What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 164 added, 65 removed, 765 unchanged (23% of the section changed)

7 unchanged sentences

Total cash and cash equivalents

Securities available-for-sale

Securities available-for-sale (amortized cost $ 174,689,840 and $ 179,668,079 at June 30, 2025 and December 31, 2024, respectively)

Restricted equity securities, at cost

27 unchanged sentences

Shareholders' Equity

Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at 03/31/25 and 12/31/24 ($ 100,000 liquidation value, per share)

Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at 06/30/25 and 12/31/24

($ 100,000 liquidation value, per share)

Common stock - $ 2.50 par value;

15,000,000 shares authorized, 5,830,269 shares issued at 03/31/25 and 5,809,035 shares issued at 12/31/24

15,000,000 shares authorized, 5,848,828 shares issued at 06/30/25 and

5,809,035 shares issued at 12/31/24

Additional paid-in capital

15 unchanged sentences

and Subsidiary

Three Months Ended March 31,

Three Months Ended June 30,

Consolidated Statements of Income

27 unchanged sentences

Earnings per common share

Weighted average number of common shares

used in computing earnings per share

Weighted average number of common shares used in computing earnings per share

Dividends declared per common share

2 unchanged sentences

and Subsidiary

Six Months Ended June 30,

Consolidated Statements of Income

Interest income

Interest and fees on loans

Interest on taxable debt securities

Interest on tax-exempt debt securities

Interest on federal funds sold and overnight deposits

Total interest income

Interest expense

Interest on deposits

Interest on borrowed funds

Interest on repurchase agreements

Interest on junior subordinated debentures

Total interest expense

Net interest income

Credit loss expense

Net interest income after credit loss expense

Non-interest income

Income from sold loans

Other income from loans

Total non-interest income

Non-interest expense

Salaries and wages

Employee benefits

Occupancy expenses, net

Other expenses

Total non-interest expense

Income before income taxes

Income tax expense

Earnings per common share

Weighted average number of common shares used in computing earnings per share

Dividends declared per common share

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

Community Bancorp.

and Subsidiary

Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

Other comprehensive income (loss)

Three Months Ended June 30,

Other comprehensive income, net of tax:

Unrealized holding gain on securities AFS arising during the period

Other comprehensive income, net of tax

Total comprehensive income

Six Months Ended June 30,

Other comprehensive income, net of tax:

Unrealized holding gain (loss) on securities AFS arising during the period

7 unchanged sentences

Consolidated Statements of Changes in Shareholders' Equity

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

shareholders'

7 unchanged sentences

Preferred stock

Shares purchased through stock buyback program

Shares purchased through stock buyback plan

Comprehensive income

4 unchanged sentences

$ 102,905,030

Three Months Ended March 31, 2024

Issuance of common stock

Cash dividends declared

( 1,346,706 )

Preferred stock

Shares purchased through stock buyback plan

Comprehensive income

Other comprehensive income

June 30, 2025

$ ( 12,487,842 )

$ ( 3,170,995 )

$ 106,343,407

*Accumulated other comprehensive loss

Community Bancorp.

and Subsidiary

Consolidated Statements of Changes in Shareholders' Equity

Six Months Ended June 30, 2024

shareholders'

14 unchanged sentences

$ ( 2,622,777 )

Issuance of common stock

Cash dividends declared

( 1,273,008 )

Preferred stock

Comprehensive income

Other comprehensive income

June 30, 2024

$ ( 17,279,553 )

$ ( 2,622,777 )

*Accumulated other comprehensive loss

3 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities:

10 unchanged sentences

( 2,691,225 )

Increase in taxes payable

Increase in interest receivable

( 2,205,500 )

Decrease in taxes payable

Decrease (increase) in interest receivable

Decrease in mortgage servicing rights

Decrease in right-of-use assets

Decrease in operating lease liabilities

Decrease (increase) in other assets

(Increase) decrease in right-of-use assets

Increase in operating lease liabilities

Increase in other assets

Increase in cash surrender value of BOLI

4 unchanged sentences

Decrease in accrued expenses

( 1,069,838 )

Increase in other liabilities

(Decrease) increase in other liabilities

Net cash provided by operating activities

6 unchanged sentences

( 2,107,700 )

( 5,107,800 )

Increase in loans, net

1 unchanged sentence

( 17,247,703 )

Capital expenditures net of proceeds from sales of bank

premises and equipment

Capital expenditures net of proceeds from sales of bank premises and equipment

Recoveries of loans charged off

20 unchanged sentences

Dividends paid on common stock

Net cash (used in) provided by financing activities

( 1,957,974 )

( 1,824,681 )

Net cash used in financing activities

( 90,873,769 )

( 3,216,430 )

Net decrease in cash and cash equivalents

3 unchanged sentences

Supplemental Schedule of Cash Paid During the Period:

Income taxes, net of refunds

Supplemental Schedule of Noncash Investing and Financing Activities:

1 unchanged sentence

$ ( 1,706,273 )

Loans transferred to OREO

Additions to operating lease liabilities

98 unchanged sentences

The following tables illustrate the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock:

Three Months Ended March 31,

Three Months Ended June 30,

Net income, as reported

3 unchanged sentences

Earnings per common share

Six Months Ended June 30,

Net income, as reported

dividends to preferred shareholders

Net income available to common shareholders

Weighted average number of common shares used in calculating earnings per share

Earnings per common share

Investment Securities

Debt securities AFS as of the balance sheet dates consisted of the following:

March 31, 2025

June 30, 2025

GSE debt securities

13 unchanged sentences

$ 159,697,420

The Company had investments in Agency MBS exceeding 10 % of shareholders’ equity with a book value of $ 131.6 million and $ 119.5 million, respectively, and a fair value of $ 117.0 million and $ 102.3 million, respectively, as of March 31, 2025 and December 31, 2024.

The Company had investments in Agency MBS exceeding 10 % of shareholders’ equity with a book value of $ 128.2 million and $ 119.5 million, respectively, and a fair value of $ 114.6 million and $ 102.3 million, respectively, as of June 30, 2025 and December 31, 2024.

Investment securities pledged as collateral for repurchase agreements consisted of certain U.S.

2 unchanged sentences

The aggregate amortized cost and fair value of these pledged investments as of the balance sheet dates were as follows:

March 31, 2025

June 30, 2025

December 31, 2024

4 unchanged sentences

December 31, 2024

There were no investment securities pledged as collateral for BTFP borrowings as of March 31, 2025, all of which matured and were repaid during the first quarter of 2025.

There were no sales of debt securities during the first three months of 2025 or 2024.

There were no investment securities pledged as collateral for BTFP borrowings as of June 30, 2025, all of which matured and were repaid during the first quarter of 2025.

There were no sales of debt securities during the first six months of 2025 or 2024.

The scheduled maturities of debt securities as of the balance sheet dates were as follows:

March 31, 2025

June 30, 2025

Due in one year or less

15 unchanged sentences

12 months or more

March 31, 2025

June 30, 2025

GSE debt securities

13 unchanged sentences

$ 147,880,823

As of March 31, 2025 and December 31, 2024, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell, any of the debt securities AFS in an unrealized loss position as of such dates prior to recovery and determined that no individual debt securities in an unrealized loss position represented credit losses that would require an allowance for credit losses.

The Company has determined that the unrealized losses as of the balance sheet dates were primarily attributed to increases in market interest rates since these securities were purchased under other market conditions.

Accordingly, there was no ACL on AFS debt securities as of March 31, 2025, or December 31, 2024.

Accrued interest receivable on AFS debt securities which totaled $ 480,617 and $ 509,429 on March 31, 2025, and December 31, 2024, respectively, was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

As of June 30, 2025 and December 31, 2024, the Company did not have the intent to sell, nor was it more likely than not that we would be required to sell any of the debt securities AFS in an unrealized loss position as of such dates prior to recovery.

Management determined that no individual debt securities in an unrealized loss position represented credit losses that would require an allowance for credit losses, and that the unrealized losses as of the balance sheet dates were primarily attributed to increases in market interest rates since these securities were purchased under other market conditions.

Accordingly, there was no ACL on AFS debt securities as of June 30, 2025, or December 31, 2024.

Accrued interest receivable on AFS debt securities which totaled $ 499,357 and $ 509,429 on June 30, 2025, and December 31, 2024, respectively, was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

Loans, Allowance for Credit Losses, Credit Quality and Off-Balance Sheet Credit Exposures

The composition of net loans as of the balance sheet dates was as follows:

March 31, 2025

June 30, 2025

December 31, 2024

11 unchanged sentences

$ 918,779,288

As of March 31, 2025, purchased loans consisted of $ 3.7 million in commercial loans and $ 3.5 million in consumer loans, compared to $ 4.0 million and $ 3.8 million, respectively, as of December 31, 2024.

The Company did not purchase any loans during the three months ended March 31, 2025.

Accrued interest receivable on loans totaled $ 4.9 million and $ 3.8 million as of March 31, 2025, and December 31, 2024, respectively, and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

As of June 30, 2025, purchased loans consisted of $ 3.5 million in commercial loans and $ 8.1 million in consumer loans, compared to $ 4.0 million and $ 3.8 million, respectively, as of December 31, 2024.

