Fifth District Bancorp, Inc.

Previous wording

Total Assets. Total assets were $531.1 million at March 31, 2025, an increase of $3.8 million, or 0.7%, compared to $527.3 million at December 31, 2024. This increase is primarily due to $3.2 million increase in investment securities available-for-sale, an $8.9 million increase in loans receivable, net, offset by a $7.8 million decrease in cash and cash equivalents.

Current wording

Total Assets. Total assets were $539.8 million at June 30, 2025, an increase of $12.5 million, or 2.4%, compared to $527.3 million at December 31, 2024. This increase is primarily due to a $7.4 million increase in investment securities available-for-sale, a $12.3 million increase in loans receivable, net, and a $6.5 million increase in other assets (receivable for bank owned life insurance proceeds), offset by a $10.2 million decrease in cash and cash equivalents and a $3.1 million decrease in bank owned life insurance.

Previous wording

Cash and Cash Equivalents. Cash and cash equivalents decreased by $7.8 million, or 20.6%, to $30.1 million at March 31, 2025 from $37.9 million at December 31, 2024. This decrease is primarily due to the purchase of investments available for sale and the origination of commercial loans.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents decreased by $10.2 million, or 27.0%, to $27.7 million at June 30, 2025 from $37.9 million at December 31, 2024. This decrease is primarily due to the purchase of investments available for sale and the origination of loans, primarily construction loans.

Previous wording

Investment Securities Available-for-Sale. Investment securities available-for-sale increased $3.2 million, or 3.4%, to $96.2 million at March 31, 2025 from $93.0 million at December 31, 2024. Securities purchased totaled $5.0 million during the three months ended March 31, 2025, and calls, maturities, and repayments totaled $3.4 million.

Current wording

Investment Securities Available-for-Sale. Investment securities available-for-sale increased $7.4 million, or 8.0%, to $100.4 million at June 30, 2025 from $93.0 million at December 31, 2024. Securities purchased totaled $12.5 million during the six months ended June 30, 2025, and calls, maturities, and repayments totaled $7.4 million. Adding to the increase was a fair market value adjustment of $2.3 million.

Previous wording

Loans Receivable, Net. Loans receivable, net, increased by $9.0 million, or 2.5%, to $376.3 million at March 31, 2025 from $367.3 million at December 31, 2024. During the three months ended March 31, 2025, loan originations were $17.8 million and loan repayments totaled $8.9 million. During the three months ended March 31, 2025, commercial loans increased by $1.8 million, primarily from the origination of commercial real estate loans, and the purchase of Bankers Healthcare loans, 1-4 single family mortgages increased by $3.7 million, home equity loans increased by $524,000, consumer loans increased by $1.1 million, and construction loans increased by $2.0 million.

Current wording

Loans Receivable, Net. Loans receivable, net, increased by $12.3 million, or 3.3%, to $379.6 million at June 30, 2025 from $367.3 million at December 31, 2024. During the six months ended June 30, 2025, loan originations were $33.1 million and loan repayments totaled $20.8 million. During the six months ended June 30, 2025, commercial loans increased by $3.4 million, primarily from the origination of commercial real estate loans, and commercial and industrial loans, 1-4 single family mortgages increased by $1.7 million, home equity loans increased by $1.9 million, consumer loans increased by $269,000, and construction loans increased by $5.1 million.

Previous wording

activity and migration from lower yielding money markets accounts. NOW accounts increased $1.8 million, or 3.2%, to $55.7 million at March 31, 2025, from $53.9 million at December 31, 2024. MMDA accounts decreased $1.4 million, or 6.2%, to $21.3 million at March 31, 2025, from $22.7 million at December 31, 2024. Savings Accounts increased $2.0 million, or 2.6%, to $78.0 million at March 31, 2025, from $76.0 million at December 31, 2024.

Current wording

Deposits. Deposits increased by $6.7 million, or 1.7%, to $398.2 million at June 30, 2025, from $391.5 million at December 31, 2024. Certificates of deposit increased $5.7 million, or 2.4%, to $244.5 million at June 30, 2025, from $238.8 million at December 31, 2024. The majority of the increase in certificates of deposit was driven by new customer activity and migration from lower yielding money markets accounts. NOW accounts increased $1.2 million, or 2.3%, to $55.1 million at June 30, 2025, from $53.9 million at December 31, 2024. MMDA accounts decreased $1.6 million, or 7.0%, to $21.1 million at June 30, 2025, from $22.7 million at December 31, 2024. Savings Accounts increased $1.4 million, or 1.8%, to $77.4 million at June 30, 2025, from $76.0 million at December 31, 2024.

