SOUTHERN MISSOURI BANCORP INC
For the period ended Dec 31, 2024. Filed Feb 10, 2025.
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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.
Dec 31, 2024 · Filed Feb 10, 2025
SMBC$70.46-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001558370-24-015347
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-10.
0001558370-25-000757
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 81 previous paragraphs and 90 current paragraphs.
41 unchanged; 33 reworded; 13 added; 7 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 33 previous and 42 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 (13)
Current report
As compared to the first six months of the prior fiscal year, our average yield on earning assets increased by 43 basis points, primarily attributable to increased yields on loans receivable, as well as available for sale securities, as compared to year-ago levels. Our cost of interest-bearing liabilities increased by 45 basis points, as certificates of deposit and savings balances increased to higher market rates. Special deposit rates and some brokered CD funding was utilized to increase balance sheet liquidity in the first six months of fiscal 2025 to support loan growth and AFS security purchases. Despite a decrease of one basis point in the net interest spread, to 2.78%, the net interest margin increased by three basis points to 3.37% during the first six months of fiscal 2025, as compared to the same period in fiscal 2024. The increase in the net interest margin was due to a higher composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior fiscal year period. In addition, net interest income benefitted from a 6.3% increase in average earnings assets, compared to the prior fiscal year period. The 100 basis points of federal funds rate cuts, from September 2024 to December 2024, a higher percentage of variable rate deposits compared to the prior fiscal year, and relatively stable price competition for deposits have eased the pressure on the net interest spread, which has increased in the second quarter of fiscal 2025, compared to the linked quarter and the second quarter of fiscal 2024.
Current report
Cash and cash equivalents were $145.8 million at December 31, 2024, an increase of $84.9 million, or 139.4%, as compared to June 30, 2024. The increase was primarily the result of strong deposit generation that outpaced loan growth (on a percentage basis) and AFS securities purchases during the period. AFS securities were $468.1 million at December 31, 2024, up $40.2 million, or 9.4%, as compared to June 30, 2024.
Current report
The Bank’s concentration in non-owner occupied commercial real estate, as defined for regulatory purposes, is estimated at 316.9% of Tier 1 capital and ACL at December 31, 2024, as compared to 317.5% as of June 30, 2024, with these loans representing 41.0% of gross loans at December 31, 2024. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, retail stand-alone, and strip centers are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner-occupied office property types included 33 loans totaling $24.2 million, or 0.60% of gross loans at December 31, 2024, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and the individual segments closely.
Current report
General. Net income for the three-month period ended December 31, 2024, was $14.7 million, an increase of $2.5 million, or 20.2%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, partially offset by increases in provision for income taxes, noninterest expense and provision for credit losses.
Current report
For the three-month period ended December 31, 2024, fully-diluted net income per share available to common shareholders was $1.30, up $0.23, or 21.5%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended December 31, 2024, was 1.21%, as compared to 1.07% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended December 31, 2024, was 11.5%, as compared to 10.6% in the same period of the prior fiscal year.
Current report
Net Interest Income. Net interest income for the three-month period ended December 31, 2024, was $38.1 million, an increase of $3.7 million, or 10.6%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.7% increase in the average balance of interest-earning assets and an 11-basis point increase in the net interest margin, from 3.25% to 3.36%, as the 32-basis point increase in the yield on interest-earning assets was partially offset by a 22-basis point increase in cost of interest-bearing liabilities. The increase in average earning asset yields was primarily attributable to renewals and new loan originations, in addition to AFS security purchases, at higher market rates.
Current report
Noninterest Income. Noninterest income for the three-month period ended December 31, 2024, was $6.9 million, an increase of $1.2 million, or 21.7%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to the Company’s realization of a $682,000 loss on sale of AFS securities in the year-ago period, as well as increases in deposit account charges and related fees, other loan fees, and wealth management fees. These increases were partially offset by lower net realized gains on sale of loans, which were primarily driven by a reduction in gains on sale of Small Business Administration (SBA) loans, and lower loan late charges.
Current report
Noninterest Expense. Noninterest expense for the three-month period ended December 31, 2024, was $24.9 million, an increase of $1.0 million, or 4.3%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to increases in compensation and benefits, legal and professional fees, other operating expense, and occupancy expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional fees were elevated due to consulting fees tied to internal projects, recruiter costs, and the settlement of a legal matter. Other operating expense increased due to increased expenses associated with SBA loans and costs for employee travel and training. Lastly, occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Partially offsetting these increases from the prior year period were lower data processing and telecommunication expenses, and a reduction in intangible amortization, as the core deposit intangible recognized from a prior period merger was fully amortized in the prior quarter.