The Company purchased a block of consumer loans totaling $ 4.9 million during the second quarter ended June 30, 2025, and are included in the Purchased loan total in the table above and the consumer loan totals in the footnote.

Accrued interest receivable on loans totaled $ 3.9 million and $ 3.8 million as of June 30, 2025, and December 31, 2024, respectively, and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

Credit loss expense

Three Months Ended March 31,

Three Months Ended June 30,

Credit loss expense - loans

Credit loss reversal - OBS credit exposure

Credit loss (reversal) expense - OBS credit exposure

Credit loss expense

Six Months Ended June 30,

Credit loss expense - loans

Credit reversal expense - OBS credit exposure

Credit loss expense

The following tables present the activity in the ACL on loans for the periods presented.

For the three months ended March 31, 2025

For the three months ended June 30, 2025

Commercial & Industrial

2 unchanged sentences

Residential Real Estate - Jr Lien

For the six months ended June 30, 2025

Commercial & Industrial

Commercial Real Estate

Residential Real Estate - 1st Lien

Residential Real Estate - Jr Lien

$ ( 111,051 )

For the year ended December 31, 2024

5 unchanged sentences

$ ( 1,481,674 )

For the three months ended March 31, 2024

For the three months ended June 30, 2024

Commercial & Industrial

Commercial Real Estate

Residential Real Estate - 1st Lien

Residential Real Estate - Jr Lien

For the six months ended June 30, 2024

Commercial & Industrial

$ ( 151,519 )

37 unchanged sentences

The risk ratings within the loan portfolio by loan segment and origination year, were as follows:

As of March 31, 2025

As of June 30, 2025

Term Loans Amortized Cost Basis by Origination Year

12 unchanged sentences

Substandard/Doubtful

As of March 31, 2025, there were no Special mention loans or Substandard/Doubtful loans within the Purchased, Municipal, and Consumer loan segments.

As of June 30, 2025, there were no Special mention loans or Substandard/Doubtful loans within the Purchased, Municipal, and Consumer loan segments.

As of December 31, 2024

14 unchanged sentences

Gross charge-offs, by loan segment and origination year, were as follows:

For the three months ended March 31, 2025

For the six months ended June 30, 2025

Term Loans Amortized Cost Basis by Origination Year

3 unchanged sentences

Total current period gross charge-offs

For the three months ended March 31, 2025, there were no current period gross charge-offs within the Purchased, CRE, Municipal, Residential real estate 1st lien and Residential real estate Jr lien loan segments.

For the six months ended June 30, 2025, there were no current period gross charge-offs within the Purchased, CRE, Municipal and Residential real estate Jr lien loan segments.

There was $266 in gross charge-offs in the Residential real estate 1 st lien loan segment, but due to rounding in the table above it is not disclosed in this table.

For the year ended December 31, 2024

7 unchanged sentences

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing as of the dates presented.

There were no nonaccrual loans with an ACL as of March 31, 2025, or December 31, 2024.

March 31, 2025

There were no nonaccrual loans with an ACL as of June 30, 2025, or December 31, 2024.

June 30, 2025

Commercial & industrial

8 unchanged sentences

The following is an age analysis of past due loans (including non-accrual) as of the balance sheet dates, by portfolio segment:

March 31, 2025

June 30, 2025

Commercial & industrial

18 unchanged sentences

repayment expected through underlying collateral, no other expected sources of repayment) as of the balance sheet dates, by collateral type:

March 31, 2025

June 30, 2025

Commercial & industrial

3 unchanged sentences

(1) Including, but not limited to, inventory, equipment, and accounts receivable, but excluding real estate.

Residential real estate loans in process of foreclosure comprised of one loan in the amount of $ 88,780 as of March 31, 2025, and December 31, 2024.

Residential real estate loans in process of foreclosure comprised of one loan in the amount of $ 88,780 as of December 31, 2024.

There were no residential real estate loans in process of foreclosure at June 30, 2025.

Allowance for credit losses

18 unchanged sentences

The Company's PD and LGD assumptions may be derived from internal historical default and loss experience or from external data where there are not statistically meaningful loss events for a loan segment, or it does not have default and loss data that covers a full economic cycle.

As of December 31, 2024 and 2023, the primary macroeconomic drivers used within the DCF model included forecasts of civilian unemployment and changes in national gross domestic product (GDP).

As of June 30, 2025, the primary macroeconomic drivers used within the DCF model included forecasts of civilian unemployment and changes in national gross domestic product (GDP).

Management monitors and assesses its macroeconomic drivers at least annually (generally in the fourth quarter, or more frequently as circumstances warrant) to determine whether they continue to be the most predictive indicator of losses within the Company's loan portfolio, and these macroeconomic drivers may change from time to time.

3 unchanged sentences

Management monitors and assesses the forecast and reversion period at least annually, or more frequently as circumstances warrant.

The Company used a one-year forecast and reversion period to calculate the ACL on loans as of March 31, 2025 and 2024.

The Company used a one-year forecast and reversion period to calculate the ACL on loans as of June 30, 2025 and 2024.

When the DCF method is used to determine the ACL, management does not adjust the effective interest rate used to discount expected cash flows to incorporate expected prepayments.

15 unchanged sentences

This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available.

During the fourth quarter of 2024, after review and analysis, management adjusted the qualitative factors for credit management oversight in all loan segments, reflecting certain personnel changes at the Company, including the retirement of the current Chief Executive Officer and the former Chief Lending Officer (CLO) taking on the combined role of President & Chief Executive Officer, with the senior team overseeing credit and lending being new in their roles.

Also during the fourth quarter of 2024, the qualitative factors for criticized and classified loans in the commercial and industrial and CRE portfolios were adjusted to reflect recent trends and the qualitative factors for external factors, exceptions, and delinquency and non-performing loans in the consumer portfolio were adjusted to improve a low coverage ratio discovered during backtesting.

Management’s review of the ACL during the first quarter of 2025 resulted in increases in the risk status of qualitative factors to reflect increasing trends in volume and exceptions in the residential loan portfolio as well as factors related to delinquencies and non-performing loans to reflect the uncertainty as to how and when inflation or a recession will, or could, affect our customers’ ability to pay.

During the second quarter of 2025, management’s review of the ACL resulted in a decrease to the qualitative factor for loan review in the commercial and CRE loan segments.

This is a reflection of the strong loan review process that is in place.

The qualitative factors are determined based on the various risk characteristics of each loan segment.

59 unchanged sentences

In connection with modifications, the Company considers applicable regulatory guidance, including a 2023 Interagency Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts.

There were no loan modifications during the first three months of 2025 or 2024.

As of March 31, 2025, the Company was not committed to lend additional amounts to borrowers experiencing financial difficulty whose loans were previously modified.

The following table presents the amortized cost basis of loans as of June 30, 2025, that were both experiencing financial difficulty and modified during the six months ended June 30, 2025, by class and by type of modification.

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.

Commercial & Industrial

As of June 30, 2025, the Company was not committed to lend additional amounts to borrowers experiencing financial difficulty whose loans were previously modified.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2025.

Term Extension

Commercial & Industrial

The Company closely monitors the performance of loans to borrowers experiencing financial difficulty that have been modified to understand the effectiveness of its modification efforts.

1 unchanged sentence

Commercial & Industrial

There were no loans to borrowers experiencing financial difficulty that were modified within the previous twelve months that had subsequently defaulted during the three months ended March 31, 2025.

There were no loans to borrowers experiencing financial difficulty that were modified within the previous twelve months that had subsequently defaulted during the six months ended June 30, 2025.

Loans are considered defaulted at 90 days past due.

8 unchanged sentences

The ACL on OBS credit exposures is presented within accrued interest and other liabilities on the consolidated balance sheets.

As of March 31, 2025, and December 31, 2024, the ACL on OBS credit exposures totaled $ 610,155 and $ 703,975 , respectively.

As of June 30, 2025, and December 31, 2024, the ACL on OBS credit exposures totaled $ 622,579 and $ 703,975 , respectively.

Goodwill and Other Intangible Assets

5 unchanged sentences

The following table shows the changes in the carrying amount of the MSRs, included in other assets in the consolidated balance sheets, for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

Balance at beginning of year

1 unchanged sentence

MSRs amortized

Change in valuation allowance

Balance at end of period

3 unchanged sentences

MSRs amortized

Change in valuation allowance

Balance at end of period

Balance at end of year

Certain assets and liabilities are recorded at fair value to provide additional insight into the Company’s quality of earnings and comprehensive income.

71 unchanged sentences

The estimated fair values of the Company's financial instruments as of the balance sheet dates were as follows:

March 31, 2025

June 30, 2025

(Dollars in Thousands)

12 unchanged sentences

Brokered deposits

Overnight borrowings

Short-term advances

Long-term advances

33 unchanged sentences

The Company has evaluated events and transactions through the date that the financial statements were issued for potential recognition or disclosure in these financial statements, as required by GAAP.

On March 19, 2025, the Company’s Board declared a cash dividend of $ 0.24 per common share, payable May 1, 2025, to shareholders of record as of April 15, 2025.

On July 16, 2025, the Company’s Board declared a cash dividend of $ 0.24 per common share, payable August 1, 2025, to shareholders of record as of July 15, 2025.

This dividend has been recorded in the Company’s consolidated financial statements as of the declaration date, including shares issuable under the DRIP.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements