What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-12 · 119 added, 105 removed, 753 unchanged (23% of the section changed)

4 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2025 December 31,

Cash and cash equivalents $ 101,156 $ 43,641

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)

Available-for-sale (“AFS”) securities, at fair value (amortized cost of $ 8,857 and $ 9,112 as of September 30, 2025 and December 31, 2024, respectively)

Held-to-maturity (“HTM”) securities, at amortized cost (fair value of $ 1,552 and $ 1,712 at September 30, 2025 and December 31, 2024, respectively)

Loans held-for-sale 271 487

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 June 30, 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 September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 28,665 28,413

8 unchanged sentences

(In thousands, except share and per share amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

10 unchanged sentences

PROVISION FOR (RELEASE OF) CREDIT LOSSES 55 8 22 ( 134 )

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

Net interest income after provision for (release of) credit losses 8,885 7,865 26,244 22,916

NONINTEREST INCOME

28 unchanged sentences

(In thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

1 unchanged sentence

Available for sale securities:

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 )

Unrealized gains arising during the period 208 161 101 84

Income tax expense related to unrealized gains ( 44 ) ( 34 ) ( 21 ) ( 18 )

Other comprehensive income, net of tax 164 127 80 66

Comprehensive income $ 1,859 $ 1,281 $ 4,994 $ 2,785

3 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

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

For the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)

(In thousands, except share and per share amounts)

4 unchanged sentences

Stockholders’

Balance, at March 31, 2025

Balance, at June 30, 2025

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

Net income — — — 1,695 — 1,695

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

Other comprehensive income, net of tax — — — — 164 164

Share-based compensation — — 75 — — 75

1 unchanged sentence

— — — ( 488 ) — ( 488 )

Balance, at June 30, 2025

Balance, at September 30, 2025

2,566,069 $ 25 $ 28,665 $ 79,724 $ ( 964 ) $ 107,450

2 unchanged sentences

Net income — — — 4,914 — 4,914

Other comprehensive loss, net of tax — — — — ( 84 ) ( 84 )

Other comprehensive income, net of tax — — — — 80 80

Share-based compensation — — 231 — — 231

2 unchanged sentences

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

Balance, at June 30, 2025

Balance, at September 30, 2025

2,566,069 $ 25 $ 28,665 $ 79,724 $ ( 964 ) $ 107,450

4 unchanged sentences

Stockholders’

Balance, at March 31, 2024

Balance, at June 30, 2024

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

2 unchanged sentences

Share-based compensation — — 98 — — 98

Common stock surrendered ( 5,053 ) — ( 218 ) — — ( 218 )

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

— — — ( 487 ) — ( 487 )

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

Common stock options exercised 11,864 — 218 — — 218

Balance, at June 30, 2024

Balance, at September 30, 2024

2,564,095 $ 25 $ 28,296 $ 74,840 $ ( 922 ) $ 102,239

2 unchanged sentences

Net income — — — 2,719 — 2,719

Other comprehensive loss, net of tax — — — — ( 61 ) ( 61 )

Other comprehensive gain, net of tax — — — — 66 66

Share-based compensation — — 291 — — 291

3 unchanged sentences

Common stock repurchased ( 1,626 ) — ( 18 ) ( 47 ) — ( 65 )

Common stock surrendered ( 5,053 ) — ( 218 ) — — ( 218 )

Common stock options exercised 13,299 — 251 — — 251

Balance, at June 30, 2024

Balance, at September 30, 2024

2,564,095 $ 25 $ 28,296 $ 74,840 $ ( 922 ) $ 102,239

4 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Amortization of net premiums on investments 64 64

Release of credit losses ( 33 ) ( 142 )

Provision for (release of) credit losses 22 ( 134 )

Depreciation and amortization 376 483

15 unchanged sentences

Other liabilities 897 148

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

Net cash provided by operating activities 5,156 2,779

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Proceeds from principal payments of held-to-maturity securities 231 27

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

Net increase in loans ( 7,692 ) ( 6,598 )

Purchase of BOLI — ( 5 )

Purchases of premises and equipment, net ( 100 ) ( 50 )

1 unchanged sentence

Proceeds from sale of OREO and other repossessed assets — 592

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

Net cash used in investing activities ( 7,339 ) ( 5,697 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Common stock repurchases — ( 65 )

Purchase of common stock surrendered to pay tax liability — ( 218 )

Dividends paid on common stock ( 1,462 ) ( 1,459 )

7 unchanged sentences

Interest paid on deposits and borrowings 16,998 19,765

Noncash investing and financing activities:

Loans transferred from loans held-for-sale to loans held-for-portfolio 2,275 859

Loans transferred from loans held-for-portfolio to OREO and repossessed assets 344 115

Cash paid for principal portion from finance leases 12 —

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

23 unchanged sentences

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.

This ASU’s amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027.

This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

1 unchanged sentence

Note 3 – Investments

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.”

At September 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

June 30, 2025

September 30, 2025

Municipal bonds $ 6,323 $ 10 $ ( 950 ) $ 5,383

7 unchanged sentences

Losses Estimated

June 30, 2025

September 30, 2025

Municipal bonds $ 703 $ — $ ( 170 ) $ 533

5 unchanged sentences

Total $ 2,130 $ — $ ( 418 ) $ 1,712

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

The amortized cost and estimated fair value of AFS and HTM securities at September 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.

June 30, 2025

September 30, 2025

Available-for-sale Held-to-maturity

6 unchanged sentences

Total $ 8,857 $ 7,637 $ 1,899 $ 1,552

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.

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

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

Accrued interest receivable on securities totaled $ 76 thousand at September 30, 2025 and $ 48 thousand at 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):

June 30, 2025

September 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 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.

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

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

At September 30, 2025 , there were no securities in an unrealized loss position for less than 12 months and 16 securities in an unrealized loss position for more than 12 months.

At 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 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.

There was no provision for credit losses recognized for investment securities during the three and nine months ended September 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

Loans-held-for portfolio (which excludes loans held-for-sale) at the dates indicated were as follows (in thousands):

September 30,

2025 December 31,

17 unchanged sentences

Total loans held-for-portfolio, net $ 901,151 $ 891,672

(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.

(1) Includes premiums resulting from purchased loans of $ 373 thousand related to one-to-four family loans, $ 220 thousand related to commercial and multifamily loans, and $ 51 thousand related to commercial business loans as of September 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 June 30, 2025, there were two collateral dependent consumer mortgage loans, totaling $ 166 thousand, that were in process of foreclosure .

As of September 30, 2025, there were three collateral dependent consumer mortgage loans, totaling $ 186 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 June 30,

Three Months Ended September 30,

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

3 unchanged sentences

Balance at end of period $ 8,564 $ 112 $ 8,676 $ 8,585 $ 147 $ 8,732

Six Months Ended June 30,

Nine Months Ended September 30,

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

3 unchanged sentences

Balance at end of period $ 8,564 $ 112 $ 8,676 $ 8,585 $ 147 $ 8,732

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 on loans receivable totaled $ 3.7 million at September 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.

10 unchanged sentences

Qualitative adjustments include but are not limited to changes in lending policies;

changes in nature and volume of the portfolio;

change in staff experience level;

changes in the nature and volume of the portfolio;

changes in staff experience levels;

changes in the volume or trends of classified loans, delinquencies, and nonaccrual loans;

7 unchanged sentences

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

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

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

4 unchanged sentences

Manufactured homes (1)

1,395 ( 47 ) — 31 1,379

Floating homes 1,410 — — ( 47 ) 1,363

3 unchanged sentences

Total $ 8,536 $ ( 57 ) $ 20 $ 65 $ 8,564

(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

(1) During the three months ended September 30,2025, there was one manufactured loan for $ 47 thousand originated in 2023 that was charged off.

(2) During the three months ended September 30,2025, there was one automobile loan for $ 1 thousand originated in 2021 that was charged off, with the remainder of the gross charge-offs of other consumer loans related entirely to deposit overdrafts.

Three Months Ended September 30, 2024

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

9 unchanged sentences

Total $ 8,493 $ ( 20 ) $ 6 $ 106 $ 8,585

(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

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

Nine Months Ended September 30, 2025

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

10 unchanged sentences

Total $ 8,499 $ ( 107 ) $ 28 $ 144 $ 8,564

(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

(1) During the nine months ended September 30, 2025, there were two manufactured home loans originated in 2022 and 2023 for $ 19 thousand and $ 47 thousand, respectively, that were charged off and then subsequently foreclosed upon.

(2) During the nine months ended September 30, 2025, there was one automobile loan for $ 1 thousand originated in 2021 that was charged off and 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.

Nine Months Ended September 30, 2024

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

9 unchanged sentences

Commercial business 107 — — ( 11 ) 96

Unallocated — — — — —

Total $ 8,760 $ ( 103 ) $ 16 $ ( 88 ) $ 8,585

(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.

(1) During the nine months ended September 30, 2024, there was one manufactured home loan for $ 23 thousand originated in 2020 that was charged off and then subsequently foreclosed upon.

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

Credit Quality Indicators.

8 unchanged sentences

When we classify problem assets as a loss, we are required to charge off those assets in the period in which they are deemed uncollectible.

Our determination as to the classification of our assets and the amount of our valuation allowances is subject to review by the FDIC (the Bank’s federal regulator) and the Washington Department of Financial Institutions (the Bank’s state banking regulator), which can order the establishment of additional credit loss allowances.

