What changed in this filing

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Item 1. Financial Statements

2024-08-14 compared with 2024-06-24 · 146 added, 118 removed, 662 unchanged (29% of the section changed)

33 unchanged sentences

Three Months Ended

Six Months Ended

Interest and Dividend Income

31 unchanged sentences

Three Months Ended

Six Months Ended

Net Income (Loss)

Other Comprehensive Income, Net of Tax

Unrealized Net Gains on Investment Securities Available-for-Sale Arising During the Period

Reclassification Adjustment for Net Losses Realized in Net Income, Net

Total Other Comprehensive Income

Other Comprehensive Income (Loss), Net of Tax

Unrealized Net Gains (Losses) on Investment Securities Available-for-Sale Arising During the Period

Reclassification Adjustment for Net Losses Realized in Net Income (Loss), Net

Total Other Comprehensive Income (Loss)

Comprehensive Income (Loss)

4 unchanged sentences

Comprehensive

Balance at March 31, 2023

Other Comprehensive Loss

Balance at June 30, 2023

Balance at March 31, 2024

Other Comprehensive Income

Balance at June 30, 2024

Comprehensive

Balance at December 31, 2022

Other Comprehensive Income

Balance at March 31, 2023

Balance at June 30, 2023

Balance at December 31, 2023

Other Comprehensive Income

Balance at March 31, 2024

Balance at June 30, 2024

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash Flows from Operating Activities

3 unchanged sentences

Recovery of Credit Losses

Gain on Sale of Premises and Equipment

Net Amortization of Deferred Loan Costs

Net Amortization on Investment Securities

Net Loss on Sale of Investment Securities

Loss on Sale of Investment Securities

Federal Home Loan Bank Stock Dividend

11 unchanged sentences

Increase in Loans Receivable, Net

Proceeds from Sale of Premises and Equipment

Purchases of Premises and Equipment

Net Cash Provided by (Used in) Investing Activities

Net Cash Used in Investing Activities

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash Flows from Financing Activities

3 unchanged sentences

Insurance, and Repairs

Net Cash Provided by Financing Activities

Net Increase in Cash and Cash Equivalents

Net Cash Provided by (Used in) Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

5 unchanged sentences

Investment Securities Available-for-Sale

Non-Cash Investing and Financing Activities

Real Estate Owned Acquired Through Foreclosure

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

17 unchanged sentences

If the conversion is unsuccessful, all deferred costs will be charged to operations.

The Bank had $ 994,000 and $ 203,000 of deferred conversion costs as of March 31, 2024 and December 31, 2023, respectively, included in other assets on the balance sheets.

The Bank incurred approximately $ 236,000 in deferred conversion costs subsequent to March 31, 2024 through the date the financial statements were available to be issued.

The Bank had $ 1,419,000 and $ 203,000 of deferred conversion costs as of June 30, 2024 and December 31, 2023, respectively, included in other assets on the balance sheets.

The Bank incurred approximately $ 127,000 in deferred conversion costs subsequent to June 30, 2024 through the date the financial statements were available to be issued.

Upon the completion of the conversion transaction, the Bank will establish a liquidation account in the amount of its retained earnings contained in the latest financial statements included in the final prospectus.

1 unchanged sentence

The conversion will be accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities, and equity unchanged as a result.

The Conversion was completed on July 31, 2024, at which time the Company became the holding company of the Bank, with the Company owning all of the issued and outstanding shares of the Bank’s common stock.

In the Conversion the Company sold 5,459,473 shares of its common stock at $ 10.00 per share and contributed an additional 100,000 shares of its common stock to The Fifth District Community Foundation, Inc.

Basis of Presentation

1 unchanged sentence

GAAP) and predominant practices within the banking industry.

In the opinion of management, the accompanying unaudited financial statements include all adjustments considered necessary to present fairly the Bank’s financial position as of March 31, 2024, results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023.

All adjustments are normal and recurring nature and are the only adjustments included in the accompanying unaudited financial statements.

Interim results are not necessarily indicative of results for a full year.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

results of operations for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023.

