Texas Community Bancshares, Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
TCBS$17.10-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001558370-25-007569
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001558370-25-010760
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 77 previous paragraphs and 98 current paragraphs.
33 unchanged; 41 reworded; 19 added; 2 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 58 previous and 63 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 (19)
Current report
Net Income. The Company had net income of $678,000 for the three months ended June 30, 2025, compared to net income of $348,000 for the three months ended June 30, 2024, an increase of $330,000, or 94.8%. The increase was primarily due to a $186,000, or 47.3%, increase in noninterest income, a $81,000, or 2.7%, decrease in noninterest expense and a $166,000 decrease in the provision for credit losses partially offset by a $94,000 increase in income tax expense. Net interest income remained flat.
Current report
Interest Income. Interest income decreased $207,000 or 3.6%, to $5.5 million for the three months ended June 30, 2024 from $5.7 million for the three months ended June 30, 2024. This decrease included $217,000 in accrued interest being removed from interest income due to three loans from two delinquent loan relationships totaling $9.0 million being put on nonaccrual. Average interest earning assets decreased by $17.7 million, or 4.1%, from 427.9 million for the three months ended June 30, 2024 to $410.2 million for the three months ended June 30, 2025 primarily from $19.0 million more in interest bearing account balances in 2024 resulting primarily from the loans sale in the first quarter of 2024.
Current report
Interest income on loans increased $470,000, or 12.4%, to $4.3 million for the three months ended June 30, 2025 from $3.8 million for the three months ended June 30, 2024. This increase resulted primarily from an increase in average loan balances of $24.1 million, or 8.7%, from $276.1 million for the three months ended June 30, 2024 to $300.2 million for the three months ended June 30, 2025, with an increase in loan yield of 18 basis points, or 3.3%, to 5.69% for the three months ended June 30, 2025 from 5.51% for the three months ended June 30, 2024. The increase in loan volume was due primarily to loan growth and average loans being low in 2024 due to the loan sale in the first quarter. Loan interest income would have been $217,000 more without the reversal of accrued interest on the previously mentioned three loans totaling $9.0 million being placed on nonaccrual.
Current report
Interest income on securities decreased $248,000, or 20.0%, from $1.2 million for the three months ended June 30, 2024 to $992,000 for the three months ended June 30, 2025. This decrease resulted from a decrease in the average balance of securities of $20.8 million, or 17.9%, from $116.3 million for the three months ended June 30, 2024 to $95.5 million for the three months ended June 30, 2025. The decrease in the portfolio was due primarily to contractual paydowns. The average yield on securities decreased by nine basis points.
Current report
Interest income on interest bearing deposits in banks decreased $110,000, or 49.5%, from $222,000 for the three months ended June 30, 2024 to $112,000 for the three months ended June 30, 2025. This decrease resulted primarily from a decrease in average interest-bearing deposits of $6.1 million, or 37.7%, from $16.2 million for the three months ended June 30, 2024 to $10.1 million for the three months ended June 30, 2025 and a decrease in average yield of 105 basis points, or 19.1%, from 5.49% for the three months ended June 30, 2024 to 4.44% for the three months ended June 30, 2025. Fed funds interest decreased $184,000, or 77.0%, from $239,000 for the three months ended June 30, 2024 to $55,000 for the three months ended June 30, 2025. This decrease resulted primarily from a decrease in average fed funds balances of $12.9 million, or 72.1%, from $17.9 million for the three months ended June 30, 2024 to $5.0 million for the three months ended June 30, 2025 and a decrease in average yield of 96 basis points, or 18.1%, from 5.33% for the three months ended June 30, 2024 to 4.37% for the three months ended June 30, 2025. These decreases were primarily due to the Company maintaining higher account balances due to receiving cash from the loan sale during the three months ended June 30, 2024 in addition to decreases in fed funds rates and other market interest rates.
Current report
Interest income from the fair value hedge was $125,000 for the three months ended June 30, 2024. The financial derivative was terminated on January 15, 2025, so there is no related interest income after the first quarter of 2025.
Current report
Interest Expense. Total interest expense decreased $198,000, or 7.9%, to $2.3 million for the three months ended June 30, 2025 from $2.5 million for the three months ended June 30, 2024 primarily due to an decrease in average interest-bearing liabilities of $19.8 million, or 5.5%, to $340.3 million for the three months ended June 30, 2025 from $360.1 million for the three months ended June 30, 2024 and a decrease in the average cost of interest-bearing liabilities of seven basis points, or 2.6%, from 2.77% for the three months ended June 30, 2024 to 2.70% for the three months ended June 30, 2025, primarily due the reduction in FHLB advance balances and changes in deposit pricing.
Current report
Interest expense on deposit accounts decreased $16,000, or 0.9%, to $1.8 million for the three months ended June 30, 2025, with a decrease in the average deposit cost of eight basis points, or 3.1%, from 2.55% for the three months ended June 30, 2024 to 2.47% for the three months ended June 30, 2025 and an increase in average interest-bearing deposits of $6.0 million, or 2.1% from $284.8 million for the three months ended June 30, 2024 to $290.8 million for the three months ended June 30, 2025, with the largest increases being in higher cost certificates of deposit which includes an additional $10.0 million in brokered deposits.
Current report
Interest expense on Federal Home Loan Bank advances decreased $182,000, or 26.6%, to $501,000 for the three months ended June 30, 2025 from $683,000 for the three months ended June 30, 2024. This decrease was due primarily to a decrease in the average balance of FHLB advances of $25.3 million, or 33.9%, to $49.3 million for the three months ended June 30, 2025 from $74.6 million for the three months ended June 30, 2024. The increase in average yield of 40 basis points, or 10.8%, is primarily due to paying off maturing advances with significantly lower rates than the weighted average cost of all FHLB borrowings.
Current report
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses decreased $166,000, or 133.9%, to a reversal of provision of $42,000 for the three months ended June 30, 2025 from a provision for credit losses of $124,000 for the three months ended June 30, 2024, primarily due to an adjustment to the allowance related to $9.0 million in loans being moved from the general reserve loan pool to being individually reviewed and not requiring a specific reserve and a reduction in unfunded commitments. The allowance for credit losses was 1.09% of total loans at June 30, 2025.
Current report
Noninterest Income. Noninterest income increased $186,000, or 47.3%, to $579,000 for the three months ended June 30, 2025 from $393,000 for the three months ended June 30, 2024, primarily due to an additional loss of $69,000 on the final piece of the loan sale and a write-down of $78,000 on bank property being held as other real estate owned being marked to fair value in the three months ended June 30, 2024. In the three months ended June 30, 2025 there was a $73,000 gain on an equity investment held at the holding company and a $29,000 increase in net appreciation of bank-owned life insurance due to a change in insurance carriers. The equity investment at the holding company is included in restricted investments carried at cost on the balance sheet and is an investment in a fintech fund.
Current report
These items were partially offset by a decrease in net service charges and fees of $61,000, or 11.7%, primarily due to a decrease of $59,000 in fee income from wholesale loans sold of $85,000 for the three months ended June 30, 2024 to $26,000 for the three months ended June 30, 2025 due primarily to decreases in housing demand related to market rates.
