PLUMAS BANCORP
For the period ended Sep 30, 2025. Filed Nov 5, 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 5, 2025
PLBC$62.46-0.2%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 2025-08-06.
0001437749-25-024964
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001437749-25-033185
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 108 previous paragraphs and 118 current paragraphs.
42 unchanged; 50 reworded; 25 added; 15 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 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 (25)
Current report
BISINESS COMBINATIONS - ACQUISTION OF CONERSTONE COMMUNITY BANCORP
Current report
On July 1, 2025 (the “Closing Date”), Plumas Bancorp (the “Company”) completed its previously announced acquisition of Cornerstone Community Bancorp (“Cornerstone”) pursuant to an Agreement and Plan of Merger and Reorganization, dated as of January 28, 2025, by and between the Company and Cornerstone (the “Merger Agreement”). Total book value of assets acquired from Cornerstone, excluding fair value adjustments, were $658 million, gross loans totaled $478 million, and deposits totaled $580 million. Goodwill associated with the acquisition of Cornerstone was $18.7 million; the core deposit intangible was $11.6 million. In addition, the Company recorded a discount on the acquired loans totaling $15.8 million. With the completion of the merger, Plumas Bank adds four branches in Anderson, Red Bluff and Redding (two branches), California.
Current report
Pursuant to the Merger Agreement, on the Closing Date, Cornerstone merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation. Immediately following the Merger, Cornerstone’s subsidiary, Cornerstone Community Bank (CCB) merged with and into the Company’s subsidiary, Plumas Bank with Plumas Bank as the surviving bank. Pursuant to the terms of the Merger Agreement, upon the completion of the Merger, each share of Cornerstone common stock outstanding immediately prior was converted into the right to receive 0.6608 shares of common stock of the Company and $9.75 cash, with cash paid in lieu of fractional shares. The total aggregate consideration delivered to holders of Cornerstone common stock in the Merger was 1,003,718 shares of Company common stock and $14.8 million cash. In addition, in accordance with the Merger Agreement, the Company paid approximately $1.3 million to holders of options to purchase Cornerstone common stock that were terminated in connection with the Merger. The Company also assumed options to purchase 35,000 shares of Cornerstone common stock representing, on an as-converted basis, options to purchase 30,803 shares of the Company’s common stock.
Current report
As a result of and upon the completion of the Merger, the Company assumed Cornerstone’s obligations with respect to an aggregate principal amount of $12 million of subordinated notes, comprised of (a) $2 million in aggregate principal amount of 4.75% Fixed to Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”) and (b) $10 million in aggregate principal amount of 4.75% Fixed-to-Floating Rate Subordinated Notes due November 30, 2030 (the “2030 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The 2030 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first five years and thereafter a quarterly variable interest rate equal to the then current three-month term SOFR plus 4.52%.
Current report
Our financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). In connection with the acquisition, the Company incurred a variety of non-recurring expenses which are summarized on the following page under the heading “Reconciliation of Non-GAAP Disclosure”. The non-recurring expenses for the three and nine months ended September 30, 2025 were $6.2 million and $7.3 million, respectively. Excluding these expenses, non-GAAP net income for the third quarter of 2025 would have been $9.5 million, resulting in diluted earnings per share of $1.35 and return on average assets of 1.66% and non-GAAP net income for the nine months ended September 30, 2025 would have been $23.8 million, resulting in diluted earnings per share of $3.74 and return on average assets of 1.72% .
Current report
The projected accretion of the discount on acquired loans is based on the acquired loans contractual payment schedules and may differ significantly from the actual accretion during the projected periods. The accretion of the premium on time deposits of $651 thousand was accelerated with the payoff of $38.5 million in brokered deposits during the three months ended September 30, 2025. This resulted in a $160 thousand discount going forward which will be amortized as an increase in interest expense over the remaining life of the time deposits acquired.
Current report
NON-GAAP FINANCIAL MEASURES
Current report
In addition to results presented in accordance with generally accepted accounting principles in the GAAP, Management has presented these non-GAAP financial measures because it believes that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP.
Current report
Net-interest income increased from $54.7 million during the nine months ended September 30, 2024, to $61.9 million during the current period. The provision for credit losses increased from $1.4 million during the nine months ended September 30, 2024, to $6.5 million during the current nine-month period.
Current report
The provision for income taxes decreased from $7.5 million, or 26.4% of pre-tax income, during the nine months ended September 30, 2024 to $7.0 million, or 27.2% of pre-tax income, during the current nine-month period.
Current report
The following table describes the components of non-interest income for the nine-month periods ended September 30, 2025 and 2024, dollars in thousands:
Current report
The following table describes the components of non-interest expense for the nine-month periods ended September 30, 2025 and 2024, dollars in thousands:
Current report
Net interest income increased from $18.9 million during the three months ended September 30, 2024, to $25.2 million during the current quarter. The provision for credit losses increased from a recovery of $400 thousand during the third quarter of 2024 to $5.4 million during the current quarter.
Current report
Non-interest income totaled $2.2 million during the three months ended September 30, 2024, and 2025.
Current report
The provision for income taxes decreased from $2.9 million, 26.7% of pre-tax income, during the three months ended September 30, 2024 to $1.8 million, or 25.6% of pre-tax income, during the current quarter.
Current report
Interest and fees on loans increased by $8.0 million related to growth in the loan portfolio, mostly related to the acquisition of CCB and to a much lesser extent an increase in yield. Average loan balances increased by $475 million, while the average yield on loans increased by 14 basis points from 6.21% during the third quarter of 2024 to 6.35% during the current quarter. The increase in loan yield includes an increase in SBA fixed rate loans, which currently have a weighted average rate of 8.2%, the repricing of loans that are priced off the 5-year Treasury and a decline in our lower yielding auto loan portfolio. Loans that are priced off the 5-year Treasury are primarily commercial real estate loans; their rate is adjusted every five years.
Current report
Interest expense increased by $1.6 million to $4.6 million, mostly related to the acquisition of Cornerstone. The average rate paid on interest bearing liabilities increased from 1.52% during the 2024 quarter to 1.67% during the three months ended September 30, 2025.
Current report
The average rate paid on interest-bearing deposits increased from 0.97% during the third quarter of 2024 to 1.56% during the current quarter. The average balance of interest-bearing deposits increased from $646 million during the three months ended September 30, 2024, to $990 million during the current quarter.
Current report
Interest on repurchase agreements and other borrowings, exclusive of the BTFP, increased by $566 thousand from $173 thousand during the three months ended September 30, 2024 to $739 thousand during the current quarter. Interest expense on the BTFP was $1.2 million during the three months ended September 30, 2024. See “Repurchase Agreements” for a discussion of the increase in the balance of this liability.
Current report
**Non-interest income.**Non-interest income totaled $2.2 million an increase of $11 thousand from the third quarter of 2024. The largest increase was an increase of $157 thousand in earnings on bank owned life insurance (BOLI) acquired from CCB. In addition, several other categories of non-interest income increased mostly related to the acquisition of CCB. The largest decrease was a $628 thousand loss generated on the disposition of CCB’s investment portfolio which was partially offset by a $254 thousand gain on termination of an interest rate swap acquired from CCB.
Current report
During the nine months ended September 30, 2025, we recorded a provision for credit losses of $6.5 million, consisting of a provision for credit losses on loans of $6.3 million and an increase in the reserve for unfunded commitments of $211 thousand. The provision includes growth in the loan portfolio, CECL day 1 provision on non-PCD loans acquired from CCB and the reserve for unfunded commitments on loans acquired from CCB. This compares to a provision for credit losses of $1.3 million consisting of a provision for credit losses on loans of $1.5 million and a decrease in the reserve for unfunded commitments of $129 thousand during the nine months ended September 30, 2024.
Current report
**Investment Portfolio and Federal Reserve Balances.**Total investment securities were $484.7 million as of September 30, 2025, and $437.7 million at December 31, 2024. Unrealized losses on available-for-sale investment securities totaling $23,411,000 were recorded, net of $6,920,000 in tax benefit, as accumulated other comprehensive loss within shareholders' equity at September 30, 2025. During the nine months ended September 30, 2025, the Company sold 90 available-for-sale investment securities for proceeds of $88,009,000, recording a $625,000 loss on sale. The Company realized a gain on sale from fifteen of these securities totaling $36,000 and a loss on sale of 75 securities totaling $661,000. These sales mostly relate to the sale of the investment portfolio acquired from CCB.
Current report
Note Payable. Plumas Bancorp has outstanding borrowings of $15 million with a correspondent bank. This loan matures on January 25, 2035, and can be prepaid at any time. During the initial three years the loan functions as an interest only revolving line of credit. Beginning on January 25, 2026 the loan converts into a term loan requiring semi-annual principal and interest payments and no further advances can be made. This borrowing bears interest at a fixed rate of 3.85% for the first 5 years and then beginning January 25, 2027 at a floating interest rate linked to WSJ Prime Rate for the remaining eight-year term. Interest expense recognized on this loan for the three and nine-months ended September 30, 2025, was $148 thousand and $438 thousand, respectively. This compares to interest of $164 thousand and $477 thousand during the three and nine months ended September 30, 2024.
Current report
**Subordinated Debentures.**As a result of and upon the completion of the Merger, the Company assumed Cornerstone’s obligations with respect to an aggregate principal amount of $12 million of subordinated notes, comprised of (a) $2 million in aggregate principal amount of 4.75% Fixed to Floating Rate Subordinated Notes due November 30, 2035 (the “2035 Notes”) and (b) $10 million in aggregate principal amount of 4.75% Fixed-to-Floating Rate Subordinated Notes due November 30, 2030 (the “2030 Notes”). The 2035 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first ten years and thereafter a quarterly variable interest rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 4.14%. The 2030 Notes, which were issued in 2020, have a fixed interest rate of 4.75% for the first five years and thereafter a quarterly variable interest rate equal to the then current three-month term SOFR plus 4.52%. It is the Company’s intention to redeem the 2030 notes on December 30, 2025. Interest expense recognized on the subordinated notes for the three and nine-months ended September 30, 2025, was $225 thousand.
Current report
Shareholders’ Equity. Shareholders’ equity increased by $68 million from $178 million at December 31, 2024 to $246 million at September 30, 2025. The $68 million increase includes earnings during the nine-month period of $18.6 million, common stock and stock options issued in the acquisition of Cornerstone totaling $45.2 million, a decrease in accumulated other comprehensive loss of $8.7 million and restricted stock and stock option activity totaling $1.2 million. These items were partially offset by the payment of cash dividends totaling $5.6 million.
Removed paragraphs (15)
Previous report
SALES/LEASEBACK AND INVESTMENT RESTRUCTURING - February 2024
Previous report
On January 19, 2024, Plumas Bank entered into a purchase and sale of real property (the “Sale Agreement”). The Sale Agreement provided for the sale to MountainSeed of nine properties owned and operated by Plumas Bank as branches (the “Branches”) for an aggregate cash purchase price of approximately $25.7 million. The sale was completed on February 14, 2024, resulting in a net gain on sale of $19.9 million, recording of right-of-use assets totaling $22.3 million and recording a lease liability of $22.3 million.
Previous report
Concurrently with the closing of the sale of the branch properties, we entered into triple net lease agreements (the “Lease Agreements”) pursuant to which Plumas Bank leased back each of the properties sold. Each Lease Agreement has an initial term of fifteen years with one 15-year renewal option. The Lease Agreements provide for an annual rent of approximately $2.4 million in the aggregate for the nine properties increased by two percent (2%) per annum for each year during the initial Term. During the renewal term, the initial rent will be the basic rent during the last year of the initial term, increased by two percent (2%) per annum for each year during the renewal term.
Previous report
Net-interest income increased by $860 thousand from $35.9 million during the six months ended June 30, 2024, to $36.7 million during the current quarter. The provision for credit losses decreased from $1.7 million during the first half of 2024 to $1.1 million during the current six-month period.
Previous report
The provision for income taxes increased by $583 thousand from $4.6 million, or 26.2% of pre-tax income, during the six months ended June 30, 2024 to $5.2 million, or 27.8% of pre-tax income, during the current six-month period.
Previous report
The following table describes the components of non-interest income for the six-month periods ended June 30, 2025 and 2024, dollars in thousands:
Previous report
Net interest income decreased by $222 thousand from $18.4 million during the three months ended June 30, 2024, to $18.2 million during the current quarter. The provision for credit losses decreased from $925 thousand during the second quarter of 2024 to $860 thousand during the current quarter.
Previous report
Non-interest income increased by $159 thousand from $2.2 million during the three months ended June 30, 2024 to $2.4 million during the second quarter of 2025.
Previous report
The provision for income taxes decreased by $149 thousand from $2.5 million, 26.9% of pre-tax income, during the three months ended June 30, 2024 to $2.4 million, or 27.1% of pre-tax income, during the current quarter.
Previous report
Average loan balances increased by $39 million, while the average yield on these loans decreased by 18 basis points from 6.32% during the second quarter of 2024 to 6.14% during the current quarter. Of the 18 basis points decrease, 13 basis points relate to the reversal of $344 thousand in interest income related to fifteen loans which were placed on nonaccrual status during the current quarter. The average prime interest rate decreased from 8.5% during the second quarter of 2024 to 7.5% during the current quarter. Approximately 16% of the Company's loans are tied to the prime interest rate, and most of these reprice within one to three months with a change in prime. Additionally, during the second quarter of 2024, we recovered $316 thousand in interest on loans that were classified as nonaccrual and which were paid off in full during the quarter which elevated loan yield during the 2024 quarter. The effect of these items was partially offset by an increase in average yield on the bank’s fixed rate portfolio which includes growth in fixed rate SBA loans which totaled $75 million at June 30, 2025, and $62 million at June 30, 2024. The weighted average rate earned on this portfolio at June 30, 2025, was 8.3%. The Bank is also benefiting from the repricing of a portion of our Commercial Real Estate loans. Most of these loans are indexed to the 5-year Treasury note and reprice every five years.
