balance of deposits and higher rates paid on deposits.

Current wording

Net Interest Income. Net interest income was $9.4 million for the three months ended September 30, 2025 compared to $9.3 million for the three months ended September 30, 2024. The net interest margin for the three months ended September 30, 2025 was 4.40% compared to 4.49% for the three months ended September 30, 2024. The increase in net interest income was due to higher average balances of interest earning assets and higher yields on these assets offset by a higher average balance of deposits and higher rates paid on deposits.

Previous wording

Net interest income was $17.8 million for the six months ended June 30, 2025, compared to $16.9 million in the six months ended June 30, 2024. The net interest margin for the six months ended June 30, 2025 was 4.24% compared to 4.12% for the six months ended June 30, 2024. The increase in net interest income was due to higher average balances of interest earning assets and higher yields on these assets offsetting the increase in interest expense due to a higher volume of deposits and higher rates paid on deposits.

Current wording

Net interest income was $27.1 million for the nine months ended September 30, 2025, compared to $26.2 million in the nine months ended September 30, 2024. The net interest margin for the nine months ended September 30, 2025 was 4.29% compared to 4.25% for the nine months ended September 30, 2024. The increase in net interest income was due to higher average balances of interest earning assets and higher yields on these assets offsetting the increase in interest expense due to a higher volume of deposits and higher rates paid on deposits.

Previous wording

Provision for Credit Losses. We recorded a provision for credit losses of $178,000 for the three months ended June 30, 2025 compared to a reversal of the provision for credit losses of ($111,000) for the three months ended June 30, 2024. We recorded a provision for credit losses of $475,000 for the six months ended June 30, 2025 compared to a reversal of the provision for credit losses of ($92,000) for the six months ended June 30, 2024. Our allowance for credit losses was $9.2 million at June 30, 2025 compared to $8.5 million at December 31, 2024. The ratio of our allowance for credit losses to total loans was 1.22% at June 30, 2025 compared to 1.15% at December 31, 2024, while the allowance for credit losses to non-performing loans was 208.6% at June 30, 2025 compared to 212.5% at December 31, 2024.

Current wording

Provision for Credit Losses. We recorded a reversal of the provision for credit losses of $1.0 million for the three months ended September 30, 2025 compared to a reversal of the provision for credit losses of $714,000 for the three months ended September 30, 2024. We recorded a reversal of the provision for credit losses of 539,000 for the nine months ended September 30, 2025 compared to a reversal of the provision for credit losses of $806,000 for the nine months ended September 30, 2024. Our allowance for credit losses was $8.2 million at September 30, 2025 compared to $8.5 million at December 31, 2024. The ratio of our allowance for credit losses to total loans was 1.10% at September 30, 2025 compared to 1.15% at December 31, 2024, while the allowance for credit losses to non-performing loans was 233.5% at September 30, 2025 compared to 212.5% at December 31, 2024.

Previous wording

Non-interest Income. For the three months ended June 30, 2025, noninterest income totaled $714,000 compared to $596,000 for the quarter ended June 30, 2024. The increase was attributable to the collection of miscellaneous fees on loans and deposits.

Current wording

Non-interest Income. For the three months ended September 30, 2025, noninterest income totaled approximately $684,000 compared to $696,000 for the quarter ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025 and June 30, 2024, noninterest income totaled $1.2 million.

Current wording

For the nine months ended September 30, 2025 and September 30, 2024, noninterest income totaled $1.9 million.

Previous wording

Non-interest Expense. For the three months ended June 30, 2025, noninterest expense totaled $5.8 million compared to $4.9 million for the three months ended June 30, 2024. Compensation and benefits increased $927,000 due to the $1.1 million cost of the equity awards granted under the 2024 Equity Incentive Plan approved by stockholders. All other expense categories combined decreased by $70,000 in the quarter ended June 30, 2025 when compared to the quarter ended June 30, 2024.

Current wording

Non-interest Expense. For the three months ended September 30, 2025, noninterest expense totaled $5.9 million compared to $5.5 million in the three months ended September 30, 2024. Compensation and benefits increased $570,000, primarily due to the costs of the 2024 equity incentive plan. For the quarter ended September 30, 2024, the expenses of the 2024 equity incentive plan were only applicable for one month based on the grant dates of the awards. All other expense categories combined decreased by $165,000 in the quarter ended September 30, 2025 when compared to the quarter ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025, noninterest expense totaled $11.9 million as compared to $9.8 million for the six months ended June 30, 2024. Compensation and benefits expense increased $2.3 million due to the $2.3 million cost of the equity awards granted under the 2024 Equity Incentive Plan approved by stockholders. All other expense categories combined decreased by $210,000 in the six-month period ended June 30, 2025 when compared to the six month period ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, noninterest expense totaled $17.8 million as compared to $15.3 million in the nine months ended September 30, 2024. Compensation and benefits expense increased $2.9 million. For the nine months ended September 30, 2025, the expenses of the 2024 equity incentive plan were applicable for all nine months compared to one month for the nine month period ended September 30, 2024. The increase in plan expenses totaled $2.9 million in the 2025 year-to-date period when compared to the same period in 2024. All other expense categories combined decreased by $374,000 in the quarter ended September 30, 2025 when compared to the quarter ended September 30, 2024.

Previous wording

Income Tax Expense. For the three months and six months ended June 30, 2025, income tax expense was $1.1 million for an effective tax rate of 27.3% and $1.7 million for an effective tax rate of 25.2%, respectively. For the three months and six months ended June 30, 2024, income tax expense was $1.3 million for an effective tax rate of 27.9% and $2.3 million for an effective tax rate of 28.2%, respectively. The lower effective tax rate in the six-month period ended June 30, 2025 was due to an accrual adjustment made in the first quarter.

Current wording

Income Tax Expense. For the three months and nine months ended September 30, 2025, income tax expense was $1.4 million for an effective tax rate of 27.9% and $3.1 million for an effective tax rate of 26.4%, respectively. For the three months and nine months ended September 30, 2024, income tax expense was $1.4 million for an effective tax rate of 27.5% and $3.8 million for an effective tax rate of 27.9%, respectively. The lower effective tax rate in the nine-month period ended September 30, 2025 was due to an accrual adjustment made in the first quarter.

Previous wording

Asset Quality. Non-performing assets at June 30, 2025 totaled $4.5 million consisting of $4.4 million in nonperforming loans and $157,000 in foreclosed real estate, compared to $4.2 million at December 31, 2024, consisting of $4.0 million in non-performing loans and $159,000 in foreclosed real estate. Commercial non-performing loans increased by $650,000 in the six-month period due to a $660,000 loan relationship being placed on non-accrual status. These loans are secured with real estate and business assets. At June 30, 2025, the allowance for credit losses on loans was $9.2 million, which represented 1.22% of total loans and 208.6% of non-performing loans compared to $8.5 million at December 31, 2024, which represented 1.15% of total loans and 212.5% of non-performing loans.

Current wording

Asset Quality. Non-performing assets at September 30, 2025 totaled $3.5 million consisting of $3.5 million in nonperforming loans and $0 in foreclosed real estate, compared to $4.2 million at December 31, 2024, consisting of $4.0 million in non-performing loans and $159,000 in foreclosed real estate. Commercial non-performing loans increased by $630,000 in the nine-month period due to a $660,000 loan relationship being placed on non-accrual status. These loans are secured with real estate and business assets. At September 30, 2025, the allowance for credit losses on loans was $8.2 million, which represented 1.10% of total loans and 233.5% of non-performing loans compared to $8.5 million at December 31, 2024, which represented 1.15% of total loans and 212.5% of non-performing loans.

Previous wording

Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from maturities of securities. We also have the ability to borrow from the FHLB. At June 30, 2025, we had a $165.5 million line of credit with the FHLB, and $23.0 million of FHLB in unfunded letters of credit used to secure municipal deposits. The Company also has a $20.0 million short-term unsecured facility from a correspondent bank.

Current wording

Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from maturities of securities. We also have the ability to borrow from the FHLB. At September 30, 2025, we had a $162.5 million line of credit with the FHLB, and $23.0 million of FHLB in unfunded letters of credit used to secure municipal deposits. The Company also has a $20.0 million short-term unsecured facility from a correspondent bank.

Previous wording

We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. At June 30, 2025, the Company had $50.3 million in brokered deposits compared to $10.0 million in brokered deposits at June 30, 2024. In addition, we had $59.1 million of municipal deposits at June 30, 2025, which represented 9.0% of total deposits. The Bank's uninsured deposits totaled $171.5 million, or 24.9% of total deposits, of which $53.2 million were secured using the market value of pledged collateral or letters of credit issued by FHLB, and an additional $28.8 million were deposits of the Company at the Bank.

Current wording

We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. At September 30, 2025, the Company had $50.3 million in brokered deposits compared to $10.0 million in brokered deposits at September 30, 2024. In addition, we had $55.3 million of municipal deposits at September 30, 2025, which represented 8.3% of total deposits. The Bank's uninsured deposits totaled $167.6 million, or 24.5% of total deposits, of which $48.2 million were secured using the market value of pledged collateral or letters of credit issued by FHLB, and an additional $19.2 million were deposits of the Company at the Bank.