What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-13 · 181 added, 109 removed, 677 unchanged (30% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 102,542 $ 43,641

Available-for-sale (“AFS”) securities, at fair value (amortized cost of $ 9,032 and $ 9,112 as of March 31, 2025 and December 31, 2024, respectively)

Held-to-maturity (“HTM”) securities, at amortized cost (fair value of $ 1,711 and $ 1,712 at March 31, 2025 and December 31, 2024, respectively)

Available-for-sale (“AFS”) securities, at fair value (amortized cost of $ 8,949 and $ 9,112 as of June 30, 2025 and December 31, 2024, respectively)

Held-to-maturity (“HTM”) securities, at amortized cost (fair value of $ 1,687 and $ 1,712 at June 30, 2025 and December 31, 2024, respectively)

Loans held-for-sale 2,025 487

24 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, none issued or outstanding

Common stock, $ 0.01 par value, 40,000,000 shares authorized, 2,566,069 and 2,564,907 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 40,000,000 shares authorized, 2,566,069 and 2,564,907 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 28,590 28,413

8 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

INTEREST INCOME

8 unchanged sentences

Net interest income 9,255 7,448 17,327 14,908

RELEASE OF CREDIT LOSSES ( 203 ) ( 33 )

Net interest income after release of credit losses 8,274 7,493

PROVISION FOR (RELEASE OF) CREDIT LOSSES 170 ( 109 ) ( 33 ) ( 142 )

Net interest income after provision (release of) for credit losses 9,085 7,557 17,360 15,050

NONINTEREST INCOME

4 unchanged sentences

Net gain on sale of loans 44 74 93 164

Other income — 30 — 30

Total noninterest income 1,120 1,162 2,216 2,258

5 unchanged sentences

Data processing 1,254 910 2,547 1,928

Net loss on OREO and repossessed assets 3 6

Net loss (gain) on OREO and repossessed assets 9 ( 17 ) 12 ( 11 )

Total noninterest expense 7,665 7,737 15,578 15,394

13 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 2,052 $ 795 $ 3,219 $ 1,564

Available for sale securities:

Unrealized losses arising during the period ( 21 ) ( 78 )

Income tax benefit related to unrealized losses 4 16

Other comprehensive loss, net of tax ( 17 ) ( 62 )

Unrealized (losses) gains arising during the period ( 85 ) 1 ( 106 ) ( 77 )

Income tax expense related to unrealized losses 18 — 22 16

Other comprehensive (loss) gain, net of tax ( 67 ) 1 ( 84 ) ( 61 )

Comprehensive income $ 1,985 $ 796 $ 3,135 $ 1,503

3 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended March 31, 2025 and 2024 (unaudited)

For the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

(In thousands, except share and per share amounts)

4 unchanged sentences

Stockholders’

Balance, at March 31, 2025

2,566,069 $ 25 $ 28,515 $ 76,952 $ ( 1,061 ) $ 104,431

Net income — — — 2,052 — 2,052

Other comprehensive loss, net of tax — — — — ( 67 ) ( 67 )

Share-based compensation — — 75 — — 75

Cash dividends paid on common stock ($ 0.19 per share)

— — — ( 487 ) — ( 487 )

Balance, at June 30, 2025

2,566,069 $ 25 $ 28,590 $ 78,517 $ ( 1,128 ) $ 106,004

Balance, at December 31, 2024

6 unchanged sentences

Common stock options exercised 1,162 — 21 — — 21

Balance, at March 31, 2025

Balance, at June 30, 2025

2,566,069 $ 25 $ 28,590 $ 78,517 $ ( 1,128 ) $ 106,004

4 unchanged sentences

Stockholders’

Balance, at March 31, 2024

2,558,546 $ 25 $ 28,110 $ 73,907 $ ( 1,050 ) $ 100,992

Net income — — — 795 — 795

Other comprehensive gain, net of tax — — — — 1 1

Share-based compensation — — 97 — — 97

Cash dividends paid on common stock ($ 0.19 per share)

— — — ( 486 ) — ( 486 )

Common stock repurchased ( 1,462 ) — ( 16 ) ( 43 ) — ( 59 )

Common stock options exercised 200 — 7 — — 7

Balance, at June 30, 2024

2,557,284 $ 25 $ 28,198 $ 74,173 $ ( 1,049 ) $ 101,347

Balance, at December 31, 2023

8 unchanged sentences

Common stock options exercised 1,435 — 33 — — 33

Balance, at March 31, 2024

Balance, at June 30, 2024

2,557,284 $ 25 $ 28,198 $ 74,173 $ ( 1,049 ) $ 101,347

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

10 unchanged sentences

Net change in advances from borrowers for taxes and insurance ( 346 ) ( 298 )

Deferred income tax ( 273 ) —

Net gain on disposal of premises and equipment, net — ( 30 )

Net gain on sale of loans ( 93 ) ( 164 )

1 unchanged sentence

Originations of loans held-for-sale ( 8,314 ) ( 8,718 )

Net gain on OREO and repossessed assets — ( 17 )

Change in operating assets and liabilities:

3 unchanged sentences

Other liabilities 979 ( 458 )

Net cash provided by operating activities 1,852 3,519

Net cash provided by (used in) operating activities 1,358 ( 496 )

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Proceeds from principal payments of held-to-maturity securities 17 19

Net decrease (increase) in loans 13,883 ( 3,570 )

Net (increase) decrease in loans ( 3,257 ) 5,875

Purchases of premises and equipment, net ( 62 ) ( 9 )

Net cash provided by (used in) investing activities 13,923 ( 5,101 )

Proceeds from disposal of premises and equipment, net — 30

Proceeds from sale of OREO and other repossessed assets — 592

Net cash (used in) provided by investing activities ( 3,160 ) 6,700

CASH FLOWS FROM FINANCING ACTIVITIES:

11 unchanged sentences

Interest paid on deposits and borrowings 11,426 12,948

Loans transferred from loans held-for-sale to loans held-for-portfolio 1,200 859

Loans transferred from loans held-for-portfolio to OREO and repossessed assets 300 115

Cash paid for principal portion from finance leases 12 —

ROU assets obtained in exchange for new operating lease liabilities 583 —

ROU assets obtained in exchange for new finance lease liabilities 130 —

See Notes to Condensed Consolidated Financial Statements

16 unchanged sentences

Note 2 – Accounting Pronouncements Recently Issued or Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

The Company adopted this ASU on January 1, 2024.

ASU 2023-07 did not have an impact on the Company's financial position or results of operation as it impacts disclosures only.

The adoption of this ASU did not have a material impact on the Company’s disclosures as the Company operates under one segment.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

1 unchanged sentence

This ASU was released in response to stakeholder feedback indicating that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

This ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

The adoption of this ASU is not expected to have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

The Company adopted this ASU on January 1, 2025 for disclosure in the Company’s Annual Report on Form 10-K for the year ending December 31, 2025, with no material impact expected on the Company’s consolidated results of operations, financial position or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which will change the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (for example, employee compensation, depreciation and amortization) in expense captions.

1 unchanged sentence

Early adoption is permitted.

The Company is currently evaluating the impact of this guidance.

The Company will evaluate the impact of this guidance through the date of adoption.

Note 3 – Investments

At March 31, 2025, the Company did not own any debt securities classified as trading or any equity investment securities, except for the FHLB securities described in “Note 8 — Borrowings, FHLB Stock and Subordinated Notes.”

At June 30, 2025, the Company did not own any debt securities classified as trading or any equity investment securities, except for the FHLB securities described in “Note 8 — Borrowings, FHLB Stock and Subordinated Notes.”

