F&M BANK CORP
For the period ended Dec 31, 2025. Filed Mar 27, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 27, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0001654954-25-003506
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-27.
0001654954-26-002891
Item 7. 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 113 previous paragraphs and 112 current paragraphs.
80 unchanged; 27 reworded; 5 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
A shift from time deposits to money market accounts was the primary driver of the decrease of $2.6 million in deposit interest expense. Interest expense on time deposits and interest bearing demand accounts decreased $4.1 million and $0.2 million, respectively, and were partially offset by an increase of $1.7 million in interest expense on savings accounts. Interest expense was further reduced by lower interest expense on short-term borrowings, which declined by $1.9 million, due to no short-term advances from the Federal Home Loan Bank (“FHLB”) during the year. The cost of funds, which is calculated as the interest expense on interest bearing liabilities plus noninterest bearing deposits divided by the total deposits, for the year was 2.15%, which was 36 basis points lower than 2024.
Current report
Noninterest income increased by $405 thousand, or 3.76%, for the year ended December 31, 2025, compared to December 31, 2024. The increase was primarily driven by increases in title insurance income and ATM and check card fees. Title insurance income increased by $375 thousand due to increased title premium and loan closing volume. ATM and check card fees increased by $249 thousand due to renegotiated interchange contracts. These increases were partially offset by decreases in mortgage banking income of $553 thousand, due to a decrease in originations of loans held for sale.
Current report
Noninterest expense increased by $2.6 million, or 7.51%, for the year ended December 31, 2025, compared to December 31, 2024. The increase was primarily driven by salaries, employee benefits, legal and professional fees, and ATM and check card fees. Salaries increased $596 thousand, or 3.87%, for the year ended December 31, 2025, due to increases in salaries, bonuses and incentives, and commissions. Employee benefits also increased by $940 thousand, or 31.69%, for the year ended December 31, 2025, due to a lower refund (rebate) of health insurance, increased stock compensation expense, and no pension settlement gains in 2025. Legal and professional fees increased by $358 thousand, or 20.07%, for the year ended December 31, 2025, compared to December 31, 2024, due to increased audit costs and increased federal examination assessment fees, as well as a recovery in legal fees in 2024, due to the payoff of a nonperforming loan. ATM and check card fees increased by $219 thousand, or 19.38%, for the year ended December 31, 2025, compared to December 31, 2024, due to increased processing fees due to an increased number of accounts. Other operating expenses increased primarily due to increases in franchise taxes, collections expense, and higher administrative software expenses.
Current report
Income Tax Expense
Current report
In October 2025, the Company entered into a Subordinated Note Purchase Agreement pursuant to which the Company issued and sold $10.0 million in aggregate principal amount of 7.55% fixed to floating rate subordinated notes due November 1, 2035. After the sale, the Company redeemed in full the $7.0 million subordinated note due July 31, 2030. See Note 9 “Short-Term Debt” and Note 10 “Long-Term Debt” in Notes to the Consolidated Financial Statements.
Removed paragraphs (6)
Previous report
Higher rates paid on time deposits coupled with growth in that deposit category resulted in an increase of $7.0 million in deposit interest expense. The increase in deposit interest expense was offset by lower interest expense on short-term borrowings, which declined by $1.2 million due to the gradual paydown of Federal Home Loan Bank (“FHLB”) advances during the year. The cost of funds for the year was 2.51%, which was 38 basis points higher than 2023.
Previous report
Noninterest income increased by $649 thousand, or 6.41% for the year ended December 31, 2024, compared to December 31, 2023. The increase was primarily driven by increases in wealth management and mortgage banking income. Wealth management income increased by $459,000 due to new client referrals and the wealth management team’s proactive business development strategy to meet with existing clients and conduct relationship reviews. This resulted in increasing assets under management for existing clients and the acquisition of new relationships. Higher production boosted mortgage banking income which grew by $517,000. These increases were partially offset by decreases in one-time gains received in 2023 for bank owned life insurance and a milestone gain on sale of a limited partnership investment.
Previous report
Noninterest expense decreased 11.19% for the year ended December 31, 2024, compared to December 31, 2023. Salaries decreased $3.5 million, or 18.51%, for the year ended December 31, 2024 due to cost savings from a voluntary early retirement program at the end of 2023. Employee benefits also decreased for the year ended December 31, 2024 due to the voluntary early retirement program in 2023, combined with gains in the Company’s pension plan and lower than expected health insurance claims.
Previous report
FDIC assessment and bank franchise taxes increased in 2024 reflecting the increase in total deposits; data processing fees increased as new technology enhancements were added to enhance customer experience with products and improve operating processes. These increases were offset by decreases in advertising, ATM and check card fees, and directors fees. Advertising expenses decreased due to one-time milestone events held in 2023, ATM and check card fees decreased due to lowered contract fees and incentives received, and directors fees decreased as a result of a subsidiary discontinuing a separate board of directors.
Previous report
Income Tax Expense (Benefit)
Previous report
In 2024 the Company used proceeds from investment maturities to pay off short-term debt which consisted of Federal Home Loan Bank (“FHLB”) advances. Long-term debt increased from $6.9 million at December 31, 2023 to $7.0 million at December 31, 2023 and consists solely of subordinated debt. See Note 10 - Short-Term Debt and Note 11 - Long-Term Debt in Notes to the Consolidated Financial Statements for a discussion of the rates, terms, and conversion features on these advances.
Reworded paragraphs (27)
Previous wording
The Bank makes fixed rate mortgage loans with terms of typically fifteen or thirty years through its subsidiary F&M Mortgage. These loans are funded by F&M Mortgage utilizing a line of credit at the Bank until sold to investors in the secondary market or transferred to the Bank and held in the loan portfolio.
Current wording
The Bank makes fixed rate mortgage loans with terms of typically fifteen or thirty years through its mortgage division. These loans are funded by a line of credit at the Bank until sold to investors in the secondary market.
Previous wording
The Company’s allowance model uses a remaining life or weighted average remaining maturity method with the portfolio segmented by federal call codes. Management considers the national unemployment rate, national gross domestic product, and the core inflation index as external economic variables in developing the allowance and utilizes economic projections published by The Federal Reserve Bank of St. Louis for reasonable and supportable forecasts. The Company uses a reasonable and supportable period forecast period of 12 months. The qualitative estimate of the allowance for credit losses on loans (“ACLL”) is sensitive to these forecasts as economic conditions are the most influential qualitative factor. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. See Note 1 – Nature of Banking Activities and Significant Accounting Policies in Notes to the Consolidated Financial Statements for additional information concerning the determination of the allowance for credit losses on loans.
Current wording
The Company’s allowance model uses a remaining life or weighted average remaining maturity method with the portfolio segmented by federal call codes. Management considers the national unemployment rate as the external economic variable in developing the allowance and utilizes economic projections published by The Federal Reserve Bank of St. Louis for reasonable and supportable forecasts. The Company uses a reasonable and supportable period forecast period of 12 months. The qualitative estimate of the allowance for credit losses on loans (“ACLL”) is sensitive to these forecasts as economic conditions are the most influential qualitative factor. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. See Note 1 “Nature of Banking Activities and Significant Accounting Policies” in Notes to the Consolidated Financial Statements for additional information concerning the determination of the allowance for credit losses on loans.
Previous wording
Net income for 2024 was $7.3 million, an increase of $4.5 million or 162.90% from 2023’s net income of $2.8 million. Basic and diluted earnings per share were $2.07 and $0.80 for 2024 and 2023, respectively. The increase in net income for 2024 was the result of an increase in net interest income of $2.2 million coupled with a decrease in noninterest expense of $4.3 million.
Current wording
Net income for 2025 was $11.2 million, an increase of $3.9 million or 54.14% from 2024’s net income of $7.3 million. Basic and diluted earnings per share were $3.16 and $2.07 for 2025 and 2024, respectively. The increase in net income for 2025 was primarily the result of an increase in net interest income of $7.6 million partially offset by an increase in noninterest expenses of $2.6 million.
Previous wording
Return on average assets (“ROA”) measures how efficiently the Company uses its assets to produce net income. Some factors reflected within this measurement include the Company’s asset mix, funding sources, pricing, fee generation, and cost control. The ROA of the Company, on an annualized basis, was 0.55% and 0.22% for 2024 and 2023, respectively.
Current wording
Return on average assets (“ROA”) measures how efficiently the Company uses its assets to produce net income. Some factors reflected within this measurement include the Company’s asset mix, funding sources, pricing, fee generation, and cost control. The ROA of the Company was 0.85% and 0.55% for 2025 and 2024, respectively.
Previous wording
Return on average equity (“ROE”) measures the utilization of shareholders’ equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company’s assets are funded by the shareholders. The ROE for the Company was 8.86% and 3.87% for 2024 and 2023, respectively.
Current wording
Return on average equity (“ROE”) measures the utilization of shareholders’ equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company’s assets are funded by the shareholders. The ROE for the Company was 11.76% and 8.86% for 2025 and 2024, respectively.
Previous wording
Net interest income is the principal component of the Company’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest income was $33.9 million for 2024 and $31.7 million for 2023, which represents an increase of $2.2 million or 7.02%. Total interest income was $64.5 million for 2024 and $56.4 million for 2023, which represents an increase of $8.1 million or 14.31% for 2024. Total interest expense was $30.6 million for 2024 and $24.7 million for 2023, which represents an increase of $5.8 million or 23.66% in 2024. The increase in total interest income, total interest expense and net interest income during 2024 was driven by the growth in interest-earning assets, interest-bearing liabilities and the repricing of assets and liabilities into higher rates.
Current wording
Net interest income is the principal component of the Company’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest income was $41.5 million for 2025 and $33.9 million for 2024, which represents an increase of $7.6 million or 22.39%. Total interest income was $67.8 million for 2025 and $64.5 million for 2024, which represents an increase of $3.3 million or 5.07% for 2025. Total interest expense was $26.2 million for 2025 and $30.6 million for 2024, which represents a decrease of $4.3 million or 14.16% in 2025.
Previous wording
The net interest margin increased 7 basis points from 2.70% for 2023 to 2.77% for 2024. The net interest margin is calculated by dividing net interest income by total average earning assets. Higher loan balances and the repricing of adjustable-rate loans contributed to an increase of $6.8 million in loan interest income, and income from cash and securities increased $1.2 million due to higher average balances of federal funds sold in 2024. As a result, the yield on earning assets increased by 46 basis points to 5.27%.
Current wording
The net interest margin increased by 58 basis points from 2.77% for 2024 to 3.35% for 2025. The net interest margin is calculated by dividing net interest income by total average earning assets. Higher loan balances and the repricing of adjustable-rate loans contributed to an increase of $1.1 million in loan interest income, and interest on federal funds sold increased by $0.8 million due to higher average balances of federal funds sold in 2025. In addition, interest income from investment securities increased by $1.6 million, due to higher yields on investments purchased during 2025. As a result, the yield on earning assets increased by 19 basis points to 5.46%.
Previous wording
The provision for credit losses totaled $2.3 million in 2024, compared to a provision for credit losses of $1.0 million for 2023. The provision comprised a $2.4 million provision for credit losses on loans and a $43 thousand recovery of provision for credit losses on unfunded commitments. The provision for credit losses in 2024 increased primarily due to historical credit loss trends and qualitative factor adjustments for changes in the future economic forecasts impacting the automobile segment. This increase was partially offset by a reduction in the provision for individually evaluated 1-4 family construction and owner-occupied commercial real estate loans, which either paid down, experienced collateral improvement, or transitioned to other real estate owned (“OREO”).
Current wording
The provision for credit losses totaled $2.7 million in 2025, compared to a provision for credit losses of $2.3 million for 2024. The provision comprised a $2.6 million provision for credit losses on loans and a $117 thousand provision for credit losses on unfunded commitments. The provision for credit losses in 2025 increased primarily due to higher net charge-offs, continued loan growth, and an increase in reserves on individually analyzed loans.
Previous wording
Income tax expense was $638 thousand for the year ended December 31, 2024, an increase of $1.4 million from the tax benefit for the year ended December 31, 2023. These amounts correspond to an effective tax rate of 8.05% and (36.84)% for 2024 and 2023, respectively. The effective tax rate is below the statutory rate of 21%, due primarily to tax credits on qualified affordable housing project investments as discussed in Note 8 – Other Assets in Notes to the Consolidated Financial Statements. The effective tax rate is also impacted by tax-exempt income on investment securities and bank owned life insurance. Note 18 – Income Tax Expense (Benefit) in Notes to the Consolidated Financial Statements provides a reconciliation between income tax expense computed using the federal statutory income tax rate and the Company’s actual income tax expense (benefit) during 2024 and 2023.
Current wording
Income tax expense was $1.7 million for the year ended December 31, 2025, an increase of $1.1 million from the income tax expense for the year ended December 31, 2024. These amounts correspond to an effective tax rate of 13.47% and 8.05% for 2025 and 2024, respectively. The effective tax rate is below the statutory rate of 21%, due primarily to tax credits on qualified affordable housing project investments as discussed in Note 7 “Other Assets” in Notes to the Consolidated Financial Statements. The effective tax rate is also impacted by tax-exempt income on investment securities and bank owned life insurance. Note 17 “Income Taxes” in Notes to the Consolidated Financial Statements provides a reconciliation between income tax expense computed using the federal statutory income tax rate and the Company’s actual income tax expense during 2025 and 2024.
Previous wording
Assets increased by $7.4 million to $1.30 billion as of December 31, 2024, compared to $1.29 billion as of December 31, 2023. The increase in assets was primarily due to an increase in loans of $17.9 million and federal funds sold of $33.8 million, which was offset by a decrease of $41.0 million in the balance of our securities portfolio due to paydowns and maturities partially offset by an increase in fair value. The securities portfolio totaled $327.7 million at December 31, 2024, compared to $368.7 million at December 31, 2023. Deposits increased by $61.9 million and totaled $1.20 billion at December 31, 2024, compared to $1.13 billion at December 31, 2023. Short-term debt of $60.0 million was paid off in 2024. Long-term debt increased $43 thousand to $6.98 million as of December 31, 2024, compared to $6.93 million at December 31, 2023 due to the amortization of debt issuance costs.
Current wording
Assets increased by $71.7 million to $1.37 billion as of December 31, 2025, compared to $1.30 billion as of December 31, 2024. The increase in assets was primarily due to increases in loans of $46.3 million, federal funds sold of $11.0 million, and securities of $17.7 million, which was offset by decreases in deferred tax assets of $2.5 million and other assets of $3.6 million. The securities portfolio totaled $345.3 million at December 31, 2025, compared to $327.7 million at December 31, 2024. Deposits increased by $50.1 million and totaled $1.25 billion at December 31, 2025, compared to $1.20 billion at December 31, 2024. Long-term debt increased by $2.94 million to $9.92 million as of December 31, 2025, compared to $6.98 million at December 31, 2024, due to the issuance of subordinated notes in 2025.
Previous wording
For the year ended December 31, 2024, unrealized losses on our holdings declined compared to December 31, 2023, resulting in an increase in the fair value of the portfolio. However, this increase was offset by maturities and paydowns on mortgage-backed securities, leading to a reduction in the portfolio from $368.7 million as of December 31, 2023, to $327.7 million as of December 31, 2024. Note 2 – Securities in Notes to the Consolidated Financial Statements provides additional details about the Company’s securities portfolio as of December 31, 2024 and 2023.
Current wording
For the year ended December 31, 2025, unrealized losses on our holdings declined by $14.2 million compared to December 31, 2024, resulting in an increase in the fair value of the portfolio. Note 2 “Securities” in Notes to the Consolidated Financial Statements provides additional details about the Company’s securities portfolio as of December 31, 2025 and 2024.
Previous wording
The Bank is an active lender with a diverse loan portfolio that includes commercial and residential real estate loans, commercial loans, consumer loans, construction and land development loans, and home equity loans. The Bank’s lending activity is concentrated on individuals, and small and medium-sized businesses primarily in its market areas. Additional discussion on the segments of loans the Company originates and related risks is included in Note 1 - Nature of Banking Activities and Significant Accounting Policies and Note 3 - Loans and Credit Quality in Notes to Consolidated Financial Statements.
Current wording
The Bank is an active lender with a diverse loan portfolio that includes commercial and residential real estate loans, commercial loans, consumer loans, construction and land development loans, and home equity loans. The Bank’s lending activity is concentrated on individuals, and small and medium-sized businesses primarily in its market areas. Additional discussion on the segments of loans the Company originates and related risks is included in Note 1 “Nature of Banking Activities and Significant Accounting Policies,” Note 3 “Loans,” and Note 4 “Allowance for Credit Losses” in the Notes to the Consolidated Financial Statements.
Previous wording
Our primary source of income is derived from interest earned on loans. The loan portfolio, excluding the allowance for credit losses, or ACL, increased $17.9 million, or 2.17%, from $822.1 million at December 31, 2023 to $839.9 million at December 31, 2024. Loan growth in 2024 was primarily driven by consumer real estate, commercial construction, and commercial and industrial lending. The bank continues to expand organically by serving customers within its market and has also strengthened its portfolio by purchasing consumer real estate loans originated by its mortgage subsidiary. This growth was partially offset by a decline in the automobile loan portfolio, as the Bank tightened credit standards for indirect consumer lending.
Current wording
Our primary source of income is derived from interest earned on loans. The loan portfolio, excluding the allowance for credit losses, or ACL, increased by $46.3 million, or 5.51%, from $839.9 million at December 31, 2024 to $886.3 million at December 31, 2025. Loan growth in 2025 was primarily driven by loans secured by farmland, residential mortgage loans, owner-occupied, and non-owner-occupied commercial real estate loans. The Bank continues to expand organically by serving customers within its market and has also strengthened its portfolio by purchasing consumer real estate loans originated by its mortgage subsidiary. This growth was partially offset by a decline in the automobile loan and construction and land development loan portfolios.
Previous wording
The Company maintains policies and procedures to promote sound underwriting and mitigate credit risk. These include underwriting standards for new originations and ongoing monitoring and reporting of asset quality and adequacy of the allowance for credit losses. Management classifies non-performing assets as non-accrual loans, loans 90 days or more past due and still accruing, and OREO. OREO represents real property taken by the Bank when its customers do not meet the contractual obligation of their loans, either through foreclosure or through a deed in lieu thereof from the borrower. OREO is recorded at the lower of cost or fair value, less estimated selling costs, and is marketed by the Bank through brokerage channels. The Bank had $77 thousand and $55 thousand in assets classified as OREO at December 31, 2024 and 2023, respectively.
Current wording
The Company maintains policies and procedures to promote sound underwriting and mitigate credit risk. These include underwriting standards for new originations and ongoing monitoring and reporting of asset quality and adequacy of the allowance for credit losses. Management classifies non-performing assets as non-accrual loans, loans 90 days or more past due and still accruing, and other real estate owned, or OREO. OREO represents real property taken by the Bank when its customers do not meet the contractual obligation of their loans, either through foreclosure or through a deed in lieu thereof from the borrower. OREO is recorded at the lower of cost or fair value, less estimated selling costs, and is marketed by the Bank through brokerage channels. The Bank had no assets classified as OREO at December 31, 2025, compared to $77 thousand in assets classified as OREO at December 31, 2024.
Previous wording
There were $7.2 million in total non-performing assets at December 31, 2024. This is an increase of $630 thousand when compared to the December 31, 2023 balance of $6.5 million. This increase resulted primarily from an increase in nonaccrual loans. In 2024, four loans were added to nonaccrual status due to delinquent payments in the following segments: owner occupied commercial real estate, other commercial real estate, agricultural loans, and commercial and industrial loans. These additions were offset by a 1-4 family construction loan moving to OREO, a loan secured by farmland being paid in full, a loan secured by farmland and a loan in owner occupied commercial real estate paying down, and a loan in other construction and land development returning to accrual status.
Current wording
There were $6.0 million in total non-performing assets at December 31, 2025. This is a decrease of $1.2 million when compared to the December 31, 2024 balance of $7.2 million. This decrease resulted primarily from a decrease in nonaccrual loans. In 2025, fourteen loans were added to nonaccrual status due to delinquent payments in the following segments: secured by farmland, home equity – open end, real estate, owner occupied commercial real estate, agricultural loans, and commercial and industrial loans. These additions were offset by a loan secured by farmland being paid in full, one loan in owner occupied commercial real estate paying off and another returning to accrual status, an other commercial real estate loan paying off, and a commercial and industrial loan paying off.
Previous wording
For the year ended December 31, 2024, net charge-offs of loans totaled $2.6 million or 0.31% of average loans held for investment, compared to net charge-offs of $1.5 million or 0.19% for the year ended December 31, 2023. A majority of the charge-offs in 2024 and 2023 related to the Company’s indirect automobile lending.
Current wording
For the year ended December 31, 2025, net charge-offs of loans totaled $2.9 million or 0.34% of average loans held for investment, compared to net charge-offs of $2.6 million or 0.31% for the year ended December 31, 2024. A majority of the charge-offs in 2025 and 2024 related to the Company’s indirect automobile lending, due to deteriorating economic conditions and higher inflation.
Previous wording
The provision for credit losses, including the recovery for unfunded commitments, was $2.3 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively. The provision for credit losses in 2024 reflects $17.9 million in loan growth, coupled with $1.9 million in net charge offs in the automobile segment. Additionally, management adjusted qualitative factors in the model methodology for economic conditions based on changes in the economic forecast during the year, changes in loan volume, and changes in past due trends. The provision for 2023 was primarily due to loan growth of $78.5 million and charge-offs in the automobile portfolio.
Current wording
The provision for credit losses, including the recovery for unfunded commitments, was $2.7 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively. The provision for credit losses in 2025 reflects $46.9 million in loan growth, coupled with $2.0 million in net charge offs in the automobile segment. The provision for credit losses in 2024 reflects $17.9 million in loan growth, coupled with $1.9 million in net charge offs in the automobile segment. Additionally, management adjusted qualitative factors in the model methodology for economic conditions based on changes in the economic forecast during 2025, changes in loan volume, and changes in past due trends.
Previous wording
The provision for credit losses includes a recovery of $43 thousand and $57 thousand on the reserve for unfunded commitments for the years ended December 31, 2024 and 2023, respectively. The provision for credit losses on loans and for unfunded commitments net together as reflected in the provision for credit losses on the consolidated statements of income. See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for a summary of the activity in the allowance for credit losses for years ended December 31, 2024 and 2023.
Current wording
The provision for credit losses includes a recovery of $117 thousand and $43 thousand on the reserve for unfunded commitments for the years ended December 31, 2025 and 2024, respectively. The provision for credit losses on loans and for unfunded commitments net together as reflected in the provision for credit losses on the consolidated statements of income. See Note 4 “Allowance for Credit Losses” in Notes to Consolidated Financial Statements for a summary of the activity in the allowance for credit losses for years ended December 31, 2025 and 2024.
Previous wording
(1) Averages as disclosed are based on the outstanding balances of the loans in each segment. These averages do no include net deferred costs and premiums.
Current wording
(1) Averages as disclosed are based on the outstanding balances of the loans in each segment. These averages do not include net deferred costs and premiums.
Previous wording
Core deposits are the Company’s primary source of funding. Demand deposits, money market accounts, savings accounts, and time deposits provide a source of fee income and opportunities to build customer relationships. Total deposits were $1.2 billion and $1.1 billion at December 31, 2024 and 2023, respectively, which represents an increase of $61.9 million or 5.46% during 2024. There was a shift in deposit mix when comparing the periods. At December 31, 2024, there was a decrease in noninterest bearing demand, interest checking, and savings accounts, coupled with an increase in time deposits compared to December 31, 2023.
Current wording
Core deposits are the Company’s primary source of funding. Demand deposits, money market accounts, savings accounts, and time deposits provide a source of fee income and opportunities to build customer relationships. Total deposits were $1.25 billion and $1.20 billion at December 31, 2025 and 2024, respectively, which represents an increase of $50.1 million or 4.19% during 2025. There was a shift in deposit mix when comparing the periods. As of December 31, 2025, there were increases in noninterest bearing demand, interest checking, and savings accounts, coupled with a decrease in time deposits compared to December 31, 2024.
Previous wording
The following table shows the average deposit balances and average rates paid for 2024 and 2023 (dollars in thousands).
Current wording
The following table shows the deposit balances for 2025 and 2024 (dollars in thousands).
Previous wording
Total uninsured deposits in excess of $250 thousand were $131.8 million and $131.9 million at December 31, 2024 and 2023, respectively.
Current wording
Total uninsured deposits in excess of $250 thousand were $167.4 million and $131.8 million at December 31, 2025 and 2024, respectively.
Previous wording
Total Shareholders’ Equity increased by $7.8 million to $86.1 million due to net income of $7.3 million and other comprehensive income of $3.6 million, offset by dividends to shareholders of $3.6 million. Other comprehensive income includes a $4.0 million improvement in unrealized losses in the bond portfolio and a $315 thousand adjustment to the pension liability.
Current wording
Total Shareholders’ Equity increased by $18.7 million to $104.8 million due to net income of $11.2 million and other comprehensive income of $10.8 million, offset by dividends to shareholders of $3.7 million. Other comprehensive income includes an $11.2 million improvement in unrealized losses in the bond portfolio and a $434 thousand adjustment to the pension liability.
Previous wording
The Company uses a variety of traditional and on-balance-sheet tools to manage our interest rate risk. Gap analysis, which monitors the “gap” between interest-sensitive assets and liabilities, is one such tool. In addition, we use simulation modeling to forecast future balance sheet and income statement behavior. By studying the effects on net interest income of rising, stable, and falling interest rate scenarios, the Company can position itself to take advantage of anticipated interest rate movement, and protect us from unanticipated rate movements, by understanding the dynamic nature of our balance sheet components.
Current wording
The Company uses a variety of traditional and on-balance-sheet tools to manage our interest rate risk. Gap analysis, which monitors the “gap” between interest-sensitive assets and liabilities, is one such tool. In addition, we use simulation modeling to forecast future balance sheet and income statement behavior. By studying the effects on net interest income of rising, stable, and falling interest rate scenarios, the Company can position itself to take advantage of anticipated interest rate movement, and protect itself from unanticipated rate movements, by understanding the dynamic nature of its balance sheet components.
Previous wording
An asset-sensitive balance sheet structure implies that assets, such as loans and securities, will reprice faster than liabilities; consequently, net interest income should be positively affected in an increasing interest rate environment. Conversely, a liability-sensitive balance sheet structure implies that liabilities, such as deposits, will reprice faster than assets; consequently, net interest income should be positively affected in a decreasing interest rate environment. At December 31, 2024, the Company had $157.9 million more in liabilities repricing than assets subject to repricing in one year. This is a one-day position that is continually changing and is not necessarily indicative of our position at any other time.
Current wording
An asset-sensitive balance sheet structure implies that assets, such as loans and securities, will reprice faster than liabilities; consequently, net interest income should be positively affected in an increasing interest rate environment. Conversely, a liability-sensitive balance sheet structure implies that liabilities, such as deposits, will reprice faster than assets; consequently, net interest income should be positively affected in a decreasing interest rate environment. At December 31, 2025, the Company had $103.6 million more in liabilities repricing than assets subject to repricing in one year. This is a one-day position that is continually changing and is not necessarily indicative of our position at any other time.
Previous wording
As of December 31, 2024, liquid assets totaled $95.6 million, or 7.3% of total assets, and liquid earning assets totaled $76.4 million, or 5.9% of total earning assets. Asset liquidity is also provided by managing loan and securities maturities and cash flows. The Bank is scheduled to receive $69.8 million from bond paydowns and maturities by the end of 2025 which can be used to fund future loan growth and for other purposes.
Current wording
As of December 31, 2025, liquid assets totaled $92.7 million, or 6.8% of total assets, and liquid earning assets totaled $73.4 million, or 5.7% of total earning assets. Asset liquidity is also provided by managing loan and securities maturities and cash flows. The Bank is scheduled to receive $64.1 million from bond paydowns and maturities by the end of 2026 which can be used to fund future loan growth and for other purposes.
Previous wording
In 2024 the Bank pledged investment securities with a par value totaling $131.3 million to the Federal Reserve System’s Discount Window. The Discount Window provides access to funding to help depository institutions manage their liquidity risks. The Bank did not borrow from the Discount Window during 2024. In addition to the Discount Window, the Bank has access to off-balance sheet liquidity through unsecured Federal funds lines totaling $90.0 million at December 31, 2024, and December 31, 2023. The Bank also has a secured line of credit with the FHLB with available credit of $172.7 million and $90.1 million as of December 31, 2024, and December 31, 2023, respectively. The FHLB line of credit is secured by a blanket lien on qualifying loans in the residential, commercial, agricultural real estate, and home equity portfolios.
Current wording
In 2025, the Bank pledged investment securities with a par value totaling $133.4 million to the Federal Reserve System’s Discount Window. The Discount Window provides access to funding to help depository institutions manage their liquidity risks. The Bank did not borrow from the Discount Window during 2025. In addition to the Discount Window, the Bank has access to off-balance sheet liquidity through unsecured Federal funds lines totaling $90.0 million at December 31, 2025, and December 31, 2024. The Bank also has a secured line of credit with the FHLB with available credit of $180.1 million and $172.7 million as of December 31, 2025, and December 31, 2024, respectively. The FHLB line of credit is secured by a blanket lien on qualifying loans in the residential, commercial, agricultural real estate, and home equity portfolios.