FS Bancorp, Inc.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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.
Jun 30, 2026 · Filed Aug 10, 2026
FSBW$43.55-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001437749-26-015942
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001437749-26-026740
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 87 previous paragraphs and 103 current paragraphs.
30 unchanged; 52 reworded; 14 added; 5 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 13 previous and 18 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 (14)
Current report
***Assets.***Total assets decreased $17.8 million to $3.18 billion at June 30, 2026, compared to $3.20 billion at December 31, 2025, primarily due to decreases of $19.2 million in securities available-for-sale, $13.2 million in loans held for sale, and $1.5 million in core deposit intangible, partially offset by increases of $6.4 million in FHLB stock, $5.8 million in loans receivable, net, $1.6 million in securities held-to-maturity, $1.5 million in total cash and cash equivalents, and $866,000 in operating lease right-of-use assets. Loan growth was funded primarily by borrowings, which also replaced a decline in deposit funding during the period.
Current report
Loans receivable, net increased $5.8 million to $2.63 billion at June 30, 2026, compared to $2.62 billion at December 31, 2025:
Current report
***Net Interest Income.***Net interest income increased $536,000 to $32.6 million for the three months ended June 30, 2026, from $32.1 million for the three months ended June 30, 2025, primarily due to an increase in total interest income of $959,000, partially offset by an increase in total interest expense of $423,000. The $959,000 increase in total interest income was primarily due to an increase of $1.2 million in interest income on loans receivable, including fees, resulting from net loan growth. The $423,000 increase in total interest expense reflected a $612,000 increase in interest expense on borrowings resulting from higher average borrowing balances and a $423,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $612,000 decrease in interest expense on deposits.
Current report
Net interest margin (“NIM”) (annualized) was unchanged at 4.30% for the three months ended June 30, 2026, compared to the same period in the prior year. NIM remained relatively stable during the periods.
Current report
***Interest Expense.***Total interest expense increased $423,000 to $17.0 million for the three months ended June 30, 2026, from $16.6 million for the comparable quarter in 2025, due to an increase of $612,000 in interest expense on borrowings resulting from higher average borrowing balances, which was fully offset by a decrease in interest expense on deposits for the same amount, reflecting primarily a shift from brokered deposits to borrowings, and a $423,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026.
Current report
The average cost of total interest-bearing liabilities decreased one-basis point to 3.12%, reflecting the benefit of the lower CD cost, partially offset by the higher cost of the subordinated note following its repricing. The average cost of funds, which includes noninterest-bearing checking, increased two- basis points to 2.41%, from 2.39% for the three months ended June 30, 2025, primarily attributable to the repricing of the subordinated note to a higher interest rate.
Current report
Net loan charge-offs totaled $3.8 million for the three months ended June 30, 2026, compared to $1.2 million during the three months ended June 30, 2025. The increase was primarily attributable to a further charge-off on an existing commercial construction loan relationship that was previously partially charged off in 2024, as well as higher net charge-offs within the indirect home improvement portfolio. The additional charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. Management expects final resolution of the relationship during the second half of 2026. The increase in indirect home improvement loan net charge-offs primarily reflects elevated delinquency levels within portions of the portfolio.
Current report
***Noninterest Expense.***Noninterest expense increased $602,000 to $26.1 million for the three months ended June 30, 2026, compared to $25.5 million for the three months ended June 30, 2025. The $602,000 increase was primarily attributable to a $1.5 million increase in salaries and benefits expense resulting from annual compensation adjustments implemented during the second quarter as part of the Company's annual compensation review process, as well as higher benefit costs. In addition, the Company recorded $417,000 in acquisition-related costs associated with the previously announced merger with Pacific West. These increases were partially offset by a $1.1 million reduction in operations expense, primarily due to an $800,000 decrease in the mortgage purchase reserve for estimated losses to mortgage loan repurchase obligations. The reduction reflects the seasoning of loans originated during the high-volume production years of 2020 and 2021, which has reduced the expected level of future repurchase-related losses.
Current report
***General.***Net income was $15.8 million for the six months ended June 30, 2026, compared to $15.7 million for the six months ended June 30, 2025. The increase was primarily due to a $2.1 million, or 3.3%, increase in net interest income and a $1.3 million, or 12.2%, increase in total noninterest income, partially offset by a $1.6 million, or 43.1%, increase in provision for credit losses, and a $1.1 million, or 2.1%, increase in total noninterest expense.
Current report
***Interest Income.***Total interest income for the six months ended June 30, 2026, increased $3.5 million to $99.0 million, from $95.5 million for the six months ended June 30, 2025. The increase was primarily due to a $3.9 million increase in interest income on loans receivable, including fees, as a result of higher average loan balances. Offsetting this growth were decreases in interest income on taxable investment securities, FHLB stock, and interest-bearing deposits at other financial institutions, collectively totaling $370,000. The decrease in interest income on taxable investment securities and FHLB stock primarily reflects lower average balances and lower yields, while the decrease in interest income on interest-bearing deposits at other financial institutions primarily reflects lower yields, partially offset by higher average balances.