Current report
Noninterest Expense. Noninterest expense decreased $81,000, or 2.7%, to $3.0 million for the three months ended June 30, 2025 from $3.1 million for the three months ended June 30, 2024 primarily due to a decrease in salary and employee benefit expenses of $75,000, or 4.6%, due primarily to reduced benefit costs related to executive officers and directors of $30,000, including a one-time $26,000 decrease in 2025 to reverse accrued equity awards forfeited. Salary and employee benefit expenses were $1.6 million for the three months ended June 30, 2025. Director fees decreased $8,000, or 10.1%, to $71,000 for the three months ended June 30, 2025 due to a reduction in the number of directors from 12 to 10 in May 2024 and technology expenses decreased $113,000, or 59.8%, due to card processing project implementation fees in the three months ended June 30, 2024.
Current report
These decreases were partially offset by increases in other expenses of $120,000, or 21.3%, primarily due to increased auditing expenses of $51,000, or 46.4%, from $110,000 for the three months ended June 30, 2024 to $161,000 for the three months ended June 30, 2025 due to contracting with a new internal audit firm to perform work regularly throughout the year and additional expenses on the external audit for December 31, 2024. Marketing expense increased $47,000, or 188.0%, to $72,000 for the three months ended June 30, 2025 due to hiring a marketing firm in 2025 and significantly increasing our presence through media outlets we weren’t currently utilizing, including television and other streaming services, We also had an expense of $28,000 that offset part of the gain on the equity investment held at the holding company.
Current report
Income Tax Expense. Income tax expense increased by $94,000, or 188.0%, to $144,000 for the three months ended June 30, 2025 from $50,000 for the three months ended June 30, 2024, due primarily to an increase in net income before taxes of $424,000 from $398,000 for the three months ended June 30, 2024 to $822,000 for the three months ended June 30, 2025. The effective tax rate was 17.52% and 12.56% for the three months ended June 30, 2025 and 2024, respectively. The increase in effective tax rate was primarily due to taxable income increasing at a faster rate than nontaxable income.
Current report
Average Balance Sheets
Current report
Interest income on restricted investments, which includes primarily Federal Home Loan Bank (FHLB) and TIB Bank stock dividends, decreased $15,000, or 13.8%, from $109,000 for the six months ended June 30, 2024 to $94,000 for the six months ended June 30, 2025. This decrease resulted from a decrease in the average balance of restricted investments of $385,000, or 10.9%, from $3.5 million for the six months ended June 30, 2024 to $3.1 million for the six months ended June 30, 2025, and also from a decrease in the average yield of these investments of 19 basis points, or 3.1%, from 6.17% for the six months ended June 30, 2024 to 5.98% for the six months ended June 30, 2025. The decrease in dividends was due primarily to $1.1 million in stock being repurchased in March 2025 by the FHLB due to the decrease in FHLB advances.
Current report
Noninterest Income. Noninterest income increased $4.2 million, or 131.3%, to $1.0 million for the six months ended June 30, 2025 from a noninterest loss of $3.2 million for the six months ended June 30, 2024, primarily due to nonrecurring losses in 2024 of $4.1 million related to the loan sale and branch construction. Excluding these one-time items, noninterest income would have increased by $77,000 over the same period. This increase is due primarily to a
Current report
Technology expense decreased $170,000, or 56.1%, to $133,000 for the six months ended June 30, 2025 from $303,000 for the six months ended June 30, 2024 due primarily to card processing fees incurred in the first half of 2024 associated with a “tap” debit card implementation project. Salaries and employee benefits decreased $86,000, or 2.6%, to $3.2 million for the six months ended June 30, 2025 from $3.3 million for the six months ended June 30, 2024 primarily related to higher benefits cost in 2024 related to the CEO transition and executive and director equity awards that were forfeited. Occupancy and equipment expenses decreased $45,000, or 8.1%, from $558,000 for the six months ended June 30, 2024 to $513,000 for the six months ended June 30, 2025 primarily due to higher expenses during 2024 related to opening two new branches. Director fees decreased $20,000 from $162,000 to $142,000 for the six months ended June 30, 2025 compared to 2024 due to a reduction in the number of directors from 14 to 12 in May 2024. The board of directors decreased further in size from 12 to 9 in May 2025. Other expenses increased $97,000 to $1.2 million from $1.1 million, primarily due to increases in audit and accounting fees of $47,000 due to contracting with a new internal audit firm to perform work regularly throughout the year and additional expenses on the external audit for December 31, 2024, marketing fees of $59,000 due to contracting with an outside marketing firm and expanding our reach through additional advertising methods, training expenses of $13,000, FDIC assessments of $16,000 and equity investment expenses of $28,000, partially offset by decreases of $37,000 in other compensation due to a one-time expense, $8,000 in REO expenses, $14,000 in legal fees, and $10,000 in office expenses.
Removed paragraphs (2)
Previous report
Noninterest Income. Noninterest income increased $4.1 million, or 113.9%, to $462,000 for the three months ended March 31, 2025 from a noninterest loss of $3.6 million for the three months ended March 31, 2024, primarily due to nonrecurring losses in 2024 of $4.1 million related to the loan sale and branch construction. In the three months ended March 31, 2025, there was an increase of $42,000, or 16.2% in other service charges and fees due primarily to a $51,000 increase in loan fees from $14,000 for the three months ended March 31, 2024 to $65,000 for the three months ended March 31, 2025 primarily due to an increase of $8,000 in servicing fees from the servicing retained in the loan sale in 2024 and a $43,000, or 390.9%, increase from loans closed through the wholesale lending program from $11,000 for the three months ended March 31, 2024 to $54,000 for the three months ended March 31, 2025. There was an increase of
Previous report
Occupancy and equipment expenses decreased $38,000, or 13.3%, from $285,000 for the three months ended March 31, 2024 to $247,000 for the three months ended March 31, 2025 primarily due to higher expenses during 2024 related to opening two new branches. Technology expenses decreased $57,000, or 50.0%, due primarily to a contract negotiation with our debit card provider. Director fees decreased $12,000, or 14.5%, due to a reduction in board size. Other expenses decreased $23,000, or 3.7%, primarily due to a decrease of $26,000 in office supply expense and $18,000 in other operating expenses due to having higher expenses during 2024 associated with branch openings, and a $21,000 decrease in legal fees due to higher fees in 2024 associated with executive changes partially offset by increased marketing expenses of $12,000 due primarily to the use of a third-party marketing firm, an increase in FDIC assessment expenses of $14,000 primarily due to an overall increase in the FDIC assessment rate, and a $21,000 increase in training expenses primarily due to employees taking on new roles and responsibilities.
Reworded paragraphs (41)
Previous wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (the “Company”) consolidated financial condition at March 31, 2025 and consolidated results of operations for the three months ended March 31, 2025 and 2024. It should be read in conjunction with the unaudited consolidated financial statements and the related notes appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements, and notes, contained in the Annual Report on Form 10-K for the year ended December 31, 2024..
Current wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (the “Company”) consolidated financial condition at June 30, 2025 and consolidated results of operations for the three and six months ended June 30, 2025 and 2024. It should be read in conjunction with the unaudited consolidated financial statements and the related notes appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements, and notes, contained in the Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
The Jumpstart Our Business Startups Act of 2012 (JOBS Act) contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we had the option to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. However, we have determined not to take advantage of the benefits of this extended transition period.
Current wording
The Jumpstart Our Business Startups Act of 2012 (JOBS Act) contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we had the option to delay adoption of new or revised accounting pronouncements applicable to public companies until such
Previous wording
For additional information regarding the allowance for credit losses, see notes 1 and 4 of the notes to consolidated financial statements.