The amortized cost and estimated fair value of our AFS securities and the corresponding amounts of gross unrealized gains and losses at the dates indicated were as follows (in thousands):

Losses Estimated

March 31, 2025

June 30, 2025

Municipal bonds $ 6,333 $ 10 $ ( 1,129 ) $ 5,214

7 unchanged sentences

Losses Estimated

March 31, 2025

June 30, 2025

Municipal bonds $ 704 $ — $ ( 191 ) $ 513

5 unchanged sentences

Total $ 2,130 $ — $ ( 418 ) $ 1,712

The amortized cost and estimated fair value of AFS and HTM securities at March 31, 2025, by contractual maturity, are shown below (in thousands).

The amortized cost and estimated fair value of AFS and HTM securities at June 30, 2025, by contractual maturity, are shown below (in thousands).

Expected maturities of AFS securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Investments not due at a single maturity date, consisting of agency mortgage-backed securities, are shown separately.

March 31, 2025

June 30, 2025

Available-for-sale Held-to-maturity

6 unchanged sentences

Total $ 8,949 $ 7,521 $ 2,113 $ 1,687

There were no pledged securities at March 31, 2025 or December 31, 2024.

There were no sales of AFS or HTM securities during both the three months ended March 31, 2025 and 2024.

Accrued interest receivable on securities totaled $ 76 thousand at March 31, 2025 and $ 48 thousand at December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

There were no pledged securities at June 30, 2025 or December 31, 2024.

There were no sales of AFS or HTM securities during the three and six months ended June 30, 2025 and 2024.

Accrued interest receivable on securities totaled $ 48 thousand at both June 30, 2025 and December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

Accrued interest receivable is excluded from the allowance for credit losses.

The following table summarizes the aggregate fair value and gross unrealized loss by length of time of those investments for which an allowance for credit losses has not been recorded that have been in a continuous unrealized loss position at the dates indicated (in thousands):

March 31, 2025

June 30, 2025

Less Than 12 Months 12 Months or Longer Total

23 unchanged sentences

Total held-to-maturity securities $ — $ — $ 1,712 $ ( 418 ) $ 1,712 $ ( 418 )

There was no allowance for credit losses on securities at March 31, 2025 or December 31, 2024.

At both March 31, 2025 and December 31, 2024, the total securities portfolio consisted of 11 agency mortgage-backed securities and 11 municipal bonds, with a total portfolio fair value of $ 9.4 million and $ 9.5 million, respectively.

At both March 31, 2025 and December 31, 2024, there was one security in an unrealized loss position for less than 12 months and 15 securities in an unrealized loss position for more than 12 months.

There was no allowance for credit losses on securities at June 30, 2025 or December 31, 2024.

At both June 30, 2025 and December 31, 2024, the total securities portfolio consisted of 11 agency mortgage-backed securities and 11 municipal bonds.

At both June 30, 2025 and December 31, 2024, there was one security in an unrealized loss position for less than 12 months and 15 securities in an unrealized loss position for more than 12 months.

The unrealized losses were caused by changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, and not related to the underlying credit of the issuers or the underlying collateral.

It is expected that these securities will not be settled at a price less than the amortized cost of each investment.

There was no provision for credit losses recognized for investment securities during the three months ended March 31, 2025 and 2024, because the declines in fair value were not attributable to credit quality and because we do not intend, and it is not likely that we will be required, to sell these securities before recovery of their amortized cost basis.

There was no provision for credit losses recognized for investment securities during the three and six months ended June 30, 2025 and 2024, because the declines in fair value were not attributable to credit quality and because we do not intend, and it is not likely that we will be required, to sell these securities before recovery of their amortized cost basis.

Note 4 – Loans

19 unchanged sentences

Total loans held-for-portfolio, net $ 895,750 $ 891,672

(1) Includes premiums resulting from purchased loans of $ 386 thousand related to one-to-four family loans, $ 236 thousand related to commercial and multifamily loans, and $ 66 thousand related to commercial business loans as of March 31, 2025.

(1) Includes premiums resulting from purchased loans of $ 379 thousand related to one-to-four family loans, $ 228 thousand related to commercial and multifamily loans, and $ 54 thousand related to commercial business loans as of June 30, 2025.

Includes premiums resulting from purchased loans of $ 404 thousand related to one-to-four family loans, $ 244 thousand related to commercial and multifamily loans, and $ 70 thousand related to commercial business loans as of December 31, 2024.

As of March 31, 2025, there was one collateral dependent consumer mortgage loan, totaling $ 260 thousand, that was in process of foreclosure .

As of June 30, 2025, there were two collateral dependent consumer mortgage loans, totaling $ 166 thousand, that were in process of foreclosure .

The following table presents a summary of activity in the ACL on loans and the reserve for unfunded loan commitments for the periods indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

ACL - Loans Reserve for Unfunded Loan Commitments ACL ACL - Loans Reserve for Unfunded Loan Commitments ACL

Balance at beginning of period $ 8,393 $ 116 $ 8,509 $ 8,598 $ 266 $ 8,864

(Release of) provision for credit losses during the period ( 85 ) ( 118 ) ( 203 ) ( 106 ) 73 ( 33 )

Provision for (release of) credit losses during the period 164 6 170 ( 88 ) ( 21 ) ( 109 )

Net charge-offs during the period ( 21 ) — ( 21 ) ( 17 ) — ( 17 )

Balance at end of period $ 8,536 $ 122 $ 8,658 $ 8,493 $ 245 $ 8,738

Accrued interest receivable on loans receivable totaled $ 3.3 million at March 31, 2025 and $ 3.4 million at December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

Six Months Ended June 30,

ACL - Loans Reserve for Unfunded Loan Commitments ACL ACL - Loans Reserve for Unfunded Loan Commitments ACL

Balance at beginning of period $ 8,499 $ 234 $ 8,733 $ 8,760 $ 193 $ 8,953

Provision for (release of) credit losses during the period 79 ( 112 ) ( 33 ) ( 194 ) 52 ( 142 )

Net charge-offs during the period ( 42 ) — ( 42 ) ( 73 ) — ( 73 )

Balance at end of period $ 8,536 $ 122 $ 8,658 $ 8,493 $ 245 $ 8,738

Accrued interest receivable on loans receivable totaled $ 3.6 million at June 30, 2025 and $ 3.4 million at December 31, 2024, in the accompanying Condensed Consolidated Balance Sheets.

Accrued interest receivable is excluded from the ACL.

21 unchanged sentences

The following tables summarize the activity in the ACL - loans for the periods indicated (in thousands):

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

4 unchanged sentences

Manufactured homes 1,303 — — 92 1,395

Floating homes 1,409 — — 1 1,410

Other consumer (1)

448 ( 23 ) 2 24 451

Commercial business 83 — — 5 88

Total $ 8,393 $ ( 23 ) $ 2 $ 164 $ 8,536

(1) During the three months ended June 30,2025, there was one other consumer loan for $ 16 thousand originated in 2024 related to a consumer line of credit that was charged off with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Three Months Ended June 30, 2024

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

One-to-four family $ 2,910 $ — $ — $ ( 112 ) $ 2,798

Home equity 179 — — 20 199

Commercial and multifamily 1,106 — — 24 1,130

Construction and land 1,329 — — ( 257 ) 1,072

Manufactured homes 833 — 105 938

Floating homes 1,799 — — 111 1,910

3 unchanged sentences

Total $ 8,598 $ ( 21 ) $ 4 $ ( 88 ) $ 8,493

(1) During the three months ended March 31, 2025, there was one manufactured home loan originated in 2022 that was charged off and then subsequently foreclosed upon.

(2) During the three months ended March 31, 2025, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

Three Months Ended March 31, 2024

(1) During the three months ended June 30, 2024, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

Six Months Ended June 30, 2025

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

10 unchanged sentences

Total $ 8,499 $ ( 50 ) $ 8 $ 79 $ 8,536

(1) During the three months ended March 31, 2024, there was one manufactured home loan originated in 2020 that was charged off and then subsequently foreclosed upon.

(2) During the three months ended March 31, 2024, the gross charge-offs of other consumer loans related entirely to deposit overdrafts that were charged off.

(1) During the six months ended June 30, 2025, there was one manufactured home loan originated in 2022 that was charged off and then subsequently foreclosed upon.

(2) During the six months ended June 30, 2025, there was one other consumer loan for $ 23 thousand originated in 2024 related to a consumer line of credit that was charged off, with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Six Months Ended June 30, 2024

Allowance Charge-offs Recoveries Provision for (Release of) Credit Losses Ending

One-to-four family $ 2,630 $ — $ — $ 168 $ 2,798

Home equity 185 — — 14 199

Commercial and multifamily 1,070 — — 60 1,130

Construction and land 1,349 — — ( 277 ) 1,072

Manufactured homes (1)

971 ( 23 ) — ( 10 ) 938

Floating homes 2,022 — — ( 112 ) 1,910

Other consumer (2)

426 ( 60 ) 10 ( 28 ) 348

Commercial business 107 — — ( 9 ) 98

Unallocated — — — — —

Total $ 8,760 $ ( 83 ) $ 10 $ ( 194 ) $ 8,493

(1) During the six months ended June 30, 2024, there was one manufactured home loan that was charged off and then subsequently foreclosed upon.

(2) During the six months ended June 30, 2024, the gross charge-offs related entirely to deposit overdrafts that were charged off.

Credit Quality Indicators.

10 unchanged sentences

Assets which do not currently expose us to sufficient risk to warrant classification as substandard or doubtful but possess weaknesses are required to be designated as special mention.

There were no loans classified as doubtful or loss as of March 31, 2025 and December 31, 2024.

The following tables present the internally assigned grades as of March 31, 2025 and December 31, 2024, by type of loan and origination year (in thousands):

At March 31, 2025

There were no loans classified as doubtful or loss as of June 30, 2025 and December 31, 2024.

The following tables present the internally assigned grades as of June 30, 2025 and December 31, 2024, by type of loan and origination year (in thousands):

At June 30, 2025

Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Amortized Cost Basis Converted to Term

21 unchanged sentences

Pass $ 10,433 $ 20,142 $ 6,342 $ 14,794 $ 23,572 $ 15,725 $ — $ — $ 91,008

Substandard — — — 2,350 — — — — 2,350

Total floating homes $ 10,433 $ 20,142 $ 6,342 $ 14,794 $ 23,572 $ 15,725 $ — $ — $ 91,008

54 unchanged sentences

The following table presents the amortized cost of nonaccrual loans as of the dates indicated, by type of loan (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

with no ACL Total

9 unchanged sentences

The following tables present the aging of past due loans, based on amortized cost, as of the dates indicated, by type of loan (in thousands):

March 31, 2025

June 30, 2025

Past Due 60-89 Days

36 unchanged sentences

Any other type of modification, including the use of multiple categories above.

At March 31, 2025, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms.

There were no loans modified within the three months ended March 31, 2025 and 2024.

At March 31, 2025 and December 31, 2024, we had no loan receivables that defaulted subsequent to their modification.

At June 30, 2025, the Company had no commitments to extend additional credit to borrowers owing loan receivables with modified terms.

There were no loans modified within the three and six months ended June 30, 2025 and 2024.

At June 30, 2025 and December 31, 2024, we had no loan receivables that defaulted subsequent to their modification.

Troubled debt restructurings (“TDRs”).

1 unchanged sentence

Troubled Debt Restructurings and Vintage Disclosures , the Company had granted a variety of concessions to borrowers in the form of loan modifications that were considered TDRs.

Loans classified as legacy TDRs totaled $ 1.3 million at both March 31, 2025 and December 31, 2024.

Loans classified as legacy TDRs totaled $ 1.3 million at both June 30, 2025 and December 31, 2024.

Collateral Dependent Loans .

4 unchanged sentences

The following tables summarize collateral dependent loans by collateral type as of the dates indicated (in thousands):

March 31, 2025

June 30, 2025

Commercial Real Estate Residential Real Estate Land Other Residential RVs/Automobiles Business Assets Total

7 unchanged sentences

Manufactured homes — — — 489 — — 489

Floating homes — — — 2,363 — — 2,363

Other consumer — — — — 8 — 8

21 unchanged sentences

ASC 820 defines fair values for financial instruments as the exit price, the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions.

The Company’s fair values for financial instruments at March 31, 2025 and December 31, 2024 were determined based on these requirements.

The Company’s fair values for financial instruments at June 30, 2025 and December 31, 2024 were determined based on these requirements.

The following methods and assumptions were used to estimate the fair value of the Company’s financial instruments:

1 unchanged sentence

Available-for-sale securities – AFS securities are recorded at fair value based on quoted market prices, if available (Level 1).

If quoted market prices are not available, management utilizes third-party pricing services or broker quotations from dealers in the specific instruments (Level 2).

If quoted market prices are not available, management utilizes third-party pricing services or broker quotations from dealers

in the specific instruments (Level 2).

Level 2 securities include those traded on an active exchange, as well as U.S.

15 unchanged sentences

OREO and repossessed assets – The fair value of OREO and repossessed assets is based on the current appraised value of the collateral less estimated costs to sell.

Off-balance sheet financial instruments - The fair value of off-balance sheet financial instruments, which consisted entirely of loan commitments at March 31, 2025 and December 31, 2024, is estimated based on fees charged to others to enter into similar agreements, taking into account the remaining terms of the agreements and credit standing of the Company’s clients.

The estimated fair value of these commitments was not significant at March 31, 2025 and December 31, 2024.

Off-balance sheet financial instruments - The fair value of off-balance sheet financial instruments, which consisted entirely of loan commitments at June 30, 2025 and December 31, 2024, is estimated based on fees charged to others to enter into similar agreements, taking into account the remaining terms of the agreements and credit standing of the Company’s clients.

The estimated fair value of these commitments was not significant at June 30, 2025 and December 31, 2024.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

1 unchanged sentence

Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s quarterly valuation process.

There were no transfers between levels during the three months ended March 31, 2025 and 2024.

There were no transfers between levels during the three and six months ended June 30, 2025 and 2024.

The following tables present information about the level in the fair value hierarchy for the Company’s financial assets and liabilities, whether recognized or recorded at fair value or not as of the dates indicated (in thousands):

March 31, 2025 Fair Value Measurements Using:

June 30, 2025 Fair Value Measurements Using:

Value Estimated

26 unchanged sentences

The following tables present the balance of assets measured at fair value on a recurring basis as of the dates indicated (in thousands):

Fair Value at March 31, 2025

Fair Value at June 30, 2025

Description Total Level 1 Level 2 Level 3

8 unchanged sentences

The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring basis as of the dates indicated:

March 31, 2025

June 30, 2025

Financial Instrument Valuation Technique Unobservable Input(s) Range

11 unchanged sentences

As a result of the difficulty in observing certain significant valuation inputs affecting our “Level 3” fair value assets, we are required to make judgments regarding these items’ fair values.

There were no assets or liabilities (excluding MSRs) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and nine months ended March 31, 2025 and 2024.

There were no assets or liabilities (excluding MSRs) measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2025 and 2024.

MSRs are measured at fair value using significant unobservable inputs (Level 3) on a recurring basis, and a reconciliation of these assets can be found in “Note 6—Mortgage Servicing Rights.

The following tables present the balance of assets measured at fair value on a nonrecurring basis at the dates indicated (in thousands):

Fair Value at March 31, 2025

Fair Value at June 30, 2025

Total Level 1 Level 2 Level 3

4 unchanged sentences

Collateral dependent loans $ 7,627 $ — $ — $ 7,627

There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis, at both March 31, 2025 and December 31, 2024.

There were no liabilities carried at fair value, measured on a recurring or nonrecurring basis, at both June 30, 2025 and December 31, 2024.

Note 6 – Mortgage Servicing Rights

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $ 418.6 million at March 31, 2025 compared to $ 425.8 million at December 31, 2024.

Of these total balances, the unpaid principal balance of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at March 31, 2025 and December 31, 2024 were $ 416.5 million and $ 423.7 million, respectively.

The unpaid principal balance of loans serviced for other financial institutions totaled $ 2.1 million at both March 31, 2025 and December 31, 2024.

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $ 414.1 million at June 30, 2025 compared to $ 425.8 million at December 31, 2024.

Of these total balances, the unpaid principal balances of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at June 30, 2025 and December 31, 2024 were $ 412.1 million and $ 423.7 million, respectively.

The unpaid principal balance of loans serviced for other financial institutions totaled $ 2.1 million at both June 30, 2025 and December 31, 2024.

Loans serviced for Fannie Mae and others are not included in the Company’s financial statements as they are not assets of the Company.

A summary of the change in the balance of mortgage servicing assets during the periods indicated were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Beginning balance, at fair value $ 4,688 $ 4,612 $ 4,769 $ 4,632

6 unchanged sentences

The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Prepayment speed (Public Securities Association “PSA” model) 125 % 125 %

1 unchanged sentence

Weighted average discount rate 10.0 % 10.0 %

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights are included in

mortgage servicing income on the Condensed Consolidated Statements of Income and totaled $ 269 thousand and $ 282 thousand for the three months ended March 31, 2025 and 2024, respectively.

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights, which are included in mortgage servicing income on the Condensed Consolidated Statements of Income, totaled $ 263 thousand and $ 531 thousand for three and six months ended June 30, 2025, and $ 279 thousand and $ 561 thousand for the three and six months ended June 30, 2024, respectively.

Note 7 – Commitments and Contingencies

5 unchanged sentences

The following tables present advances from the FHLB as of the dates indicated (dollars in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

FHLB advances:

Short-term advances

Long-term advances

10,000 25,000

Short-term advances (one year or less) $ 15,000 $ —

Long-term advances (over one year) 10,000 25,000

$ 25,000 $ 25,000

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Outstanding balance $ 25,000 $ 25,000

9 unchanged sentences

The following table presents the Company’s borrowing capacity from the FHLB as of the dates indicated:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amount available to borrow under credit facility (1)

10 unchanged sentences

As a member of the FHLB, the Company is required to maintain a minimum level of investment in FHLB of Des Moines stock based on specific percentages of its outstanding FHLB advances.

At both March 31, 2025 and December 31, 2024, the Company had an investment of $ 1.7 million in FHLB of Des Moines stock.

At both June 30, 2025 and December 31, 2024, the Company had an investment of $ 1.7 million in FHLB of Des Moines stock.

Federal Reserve Bank of San Francisco (“FRB SF”) Borrowings

1 unchanged sentence

The terms of the agreement call for a blanket pledge of a portion of the Company’s consumer and commercial business loans based on the Company’s outstanding borrowing balance.

At March 31, 2025 and December 31, 2024, the amount available to borrow under this credit facility was $ 20.3 million and $ 20.8 million, respectively, subject to eligible pledged collateral.

The Company had no outstanding borrowings under this arrangement at March 31, 2025 and December 31, 2024.

At June 30, 2025 and December 31, 2024, the amount available to borrow under this credit facility was $ 19.4 million and $ 20.8 million, respectively, subject to eligible pledged collateral.

The Company had no outstanding borrowings under this arrangement at June 30, 2025 and December 31, 2024.

Other Borrowings

1 unchanged sentence

The line has a one year term maturing on June 30, 2026 and is renewable annually.

As of March 31, 2025, the amount available under this line of credit was $ 20.0 million.

There was no balance on this line of credit as of March 31, 2025 and December 31, 2024.

As of June 30, 2025, the amount available under this line of credit was $ 20.0 million.

There was no balance on this line of credit as of June 30, 2025 and December 31, 2024.