Current report
The average cost of total interest-bearing deposits decreased seven-basis points to 2.94% for the six months ended June 30, 2026, compared to 3.01% for the six months ended June 30, 2025, primarily reflecting lower rates paid on CDs, partially offset by higher rates paid on savings, money market, and interest-bearing checking accounts. The average balance of total interest-bearing deposits increased $114.3 million to $1.96 billion primarily due to growth in interest-bearing checking balances, including brokered deposits, and higher average savings and money market balances. These increases were partially offset by a decrease in average CD balances.
Current report
***Noninterest Income.***Noninterest income increased $1.3 million to $11.6 million for the six months ended June 30, 2026, from $10.3 million for the six months ended June 30, 2025. The increase was primarily due to a $1.3 million increase in gain on sale of loans.
Current report
***Noninterest Expense.***Noninterest expense increased $1.1 million to $51.6 million for the six months ended June 30, 2026, compared to $50.6 million for the six months ended June 30, 2025. The increase was primarily due to a $1.8 million increase in salaries and benefits, including a $1.5 million increase resulting from annual compensation adjustments implemented during the second quarter as part of the Company’s annual compensation review process, as well as higher benefit costs. In addition, the Company recorded $712,000 in acquisition related costs associated with the previously announced merger with Pacific West, and a $515,000 increase in loan costs, partially offset by decreases of $1.2 million in operations expense, primarily due to a reduction in the mortgage repurchasing reserve previously mentioned and $762,000 in data processing expense.
Current report
The efficiency ratio improved to 67.27% for the six months ended June 30, 2026, compared to 68.89% for the six months ended June 30, 2025, due to revenue growth outpacing noninterest expense.
Removed paragraphs (5)
Previous report
***Assets.***Total assets remained virtually unchanged at $3.20 billion at March 31, 2026, compared to December 31, 2025. The most significant changes between these periods were a $17.7 million decrease in securities available-for-sale, a $12.6 million increase in loans held for sale, a $10.5 million increase in total cash and cash equivalents, and a $919,000 increase in loans receivable, net. Asset growth was primarily funded by brokered deposits.
Previous report
Loans receivable, net, was $2.62 billion at both March 31, 2026, and December 31, 2025.
Previous report
○ $1.2 million in multi-family loans.
Previous report
○ $197,000 in home equity loans.
Previous report
***Noninterest Expense.***Noninterest expense increased $465,000 to $25.5 million for the three months ended March 31, 2026, compared to $25.1 million for the three months ended March 31, 2025. The $465,000 increase was primarily due to the following increases: $334,000 in loan costs, due to higher origination activity, $321,000 in salaries and benefits, primarily due to competitive wage adjustments; $295,000 in acquisition cost related to the previously announced merger with Pacific West Bancorp; and $159,000 in occupancy expense related to branch renovations. These increases were partially offset by a $451,000 decrease in data processing expenses attributable to executed contract negotiations with the Company's data processing vendors, and a $172,000 decrease in professional and board fees.
Reworded paragraphs (52)
Previous wording
At March 31, 2026, the Company's loan portfolio consisted of the following major categories: CRE loans, residential real estate loans, consumer loans, and commercial business loans representing 37.2%, 28.8%, 21.9%, and 12.1% of the portfolio, respectively.
Current wording
At June 30, 2026, the Company's loan portfolio consisted of the following major categories: CRE loans, residential real estate loans, consumer loans, and commercial business loans representing 37.8%, 29.8%, 21.5%, and 10.9% of the portfolio, respectively.
Previous wording
Indirect home improvement loans to finance window, gutter, siding replacement, solar panels, spas, and other improvement renovations represent a large segment of the consumer loan portfolio. These loans are sourced through a contractor/dealer network of 30 active fixture dealerships located throughout Washington, Oregon, California, Idaho, Colorado, Nevada, Arizona, Minnesota, Texas, Utah, Massachusetts, Montana, and New Hampshire. During the three months ended March 31, 2026, the Company originated 1,181 indirect home improvement loans with an aggregate total of $26.6 million. Five contractor/dealers accounted for 71.7% of the dollar volume funded in this category, and four states – Washington, Oregon, California, and Utah – represented nearly three-quarters of total loan originations at 36.4%, 21.0%, 15.3%, and 4.7%, respectively.
Current wording
Indirect home improvement loans to finance window, gutter, siding replacement, solar panels, spas, and other improvement renovations represent a large segment of the consumer loan portfolio. These loans are sourced through a contractor/dealer network of 27 active fixture dealerships located throughout Washington, Oregon, California, Idaho, Colorado, Nevada, Arizona, Minnesota, Texas, Utah, Massachusetts, Montana, and New Hampshire. During the three months ended June 30, 2026, the Company originated 1,221 indirect home improvement loans with an aggregate total of $28.9 million. Five contractor/dealers accounted for 72.9% of the dollar volume funded in this category, and three states – Washington, Oregon, and California – represented nearly three-quarters of total loan originations at 33.9%, 25.3%, and 14.6%, respectively.
Previous wording
The Company originates one-to-four-family residential mortgage loans through referrals from real estate agents, financial planners, builders, and existing customers with retail banking customers also serving as an important source of loan originations. During the three months ended March 31, 2026, the Company originated $204.9 million of one-to-four-family loans (including loans held for sale, loans held for investment, and fixed seconds). In addition, $3.1 million of loans were brokered to other institutions through the home lending segment. Of the loans originated, $154.7 million were sold to investors, of which $73.6 million were sold to the FNMA and FHLMC with servicing rights retained to further develop these customer relationships.