Current wording
For additional information regarding the allowance for credit losses, see notes 1 and 4 of the notes to the accompanying consolidated financial statements.
Previous wording
Total Assets. Total assets were $442.2 million at March 31, 2025, a decrease of $1.3 million, or 0.3%, from $443.5 million at December 31, 2024. The decrease was due primarily to a decrease in securities of $1.3 million, or 1.3%, to $96.0 million at March 31, 2025 from $97.3 million at December 31, 2024, a decrease in cash and interest bearing deposits in banks of $1.9 million, or 8.3%, to $21.1 million at March 31, 2025 from $23.0 million at December 31, 2024 and a decrease in restricted investments carried at cost of $1.0 million, or 23.8%, to $3.2 million at March 31, 2025 partially offset by an increase in net loans and leases of $3.8 million, or 1.3%, to $297.5 million at March 31, 2025 from $293.7 million at December 31, 2024.
Current wording
Total Assets. Total assets were $444.1 million at June 30, 2025, an increase of $625,000, or 0.1%, from $443.5 million at December 31, 2024. The increase was due primarily to an increase of $313,000 in net loans and leases and an increase of $7.6 million in interest bearing deposits in banks partially offset by a decrease of $2.0 million in cash and cash equivalents and a decrease in securities of $3.8 million, or 3.9%, to $93.5 million at June 30, 2025 from $97.3 million at December 31, 2024, a decrease in restricted investments carried at cost of $908,000, or 21.4%, to $3.3 million at June 30, 2025 and a decrease in foreclosed assets of $52,000, or 10.8%, to $428,000 at June 30, 2025 from $480,000 at December 31, 2024.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents decreased $1.5 million, or 11.3%, to $11.8 million (which includes fed funds sold of $3.2 million) at March 31, 2025 from $13.3 million (which includes fed funds sold of $9.3 million) at December 31, 2024. This decrease was primarily the result of an increase in loans of $3.8 million, or 1.3%, and stock repurchases of $495,000 partially offset by a decrease in securities of $1.3 million and an increase in deposits of $1.7 million.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents decreased $2.0 million, or 15.0%, to $11.3 million (which includes fed funds sold of $6.4 million) at June 30, 2025 from $13.3 million (which includes fed funds sold of $9.3 million) at December 31, 2024. This decrease was primarily the result of $1.3 million in Company stock being repurchased, cash dividends paid to shareholders of $242,000 and an increase in net loans and leases of $313,000.
Previous wording
Interest Bearing Deposits in Banks. Interest bearing deposits in banks decreased $436,000, or 4.5%, to $9.3 million at March 31, 2025, compared to $9.7 million at December 31, 2024. The decrease was primarily the result of a decrease in FHLB advances of $320,000 and cash dividends of $123,000 paid by the Company.
Current wording
Interest Bearing Deposits in Banks. Interest bearing deposits in banks increased $7.6 million, or 78.4%, to $17.3 million at June 30, 2025, compared to $9.7 million at December 31, 2024. The increase was primarily the result of a decrease in securities of $3.8 million and an increase in deposits of $3.4 million.
Previous wording
Securities Available for Sale. Securities available for sale decreased by $400,000, or 0.5%, to $74.8 million at March 31, 2025 from $75.2 million at December 31, 2024. During the three months ended March 31, 2025, there were purchases of securities of $2.7 million offset by net paydowns of $3.6 million. Accumulated other comprehensive income decreased by $400,000, or 8.5%, to $4.4 million, net of tax, from $4.8 million, net of tax, due primarily to changes in market interest rates and the termination of the derivative. Gross unrealized losses on the AFS portfolio consisting of 78 securities decreased from $6.5 million, or 8.0% of the portfolio’s amortized cost of $81.6 million at December 31, 2024, to $5.5 million, or 6.9% of the amortized cost of $80.3 million at March 31, 2025. These unrealized losses are due to increases in market interest rates. At March 31, 2025, the AFS portfolio was comprised of 11.9% residential mortgage backed securities, 60.7% collateralized mortgage obligations, 17.8% state and municipal securities and 9.7% corporate bonds.
Current wording
Securities Available for Sale. Securities available for sale decreased by $2.0 million, or 2.7%, to $73.2 million at June 30, 2025 from $75.2 million at December 31, 2024. During the six months ended June 30, 2025, there were purchases of securities of $4.2 million offset by paydowns of $7.0 million. Accumulated other comprehensive loss decreased by $608,000, or 12.8%, to $4.2 million, net of tax, from $4.8 million, net of tax, due primarily to changes in market interest rates and the termination of a derivative instrument. Gross unrealized losses on the AFS portfolio consisting of 78 securities decreased from $6.5 million, or 7.9% of the portfolio’s amortized cost of $81.6 million at December 31, 2024, to $5.3 million, or 6.7%, of the amortized cost of $78.5 million at June 30, 2025. These unrealized losses are due to increases in market interest rates. At June 30, 2025, the AFS portfolio was comprised of 11.8% residential mortgage backed securities, 60.1% collateralized mortgage obligations, 18.2% state and municipal securities and 9.9% corporate bonds.
Previous wording
Securities Held to Maturity. Securities held to maturity decreased by $900,000, or 4.1%, to $21.2 million at March 31, 2025 from $22.1 million at December 31, 2024. This decrease is due primarily to paydowns of $891,000. The HTM portfolio had 69 securities with gross unrealized losses of $2.2 million, or 10.4%, of the amortized cost of $21.2 million at March 31, 2025 compared to $2.6 million, or 10.0%, of the amortized cost of $26.0 million at December 31, 2024. These unrealized losses are due to increases in market interest rates. At March 31, 2025, the HTM portfolio was comprised of 86.6% residential mortgage backed securities, 7.4% state and municipal securities and 6.0% U.S government and agency bonds.
Current wording
Securities Held to Maturity. Securities held to maturity decreased by $1.8 million, or 8.1%, to $20.3 million at June 30, 2025 from $22.1 million at December 31, 2024. This decrease is due to paydowns of $1.8 million. The HTM portfolio had 69 securities with gross unrealized losses of $2.0 million, or 9.8%, of the amortized cost of $20.3 million at June 30, 2025 compared to $2.6 million, or 11.6%, of the amortized cost of $22.1 million at December 31, 2024. These unrealized losses are due to increases in market interest rates. At June 30, 2025, the HTM portfolio was comprised of 86.6% residential mortgage backed securities, 7.7% state and municipal securities and 5.7% U.S government and agency bonds.
Previous wording
Loans and Leases Receivable, Net. Net loans and leases receivable increased $3.8 million, or 1.3%, to $297.5 million at March 31, 2025 from $293.7 million at December 31, 2024. The increase in loans was primarily due to $21.2 million in loan originations and $2.8 million in loans repurchased from the 2024 loan sale partially offset by payoffs and contractual repayments.
Current wording
Loans and Leases Receivable, Net. Net loans and leases receivable increased $313,000, or 0.1%, to $294.0 million at June 30, 2025 from $293.7 million at December 31, 2024. The increase in loans was primarily due to $33.7 million in loan originations and $2.8 million in loans repurchased from the 2024 loan sale partially offset by payoffs and contractual repayments.
Previous wording
The loan and lease portfolio totaled $300.8 million and is comprised of $277.8 million, or 92.3%, real estate loans, $5.6 million, or 1.9%, commercial and industrial loans, $5.0 million, or 1.7%, consumer loans and other loans, and $12.4 million, or 4.1%, municipal loans. Real estate loans include $143.6 million, or 51.7%, 1-4 family residential loans, $10.5 million, or 3.8%, multi-family loans, $57.3 million, or 20.6%, commercial real estate (CRE) loans, $18.5 million, or 6.7%, 1-4 family construction loans, $37.8 million, or 13.6%, other construction and development loans and $10.0 million, or 3.6%, farmland loans. Total loans include interim construction loans of $34.6 million, or 75.9%, of the completed project balance of $45.5 million which includes $18.3 million in single-family residence loans, including $4.6 million in speculative construction loans to builders, $2.6 million in subdivision construction, $15.5 million in muti-family construction loans and $9.1 million in CRE loans. The total construction loan portfolio consisted of 57 loans with completed project balances of $45.5 million at March 31, 2025 compared to 55 loans totaling $42.5 million at December 31, 2024.
Current wording
The loan and lease portfolio totaled $297.2 million and was comprised of $274.1 million, or 92.2%, real estate loans, $5.4 million, or 1.8%, commercial and industrial loans, $13.2 million, or 4.4%, municipal loans and $4.5 million, or 1.5%, consumer loans and other loans. Real estate loans include $141.8 million, or 51.8%, 1-4 family residential loans, $11.0 million, or 4.0%, multi-family loans, $57.5 million, or 21.0%, commercial real estate (CRE) loans, $17.1 million, or 6.2%, 1-4 family construction loans, $36.9 million, or 13.5%, other construction and development loans and $9.8 million, or 3.6%, farmland loans. Total loans include interim construction loans of $31.1 million, or 76.1%, of the completed project balance of $40.9 million which includes $15.4 million in single-family residence loans, including $5.6 million in speculative construction loans to builders, $1.7 million in subdivision construction, $12.0 million in multi-family construction loans and $11.8 million in CRE loans. The total construction loan portfolio consisted of 52 loans with completed project balances of $40.9 million at June 30, 2025 compared to 55 loans totaling $42.5 million at December 31, 2024.
Previous wording
At March 31, 2025, commercial real estate loans consisted of $23.5 million owner occupied and $33.8 million non-owner occupied real estate. At March 31, 2025, commercial real estate loans primarily include loans collateralized by self-storage facilities ($16.3 million), commercial rental properties ($7.5 million), gas stations with convenience stores ($10.8 million), churches ($4.4 million), rural water district assets ($3.8 million), and restaurants ($3.6 million). The maximum loan-to-value ratio of our commercial real estate loans is generally 80%. Generally, we require the debt service coverage ratio to be at least 1.2x. The significant majority of our commercial real estate loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of commercial real estate borrowers. We consider a number of factors in originating commercial real estate
Current wording
At June 30, 2025, commercial real estate loans consisted of $24.8 million owner occupied and $32.7 million non-owner occupied real estate. At June 30, 2025, commercial real estate loans primarily include loans collateralized by self-storage facilities ($16.1 million), gas stations with convenience stores ($10.4 million), commercial rental properties ($7.5 million), churches ($4.5 million), rural water district assets ($3.8 million), restaurants ($3.0 million), and metal building manufacturer assets ($2.0 million). The maximum loan-to-value ratio of our commercial real estate loans is generally 80%. Generally, we require the debt service coverage ratio to be at least 1.2x. The significant majority of our commercial real estate loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of commercial real estate borrowers. We consider a number of factors in originating commercial real estate loans. We evaluate the qualifications and financial conditions of
Previous wording
loans. We evaluate the qualifications and financial conditions of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property, debt service capabilities, global cash flows of the borrower and other guarantors, and the borrower’s payment history with us and other financial institutions.
Current wording
the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property, debt service capabilities, global cash flows of the borrower and other guarantors, and the borrower’s payment history with us and other financial institutions.
Previous wording
Deposits. Deposits increased $1.7 million, or 0.5%, to $337.5 million at March 31, 2025 from $335.8 million at December 31, 2024. Core deposits (defined as all deposits other than certificates of deposit) decreased $1.9 million, or 0.9%, to $204.0 million at March 31, 2025 from $205.9 million at December 31, 2024. Certificates of deposit increased $3.6 million, or 2.8%, to $133.5 million at March 31, 2025 from $129.9 million at December 31, 2024. At March 31, 2025, there were $22.0 million in brokered and $499,000 in listed deposits. The year-to-date average cost of interest-bearing deposits decreased 14 basis points, or 5.4%, to 2.45% at March 31, 2025 compared to 2.59% at December 31, 2024. At March 31, 2025, there were 204 accounts with balances in excess of the $250,000 FDIC insurance limit with an aggregate balance of $98.2 million, or 30.5% of deposits. The amount that was over the FDIC insurance limit was $47.2 million, or 14.0%, that was potentially uninsured, including certificates of deposit of $11.3 million, money market accounts of $10.8 million and $25.1 million in checking and savings accounts.
Current wording
Deposits. Deposits increased $3.4 million, or 1.0%, to $339.2 million at June 30, 2025 from $335.8 million at December 31, 2024. Core deposits (defined as all deposits other than certificates of deposit) decreased $6.0 million, or 2.9%, to $199.9 million at June 30, 2025 from $205.9 million at December 31, 2024. Certificates of deposit increased $9.4 million, or 7.2%, to $139.3 million at June 30, 2025 from $129.9 million at December 31, 2024. At June 30, 2025, there were $22.0 million in brokered deposits and $1.4 million in listed deposits. The year-to-date average cost of interest-bearing deposits decreased 13 basis points, or 5.0%, to 2.46% at June 30, 2025 compared to 2.59% at December 31, 2024. At June 30, 2025, there were 197 accounts with balances in excess of the $250,000 FDIC insurance limit with an aggregate balance of $97.8 million, or 28.8% of deposits. The amount that was over the FDIC insurance limit was $48.6 million, or 14.3%, that was potentially uninsured, including certificates of deposit of $14.1 million, money market accounts of $11.2 million and $23.3 million in checking and savings accounts.
Previous wording
Advances from Federal Home Loan Bank. Advances from Federal Home Loan Bank decreased by $300,000, or 0.6%, to $49.6 million at March 31, 2025 from $49.9 million at December 31, 2024 due to normal principal payments on amortizing advances of $320,000. There is $3.5 million in advances that will mature in 2025. There are no current plans to renew the advances.
Current wording
Advances from Federal Home Loan Bank. Advances from Federal Home Loan Bank decreased by $642,000, or 1.3%, to $49.2 million at June 30, 2025 from $49.9 million at December 31, 2024 due to contractual principal payments on amortizing advances. There are $3.4 million in advances that will mature in 2025. There are no current plans to renew the advances.
Previous wording
Total Shareholders’ Equity. Total shareholders’ equity increased $647,000, or 1.2%, to $52.8 million at March 31, 2025 from $52.1 million at December 31, 2024. This increase was primarily due to net income of $643,000 for the three months ended March 31, 2025. The Company had additional increases in equity of $175,000 from vesting of the 2022 Equity Plan and an increase of $52,000 with the accrual of ESOP commitments for the three months ended March 31, 2025 partially offset by a decrease of $495,000 from the repurchase of 31,500 shares of its common stock and quarterly dividends paid totaling $123,000. There was a decrease in the accumulated other comprehensive loss of $395,000, net of tax, due to changes in market interest rates and the termination of the derivative at March 31, 2025.