Current report
General. Net income for the six-month period ended December 31, 2024, was $27.1 million, an increase of $1.8 million, or 7.0% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, partially offset by increases in PCL, noninterest expense, and provision for income taxes.
Current report
Net Interest Income. Net interest income for the six-month period ended December 31, 2024, was $74.8 million, an increase of $4.9 million, or 7.0%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.3% increase in the average balance of interest-earning assets and an increase in the net interest margin to 3.37%, as compared to 3.34% in the same period a year ago. The increase in the net interest margin was due to a higher composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior year.
Current report
Provision for Credit Losses. The PCL for the six-month period ended December 31, 2024, was a charge of $3.1 million, an increase of $1.3 million from the same period of the prior fiscal year. The current period PCL was the result of a $2.5 million provision attributable to the ACL for loan balances outstanding and a $569,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of two basis points (annualized) during the current period, compared to seven basis points during the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).
Current report
Noninterest Expense. Noninterest expense for the six-month period ended December 31, 2024, was $50.7 million, an increase of $3.2 million, or 6.6%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and
Current report
Income Taxes. The income tax provision for the six-month period ended December 31, 2024, was $7.9 million, an increase of $1.3 million, or 19.0%, as compared to the same period of the prior fiscal year, due primarily to increased pre-tax income and a $380,000 adjustment of tax accruals attributable to completed merger & acquisition activity. The effective tax rate increased to 22.6% as compared to 20.8% over the same period last year.
Removed paragraphs (7)
Previous report
reduced after-tax net income by $652,000, or $0.06 per fully diluted common share, and was a primary reason for the increase in non-interest expense and the decrease in net income during the current period. For more information see “Results of Operations.”
Previous report
As compared to the first three months of the prior fiscal year, our average yield on earning assets increased by 54 basis points, primarily attributable to increases during the period in market interest rates at which earning assets were originated, or renewed, as well as a shift in the earning asset mix to loans receivable from cash and cash equivalents from year-ago levels. Our average cost of interest-bearing liabilities increased by 70 basis points, as the Company increased offering rates on nonmaturity accounts and time deposits to adjust to the higher rate environment. Special deposit rates and brokered CD funding was utilized to fund loan growth as noninterest bearing and lower cost nonmaturity deposits decreased. The impact of the rapid increase in the level of short-term market interest rates over the prior two fiscal years, along with the yield curve inversion, caused our cost of funds to increase at a faster pace than our asset yields over prior periods. However, the September federal funds decrease, relatively stable price competition for deposits, and the increased percentage of our deposits that have already repriced in the current higher rate environment, in combination with new loan originations at higher market rates allowed the net interest margin to increase over the linked June 30, 2024, quarter, as upward pressure on deposit pricing has subsided and loan portfolio yields have continued to increase due to loan renewals and repricing, as well as new loan originations at higher long term rates.
Previous report
Cash equivalents were $75.3 million at September 30, 2024, an increase of $14.4 million, or 23.7%, as compared to June 30, 2024. AFS securities were $420.2 million at September 30, 2024, down $7.7 million, or 1.8%, as compared to June 30, 2024, as the Company was less active in reinvesting principal payments received.
Previous report
General. Net income for the first three months of fiscal 2025 was $12.5 million, a decrease of $693,000 or 5.3%, as compared to the same period of the prior fiscal year. The decrease was due primarily to higher PCL expense, as well as higher noninterest expense. Included in noninterest expense was a one-time expense to complete a performance improvement project to enhance operations and revenues of the Bank. This was partially offset by increases in noninterest income and net interest income.
Previous report
Net Interest Income. Net interest income for the three-month period ended September 30, 2024, was $36.7 million, an increase of $1.3 million, or 3.6%, as compared to the same period of the prior fiscal year. The increase was attributable to a 5.9% increase in the average balance of interest-earning assets in the current three-month period, as compared to the same period a year ago, partially offset by a seven basis point decrease in net interest margin, from 3.44% to 3.37%, as
Previous report
the cost of interest-bearing liabilities increased by 70 basis points, outpacing the 54-basis point increase in the yield earned on interest earning assets.
Previous report
expectations. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.01% (annualized) during the current period, as compared to 0.03% (annualized) for the same period of the prior fiscal year.
Reworded paragraphs (33)
Previous wording
Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (the Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). At September 30, 2024, the Bank operated from its headquarters, 62 full-service branch offices, two limited-service branch offices, and two loan production offices. The Bank owns the office building and related land in which its headquarters are located, and 59 of its other branch offices. The remaining eight branches and offices are either leased or partially owned.