All adjustments are normal and recurring nature and are the only adjustments included in the accompanying unaudited financial statements.

Interim results are not necessarily indicative of results for a full year.

Use of Estimates

6 unchanged sentences

While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions.

In addition, regulatory agencies, as an integral part of their examination processes, periodically review the estimated losses on loans and may have judgements that differ from management.

As a result of such reviews, management may determine to adjust the allowance for credit losses.

In addition, regulatory agencies, as an integral part of their examination processes, periodically review the estimated losses on loans.

Based on such reviews the Bank may determine to recognize additional losses based on their judgements about information available to them at the time of their examination.

Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near-term.

3 unchanged sentences

Generally, federal funds are sold for one-day periods.

Cash and due from banks include bank deposit accounts aggregating approximately $ 26,169,000 and $ 8,934,000 in excess of the Federal Deposit Insurance Corporation limit of $ 250,000 per institution on March 31, 2024 and December 31, 2023, respectively.

Cash and due from banks include bank deposit accounts aggregating approximately $ 28,569,000 and $ 8,934,000 in excess of the Federal Deposit Insurance Corporation limit of $ 250,000 per institution on June 30, 2024 and December 31, 2023, respectively.

The Bank has not experienced any losses and does not believe that significant credit risk exists as a result of this practice.

1 unchanged sentence

The requirement is dependent upon the Bank’s cash on hand or noninterest-bearing balances.

There was no reserve requirement as of March 31, 2024, and December 31, 2023.

There was no reserve requirement as of June 30, 2024, and December 31, 2023.

Investment Securities

1 unchanged sentence

These securities are carried at cost, adjusted for amortization of premium and accretion of discounts.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities, identified as the call date as to premiums and maturity date as to discounts.

The Bank held no held-to-maturity securities as of March 31, 2024, and December 31, 2023.

Debt securities classified as available-for-sale are those debt securities that the Bank intends to hold for an indefinite period of time but not necessarily to maturity.

Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in the maturity mix of the Bank’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors.

These securities are carried at estimated fair value by a third-party pricing service with any

Purchase premiums and discounts are recognized in interest income using the effective interest method over the terms of the securities, identified as the call date as to premiums and maturity date as to discounts.

The Bank held no held-to-maturity securities as of June 30, 2024 or December 31, 2023.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of equity capital, net of the related deferred tax effect.

Debt securities classified as available-for-sale are those debt securities that the Bank intends to hold for an indefinite period of time but not necessarily to maturity.

These securities are carried at estimated fair value by a third-party pricing service with any unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of equity capital, net of the related deferred tax effect.

Debt securities that are classified as trading are acquired and held principally for the purpose of selling in the near term.

These securities are carried at estimated fair value by a third-party pricing service with any unrealized gains or losses included in net income and reported in non-interest income in the statements of income.

The Bank held no trading securities as of March 31, 2024 and December 31, 2023.

Gains and losses realized on sales of debt securities, determined using the adjusted cost basis of the specific securities sold, are included in non-interest income in the statements of income.

The Bank held no trading securities as of June 30, 2024 or December 31, 2023.

Gains and losses realized on sales of debt securities, determined using the adjusted cost basis of the specific securities sold, are included in non-interest income in the statements of operations.

Dividend and interest income, including amortization of premium and accretion of discount arising at acquisition, from all categories of investment securities are included in interest income in the statements of operations.

8 unchanged sentences

In making the assessment, the Bank may consider various factors including the extent to which fair value is less than amortized cost, performance on underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments, and adverse conditions specifically related to the security.

If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected is compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited to the amount that the fair value is less than the amortized cost basis, recognized as a provision for credit loss in the statements of income.

Any amount of noncredit related unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

1 unchanged sentence

Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met.

At March 31, 2024 and December 31, 2023, there was no allowance for credit loss related to the available-for-sale portfolio.

Accrued interest receivable on available-for-sale securities totaled approximately $ 155,000 and $ 168,000 at March 31, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

At June 30, 2024 and December 31, 2023, there was no allowance for credit loss related to the available-for-sale portfolio.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Accrued interest receivable on available-for-sale securities totaled approximately $ 237,000 and $ 168,000 at June 30, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

Loans Receivable

1 unchanged sentence

Amortized cost is the principal balance outstanding, net of purchase premiums and discounts and deferred fees and costs.

