Central Plains Bancshares(US:CPBI)2025-08-12 20:31Financial Position - Total assets decreased by $7.8 million, or 1.5%, to $500.9 million at June 30, 2025, from $508.7 million at March 31, 2025[97]. - Cash and cash equivalents decreased by $20.8 million, or 72.4%, to $7.9 million at June 30, 2025, primarily due to increased loan funding and decreased total deposits[98]. - Total deposits decreased by $15.6 million, or 3.7%, to $400.6 million at June 30, 2025, primarily due to funds leaving the Association held in a 1031 exchange[102]. - Outstanding borrowings increased to $8.5 million at June 30, 2025, from no outstanding borrowings at March 31, 2025[104]. - Stockholders' equity increased by $1.3 million, or 1.6%, to $84.6 million at June 30, 2025, driven by net income of $988,000 and a decrease in unrealized losses on securities[105]. Loan and Investment Activity - Gross loans increased by $11.0 million, or 2.7%, to $413.2 million at June 30, 2025, driven by increases across all loan categories except for land development and SIDs[100]. - Investment securities available for sale increased by $1.7 million, or 2.9%, to $61.1 million at June 30, 2025, with purchases of $3.4 million during the period[99]. - Interest income on loans increased by $591,000, or 11.1%, to $5.9 million, with the average balance of loans growing by $25.2 million, or 6.7%, to $403.6 million[113]. - The company targets new commercial real estate loan originations to experienced small- and mid-sized owners and investors, focusing on properties within its primary market area[148][150]. Income and Expenses - Net income for the three months ended June 30, 2025, was $988,000, an increase of 9.4% from $903,000 in the same period of 2024[111]. - Interest and dividend income rose by $670,000, or 11.3%, to $6.6 million for the three months ended June 30, 2025, compared to $5.9 million in 2024[112]. - Net interest income before provision for credit losses increased by $523,000, or 13.2%, to $4.5 million for the three months ended June 30, 2025[117]. - Non-interest income increased by $42,000, or 6.9%, to $654,000, driven by a 60.4% increase in gain on sale of loans to $77,000[122]. - Total non-interest expense rose by $446,000, or 12.8%, to $3.9 million, with salaries and employee benefits increasing by $260,000 due to the implementation of the 2024 Equity Incentive Plan[124][125]. Tax and Interest Rates - The effective income tax rate for the three months ended June 30, 2025, was 19.6%, compared to 18.7% in 2024[126]. - The interest rate spread increased by 28 basis points to 3.05%, and the net interest margin increased by 22 basis points to 3.75% for the three months ended June 30, 2025[118]. - The company recorded a reversal of provision for credit losses of $3,000 for the three months ended June 30, 2025, compared to a provision of $5,000 in 2024[119]. - The average interest-earning assets to interest-bearing liabilities ratio was 140.53% for the three months ended June 30, 2025, compared to 144.45% in 2024[118]. - As of June 30, 2025, a 200 basis point increase in market interest rates would result in a 0.50% decrease in Net Interest Income (NII) while a 200 basis point decrease would lead to a 0.69% increase in NII[133]. Market Value and Borrowing Capacity - The estimated changes in Market Value of Equity (MVE) indicate a decrease of $987,000 (0.88%) with a 400 basis point increase in interest rates and a decrease of $17.8 million (15.81%) with a 200 basis point decrease[136][138]. - The MVE ratio is projected to decrease to 13.69% with a 400 basis point decrease in interest rates, compared to a base ratio of 23.38%[136]. - The Association had approximately $32.5 million available for Federal Home Loan Bank (FHLB) borrowings as of June 30, 2025, with the potential to increase borrowing capacity by pledging additional assets[142]. Cash Flow and Operating Activities - For the three months ended June 30, 2025, net cash used in operating activities was $96,000, with net income of $1.0 million and a decrease in cash and cash equivalents of $20.8 million[145]. - Cash flows from investing activities resulted in a net outflow of $13.0 million, primarily due to an increase in loans of $11.0 million and the purchase of investment securities of $3.4 million[145]. - The company experienced a decrease in deposits of $15.6 million during financing activities, partially offset by $8.0 million from short-term FHLB advances[145]. Economic Impact - The impact of inflation on the company's operations is primarily reflected in increased operating costs, with interest rates having a more significant effect on performance than inflation[147]. - The debt service coverage ratio for commercial real estate loans is generally maintained at a minimum of 1.20x, ensuring borrower financial stability[151].