Current wording
The Company originates one-to-four-family residential mortgage loans through referrals from real estate agents, financial planners, builders, and existing customers, with retail banking customers also serving as an important source of loan originations. During the three months ended June 30, 2026, the Company originated $202.7 million of one-to-four-family loans (including loans held for sale, loans held for investment, and fixed seconds). In addition, $2.6 million of loans were brokered to other institutions through the home lending segment. Of the loans originated, $156.1 million were sold to investors, of which $72.7 million were sold to the FNMA and FHLMC with servicing rights retained to maintain and further develop these customer relationships.
Previous wording
● Commercial real estate (“CRE”) loans increased $17.4 million, primarily reflecting:
Current wording
● Commercial real estate (“CRE”) loans increased $35.5 million, primarily reflecting:
Previous wording
○ $4.5 million in commercial and speculative construction and development loans, and
Current wording
○ $16.3 million in commercial and speculative construction and development loans,
Previous wording
○ $5.5 million in CRE non-owner occupied loans,
Current wording
○ $11.1 million in CRE non-owner occupied loans, and
Previous wording
○ $6.2 million in CRE owner occupied loans,
Current wording
○ $8.1 million in CRE owner occupied loans.
Previous wording
● Residential real estate loans increased $4.2 million, driven by:
Current wording
● Residential real estate loans increased $34.1 million, driven by:
Previous wording
○ $2.2 million in one-to-four-family loans (excluding loans held for sale),
Current wording
○ $31.8 million in one-to-four-family loans (excluding loans held for sale), and
Previous wording
○ $1.8 million in residential custom construction loans, and
Current wording
○ $2.4 million in residential custom construction loans.
Previous wording
● Commercial business loans decreased $6.7 million, reflecting a decrease of $10.0 million in warehouse lending, partially offset by an increase of $3.4 million in commercial and industrial (“C&I”) loans.
Current wording
●Commercial business loans decreased $40.8 million, reflecting a decrease of $20.9 million in warehouse lending and $19.9 million in commercial and industrial (“C&I”) loans.
Previous wording
● Consumer loans decreased $13.5 million, primarily due to declines of $12.4 million in indirect home improvement loans and $989,000 in marine loans.
Current wording
● Consumer loans decreased $23.8 million, primarily due to the decline of $23.7 million in indirect home improvement loans.
Previous wording
Overall, loan growth was concentrated in CRE, including owner occupied, non-owner occupied, and construction and development loans, and to a lesser extent, multi-family and residential real estate segments. Consumer balances declined, driven primarily by a reduction in indirect home improvement loans, reflecting the impact of current economic conditions on consumer demand.
Current wording
In summary, loan growth was concentrated in CRE and one-to-four-family residential lending, while consumer balances declined, driven primarily by a reduction in indirect home improvement loans, reflecting the impact of current economic conditions on consumer demand.
Previous wording
● Total undisbursed construction and development loan commitments decreased $16.9 million to $218.5 million at March 31, 2026, from $235.4 million at December 31, 2025.
Current wording
Total undisbursed construction and development loan commitments decreased $19.9 million to $215.5 million at June 30, 2026, from $235.4 million at December 31, 2025.
Previous wording
Loans held for sale, consisting of one-to-four-family loans, increased $12.6 million to $56.3 million at March 31, 2026, from $43.7 million at December 31, 2025, reflecting higher origination volume driven by increased refinance activity resulting from improved mortgage rates.
Current wording
Loans held for sale, consisting of one-to-four-family loans, decreased $13.2 million to $30.5 million at June 30, 2026, from $43.7 million at December 31, 2025.
Previous wording
For the three months ended March 31, 2026, one-to-four-family loan originations and refinancing activity increased significantly compared to the prior period, driven by improved mortgage rates which resulted in a 175% increase in refinance volume. Purchase originations also increased $18.9 million. or 15.7%, reflecting continued demand in the Company's market areas.
Current wording
For the six months ended June 30, 2026, one-to-four-family loan originations and refinancing activity increased, compared to the six months ended June 30, 2025, driven by improved mortgage rates. Refinance volume increased $56.6 million or 104.9%, and purchase originations increased $12.0 million or 4.1%, reflecting continued demand in the Company’s market areas.
Previous wording
During the three months ended March 31, 2026, the Company sold $154.7 million of one-to-four-family loans, compared to $91.9 million for the same period one year ago. The increase in loan sales reflects improved mortgage rates which is also driving higher refinance activity. The Company remains focused on managing loan production capacity and maintaining a pipeline consistent with market demand. Gross margin on home loan sales was 3.03% for the three months ended March 31, 2026, compared to 3.26% for the three months ended March 31, 2025. The compression in gross margin reflects competitive pricing pressures in the current mortgage market environment as the Company maintained production volume consistent with market demand. Gross margin is defined as the margin on loans sold without the impact of deferred loan costs.