Previous wording

Total Stockholders’ Equity. Total stockholders’ equity increased by $1.5 million, or 1.2%, to $127.3 million at March 31, 2025, from $125.8 million at December 31, 2024. The increase resulted primarily from the accumulated other comprehensive loss (as a result of market value adjustment of investment securities available-for-sale due to the rise in market interest rates during the period) declining $1.3 million and retained earnings increasing $78,000 due to the net income for the period ended March 31, 2025.

Current wording

Total Stockholders’ Equity. Total stockholders’ equity increased by $5.1 million, or 4.1%, to $130.9 million at June 30, 2025, from $125.8 million at December 31, 2024. The increase resulted primarily from the accumulated other comprehensive loss (as a result of market value adjustment of investment securities available-for-sale due to the rise in market interest rates during the period) declining $1.8 million and retained earnings increasing $3.2 million due to the net income for the six months ended June 30, 2025.

Previous wording

Interest and Dividend Income. Interest and dividend income increased by $909,000, or 21.0%, to $5.2 million for the three months ended March 31, 2025, compared to $4.3 million for the three months ended March 31, 2024. The increase is attributed to a $313,000, or 8.5%, increase in interest on loans, a $91,000, or 45.1%, increase in interest on other interest-earning assets and $505,000, or 127.5%, increase in interest on investment securities available-for-sale.

Current wording

Interest and Dividend Income. Interest and dividend income increased by $839,000, or 18.1%, to $5.5 million for the three months ended June 30, 2025, compared to $4.6 million for the three months ended June 30, 2024. The increase is attributed to a $396,000, or 10.4%, increase in interest on loans, a $510,000, or 100.4%, increase in interest on investment securities available-for-sale offset by a $67,000, or 20.7%, decrease in interest on other interest-earning assets.

Previous wording

During the three months ended March 31, 2025, average loans receivable, net, increased by $5.3 million, or 1.5%, from the three months ended March 31, 2024. The average yield on loans increased to 4.40% for the three months ended March 31, 2025, from 4.06% for the three months ended March 31, 2024, due to the rising market rate environment.

Current wording

During the three months ended June 30, 2025, average loans receivable, net, increased by $11.8 million, or 3.2%, from the three months ended June 30, 2024. The average yield on loans increased to 4.50% for the three months ended June 30, 2025, from 4.16% for the three months ended June 30, 2024, mainly due to the higher yielding loans that were originated during the period.

Previous wording

The average balance of investment securities available-for-sale increased $28.3 million, or 42.7%, to $94.6 million for the three months ended March 31, 2025, from $66.3 million for the three months ended March 31, 2024. The average yield on available-for-sale investment securities increased to 3.86% for the three months ended March 31, 2025, from 2.39% for the three months ended March 31, 2024. The increase in the average yield on available-for-sale investment securities was primarily due to the rising market interest rate environment as well as reinvesting in higher yielding bonds

Current wording

The average balance of investment securities available-for-sale increased $36.4 million, or 58.3%, to $98.9 million for the three months ended June 30, 2025, from $62.5 million for the three months ended June 30, 2024. The average yield on available-for-sale investment securities increased to 4.18% for the three months ended June 30, 2025, from 3.26% for the three months ended June 30, 2024. The increase in the average yield on available-for-sale investment securities was primarily due to reinvesting in higher yielding bonds.

Previous wording

Interest income on cash and cash equivalents, comprised primarily of overnight deposits, increased by $91,000, or 46.7%, for the three months ended March 31, 2025, primarily due to an increase in the average yield to 4.03% for the three months ended March 31, 2025, from 3.78% for the three months ended March 31, 2024. The increase in average yield was due to the rise in market interest rates. The average balance of cash and cash equivalents increased by $8.2 million to $28.8 million from the three months ended March 31, 2025, from $20.6 million for the three months ended March 31, 2024.

Current wording

Interest income on cash and cash equivalents, comprised primarily of overnight deposits, decreased by $67,000, or 20.7%, for the three months ended June 30, 2025, primarily due to an decrease in the average yield to 4.09% for the three months ended June 30, 2025, from 5.12% for the three months ended June 30, 2024. The decrease in average yield was due to the decline in market interest rates. The average balance of cash and cash equivalents decreased by $636,000 to $24.2 million from the three months ended June 30, 2025, from $24.8 million for the three months ended June 30, 2024.

Previous wording

Interest Expense*.* Total interest expense increased $20,000 or 0.9%, to $2.3 million for the three months ended March 31, 2025, from $2.3 million for the three months ended March 31, 2024. The increase was primarily due to the increase in the average cost of deposits to 2.36% for the three months ended March 31, 2025, from 2.29% for the three months ended March 31, 2024, reflecting the rising market interest rate environment. The average balance of interest-bearing deposits decreased by $3.9 million, or 1.0%, to $389.7 million for the three months ended March 31, 2025, from $393.5 million for the three months ended March 31, 2024.

Current wording

Interest Expense*.* Total interest expense decreased $35,000 or 1.5%, to $2.3 million for the three months ended June 30, 2025, from $2.4 million for the three months ended June 30, 2024. The average balance of interest-bearing deposits decreased by $4.7 million, or 1.2%, to $397.0 million for the three months ended June 30, 2025, from $401.7 million for the three months ended June 30, 2024.

Previous wording

Net Interest Income*.* Net interest income increased $889,000, or 43.4%, to $2.9 million for the three months ended March 31, 2025, compared to $2.0 million for the three months ended March 31, 2024. The increase reflects the increase in the interest rate spread to 1.91% for the three months ended March 31, 2025, from 1.51% for the three months ended March 31, 2024, while average net interest-earning assets increased $46.1 million period-to-period. The net interest margin increased to 2.41% for the three months ended March 31, 2025, from 1.81% for the three months ended March 31, 2024. The average yield on interest-earning assets increased from 3.80% for the three months ended March 31, 2024, to 4.27% for the three months ended March 31, 2025. The average rate paid on interest-bearing liabilities increased from 2.28% for the three months ended March 31, 2024, to 2.36% for the three months ended March 31, 2025, primarily due to an increase in the average rate paid on certificates of deposit from 3.74% in 2024 to 3.79% in 2025. The increase in the average rate paid on certificates of deposit contributed to migration from lower yielding savings accounts and money market accounts, to higher yielding certificates of deposit. The average balance of certificates of deposit increased from $234.3 million as of March 31, 2024, to $238.2 million as March 31, 2025, while over the same period the average balance of savings accounts decreased from $83.5 million to $77.0 million, and the average balance of money market accounts decreased from $25.7 million to $21.7 million.

Current wording

Net Interest Income*.* Net interest income increased $874,000, or 38.4%, to $3.1 million for the three months ended June 30, 2025, compared to $2.3 million for the three months ended June 30, 2024. The increase reflects the increase in the interest rate spread to 2.04% for the three months ended June 30, 2025, from 1.73% for the three months ended June 30, 2024, while average net interest-earning assets increased $52.3 million period-to-period. The net interest margin increased to 2.54% for the three months ended June 30, 2025, from 2.00% for the three months ended June 30, 2024. The average yield on interest-earning assets increased from 4.09% for the three months ended June 30, 2024, to 4.42% for the three months ended June 30, 2025. The average rate paid on interest-bearing liabilities increased from 2.36% for the three months ended June 30, 2024, to 2.38% for the three months ended June 30, 2025. The average rate on certificates of deposits decreased from 3.87% for the three months ended June 30, 2024, to 3.80% for the three months ended June 30, 2025. The decrease in the average rate paid on certificates of deposit primarily resulted from a decrease in market interest rates. The average balance of certificates of deposit increased from $239.8 million as of June 30, 2024, to $243.6 million as June 30, 2025, while over the same period the average balance of savings accounts decreased from $82.9 million to $77.8 million, and the average balance of money market accounts decreased from $23.9 million to $21.1 million.

Previous wording

Provision (Recovery) for Credit Losses*.*The recovery of credit losses on loans decreased $100,000 to $0 for the three months ended March 31, 2025, compared to $100,000 for the three months ended March 31, 2024. The allowance for credit losses on loans represented 0.45% of total loans at March 31, 2025 and 0.46% of total loans at March 31, 2024. The recovery of credit losses is based on our evaluation of the adequacy of the allowance for credit losses throughout the reporting period.