Current wording
Total Shareholders’ Equity. Total shareholders’ equity increased $761,000, or 1.5%, to $52.9 million at June 30, 2025 from $52.1 million at December 31, 2024. This increase was primarily due to net income of $1.3 million for the six months ended June 30, 2025. The Company had additional increases in equity of $305,000 from vesting of equity awards granted under the 2022 Equity Plan and an increase of $110,000 from the accrual of ESOP commitments for the six months ended June 30, 2025 partially offset by a decrease of $1.3 million from the repurchase of 84,500 shares of its common stock and quarterly dividends paid totaling $242,000. At June 30, 2025, there was a decrease in the accumulated other comprehensive loss of $608,000, net of tax, due to changes in market interest rates and the termination of the derivative.
Previous wording
At March 31, 2025, Broadstreet Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes. A community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements. At March 31, 2025, Broadstreet Bank was well capitalized and had a ratio of 11.09%.
Current wording
At June 30, 2025, Broadstreet Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes. A community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements. At June 30, 2025, Broadstreet Bank was well capitalized and had a ratio of 11.32%.
Previous wording
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $121,000 and $85,000 for the three months ended March 31, 2025 and 2024, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Current wording
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $120,000 and $115,000 for the three months ended June 30, 2025 and 2024, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Previous wording
Interest income on restricted investments, which includes primarily Federal Home Loan Bank (FHLB) and TIB Bank stock dividends, decreased $5,000, or 9.1%, from $55,000 for the three months ended March 31, 2024 to $50,000 for the three months ended March 31, 2025. This decrease resulted from a decrease in the average yield of these investments of 77 basis points, or 12.3%, from 6.28% for the three months ended March 31, 2024 to 5.51% for the three months ended March 31, 2025, partially offset by an increase in the average balance of restricted investments of $125,000, or 3.6%, from $3.5 million for the three months ended March 31, 2024 to $3.6 million for the three months ended March 31, 2025. The decrease in yield was due primarily to decreases in dividends paid by the FHLB.
Current wording
Interest income on restricted investments, which includes primarily Federal Home Loan Bank (FHLB) and TIB Bank stock dividends, decreased $10,000, or 18.5%, from $54,000 for the three months ended June 30, 2024 to $44,000 for the three months ended June 30, 2024. This decrease resulted from a decrease in the average balance of these investments of $890,000 or 24.8%, from $3.6 million for the three months ended June 30, 2024 to $2.7 million for the three months ended June 30, 2025. This decrease was due to the FHLB repurchasing $1.1 million in stock related to the decrease in outstanding advances. There was an increase of 53 basis points, or 8.7%, in average yield from 6.07% for the three months ended June 30, 2024 to 6.60% for the three months ended June 30, 2025. The increase in yield was due primarily to advances with rates significantly lower than the overall borrowing base being paid off.
Previous wording
Net Income. The Company had net income of $643,000 for the three months ended March 31, 2025, compared to a net loss of $2.7 million for the three months ended March 31, 2024, an increase of $3.3 million, or 123.9%. In the first quarter of 2024, the Company made a strategic loan sale at a loss of $3.8 million in order to rebalance the portfolio and demolished a branch after constructing a new one resulting in combined nonrecurring deductions from noninterest income of $4.1 million. The increase in net income before tax with the removal of these two nonrecurring items in 2024 was $98,000 primarily due to an increase in net interest income of $365,000, a decrease in noninterest expenses of $143,000 partially offset by a decrease of $40,000 in noninterest income primarily related to a loss on real estate owned and a $390,000 increase in the provision for credit losses primarily from a large decrease in 2024 related to the sale of loans.
Current wording
Net Income. The Company had net income of $1.3 million for the six months ended June 30, 2025, compared to a net loss of $2.3 million for the six months ended June 30, 2024, an increase of $3.6 million, or 156.5%. In the first quarter of 2024, the Company made a strategic loan sale at a loss of $3.8 million in order to rebalance the portfolio and demolished a branch office building after constructing a new one resulting in combined nonrecurring deductions from noninterest income of $4.1 million. The increase in net income before tax excluding these two nonrecurring items in 2024 was $433,000 primarily due to an increase in net interest income of $356,000, a decrease in noninterest expenses of $224,000, and an increase of $77,000 in noninterest income. This is partially offset by a $224,000 increase in the provision for credit losses primarily from a large decrease in 2024 related to the sale of loans.
Previous wording
Interest Income. Interest income increased $216,000, or 4.0%, to $5.6 million for the three months ended March 31, 2025 from $5.4 million for the three months ended March 31, 2024. This was primarily the result of increased interest income on loans due to increased yields and an increase in the average balance of loans. Average interest earning assets decreased by $13.9 million, or 3.3%, from $424.9 million for the three months ended March 31, 2024 to $411.0 million for the three months ended March 31, 2025 but was offset primarily by an increase in the yield on average interest earning assets of 38 basis points, or 7.5%, from 5.10% for the three months ended March 31, 2024 to 5.48% for the three months ended March 31, 2025.
Current wording
Interest Income. Interest income for the six months ended June 30, 2025 was $11.1 million, which is unchanged from the six months ended June 30, 2024. Interest on loans increased by $1.2 million following the loan sale and strategic restructuring into higher yielding loans in the first quarter of 2024, and there was an increase in the average loan balance. However, this was offset by decreases in interest from lower balances on securities, fed funds, deposits in banks, and the financial derivative which was terminated at the beginning of the year. Average interest earning assets decreased by $15.7 million, or 3.7%, from $426.4 million for the six months ended June 30, 2024 to $410.7 million for the six months ended June 30, 2025 but was offset primarily by an increase in the yield on average interest earning assets of 20 basis points, or 3.9%, from 5.21% for the six months ended June 30, 2024 to 5.41% for the six months ended June 30, 2025.
Previous wording
Interest income on loans increased $691,000, or 18.6%, to $4.4 million for the three months ended March 31, 2025 from $3.7 million for the three months ended March 31, 2024. This increase resulted primarily from an increase in average loans of $18.1 million, or 6.4%, from $281.3 million for the three months ended March 31, 2024 to $299.4 million for the three months ended March 31, 2025 and an increase in loan yield of 61 basis points, or 11.5%, to 5.88% for the three months ended March 31, 2025 from 5.27% for the three months ended March 31, 2024. The increase in loan yield was due primarily to the diversification of the loan portfolio resulting in a reduction of lower yielding residential loans and an increase in higher yielding commercial real estate loans.
Current wording
Interest income on loans increased $1.2 million, or 16.0%, to $8.7 million for the six months ended June 30, 2025 from $7.5 million for the six months ended June 30, 2024. This increase resulted primarily from an increase in average loans of $21.1 million, or 7.6%, from $278.7 million for the six months ended June 30, 2024 to $299.8 million for the six months ended June 30, 2025 and an increase in average loan yield of 39 basis points, or 7.3%, to 5.78% for the six months ended June 30, 2025 from 5.39% for the six months ended June 30, 2024. The increase in loan yield was due primarily to the diversification of the loan portfolio resulting in a reduction of lower yielding residential loans and an increase in higher yielding commercial real estate loans. Interest income on loans would have been $217,000 more had there not been a reversal of accrued interest in the second quarter of 2025 due to two loan relationships totaling $9.0 million being placed on nonaccrual.
Previous wording
Interest income on securities decreased $188,000, or 15.5%, from $1.2 million for the three months ended March 31, 2024 to $1.0 million for the three months ended March 31, 2025. This decrease resulted from a decrease in the average balance of securities of $23.0 million, or 19.3%, from $119.1 million for the three months ended March 31, 2024 to $96.1 million for the three months ended March 31, 2025, partially offset by an increase of 19 basis points, or 4.6%, in average yield from 4.09% for the three months ended March 31, 2024 to 4.28% for the three months ended March 31, 2025. The rate increase is reflective of the purchase of higher yielding securities in 2024.
Current wording
Interest income on securities decreased $436,000, or 17.5%, from $2.5 million for the six months ended June 30, 2024 to $2.0 million for the six months ended June 30, 2025. This decrease resulted from a decrease in the average balance of securities of $21.9 million, or 18.6%, from $117.7 million for the six months ended June 30, 2024 to $95.8 million for the six months ended June 30, 2025, partially offset by an increase of five basis points, or 1.2%, in average yield from 4.17% for the six months ended June 30, 2024 to 4.22% for the six months ended June 30, 2025. The yield increase is reflective of the purchase of higher yielding securities in 2024 and 2025.
Previous wording
Interest income on interest bearing deposits in banks decreased $152,000, or 59.4%, from $256,000 for the three months ended March 31, 2024 to $104,000 for the three months ended March 31, 2025. This decrease resulted primarily from a decrease in average interest-bearing deposits of $9.4 million, or 50.0%, from $18.8 million for the three months ended March 31, 2024 to $9.4 million for the three months ended March 31, 2025 and a decrease in average yield of 103 basis points, or 18.8%, from 5.44% for the three months ended March 31, 2024 to 4.41% for the three months ended March 31, 2025. The decrease in yields on deposits in banks and fed funds is reflective of the decrease in fed funds rates and other market interest rates. During the three months ended March 31, 2024, the Company maintained higher account balances due to receiving cash from the loan sale.
Current wording
Interest income on interest bearing deposits in banks decreased $262,000, or 54.8%, from $478,000 for the six months ended June 30, 2024 to $216,000 for the six months ended June 30, 2025. This decrease resulted primarily from a decrease in average interest-bearing deposits of $7.7 million, or 44.0%, from $17.5 million for the six months ended June 30, 2024 to $9.8 million for the six months ended June 30, 2025 and a decrease in average yield of 103 basis points, or 18.9%, from 5.46% for the six months ended June 30, 2024 to 4.43% for the six months ended June 30, 2025. The decrease in yields on deposits in banks and fed funds is reflective of the decrease in fed funds rates and other market
Previous wording
agreements on January 15, 2025, and the $463,000 unrealized gain in the value of the asset was locked in at the time of sale and will be amortized to interest income over the remaining life of the hedged securities. Refer to additional detail regarding the fair value hedge in Note 10 – Derivatives of the accompanying unaudited consolidated financial statements.
Current wording
Interest income from the fair value hedge decreased $250,000 due to the termination of the swap agreement from interest income of $240,000 for the six months ended June 30, 2024 to an expense of $10,000 for the six months ended June 30, 2025. The Company terminated the interest rate swap agreements on January 15, 2025, and the $463,000 unrealized gain in the value of the asset was locked in at the time of sale and will be amortized to interest income over the remaining life of the hedged securities.
Previous wording
Interest Expense. Total interest expense decreased $149,000, or 6.1%, to $2.3 million for the three months ended March 31, 2025 from $2.4 million for the three months ended March 31, 2024 primarily due to a decrease in average interest-bearing liabilities of $7.6 million, or 2.2%, to $343.8 million for the three months ended March 31, 2025 from $351.4 million for the three months ended March 31, 2024 and a decrease in the average cost of interest-bearing liabilities of 11 basis points, or 3.8%, from 2.79% for the three months ended March 31, 2024 to 2.68% for the three months ended March 31, 2025, primarily due to a decrease in average FHLB advances. Interest expense on deposit accounts increased $42,000, or 2.4%, to $1.8 million for the three months ended March 31, 2025, due to an increase in average interest-bearing deposits of $19.6 million, or 7.2%, from $274.0 million for the three months ended March 31, 2024 to $293.6 million for the three months ended March 31, 2025, partially offset by a decrease in the average interest-bearing deposit cost of 11 basis points, or 4.3%, from 2.56% for the three months ended March 31, 2024 to 2.45% for the three months ended March 31, 2025 with the decrease in average cost being primarily in certificates of deposit and money market accounts.
Current wording
Interest Expense. Total interest expense decreased $347,000, or 7.0%, to $4.6 million for the six months ended June 30, 2025 from $5.0 million for the six months ended June 30, 2024 primarily due to a decrease in average interest-bearing liabilities of $13.7 million, or 3.9%, to $342.0 million for the six months ended June 30, 2025 from $355.7 million for the six months ended June 30, 2024 and a decrease in the average cost of interest-bearing liabilities of nine basis points, or 3.3%, from 2.78% for the six months ended June 30, 2024 to 2.69% for the six months ended June 30, 2025, primarily due to a decrease of $26.1 million in average FHLB advances. Interest expense on deposit accounts increased $26,000, or 0.7%, to $3.6 million for the six months ended June 30, 2025, due to an increase in average interest-bearing deposits of $12.8 million, or 4.6%, from $279.4 million for the six months ended June 30, 2024 to $292.2 million for the six months ended June 30, 2025, partially offset by a decrease in the average interest-bearing deposit cost of 10 basis points, or 3.9%, from 2.56% for the six months ended June 30, 2024 to 2.46% for the six months ended June 30, 2025 with the decrease in average cost being primarily in money market accounts, interest-bearing demand accounts and certificates of deposit.
Previous wording
Interest expense on Federal Home Loan Bank advances decreased $193,000, or 27.7%, to $503,000 for the three months ended March 31, 2025 from $696,000 for the three months ended March 31, 2024. This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $26.9 million, or 35.1%, to $49.7 million for the three months ended March 31, 2025 from $76.6 million for the three months ended March 31, 2024. The average yield on advances increased 42 basis points, or 11.6%, from 3.63% for the three months ended March 31, 2024 to 4.05% for the three months ended March 31, 2025 due to paying off advances with significantly lower rates than the weighted average cost of all FHLB borrowings.
Current wording
Interest expense on Federal Home Loan Bank advances decreased $375,000, or 27.2%, to $1.0 million for the six months ended June 30, 2025 from $1.4 million for the six months ended June 30, 2024. This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $26.1 million, or 34.5%, to $49.5 million for the six months ended June 30, 2025 from $75.6 million for the six months ended June 30, 2024. The average yield on advances increased 41 basis points, or 11.2%, from 3.65% for the six months ended June 30, 2024 to 4.06% for the six months ended June 30, 2025 due to the maturity of advances with rates significantly lower than the weighted average cost of all FHLB borrowings.
Previous wording
Net Interest Income. Net interest income increased $365,000, or 12.3%, to $3.3 million for the three months ended March 31, 2025 from $3.0 million for the three months ended March 31, 2024 due primarily to an increase in net interest margin of 45 basis points, or 16.0%, to 3.24% for the three months ended March 31, 2025 from 2.79% for the three months ended March 31, 2024 partially offset by a decrease in average net interest-earning assets of $6.3 million, or 8.6%, to $67.2 million at March 31, 2025 from $73.6 million at March 31, 2024. The increase in net interest margin was primarily due to balance sheet restructurings, which included the loan sale in 2024, allowing us to place the funds in higher yielding assets and increase the rate of repricing interest-earning assets to better align with the rate of repricing deposits in addition to a more disciplined approach to deposit pricing. The average yield on interest-earning assets increased by 38 basis points, or 7.5% and the average yield on interest bearing liabilities decreased by 11 basis points, or 3.8%.
Current wording
Net Interest Income. Net interest income increased $356,000, or 5.8%, to $6.5 million for the six months ended June 30, 2025 from $6.1 million for the six months ended June 30, 2024 due primarily to an increase in net interest margin of 29 basis points, or 10.1%, to 3.17% for the six months ended June 30, 2025 from 2.88% for the six months ended June 30, 2024 partially offset by a decrease in average net interest-earning assets of $2.0 million, or 2.8%, to $68.7 million at June 30, 2025 from $70.7 million at June 30, 2024. The increase in net interest margin was primarily due to balance sheet restructurings, which included the loan sale in 2024, allowing us to place the funds in higher yielding assets and increase the rate of repricing interest-earning assets to better align with the rate of repricing deposits in addition to a more disciplined approach to loan and deposit pricing. The average yield on interest-earning assets increased by 20 basis points, or 3.9%, and the average yield on interest bearing liabilities decreased by nine basis points, or 3.3%.
Previous wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses increased $390,000, or 140.8%, to $113,000 for the three months ended March 31, 2025 from a reversal of provision for credit losses of $277,000 for the three months ended March 31, 2024, primarily due to a previous decrease in the allowance related to the sale of residential loans being reversed as new loans are originated and added to the portfolio. Many of the loans added are in the commercial portfolio that carry a higher allowance requirement as well. An increase in average loans and leases of $18.1 million from $281.3 million for the three months ended March 31, 2024 to $299.4 million for the three months ended March 31, 2025 also added to the provision required. The allowance for credit losses was 1.09% of total loans at March 31, 2025.
Current wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses increased $224,000, or 146.4%, to $71,000 for the six months ended June 30, 2025 from a reversal of provision for credit losses of $153,000 for the six months ended June 30, 2024, primarily due to a previous decrease in the allowance related to the sale of residential loans being reversed as new loans are originated and added to the portfolio. Many of the loans added are in the commercial portfolio that carry a higher allowance requirement as well. An increase in average loans and leases of $21.1 million, or 7.96%, from $278.7 million for the six months ended June 30, 2024 to $299.8 million for the six months ended June 30, 2025 also added to the provision required. The allowance for credit losses was 1.09% of total loans at June 30, 2025.
Previous wording
$11,000, or 36.7%, in net appreciation of bank-owned life insurance due to a change in carriers in 2024 to increase yield, partially offset by an $89,000 decrease in net income on sales of real estate owned primarily due to a $52,000 net loss in the three months ended March 31, 2025 due to an additional write-down to market value on two bank properties that were purchased originally for expansion then listed for sale in 2024 compared to a $37,000 net gain on the sale of a foreclosed property in 2024.
Current wording
$73,000 gain on an equity investment held at the holding company. In the six months ended June 30, 2025 there was an increase in net appreciation on bank-owned life insurance of $40,000 partially offset by decreases in other service charges and fees of $22,000, and an increase in losses of $13,000 on other real estate owned due to an additional write-down of $54,000 in 2025 on two bank properties that were originally purchased for expansion then listed for sale in 2024.
Previous wording
Noninterest Expense. Noninterest expense decreased $143,000, or 4.7%, to $2.9 million for the three months ended March 31, 2025 from $3.1 million for the three months ended March 31, 2024 primarily due to decreases in occupancy and equipment expenses, salary and employee benefit expenses, technology expenses and director fees.
Current wording
Noninterest Expense. Noninterest expense decreased $224,000, or 3.7%, to $5.9 million for the six months ended June 30, 2025 from $6.1 million for the six months ended June 30, 2024 primarily due to decreases in technology expense, salaries and employee benefits, and occupancy and equipment expenses.
Previous wording
Income Tax Expense. Income tax expense increased by $814,000, or 115.0%, to $106,000 for the three months ended March 31, 2025 from an income tax benefit of $708,000 for the three months ended March 31, 2024, due to the increase in net income before taxes of $4.1 million from a loss of $3.4 million for the three months ended March 31, 2024 to income of $749,000 for the three months ended March 31, 2025. The effective tax rate was 14.15% and 20.87% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the effective tax rate was primarily due to nontaxable income increasing at a faster rate than taxable income.
Current wording
Income Tax Expense. Income tax expense increased by $908,000, or 138.0%, to $250,000 for the six months ended June 30, 2025 from an income tax benefit of $658,000 for the six months ended June 30, 2024, due to the increase in net income before taxes of $4.6 million from a loss before taxes of $3.0 million for the six months ended June 30, 2024 to income before taxes of $1.6 million for the six months ended June 30, 2025. The effective tax rate was 15.91% and 21.97% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the effective tax rate was primarily due to nontaxable income increasing at a faster rate than taxable income.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. The Federal Reserve Bank of Boston provides the Bank with a federal funds line of credit. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We are also able to borrow from the Federal Home Loan Bank of Dallas. At March 31, 2025, we had outstanding advances of $49.6 million from the Federal Home Loan Bank of Dallas. At March 31, 2025, we had unused borrowing capacity of $98.7 million with the Federal Home Loan Bank of Dallas. In addition, at March 31, 2025, we had an unused unsecured $10.0 million line of credit and an unused secured $3.0 million line of credit with Texas Independent Bankers Bank and an unused $5.0 million line of credit with First Horizon Bank.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. The Federal Reserve Bank of Boston provides the Bank with a federal funds line of credit. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We are also able to borrow from the Federal Home Loan Bank of Dallas. At June 30, 2025, we had outstanding advances of $49.2 million from the Federal Home Loan Bank of Dallas. At June 30, 2025, we had unused borrowing capacity of $99.8 million with the Federal Home Loan Bank of Dallas. In addition, at June 30, 2025, we had two unused unsecured lines of credit totaling $8.0 million with correspondent banks.
Previous wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flow for the three months ended March 31, 2025 and 2024 included as part of the consolidated financial statements included in this report.
Current wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flow for the three and six months ended June 30, 2025 and 2024 included as part of the consolidated financial statements included in this report.
Previous wording
Texas Community Bancshares, Inc. is a separate legal entity from Broadstreet Bank, and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Broadstreet Bank. The amount of dividends that Broadstreet Bank may declare and pay to Texas Community Bancshares, Inc. is governed by applicable banking laws and regulations. At March 31, 2025, Texas Community Bancshares, Inc. (on a stand-alone, unconsolidated basis) had liquid assets of $7.1 million.
Current wording
Texas Community Bancshares, Inc. is a separate legal entity from Broadstreet Bank, and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Broadstreet Bank. The amount of dividends that Broadstreet Bank may declare and pay to Texas Community Bancshares, Inc. is governed by applicable banking laws and regulations. At June 30, 2025, Texas Community Bancshares, Inc. (on a stand-alone, unconsolidated basis) had liquid assets of $6.0 million.