Current wording
During the six months ended June 30, 2026, the Company sold $310.8 million of one-to-four-family loans, compared to $219.0 million for the same period in 2025, reflecting higher refinance activity driven by more favorable interest rates. The Company continues to manage loan production capacity in an effort to maintain a pipeline consistent with market demand. Gross margin on home loan sales (defined as the margin on loans sold, excluding the impact of deferred loan costs) was 3.01% for the six months ended June 30, 2026, compared to 3.14% for the six months ended June 30, 2025. The compression in gross margin reflects competitive pricing pressure in the current mortgage market as the Company maintained production volume consistent with market demand.
Previous wording
The ACL on loans totaled $32.4 million, or 1.22%, of gross loans receivable (excluding loans held for sale), at March 31, 2026, compared to $31.9 million, or 1.20%, at December 31, 2025. The ACL on unfunded loan commitments decreased $121,000 to $1.6 million at March 31, 2026, from $1.8 million at December 31, 2025. Total loans 30 days or more past due increased to $23.2 million, or 0.87% of total loans, from $22.2 million, or 0.84%, at December 31, 2025, reflecting softening credit performance across the broader loan portfolio, driven by current economic conditions and their impact on borrower cash flows.
Current wording
The ACL on loans totaled $31.2 million, or 1.17%, of gross loans receivable (excluding loans held for sale), at June 30, 2026, compared to $31.9 million, or 1.20%, at December 31, 2025. The ACL on unfunded loan commitments decreased $39,000 to $1.7 million at June 30, 2026, from $1.8 million at December 31, 2025. Total loans 30 days or more past due decreased to $16.6 million, or 0.62% of total loans, from $22.2 million, or 0.84%, at December 31, 2025, reflecting improved credit performance across the broader loan portfolio as the markets respond to current economic conditions and their impact on borrower cash flows.
Previous wording
Nonperforming loans, consisting solely of nonaccrual loans, decreased $477,000 to $18.3 million at March 31, 2026, from $18.7 million at December 31, 2025. The decrease was primarily attributable to nonperforming CRE loans, which decreased $762,000 to $10.5 million, and nonperforming C&I loans, which decreased $415,000 to $165,000, partially offset by nonperforming indirect home improvement loans, which increased $366,000 to $4.6 million and nonperforming residential loans, which increased $290,000 to $2.5 million. The ratio of nonperforming loans to total gross loans reduced slightly to 0.69% at March 31, 2026, from 0.71% at December 31, 2025.
Current wording
Nonperforming loans, consisting solely of nonaccrual loans, decreased $3.1 million to $15.6 million at June 30, 2026, from $18.7 million at December 31, 2025. The decrease was primarily attributable to a $2.3 million charge-off on a nonperforming commercial construction loan, and a decrease of $1.4 million in nonperforming CRE owner occupied loans, primarily due to loan payoffs, partially offset by an increase of $500,000 in nonperforming indirect home improvement loans. The ratio of nonperforming loans to total gross loans reduced to 0.59% at June 30, 2026, from 0.71% at December 31, 2025.
Previous wording
Classified loans totaled $26.1 million at March 31, 2026, compared to $27.3 million at December 31, 2025. The coverage ratio of the ACL on loans to nonperforming loans was 177.7% at March 31, 2026, compared to 170.6% at December 31, 2025. The increase in the coverage ratio primarily reflects increased provision for nonperforming loans.
Current wording
Classified loans totaled $25.0 million at June 30, 2026, compared to $27.3 million at December 31, 2025. The coverage ratio of the ACL on loans to nonperforming loans was 199.2% at June 30, 2026, compared to 170.6% at December 31, 2025. The increase in the coverage ratio primarily reflects the decline in nonperforming loans relative to the ACL on loans.
Previous wording
Overall, asset quality trends reflect growth in CRE, construction, multi-family, and residential loan segments, ongoing elevated losses in certain consumer loan portfolios, and continued risk management and monitoring of nonperforming and substandard exposures.
Current wording
Overall, asset quality trends reflected improved delinquency and nonperforming loan metrics, continued growth in construction, CRE, and residential loan portfolios, ongoing elevated losses in certain consumer loan portfolios, and continued risk management and monitoring of nonperforming and substandard exposures.
Previous wording
Liabilities. Total liabilities were $2.89 billion at both March 31, 2026 and December 31, 2025. The loan-to-deposit ratio was approximately 102.9% at March 31, 2026, compared to approximately 100.9% at December 31, 2025.
Current wording
Liabilities. Total liabilities decreased $29.0 million to $2.86 billion at June 30, 2026, from $2.89 billion at December 31, 2025. The loan-to-deposit ratio was approximately 108.6% at June 30, 2026, compared to approximately 100.9% at December 31, 2025.
Previous wording
Total deposits decreased $36.1 million to $2.64 billion at March 31, 2026, from $2.67 billion at December 31, 2025, reflecting decreases in all deposit categories other than escrow accounts. Transactional accounts (noninterest-bearing checking, interest-bearing checking and escrow accounts) decreased $13.7 million to $980.0 million at March 31, 2026, from $993.6 million at December 31, 2025, primarily due to decreases of $12.4 million in noninterest-bearing checking, and $9.2 million in interest-bearing checking, partially offset by an $8.0 million increase in escrow accounts related to mortgages serviced, reflecting higher customer balances and increased activity in mortgage servicing. Money market and savings accounts decreased $2.5 million to $547.1 million at March 31, 2026, from $549.7 million at December 31, 2025, primarily reflecting a decline in money market balances, partially offset by an increase in retail and business savings accounts.