Current wording

Provision (Recovery) for Credit Losses*.*The provision for credit losses on loans was $-0- for the three months ended June 30, 2025, compared to a recovery of $1.0 million for the three months ended June 30, 2024. The allowance for credit losses on loans represented 0.44% of total loans at June 30, 2025 and 0.46% of total loans at June 30, 2024. The recovery of credit losses is based on our evaluation of the adequacy of the allowance for credit losses throughout the reporting period.

Previous wording

Total non-performing loans were $758,000 at March 31, 2025, compared to $753,000 at March 31, 2024. We had $145,000 of loans over 90 days delinquent at March 31, 2025, compared to $753,000 at March 31, 2024. Classified loans totaled $758,000 at March 31, 2025, compared to $212,000 at March 31, 2024. As a percentage of nonperforming loans, the allowance for credit losses on loans was 224.1% at March 31, 2025, and 225.6% at March 31, 2024.

Current wording

Total non-performing loans were $1.3 million at June 30, 2025, compared to $1.1 million at June 30, 2024. We had $1.3 of loans over 90 days delinquent at June 30, 2025, compared to $1.1 at June 30, 2024. Classified loans totaled $915,000 at June 30, 2025, compared to $118,000 at June 30, 2024. As a percentage of nonperforming loans, the allowance for credit losses on loans was 130.7% at June 30, 2025, and 160.7% at June 30, 2024.

Previous wording

Noninterest Expense*.*Noninterest expense increased $416,000, or 15.5%, to $3.1 million for the three months ended March 31, 2025, compared to $2.7 million for the three months ended March 31, 2024. The increase was primarily due to an increase in salaries and employee benefits of $258,000, or 16.5%, an increase in occupancy and equipment expense of $50,000, or 11.7%, an increase in professional and legal fees of $22,000, or 57.9%, an increase in data processing expense of $24,000, or 8.2%, an increase in audit and examination fees of $22,000, or 34.9%, and an increase in other expenses of $45,000, or 30.8%, partially offset by a $9,000, or 32.1%, decrease advertising.

Current wording

Noninterest Expense*.*Noninterest expense increased $1.0 million, or 36.4%, to $3.8 million for the three months ended June 30, 2025, compared to $2.8 million for the three months ended June 30, 2024. The increase was primarily due to an increase in salaries and employee benefits of $929,000, or 57.8%, an increase in occupancy and equipment expense of $8,000, or 1.7%, an increase in professional and legal fees of $38,000, or 100.0%, an increase in data processing expense of $7,000, or 2.0%, an increase in audit and examination fees of $21,000, or 33.3%, and an increase in other expenses of $42,000, or 28.7%, partially offset by a $23,000, or 47.9%, decrease advertising. The increase in salaries and employee benefits is mainly from a death benefit paid to the intended beneficiaries of the late President and Chief Executive Officer from the proceeds of the bank owned life insurance.

Previous wording

General*.* Net income (loss) for the three months ended March 31, 2025, was $78,000, an increase of $1.2 million, or 106.9%, compared to ($1.1) million for the three months ended March 31, 2024. The net income was primarily from an increase in interest income of $909,000, an increase in non-interest income of $1.2 million, partially offset by a $416,000 increase in non-interest expense, and a $322,000 increase in provision for income taxes.

Current wording

General*.* Net income (loss) for the six months ended June 30, 2025, was $3.2 million an increase of $3.7 million or 813.6%, compared to ($449,000) for the six months ended June 30, 2024. The net income was primarily from an increase in interest income of $1.7 million, an increase in non-interest income of $4.5 million mainly due to a gain on bank owned life insurance proceeds, partially offset by a decrease in recovery of credit losses on loans of $1.1 million, a $1.4 million increase in non-interest expense, and a $48,000 decrease in the (benefit) for income taxes.

Previous wording

Noninterest Income (loss). Noninterest income (loss) totaled $262,000 for the three months ended March 31, 2025, an increase of $1.2 million, or 129.2%, from ($897,000) for the three months ended March 31, 2024. A $1.1 million realized loss on the sale of investment securities available-for-sale was recorded during the three months ended March 31, 2024, compared to no such realized losses recorded during the three months ended March 31, 2025.

Current wording

Noninterest Income (loss). Noninterest income (loss) totaled $4.0 million for the six months ended June 30, 2025, an increase of $4.5 million, or 925.9%, from ($482,000) for the six months ended June 30, 2024. A $1.1 million realized loss on the sale of investment securities available-for-sale was recorded during the six months ended June 30, 2024, compared to no such realized losses recorded during the six months ended June 30, 2025. A $3.5 million gain on bank owned life insurance proceeds was recorded during the six months ended June 30, 2025, while no such gain was recorded during the six months ended June 30, 2024.

