What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-07 · 333 added, 163 removed, 959 unchanged (34% of the section changed)

9 unchanged sentences

Mortgage loans held for sale

Loans receivable, net of allowance for credit losses of $ 64,704 – March 2025;

Loans receivable, net of allowance for credit losses of $ 64,815 – June 2025;

$ 64,760 – December 2024

20 unchanged sentences

authorized 1,000,000 shares;

issued and outstanding March 2025 and December 2024 - - 0 - shares

issued and outstanding June 2025 and December 2024 - - 0 - shares

Common stock, $ .01 par value;

authorized 20,000,000 shares;

issued and outstanding March 2025 – 11,565,211 shares;

issued and outstanding June 2025 – 11,396,533 shares;

December 2024 – 11,723,548 shares

36 unchanged sentences

Expense (income) on other real estate and repossessions

Acquired intangible asset amortization

Intangible asset amortization

Other operating expenses

8 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)

SIX MONTHS ENDED

INTEREST INCOME

Investment securities and other

TOTAL INTEREST INCOME

INTEREST EXPENSE

Securities sold under reverse repurchase agreements

Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities

Subordinated debentures issued to capital trust

Subordinated notes

TOTAL INTEREST EXPENSE

NET INTEREST INCOME

PROVISION FOR CREDIT LOSSES ON LOANS

PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES ON LOANS AND PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS

NON-INTEREST INCOME

Overdraft and insufficient funds fees

Point-Of-Sale and ATM fee income and service charges

Net gains on loan sales

Late charges and fees on loans

Loss on derivative interest rate products

TOTAL NON-INTEREST INCOME

NON-INTEREST EXPENSE

Salaries and employee benefits

Net occupancy and equipment expense

Office supplies and printing

Legal, audit and other professional fees

Expense (income) on other real estate and repossessions

Intangible asset amortization

Other operating expenses

TOTAL NON-INTEREST EXPENSE

INCOME BEFORE INCOME TAXES

PROVISION FOR INCOME TAXES

Basic Earnings Per Common Share

Diluted Earnings Per Common Share

Dividends Declared Per Common Share

See Notes to Consolidated Financial Statements

GREAT SOUTHERN BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

6 unchanged sentences

Comprehensive Income

SIX MONTHS ENDED

Unrealized appreciation (depreciation) on available-for-sale securities, net of taxes (credit) of $ 3,067 and $( 2,216 ), for 2025 and 2024, respectively

Unrealized loss on securities transferred to held-to-maturity, net of taxes (credit) of $( 32 ) and $( 24 ) for 2025 and 2024, respectively

Amortization of realized loss on termination of cash flow hedge, net of taxes (credit) of $( 920 ) and $( 924 ), for 2025 and 2024, respectively

Change in value of active cash flow hedges, net of taxes (credit) of $ 2,236 and $( 971 ) for 2025 and 2024, respectively

Comprehensive Income

See Notes to Consolidated Financial Statements

3 unchanged sentences

(In Thousands, Except Per Share Data)

THREE MONTHS ENDED MARCH 31, 2025

THREE MONTHS ENDED JUNE 30, 2025

Comprehensive

1 unchanged sentence

Income (Loss)

Balance, January 1, 2025

Balance, March 31, 2025

Stock issued under Stock Option Plan

5 unchanged sentences

Reclassification of treasury stock per Maryland law

Balance, June 30, 2025

THREE MONTHS ENDED JUNE 30, 2024

Comprehensive

Paid-in Capital

Income (Loss)

Balance, March 31, 2024

THREE MONTHS ENDED MARCH 31, 2024

Stock issued under Stock Option Plan

Common cash dividends declared, $ 0.40 per share

Change in fair value of cash flow hedges

Change in unrealized loss on held-to-maturity securities

Change in unrealized loss on available-for-sale securities

Repurchase of the Company’s common stock

Reclassification of treasury stock per Maryland law

Balance, June 30, 2024

See Notes to Consolidated Financial Statements

GREAT SOUTHERN BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands, Except Per Share Data)

SIX MONTHS ENDED JUNE 30, 2025

Comprehensive

4 unchanged sentences

Common cash dividends declared, $ 0.80 per share

Change in fair value of cash flow hedges

Change in unrealized loss on held-to-maturity securities

Change in unrealized gain on available-for-sale securities

Purchase of the Company’s common stock

Reclassification of treasury stock per Maryland law

Balance, June 30, 2025

SIX MONTHS ENDED JUNE 30, 2024

Comprehensive

Paid-in Capital

Income (Loss)

Balance, January 1, 2024

Stock issued under Stock Option Plan

Common cash dividends declared, $ 0.80 per share

Retained Earnings effect of ASU 2023-02 adoption

2 unchanged sentences

Change in unrealized loss on available-for-sale securities

Repurchase of the Company’s common stock

Purchase of the Company’s common stock

Reclassification of treasury stock per Maryland law

Balance, March 31, 2024

Balance, June 30, 2024

See Notes to Consolidated Financial Statements

3 unchanged sentences

(In Thousands)

THREE MONTHS ENDED

SIX MONTHS ENDED

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Net gain on loan sales

Net loss on sale of premises and equipment

Net (gain) loss on sale of premises and equipment

Net (gain) loss on sale/write-down of other real estate owned and repossessions

1 unchanged sentence

Loss on derivative interest rate products

Net non-cash gain recorded on contract termination

Deferred income taxes

3 unchanged sentences

Income taxes refundable/payable

Net cash provided by (used in) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

9 unchanged sentences

Redemption of Federal Home Loan Bank stock and change in other interest-earning assets

Net cash provided by investing activities

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase (decrease) in certificates of deposit

Net increase in checking and savings deposits

Net increase (decrease) in short-term borrowings

Net increase (decrease) in checking and savings deposits

Net increase in short-term borrowings

Proceeds from borrowing under Federal Reserve Bank Term Funding Program

Repayment of borrowing under Federal Reserve Bank Term Funding Program

Redemption of subordinated notes

Advances from borrowers for taxes and insurance

2 unchanged sentences

Stock options exercised

Net cash used in financing activities

Net cash provided by (used in) financing activities

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

10 unchanged sentences

Those adjustments consist only of normal recurring adjustments.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year.

Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year.

The consolidated statement of financial condition of the Company as of December 31, 2024, has been derived from the audited consolidated statement of financial condition of the Company as of that date.

27 unchanged sentences

ASU 2023-07 implements a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker, expands certain annual disclosures to interim periods, clarifies that single reportable segment entities must apply Topic 280 in its entirety and permits more than one measure of segment profit or loss to be reported under certain conditions.

ASU 2023-07 became effective for the Company for our annual financial statements in 2024 and is effective for interim periods within fiscal years beginning in 2025.

See Note 17 – Operating Segments for application of this ASU.

ASU 2023-07 became effective for the Company for our annual financial statements in 2024.

See Note 17 – Operating Segments.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

ASU 2023-09 is focused on additional income tax disclosures and requires public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate).

ASU 2023-09 became effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024.

The adoption of ASU 2023-09 in the three months ended March 31, 2025 did not have a material impact on the Company’s consolidated financial statements.

ASU 2023-09 became effective for the Company beginning with the fiscal year ending December 31, 2025.

In November 2024, the FASB issued ASU No.

8 unchanged sentences

EARNINGS PER SHARE

Three Months Ended March 31,

Three Months Ended June 30,

(In Thousands, Except Per Share Data)

5 unchanged sentences

Per common share amount

Options outstanding at March 31, 2025 and 2024, to purchase 854,813 and 871,587 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three month periods because the exercise prices of such options were greater than the average market price of the common stock for the three months ended March 31, 2025 and 2024, respectively.

Six Months Ended June 30,

(In Thousands, Except Per Share Data)

Average common shares outstanding

Per common share amount

Average common shares outstanding

Net effect of dilutive stock options – based on the treasury stock method using average market price

Diluted common shares

Per common share amount

Options outstanding at June 30, 2025 and 2024, to purchase 835,549 and 741,708 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three- and six-month periods then ended because the exercise prices of such options were greater than the average market price of the common stock for the three- and six-months ended June 30, 2025 and 2024, respectively.

INVESTMENT SECURITIES

Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts.

Premiums and discounts are amortized and accreted, respectively, to interest income over the security’s estimated life.

Prepayments are anticipated for certain mortgage-backed securities.

Premiums on callable securities are amortized to their earliest call date.

Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value.

4 unchanged sentences

Premiums on callable securities are amortized to their earliest call date.

Premiums and discounts are amortized and accreted, respectively, to interest income over the security’s estimated life.

Prepayments are anticipated for certain mortgage-backed securities.

Premiums on callable securities are amortized to their earliest call date.

The amortized cost and fair values of securities were as follows:

March 31, 2025

June 30, 2025

(In Thousands)

4 unchanged sentences

Small Business Administration securities

March 31, 2025

June 30, 2025

(In Thousands)

16 unchanged sentences

States and political subdivisions

The amortized cost and fair value of available-for-sale and held-to-maturity securities at March 31, 2025, by contractual maturity, are shown below.

The amortized cost and fair value of available-for-sale and held-to-maturity securities at June 30, 2025, by contractual maturity, are shown below.

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

12 unchanged sentences

Certain available-for-sale investments in debt securities are reported in the financial statements at an amount less than their amortized cost.

Total fair value of these investments at March 31, 2025 and December 31, 2024, was approximately $ 458.2 million and $ 523.9 million, respectively, which was approximately 85.5 % and 98.2 % of the Company’s total available-for-sale investment portfolio at those dates.

The total fair value of these investments at June 30, 2025 and December 31, 2024, was approximately $ 469.2 million and $ 523.9 million, respectively, which was approximately 88.9 % and 98.2 % of the Company’s total available-for-sale investment portfolio at those dates.

A high percentage of the unrealized losses were related to the Company’s mortgage-backed securities, collateralized mortgage obligations and Small Business Administration (SBA) securities, which are issued and guaranteed by U.S.

1 unchanged sentence

The Company’s state and political subdivisions securities are investments in insured fixed rate municipal bonds for which the issuers continue to make timely principal and interest payments under the contractual terms of the securities.

Held-to-maturity investments in debt securities are reported in the financial statements at their amortized carrying value at March 31, 2025 and December 31, 2024, which was $ 185.9 million and $ 187.4 million, respectively.

Total fair value of these investments at March 31, 2025 and December 31, 2024 was approximately $ 165.2 million and $ 162.8 million, respectively, which is 100.0 % of the Company’s held-to-maturity investment portfolio.

Held-to-maturity investments in debt securities are reported in the financial statements at their amortized carrying value at June 30, 2025 and December 31, 2024, which was $ 183.1 million and $ 187.4 million, respectively.

Total fair value of these investments at June 30, 2025 and December 31, 2024 was approximately $ 163.8 million and $ 162.8 million, respectively, which is 100.0 % of the Company’s held-to-maturity investment portfolio.

Held-to-maturity investment securities are evaluated for potential losses under ASU 2016-13.

The Company continually assesses its liquidity sources, both on-balance sheet and off-balance sheet, and believes that at March 31, 2025, it had ample liquidity sources to fund its ongoing operations without selling investment securities in its portfolio.

The Company continually assesses its liquidity sources, both on-balance sheet and off-balance sheet, and believes that at June 30, 2025, it had ample liquidity sources to fund its ongoing operations without selling investment securities in this portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings of issuers, management believes the declines in fair value for the Company’s available-for-sale debt securities are not credit related.

The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024:

March 31, 2025

June 30, 2025

Less than 12 Months

25 unchanged sentences

States and political subdivisions securities

There were no sales of available-for-sale securities during the three months ended March 31, 2025 or March 31, 2024, respectively.

There were no sales of available-for-sale securities during the three or six months ended June 30, 2025 or June 30, 2024, respectively.

Allowance for Credit Losses.

On January 1, 2021, the Company began evaluating all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments .

All of the mortgage-backed, collateralized mortgage, and SBA securities held by the Company as of March 31, 2025 were issued by U.S.

The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments .

All of the mortgage-backed, collateralized mortgage, and SBA securities held by the Company as of June 30, 2025 were issued by U.S.

government-sponsored entities and agencies.

9 unchanged sentences

LOANS AND ALLOWANCE FOR CREDIT LOSSES

The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , effective January 1, 2021.

The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables.

The Company measures the allowance for credit losses under ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , referred to as the CECL methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable.

It also applies to off-balance sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credits, financial guarantees, and other similar instruments.

Classes of loans at March 31, 2025 and December 31, 2024 were as follows:

Classes of loans at June 30, 2025 and December 31, 2024 were as follows:

(In Thousands)

15 unchanged sentences

Classes of loans by aging were as follows as of the dates indicated.

March 31, 2025

June 30, 2025

> 90 Days Past

49 unchanged sentences

Total nonaccruing loans

No interest income was recorded on nonaccrual loans for the three months ended March 31, 2025 and 2024, respectively.

Nonaccrual loans for which there is no related allowance for credit losses as of March 31, 2025 and December 31, 2024, had an amortized cost of $ 3.3 million and $ 2.2 million, respectively.

These loans are individually assessed and do not require an allowance due to being adequately collateralized under the collateral-dependent valuation method.

During the three and six months ended June 30, 2025, the Company recorded $ 115,000 in interest income related to recoveries on nonaccrual loans.

No interest income was recorded on nonaccrual loans for the three or six months ended June 30, 2024.

Nonaccrual loans for which there is no related allowance for credit losses as of June 30, 2025 and December 31, 2024, had an amortized cost of $ 1.9 million and $ 2.2 million, respectively.

These loans were individually assessed and did not require an allowance due to being adequately collateralized under the collateral-dependent valuation method at those dates.

A collateral-dependent loan is a financial asset for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date.

Collateral-dependent loans are identified primarily by a classified risk rating with a loan balance equal to or greater than $ 100,000 , including, but not limited to, any loan in process of foreclosure or repossession.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025, the Company did no t record a provision expense on its portfolio of outstanding loans.

During the three months ended March 31, 2024, the Company recorded provision expense of $ 500,000 on its portfolio of outstanding loans.

The following table presents the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2025 and 2024.

During the three and six months ended June 30, 2025, the Company did no t record a provision expense on its portfolio of outstanding loans.

During the three months ended June 30, 2024, the Company did no t record a provision expense on its portfolio of outstanding loans and during the six months ended June 30, 2024, the Company recorded provision expense of $ 500,000 on its portfolio of outstanding loans.

One- to Four-

2 unchanged sentences

Allowance for credit losses

Balance, January 1, 2024

Balance, March 31, 2024

Provision (credit) charged to expense

Losses charged off

Balance, June 30, 2024

Allowance for credit losses

Balance, March 31, 2025

Provision (credit) charged to expense

Losses charged off

Balance, June 30, 2025

One- to Four-

Residential and

(In Thousands)

Allowance for credit losses

2 unchanged sentences

Losses charged off

Balance, June 30, 2024

Allowance for credit losses

Balance, January 1, 2025

Provision (credit) charged to expense

Losses charged off

Balance, June 30, 2025

The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the three and six months ended June 30, 2025 and 2024.

The provision for losses on unfunded commitments for the three months ended June 30, 2025 was a credit (negative expense) of $ 110,000 , compared to a credit (negative expense) of $ 607,000 for the three months ended June 30, 2024.

The provision for losses on unfunded commitments for the six months ended June 30, 2025 was a credit (negative expense) of $ 458,000 , compared to a credit (negative expense) of $ 477,000 for the six months ended June 30, 2024.

One- to Four-

Residential and

(In Thousands)

Allowance for unfunded commitments

Balance, March 31, 2024

The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the three months ended March 31, 2025 and 2024.

The provision for losses on unfunded commitments for the three months ended March 31, 2025 was a credit (negative expense) of $ 348,000 , compared to a provision expense of $ 130,000 for the three months ended March 31, 2024.

Provision (credit) charged to expense

Balance, June 30, 2024

Allowance for unfunded commitments

Balance, March 31, 2025

Provision (credit) charged to expense

Balance, June 30, 2025

One- to Four-

4 unchanged sentences

Provision (credit) charged to expense

Balance, March 31, 2024

Balance, June 30, 2024

Allowance for unfunded commitments

1 unchanged sentence

Provision (credit) charged to expense

Balance, March 31, 2025

Balance, June 30, 2025

The portfolio segments used in the preceding tables correspond to the loan classes used in all other tables in Note 6 as follows:

6 unchanged sentences

The following table presents the amortized cost basis of collateral-dependent loans by class of loans:

March 31, 2025

June 30, 2025

December 31, 2024

13 unchanged sentences

Modified Loans.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures .

ASU 2022-02 eliminates the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan.

It also enhances disclosure requirements and introduces new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

Adoption of this ASU on January 1, 2023 did not have a material impact on the Company’s results of operations, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties.