Current wording
Total deposits decreased $224.8 million to $2.45 billion at June 30, 2026, from $2.67 billion at December 31, 2025, reflecting decreases in most of the deposit categories. Transactional accounts (noninterest-bearing checking, interest-bearing checking and escrow accounts) decreased $54.7 million to $938.8 million at June 30, 2026, from $993.6 million at December 31, 2025, primarily due to decreases of $38.5 million in interest-bearing checking, $17.4 million in noninterest-bearing checking, and an offsetting increase of $1.1 million in escrow accounts related to mortgages serviced, reflecting higher customer balances associated with mortgage servicing activities. Money market and savings accounts increased $3.3 million to $553.0 million at June 30, 2026, from $549.7 million at December 31, 2025, primarily reflecting a $9.0 million increase in savings account balances, partially offset by a $5.8 million decrease in money market account balances.
Previous wording
CDs, which include both retail and non-retail CDs, decreased $19.8 million to $1.11 billion at March 31, 2026, from $1.13 billion at December 31, 2025. Retail CDs decreased $5.0 million to $916.7 million at March 31, 2026, from $921.7 million at December 31, 2025. Non-retail CDs, which include brokered CDs, online CDs and public funds CDs decreased $14.9 million to $193.8 million, compared to $208.7 million at December 31, 2025, primarily due to a decrease of $15.3 million in brokered CDs. Non-retail CDs represented 17.5% and 18.5% of total CDs at March 31, 2026 and December 31, 2025, respectively. The decrease in non-retail CDs aligns with the Company's strategy to manage interest rate risk and liquidity by accessing larger and more diversified funding sources at competitive rates that were only slightly higher than local market rates, while reducing reliance on higher cost borrowings.
Current wording
Certificates of deposit (“CDs”), which include both retail and non-retail CDs, decreased $173.3 million to $957.1 million at June 30, 2026, from $1.13 billion at December 31, 2025. Retail CDs decreased $4.3 million to $917.4 million at June 30, 2026, from $921.7 million at December 31, 2025. Non-retail CDs, which include brokered CDs, online CDs and public funds CDs decreased $169.0 million to $39.7 million, compared to $208.7 million at December 31, 2025, primarily due to a decrease of $167.0 million in brokered CDs. Non-retail CDs represented 4.2% and 18.5% of total CDs at June 30, 2026 and December 31, 2025, respectively. The decrease in non-retail CDs reflects the Company’s funding strategy of replacing certain brokered deposits with lower-cost FHLB and FRB borrowings, while continuing to manage liquidity and interest rate risk.
Previous wording
The Bank had uninsured deposits of approximately $704.2 million or 26.7% of total deposits, at March 31, 2026, compared to approximately $718.1 million or 26.9% of total deposits at December 31, 2025. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.
Current wording
The Bank had uninsured deposits of approximately $719.5 million or 29.4% of total deposits, at June 30, 2026, compared to approximately $718.1 million or 26.9% of total deposits at December 31, 2025. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.
Previous wording
Borrowings increased $38.0 million to $167.3 million at March 31, 2026, from $129.3 million at December 31, 2025. The increase reflects competitive rates on borrowings, compared to brokered deposits, consistent with the Company's funding strategy. At March 31, 2026, borrowings were comprised of FHLB and FRB advances.
Current wording
Borrowings increased $195.2 million to $324.5 million at June 30, 2026, from $129.3 million at December 31, 2025. The increase reflects a shift toward FHLB and FRB borrowings, which offered more competitive rates than brokered deposits during the period, consistent with the Company's funding strategy. At June 30, 2026, borrowings were comprised of FHLB and FRB advances.
Previous wording
Stockholders’*** Equity.*** Total stockholders’ equity increased $6.2 million to $313.9 million at March 31, 2026, from $307.7 million at December 31, 2025. The increase primarily reflects net income of $7.8 million. Declines in the fair value of available-for-sale securities recorded in accumulated other comprehensive income (“AOCI”) were largely offset by improvements in the fair value of interest rate swap cash flow hedges, resulting in a net improvement of $83,000, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in shareholders’ equity was partially offset by cash dividends paid totaling $2.2 million, and share repurchases of $620,000.
Current wording
Stockholders’*** Equity.*** Total stockholders’ equity increased $11.3 million to $319.0 million at June 30, 2026, from $307.7 million at December 31, 2025. The increase primarily reflects net income of $15.8 million. Declines in the fair value of available-for-sale securities recorded in accumulated other comprehensive income (“AOCI”) were largely offset by improvements in the fair value of interest rate swap cash flow hedges, resulting in a net improvement of $4.1 million, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in shareholders’ equity was partially offset by cash dividends paid totaling $4.3 million, and share repurchases of $4.3 million.