Our determination as to the classification of our assets and the amount of our valuation allowances is subject to review by the FDIC (the Bank’s federal banking regulator) and the Washington Department of Financial Institutions (the Bank’s state banking regulator), which can order the establishment of additional credit loss allowances.

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 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

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

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

At September 30, 2025

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

77 unchanged sentences

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

June 30, 2025 December 31, 2024

September 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):

June 30, 2025

September 30, 2025

Past Due 60-89 Days

36 unchanged sentences

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

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.

At September 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 nine months ended September 30, 2025 and 2024.

At September 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 June 30, 2025 and December 31, 2024.

Loans classified as legacy TDRs totaled $ 1.1 million and $ 1.3 million at September 30, 2025 and December 31, 2024, respectively.

Collateral Dependent Loans .

4 unchanged sentences

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

June 30, 2025

September 30, 2025

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

30 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 June 30, 2025 and December 31, 2024 were determined based on these requirements.

The Company’s fair values for financial instruments at September 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:

20 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 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.

Off-balance sheet financial instruments - The fair value of off-balance sheet financial instruments, which consisted entirely of loan commitments at September 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 September 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 and six months ended June 30, 2025 and 2024.

There were no transfers between levels during the three and nine months ended September 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):

June 30, 2025 Fair Value Measurements Using:

September 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 June 30, 2025

Fair Value at September 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:

June 30, 2025

September 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 six months ended June 30, 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 nine months ended September 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 June 30, 2025

Fair Value at September 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 June 30, 2025 and December 31, 2024.

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

Note 6 – Mortgage Servicing Rights

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.

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $ 406.2 million at September 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 September 30, 2025 and December 31, 2024 were $ 404.1 million and $ 423.7 million, respectively.

The unpaid principal balance of loans serviced for other financial institutions totaled $ 2.1 million at both September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

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

June 30, 2025 December 31, 2024

September 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, 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.

Average debt service cost per residential loan $ 96.00 $ 80.00

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 $ 262 thousand and $ 794 thousand for three and nine months ended September 30, 2025, and $ 280 thousand and $ 841 thousand for the three and nine months ended September 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):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

FHLB advances:

2 unchanged sentences

$ 25,000 $ 25,000

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Outstanding balance $ 25,000 $ 25,000

3 unchanged sentences

The following table presents the maturity of our FHLB advances (dollars in thousands):

September 30, 2025

Remainder of 2025 $ —

4 unchanged sentences

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

June 30, 2025 December 31, 2024

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

At both September 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 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.

At September 30, 2025 and December 31, 2024, the amount available to borrow under this credit facility was $ 19.5 million and $ 20.8 million, respectively, subject to eligible pledged collateral.

The Company had no outstanding borrowings under this arrangement at September 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 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.

As of September 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 September 30, 2025 and December 31, 2024.

Subordinated Debt

3 unchanged sentences

The subordinated notes mature on May 15, 2030, and may be redeemed by the Company, in whole or in part, on October 1, 2025, or on any subsequent interest payment date.

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 June 30, 2025 and December 31, 2024.

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

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

Subsequent to quarter end on October 1, 2025, the Company redeemed $ 4.0 million of the $ 12.0 million of its subordinated notes outstanding.

Refer to “Note 11—Subsequent Events” for further detail.

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 Six Months Ended

Three Months Ended Nine Months Ended

2025 2024 2025 2024

11 unchanged sentences

Earnings per share, diluted $ 0.66 $ 0.45 $ 1.90 $ 1.05

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

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

Note 10 – Leases

2 unchanged sentences

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

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

As of September 30, 2025, our leases had remaining terms ranging from 5 months to 4.7 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.

We also have finance leases for certain equipment, including copier machines which had an initial term of five years and a remaining term of approximately 4.25 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):

September 30,

2025 December 31,

4 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

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

June 30, Finance Leases Operating Leases Total Lease Payments

2026 $ 29 $ 1,158 $ 1,187

September 30, Finance Leases Operating Leases Total Lease Payments

2026 $ 29 $ 1,145 $ 1,174

6 unchanged sentences

Lease term and discount rate by lease type consisted of the following at the dates indicated:

September 30,

2025 December 31,

6 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

6 unchanged sentences

Note 11 – Subsequent Events

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.

On October 1, 2025, the Company redeemed $ 4.0 million of its $ 12.0 million of outstanding subordinated notes.

This transaction represented a partial redemption under the terms of the subordinated notes.

Refer to “Note—8 Borrowings” for additional information regarding the redemption parameters.

On October 28, 2025, the Company announced that its Board of Directors declared a quarterly cash dividend of $ 0.19 per common share, payable on November 21, 2025 to stockholders of record at the close of business on November 7, 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