Current wording
Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (the Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). At December 31, 2024, the Bank operated from its headquarters, 62 full-service branch offices, two limited-service branch offices, and two loan production offices. The Bank owns the office building and related land in which its headquarters are located, and 59 of its other branch offices. The remaining seven branches and offices are either leased or partially owned.
Previous wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at September 30, 2024, and results of operations for the three-month periods ended September 30, 2024 and 2023.
Current wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at December 31, 2024, and results of operations for the three- and six- month periods ended December 31, 2024 and 2023.
Previous wording
During the first three months of fiscal 2025, total assets increased by $124.9 million. The increase was primarily attributable to increases in loans, net of the allowance for credit losses (ACL), and cash equivalents, partially offset by a decrease in available-for-sale (AFS) securities. Loans, net of the ACL, increased $114.8 million; cash equivalents increased $14.4 million; and AFS securities decreased $7.7 million. Liabilities increased $108.0 million, as deposits increased $97.1 million; securities sold under agreements to repurchase increased $5.6 million; and advances from the Federal Home Loan Bank (FHLB) increased $5.0 million. Equity increased $16.9 million, attributable primarily to earnings retained after cash dividends paid and a decrease of $6.9 million in accumulated other comprehensive loss as the market value of the Company’s investments appreciated due to decreases in market interest rates. For more information, see “Comparison of Financial Condition at September 30, 2024 and June 30, 2024.”
Current wording
During the first six months of fiscal 2025, total assets increased by $303.4 million. The increase was primarily attributable to an increase in net loans receivable, cash and cash equivalents, and AFS securities. Net loans receivable increased by $175.0 million; cash and cash equivalents increased by $84.9 million; and AFS securities increased by $40.2 million. Liabilities increased $279.7 million, which was primarily attributable to an increase in deposits of $267.6 million. Equity increased $23.6 million, attributable primarily to earnings retained after cash dividends paid, in combination with a $1.0 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. For more information, see “Comparison of Financial Condition at December 31, 2024 and June 30, 2024.”
Previous wording
Net income for the first three months of fiscal 2025 was $12.5 million, a decrease of $693,000, or 5.3% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s decrease in net income was attributable to an increase in noninterest expense and an increase in provision for credit losses (PCL), partially offset by increases in net interest income and noninterest income. Diluted net income was $1.10 per common share for the first three months of fiscal 2025, as compared to $1.16 per common share for the same period of the prior fiscal year. For the first three months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $1.3 million, or 3.6%; PCL increased $1.3 million, or 139.9%; noninterest income increased $1.3 million, or 22.6%; noninterest expense increased $2.1 million, or 9.0%; and provision for income tax decreased $110,000, or 3.2%. During the first quarter of fiscal 2025, the Company engaged with a consultant to complete a performance improvement project to enhance operations and revenues of the Bank. The one-time cost associated with this review totaled $840,000,
Current wording
Net income for the first six months of fiscal 2025 was $27.1 million, an increase of $1.8 million, or 7.0% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, which were partially offset by increases in provision for credit losses (PCL), noninterest expense, and provision for income taxes. Diluted net income was $2.40 per common share for the first six months of fiscal 2025, as compared to $2.23 per common share for the same period of the prior fiscal year. For the first six months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $4.9 million or 7.0%; PCL increased $1.3 million, or 71.7%; noninterest income increased $2.5 million, or 22.2%; noninterest expense increased $3.2 million, or 6.6%; and income before income taxes increased $3.0 million, or 9.5%. During the second quarter of fiscal 2024, the Bank sold bonds with a book value of $12.4 million, realizing a loss of $682,000 which was recognized in noninterest income. Recognition of this loss during the quarter reduced after-tax net income by $541,000. For more information see “Results of Operations.”
Previous wording
Interest rates during the first three months of fiscal 2025 remained volatile and moved lower at the end of the period. As a result the yield curve remained inverted, with shorter-term obligations yielding more than longer-term obligations. However, the two-year part of the curve compared to the longer end of the curve uninverted, with a small positive slope. The Federal Reserve’s Open Market Committee (FOMC) decreased the federal funds rate in September 2024, and market expectations are for additional reductions over the next year. At September 30, 2024, as compared to June 30, 2024, the yield on two-year treasuries decreased from 4.72% to 3.62%; the yield on five-year treasuries decreased from 4.33% to 3.52%; the yield on ten-year treasuries decreased from 4.34% to 3.74%; and the yield on 30-year treasuries decreased from 4.50% to 4.08%.