Previous wording
Liquidity management and asset quality continue to be high priorities. With continued volatility in the market, recent banking sector events and market interest rate fluctuations, liquidity management and analysis is a key factor in daily asset and liability management and strategic planning. We are monitoring deposit balances daily. We run stress tests quarterly in multiple scenarios, which include deposit runoff combined with the inability to access our available lines of credit and a reduction in the availability of FHLB advances. The scenarios indicate that we are able to maintain our operational liquidity with a designated buffer with our liquidity resources available. We are closely monitoring our assets, liabilities, capital and investment portfolio unrealized losses for possible issues and opportunities related to the current economic and market conditions.
Current wording
Liquidity management and asset quality continue to be high priorities. With continued volatility in the market and market interest rate fluctuations, liquidity management and analysis is a key factor in daily asset and liability management and strategic planning. We are monitoring deposit balances daily. We run stress tests quarterly in multiple scenarios, which include deposit runoff combined with the inability to access our available lines of credit and a reduction in the availability of FHLB advances. The scenarios indicate that we are able to maintain our operational liquidity with a designated buffer with our liquidity resources available. We are closely monitoring our assets, liabilities, capital and investment portfolio unrealized losses for possible issues and opportunities related to the current economic and market conditions.
Previous wording
We monitor our large depositors and have discussions with them on how to maximize FDIC coverage to the fullest legal extent, which is limited to coverage of $250,000 per insured depositor. At March 31, 2025, there were 204 accounts with balances in excess of the $250,000 FDIC insurance limit totaling $98.2 million, or 29.1% of deposits. The amount that was over $250,000 was $47.2 million, or 14.0%, that was potentially uninsured, including certificates of deposit of $11.3 million and $35.9 million in checking, MMDA and savings accounts.
Current wording
We monitor our large depositors and have discussions with them on how to maximize FDIC coverage to the fullest legal extent, which is limited to coverage of $250,000 per insured depositor. At June 30, 2025, there were 197 accounts with balances in excess of the $250,000 FDIC insurance limit totaling $97.8 million, or 28.8% of deposits. The amount that was over $250,000 was $48.6 million, or 14.3%, that was potentially uninsured, including certificates of deposit of $14.1 million and $34.5 million in checking, MMDA and savings accounts.
Previous wording
At March 31, 2025, the weighted average life (WAL) of our securities portfolio is 5.1 years. The gross unrealized losses on the AFS securities was $5.5 million, or 6.9% of the $80.3 million AFS portfolio and 9.7% of capital. Unrealized losses on the HTM securities were $2.2 million, or 10.3 % of the $21.2 million HTM portfolio and 3.8% of capital. The total gross unrealized losses are $7.7 million, or 7.6% of the $101.5 million securities portfolio and 13.5% of capital, which includes $40.5 million, or 39.9%, that are agency issued and guaranteed by the U.S. government. These losses are the result of market interest rate increases and we continue to monitor the portfolio for
Current wording
At June 30, 2025, the weighted average life (WAL) of our securities portfolio is 4.7 years. The gross unrealized losses on the AFS securities was $5.3 million, or 6.7% of the $78.5 million AFS portfolio and 9.3% of capital. Unrealized losses on the HTM securities were $2.0 million, or 9.8 % of the $20.3 million HTM portfolio and 3.5% of capital. The total gross unrealized losses are $7.3 million, or 7.4% of the $98.7 million securities portfolio and 12.8% of capital, which includes $39.1 million, or 39.6%, that are agency issued and guaranteed by the U.S. government. These losses are the result of market interest rate increases and we continue to monitor the portfolio for credit and other risks.
Previous wording
credit and other risks. The net unrealized loss on AFS securities, and the corresponding other comprehensive loss, was $4.4 million, or 7.7% of capital. Over the next 24 months from March 31, 2025, we expect to realize $43.7 million in cash flow from the securities portfolio with $17.8 million in 2025, $21.5 million in 2026 and $4.4 million in 2027. We should receive $21.3 million of that over the next 12 months. See the Securities section of the management discussion and analysis for more information.
Current wording
The net unrealized loss on AFS securities, and the corresponding other comprehensive loss, was $4.2 million, or 7.4% of capital. Over the next 24 months from June 30, 2025, we expect to realize $43.5 million in cash flow from the securities portfolio with $8.4 million in 2025, $22.5 million in 2026 and $12.5 million in 2027. We should receive $21.3 million of that over the next 12 months. See the Securities section of the management discussion and analysis for more information.
Previous wording
Our asset quality remains strong. At March 31, 2025, our allowance for credit losses to loans and leases held for investment was 1.09%. The Company continues to monitor rates and loan demand weekly and align pricing accordingly. Housing supply and demand are monitored for indicators of a significant change in the local housing markets. We are increasing our lending in CRE, other commercial lending and loans to municipalities to more strategically balance our loan portfolio. This was a key component of the loan sale strategy resulting in $27.1 million in residential mortgage loans sold in 2024. At March 31, 2025, we do not have any plans to sell additional loans.
Current wording
Our asset quality remains strong. At June 30, 2025, our allowance for credit losses to loans and leases held for investment was 1.09%. The Company continues to monitor rates and loan demand weekly and aligns pricing accordingly. Housing supply and demand are monitored for indicators of a significant change in the local housing markets. We are increasing our lending in CRE, other commercial lending and loans to municipalities to more strategically balance our loan portfolio. This was a key component of the loan sale strategy resulting in $27.1 million in residential mortgage loans sold in 2024. At June 30, 2025, we do not have any plans to sell additional loans.
Previous wording
The table above indicates that at March 31, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 3.95% increase in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.55% decrease in net interest income.
Current wording
The table above indicates that at June 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 3.82% increase in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 1.51% decrease in net interest income.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
pronouncements are made applicable to private companies. However, we have determined not to take advantage of the benefits of this extended transition period.
Current report — wording carried from elsewhere
Net Interest Income. Net interest income remained flat at $3.2 million for the three months ended June 30, 2025. Net interest margin increased 11 basis points, or 3.7%, to 3.09% for the three months ended June 30, 2025 from 2.98% for the three months ended June 30, 2024. The increase in net interest margin was primarily due to a reduction in FHLB advances and balance sheet restructurings, which included the loan sale in 2024, allowing us to place the funds in higher yielding assets and increase the rate of repricing interest-earning assets to better align with the rate of repricing interest-bearing liabilities. The average yield on interest-earning assets increased by three basis points, or 0.5%, to 5.34% for the three months ended June 30, 2025 and the average yield on interest bearing liabilities decreased by seven basis points, or 2.6%, to 2.70% for the three months ended June 30, 2025.
Current report — wording carried from elsewhere
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $240,000 and $200,000 for the six months ended June 30, 2025 and 2024, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Current report — wording carried from elsewhere
Comparison of the Operating Results for the Six months ended June 30, 2025 and June 30, 2024
Current report — wording carried from elsewhere
interest rates. During the six months ended June 30, 2024, the Company maintained higher account balances due to receiving cash from the loan sale.
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Previous report — wording carried elsewhere
Interest expense from the fair value hedge was $10,000 for the three months ended March 31, 2025 compared to interest income of $115,000 for the three months ended March 31, 2024. The Company terminated the interest rate swap