XML 26 R14.htm IDEA: XBRL DOCUMENT v3.25.3
Loans and Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses

 

3.Loans and Allowance for Credit Losses

 

Loans consisted of the following as of the dates indicated below:

 

   September 30,   December 31, 
(Dollars in thousands)  2025   2024 
         
One-to-four family residential real estate loans  $381,641   $352,209 
Construction and land loans   19,741    25,328 
Commercial real estate loans   389,574    345,159 
Commercial loans   186,656    192,325 
Agriculture loans   99,897    100,562 
Municipal loans   6,884    7,091 
Consumer loans   33,660    29,679 
Total gross loans   1,118,053    1,052,353 
Net deferred loan fees and loans in process   (763)   (307)
Allowance for credit losses   (12,299)   (12,825)
Loans, net  $1,104,991   $1,039,221 

 

The following tables provide information on the Company’s allowance for credit losses by loan class and allowance methodology for the three and nine months ended September 30, 2025 and 2024:

 

                         
   Three months and nine months ended September 30, 2025 
(Dollars in thousands)  One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                 
Allowance for credit losses:                                        
Balance at July 1, 2025  $1,788   $131   $5,076   $5,283   $1,267   $45   $172   $13,762 
Charge-offs   -    -    -    (2,268)   -    -    (112)   (2,380)
Recoveries   -    -    -    2    -    -    65    67 
Provision for credit losses   265    (32)   273    284    (10)   -    70    850 
Balance at September 30, 2025  $2,053   $99   $5,349   $3,301   $1,257   $45   $195   $12,299 
                                         
Allowance for credit losses:                                        
Balance at January 1, 2025  $1,765   $143   $4,506   $4,964   $1,227   $51   $169   $12,825 
Charge-offs   -    -    -    (2,287)   -    -    (304)   (2,591)
Recoveries   -    5    -    16    -    6    188    215 
Provision for credit losses   288    (49)   843    608    30    (12)   142    1,850 
Balance at September 30, 2025  $2,053   $99   $5,349   $3,301   $1,257   $45   $195   $12,299 

 

 

                         
   Three months and nine months ended September 30, 2024 
(Dollars in thousands)  One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                 
Allowance for credit losses:                                        
Balance at July 1, 2024  $2,020   $220   $4,515   $2,778   $1,118   $55   $197   $10,903 
Charge-offs   -    -    -    (22)   -    -    (131)   (153)
Recoveries   -    45    -    8    54    -    37    144 
Provision for credit losses   (30)   (109)   38    611    50    2    88    650 
Balance at September 30, 2024  $1,990   $156   $4,553   $3,375   $1,222   $57   $191   $11,544 

 

(Dollars in thousands)  One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                 
Allowance for credit losses:                                        
Balance at January 1, 2024  $2,035   $150   $4,518   $2,486   $1,190   $15   $214   $10,608 
Charge-offs   -    -    -    (105)   -    -    (308)   (413)
Recoveries   -    245    -    28    54    12    110    449 
Provision for credit losses   (45)   (239)   35    966    (22)   30    175    900 
Balance at September 30, 2024  $1,990   $156   $4,553   $3,375   $1,222   $57   $191   $11,544 

 

The Company recorded net loan charge-offs of $2.3 million during the third quarter of 2025, compared to net loan charge-offs of $9,000 during the third quarter of 2024. The Company recorded net loan charge-offs of $2.4 million during the nine months ended September 30, 2025, compared to net loan recoveries of $36,000 during the nine months ended September 30, 2024.

 

 

The following table presents information regarding non-accrual and loans past due over 89 days and still accruing as of the dates indicated:

 

   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
(Dollars in thousands)  As of September 30, 2025 
   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
             
One-to-four family residential real estate loans  $497   $158   $       - 
Commercial real estate loans   4,655    -    - 
Commercial loans   1,804    2,855    - 
Agriculture loans   -    30    - 
Total loans  $6,956   $3,043   $- 

 

   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
(Dollars in thousands)  As of December 31, 2024 
   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
             
One-to-four family residential real estate loans  $34   $-   $         - 
Commercial real estate loans   782    -    - 
Commercial loans   314    10,939    - 
Agriculture loans   1,046    -    - 
Total loans  $2,176   $10,939   $- 

 

The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following table presents information regarding the amortized cost basis and collateral type of collateral-dependent loans as of the dates indicated:

 

(Dollars in thousands)  As of September 30, 2025
   Loan balance   Collateral Type
         
One-to-four family residential real estate loans  $655   First mortgage on residential real estate
Commercial real estate loans   4,270   First mortgage on commercial real estate
Commercial loans   4,758   Various business asset including real estate
Agriculture loans   30   Crops, livestock, machinery and real estate
Total loans  $9,713    

 

(Dollars in thousands)  As of December 31, 2024
   Loan balance   Collateral Type
        
One-to-four family residential real estate loans  $34   First mortgage on residential real estate
Commercial real estate loans   782   First mortgage on commercial real estate
Commercial loans   3,150   Various business asset including real estate
Agriculture loans   1,456   Crops, livestock, machinery and real estate
Total loans  $5,422    

 

The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is 90 days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans 90 days or more delinquent and accruing interest at either September 30, 2025 or December 31, 2024.