Previous wording

Provision (Benefit) for Income Taxes*.*The provision (benefit) for income taxes increased by $322,000, or 107.0%, to $21,000 for the three months ended March 31, 2025, compared to ($301,000) for the three months ended March 31, 2024. The increase was due to a $1.5 million, or 106.9%, increase in pretax income. The effective tax rate was 21% for both periods.

Current wording

Provision (Benefit) for Income Taxes*.*The (benefit) for income taxes decreased by $48,000, or 40.3%, to ($71,000) for the six months ended June 30, 2025, compared to ($119,000) for the six months ended June 30, 2024. While pretax income increased by $3.7 million, or 651.6%, for the six months ended June 30, 2025, $3.5 million of the pretax income was from the non-taxable proceeds of the bank owned life insurance The effective tax rate was 21% for both periods.

Previous wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and from two correspondent banks and, until March 11, 2024, had the ability to obtain advances under the Federal Reserve Board’s Bank Term Funding Program. Under the terms of the Bank Term Funding Program, advances cannot be obtained after March 11, 2024. At March 31, 2025, we had no outstanding advances from the Federal Home Loan Bank of Dallas. At March 31, 2025, we had no outstanding balances under the correspondent bank credit facilities and no outstanding balance under the Bank Term Funding Program.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and from two correspondent banks. At June 30, 2025, we had no outstanding advances from the Federal Home Loan Bank of Dallas. At June 30, 2025, we had no outstanding balances under the correspondent bank credit facilities.

Previous wording

Time deposits that meet or exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 at March 31, 2025 and December 31, 2024 were $45.3 million and $48.3 million, respectively.

Current wording

Time deposits that meet or exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 at June 30, 2025 and December 31, 2024 were $49.7 million and $48.3 million, respectively.

Previous wording

Based on collateral pledged, consisting of all shares of FHLB stock owned and the blanket pledge of approximately $234.2 million of its qualifying mortgage loans as of March 31, 2025, the Bank was eligible to borrow up to an additional $184.5 million as of March 31, 2025.

Current wording

Based on collateral pledged, consisting of all shares of FHLB stock owned and the blanket pledge of approximately $236.2 million of its qualifying mortgage loans as of June 30, 2025, the Bank was eligible to borrow up to an additional $185.8 million as of June 30, 2025.

Previous wording

At March 31, 2025, we had $24.6 million of outstanding commitments to originate loans, which primarily consists of $9.9 million of remaining funds to be disbursed on construction loans in process and $14.2 million of unused balances of home equity lines of credit. At March 31, 2025, certificates of deposit that are scheduled to mature on or before March 31, 2026 totaled $215.2 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may raise interest rates on deposits to attract new accounts or utilize Federal Home Loan Bank of Dallas advances, which may result in higher levels of interest expense.

Current wording

At June 30, 2025, we had $27.9 million of outstanding commitments to originate loans, which primarily consists of $11.2 million of remaining funds to be disbursed on construction loans in process and $14.9 million of unused balances of home equity lines of credit. At June 30, 2025, certificates of deposit that are scheduled to mature on or before June 30, 2026 totaled $225.1 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may raise interest rates on deposits to attract new accounts or utilize Federal Home Loan Bank of Dallas advances, which may result in higher levels of interest expense.

Previous wording

The following table sets forth, as of March 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the board of directors.

Current wording

The following table sets forth, as of June 30, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the Company’s board of directors.

Previous wording

The table above indicates that at March 31, 2025, we would have experienced a 27.48% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 19.34% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.

Current wording

The table above indicates that at June 30, 2025, we would have experienced a 27.38% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 18.88% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.

Previous wording

Change in Net Interest Income. The following table sets forth, as of March 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the board of directors.

Current wording

Change in Net Interest Income. The following table sets forth, as of June 30, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. All estimated changes presented in the table are within the policy limits established by the Company’s board of directors.

Previous wording

The table above indicates that as of March 31 2025, we would have experienced a 15.70% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 4.50% increase in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates.

Current wording

The table above indicates that as of June 30, 2025, we would have experienced a 18.55% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 6.73% increase in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates.