What changed in this filing

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Item 1. Business

2026-03-25 compared with 2025-03-27 · 76 added, 74 removed, 686 unchanged (18% of the section changed)

44 unchanged sentences

Broadstreet Bank, SSB

Formerly named Mineola Community Bank, S.S.B., Broadstreet Bank, SSB is a Texas-chartered savings bank headquartered in Mineola, Texas.

On December 4, 2023, the name of the Bank changed from Mineola Community Bank to Broadstreet Bank to be more inclusive of all of the communities we serve.

Broadstreet Bank, SSB is a Texas-chartered savings bank headquartered in Mineola, Texas.

Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings from the Federal Home Loan Bank of Dallas, in residential real estate loans, commercial real estate loans, construction and land loans, municipality loans, and, to a lesser extent, commercial loans, and consumer and other loans.

The majority of Broadstreet Bank’s loans are currently fixed-rate loans, however the Bank is originating more

commercial loans with adjustable rates to diversify our loan portfolio and decrease risk associated with fluctuations in market rates.

We also invest in securities, which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S.

The majority of Broadstreet Bank’s loans are currently fixed-rate loans, however the Bank’s pricing and terms for commercial loans have changed to adjustable rates or maximum fixed-rate of 5-years to diversify our loan portfolio and decrease risk associated with fluctuations in market rates.

We also invest in securities,

which have historically consisted primarily of mortgage-backed securities and obligations issued by U.S.

government sponsored enterprises and others, state and municipal securities, collateralized mortgage obligations, corporate bonds, and Federal Home Loan Bank stock.

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Broadstreet Bank is subject to comprehensive regulation and examination by the Texas Department of Savings and Mortgage Lending and the Federal Deposit Insurance Corporation and is a member of the Federal Home Loan Bank system.

We consider Franklin County, Hopkins County, Smith County, Van Zandt County and Wood County, and contiguous areas, as our primary market area for originating loans and gathering deposits.

Our main office and six branch offices are located in these counties including the Tyler, Texas branch in Smith County which opened in the first quarter of 2024.

We consider our primary market area, for originating loans and gathering deposits, the counties in which our main office and six branch offices are located, which include, Franklin County, Hopkins County, Smith County, Van Zandt County and Wood County, and contiguous areas.

Our branch office in Winnsboro, Texas, is in Wood County, but the Winnsboro city limits also lie within Franklin County and Hopkins County.

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Our historical lending activity consists primarily of originating one-to four-family residential mortgage loans, commercial real estate loans, and construction and land loans.

To a substantially lesser extent, we originate agricultural loans, commercial loans, loans to municipalities, and consumer and other loans.

While the majority of the Company’s loan portfolio is comprised of fixed rate loans, we have updated our commercial lending terms and are originating more commercial loans with adjustable rates.

To a substantially lesser extent,

we originate agricultural loans, commercial loans, loans to municipalities, and consumer and other loans.

While the majority of the Company’s loan portfolio is comprised of fixed rate loans, we have updated our commercial lending pricing and terms to adjustable rates or maximum fixed-rates of 5-years.

Loan Portfolio Composition.

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The majority of our one-to-four family residential real estate loans are secured by properties located in our primary market area.

We have also originated residential mortgage loans secured by owner-occupied properties located in the northern and eastern sections of the Dallas Metroplex.

We have also originated residential mortgage loans secured by owner-occupied properties located in the the Dallas Fort Worth Metroplex.

These loans are originated primarily through existing relationships and word-of-mouth referrals.

These are generally jumbo loans with low loan-to-value ratios, generally in the range of 60% to 75%.

At December 31, 2024, these loans amounted to $44.6 million, of which $27.8 million were jumbo loans and $16.8 million were conventional loans.

At December 31, 2025, these loans amounted to $42.4 million, of which $14.8 million were jumbo loans with current balances exceeding the 2025 conforming loan limits and $27.6 million were conventional loans.

Our one-to-four family residential real estate loans are generally underwritten to Freddie Mac guidelines.

Substantially all of our residential mortgage loans are fixed-rate loans.

Residential mortgage loans are generally originated at a fixed rate of 15, 20, or 30 years or with the optional 6-year or 10-year balloon terms based on a 20- or 30-year amortization schedule.

We generally limit the loan-to-value ratios of our one-to-four family residential mortgage loans to 80% (or 95% with private mortgage insurance) of the purchase price or appraised value, whichever is lower.

Residential mortgage loans are generally originated at a fixed rate of 15, 20, or 30 years.

We generally limit the loan-to-value ratios of our one-to-four family residential mortgage loans to 89% of the purchase price or appraised value, whichever is lower.

We do not offer “interest only” mortgage loans on permanent one-to-four family residential real estate loans (where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan).

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In 2023, the Company entered into an agreement with The Independent Bankers Bank (“TIB”) to facilitate the loan application process for conventional, FHA, VA, and USDA residential mortgage loans.

During the year ended

December 31, 2024, we derived $194,000 in noninterest income from the facilitation of 35 loan applications for a total of $10.0 million.

During the year ended December 31, 2025, we derived $144,000 in noninterest income from the facilitation of 22 loan applications for a total of $7.7 million.

Commercial Real Estate Loans .

At December 31, 2025, we had $61.5 million in commercial real estate loans, or 20.1% of total loans.

Our commercial real estate loans are fixed-rate balloon loans with a six to ten year initial term and with a 10- to 20-year amortization period or adjustable rate loans tied to WSJ Prime rate.

The majority of the commercial real estate loans originated in 2024 have adjustable rates.

Our commercial real estate loans are adjustable rate loans with a maximum five year initial term and with a 10- to 20-year amortization period or adjustable rate loans tied to WSJ Prime rate.

The maximum loan-to-value ratio of our commercial real estate loans is generally 80%.

At December 31, 2024, we had twelve loans secured by self-storage facilities totaling $16.3 million, seven loans secured by gas stations with convenience stores totaling $10.5 million, sixteen loans secured by commercial rental properties totaling $7.6 million, eight loans secured by churches totaling $4.5 million, two loans secured by a rural water district totaling $3.8 million, six loans secured by restaurant/fast food restaurant properties totaling $3.6 million, and one loan secured by a hotel totaling $923,000.

At December 31, 2025, we had eleven loans secured by self-storage facilities totaling $15.6 million, nine loans secured by gas stations with convenience stores totaling $16.7 million, and nineteen loans secured by commercial rental properties totaling $11.4 million.

At December 31, 2025, all of these loans were performing according to their terms.

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At December 31, 2025, our largest multi-family loan relationship consisted of one loan totaling $7.7 million, which is secured by a townhome apartment complex.

This loan was paid off in full in January 2026.

At December 31, 2025, all multi-family loans were performing according to their original terms.

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At December 31, 2025, $5.7 million of our single-family construction loans were to individuals and $4.6 million were to builders.

At December 31, 2024, our construction portfolio also included $4.5 million in commercial real estate construction, $15.4 million in apartment or duplex construction, and $1.5 million in subdivision developments.

At December 31, 2024, our largest single family residence construction loan was for $752,000, upon completion.

At December 31, 2024, our largest construction and land development loan relationship consisted of three loans totaling $8.0 million, which is fully funded.

At December 31, 2025, our construction portfolio also included $5.1 million in commercial real estate construction and development loans, $6.3 million in apartment or duplex construction, and $2.2 million in subdivision developments.

At December 31, 2025, our largest single family residence construction loan was a speculative construction loan of $1.2 million, upon completion.

At December 31, 2025, our largest construction and land development loan relationship consisted of four loans totaling $9.0 million, which is fully funded.

At December 31, 2025, all of these loans were performing according to their original terms.

Our construction loans are primarily secured by properties in our primary market area.

We have also developed long-term relationships with borrowers who now reside in the northern and eastern sections of the Dallas Metroplex and continue to provide them with financing, including residential construction.

At December 31, 2024, five construction loans totaling $3.2 million, upon completion, were in process to individual borrowers in the Metroplex.

While we may originate loans to builders whether or not the collateral property underlying the loan is under contract for sale, we consider each project carefully in light of current residential real estate market conditions.

We have also developed long-term relationships with borrowers who now reside in the Dallas Fort Worth Metroplex and continue to provide them with financing, including residential construction.

At December 31, 2025, ten construction loans totaling $7.5 million, upon completion, were in process to borrowers in the Dallas Fort Worth Metroplex.

While we may originate loans to builders whether or not the collateral property underlying the loan is under contract for sale, we consider each project carefully and evaluate current residential real estate market conditions.

Construction loans originated to builders where there is no contract for sale for the underlying completed home at the time of origination are referred to as speculative construction loans.

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We generally will limit the maximum number of speculative units (units that are not pre-sold) approved for each builder, typically starting with one speculative loan per builder until we develop a relationship with the builder.

At December 31, 2024, speculative construction loans consisted of thirteen loans totaling $5.1 million, upon completion.

Due to the continued growth in our market area, the need for multi-family housing has increased and at December 31, 2024, multi-family construction totaled $15.5 million, upon completion, which primarily consists of apartment and quad-plex construction in our market area.

Our single-family construction loans are fixed rate interest-only loans that provide for the payment of interest during the construction phase, which is usually up to 12 months.

At December 31, 2025, speculative construction loans consisted of eighteen loans totaling $9.7 million, upon completion.

Due to the continued growth in our market area, the need for multi-family housing has increased and at December 31, 2025, multi-family construction totaled $6.9 million, upon completion, which primarily consists of a quad-plex construction project in our market area.

Our owner-occupied single-family construction loans are fixed rate interest-only loans that provide for the payment of interest during the construction phase, which is usually up to 12 months.

Our commercial construction and land development loans are adjustable rate interest-only loans with terms up to 24 months.

At the end of the construction phase, the loan may convert to a permanent mortgage loan or may be paid in full.

Construction loans generally can be made with a maximum loan-to-value ratio of 95% of the estimated appraised market value upon completion of the project.

Mortgage insurance pre-approval is required for loans exceeding 80% loan-to-value.

Commercial construction and land development loans generally can be made with maximum loan-to-value of 80% of the estimated market value of the completed project or loan-to-cost of 80% of the estimated construction costs of the completed project.

Single-family construction loans generally can be made with a maximum loan-to-value ratio of 89% of the estimated appraised market value upon completion of the project.

Before making a commitment to fund a construction loan, we require an appraisal of the property by an independent licensed appraiser.

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Commercial loans secured by accounts receivable are made with adjustable rates and for terms not to exceed 12 months.

Commercial equipment loans are made with fixed-interest rates and for terms generally up to 60 months.

Commercial equipment loans are made with fixed-interest rates and for terms generally up to 60 months based on useful life of the equipment.

Depending on the collateral used to secure the loans, commercial loans are generally made in amounts of up to 80% of the value of the collateral securing the loan.

When making commercial loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, the projected cash flows of the business and the value of the collateral, accounts receivable, inventory and equipment.

At December 31, 2024, our largest commercial loan totaled $843,000 and is secured by manufacturing equipment.

At December 31, 2024, this loan was classified as collateral dependent with an associated allowance for credit losses of $54,000.

Our largest commercial relationship consists of five loans totaling $925,000 and is secured by machinery and equipment.

At December 31, 2024, these loans performing according to the original terms.

At December 31, 2025, our largest commercial loan relationship consisted of one loan totaling $3.6 million to a water supply corporation and is secured by accounts receivable.

At December 31, 2025, this loan was performing according to the original terms.

Municipal Loans .

At December 31, 2025, municipal loans were $14.9 million, or 4.8% of total loans.

We make loans to municipalities, political subdivisions, and school districts in Texas, which are primarily secured by tax or revenue pledges.

At December 31, 2025, our largest municipal loan relationship consisted of one loan totaling $3.2 million and is secured by tax revenue.

Consumer and Other Loans .

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We have generally required that the properties securing these real estate loans have an aggregate debt service ratio, including the guarantor’s cash flows and the borrower’s other projects, of at least 1.20x.

An environmental phase one report is obtained when required by policy or when the possibility exists that hazardous materials may have existed on the site or the site may have been impacted by adjoining properties that handled hazardous materials.

An environmental phase one report is

obtained when required by policy or when the possibility exists that hazardous materials may have existed on the site or the site may have been impacted by adjoining properties that handled hazardous materials.

If we foreclose on a commercial real estate loan, the marketing and liquidation period to convert the real estate asset to cash can be lengthy with substantial holding costs.

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Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio.

In addition, generally during the term of a construction loan, interest may be funded by the borrower or disbursed from an interest reserve set aside from the construction loan budget.

These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest.

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These increased risks arise because of the risk that there will be inadequate demand to ensure the sale of the property within an acceptable time.

in addition to the risks associated with traditional construction loans, speculative construction loans carry the added risk that the builder will have to pay the property taxes and other carrying costs of the property until an end buyer is found.

As a result, in addition to the risks associated with traditional construction loans, speculative construction loans carry the added risk that the builder will have to pay the property taxes and other carrying costs of the property until an end buyer is found.

Land loans have substantially similar risks to speculative construction loans.

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Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower.

Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy.

Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Originations, Purchases and Sales of Loans

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We underwrite our participation interest in the loan that we are purchasing according to our own underwriting criteria and procedures.

At December 31, 2024, we had one purchased construction loan participation interest in commercial real estate of $403,000, upon completion, and one purchased construction participation of $1.0 million, upon completion, secured by a hotel.

At December 31, 2024, we had one loan for the construction of a convenience store, secured by the completed project of $4.2 million, for which we sold one participation interest totaling $1.2 million.

At December 31, 2025, we had one purchased construction loan participation interest in commercial real estate of $403,000, upon completion, and one purchased participation of $884,000 secured by a hotel.

We generally do not originate loans for sale.

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Notwithstanding this legal limit, Broadstreet Bank had an in-house limit of $3.0 million for a consumer borrower and $8.0 million for a commercial borrower at December 31, 2025.

At December 31, 2024, our largest loan relationship with one borrower had extensions of credit totaling $9.0 million, when fully funded, secured primarily by single-family residential construction and multi-family construction projects.

At December 31, 2024, the loans were fully funded and were performing according to the original terms.

At December 31, 2025, our largest loan relationship with one borrower had extensions of credit totaling $9.0 million, when fully funded, secured primarily by duplex construction projects and land.

At December 31, 2025, the loans were performing according to the original terms.

Our lending is subject to written underwriting standards and origination procedures.

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Individual loan officer approval authorities range up to $500,000.

Our Loan Committee has approval authority up to $500,000 on commercial and $750,000 on residential properties.

Our Loan Committee has approval authority up to $1 million on commercial and residential properties.

Our Executive Committee has approval authority up to $2.5 million.

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The foreclosure process would begin when a loan becomes 120 days delinquent.

Loan collections depend on the borrower’s continuing financial stability, and therefore are

likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy.

Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans

Loans Past Due and Nonperforming Assets.

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Commercial loans

Municipalities

Consumer and other loans

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Commercial loans

Municipalities

Consumer loans

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When an insured institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount.

An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, such that additional general or specific loss allowances may be required.

An institution’s determination as to the

classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, such that additional general or specific loss allowances may be required.

In connection with the filing of our periodic reports with the Federal Deposit Insurance Corporation and in accordance with our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification in accordance with applicable regulations.

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Changes in the allowance relating to collateral dependent loans are charged or credited to the provision for credit losses.

specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses.

Management’s periodic evaluation of the adequacy of the allowance is based on various factors, including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and nonaccrual loans, existing risk characteristics of specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses.

As an integral part of their examination process, the Texas Department of Savings and Mortgage Lending and the Federal Deposit Insurance Corporation will periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses.

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Commercial loans

Municipalities

Consumer loans

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Commercial loans

Municipalities

Consumer loans

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Net (charge-offs) recoveries

Overage from off-balance sheet credit exposures

Adjustment for adoption of CECL methodology

Allowance for credit losses at end of year

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During the year ended December 31, 2023, the Company entered into interest rate swap agreements with a total notional amount of $25 million to hedge the risk of changes in the fair value of fixed rate available for sale securities for changes in the Secured Overnight Financing Rate (SOFR).

For additional information regarding the fair value hedge, see Note 19 to the notes to consolidated financial statements.

The Company terminated the interest rate swap agreements on January 15, 2025, and the $463,000 unrealized gain will be amortized to interest income over the remaining life of the hedged securities.

Sources of Funds

Customer deposits have traditionally been our primary source of funds for use in lending and investment activities.

We also use borrowings, and occasionally brokered deposits, to supplement cash flow needs, manage the maturities of liabilities for interest rate risk purposes and to manage the cost of funds.

In addition, we receive funds from scheduled loan payments, investment maturities, loan prepayments, retained earnings and income on earning assets.

We also use borrowings, brokered deposits, and listed deposits to supplement cash flow needs, manage the maturities of liabilities for interest rate risk purposes and to manage the cost of funds.

In addition, we receive funds from scheduled loan payments and prepayments, investment maturities and paydowns, retained earnings and income on earning assets.

While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition.

Our deposits are generated primarily from our primary market area.

We occasionally attain brokered deposits.

Our deposits are generated primarily from our primary market area and we attain brokered deposits and listed deposits to supplement our more traditional deposit sources.

We offer a selection of deposit accounts, including savings accounts, checking accounts, money market accounts, certificates of deposit and individual retirement accounts.

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Certificates of deposit

At December 31, 2024 and 2023, the aggregate amount of uninsured deposits, which includes deposit account balances in excess of $250,000, which is the maximum amount for federal deposit insurance, was $50.3 million and $37.2 million, respectively.

At December 31, 2024 and 2023, the aggregate amount of our uninsured certificates of

deposit balances in excess of $250,000 was $10.7 million and $8.6 million, respectively.

At December 31, 2025 and 2024, the aggregate amount of uninsured deposits, which includes deposit account balances in excess of $250,000, which is the maximum amount for federal deposit insurance, was $45.8 million and

$50.3 million, respectively.

At December 31, 2025 and 2024, the aggregate amount of our uninsured certificates of deposit balances in excess of $250,000 was $13.6 million and $10.7 million, respectively.

At December 31, 2025 and December 31, 2024, we had no deposits that were uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

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All brokered deposits were fully insured.

The following table sets forth the maturity of our uninsured certificates of deposit at December 31, 2024.

The following table sets forth the maturity of our uninsured portion of certificates of deposit at December 31, 2025.

At December 31,

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For further information regarding our borrowings from the Federal Home Loan Bank of Dallas, see note 9 of the notes to consolidated financial statements.

As of December 31, 2024, we had 60 full-time employees and eight part-time employees.

Personnel and Human Capital Resources

As of December 31, 2025, we had 61 full-time employees and 10 part-time employees.

Our employees are not represented by any collective bargaining group.

Management believes that we have good working relations with our employees.

The success of our business depends highly on our employees, who provide value to our customers and communities through their dedication to our business.

We encourage and support the growth and development of our employees and, wherever possible, seek to fill open positions by promotion and transfer from within the organization.

Continual learning and career development are advanced through internally developed training programs.

We believe our ability to attract and retain employees is a key to our success and strive to offer competitive salaries and employee benefits to all employees and monitor salaries in our market areas.

Subsidiary Activities

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These ratings are inherently subjective and the receipt of a less than satisfactory rating in one or more categories may result in enforcement action by the banking regulators against a financial institution.

A less than satisfactory rating may also prevent a financial institution, such as Broadstreet Bank or its holding company, from

obtaining necessary regulatory approvals to access the capital markets, pay dividends, acquire other financial institutions or establish new branches.

A less than satisfactory rating may also prevent a financial institution, such as Broadstreet Bank or its holding company, from obtaining necessary regulatory approvals to access the capital markets, pay dividends, acquire other financial institutions or establish new branches.

In addition, we must comply with significant anti-money laundering and anti-terrorism laws and regulations, Community Reinvestment Act laws and regulations, and fair lending laws and regulations.

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As a Texas-chartered savings bank, Broadstreet Bank is subject to supervision and regulation by the Texas Department of Savings and Mortgage Lending and the Federal Deposit Insurance Corporation.

The Texas Department of Savings and Mortgage Lending supervises and regulates all areas of Broadstreet Bank’s operations including, without limitation, the making of loans, the issuance of securities, the conduct of corporate affairs, the satisfaction of capital adequacy requirements, the payment of dividends, and the establishment or closing of banking offices.

The Texas Department of Savings and Mortgage Lending supervises and regulates all areas of Broadstreet Bank’s operations including, without limitation, the making of loans, the purchase of securities, the conduct of corporate affairs, the satisfaction of capital adequacy requirements, the payment of dividends, and the establishment or closing of banking offices.

The Texas Department of Savings and Mortgage Lending also conducts examinations of state savings banks and generally conducts joint examinations with the Federal Deposit Insurance Corporation.

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Various state consumer laws and regulations also affect the operations of Broadstreet Bank, including state usury laws and consumer credit laws.

savings and loan association or under federal law for a federal savings and loan association, savings bank or national bank if such institution’s principal office is located in Texas.

Texas law further provides that, subject to the limitations established by rule of the Texas Finance Commission, a Texas savings bank may make any loan or investment or engage in any activity permitted under state law for a bank or savings and loan association or under federal law for a federal savings and loan association, savings bank or national bank if such institution’s principal office is located in Texas.

This provision is commonly referred to as the “Expansion of Powers” provision of the Texas Finance Code applicable to state savings banks.

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Federal law required the federal banking agencies, including the Federal Deposit Insurance Corporation, to establish a “community bank leverage ratio” of between 8% and 10% for institutions with assets of less than $10 billion.

Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements.

Institutions with capital complying with the ratio and otherwise meeting the specified requirements and electing the

alternative framework are considered to comply with the applicable regulatory capital requirements, including the risk-based requirements.

The community bank leverage ratio was established at 9% Tier 1 capital to total average assets, effective January 1, 2020.

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Under applicable regulations, an institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.

An institution is “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater.

An institution is “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%.

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An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.

At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions

on the payment of dividends, and restrictions on the acceptance of brokered deposits.

Furthermore, if an insured depository institution is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the appropriate federal banking agency, and the holding company must guarantee the performance of that plan.

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Privacy Regulations.

Federal regulations generally require that Broadstreet Bank disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter.

establishing the customer relationship and annually thereafter.

In addition, Broadstreet Bank would be required to provide its customers with the ability to “opt-out” of having their personal information shared with unaffiliated third parties and not to disclose account numbers or access codes to non-affiliated third parties for marketing purposes, however, the Bank does not share personal information requiring the opt-out notice.

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Broadstreet Bank is subject to the USA PATRIOT Act, which gives federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements.

The USA PATRIOT Act

contains provisions intended to encourage information sharing among bank regulatory agencies and law enforcement bodies and imposes affirmative obligations on financial institutions, such as enhanced recordkeeping and customer identification requirements.

The USA PATRIOT Act contains provisions intended to encourage information sharing among bank regulatory agencies and law enforcement bodies and imposes affirmative obligations on financial institutions, such as enhanced recordkeeping and customer identification requirements.

Prohibitions Against Tying Arrangements .

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Under the Change in Bank Control Act, no person or group of persons may acquire “control” of a bank holding company, such as Texas Community Bancshares, unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.

a determination by the regulator that the acquirer has the power, directly or indirectly, to exercise a controlling influence over the management or policies of the institution.

Control, as defined under federal law, means ownership, control of or holding irrevocable proxies representing more than 25% of any class of voting stock, control in any manner of the election of a majority of the institution’s directors, or a determination by the regulator that the acquirer has the power, directly or indirectly, to exercise a controlling influence over the management or policies of the institution.

There is a presumption of control upon the acquisition of 10% or more of a class of voting stock if the holding company involved has its shares registered under the Securities Exchange Act of 1934, or, of the holding company involved does now have its shares registered under the Securities Exchange Act of 1934, if no other persons will own, control or hold the power to vote a greater percentage of that class of voting security after the acquisition.

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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-K

Item 1. Business