 

 

The following tables present information regarding the Company’s past due and non-accrual loans by loan class, as of the dates indicated:

 

   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
(Dollars in thousands)  As of September 30, 2025 
   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
                             
One-to-four family residential real estate loans  $1,242   $214   $-   $1,456   $655   $2,111   $379,530 
Construction and land loans   279    -    -    279    -    279    19,462 
Commercial real estate loans   892    -    -    892    4,655    5,547    384,027 
Commercial loans   1,941    57    -    1,998    4,659    6,657    179,999 
Agriculture loans   -    25    -    25    30    55    99,842 
Municipal loans   -    -    -    -    -    -    6,884 
Consumer loans   90    113    -    203    -    203    33,457 
Total  $4,444   $409   $-   $4,853   $9,999   $14,852   $1,103,201 
                                    
Percent of gross loans   0.40%   0.04%   0.00%   0.44%   0.89%   1.33%   98.67%

 

(Dollars in thousands)  As of December 31, 2024 
   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
                             
One-to-four family residential real estate loans  $115   $323   $-   $438   $34   $472   $351,737 
Construction and land loans   -    118    -    118    -   $118    25,210 
Commercial real estate loans   1,083    3,081    -    4,164    782   $4,946    340,213 
Commercial loans   500    59    -    559    11,253   $11,812    180,513 
Agriculture loans   864    -    -    864    1,046   $1,910    98,652 
Municipal loans   -    -    -    -    -   $-    7,091 
Consumer loans   33    25    -    58    -   $58    29,621 
 Total  $2,595   $3,606   $-   $6,201   $13,115   $19,316   $1,033,037 
                                    
Percent of gross loans   0.25%   0.34%   0.00%   0.59%   1.25%   1.84%   98.16%

 

Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the nine months ended September 30, 2025 and 2024 would have increased interest income by $389,000 and $244,000, respectively. No interest income related to non-accrual loans was included in interest income for the three or nine months ended September 30, 2025 and 2024.

The Company also categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions:

 

Special Mention: Loans are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.

 

Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

 

Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

 

 

The following table presents information regarding the Company’s risk category of loans by type and year of origination, as of the dates indicated:

 

                            
(Dollars in thousands)  As of September 30, 2025 
   2025   2024   2023   2022   2021   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
                                     
One-to-four family residential real estate loans                                             
Nonclassified  $64,804   $78,991   $79,555   $67,894   $32,930   $49,678   $7,048   $86   $380,986 
Classified  $-   $158   $417   $-   $-   $80   $-   $-    655 
Total  $64,804   $79,149   $79,972   $67,894   $32,930   $49,758   $7,048   $86   $381,641 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Construction and land loans                                             
Nonclassified  $6,325   $3,627   $2,557   $1,775   $1,617   $3,740   $100   $-   $19,741 
Classified   -    -    -    -    -    -    -    -    - 
Total  $6,325   $3,627   $2,557   $1,775   $1,617   $3,740   $100   $-   $19,741 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate loans                                             
Nonclassified  $61,573   $55,997   $58,404   $57,322   $51,848   $93,009   $2,937   $29    381,119 
Classified   135    1,184    -    282    445    6,409    -    -    8,455 
Total  $61,708   $57,181   $58,404   $57,604   $52,293   $99,418   $2,937   $29   $389,574 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial loans                                             
Nonclassified  $26,520   $34,063   $17,607   $17,711   $8,037   $6,476   $61,469   $114   $171,997 
Classified   2,576    2,103    1,400    1,936    30    3,608    2,449    557    14,659 
Total  $29,096   $36,166   $19,007   $19,647   $8,067   $10,084   $63,918   $671   $186,656 
Gross charge-offs  $-   $2,276   $-   $-   $11   $-   $-   $-   $2,287 
Agriculture loans                                             
Nonclassified  $8,965   $12,503   $2,543   $6,000   $3,183   $12,527   $49,740   $224   $95,685 
Classified   47    1,630    -    1,291    91    26    1,127    -    4,212 
Total  $9,012   $14,133   $2,543   $7,291   $3,274   $12,553   $50,867   $224   $99,897 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Municipal loans                                             
Nonclassified  $-   $-   $5,552   $58   $-   $1,274   $-   $-   $6,884 
Classified   -    -    -    -    -    -    -    -    - 
Total  $-   $-   $5,552   $58   $-   $1,274   $-   $-   $6,884 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer loans                                             
Nonclassified  $5,469   $1,743   $2,731   $466   $816   $2,661   $19,624   $150   $33,660 
Classified   -    -    -    -    -    -    -    -    - 
Total  $5,469   $1,743   $2,731   $466   $816   $2,661   $19,624   $150   $33,660 
Gross charge-offs  $304   $-   $-   $-   $-   $-   $-   $-   $304 
Total loans                                             
Nonclassified  $173,656   $186,924   $168,949   $151,226   $98,431   $169,365   $140,918   $603   $1,090,072 
Classified   2,758    5,075    1,817    3,509    566    10,123    3,576    557    27,981 
Total  $176,414   $191,999   $170,766   $154,735   $98,997   $179,488   $144,494   $1,160   $1,118,053 
Gross charge-offs for the nine months                                             
ended September 30, 2025  $304   $2,276   $-   $-   $11   $-   $-   $-   $2,591 

 

 

   2024   2023   2022   2021   2020   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
(Dollars in thousands)  As of December 31, 2024 
   2024   2023   2022   2021   2020   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
                                     
One-to-four family residential real estate loans                                             
Nonclassified  $86,701   $84,467   $75,517   $37,411   $27,293   $35,112   $5,552   $122   $352,175 
Classified  $-   $-   $-   $-   $-   $34   $-   $-   $34 
Total  $86,701   $84,467   $75,517   $37,411   $27,293   $35,146   $5,552   $122   $352,209 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Construction and land loans                                             
Nonclassified  $6,481   $11,202   $1,937   $1,697   $2,569   $1,340   $102   $-   $25,328 
Classified  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Total  $6,481   $11,202   $1,937   $1,697   $2,569   $1,340   $102   $-   $25,328 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate loans                                             
Nonclassified  $59,717   $47,624   $68,854   $53,868   $41,862   $67,351   $3,217   $85   $342,578 
Classified  $360   $-   $-   $476   $151   $1,594   $-   $-   $2,581 
Total  $60,077   $47,624   $68,854   $54,344   $42,013   $68,945   $3,217   $85   $345,159 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial loans                                             
Nonclassified  $31,083   $27,158   $23,574   $9,813   $7,930   $2,203   $68,282   $135   $170,178 
Classified  $11,364   $1,851   $1,897   $39   $3,637   $13   $1,969   $1,377   $22,147 
Total  $42,447   $29,009   $25,471   $9,852   $11,567   $2,216   $70,251   $1,512   $192,325 
Gross charge-offs  $-   $-   $16   $114   $56   $-   $-   $-   $186 
Agriculture loans                                             
Nonclassified  $21,379   $3,659   $8,404   $3,616   $3,297   $14,215   $44,458   $217   $99,245 
Classified  $29   $178   $257   $419   $9   $73   $352   $-   $1,317 
Total  $21,408   $3,837   $8,661   $4,035   $3,306   $14,288   $44,810   $217   $100,562 
Gross charge-offs  $-   $-   $-   $-   $-   $64   $-   $-   $64 
Municipal loans                                             
Nonclassified  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Classified  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Total  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer loans                                             
Nonclassified  $2,850   $3,229   $645   $1,072   $682   $3,167   $17,896   $138   $29,679 
Classified  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Total  $2,850   $3,229   $645   $1,072   $682   $3,167   $17,896   $138   $29,679 
Gross charge-offs  $376   $7   $1   $-   $-   $24   $-   $1   $409 
Total loans                                             
Nonclassified  $213,776   $177,339   $179,021   $107,477   $83,633   $124,824   $139,507   $697   $1,026,274 
Classified  $11,753   $2,029   $2,154   $934   $3,797   $1,714   $2,321   $1,377   $26,079 
Total  $225,529   $179,368   $181,175   $108,411   $87,430   $126,538   $141,828   $2,074   $1,052,353 
Gross charge-offs for the year ended December 31, 2024  $376   $7   $17   $114   $56   $88   $-   $1   $659 

 

 

The following table provides information regarding the Company’s allowance for credit losses related to unfunded loan commitments for the periods indicated:

 

   2025   2024   2025   2024 
   Three months ended   Nine months ended 
(dollars in thousands)  September 30,   September 30, 
   2025   2024   2025   2024 
Balance at beginning of period  $150    300   $150    250 
Provision for credit losses   -    (150)   -    (100)
Balance at end of period  $150   $150   $150   $150 

 

The Company did not make any loan modifications to borrowers experiencing financial difficulty during the three months ended September 30, 2025. The Company made two loan modifications to a single borrower experiencing financial difficulty during the nine months ended September 30, 2025. The Company did not make any loan modifications to borrowers experiencing financial difficulty during the three or nine months ended September 30, 2024. The following table presents the amortized cost basis of loans at September 30, 2025 that were both experiencing financial difficulty and modified during the nine months ended September 30, 2025 by class, type of modification and includes the financial effect of the modification.

 

   As of June 30, 2025
   Amortized cost basis   % of loan class total   Financial effect
Term extension:             
Commercial  $277    0.1%  Renewal of existing loan

 

As of September 30, 2025, all loans both experiencing financial difficulty and modified during the nine months ended September 30, 2025 were current under the terms of the agreements.