The Company has adopted this update prospectively.

Loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty.

5 unchanged sentences

The following tables show, as of the dates indicated, the composition of modifications made to loans to borrowers experiencing financial difficulty, by the loan class and type of concession granted.

During the three months ended March 31, 2025, principal forgiveness of $ 7,000 was completed on consumer loans.

During the three ended March 31, 2024, principal forgiveness of $ 14,000 was completed on consumer loans.

Amortized Cost Basis at March 31, 2025

During the three and six months ended June 30, 2025, principal forgiveness of $ 0 and $ 7,000 , respectively, was completed on consumer loans.

During the three and six months ended June 30, 2024, principal forgiveness of $ 241,000 and $ 255,000 , respectively, was completed on consumer loans and a land development loan.

Amortized Cost Basis at June 30, 2025

Interest Rate

16 unchanged sentences

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

The following tables depict the performance of loans (under modified terms) at March 31, 2025 and at December 31, 2024, respectively:

March 31, 2025

The following tables depict the performance of loans (under modified terms) at June 30, 2025 and at December 31, 2024, respectively:

June 30, 2025

(In Thousands)

35 unchanged sentences

In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by the credit review department, which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan.

The following tables present a summary of loans by category and risk rating separated by origination and loan class as of March 31, 2025 and December 31, 2024.

The following tables present a summary of loans by category and risk rating separated by origination and loan class as of June 30, 2025 and December 31, 2024.

Term Loans by Origination Year

March 31, 2025

June 30, 2025

(In Thousands)

101 unchanged sentences

Periodically, the Company has invested in certain limited partnerships that were formed to develop and operate apartments and single-family houses designed as high-quality affordable housing for lower income tenants throughout Missouri and contiguous states (“Affordable Housing Partnerships”).

At March 31, 2025, the Company had 22 such investments, with a net carrying value of $ 96.1 million.

At June 30, 2025, the Company had 21 such investments, with a net carrying value of $ 100.9 million.

At December 31, 2024, the Company had 23 such investments, with a net carrying value of $ 98.8 million.

2 unchanged sentences

If the partnerships cease to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken may be subject to recapture with interest.

The remaining federal affordable housing tax credits to be utilized through 2034 were $ 102.9 million as of March 31, 2025, assuming no tax credit recapture events occur and all projects currently under construction are completed as planned.

The remaining federal affordable housing tax credits to be utilized through 2034 were $ 99.7 million as of June 30, 2025, assuming no tax credit recapture events occur and all projects currently under construction are completed as planned.

Amortization of the investments in partnerships is expected to be approximately $ 89.5 million, assuming all projects currently under construction are completed and funded as planned.

The Company’s usage of federal affordable housing tax credits approximated $ 3.2 million and $ 2.8 million during the three months ended March 31, 2025 and 2024, respectively.

Investment amortization was $ 2.9 million for the three months ended March 31, 2025, compared to $ 2.6 million for the three months ended March 31, 2024.

The Company’s usage of federal affordable housing tax credits approximated $ 3.2 million and $ 2.8 million during the three months ended June 30, 2025 and 2024, respectively.

Investment amortization was $ 2.7 million for the three months ended June 30, 2025, compared to $ 2.5 million for the three months ended June 30, 2024.

The Company’s usage of federal affordable housing tax credits approximated $ 6.4 million and $ 5.6 million during the six months ended June 30, 2025 and 2024, respectively.

Investment amortization was $ 5.6 million for the six months ended June 30, 2025, compared to $ 5.1 million for the six months ended June 30, 2024.

Investments in Community Development Entities

From time to time, the Company has invested in certain limited partnerships that were formed to develop and operate business and real estate projects located in low-income communities.

At March 31, 2025, the Company had one such investment, with a net carrying value of $ 174,000 .

At June 30, 2025, the Company had one such investment, with a net carrying value of $ 149,000 .

At December 31, 2024, the Company had one such investment, with a net carrying value of $ 199,000 .

5 unchanged sentences

The investments in the community development entities cannot be redeemed before the end of the seven-year period.

The Company’s usage of federal new market tax credits approximated $ 30,000 during both the three months ended March 31, 2025 and the three months ended March 31, 2024.

Investment amortization amounted to $ 25,000 for both the three months ended March 31, 2025 and the three months ended March 31, 2024.

The Company’s usage of federal new market tax credits approximated $ 30,000 during both the three months ended June 30, 2025 and the three months ended June 30, 2024.

Investment amortization amounted to $ 25,000 for both the three months ended June 30, 2025 and the three months ended June 30, 2024.

The Company’s usage of federal new market tax credits approximated $ 60,000 during both the six months ended June 30, 2025 and the six months ended June 30, 2024.

Investment amortization amounted to $ 50,000 for both the six months ended June 30, 2025 and the six months ended June 30, 2024.

Upon adoption of ASU 2023-02 on January 1, 2024, the Company recorded a reduction in the investment in these new market tax credits, with a corresponding reduction in retained earnings, of $ 62,000 .

1 unchanged sentence

From time to time, the Company has invested in certain limited partnerships that were formed to provide certain federal rehabilitation/historic tax credits.

At March 31, 2025 and December 31, 2024, the Company had no such investments, with the previous investment fully amortizing during 2024.

At June 30, 2025 and December 31, 2024, the Company had no such investments, with the previous investment fully amortizing during 2024.

Under current tax law, such partnerships provide federal rehabilitation/historic tax credits over a five-year credit allowance period.

The Company’s usage of certain federal rehabilitation/historic tax credits approximated $- 0 - and $ 76,000 during the three months ended March 31, 2025 and 2024, respectively.

Investment amortization amounted to $- 0 - and $ 64,000 for the three months ended March 31, 2025 and 2024, respectively.

The Company’s usage of certain federal rehabilitation/historic tax credits approximated $- 0 - and $ 76,000 during the three months ended June 30, 2025 and 2024, respectively.

Investment amortization amounted to $- 0 - and $ 64,000 for the three months ended June 30, 2025 and 2024, respectively.

The Company’s usage of certain federal rehabilitation/historic tax credits approximated $- 0 - and $ 152,000 during the six months ended June 30, 2025 and 2024, respectively.

Investment amortization amounted to $- 0 - and $ 127,000 for the six months ended June 30, 2025 and 2024, respectively.

Upon adoption of ASU 2023-02 on January 1, 2024, the Company recorded a reduction in the investment in these rehabilitation/historic tax credits, with a corresponding reduction in retained earnings, of $ 161,000 .

17 unchanged sentences

Other real estate owned and repossessions

At March 31, 2025 and December 31, 2024, there was no other real estate owned not acquired through foreclosure.

At both March 31, 2025 and December 31, 2024, residential mortgage loans totaling $ 12,000 were in the process of foreclosure.

At June 30, 2025 and December 31, 2024, there was no other real estate owned not acquired through foreclosure.

At June 30, 2025 and December 31, 2024, residential mortgage loans totaling $ 70,000 and $ 12,000 , respectively, were in the process of foreclosure.

Expenses (income) applicable to other real estate owned and repossessions included the following:

1 unchanged sentence

(In Thousands)

Net loss on sales of other real estate owned and repossessions

Net loss (gain) on sales of other real estate owned and repossessions

Valuation write-downs

Operating expenses, net of rental income

Operating expenses (income), net of rental income

Six Months Ended

(In Thousands)

Net loss (gain) on sales of other real estate owned and repossessions

Valuation write-downs

Operating expenses (income), net of rental income

PREMISES AND EQUIPMENT

5 unchanged sentences

accumulated depreciation

In 2019, the Company adopted ASU 2016-02, Leases (Topic 842).

Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $ 9.5 million.

The Company records leases in accordance with ASU 2016-02, Leases (Topic 842).

The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals.

As of March 31, 2025, the lease right of use asset value was $ 6.1 million and the corresponding lease liability was $ 6.4 million.

As of June 30, 2025, the lease right of use asset value was $ 5.9 million and the corresponding lease liability was $ 6.1 million.

As of December 31, 2024, the lease right of use asset value was $ 6.4 million and the corresponding lease liability was $ 6.6 million.

At March 31, 2025, expected lease terms ranged from 2.3 years to 13.7 years with a weighted-average lease term of 6.7 years.

The weighted-average discount rate at March 31, 2025 was 4.03 %.

For the three months ended March 31, 2025 and 2024, lease expense was $ 419,000 and $ 483,000 , respectively.

At June 30, 2025, expected lease terms ranged from 2.1 years to 13.4 years with a weighted-average lease term of 6.5 years.

The weighted-average discount rate at June 30, 2025 was 3.99 %.

For the three months ended June 30, 2025 and 2024, total lease expense was $ 402,000 and $ 413,000 , respectively.

For the six months ended June 30, 2025 and 2024, total lease expense was $ 821,000 and $ 895,000 , respectively.

The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs.

The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three months ended March 31, 2025 and 2024 was $ 76,000 and $ 81,000 , respectively.

The variable portion of these lease payments is not material and the lease expense related to ATMs for the three months ended June 30, 2025 and 2024 was $ 79,000 and $ 90,000 , respectively.

The lease expense related to ATMs for the six months ended June 30, 2025 and 2024 was $ 156,000 and $ 171,000 , respectively.

The Company does not sublease any of its leased facilities;

1 unchanged sentence

In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases.

In the three months ended March 31, 2025 and 2024, income recognized from these lease agreements was $ 321,000 and $ 341,000 , respectively, and was included in occupancy and equipment expense.

March 31, 2025

In the three months ended June 30, 2025 and 2024, income recognized from these lease agreements was $ 358,000 and $ 339,000 , respectively, and was included in occupancy and equipment expense.

In the six months ended June 30, 2025 and 2024, income recognized from these lease agreements was $ 678,000 and $ 680,000 , respectively, and was included in occupancy and equipment expense.

June 30, 2025

December 31, 2024

4 unchanged sentences

For the Three Months Ended

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

(In Thousands)

6 unchanged sentences

Operating leases

At March 31, 2025, future expected lease payments for leases with terms exceeding one year were as follows (in thousands):

For the Six Months Ended

June 30, 2025

June 30, 2024

(In Thousands)

Statement of Income

Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset)

Supplemental Cash Flow Information

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Right of use assets obtained in exchange for lease obligations:

Operating leases

At June 30, 2025, future expected lease payments for leases with terms exceeding one year were as follows (in thousands):

Future lease payments expected

17 unchanged sentences

The Bank utilizes brokered deposits as an additional funding source.

The aggregate amount of brokered deposits was approximately $ 895.4 million and $ 772.1 million at March 31, 2025 and December 31, 2024, respectively.

At both March 31, 2025 and December 31, 2024, brokered deposits included $ 300.0 million of purchased funds through the IntraFi Financial network.

The aggregate amount of brokered deposits was approximately $ 833.3 million and $ 772.1 million at June 30, 2025 and December 31, 2024, respectively.

At both June 30, 2025 and December 31, 2024, brokered deposits included $ 300.0 million of purchased funds through the IntraFi Financial network.

These IntraFi Financial deposits have a rate of interest that floats daily with an index of effective federal funds rate plus a spread.

At March 31, 2025, there were brokered deposits totaling $ 99.7 million that had fixed rates of interest but were callable at the Bank’s discretion.

At March 31, 2025, approximately 35 % of the Company’s total deposits were uninsured, when including deposit accounts of consolidated subsidiaries of the Company and collateralized deposits of unaffiliated entities.

Excluding deposit accounts of the Company’s consolidated subsidiaries, approximately 14 % of the Company’s total deposits were uninsured at March 31, 2025.

At June 30, 2025, there were brokered deposits totaling $ 99.7 million that had fixed rates of interest but were callable at the Bank’s discretion.

At June 30, 2025, approximately 35 % of the Company’s total deposits were uninsured, when including deposit accounts of consolidated subsidiaries of the Company and collateralized deposits of unaffiliated entities.

Excluding deposit accounts of the Company’s consolidated subsidiaries, approximately 15 % of the Company’s total deposits were uninsured at June 30, 2025.

ADVANCES FROM FEDERAL HOME LOAN BANK

At March 31, 2025 and December 31, 2024, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines.

At March 31, 2025 and December 31, 2024, there were outstanding overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included in Note 12 below.

At June 30, 2025 and December 31, 2024, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines.

At June 30, 2025 and December 31, 2024, there were outstanding overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included in Note 12 below.

The Bank has pledged FHLB stock, investment securities and first mortgage loans free of other pledges, liens and encumbrances as collateral for outstanding advances or borrowings.

At March 31, 2025, investment securities with carrying values of approximately $ 295.7 million and loans with carrying values of approximately $ 2.10 billion were pledged as collateral for FHLB borrowings, which equates to an advance equivalent of $ 1.53 billion.

At June 30, 2025, investment securities with carrying values of approximately $ 292.5 million and loans with carrying values of approximately $ 2.17 billion were pledged as collateral for FHLB borrowings, which equates to an advance equivalent of $ 1.59 billion.

At December 31, 2024 investment securities with carrying values of approximately $ 110.4 million and loans with carrying values of approximately $ 2.12 billion were pledged as collateral for outstanding advances or borrowings, which equates to an advance equivalent of $ 1.39 billion.

The Bank had $ 1.17 billion remaining available on its line of credit under a borrowing arrangement with the FHLB of Des Moines at March 31, 2025.

The Bank had $ 1.22 billion remaining available on its line of credit under a borrowing arrangement with the FHLB of Des Moines at June 30, 2025.

SECURITIES SOLD UNDER REVERSE REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS

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The line was secured primarily by the Bank’s held-to-maturity investment securities, with assets pledged totaling approximately $ 187.7 million as of December 31, 2024.

As of March 31, 2025, the Company had no outstanding borrowings from the Federal Reserve Bank.

As of June 30, 2025, the Company had no outstanding borrowings from the Federal Reserve Bank.

The Bank enters into sales of securities under agreements to repurchase (reverse repurchase agreements).

1 unchanged sentence

The dollar amount of securities underlying the agreements remains in the asset accounts.

Securities underlying the agreements are held by the Bank during the agreement period.

The underlying securities sold in the agreements are held by the Bank during the agreement period.

All agreements are written on a term of one month or less.

5 unchanged sentences

On June 10, 2020, the Company completed the public offering and sale of $ 75.0 million of its subordinated notes.

The notes are due June 15, 2030, and have a fixed interest rate of 5.50 % until June 15, 2025, at which time the rate becomes floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate ( SOFR ) plus 5.325 %.

The Company may call the notes at par beginning on June 15, 2025, and on any scheduled interest payment date thereafter.

The notes were due June 15, 2030, and had a fixed interest rate of 5.50 % until June 15, 2025, at which time the rate was to begin floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate ( SOFR ) plus 5.325 %.

The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $ 73.5 million.

Total debt issuance costs of approximately $ 1.5 million were deferred and are being amortized over the expected life of the notes, which is five years .

Amortization of the debt issuance costs during the three months ended March 31, 2025 and 2024, totaled $ 74,000 and $ 74,000 , respectively.

Amortization of the debt issuance costs is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.90 %.

At March 31, 2025 and December 31, 2024, subordinated notes were as follows:

Total debt issuance costs of approximately $ 1.5 million were deferred and amortized over the expected life of the notes, which was five years .

On June 15, 2025, in accordance with the terms of the notes, the Company redeemed all $ 75.0 million aggregate principal amount of the subordinated notes at a redemption price equal to 100 % of their principal amount, plus accrued and unpaid interest.

Amortization of the debt issuance costs during the three months ended June 30, 2025 and 2024, totaled $ 50,000 and $ 74,000 , respectively.

Amortization of the debt issuance costs during the six months ended June 30, 2025 and 2024, totaled $ 124,000 and $ 148,000 , respectively.

At June 30, 2025 and December 31, 2024, subordinated notes were as follows:

(In Thousands)

1 unchanged sentence

unamortized debt issuance costs

As discussed in Note 18 - Subsequent Events, the subordinated notes will be redeemed in full on June 15, 2025.

As discussed in Note 3 – Recent Accounting Pronouncements, in January 2025, the Company adopted ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU requires additional income tax disclosures, including specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

The Company has elected to adopt this ASU on a prospective basis.

All of the Company’s activities are within the United States of America;

therefore, the Company does not have any foreign tax items.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing its expected impact on our consolidated financial statements.

Reconciliations of the Company’s effective tax rates to the statutory corporate tax rates were as follows:

Three Months Ended

Three Months Ended June 30,

(In Thousands)

4 unchanged sentences

State income or franchise taxes

During the three months ended March 31, 2025, the Company paid no U.S.

federal income taxes and paid taxes to various state jurisdictions totaling $ 35,000 .

