2025 Annual Report
Dear Shareholders:
Net income totaled $2,092,000 in 2025 compared with $2,001,000 reported in 2024. Earnings per share totaled $4.08 per share in 2025, which increased from $3.85 in 2024. Net interest income, which is the bank’s most significant driver of profitability, increased by $799,000, or 11.2%, in 2025 compared with 2024. The most notable change was $781,000 higher interest income while interest expense decreased slightly, or $18,000.
Noninterest income decreased by $430,000 in 2025 compared with 2024. Earnings on bank-owned life insurance decreased $472,000 while gas well royalties increased from $188,000 to $258,000 between years.
The loan portfolio increased $7.6 million, or 4.4 %, and remains primarily secured by residential real estate, both investment properties and owner-occupied homes. Diligent, but flexible underwriting has continued to serve the bank in attracting and expanding lending relationships while sustaining strong asset quality with few watchlist credits and low delinquency. Provision for credit loss expense totaled $105,000 in 2025 due to loan portfolio growth.
Deposit balances decreased by $1.8 million, or 1.3%, in 2025 because of ongoing competition from banks, money market mutual funds and attractive other investment options. Despite a small decrease in deposits and an increase in borrowings, lower interest rates paid on wholesale funding and time deposits caused interest expense to decrease while liabilities increased by $6.5 million, which funded loan growth. Nevertheless, the bank’s net interest margin exceeded 4.3% in 2025 and compared favorably with industry peers.
Technological advancements in recent years have been creating more efficiencies and keep the bank competitive with larger financial institutions. Total noninterest expense increased 3.7% during 2025 which was consistent with inflation for the second consecutive year.
The quarterly dividend increased from $0.57 to $0.58 per share, or 1.8%, in the fourth quarter and represented the sixteenth consecutive annual increase. Dividends remain a priority for the loyal retail investors and approximates a 4.8% current yield. Dividends increased to $2.29 and resulted in a 56% payout ratio in 2025. In addition to a history of consistent earnings, stock purchases totaled $494,000, which further supported the company’s stock price.
Stable earnings, prudent lending, a commitment to outstanding customer service, investment in technology and talented, dedicated staff continue to produce attractive shareholder returns. On behalf of the board of directors, your loyalty is deeply appreciated.
Sincerely,
Nelson L. Person
President and CEO