Accrued interest receivable related to loans totaled approximately $ 1,767,000 and $ 1,589,000 at March 31, 2024, and December 31, 2023, respectively, and was reported in accrued interest receivable on the balance sheets.

Accrued interest receivable related to loans totaled approximately $ 1,834,000 and $ 1,589,000 at June 30, 2024, and December 31, 2023, respectively, and was reported in accrued interest receivable on the balance sheets.

Interest income is accrued on the unpaid principal balance as earned using the interest method over the life of the loan.

45 unchanged sentences

Loans that do not share risk characteristics are evaluated on an individual basis.

When the borrower is experiencing financial difficulty and repayment is expected to be provided through the operation or sale of the collateral, the expected credit losses are based on the fair value of collateral at the reporting date, adjusted for selling costs as appropriate.

FIFTH DISTRICT SAVINGS BANK

4 unchanged sentences

Such financial instruments are recorded when they are funded.

The Bank records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Bank’s statements of income.

The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees.

2 unchanged sentences

The Bank is the beneficiary of life insurance contracts purchased on the lives of certain officers of the Bank which are reported at their cash surrender value.

At March 31, 2024, and December 31, 2023, life insurance contracts totaled approximately $ 10,415,000 and $ 10,332,000 , respectively.

Appreciation in the cash surrender value amounted to approximately $ 83,000 and $ 61,000 for the three months ended March 31, 2024 and 2023, respectively.

Appreciation in value of the insurance policies is included in bank owned life insurance within non-interest income in the statements of income.

At June 30, 2024, and December 31, 2023, life insurance contracts totaled approximately $ 10,513,000 and $ 10,332,000 , respectively.

Appreciation in the cash surrender value amounted to approximately $ 98,000 and $ 88,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 181,000 and $ 148,000 for the six months ended June 30, 2024 and 2023, respectively.

Appreciation in value of the insurance policies is included in bank owned life insurance within non-interest income in the statements of operations.

Premises and Equipment

12 unchanged sentences

Operating income of such properties, net of related expenses, and gains and losses on their disposition, are included in the statements of operations.

The Bank had approximately $ 42,000 of real estate owned as of March 31, 2024, and December 31, 2023.

The Bank had approximately $ 42,000 of real estate owned as of June 30, 2024, and December 31, 2023.

FIFTH DISTRICT SAVINGS BANK

12 unchanged sentences

The Bank believes that it has appropriate support for any tax positions taken, and management has determined that there are no uncertain tax positions that are material to the financial statements.

The Bank recognized no interest and/or penalties in the statements of operations for the three months ended March 31, 2024 and 2023, nor any amount of interest and/or penalties payable that were recognized in the balance sheets as of March 31, 2024 and December 31, 2023, in relation to its income tax returns.

The Bank recognized no interest and/or penalties in the statements of operations for the three months and six months ended June 30, 2024 and 2023, nor any amount of interest and/or penalties payable that were recognized in the balance sheets as of June 30, 2024 and December 31, 2023, in relation to its income tax returns.

Any penalties or interest would be recognized in income tax expense.

23 unchanged sentences

The Bank expenses all advertising costs, except for direct-response advertising, as incurred.

Advertising and promotional expenses totaled approximately $ 28,000 and $ 69,000 for the three months ended March 31.

2024 and 2023, respectively.

Advertising and promotional expenses totaled approximately $ 48,000 and $ 73,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 76,000 and $ 142,000 for the six months ended June 30, 2024 and 2023, respectively.

In the event the Bank incurs expenses for material direct-response advertising, it will be amortized over the estimated benefit period.

Direct-response advertising consists of advertising whose primary purpose is to elicit sales to customers who could be shown to have responded specifically to the advertising and results in probable future benefits.

For the three months ended March 31, 2024, and 2023, the Bank did not incur any direct-response advertising costs.

For the three months and six months ended June 30, 2024, and 2023, the Bank did not incur any direct-response advertising costs.

Recent Accounting Pronouncements - Not Yet Adopted

8 unchanged sentences

The amendments were effective upon issuance.

The Company does not expect these amendments to have a material effect on its financial statements.

The Bank does not expect these amendments to have a material effect on its financial statements.

In August 2023, the FASB issued ASU 2023-04, which included amendments to SEC Paragraphs in the Accounting Standards Codification pursuant to SEC Staff Accounting Bulletin No.

The amendments were effective upon issuance.

The Company does not expect these amendments to have a material effect on its financial statements.

In December 2023, the FASB issued ASU 2023-09, which amended the Income Taxes topic in the Accounting Standards Codification 742 to improve the transparency of income tax disclosures.

The amendments are effective

The Bank does not expect these amendments to have a material effect on its financial statements.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

for annual periods beginning after December 15, 2024.

In December 2023, the FASB issued ASU 2023-09, which amended the Income Taxes topic in the Accounting Standards Codification 742 to improve the transparency of income tax disclosures.

The amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company does not expect these amendments to have a material effect on its financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

The Bank does not expect these amendments to have a material effect on its financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Bank’s financial position, results of operations or cash flows.

Investment Securities

The amortized cost and estimated fair values of investment securities available-for-sale at March 31, 2024 and December 31, 2023 are as follows (in thousands):

March 31, 2024

The amortized cost and estimated fair values of investment securities available-for-sale at June 30, 2024 and December 31, 2023 are as follows (in thousands):

June 30, 2024

Government Agencies

6 unchanged sentences

Collateralized Mortgage Obligations

The following tables show the gross unrealized losses and estimated fair value of investment securities available-for-sale for which an allowance for credit losses has not been recorded by category and length of time that securities have been in a continuous unrealized loss position at March 31, 2024, and December 31, 2023 (in thousands):

The following tables show the gross unrealized losses and estimated fair value of investment securities available-for-sale for which an allowance for credit losses has not been recorded by category and length of time that securities have been in a continuous unrealized loss position at June 30, 2024, and December 31, 2023 (in thousands):

With Losses Under

With Losses Over

March 31, 2024

June 30, 2024

Government Agencies

9 unchanged sentences

Collateralized Mortgage Obligations

At March 31, 2024, 63 of the Bank’s available-for-sale securities had unrealized losses totaling 14.3 % of the individual securities’ amortized cost basis and 13.7 % of the Bank’s total amortized cost basis of the investment securities portfolio.

At March 31, 2024, 60 of the 63 securities had been in a continuous loss position for over 12 months.

At June 30, 2024, 69 of the Bank’s available-for-sale securities had unrealized losses totaling 11.8 % of the individual securities’ amortized cost basis and 10.1 % of the Bank’s total amortized cost basis of the investment securities portfolio.

At June 30, 2024, 60 of the 69 securities had been in a continuous loss position for over 12 months.

The unrealized losses of these securities are believed to be caused by interest rate increases and changing market conditions and the Bank does not intend to sell the securities, and it is not likely to be required to sell these securities prior to maturity.

1 unchanged sentence

All of the mortgage-backed securities and collateralized mortgage obligations in an unrealized loss position are issued or guaranteed by government-sponsored enterprises.

No allowance for credit losses was recorded for available-for-sale securities at March 31, 2024, and December 31, 2023.

The amortized cost and estimated fair value of securities classified as available-for-sale at March 31, 2024, by contractual maturity, are shown in the table below (in thousands).

No allowance for credit losses was recorded for available-for-sale securities at June 30, 2024, and December 31, 2023.

The amortized cost and estimated fair value of securities classified as available-for-sale at June 30, 2024, by contractual maturity, are shown in the table below (in thousands).

Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options.

6 unchanged sentences

Due after 10 Years

The bank sold $ 18,685,000 of securities available-for-sale and recorded a loss of $ 1,144,000 during the three months ended March 31, 2024.

There were no sales of available-for-sale securities during the three months ended March 31, 2023.

There were no sales of available-for-sale securities during the three months ended June 30, 2024 and 2023.

The Bank sold $ 18,685,000 securities available-for-sale and recorded a loss of $ 1,144,000 during the six months ended June 30, 2024 and there was no sales of available-for-sale securities during the six months ended June 30, 2023.

FIFTH DISTRICT SAVINGS BANK

1 unchanged sentence

Restricted Stock

The following table shows the amount of restricted stock as of March 31, 2024, and December 31, 2023 (in thousands):

The following table shows the amount of restricted stock as of June 30, 2024, and December 31, 2023 (in thousands):

Federal Home Loan Bank

1 unchanged sentence

Loans Receivable and Allowance for Credit Losses

Loans receivable at March 31, 2024, and December 31, 2023 are summarized as follows (in thousands):

Loans receivable at June 30, 2024, and December 31, 2023 are summarized as follows (in thousands):

One-to-Four Family Mortgages

7 unchanged sentences

Total Loans Receivable, Net

The following tables present an analysis of past-due loans as of March 31, 2024, and December 31, 2023 (in thousands):

The following tables present an analysis of past-due loans as of June 30, 2024, and December 31, 2023 (in thousands):

Loans 90 Days or

More Past Due and

March 31, 2024

June 30, 2024

Still Accruing

24 unchanged sentences

Notes to Financial Statements

The following table presents the Bank’s recorded investment in loans by credit quality indicator by year of origination as of March 31, 2024 (in thousands):

The following table presents the Bank’s recorded investment in loans by credit quality indicator by year of origination as of June 30, 2024 (in thousands):

Term Loans by Year of Origination

46 unchanged sentences

Nonaccrual Loans

The following table is a summary of the Bank’s nonaccrual loans by major categories for the period indicated (in thousands):

March 31, 2024

The following table is a summary of the Bank’s nonaccrual loans by major categories at June 30, 2024 and December 31, 2023(in thousands):

June 30, 2024

December 31, 2023

7 unchanged sentences

The Bank does not recognize interest income while loans are on nonaccrual status.

The following table represents the accrued interest receivables written off by reversing interest income during the three months ended March 31, 2024 and March 31, 2023 (in thousands):

For the Three Months Ended

March 31, 2024

March 31, 2023

The following table represents the accrued interest receivables written off by reversing interest income during the three and six months ended June 30, 2024 and 2023 (in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

One-to-Four Family Mortgages

12 unchanged sentences

Notes to Financial Statements

The following table presents an analysis of collateral-dependent loans of the Bank as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following table presents an analysis of collateral-dependent loans of the Bank as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

One-to-Four Family Mortgages

10 unchanged sentences

Allowance for Credit Losses

The decrease in the allowance for credit losses as of March 31, 2024 as compared to December 31, 2023 was driven by various factors, including the evolving economic outlook, values in the local real estate market, and low net charge-offs.

The following table summarizes the activity related to the allowance for credit losses for the three months ended March 31, 2024 (in thousands):

The decrease in the allowance for credit losses as of June 30, 2024 as compared to December 31, 2023 was driven by various factors, including the evolving economic outlook, values in the local real estate market, low net charge-offs, and refining our peer group selection to better align with peers whose loan portfolios reflect the composition of our own loan portfolio and the current local economic conditions.

Adjusting this component of our estimate has resulted in a reduced peer group loss rate and corresponding adjustments to our peer comparisons.

This change in accounting estimate will be recognized prospectively.

In turn our CECL reserve percentage was decreased resulting in a $ 1.1 million reversal in our allowance for credit loss.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

The following table summarizes the activity related to the allowance for credit losses for the three months ended June 30, 2024 and 2023 (in thousands):

Loans / Lines

March 31, 2024

Three Months Ended June 30, 2024

Allowance for Credit Losses

4 unchanged sentences

Ending Balance

Three Months Ended June 30, 2023

Allowance for Credit Losses

Beginning Balance, Prior to Adoption of ASC 326

Recovery of Credit Loss

Loans Charged-Off

Recoveries Collected

Ending Balance

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

The following table includes disclosures related to the allowance for loan losses for the three months ended March 31, 2023 (in thousands):

The following table includes disclosures related to the allowance for loan losses for the six months ended June 30, 2024 and 2023 (in thousands):

Loans / Lines

March 31, 2023

Six Months Ended June 30, 2024

Allowance for Credit Losses

Beginning Balance

Recovery of Credit Loss

Loans Charged-Off

Recoveries Collected

Ending Balance

Six Months Ended June 30, 2023

Allowance for Credit Losses

Beginning Balance, Prior to Adoption of ASC 326

16 unchanged sentences

If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

Upon the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectable, the loan (or portion of the loan) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

The Bank had no loans with modifications to borrowers experiencing financial difficulty as of March 31, 2024, and December 31, 2023.

There were no modifications to borrower’s experiencing financial difficulty entered into during the three months ended March 31, 2024 and 2023 and no loans which had defaults during the three months ended March 31, 2024 and 2023 which have been modified due to the borrower experiencing financial difficulty.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Upon the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectable, the loan (or portion of the loan) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

The Bank had no loans with modifications to borrowers experiencing financial difficulty as of June 30, 2024, and December 31, 2023.

There were no modifications to borrower’s experiencing financial difficulty entered into during the three and six months ended June 30, 2024 and 2023 and no loans which had defaults during the three and six months ended June 30, 2024 and 2023 which have been modified due to the borrower experiencing financial difficulty.

Unfunded Commitments

The Bank did not record an adjustment for unfunded commitments for the adoption of ASC 326.

For the three months ended March 31, 2024 and 2023, provision for credit losses for unfunded commitments totaled approximately $- 0 -, respectively.

At March 31, 2024 and December 31, 2023, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was approximately $ 125,000 .

For the three and six months ended June 30, 2024 and 2023, provision for credit losses for unfunded commitments totaled approximately $- 0 -.

At June 30, 2024 and December 31, 2023, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was approximately $ 125,000 .

Related Party Loans

2 unchanged sentences

They do not involve more than normal risk of collectability or present other unfavorable features.

An analysis of the related party activity during the three months ended March 31, 2024 and 2023 is as follows (in thousands):

An analysis of the related party activity during the six months ended June 30, 2024 and 2023 is as follows (in thousands):

Balance, Beginning of the Year

9 unchanged sentences

Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices.

The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, Tier I capital and total capital to risk-weighted assets and Tier I capital to average assets.

1 unchanged sentence

banks (Basel Ill rules) became fully effective for the Bank on January 1, 2019.

Management believes, as of March 31, 2024 and December 31, 2023, that the Bank meets all capital adequacy requirements to which it is subject.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

As of March 31, 2024 and December 31, 2023, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.

Management believes, as of June 30, 2024 and December 31, 2023, that the Bank meets all capital adequacy requirements to which it is subject.

As of June 30, 2024 and December 31, 2023, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.

To be categorized as well capitalized, the Bank must maintain minimum total ratios as disclosed in the table below.

There are no conditions or events since the notification that management believes have changed the Bank’s prompt corrective action category.

The Bank’s actual capital amounts and ratios as of March 31, 2024 and December 31, 2023 are also presented in the table below (dollar amounts in thousands):

The Bank’s actual capital amounts and ratios as of June 30, 2024 and December 31, 2023 are also presented in the table below (dollar amounts in thousands):

Required to Be Well-

3 unchanged sentences

Action Provisions

March 31, 2024

June 30, 2024

Tier 1 Capital to Average Assets

7 unchanged sentences

Total Capital to Risk-Weighted Assets

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Comprehensive Income (Loss)

The components of other comprehensive income (loss) and related tax effects are as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Gross Unrealized Holding Gains on Investment Securities Available-for-Sale

6 unchanged sentences

Net-of-Tax Amount

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Financial Instruments with Off-Balance Sheet Risk

3 unchanged sentences

The contract amounts of those instruments reflect the extent of the involvement the Bank has in particular classes of financial instruments.

As of March 31, 2024 and December 31, 2023, the Bank had made various commitments to extend credit totaling approximately $ 23,000,000 and $ 24,000,000 , respectively.