Six Months Ended June 30,

(In Thousands)

Tax at statutory rate

Nontaxable interest and dividends

federal tax credits (primarily low-income housing)

State income or franchise taxes

During the six months ended June 30, 2025, the Company paid U.S.

federal income taxes totaling $ 3.0 million and paid taxes to various state jurisdictions totaling $ 649,000 .

There were no payments to any individual state jurisdiction exceeding five percent of taxable income.

In addition, the Company received a refund of $ 19,000 from one state jurisdiction and a federal income tax refund of $ 49,000 .

In addition, the Company received a refund of $ 19,000 from one state jurisdiction and federal income tax refunds totaling $ 65,000 .

The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS).

As a result, federal tax years through December 31, 2020 are now closed.

In addition, there are no pending audits by any state jurisdiction at March 31, 2025.

In addition, there were no pending audits by any state jurisdiction at June 30, 2025.

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

14 unchanged sentences

Recurring Measurements

The following table presents the fair value measurements of assets recognized in the accompanying statements of financial condition measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at March 31, 2025 and December 31, 2024:

Fair value measurements using

2 unchanged sentences

(In Thousands)

March 31, 2025

June 30, 2025

Available-for-sale securities

13 unchanged sentences

Interest rate derivative liability

The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at March 31, 2025 and December 31, 2024 as well as the general classification of such assets pursuant to the valuation hierarchy.

There were no significant changes in the valuation techniques during the three-month period ended March 31, 2025.

The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at June 30, 2025 and December 31, 2024 as well as the general classification of such assets pursuant to the valuation hierarchy.

There were no significant changes in the valuation techniques during the six-month period ended June 30, 2025.

Available-for-Sale Securities.

5 unchanged sentences

Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models.

There were no recurring Level 3 securities at March 31, 2025 or December 31, 2024.

There were no recurring Level 3 securities at June 30, 2025 or December 31, 2024.

Interest Rate Derivatives.

The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy.

The fair values are estimated using forward-looking interest rate curves and are determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy.

Nonrecurring Measurements

The following tables present the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the measurements fell at March 31, 2025 and December 31, 2024:

Fair Value Measurements Using

2 unchanged sentences

(In Thousands)

March 31, 2025

June 30, 2025

Collateral-dependent loans

9 unchanged sentences

The Company typically does not have commercial loans held for sale.

At March 31, 2025 and December 31, 2024, the aggregate fair value of mortgage loans held for sale was not materially different than their cost.

At June 30, 2025 and December 31, 2024, the aggregate fair value of mortgage loans held for sale was not materially different than their cost.

Accordingly, no mortgage loans held for sale were marked down and reported at fair value.

2 unchanged sentences

If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for credit losses specific to the loan.

Loans for which such charge-offs or reserves were recorded during the three months ended March 31, 2025 and the year ended December 31, 2024, are shown in the table above (net of reserves).

Loans for which such charge-offs or reserves were recorded during the six months ended June 30, 2025 and the year ended December 31, 2024, are shown in the table above (net of reserves).

Foreclosed Assets Held for Sale.

2 unchanged sentences

Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy.

There were no foreclosed assets held for sale at March 31, 2025 or December 31, 2024 which had valuation write-downs subsequent to the initial recording of the assets.

There were no foreclosed assets held for sale at June 30, 2025 or December 31, 2024 which had valuation write-downs subsequent to the initial recording of the assets.

Fair Value of Financial Instruments

30 unchanged sentences

Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

March 31, 2025

June 30, 2025

December 31, 2024

31 unchanged sentences

As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

At March 31, 2025, the Company had five interest rate swaps totaling $ 86.2 million in notional amount with commercial customers, and five interest rate swaps with the same aggregate notional amount with third parties related to its program.

In addition, at March 31, 2025, the Company had one participation loan purchased totaling $ 8.4 million, in which the lead institution has an interest rate swap with its customer and the economics of the counterparty swap are passed along to the Company through the loan participation.

At June 30, 2025, the Company had five interest rate swaps totaling $ 85.6 million in notional amount with commercial customers, and five interest rate swaps with the same aggregate notional amount with third parties related to its program.

At December 31, 2024, the Company had five interest rate swaps totaling $ 86.7 million in notional amount with commercial customers, and five interest rate swaps with the same notional amount with third parties related to its program.

In addition, at December 31, 2024, the Company had one participation loan purchased totaling $ 8.4 million, in which the lead institution has an interest rate swap with its customer and the economics of the counterparty swap are passed along to the Company through the loan participation.

During the three months ended March 31, 2025 and 2024, the Company recognized net losses of $ 24,000 and $ 13,000 , respectively, in non-interest income related to changes in the fair value of these swaps.

During the three months ended June 30, 2025 and 2024, the Company recognized net losses of $ 28,000 and $ 7,000 , respectively, in non-interest income related to changes in the fair value of these swaps.

During the six months ended June 30, 2025 and 2024, the Company recognized net losses of $ 52,000 and $ 20,000 , respectively, in non-interest income related to changes in the fair value of these swaps.

Fair Value Hedges

21 unchanged sentences

This had the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the period.

At March 31, 2025, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income on the terminated swap in future periods.

At June 30, 2025, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income on the terminated swap in future periods.

If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly.

The Company recorded $ 2.0 million of interest income related to this terminated swap in each of the three-month periods ended March 31, 2025 and 2024.

The Company recorded $ 2.0 million of interest income related to this terminated swap in each of the three-month periods ended June 30, 2025 and 2024.

The Company recorded $ 4.0 million and 4.1 million of interest income related to the swap in the six months ended June 30, 2025 and June 30, 2024, respectively.

In March 2022, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans.

5 unchanged sentences

As this interest rate swap reached its contractual termination date on March 1, 2024, there has been no further interest income impact related to this swap after the three months ended March 31, 2024.

The Company recorded a reduction of loan interest income related to this swap transaction of $ 1.9 million in the three months ended March 31, 2024.

The Company recorded a reduction of loan interest income related to this swap transaction of $ 1.9 million in the six months ended June 30, 2024.

In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans.

5 unchanged sentences

If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans.

At March 31, 2025, the USD-Prime rate was 7.50 % and the one-month USD-SOFR OIS rate was 4.33365 %.

The Company recorded a reduction of loan interest income related to these swap transactions of $ 1.7 million and $ 2.8 million in the three months ended March 31, 2025 and 2024, respectively.

At June 30, 2025, the USD-Prime rate was 7.50 % and the one-month USD-SOFR OIS rate was 4.31926 %.

The Company recorded a reduction of loan interest income related to these swap transactions of $ 1.8 million and $ 2.8 million in the three months ended June 30, 2025 and 2024, respectively.

The Company recorded a reduction of loan interest income related to these swap transactions of $ 3.5 million and $ 5.5 million in the six months ended June 30, 2025 and 2024, respectively.

The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings.

Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

During each of the three months ended March 31, 2025 and 2024, the Company recognized no non-interest income related to changes in the fair value of these derivatives.

During each of the three and six months ended June 30, 2025 and 2024, the Company recognized no non-interest income related to changes in the fair value of these derivatives.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statements of Financial Condition:

18 unchanged sentences

Recognized in AOCI

Three Months Ended March 31,

Three Months Ended June 30,

Cash Flow Hedges

2 unchanged sentences

Active interest rate swaps, net of income taxes

The following table presents the effect of cash flow hedge accounting on the statements of income:

Three Months Ended March 31,

Amount of Gain (Loss)

Recognized in AOCI

Six Months Ended June 30,

Cash Flow Hedges

(In Thousands)

Terminated interest rate swap, net of income taxes

Active interest rate swaps, net of income taxes

The following table presents, for the periods indicated, the effect of cash flow hedge accounting on the statements of income:

Three Months Ended June 30,

Cash Flow Hedges

(In Thousands)

Total Interest Income

2 unchanged sentences

Active interest rate swaps

Six Months Ended June 30,

Cash Flow Hedges

(In Thousands)

Total Interest Income

Total Interest Expense

Terminated interest rate swap

Active interest rate swaps

Agreements with Derivative Counterparties

3 unchanged sentences

Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Company’s credit rating is downgraded below a specified level.

At March 31, 2025, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers and interest rate swaps to hedge risk related to the Company’s variable rate loans) in an overall net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 55,000 .

At June 30, 2025, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers and interest rate swaps to hedge risk related to the Company’s variable rate loans) in an overall net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 27,000 .

The Company has minimum collateral posting thresholds with its derivative dealer counterparties.

At March 31, 2025, the Company had given cash collateral to one derivative counterparty of $ 6.1 million to cover its net fair value position.

At June 30, 2025, the Company had given cash collateral to one derivative counterparty of $ 3.5 million to cover its net fair value position.

This counterparty position included collateral from the counterparty of $ 5.3 million for commercial lending swaps and collateral from the Company of $ 8.5 million for interest rate swaps related to variable rate loans.

2 unchanged sentences

This counterparty position included collateral from the counterparty of $ 8.1 million for commercial lending swaps and collateral from the Company of $ 17.7 million for interest rate swaps related to variable rate loans.

If the Company had breached any of these provisions at March 31, 2025 or December 31, 2024, it could have been required to settle its obligations under the agreements at the termination value.

If the Company had breached any of these provisions at June 30, 2025 or December 31, 2024, it could have been required to settle its obligations under the agreements at the termination value.

Under the collateral agreements between the parties, either party may choose to provide cash or securities to satisfy its collateral requirements.

6 unchanged sentences

Our chief executive officer reviews actual net income versus budgeted net income, as well as comparison to other comparable financial reporting periods, to assess performance on a monthly basis and to make decisions about allocating capital and personnel.

Financial results by operating segment (all attributed to the banking segment), including significant expense categories provided to the chief operating decision maker, are detailed below for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31,

Three Months Ended June 30,

(In Thousands)

18 unchanged sentences

Expense (income) on other real estate and repossessions

Acquired intangible asset amortization

Intangible asset amortization

Travel meals and entertainment

2 unchanged sentences

Provision for Income Taxes

SUBSEQUENT EVENT

On April 30, 2025, the Company notified holders that it will redeem on June 15, 2025 (the “Redemption Date”) all of the Company’s outstanding 5.50 % Fixed-to-Floating Rate Subordinated Notes due June 15, 2030, having an aggregate principal amount of $ 75.0 million (the “Subordinated Notes”), in accordance with the terms of the Subordinated Notes.

The total redemption price will be 100 % of the aggregate principal amount of the Subordinated Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date.

The Company will utilize excess cash on hand for the redemption payment.

The annual combined interest expense and amortization of deferred issuance costs on the Subordinated Notes has been approximately $ 4.4 million.

Six Months Ended June 30,

(In Thousands)

Interest income

Interest expense

Net interest income

Credit loss expense

Net interest income after credit loss expense

Non-interest Income

Overdraft and insufficient funds fees

Point-of-sale and ATM fee income and service charges

Net gain on loan sales

Late charges and fees on loans

Fees from debit card contracts

Non-interest Expense

Salaries and incentives

Employee benefits

Net occupancy expense

Technology, furniture and equipment expense

Office supplies and printing

Legal, audit and other professional fees

Expense (income) on other real estate and repossessions

Intangible asset amortization

Travel meals and entertainment

Other operating expenses

Income Before Income Taxes

Provision for Income Taxes

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