Previous report
Interest expense decreased by $305 thousand, related to the repayment of the BTFP borrowings. The average rate paid on interest bearing liabilities decreased from 1.44% during the 2024 quarter to 1.33% in 2025 related to the decrease in these borrowings.
Previous report
Net interest margin for the three months ended June 30, 2025 decreased 6 basis points to 4.83%, down from 4.89% for the same period in 2024. Excluding the $344 thousand in interest reversed described earlier, net interest margin for the three months ended June 30, 2025 would have been 4.93%.
Previous report
**Non-interest income.**Non-interest income increased by $159 thousand to $2.4 million during the current quarter. The largest increase was related to a $184 thousand adjustment to the value of our stock holdings in one of our correspondent banks. This adjustment is included in Other in the following table.
Previous report
During the first half of 2025, we recorded a provision for credit losses of $1.1 million consisting of a provision for credit losses on loans of $1.1 million and a decrease in the reserve for unfunded commitments of $40 thousand. The $1.1 million mostly relates to the specific loan loss reserves noted in the previous paragraph. This compares to a provision for credit losses of $1.7 million consisting of a provision for credit losses on loans of $1.8 million and a decrease in the reserve for unfunded commitments of $79 thousand during the six months ended June 30, 2024.
Previous report
Shareholders’ Equity. Shareholders’ equity increased by $15.2 million from $177.9 million at December 31, 2024 to $193.1 million at June 30, 2025. The $15.2 million increase was related to net income during the current period of $13.5 million, a decline in accumulated other comprehensive loss of $4.5 million and stock option and restricted stock activity of $760 thousand partially offset by shareholder dividends of $3.5 million.
Reworded paragraphs (50)
Previous wording
The following discussion and analysis sets forth certain statistical information relating to the Company as of June 30, 2025 and December 31, 2024 and for the three and six-month periods ended June 30, 2025 and 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included in Plumas Bancorp’s Annual Report filed on Form 10-K for the year ended December 31, 2024.
Current wording
The following discussion and analysis sets forth certain statistical information relating to the Company as of September 30, 2025 and December 31, 2024 and for the three and nine-month periods ended September 30, 2025 and 2024. This discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included in Plumas Bancorp’s Annual Report filed on Form 10-K for the year ended December 31, 2024.
Previous wording
The following table describes the components of non-interest expense for the three-month periods ended June 30, 2025 and 2024, dollars in thousands:
Current wording
In addition, during the third quarter of 2025, the Company incurred expenses/income related to the amortization/accretion of various Fair Value (FV) marks required under GAAP. The following table presents the effect on pretax earnings of the amortization/accretion of the FV marks recorded during the three months ended September 30, 2025 and the projected effect for the three months ended December 31, 2025, and twelve months ended December 31, 2026. Positive numbers would increase pretax income and negative are a decrease in pretax income.
Previous wording
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED June 30, 2025
Current wording
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED September 30, 2025
Previous wording
**Net Income.**The Company recorded net income of $6.3 million for the three months ended June 30, 2025, down from net income of $6.8 million for the three months ended June 30, 2024. An increase of $159 thousand in non-interest income and declines of $149 thousand in the provision for income taxes and $65 thousand in the provision for credit losses were offset by a decline in net interest income of $222 thousand and an increase of $616 thousand in non-interest expense. The annualized return on average assets was 1.56% for the three months ended June 30, 2025, down from 1.67% for the three months ended June 30, 2024. The annualized return on average equity decreased from 17.1% during the second quarter of 2024 to 13.4% during the current quarter.
Current wording
**Net Income.**The Company recorded net income of $18.6 million for the nine months ended September 30, 2025, down from net income of $20.9 million for the nine months ended September 30, 2024. Increases of $7.2 million in net interest income and $1.2 million in non-interest income, and a decline of $0.5 million in the provision for income taxes were offset by an increase of $5.1 million in the provision for credit losses and an increase of $6.0 million in non-interest expense. The annualized return on average assets was 0.90% for the three months ended September 30, 2025, down from 1.84% for the three months ended September 30, 2024. The annualized return on average equity decreased from 18.1% during the third quarter of 2024 to 8.5% during the current quarter.
Previous wording
Non-interest income increased by $1.2 million from $4.3 million during the six months ended June 30, 2024 to $5.5 million during the first half of 2025 mostly related to a legal settlement totaling $1.1 million received in the first quarter of 2025. This settlement related to the Dixie Fire in August of 2021 which swept through the town of Greenville, California. The fire caused severe damage to the Greenville area, including the telecommunications infrastructure which adversely affected our ability to service our customers in this area during the last few years.
Current wording
Non-interest income increased by $1.2 million from $6.6 million during the nine months ended September 30, 2024 to $7.8 million during the nine months ended September 30, of 2025 mostly related to a legal settlement totaling $1.1 million received in the first quarter of 2025. This settlement related to the Dixie Fire in August of 2021 which swept through the town of Greenville, California. The fire caused severe damage to the Greenville area, including the telecommunications infrastructure which adversely affected our ability to service our customers in this area during the last few years.
Previous wording
Non-interest expense increased by $1.7 million from $20.8 million during the first half of 2024 to $22.5 million during the current six-month period. Of this amount $1.1 million relates to costs associated with our acquisition of Cornerstone Community Bancorp. We signed a definitive agreement to acquire Cornerstone Community Bancorp on January 28, 2025, and completed the acquisition on July 1, 2025. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $1.1 million in merger related costs, $801 thousand is estimated to be not deductible for state and federal income tax.
Current wording
Non-interest expense increased by $6.0 million from $31.6 million during the nine months ended September 30, 2024, to $37.6 million during the current nine-month period. Of this amount $1.9 million relates to costs associated with our acquisition of Cornerstone. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $1.9 million in merger related costs, $946 thousand is estimated to be not deductible for state and federal income tax.
Previous wording
Net interest income before provision for credit losses. Driven mostly by growth in the loan portfolio and the repayment of Bank Term Funding Program (BTFP) borrowings, net interest income increased by $860 thousand from $35.9 million during the six months ended June 30, 2024, to $36.7 million for the six months ended June 30, 2025. The increase in net interest income includes an increase of $36 thousand in interest income and a decline of $824 thousand in interest expense. See "Short-term Borrowing Arrangements" for a discussion of BTFP borrowing activity.
Current wording
Net interest income before provision for credit losses. Driven by growth in the loan portfolio, the acquisition of Cornerstone and repayment of Bank Term Funding Program (BTFP) borrowings, net interest income increased by $7.2 million from $54.7 million during the nine months ended September 30, 2024, to $61.9 million for the nine months ended September 30, 2025. The increase in net interest income includes an increase of $8.0 million in interest income partially offset by an increase of $0.8 million in interest expense. See "Short-term Borrowing Arrangements" for a discussion of BTFP borrowing activity.
Previous wording
Interest and fees on loans increased by $1.0 million related to an increase in average balance partially offset by a decline in yield. The average balance of loans during the six months ended June 30, 2025 was $1.0 billion, an increase of $44 million from $972 million during the same period in 2024. The average yield on loans decreased by 6 basis points from 6.21% during the first six months of 2024 to 6.15% during the current period.
Current wording
Interest and fees on loans increased by $9.0 million, mostly related to an increase in average balance. The average balance of loans during the nine months ended September 30, 2025, was $1.2 billion, an increase of $189 million from $982 million during the same period in 2024. The average yield on loans increased by 3 basis points from 6.21% during the first nine months of 2024 to 6.24% during the current period.
Previous wording
Interest on investment securities increased by $84 thousand related to an increase in yield of 21 basis points to 4.10% partially offset by a decline in average balance. The increase in investment yields is consistent with the increase in market rates and the restructuring of the investment portfolio in February of 2024. Average investment securities declined from $462 million during the six months ended June 30, 2024 to $443 million during the current period.
Current wording
Interest on investment securities increased by $536 thousand related to an increase in yield of 17 basis points to 4.09% partially offset by a $736 thousand decline in average balance. The increase in investment yields is consistent with the increase in market rates and the restructuring of the investment portfolio in February of 2024. Average investment securities declined from $457 million during the nine months ended September 30, 2024, to $456 million during the current period.
Previous wording
Interest on cash balances declined by $1.1 million related to both a decline in balance and a decline in yield. The rate earned on cash balances declined by 104 basis points to 4.5% and the average balance declined from $81.8 million during the first six months of 2024 to $53.8 million during the current period.
Current wording
Interest on cash balances declined by $1.6 million related to both a decline in balance and a decline in yield. The rate earned on cash balances declined by 99 basis points to 4.5% and the average balance declined from $97.2 million during the first nine months of 2024 to $72.2 million during the current period. The decline in rate is consistent with the decline in rate earned on Federal Reserve Bank of San Francisco (FRB) balances.
Previous wording
Related to a $2.5 million decline in interest on BTFP borrowings partially offset by an increase in interest bearing deposits and an increase in the cost of these deposits, interest expense decreased from $5.3 million during the six months ended June 30, 2024 to $4.5 million during the current period. The average rate paid on interest bearing liabilities decreased from 1.39% during the 2024 period to 1.24% in 2025.
Current wording
Related to an increase in interest bearing deposits, an increase in the cost of these deposits and the acquisition of CCB partially offset by a $3.7 million decline in interest on the Bank Term Funding Program (BTFP) borrowings, interest expense increased from $8.3 million during the nine months ended September 30, 2024 to $9.1 million during the current period. The average rate paid on interest bearing liabilities was 1.43% during both periods. All BTFP borrowings were paid off during 2024. Interest expense recognized on the BTFP borrowings for the three and nine months ended September 30, 2024, was $1.2 million and $3.7 million, respectively.
Previous wording
Interest paid on deposits increased by $1.7 million and is broken down by product type as follows: money market accounts - $1.6 million and savings deposits - $109 thousand. The average rate paid on interest-bearing deposits increased from 0.79% during the six months ended June 30, 2024 to 1.21% during the current period. Average interest-bearing deposits totaled $698 million during the first half of 2025, an increase of $62 million from $636 million during the first half of 2024.
Current wording
Interest paid on deposits increased by $4.0 million and is broken down by product type as follows: money market accounts - $3.4 million, savings deposits - $220 thousand and time deposits - $380 thousand. The average rate paid on interest-bearing deposits increased from 0.85% during the nine months ended September 30, 2024, to 1.35% during the current period. Average interest-bearing deposits totaled $796 million during the nine months ended September 30, 2025, an increase of $157 million from $639 million during the nine months ended September 30, 2024.
Previous wording
Net interest margin for the six months ended June 30, 2025 increased 13 basis points to 4.89%, up from 4.76% for the same period in 2024.
Current wording
Net interest margin for the nine months ended September 30, 2025, increased 11 basis points to 4.87%, up from 4.76% for the same period in 2024.
Previous wording
The following table presents for the six-month periods indicated the distribution of consolidated average assets, liabilities and shareholders' equity. It also presents the amounts of interest income from interest earning assets and the resultant annualized yields expressed in both dollars and annualized yield percentages, as well as the amounts of interest expense on interest bearing liabilities and the resultant cost expressed in both dollars and annualized rate percentages. Average balances are based on daily averages. Nonaccrual loans are included in the calculation of average loans while nonaccrued interest thereon is excluded from the computation of yields earned:
Current wording
The following table presents for the nine-month periods indicated the distribution of consolidated average assets, liabilities and shareholders' equity. It also presents the amounts of interest income from interest earning assets and the resultant annualized yields expressed in both dollars and annualized yield percentages, as well as the amounts of interest expense on interest bearing liabilities and the resultant cost expressed in both dollars and annualized rate percentages. Average balances are based on daily averages. Nonaccrual loans are included in the calculation of average loans while nonaccrued interest thereon is excluded from the computation of yields earned:
Previous wording
The following table sets forth changes in interest income and interest expense for the six-months ended June 30, 2025, and the amount of change attributable to variances in volume, rates and the combination of volume and rates based on the relative changes of volume and rates:
Current wording
The following table sets forth changes in interest income and interest expense for the nine-months ended September 30, 2025, and the amount of change attributable to variances in volume, rates and the combination of volume and rates based on the relative changes of volume and rates:
Previous wording
**Provision for credit losses.**During the first half of 2025 we recorded a provision for credit losses of $1,110,000 consisting of a provision for credit losses on loans of $1,150,000 and a decrease in the reserve for unfunded commitments of $40,000. This compares to a provision for credit losses of $1,746,000 consisting of a provision for credit losses on loans of $1,825,000 and a decrease in the reserve for unfunded commitments of $79,000 during the first half of 2024. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Current wording
Provision for credit losses**.** During the first nine months of 2025, we recorded a provision for credit losses of $6.5 million, consisting of a provision for credit losses on loans of $6.3 million and an increase in the reserve for unfunded commitments of $211 thousand. The provision includes growth in the loan portfolio, a $5.0 million Current Expected Credit Losses (CECL) day 1 provision on non-Purchased Credit Deteriorated (non-PCD) loans acquired from CCB and the reserve for unfunded commitments on loans acquired from CCB. This compares to a provision for credit losses of $1.3 million consisting of a provision for credit losses on loans of $1.5 million and a decrease in the reserve for unfunded commitments of $129 thousand during the nine months ended September 30, 2024. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Previous wording
**Non-interest income.**During the six months ended June 30, 2025, non-interest income totaled $5.6 million, an increase of $1.2 million from the six months ended June 30, 2024. The largest component of this increase was a legal settlement totaling $1.1 million related to the Dixie Fire in August of 2021. This settlement is included in Other in the following table.
Current wording
**Non-interest income.**During the nine months ended September 30, 2025, non-interest income totaled $7.8 million, an increase of $1.2 million from the nine months ended September 30, 2024. The largest component of this increase was a legal settlement totaling $1.1 million related to the Dixie Fire in August of 2021. This settlement is included in Other in the following table.
Previous wording
**Non-interest expense.**During the six months ended June 30, 2025, total non-interest expense increased by $1.7 million from $20.8 million during the first half of 2024 to $22.5 million during the current period. The largest components of this increase were merger related expenses of $1.1 million, salary and benefit expenses of $784 thousand and occupancy and equipment expenses of $425 thousand. The increase in salary and benefit expense included an increase in salary expense of $484 thousand related primarily to merit and promotional salary increases. A decrease in deferred loan origination fees of $257 thousand was offset by a decline in commission expense of $317 thousand. Both items mostly relate to a decline in SBA loan production during the comparison periods. The increase in occupancy and equipment expense mostly relates to an increase in rent expense of $374 thousand related to the February 2024 sales/leaseback transaction. Partially offsetting these increases in expense were several reductions in non-interest expense the largest of which was a reduction in professional fees of $320 thousand. Included in professional fees during the six months ended June 30, 2024 were legal expenses totaling $188 thousand related to a litigation matter that was settled in the second half of 2024.
Current wording
**Non-interest expense.**During the nine months ended September 30, 2025, total non-interest expense increased by $6.0 million from $31.6 million during the nine months ended September 30, 2024, to $37.6 million during the current period. The largest components of this increase were salary and benefit expenses of $2.7 million, merger related expenses of $1.9 million, and occupancy and equipment expenses of $908 thousand. The increase in salary and benefit expense included an increase in salary expense of $1.8 million primarily related to the acquisition of CCB and to a lesser extent merit and promotional salary increases. Other significant increases in salary and benefit expense were $569 thousand in bonus expense, $186 thousand in health insurance costs, $174 thousand in payroll taxes and $150 thousand in accrued vacation. The increase in occupancy and equipment expenses mostly relates to the acquisition of CCB and an increase in rent related to the February 2024 sales/leaseback transaction.
Previous wording
**Provision for income taxes.**The provision for income taxes increased by $583 thousand from $4.6 million, or 26.2% of pre-tax income, during the six months ended June 30, 2024 to $5.2 million, or 27.8% of pre-tax income, during the current period. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income, such as earnings on Bank owned life insurance and municipal securities interest, decrease taxable income while non-deductible merger transaction costs incurred during the current period increase taxable income.
Current wording
**Provision for income taxes.**The provision for income taxes decreased from $7.5 million, or 26.4% of pre-tax income, during the nine months ended September 30, 2024 to $7.0 million, or 27.2% of pre-tax income, during the current nine-month period. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income, such as earnings on Bank owned life insurance and municipal securities interest, decrease taxable income while non-deductible merger transaction costs incurred during the current period increase taxable income.
Previous wording
**Net Income.**The Company recorded net income of $13.5 million for the six months ended June 30, 2025, up from net income of $13.0 million for the six months ended June 30, 2024. Increases of $860 thousand in net interest income and $1.2 million in non-interest income and a decline of $636 thousand in the provision for credit losses were partially offset by increases of $1.7 million in non-interest expense and $583 thousand in the provision for income tax expense. The annualized return on average assets was 1.67% for the six months ended June 30, 2025, up from 1.61% for the six months ended June 30, 2024. The annualized return on average equity decreased from 16.7% during the six months ended June 30, 2024, to 14.7% during the current period.
Current wording
**Net Income.**The Company recorded net income of $5.1 million for the three months ended September 30, 2025, down from net income of $7.8 million for the three months ended September 30, 2024. An increase of $6.3 million in net interest income and a decline of $1.1 million in the provision for income taxes was offset by an increase of $5.8 million in the provision for credit losses and an increase of $4.3 million in non-interest expense. The annualized return on average assets was 0.90% for the three months ended September 30, 2025, down from 1.84% for the three months ended September 30, 2024. The annualized return on average equity decreased from 18.1% during the third quarter of 2024 to 8.5% during the current quarter.
Previous wording
Non-interest expense increased by $616 thousand from $10.4 million during the second quarter of 2024 to $11.0 million during the current quarter. Of this amount, $481 thousand relates to costs associated with our acquisition of Cornerstone Community Bancorp. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $481 thousand in merger related costs, $239 thousand is estimated to be not deductible for state and federal income tax.
Current wording
Non-interest expense increased by $4.3 million from $10.8 million during the third quarter of 2024 to $15.1 million during the current quarter. Of this amount, $879 thousand relates to costs associated with our acquisition of Cornerstone Community Bancorp. Merger transaction costs that facilitate the merger are not deductible for income tax purposes. Of the $879 thousand in merger related costs, $145 thousand is estimated to be not deductible for state and federal income tax.
Previous wording
Net interest income before provision for credit losses. Net interest income was $18.2 million for the three months ended June 30, 2025, a decrease of $222 thousand from the same period in 2024. The decrease in net interest income includes a decrease of $527 thousand in interest income partially offset by a decrease of $305 thousand in interest expense. Interest and fees on loans increased by $200 thousand related to growth in the loan portfolio partially offset by a decline in yield.
Current wording
Net interest income before provision for credit losses. Net interest income was $25.2 million for the three months ended September 30, 2025, an increase of $6.3 million from the same period in 2024. The increase in net interest income includes an increase of $7.9 million in interest income partially offset by an increase of $1.6 million in interest expense.
Previous wording
Interest on investment securities decreased by $30 thousand as yield on these securities decreased slightly from 4.11% during the 2024 quarter to 4.08% during the current quarter and average investment securities declined from $444 million during the three months ended June 30, 2024 to $442 million during the current quarter.
Current wording
Interest on investment securities increased by $453 thousand as yield on these securities increased by 7 basis points to 4.06% and the average balance increased by $35 million from $447 million during the three months ended September 30, 2024, to $482 million during the current quarter.
Previous wording
Interest on cash balances decreased by $697 thousand related to a decline in average balance of $42 million and a decrease in average rate paid on cash balances of 104 basis points from 5.51% during the second quarter of 2024 to 4.47% during the current quarter. This decline in yield was mostly related to a decline in rate paid on balances held at the FRB. The average rate earned on FRB balances decreased from 5.40% during the second quarter of 2024 to 4.40% during the current quarter.
Current wording
Interest on cash balances decreased by $518 thousand related to a decline in average balance of $19 million and a decrease in average rate paid on cash balances of 94 basis points from 5.44% during the third quarter of 2024 to 4.50% during the current quarter. This decline in yield was related to a decline in rate paid on balances held at the FRB. The average rate earned on FRB balances decreased from 5.33% during the third quarter of 2024 to 4.36% during the current quarter.
Previous wording
Interest paid on deposits increased by $968 thousand and is broken down as follows: money market accounts - $815 thousand, savings deposits - $83 thousand and time deposits - $70 thousand. The increase in interest paid on money market accounts mostly relates to an increase in public entity balances and the rate earned on these balances. During the second half of 2024 and continuing into 2025, we have offered a premium money market rate on large balances of public entities in our service area, matching the rate they could earn from the California local agency investment fund. This has led to the significant increase in balances and rate paid on money market accounts. The average balance of money market accounts during the current quarter was $288 million, an increase of $72 million from $216 million during the three months ended June 30, 2024. The average rate paid on money market accounts increased 92 basis points to 1.79%. The increase in interest on savings accounts was driven by an increase in the average rate paid of 12 basis points to 34 basis points. The increase in interest on time deposits includes an increase in average balance of $23 million partially offset by a decline in average rate paid of 33 basis points to 2.53% as promotional time deposits issued in 2024 matured. Many of these promotional time deposits were renewed at lower rates. The average rate paid on interest-bearing deposits increased from 0.84% during the second quarter of 2024 to 1.30% during the current quarter. The average balance of interest-bearing deposits increased from $633 million during the three months ended June 30, 2024 to $705 million during the quarter.
Current wording
Interest paid on deposits increased by $2.3 million and the increase is broken down by product type as follows: money market accounts - $1.8 million, savings deposits - $112 thousand and time deposits - $396 thousand. The average balance of money market accounts during the current quarter was $439 million, an increase of $216 million from $223 million during the three months ended September 30, 2024. The average rate paid on money market accounts increased 105 basis points to 2.22%. The increase is primarily related to higher rate money market accounts acquired in the acquisition of CCB. The increase in interest on savings accounts was driven by an increase in the average rate paid of 15 basis points to 37 basis points. The increase in interest on time deposits includes an increase in average balance of $140 million, partially offset by a decline in average rate paid of 106 basis points to 1.87%. The increase in the average balance of time deposits mostly relates to the acquisition of CCB. The decline in the rate paid on time deposits resulted from a reduction in interest expense of $651 thousand related to the amortization of the fair value mark on time deposits acquired in the acquisition of CCB. This amortization was accelerated with the payoff of $38.5 million in brokered deposits.
Previous wording
**Provision for credit losses.**During the second quarter of 2025 we recorded a provision for credit losses of $860 thousand consisting of a provision for credit losses on loans of $900 thousand and a reduction in the provision for unfunded loan commitments of $40 thousand. This compares to a provision for credit losses of $925 thousand, all of which represented a provision for credit losses on loans, during the second quarter of 2024. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Current wording
**Provision for credit losses.**During the third quarter of 2025 we recorded a provision for credit losses of $5.4 million, consisting of a provision for credit losses on loans of $5.1 million and an increase in the reserve for unfunded commitments of $251 thousand. The provision includes growth in the loan portfolio, a $5.0 million CECL day 1 provision on non-PCD loans acquired from CCB and an increase in the reserve for unfunded commitments on loans acquired from CCB. See “Analysis of Asset Quality and Allowance for Loan Losses” for a discussion of loan quality trends and the provision for credit losses.
Previous wording
**Non-interest expense.**During the three months ended June 30, 2025, total non-interest expense increased by $616 thousand from $10.4 million during the second quarter of 2024 to $11.0 million during the current quarter. The largest components of this increase were merger related expenses of $481 thousand and salary and benefit expense of $270 thousand. The increase in salary and benefit expense includes an increase in salary expense of $216 thousand related primarily to merit and promotional salary increases. A decrease in deferred loan origination fees of $144 thousand was offset by a decline in commission expense of $180 thousand. Both items mostly relate to a decline in SBA loan production during the comparison quarters.
Current wording
**Non-interest expense.**During the three months ended September 30, 2025, total non-interest expense increased by $4.3 million from $10.8 million during the third quarter of 2024 to $15.1 million during the current quarter. The largest components of this increase were merger related expenses of $879 thousand and salary and benefit expenses of $1.9 million. The increase in salary and benefit expense includes an increase in salary expense of $1.3 million mostly related to former CCB employees. Other significant increases in salary and benefits include $312 thousand in bonus expense, $217 thousand in commissions related to an increase in SBA loan fundings and an increase in the accrued vacation liability of $150 thousand. We view the increase in the accrued vacation as a non-recurring expense. Other large increases in non-interest expense, which largely relate to the acquisition of CCB, include $483 thousand in occupancy and equipment costs, $470 thousand in outside services and $564 thousand in amortization of core deposit intangible.
Previous wording
**Provision for income taxes.**The provision for income taxes decreased by $149 thousand from $2.5 million, or 26.9% of pre-tax income, during the three months ended June 30, 2024 to $2.4 million, or 27.1% of pre-tax income, during the current quarter. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income such as earnings on Bank owned life insurance and municipal securities interest decrease taxable income while non-deductible merger transaction costs incurred during the current quarter effectively increase taxable income.
Current wording
**Provision for income taxes.**The provision for income taxes decreased by $1.1 million from $2.9 million, or 26.7% of pre-tax income, during the three months ended September 30, 2024, to $1.8 million, or 25.6% of pre-tax income, during the current quarter. The percentages for 2025 and 2024 differ from statutory rates as tax exempt items of income such as earnings on Bank owned life insurance and municipal securities interest decrease taxable income while non-deductible merger transaction costs incurred during the current quarter effectively increase taxable income.
Previous wording
Total assets on June 30, 2025, were $1.6 billion, an increase of $5 million from December 31, 2024. The largest components of this increase were increases in accrued interest receivable and other assets of $5.1 million, investment securities of $1.9 million and net loans of $1.5 million. These increases were partially offset by a decrease of $2.7 million in cash equivalents. Accrued interest payable and other liabilities increased by $1.4 million and shareholders’ equity increased by $15.2 million from $177.9 million on December 31, 2024, to $193.1 million on June 30, 2025. The largest declines in liabilities were decreases in repurchase agreements of $7.1 million and total deposits which decreased by $4.3 million and totaled $1.4 billion on June 30, 2025. A detailed discussion of each of these changes follows.
Current wording
Mostly related to the acquisition of Cornerstone, total assets increased by $606 million from $1.6 billion on December 31, 2024, to $2.2 billion on September 30, 2025. The largest components of this increase were increases in net loans of $475 million, investment securities of $47 million, accrued interest receivable and other assets of $31 million, Goodwill of $19 million, BOLI of $17 million, premises and equipment of $12 million and cash and cash equivalents of $5 million. Increases in liabilities include $448 million in deposits, $72 million in repurchase agreements, $12 million in borrowings and $6 million in accrued interest payable and other liabilities. Total shareholders' equity increased by $68 million. The increase in premises and equipment, BOLI and cash and cash equivalents relates to the acquisition of Cornerstone. A detailed discussion of each of the other changes follows.