Previous wording
Book value per common share was $42.42 at March 31, 2026, compared to $41.55 at December 31, 2025. The calculation of book value per share at March 31, 2026, was based on 7,398,571 common shares, derived by subtracting the 102,971 unvested restricted stock shares from the 7,501,542 reported common shares outstanding as of that date. Similarly, the book value per share at December 31, 2025, was calculated based on 7,404,548 common shares, after deducting 102,971 unvested restricted stock shares from the 7,507,519 reported common shares outstanding as of that date.
Current wording
Book value per common share was $43.57 at June 30, 2026, compared to $41.55 at December 31, 2025. The calculation of book value per share at June 30, 2026, was based on 7,320,801 common shares, derived by subtracting 102,971 of unvested restricted stock shares from the 7,423,772 reported common shares outstanding as of that date. Similarly, the book value per share at December 31, 2025, was calculated based on 7,404,548 common shares, after deducting 102,971 of unvested restricted stock shares from the 7,507,519 reported common shares outstanding as of that date.
Previous wording
***General.***Net income was $7.8 million for the three months ended March 31, 2026, compared to $8.0 million for the three months ended March 31, 2025. The decrease was primarily due to a $937,000, or 58.9%, increase in provision for credit losses, a $627,000, or 43.5%, increase in provision for income taxes, and a $465,000, or 1.9%, increase in total noninterest expense, partially offset by a $1.6 million, or 5.0%, increase in net interest income, and a $275,000, or 5.4%, increase in total noninterest income.
Current wording
***General.***Net income was $7.9 million for the three months ended June 30, 2026, compared to $7.7 million for the three months ended June 30, 2025. The increase was primarily due to a $980,000, or 19.0%, increase in total noninterest income and a $536,000 increase in net interest income, partially offset by a $620,000 increase in provision for credit losses, a $602,000, or 2.4%, increase in total noninterest expense and an $86,000 increase in provision for income taxes.
Previous wording
***Interest Income.***Total interest income for the three months ended March 31, 2026, increased $2.5 million to $49.3 million, from $46.8 million for the three months ended March 31, 2025. The increase was primarily due to a $2.7 million increase in interest income on loans receivable, including fees, as a result of higher average loan balances and a five-basis point increase in average loan yields. Offsetting this growth were decreases in interest income on investment securities and FHLB stock, collectively totaling $190,000, reflecting yield compression on taxable investment securities from 4.34% to 3.99% and lower average FHLB stock balances.
Current wording
***Interest Income.***Total interest income for the three months ended June 30, 2026, increased $959,000 to $49.7 million, from $48.7 million for the three months ended June 30, 2025. The increase was primarily due to a $1.2 million increase in interest income on loans receivable, including fees, as a result of higher average loan balances, partially offset by a lower average yield. Offsetting this growth were decreases in interest income on investment securities and interest-bearing deposits at other financial institutions, collectively totaling $266,000, primarily reflecting lower average balances and lower yields on interest-bearing deposits at other financial institutions.
Previous wording
The average cost of total interest-bearing deposits decreased three-basis points to 2.97% for the three months ended March 31, 2026, compared to 3.00% for the three months ended March 31, 2025, primarily reflecting lower rates paid on certificates of deposit, which more than offset higher rates on interest-bearing checking accounts. The average balance of total interest-bearing deposits increased $243.6 million to $2.0 billion for the three months ended March 31, 2026, compared to $1.77 billion for the three months ended March 31, 2025, driven primarily by an increase in interest-bearing checking balances, including brokered deposits.
Current wording
The average cost of total interest-bearing deposits decreased 11-basis points to 2.92% for the three months ended June 30, 2026, compared to 3.03% for the three months ended June 30, 2025, primarily reflecting lower rates paid on CDs, which more than offset higher rates on interest-bearing checking and savings and money market accounts. The average balance of total interest-bearing deposits decreased $13.5 million to $1.91 billion for the three months ended June 30, 2026, compared to $1.92 billion for the three months ended June 30, 2025, driven primarily by a decrease in CDs, partially offset by increases in interest-bearing checking and savings and money market accounts.
Previous wording
***Noninterest Income.***Noninterest income increased $275,000 to $5.4 million for the three months ended March 31, 2026, from $5.1 million for the three months ended March 31, 2025. The increase primarily reflects a $684,000 increase in gain on sale of loans, partially offset by a $246,000 decrease in other noninterest income, and a $171,000 decrease in service charges and fee income.
Current wording
***Noninterest Income.***Noninterest income increased $980,000 to $6.2 million for the three months ended June 30, 2026, from $5.2 million for the three months ended June 30, 2025. The increase primarily reflects a $609,000 increase in gain on sale of loans and a $404,000 increase in other noninterest income.
Previous wording
The efficiency ratio, which is calculated by dividing noninterest expense by total net interest income and noninterest income, improved to 67.25% for the three months ended March 31, 2026, compared to 69.39% for the three months ended March 31, 2025, due to revenue growth outpacing noninterest expense.
Current wording
The efficiency ratio, which is calculated by dividing noninterest expense by the sum of net interest income and noninterest income, improved to 67.28% for the three months ended June 30, 2026, compared to 68.40% for the three months ended June 30, 2025, due to revenue growth outpacing noninterest expense.