Of these commitments, approximately $ 7,160,000 and $ 9,368,000 are at variable rates as of March 31, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Bank had made various commitments to extend credit totaling approximately $ 23,447,000 and $ 24,000,000 , respectively.

Of these commitments, approximately $ 8,865,000 and $ 9,368,000 are at variable rates as of June 30, 2024 and December 31, 2023, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.

3 unchanged sentences

The amount of collateral obtained, if considered necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the customer.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Fair Value Measurements

10 unchanged sentences

The following describes the hierarchy designation, valuation methodology, and key inputs to measure fair value on a recurring basis for designated financial instruments:

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Investment Securities Available-for-Sale

3 unchanged sentences

The carrying amount of accrued interest on securities approximates its fair value.

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 are summarized below (in thousands):

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 are summarized below (in thousands):

Fair Value Measurements

March 31, 2024

June 30, 2024

Investment Securities Available-for-Sale

2 unchanged sentences

Collateralized Mortgage Obligations

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Fair Value Measurements

4 unchanged sentences

Collateralized Mortgage Obligations

The Bank did no t record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at March 31, 2024 and December 31, 2023.

There were no transfers into, out of, purchases, or sales of Level 3 securities during the three months ended March 31, 2024 and 2023.

The Bank did no t record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at June 30, 2024 and December 31, 2023.

There were no transfers into, out of, purchases, or sales of Level 3 securities during the three and six months ended June 30, 2024 and 2023.

Assets and Liabilities Measured on a Non-Recurring Basis

The following describes the hierarchy designation, valuation methodologies, and key inputs for those assets that are measured at fair value on a non-recurring basis:

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Collateral Dependent Loans

10 unchanged sentences

Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

The following tables present the Bank’s assets and liabilities measured at fair value on a non-recurring basis at March 31, 2024 and December 31, 2023 (in thousands):

The following tables present the Bank’s assets and liabilities measured at fair value on a non-recurring basis at June 30, 2024 and December 31, 2023 (in thousands):

Fair Value Measurements

March 31, 2024

June 30, 2024

Collateral Dependent Loans

Real Estate Owned

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Fair Value Measurements

2 unchanged sentences

Real Estate Owned

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

The following tables show significant unobservable inputs used in the fair value measurement of Level 3 assets:

Weighted Average

March 31, 2024

June 30, 2024

Collateral Dependent Loans

14 unchanged sentences

Cash and Cash Equivalents - Fair value approximates carrying value.

Certificates of Deposit at Other Financial Institutions - Fair value approximates carrying value.

Investment Securities Available-for-Sale - Fair value is obtained from an independent pricing service based on quoted market prices or quoted market prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques, or matrix pricing models.

4 unchanged sentences

Bank Owned Life Insurance - Fair value approximates carrying value.

Deposits - For NOW, savings and certain money market fund accounts, fair value is equal to the amount payable on demand or carrying value.

For time deposits, fair value is estimated using a discounted cash flow method.

FIFTH DISTRICT SAVINGS BANK

Notes to Financial Statements

Deposits - For NOW, savings and certain money market fund accounts, fair value is equal to the amount payable on demand or carrying value.

For time deposits, fair value is estimated using a discounted cash flow method.

Federal Home Loan Bank Advances- Fair value approximates carrying value.

The carrying amount and estimated fair value of the Bank’s financial instruments are as follows (in thousands):

Fair Value Measurements

March 31, 2024

June 30, 2024

Financial Assets

21 unchanged sentences

In accordance with the subsequent events topic of the FASB ASC 855, the Bank evaluates events and transactions that occur after the balance sheets date for potential recognition in the financial statements.

The effects of all subsequent events that provide additional evidence of conditions that existed at the balance sheets date are recognized in the financial statements as of March 31, 2024 and December 31, 2023.

The effects of all subsequent events that provide additional evidence of conditions that existed at the balance sheets date are recognized in the financial statements as of June 30, 2024 and December 31, 2023.

In preparing these financial statements, the Bank evaluated the events and transactions that occurred through the date the financial statements were available to be issued.

1 unchanged sentence

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