Current wording
Interest rates during the first six months of fiscal 2025 remained volatile and moved lower at the shorter end of the curve due to Federal Open Market Committee federal funds rate cuts totaling 100 basis points during the fiscal year. Market expectations are for slight reductions in the federal funds rate over the next year, while concerns that economic conditions could keep inflation somewhat elevated and above the FOMC target range, yields on the longer end of the curve increased. As a result, the yield curve uninverted, with 33 basis points positive slope between the two-year and ten-year treasury rates. At December 31, 2024, as compared to June 30, 2024, the yield on two-year treasuries decreased from 4.72% to 4.24%; the yield on five-year treasuries increased from 4.33% to 4.38%; the yield on ten-year treasuries increased from 4.34% to 4.57%; and the yield on 30-year treasuries increased from 4.50% to 4.79%.
Previous wording
The Company’s net income is also affected by the level of its noninterest income and noninterest expense. Noninterest income generally consists primarily of deposit account service charges, bank card interchange income, loan-related fees, earnings on bank-owned life insurance, gains on sales of loans, and other general operating income. Noninterest expense consists primarily of compensation and employee benefits, occupancy-related expenses, data processing expense, telecommunications expense, deposit insurance assessments, professional fees, advertising, postage and office expenses, other insurance expenses, the amortization of intangible assets, and other general operating expenses.
Current wording
The Company’s net income is also affected by the level of its noninterest income and noninterest expense. Noninterest income generally consists primarily of deposit account service charges, bank card interchange income, loan-related fees, earnings on bank-owned life insurance, gains on sales of loans, and other general operating income. Noninterest expense consists primarily of compensation and employee benefits, occupancy-related expenses, data processing expense, telecommunications expense, deposit insurance assessments, professional fees, advertising, postage and office expenses , amortization of intangible assets, and other general operating expenses.
Previous wording
The Company’s noninterest income for the three-month period ended September 30, 2024, was $7.2 million, an increase of $1.3 million, or 22.6%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, and net realized gains on sale of loans. Net realized gains on sale of loans increased due to sales of Small Business Administration loans. These increases were partially offset by lower loan late charges, wealth management fees, and other noninterest income. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.
Current wording
The Company’s noninterest income for the six- month period ended December 31, 2024, was $14.0 million, an increase $2.5 million, or 22.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, earnings on bank owned life insurance, and the absence of a net realized loss on sale of AFS securities. These increases were partially offset by lower loan late charges, other noninterest income, and lower net realized gain on sale of loans. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.
Previous wording
Noninterest expense for the three-month period ended September 30, 2024, was $25.8 million, an increase of $2.1 million, or 9.0%, as compared to the same period of the prior fiscal year. In the current quarter, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first fiscal quarter of 2025, as discussed above. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in later quarters. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Advertising activity in the current quarter increased marketing expenses compared to the same quarter of the prior fiscal year.
Current wording
Noninterest expense for the six-month period ended December 31, 2024, was $50.7 million, an increase of $3.2 million, or 6.6%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first quarter of fiscal 2025. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in the second quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Increased advertising activity grew marketing expenses compared to the prior period.
Previous wording
We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we will utilize brokered funding and short- and long-term FHLB borrowings. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model.
Current wording
We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we will utilize brokered funding and short- and long-
Previous wording
The Company experienced balance sheet growth in the first three months of fiscal 2025, with total assets of $4.7 billion at September 30, 2024, reflecting an increase of $124.9 million, or 2.7%, as compared to June 30, 2024. Growth primarily reflected an increase in net loans receivable and cash equivalents and time deposits.
Current wording
The Company experienced balance sheet growth in the first six months of fiscal 2025, with total assets of $4.9 billion at December 31, 2024, reflecting an increase of $303.4 million, or 6.6%, as compared to June 30, 2024. Growth primarily reflected increases in net loans receivable, cash and cash equivalents, and AFS securities.
Previous wording
Loans, net of the ACL, were $3.9 billion at September 30, 2024, increasing by $114.8 million, or 3.0%, as compared to June 30, 2024. The Company noted growth in both the real estate and commercial portfolios. Real estate loan growth was primarily driven by drawn construction, 1-4 family residential, and owner occupied commercial real estate loan balances. This was somewhat offset by a decrease in loans secured by multi-family real estate. In the commercial portfolio, growth was driven by seasonal agricultural production loan draws and modest growth in commercial and industrial loan balances.
Current wording
Loans, net of the allowance for credit losses (ACL), were $4.0 billion at December 31, 2024, increasing by $175.0 million, or 4.6%, as compared to June 30, 2024. The Company noted growth primarily in drawn construction, 1-4 family residential, commercial and industrial, agricultural production loan draws, owner occupied commercial real estate, and agriculture real estate loan balances. This was somewhat offset by a decrease in loans secured by non-owner occupied commercial real estate, multi-family property, and consumer loans. For more information see “Note 4: Loans and Allowance for Credit Losses.”
Previous wording
Loans anticipated to fund in the next 90 days totaled $168.0 million at September 30, 2024, as compared to $157.1 million at June 30, 2024, and $158.2 million at September 30, 2023.
Current wording
Loans anticipated to fund in the next 90 days totaled $172.5 million at December 31, 2024, as compared to $157.1 million at June 30, 2024, and $140.5 million at December 31, 2023.
Previous wording
Deposits were $4.0 billion at September 30, 2024, an increase of $97.1 million, or 2.5%, as compared to June 30, 2024. The deposit portfolio saw increases in certificates of deposit and savings accounts, as customers remained willing to move balances into high yield savings accounts and special rate time deposits during the higher rate environment. Public unit balances totaled $510.5 million at September 30, 2024, a decrease of $84.1 million compared to June 30, 2024, due to the Company losing the bid to retain a large local public unit depositor, and also experienced expected seasonal decreases in these accounts generally. Brokered deposits totaled $273.2 million at September 30, 2024, an increase of $99.4 million compared to June 30, 2024. The Company increased brokered deposits in the quarter due to more attractive pricing for brokered certificates of deposits relative to local market rates and the need to fund seasonal loan demand. The average loan-to-deposit ratio for the first quarter of fiscal 2025 was 98.5%, as compared to 96.3% for the linked quarter.
Current wording
Deposits were $4.2 billion at December 31, 2024, an increase of $267.6 million, or 6.8%, as compared to June 30, 2024. The deposit portfolio saw year-to-date increases primarily in certificates of deposit and savings accounts, as customers continued to move balances into high yield savings accounts and special rate time deposits in the relatively high-rate environment. Public unit balances totaled $565.9 million at December 31, 2024, a decrease of $28.7 million compared to June 30, 2024, but an increase of $55.4 million as compared to $510.5 million at September 30, 2024. Public unit balances increased compared to September 30, 2024, the linked quarter, due to seasonal inflows, but decreased year-to-date due to the loss of a large local public unit depositor. Brokered deposits totaled $254.0 million at December 31, 2024, an increase of $80.3 million as compared to June 30, 2024, but a decrease of $19.1 million compared to September 30, 2024, the linked quarter. Fiscal year-to-date, the Company increased brokered deposits due to more attractive pricing for brokered certificates of deposit relative to local market rates and the need to meet seasonal loan demand, and to build on-balance sheet liquidity. The average loan-to-deposit ratio for the second quarter of fiscal 2025 was 96.4%, as compared to 96.3% for the quarter ended June 30, 2024, and 94.3% for the same period of the prior fiscal year. The loan-to-deposit ratio at period end December 31, 2024, was 95.6%.
Previous wording
FHLB advances were $107.1 million at September 30, 2024, a decrease of $5.0 million, or 4.9%, from June 30, 2024, due to maturing advances which were not renewed. At both September 30 and June 30, 2024, the Company had no FHLB overnight borrowings at period end.
Current wording
FHLB advances were $107.1 million at December 31, 2024, an increase of $5.0 million, or 4.9%, as compared to June 30, 2024.
Previous wording
The Company’s stockholders’ equity was $505.6 million at September 30, 2024, an increase of $16.9 million, or 3.5%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a decrease in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to decreases in market interest rates. The AOCL decreased from $17.4 million at June 30, 2024, to $10.6 million at September 30, 2024. The Company does not hold any securities classified as held-to-maturity.
Current wording
The Company’s stockholders’ equity was $512.4 million at December 31, 2024, an increase of $23.6 million, or 4.8%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $1.0 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $16.4 million at December 31, 2024 compared $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.
Previous wording
Average Balance Sheet, Interest, and Average Yields and Rates for the Three-Month Periods Ended
Current wording
Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Six- Month Periods Ended
Previous wording
The tables below present certain information regarding our financial condition and net interest income for the three-month periods ended September 30, 2024 and 2023. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.
Current wording
The tables below present certain information regarding our financial condition and net interest income for the three- and six- month periods ended December 31, 2024 and 2023. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.
Previous wording
The following tables set forth the effects of changing rates and volumes on the Company’s net interest income for the three-month period ended September 30, 2024, compared to the three-month period ended September 30, 2023. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).
Current wording
The following tables set forth the effects of changing rates and volumes on the Company’s net interest income for the three- and six- month periods ended December 31, 2024, compared to the three- and six- month periods ended December 31, 2023. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).
Previous wording
Provision for Credit Losses. The PCL was $2.2 million in the three-month period ended September 30, 2024, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $2.0 million provision attributable to the ACL for loan balances outstanding and a $138,000 provision attributable to the allowance for off-balance sheet credit exposures. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).
Current wording
**Provision for Credit Losses.**The Company recorded a PCL of $932,000 in the three-month period ended December 31, 2024, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $501,000 provision attributable to the ACL for loan balances outstanding and a $431,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.02% (annualized) during the current period, as compared to 0.10% for the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).
Previous wording
Income Taxes. The income tax provision for the three-month period ended September 30, 2024, was $3.4 million, a decrease of 3.2%, as compared to the same period of the prior fiscal year, primarily due to the decrease in net income before income taxes. The effective tax rate was 21.3% as compared to 21.0% in the same quarter of the prior fiscal year.
Current wording
Income Taxes. The income tax provision for the three-month period ended December 31, 2024, was $4.5 million, an increase of $1.4 million, or 43.3%, as compared to the same period of the prior fiscal year. The current period effective tax rate was 23.7%, as compared to 20.6% in the same quarter of the prior fiscal year. The effective tax rate for the December 31, 2024, quarter was elevated due a $380,000 adjustment of tax accruals attributable to completed merger activity.
Previous wording
For the three-month period ended September 30, 2024, basic and fully-diluted net income per share available to common shareholders was $1.10 under both measures, as compared to $1.16 under both measures for the same period of the prior fiscal year, which represented decreases of $0.06, or 5.2% under both measures. Our annualized return on average assets (ROA) for the three-month period ended September 30, 2024, was 1.07%, as compared to 1.20% for the same period of the prior fiscal year. Our return on average common stockholders’ equity (ROE) for the three-month period ended September 30, 2024, was 10.0%, as compared to 11.7% for the same period of the prior fiscal year. The one-time cost for the performance improvement review totaled $840,000, reduced after-tax net income by $652,000, or $0.06 per fully diluted common share, and reduced after-tax ROA by six basis points and ROE by 52 basis points.
Current wording
For the six-month period ended December 31, 2024, fully-diluted net income per share available to common shareholders was $2.40, as compared to $2.23 for the same period of the prior fiscal year, an increase of $0.17, or 7.6%. Our annualized return on average assets for the six-month period ended December 31, 2024, was 1.15%, as compared to 1.20% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the six-month period ended December 31, 2024, was 10.8%, as compared to 11.7% in the same period of the prior fiscal year.
Previous wording
Loan discount accretion and deposit premium amortization related to the November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $975,000 in net interest income for the three-month period ended September 30, 2024, as compared to $1.7 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the three-month period ended September 30, 2024, as compared to a 16 basis point contribution for the same period of the prior fiscal year, and as compared to a ten basis point contribution in the linked quarter ended June 30, 2024, when net interest margin was 3.25%.
Current wording
Loan discount accretion and deposit premium amortization related to the November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $2.0 million in net interest income for the six-month period ended December 31, 2024, as compared to $3.2 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the six-month period ended December 31, 2024, as compared to a 15 basis point contribution for the same period of the prior fiscal year.
Previous wording
Noninterest Income. Noninterest income for the three-month period ended September 30, 2024, was $7.2 million, an increase of $1.3 million, or 22.6%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, and net realized gains on sale of loans. Net realized gains on sale of loans increased due to sales of Small Business Administration loans. These increases were partially offset by lower loan late charges, wealth management fees, and other noninterest income. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.
Current wording
Noninterest Income. Noninterest income for the six-month period ended December 31, 2024, was $14.0 million, an increase of $2.5 million, or 22.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, earnings on bank owned life insurance, and the absence of a net realized loss on sale of AFS securities. These increases were partially offset by lower loan late charges, other noninterest income, and lower net realized gain on sale of loans. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment. The lower gain on sale of loans was primarily attributable to lower gain on sale of residential loans.
Previous wording
Noninterest Expense. Noninterest expense for the three-month period ended September 30, 2024, was $25.8 million, an increase of $2.1 million, or 9.0%, as compared to the same period of the prior fiscal year. In the current quarter, this increase was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense for a performance improvement project that started during the first fiscal quarter of 2025, as discussed above. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in later quarters. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Advertising activity in the current quarter increased marketing expenses compared to the same quarter of the prior fiscal year.
Current wording
professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first fiscal quarter of 2025. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in the second quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Increased advertising activity grew marketing expenses compared to the prior period.
Previous wording
The following table summarizes changes in the ACL over the three-month periods ended September 30, 2024 and 2023:
Current wording
The following table summarizes changes in the ACL over the three- and six- month periods ended December 31, 2024 and 2023:
Previous wording
Our ACL at September 30, 2024, totaled $54.4 million, representing 1.37% of gross loans and 663% of nonperforming loans, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans, at June 30, 2024. The Company has estimated its expected credit losses as of September 30, 2024, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as the Federal Reserve has tightened monetary policy to address inflation risks. The PCL was based on the estimated required ACL, reflecting management’s estimate of the current expected credit losses in the Company’s loan portfolio at September 30, 2024. Qualitative adjustments in the Company’s ACL model were slightly decreased compared to June 30, 2024. In addition, Company increased the allowance attributable to classified hotel loans that have been slow to recover from the COVID-19 pandemic. The PCL was also increased due to loan growth in the first quarter of fiscal year 2025 and a slight increase in modeled expected losses due to a modest increase in the unemployment rate
Current wording
Our ACL at December 31, 2024, totaled $54.7 million, representing 1.36% of gross loans and 659% of NPLs, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of NPLs, at June 30, 2024. The Company has estimated its expected credit losses as of December 31, 2024, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, despite the Federal Reserve having reduced short-term rates somewhat during this fiscal year. Qualitative adjustments in the Company’s ACL model were increased compared to June 30, 2024, due to various factors that are relevant to determining expected collectability of credit. The Company decreased the allowance attributable to classified hotel loans that have been slow to recover from the COVID-19 pandemic as a result of updated collateral appraisals, which provided a more favorable assessment than the Company’s prior period estimates. Additionally, PCL was required due to loan growth in fiscal year 2025 to date. As a percentage of average loans outstanding, the Company recorded net charge offs of two basis points (annualized) during the current period, compared to seven basis points during the same period of the prior fiscal year.
Previous wording
At September 30, 2024, the Bank had accrued within other liabilities an allowance for off-balance sheet credit exposures of $3.4 million, as compared to $3.3 million at June 30, 2024. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures noted above. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $138,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an expected increase in credit utilization based on historical usage of these off-balance sheet credit exposures.
Current wording
At December 31, 2024, the Company had accrued within other liabilities an allowance for off-balance sheet credit exposures of $3.8 million, as compared to $3.3 million at June 30, 2024. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $569,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an expected increase in credit utilization based on historical usage of these off-balance sheet credit exposures.
Previous wording
At September 30, 2024, the Company had loans of $40.4 million, or 1.02% of total loans, adversely classified ($40.4 million classified “substandard”; none classified “doubtful”), as compared to loans of $40.9 million, or 1.06% of total loans, adversely classified ($40.9 million classified “substandard”; none classified “doubtful”) at June 30, 2024, and $42.5 million, or 1.15% of total loans, adversely classified ($42.5 million classified “substandard”; none classified “doubtful”) at September 30, 2023. Classified loans were generally comprised of loans secured by commercial and residential real estate, and other commercial purpose collateral. All of these loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $8.2 million at September 30, 2024. As reported in Note 4 of the Notes to Consolidated Financial Statements, the Company’s total past due loans increased from $9.2 million at June 30, 2024, to $13.4 million at September 30, 2024. This increase was primarily from loans collateralized by 1-4 family real estate and agricultural real estate. Total past due loans were $28.4 million at September 30, 2023. See Note 4 – “Loans and Allowance for Credit Losses – Past Due Loans” in the Notes to Consolidated Financial Statements.
Current wording
At December 31, 2024, the Company had loans of $39.6 million, or 0.98% of total loans, adversely classified ($39.6 million classified “substandard”; none classified “doubtful”), as compared to loans of $40.9 million, or 1.06% of total loans, adversely classified ($40.9 million classified “substandard”; none classified “doubtful”) at June 30, 2024, and $39.3 million, or 1.05% of total loans, adversely classified ($39.3 million classified “substandard”; none classified “doubtful”), at December 31, 2023. Classified loans were generally comprised of loans secured by agriculture, commercial, and residential real estate, and other commercial purpose collateral. All of these loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $8.3 million at December 31, 2024. The Company’s total past due loans increased from $9.2 million at June 30, 2024, to $13.4 million at December 31, 2024. This increase was primarily from loans collateralized by 1-4 family real estate and agricultural real estate. Total past due loans were $8.3 million at December 31, 2023. See “Note 4 – Loans and Allowance for Credit Losses – Past Due Loans” in the “Notes to Consolidated Financial Statements.”
Previous wording
The Company adopted ASU No. 2022-02 in fiscal 2024, which eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. At September 30, 2024, modifications to borrowers experiencing financial difficulty totaled $25.2 million, of which $891,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.3 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, these loans were subject to classification as modifications due to payment delays and term extensions given to borrowers experiencing financial difficulty at September 30, 2024. At June 30, 2024, these modifications totaled $25.5 million, of which $895,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.6 million in modifications at June 30, 2024, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.
Current wording
The Company adopted ASU No. 2022-02 in fiscal 2024, which eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. At December 31, 2024, modifications to borrowers experiencing financial difficulty totaled $24.9 million, of which $843,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.1 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, these loans were subject to classification as modifications due to payment delays and term extensions given to borrowers experiencing financial difficulty at December 31, 2024. At June 30, 2024, these modifications totaled $25.5 million, of which $895,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.6 million in modifications at June 30, 2024, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.
Previous wording
At September 30, 2024, nonperforming assets totaled $12.1 million, as compared to $10.6 million at June 30, 2024, and $10.8 million at September 30, 2023. The change in nonperforming assets was attributable to the increase of $1.5 million in nonperforming loans, of which the largest individual loan was collateralized by a single-family residential property.
Current wording
At December 31, 2024, nonperforming assets totaled $10.8 million, as compared to $10.6 million at June 30, 2024, and $9.8 million at December 31, 2023. The rise in the nonperforming assets, compared to June 30,2024, reflects an increase in nonperforming loans, which was largely offset by a reduction in other real estate owned due to property sales. The increase in nonperforming loans was primarily attributable to the addition of three unrelated loans collateralized by single-family residential property, totaling $1.4 million.
Previous wording
At September 30, 2024, the Company had outstanding commitments and approvals to extend credit of approximately $902.0 million (including $605.5 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At September 30, 2024, the Bank had pledged $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $870.3 million, of which $107.1 million was advanced, while $479,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. The Bank has the ability to pledge other assets, including, for example, additional unpledged real estate loans held by the Bank or the Bank’s REIT, and the unpledged securities in the Bank’s portfolio, which could provide additional collateral for additional borrowings. In total, FHLB borrowings are generally limited to 45% of bank assets, or approximately $2.0 billion, subject to available collateral. Also, at September 30, 2024, the Bank had pledged a total of $415.0 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $357.9 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at September 30, 2024. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.
Current wording
At December 31, 2024, the Company had outstanding commitments and approvals to extend credit of approximately $894.7 million (including $595.5 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At December 31, 2024, the Bank had pledged $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $858.1 million, of which $107.1 million was advanced, while $499,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. The Bank has the ability to pledge other assets, including, for example, additional unpledged real estate loans held by the Bank or the Bank’s REIT, and the unpledged securities in the Bank’s portfolio, which could provide additional collateral for additional borrowings. In total, FHLB borrowings are generally limited to 45% of bank assets, or approximately $2.1 billion, subject to available collateral. Also, at December 31, 2024, the Bank had pledged a total of $412.2 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $357.3 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at December 31, 2024. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.
Previous wording
Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital (as defined), and common equity Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as
Current wording
Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital (as
Previous wording
defined) to average total assets (as defined). Additionally, to make distributions or discretionary bonus payments, the Company and Bank must maintain a capital conservation buffer of 2.5% of risk-weighted assets. Management believes, as of September 30, 2024 and June 30, 2024, that the Company and the Bank met all capital adequacy requirements to which they are subject.
Current wording
defined), and common equity Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average total assets (as defined). Additionally, to make distributions or discretionary bonus payments, the Company and Bank must maintain a capital conservation buffer of 2.5% of risk-weighted assets. Management believes, as of December 31, 2024 and June 30, 2024, that the Company and the Bank met all capital adequacy requirements to which they are subject.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
term FHLB borrowings. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model.
Current report — wording carried from elsewhere
Loan discount accretion and deposit premium amortization related to the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $987,000 in net interest income for the three-month period ended December 31, 2024, as compared to $1.5 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the three-month period ended December 31, 2024, compared to 14 basis points during the same period of the prior fiscal year, when the net interest margin was 3.25%.
Current report — wording carried from elsewhere
Results of Operations – Comparison of the six-month periods ended December 31, 2024 and 2023