Core Viewpoint - A series of financial support measures have been introduced to promote agricultural modernization and invigorate new agricultural business entities, providing substantial development assistance to family farms and farmers' cooperatives [1] Group 1: Expansion of Loan Recipients - The support scope now includes family farms, large-scale farmers, and farmers' cooperatives that have been engaged in crop planting, livestock and aquaculture, agricultural product processing, and agricultural social services for over two years [2] Group 2: Preferential Loan Rates - Personal loan interest rates will not exceed 3.5%, while farmers' cooperatives will have loan rates capped at 4%, based on current base interest rates [2] Group 3: Loan Term Extensions - Personal loans can have a maximum term of 5 years, and loans for cooperatives can last up to 3 years. For entities with good credit, a no-repayment renewal option is available, extending personal loan terms up to 10 years [3] Group 4: Optimized Loan Guarantee Combinations - Loans under 1 million yuan for individuals will be supported primarily through unsecured credit. For cooperatives, loans under 2 million yuan can be guaranteed by members of the cooperative's council, while loans under 3 million yuan can be backed by the provincial agricultural guarantee company [4] Group 5: Insurance Premium Subsidies and Fiscal Interest Subsidies - The provincial agricultural guarantee company will focus on supporting new agricultural business entities with loan demands between 100,000 and 3 million yuan. Guarantee fees will not exceed 0.8%, with specific rates for land transfer and agricultural machinery purchases capped at 0.5%. Timely repayment will yield a subsidy of up to 50% of the actual guarantee fee [5] Group 6: Strengthening Credit Resource Assurance - Loans for new agricultural business entities will be prioritized over other business loans in terms of investigation, review, and approval processes. Agricultural banks will cover costs related to mortgage registration, evaluation, supervision, and notarization [6]

Core Insights - The central bank released the loan allocation statistics report for financial institutions for Q4 2025, indicating a total balance of RMB 53.57 trillion in domestic and foreign currency agricultural loans, representing a year-on-year growth of 6.5%, which is 0.3 percentage points higher than the overall loan growth rate [1] Group 1: Agricultural Loans - The balance of rural loans reached RMB 39.24 trillion by the end of Q4 2025, with a year-on-year increase of 6.3, contributing an annual increase of RMB 2.44 trillion [1] - The balance of household loans amounted to RMB 18.42 trillion, showing a modest year-on-year growth of 1.0%, with an annual increase of RMB 216.8 billion [1] - Agricultural loans totaled RMB 6.89 trillion, reflecting a year-on-year growth of 8.3%, with an annual increase of RMB 534.3 billion [1]

Financial Performance - Net income decreased by 389% from $29776 thousand in 2023 to $28619 thousand in 2024[82] - Net interest income increased by 558% from $69794 thousand in 2023 to $73691 thousand in 2024[82] - The net interest margin increased by 170% from 471% in 2023 to 479% in 2024[82] - Return on average assets(ROAA) decreased by 745% from 188% in 2023 to 174% in 2024[82] - Return on average equity(ROAE) decreased by 265% from 234% in 2023 to 172% in 2024[82] Balance Sheet - Total assets increased by 080% from $1610416 thousand in 2023 to $1623326 thousand in 2024[82] - Total deposits increased by 281% from $1333655 thousand in 2023 to $1371101 thousand in 2024[82] - Net loans increased by 598% from $948604 thousand in 2023 to $1005375 thousand in 2024[82] Loan Portfolio - Government guaranteed loans represented approximately 7% of total loans as of December 31 2024[67] - Agricultural lending balances represented 12% of total loans as of December 31 2024[71]

Financial Data and Key Metrics Changes - The company reported net income of $10.2 million or $0.66 per diluted share, a 60% increase from Q1 2024 and a $275,000 increase from the previous quarter [4] - Net interest income for the quarter was $32.8 million, representing a 4.5% increase compared to the previous quarter [5] - The efficiency ratio improved to 64.9% from 68.3% in the linked quarter and 73.8% in the prior year's first quarter [11] Business Line Data and Key Metrics Changes - The loan and lease portfolio grew at an annualized rate of 2.8% during the first quarter, with total loans and leases increasing by $22.8 million [11] - Non-interest income declined by $1.2 million or 12.8% compared to the linked quarter, primarily due to a decrease in gains on the sale of loans and other fees [10] - The company anticipates loan growth to be in the mid-single digit range for the remainder of 2025 [14] Market Data and Key Metrics Changes - Total deposits increased by $27 million or an annualized growth rate of 3.2%, with organic deposit growth of $67.1 million excluding brokered deposits [14][15] - The loan-to-deposit ratio was 95.8% at quarter-end, indicating a disciplined approach to managing loan growth [15] - The average deposit account, excluding CDs, was approximately $28,000, reflecting a granular deposit base [15] Company Strategy and Development Direction - The company continues to focus on deepening customer relationships to reduce reliance on brokered funding, which is seen as a valuable characteristic of the deposit franchise [16] - Management is committed to increasing tangible common equity while balancing dividend payments and potential stock repurchases [17][18] - The company plans to invest in technology and digital initiatives to enhance customer engagement and operational efficiency [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the core deposit franchise and the ability to control non-interest expenses, positioning the company well for future success [19][90] - The economic environment in Ohio and Southeastern Indiana remains stable, with no signs of deterioration in credit quality [19] - Management anticipates continued loan demand but acknowledges potential impacts from economic uncertainties on loan growth [14][19] Other Important Information - The company announced a quarterly dividend of $0.17 per share, representing an annualized yield of 3.48% [8] - A stock repurchase program was renewed, authorizing the repurchase of up to $13.5 million in outstanding shares [8] Q&A Session Summary Question: Margin inputs and funding costs - Management indicated there is still opportunity for margin expansion, expecting 4-5 basis points in the second quarter and 2-3 basis points in the third quarter [26][30] Question: Expense normalization and future investments - Management expects expenses to remain flat in the second quarter, with potential increases in the second half due to investments in technology and marketing [33][37] Question: Fee income outlook - Management anticipates a bounce back in fee income in the second quarter, particularly in mortgage and leasing [40][42] Question: Loan yield increase - The increase in loan yield was attributed to new loans repricing higher, with no unusual recoveries contributing to the increase [51] Question: Commercial borrowers' sentiment - Management noted a cautious sentiment among commercial borrowers regarding CapEx spending due to economic uncertainties [56][58] Question: Credit metrics and expectations - Management remains optimistic about credit quality, with delinquencies down and a healthy allowance for credit losses [83][84]