Previous wording
**Loan Portfolio.**Gross loans increased by approximately $2.4 million, or 0.2%, and totaled $1.0 billion on June 30, 2025, and December 31, 2024. The largest increases in loans were $26.7 million in commercial real estate loans, $3.7 million in commercial loans and $3.7 million in equity lines of credit. These were offset by declines of $12.7 million in construction and land development loans, $13.2 million in auto loans, $5.0 million in agricultural loans and $0.8 million in all other loans. Although the Company offers a broad array of financing options, it continues to concentrate its focus on small to medium sized commercial businesses. These loans offer diversification as to industries and types of businesses, thus limiting material exposure in any industry concentrations. The Company offers both fixed and floating rate loans and obtains collateral in the form of real property, business assets and deposit accounts, but looks to business and personal cash flows as its primary source of repayment. In the fourth quarter of 2023 we terminated our indirect automobile loan program. Ending this program, which was our lowest yielding loan segment, also improved our loan loss risk profile since this program had historically higher charge-off rates. Terminating this program also improved our consumer compliance risk profile.
Current wording
**Loan Portfolio.**Gross loans increased by approximately $481 million, or 47%, and totaled $1.5 billion on September 30, 2025, and $1.0 billion on December 31, 2024. The largest increases in loans were $334 million in commercial real estate loans, $84 million in commercial loans, $35 million in agricultural loans, and $22 million in residential loans. Decreases in loan balances totaled $24 million consisting of a decline in automobile loans of $20 million and a decline in construction loans of $4 million. Although the Company offers a broad array of financing options, it continues to concentrate its focus on small to medium sized commercial businesses. These loans offer diversification as to industries and types of businesses, thus limiting material exposure in any industry concentrations. The Company offers both fixed and floating rate loans and obtains collateral in the form of real property, business assets and deposit accounts, but looks to business and personal cash flows as its primary source of repayment. In the fourth quarter of 2023 we terminated our indirect automobile loan program. Ending this program, which was our lowest yielding loan segment, also improved our loan loss risk profile since this program had historically higher charge-off rates. Terminating this program also improved our consumer compliance risk profile.
Previous wording
As shown in the following table the Company's largest lending categories are commercial real estate loans, agricultural loans, commercial loans and auto loans.
Current wording
As shown in the following table the Company's largest lending categories are commercial real estate loans, commercial loans, agricultural loans, and equity lines of credits.
Previous wording
The Company’s real estate related loans, including real estate mortgage loans, real estate construction and land development loans, consumer equity lines of credit, and agricultural loans secured by real estate, comprised 83% of the total loan portfolio at June 30, 2025. Moreover, the business activities of the Company currently are focused in the California counties of Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta and Sutter and in Washoe and Carson City Counties in Northern Nevada. Consequently, the results of operations and financial condition of the Company are dependent upon the general trends in these economies and, in particular, the commercial real estate markets. In addition, the concentration of the Company's operations in these areas of Northeastern California and Northwestern Nevada exposes it to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in these regions.
Current wording
The Company’s real estate related loans, including real estate mortgage loans, real estate construction and land development loans, consumer equity lines of credit, and agricultural loans secured by real estate, comprised 80% of the total loan portfolio at September 30, 2025. Moreover, the business activities of the Company currently are focused in the California counties of Butte, Lassen, Modoc, Nevada, Placer, Plumas, Shasta, Sutter and Tehama and in Washoe and Carson City Counties in Northern Nevada. Consequently, the results of operations and financial condition of the Company are dependent upon the general trends in these economies and, in particular, the commercial real estate markets. In addition, the concentration of the Company's operations in these areas of Northeastern California and Northwestern Nevada exposes it to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in these regions.
Previous wording
Commercial real estate loans (“CRE”) comprised 66% of the lending portfolio at June 30, 2025. CRE loans were 40% investor-owned, 44% owner-occupied, and 16% multi-family. Concentrations by real estate type within the CRE portfolio, excluding multi-family, were 13% Retail, 13% Mixed Commercial Real Estate, 12% Office, 8% Hospitality, 8% Special Purpose, 8% Gas Stations, 8% Industrial, 6% Mini Storage Facilities, 6% Residential, 5% Senior Care Facilities, and 5% Mixed Commercial and Residential, with all remaining concentrations below 5%. There were no rent-controlled properties within the multi-family category. Office facilities are typically small and located in more rural areas. 29% of CRE loans were located in northern Nevada and 49% were located in northern California. Of the $13.7 million in non-accrual balances at June 30, 2025, approximately 9% were CRE. Of the $22.0 million in substandard balances at June 30, 2025 approximately 24% were CRE.
Current wording
Commercial real estate loans (“CRE”) comprised 66% of the lending portfolio at September 30, 2025. CRE loans were 41% investor-owned, 44% owner-occupied, and 15% multi-family. Concentrations by real estate type within the CRE portfolio, excluding multi-family, were 15% Mixed Commercial Real Estate, 14% Office, 13% Retail, 10% Hospitality, 10% Industrial, 8% Gas Stations, 6% Special Purpose, and 5% Mini Storage Facilities, with all remaining concentrations below 5%. There were no rent-controlled properties within the multi-family category. Office facilities are typically small and located in more rural areas. 21% of CRE loans were located in northern Nevada and 60% were located in northern California. Of the $15.0 million in non-accrual balances at September 30, 2025, approximately 12% were CRE. Of the $26.0 million in substandard balances at September 30, 2025 approximately 30% were CRE.