Subordinated Debt

4 unchanged sentences

Prior to October 1, 2025, the Company may redeem these notes, in whole but not in part, only under certain limited circumstances set forth in the terms of the subordinated notes.

The balance of the subordinated notes was $ 11.8 million as of both March 31, 2025 and December 31, 2024.

The balance of the subordinated notes was $ 11.8 million as of both June 30, 2025 and December 31, 2024.

Note 9 – Earnings Per Common Share

The following table summarizes the calculation of earnings per share for the periods indicated (in thousands, except per share data):

Three Months Ended

Three Months Ended Six Months Ended

2025 2024 2025 2024

Net income $ 2,052 $ 795 $ 3,219 $ 1,564

10 unchanged sentences

Earnings per share, diluted $ 0.79 $ 0.31 $ 1.24 $ 0.61

There were no anti-dilutive securities during the three months ended March 31, 2025 and 7,596 anti-dilutive securities during the three months ended March 31, 2024.

There were no anti-dilutive securities during the three and six months ended June 30, 2025 and June 30, 2024.

Note 10 – Leases

We currently have operating leases for branch locations, a loan production office and our corporate office and in the past, we also had operating leases for certain equipment.

The term for our leases begins on the date we become legally obligated for the

rent payments or we take possession of the building premises, whichever is earlier.

We currently have operating leases for branch locations, a loan production office and our corporate office.

The term for our leases generally begins on the date we become legally obligated for the rent payments or we take possession of the building premises, whichever is earlier.

Our real estate leases have initial terms ranging from one to 10.5 years and typically include one renewal option.

As of March 31, 2025, our leases had remaining terms ranging from 11 months to 5.2 years.

As of June 30, 2025, our leases had remaining terms ranging from 8 months to 4.9 years.

The operating leases require us to pay property taxes and operating expenses for the properties.

We have finance leases for certain equipment, including copier machines.

The lease initial term was for 5 years and has a remaining term 4.5 years.

The following table presents the lease right-of-use assets and lease liabilities recorded on the Condensed Consolidated Balance Sheets at the dates indicated (in thousands):

1 unchanged sentence

Operating lease right-of-use assets $ 3,816 $ 3,725

Finance lease right-of-use assets 117 —

Operating lease liabilities 4,095 4,013

Finance lease liabilities 118 —

The following table presents the components of lease expense for the periods indicated (in thousands):

Three Months Ended March 31,

Operating lease expense

Office leases $ 273 $ 270

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Lease expense

Operating leases $ 275 $ 270 $ 548 $ 540

Finance leases

Amortization of right-of-use assets 13 — 13 —

Interest on lease liabilities 3 — 3 —

Sublease income — ( 1 ) — ( 4 )

1 unchanged sentence

The following table presents the schedule of lease liability payments at the date indicated (in thousands):

March 31, 2025

Remainder of 2025

June 30, Finance Leases Operating Leases Total Lease Payments

2026 $ 29 $ 1,158 $ 1,187

2027 29 1,132 1,161

2028 29 1,086 1,115

2029 29 865 894

2030 14 106 120

Total lease payments 130 4,347 4,477

4 unchanged sentences

Weighted-average remaining lease term:

Office leases 4.0 years 4.3 years

Operating leases 3.9 years 4.3 years

Finance leases 4.5 years 0.0 years

Weighted-average discount rate (annualized):

Office leases 2.90 % 2.88 %

Operating leases 3.09 % 2.88 %

Finance leases 4.41 % — %

Supplemental cash flow information related to leases was as follows for the periods indicated (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

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

Operating cash flows:

Office leases $ 279 $ 278

Operating leases $ 280 $ 280 $ 559 $ 558

Finance leases 3 — 3 —

Financing cash flows:

Finance leases 12 — 12 —

Note 11 – Subsequent Events

On April 29, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.19 per common share, payable on May 23, 2025 to stockholders of record at the close of business on May 9, 2025.

On July 29, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.19 per common share, payable on August 25, 2025 to stockholders of record at the close of business on August 11, 2025.

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