Previous wording
Provision for Income Taxes.* *For the three months ended March 31, 2026, the Company recorded a provision for income taxes of $2.1 million, compared to $1.4 million for the three months ended March 31, 2025. The effective corporate income tax rates for the three months ended March 31, 2026 and 2025, were 20.9% and 15.2%, respectively. The increase in both the provision and effective tax rate was primarily attributable the absence of alternative energy tax credits under the Inflation Reduction Act of 2022, which benefited the comparable quarter in the prior year.
Current wording
*Provision for Income Taxes. *For the three months ended June 30, 2026, the Company recorded a provision for income taxes of $2.1 million, compared to $2.0 million for the three months ended June 30, 2025. The effective corporate income tax rates for the three months ended June 30, 2026 and 2025, were 21.1% and 20.8%, respectively. The increase in both the provision and effective tax rate was primarily attributable to the absence of alternative energy tax credits under the Inflation Reduction Act of 2022, which benefited the comparable prior year period.
Previous wording
***Net Interest Income.***Net interest income increased $1.6 million to $32.5 million for the three months ended March 31, 2026, from $31.0 million for the three months ended March 31, 2025, primarily due to an increase in total interest income of $2.5 million, partially offset by an increase in total interest expense of $982,000. The increase in total interest income was primarily due to an increase of $2.7 million in interest income on loans receivable, including fees, driven primarily by a five-basis point increase in the average yield earned on loans receivable as new loans were originated at higher rates and variable-rate loans repriced higher, and a higher average balance of loans outstanding. The increase in total interest expense was primarily the result of a $1.7 million increase in deposit interest expense, reflecting significantly higher average balances in interest-bearing checking accounts, including brokered deposits, and a 108 basis point increase in the rate paid on those accounts. Additionally, the repricing of the Company's subordinated notes to a floating rate on February 15, 2026, contributed $206,000 of incremental interest expense. These increases were partially offset by an $879,000 decrease in borrowing costs, as the Company reduced average borrowings by $86.4 million in accordance with its funding and liquidity strategy.
Current wording
***Net Interest Income.***Net interest income increased $2.1 million to $65.2 million for the six months ended June 30, 2026, from $63.1 million for the six months ended June 30, 2025, primarily due to an increase in total interest income of $3.5 million, partially offset by an increase in total interest expense of $1.4 million. The increase in total interest income was primarily due to a higher average balance of loans outstanding. The increase in total interest expense was primarily the result of a $1.0 million increase in deposit interest expense, reflecting significantly higher average balances in interest-bearing checking accounts, including brokered deposits, and a 95- basis point increase in the rate paid on those accounts. Additionally, the repricing of the Company's subordinated notes to a floating rate on February 15, 2026, contributed $629,000 of incremental interest expense as the applicable interest rate increased following the repricing date. These increases were partially offset by a $267,000 decrease in borrowing costs, as the Company reduced average borrowings by $5.9 million in accordance with its funding and liquidity strategy.
Previous wording
Net interest margin (“NIM”) (annualized) decreased one basis point to 4.31% for the three months ended March 31, 2026, from 4.32% for the same period the prior year. The change in NIM primarily reflects the repricing of the Company's subordinated notes to a floating rate on February 15, 2026, which resulted in an estimated two-basis point decline in NIM for the quarter, and higher funding costs associated with growth in interest-bearing checking balances, including brokered deposits. These effects were largely offset by a five-basis point improvement in average loan yields and a modest decline in CD rates.
Current wording
NIM (annualized) decreased one- basis point to 4.30% for the six months ended June 30, 2026, from 4.31% for the same period the prior year. The change in NIM primarily reflects the repricing of the Company's subordinated notes to a floating rate on February 15, 2026, which resulted in an estimated one-basis point decline in NIM for the period, and higher costs associated with growth in interest-bearing checking balances, including brokered deposits. These increases were substantially offset by lower costs on CDs and borrowings.
Previous wording
***Interest Expense.***Total interest expense increased $982,000 to $16.8 million for the three months ended March 31, 2026, from $15.8 million for the comparable quarter in 2025, primarily due to an increase of interest expense on deposits of $1.7 million, partially offset by a decrease of $879,000 of interest expense on borrowings. The higher deposit costs were the result of an increase in interest-bearing checking balances, including brokered deposits, combined with a 108-basis point increase in the rate paid on those accounts, partially offset by a $332,000 decrease in interest expense on CDs due to a 19-basis point decline in CD rates. Additionally, the repricing of the Company's subordinated notes to a floating rate on February 15, 2026, contributed $206,000 of incremental interest expense.
Current wording
***Interest Expense.***Total interest expense increased $1.4 million to $33.8 million for the six months ended June 30, 2026, from $32.4 million for the comparable period in 2025, primarily due to an increase in interest expense on deposits and subordinated notes, partially offset by a decrease in interest expense on borrowings. The higher deposit costs were the result of an increase in interest-bearing checking balances, including brokered deposits, combined with a 95-basis point increase in the average rate paid on interest-bearing checking accounts. These increases were partially offset by a $2.4 million decrease in interest expense on CDs due to lower average CD balances and a 16-basis point decline in CD rates. The increase in subordinated note expense resulted from the repricing of the Company's subordinated notes to a floating rate on February 15, 2026.
Previous wording
The average cost of total interest-bearing liabilities similarly decreased four basis points to 3.11%, reflecting the benefit of lower borrowing costs as average borrowings declined $86.4 million. The average cost of funds, which includes noninterest-bearing checking, increased one basis point to 2.39%, primarily reflecting a lower proportion of noninterest-bearing deposits in the overall funding mix.
Current wording
The average cost of total interest-bearing liabilities similarly decreased two basis points to 3.12%, reflecting the benefit of lower borrowing costs resulting from both a decrease in average borrowings of $5.9 million, and a decline in the average borrowing rate. The average cost of funds, which includes noninterest-bearing checking, increased two-basis points to 2.40%, from 2.38% for the six months ended June 30, 2025, primarily reflecting a lower proportion of noninterest-bearing deposits in the overall funding mix.
Previous wording
Provision for Credit Losses. For the three months ended March 31, 2026, the provision for credit losses was $2.5 million, consisting of a $2.6 million provision for credit losses on loans and a $121,000 recovery of credit losses on unfunded loan commitments. This compares to a $1.6 million provision for credit losses for the three months ended March 31, 2025. which consisted of a $1.5 million provision for credit losses on loans, a $21,000 provision for credit losses on held‑to‑maturity securities, and a $66,000 provision for credit losses on unfunded loan commitments. The increase in the provision for credit losses on loans primarily reflects an increase in nonperforming loans and higher net charge‑offs.
Current wording
Provision for Credit Losses. For the six months ended June 30, 2026, the provision for credit losses was $5.2 million, consisting of a $5.2 million provision for credit losses on loans and a $39,000 recovery of credit losses on unfunded loan commitments. This compares to a $3.6 million provision for credit losses for the six months ended June 30, 2025. which consisted of a $3.2 million provision for credit losses on loans, a $217,000 provision for credit losses on unfunded loan commitments, and a $175,000 provision for credit losses on held-to-maturity investments. The increase in the provision for credit losses on loans primarily reflects an increase in nonperforming loans and higher net charge‑offs during the period.
Previous wording
Net loan charge-offs totaled $2.1 million for the three months ended March 31, 2026, compared to $1.7 million during the three months ended March 31, 2025. The increase was primarily due to a $624,000 increase in indirect home improvement loan net charge-offs, partially offset by a $281,000 decrease in commercial business loan net charge-offs, with the remainder attributable to slightly higher net charge-offs in marine and consumer loans. The rise in indirect home improvement and consumer loan net charge-offs reflects continued credit stress in those portfolios amid a challenging economic environment that could result in a material increase in the ACL on loans and adversely affect the Company’s financial condition and results of operations.
Current wording
Net loan charge-offs totaled $6.0 million for the six months ended June 30, 2026, compared to $2.9 million during the six months ended June 30, 2025. The increase was primarily due to a $2.3 million increase in commercial construction loan net charge-offs and an $882,000 increase in indirect home improvement loan net charge-offs, partially offset by a $172,000 decrease in commercial business loan net charge-offs, with the remainder attributable to slightly higher net charge-offs in marine and consumer loans. The rise in indirect home improvement and consumer loan net charge-offs reflects continued credit stress in those portfolios amid a challenging economic environment that could result in a material increase in the ACL on loans and adversely affect the Company’s financial condition and results of operations.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Provision for Credit Losses. For the three months ended June 30, 2026, the provision for credit losses was $2.6 million, consisting of a $2.6 million provision for credit losses on loans and an $82,000 provision on credit losses on unfunded loan commitments. This compares to a $2.0 million provision for credit losses for the three months ended June 30, 2025, which consisted of a $1.7 million provision for credit losses on loans, a $154,000 provision for held-to-maturity securities, and a $151,000 provision for credit losses on unfunded loan commitments. The increase in the provision for credit losses on loans primarily reflects higher net charge‑offs during the period.
Current report — wording carried from elsewhere
Comparison of Results of Operations for the Six Months Ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
Average Balances, Interest and Average Yields/Cost
Current report — wording carried from elsewhere
The following table sets forth for the periods indicated, information regarding average balances of assets and liabilities, as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities, resultant yields, interest rate spread, net interest margin (otherwise known as net yield on interest-earning assets), and the ratio of average interest-earning assets to average interest-bearing liabilities. Also presented are the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread for the periods presented. Average balances are daily average balances. The yields on tax-exempt municipal bonds have not been computed on a tax equivalent basis.
Current report — wording carried from elsewhere
The following table compares average interest-earning asset balances, associated yields, and resulting changes in interest income for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
The following table details average balances of interest-bearing liabilities, associated rates, and resulting change in interest expense for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
*Provision for Income Taxes. *For the six months ended June 30, 2026, the Company recorded a provision for income taxes of $4.2 million, compared to $3.5 million for the six months ended June 30, 2025. The effective corporate income tax rates for the six months ended June 30, 2026 and 2025, were 21.0% and 18.1%, respectively. The increase in both the provision and effective tax rate was primarily attributable to the absence of alternative energy tax credits under the Inflation Reduction Act of 2022, which benefited the comparable period in the prior year.