Previous wording
The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency in which variable rate loans reprice can vary from one day to several years. At June 30, 2025, and December 31, 2024, approximately 78% and 77%, respectively, of the Company's loan portfolio was comprised of variable rate loans. Loans indexed to the prime interest rate were approximately 21% of the Company’s variable rate loan portfolio on June 30, 2025; these loans reprice within one day to three months of a change in the prime rate. The remainder of the Company's variable rate loans mostly consist of commercial real estate loans tied to U.S. Treasury rates and reprice every five years. Approximately 76% of the variable rate loans are indexed to the five-year T-Bill rate and reprice every five years. While real estate mortgage, agricultural, commercial and consumer lending remain the foundation of the Company's historical loan mix, some changes in the mix have occurred due to the changing economic environment and the resulting change in demand for certain loan types
Current wording
The rates of interest charged on variable rate loans are set at specific increments in relation to the Company's lending rate or other indexes such as the published prime interest rate or U.S. Treasury rates and vary with changes in these indexes. The frequency in which variable rate loans reprice can vary from one day to several years. At September 30, 2025, and December 31, 2024, approximately 80% and 77%, respectively, of the Company's loan portfolio was comprised of variable rate loans. Loans indexed to the prime interest rate were approximately 21% of the Company’s variable rate loan portfolio on September 30, 2025; these loans reprice within one day to three months of a change in the prime rate. The remainder of the Company's variable rate loans mostly consist of commercial real estate loans tied to U.S. Treasury rates and reprice every five years. Approximately 75% of the variable rate loans are indexed to the five-year T-Bill rate and reprice every five years. While real estate mortgage, agricultural, commercial and consumer lending remain the foundation of the Company's historical loan mix, some changes in the mix have occurred due to the changing economic environment and the resulting change in demand for certain loan types
Previous wording
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at June 30, 2025, were $13.7 million, up from $4.3 million at December 31, 2024. Nonperforming assets as a percentage of total assets increased to 0.84% at June 30, 2025, up from 0.27% at December 31, 2024. OREO totaled $91 thousand at June 30, 2025, and December 31, 2024. Nonperforming loans were $13.7 million at June 30, 2025 and $4.1 million at December 31, 2024. Nonperforming loans as a percentage of total loans increased to 1.34% at June 30, 2025, up from 0.40% at December 31, 2024. The increase in nonperforming loans is related to one agricultural loan relationship of 15 loans totaling $9.9 million. The borrower on these loans was unable to meet his commitments under modified loan agreements, and therefore during the quarter, we placed the loans on nonaccrual status. Interest reversed on these loans during the current quarter totaled $344 thousand and specific loan loss reserves totaling $931 thousand were applied against the loans.
Current wording
Nonperforming assets (which are comprised of nonperforming loans, other real estate owned (“OREO”) and repossessed vehicle holdings) at September 30, 2025, were $15.2 million, up from $4.3 million at December 31, 2024. Nonperforming assets as a percentage of total assets increased to 0.68% at September 30, 2025, up from 0.27% at December 31, 2024. OREO totaled $114 thousand at September 30, 2025, and $91 thousand December 31, 2024. Nonperforming loans were $15.0 million at September 30, 2025 and $4.1 million at December 31, 2024. Nonperforming loans as a percentage of total loans increased to 1.00% at September 30, 2025, up from 0.40% at December 31, 2024. The increase in nonperforming loans is mostly related to one agricultural loan relationship of 15 loans totaling $9.8 million. The borrower on these loans was unable to meet his commitments under modified loan agreements, and therefore during the second quarter of 2025, we placed the loans on nonaccrual status. Interest reversed on these loans during the nine months ended September 30, 2025, was $344 thousand and specific loan loss reserves totaling $870 thousand were reserved against the loans at September 30, 2025.
Previous wording
Net charge-offs totaled $137 thousand and $610 thousand during the six months ended June 30, 2025 and 2024, respectively. The allowance for credit losses totaled $14.2 million at June 30, 2025 and $13.2 million at December 31, 2024. The allowance for credit losses as a percentage of total loans was 1.39% and 1.30% at June 30, 2025 and December 31, 2024.
Current wording
Net charge-offs totaled $219 thousand and $736 thousand during the nine months ended September 30, 2025, and 2024, respectively. The allowance for credit losses totaled $19.6 million at September 30, 2025, and $13.6 million at September 30, 2024. The allowance for credit losses as a percentage of total loans was 1.30% on September 30, 2025, and December 31, 2024.
Previous wording
The following table provides a summary of the change in the number and balance of OREO properties for the six months ended June 30, 2025 and 2024 (dollars in thousands):
Current wording
The following table provides a summary of the change in the number and balance of OREO properties for the nine months ended September 30, 2025 and 2024 (dollars in thousands):
Previous wording
The gain on sales of the branches was offset by losses on the sale of approximately $115 million in investment securities. During the three months ended March 31, 2024, we sold $115 million in investment securities having a weighted average tax equivalent yield of 2.24% recording a $19.8 million net loss on the sales. As part of the restructuring, beginning in December 2023 and ending on March 27, 2024, we purchased $120 million in investment securities having a weighted average tax equivalent yield of 5.25%.
Current wording
Unrealized losses on available-for-sale investment securities totaling $35.7 million were recorded, net of $10.6 million in tax benefits, as accumulated other comprehensive loss within shareholders' equity at December 31, 2024. During the first quarter of 2024 we sold $116 million in investment securities having a weighted average tax equivalent yield of 2.24% recording a $19.8 million loss on sale. Beginning in December 2023 and ending on March 27, 2024 we purchased $120 million in investment securities having a weighted average tax equivalent yield of 5.25%. These sales and purchases were made as part of an investment restructure the losses of which were offset by the gain recorded on the sales/leaseback.
Previous wording
The investment portfolio at June 30, 2025, consisted of $351.8 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 169 municipal securities totaling $87.9 million. The investment portfolio at December 31, 2024, consisted of $350.2 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 170 municipal securities totaling $87.5 million.
Current wording
The investment portfolio at September 30, 2025, consisted of $390 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 174 municipal securities totaling $95 million. The investment portfolio at December 31, 2024, consisted of $350 million in securities of U.S. Government-sponsored agencies and U.S. Government agencies, and 170 municipal securities totaling $88 million.
Previous wording
There were no Federal funds sold at June 30 2025, and December 31, 2024; however, the Bank maintained interest earning balances at the Federal Reserve Bank totaling $41.1 million at June 30, 2025, and $47.2 million at December 31, 2024. The balance, on June 30, 2025, earns interest at the rate of 4.40%.
Current wording
There were no Federal funds sold at September 30, 2025, and December 31, 2024; however, the Bank maintained interest earning balances at the Federal Reserve Bank totaling $48 million at September 30, 2025, and $47 million at December 31, 2024. The balance on September 30, 2025, earns interest at the rate of 4.15%.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net interest margin for the three months ended September 30, 2025, was 4.83%, up from 4.76% for the same period in 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
**Investment Portfolio and Federal Reserve Balances.**Total investment securities were $439.7 million as of June 30, 2025, and $437.7 million at December 31, 2024. Unrealized losses on available-for-sale investment securities totaling $29.4 million were recorded, net of $8.7 million in tax benefits, as accumulated other comprehensive loss within shareholders' equity at June 30, 2025. Unrealized losses on available-for-sale investment securities totaling $35.7 million were recorded, net of $10.6 million in tax benefits, as accumulated other comprehensive loss within shareholders' equity at December 31, 2024. During the first quarter of 2024 we sold $116 million in investment securities having a weighted average tax equivalent yield of 2.24% recording a $19.8 million loss on sale. Beginning in December 2023 and ending on March 27, 2024 we purchased $120 million in investment securities having a weighted average tax equivalent yield of 5.25%. These sales and purchases were made as part of the investment restructure described earlier. During the three and six-months ending June 30, 2025 we sold $1.2 million in available for sale investment securities recording a net gain on sale of $3 thousand.