Central Plains Bancshares(CPBI) - 2026 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended December 31, 2025, was $1.2 million, up from $951,000 in the same period in 2024, representing a year-over-year increase of 26.1%[121] - For the nine months ended December 31, 2025, net income was $3.0 million, compared to $2.8 million for the same period in 2024, indicating a growth of 7.1%[121] - Non-interest income increased by $48,000, or 7.3%, to $704,000 for the three months ended December 31, 2025, primarily due to a 52.4% increase in gains on sale of loans, which rose to $96,000 from $63,000[139] - The company recorded a total non-interest income of $2.0 million for the nine months ended December 31, 2025, reflecting a 7.7% increase compared to $1.9 million for the same period in 2024[140] Asset and Liability Management - Total assets increased by $27.0 million, or 5.3%, to $535.7 million at December 31, 2025, compared to $508.7 million at March 31, 2025, primarily due to a $28.0 million, or 7.0%, increase in gross loans[104] - Gross loans rose by $28.0 million, or 7.0%, to $430.2 million at December 31, 2025, with the largest increase in commercial non-real estate loans, which grew by $12.8 million, or 40.1%[107] - Total deposits increased by $23.8 million, or 5.7%, to $440.0 million at December 31, 2025, reflecting customer confidence and the strength of the core deposit base[109] - Stockholders' equity increased by $4.4 million, or 5.3%, to $87.7 million at December 31, 2025, driven by net income of $3.0 million and a $1.2 million decrease in unrealized losses on securities valuations[112] - Cash and cash equivalents decreased by $574,000, or 2.0%, to $28.1 million at December 31, 2025, primarily due to increased loan funding[105] - Investment securities available-for-sale decreased by $480,000, or 0.8%, to $58.9 million at December 31, 2025, with net unrealized losses decreasing by $1.5 million[106] - Noninterest-bearing deposits decreased by $2.5 million, or 3.9%, to $62.0 million, while certificates of deposit increased by $25.8 million, or 21.1%, to $148.6 million[110] - The company had no outstanding borrowings at December 31, 2025, and March 31, 2025, relying on deposit growth to fund operations[111] Income and Expense Analysis - Interest and dividend income increased by $924,000, or 14.8%, to $7.2 million for the three months ended December 31, 2025, compared to $6.2 million for the same period in 2024[122] - Interest income on loans rose by $926,000, or 16.4%, to $6.6 million for the three months ended December 31, 2025, with an average loan balance increase of $26.0 million, or 6.5%[123] - The net interest income before provision for credit losses increased by $723,000, or 17.5%, to $4.9 million for the three months ended December 31, 2025, compared to $4.1 million for the same period in 2024[133] - Non-interest expense increased by $544,000, or 15.4%, to $4.1 million for the three months ended December 31, 2025, with salaries and employee benefits rising by 15.1% to $2.2 million[143] - Non-interest expense for the nine months ended December 31, 2025, increased by $1.5 million, or 14.5%, to $12.1 million, with salaries and employee benefits rising by 14.2% to $6.5 million[144] Interest Rate and Margin Analysis - The interest rate spread increased by 46 basis points to 3.24% for the three months ended December 31, 2025, compared to 2.78% for the same period in 2024[134] - The net interest margin increased by 43 basis points to 3.98% for the three months ended December 31, 2025, compared to 3.55% for the same period in 2024[134] - Total interest-earning assets increased to $487.4 million for the three months ended December 31, 2025, from $465.3 million in the same period in 2024, reflecting a growth of 4.8%[1] - Total interest-bearing liabilities rose to $350.5 million for the three months ended December 31, 2025, compared to $327.2 million for the same period in 2024, an increase of 7.1%[1] - Interest expense increased by $201,000, or 9.5%, to $2.3 million for the three months ended December 31, 2025, compared to $2.1 million for the same period in 2024[128] Cash Flow Analysis - For the nine months ended December 31, 2025, net cash provided by operating activities amounted to $3.3 million, primarily due to net income of $3.0 million[164] - Net cash used in investing activities for the same period was $27.0 million, primarily due to a net increase in loans of $28.0 million[164] - Cash flows from financing activities for the nine months ended December 31, 2025, resulted in a net increase of $23.0 million, primarily due to an increase in deposits of $23.8 million[164] - The Association had a net decrease in cash and cash equivalents of $574,000 for the nine months ended December 31, 2025[163] Future Projections and Economic Impact - Net interest income (NII) is projected to increase by 1.11% with a gradual 200 basis point increase in market interest rates, while a decrease of the same magnitude would result in a 1.37% decrease in NII[153] - The market value of equity (MVE) is estimated to increase by 7.38% with an instantaneous 200 basis point increase in market interest rates, while a decrease of the same magnitude would lead to a 12.79% decrease in MVE[158] - The company plans to continue evaluating the estimated future credit loss impact based on credit quality and macroeconomic forecasts[137] - The primary impact of inflation on operations is reflected in increased operating costs, with interest rates having a more significant impact on performance[168] Loan and Borrowing Information - The Association's commercial real estate loans generally have terms and amortization periods up to 20 years, with loan-to-value ratios limited to 75%[169] - The debt service coverage ratio for commercial real estate loans is generally at least 1.20x[171] - As of December 31, 2025, the Association had remaining availability for FHLB and FRB borrowings of approximately $57.0 million[161] - The company has not engaged in hedging activities and does not anticipate entering into similar transactions in the future[149]