ex_884270.htm

EX-99.1 2 ex_884270.htm EXHIBIT 99.1 ex_884270.htm

Exhibit 99.1

Unaudited Consolidated Financial Statements of Wichita Falls Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheets at September 30, 2025 and December 31, 2024	1
Consolidated Statements of Income for the Nine Months ended September 30, 2025 and 2024	2
Consolidated Statements of Comprehensive Income for the Nine Months ended September 30, 2025 and 2024	3
Consolidated Statements of Change in Stockholders’ Equity for the Nine Months ended September 30, 2025 and 2024	4
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024	5
Notes to Consolidated Financial Statements	7

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

September 30, 2025 (Unaudited) and December 31, 2024

(in thousands, except per share data)

	September 30, 2025			December 31, 2024
Assets
Cash and cash equivalents
Cash and due from banks	$	9,113		$	25,191
Interest-bearing deposits		119,794			138,892

Total cash and equivalents		128,907			164,083

Debt securities available for sale, at fair value (amortized cost $54,806 and $59,429, net of allowance for credit losses of $0 and $0)		52,024			55,157
Debt securities held to maturity, net of allowance for credit losses of $0 and $0, (fair value 9/30/2025 - $365, 12/31/2024 - $501)		364			501
Restricted stock, at cost		4,676			12,686
Investment in unconsolidated subsidiary		278			279
Loans held-for-sale		433			1,999
Loans, net of allowance for credit losses of $10,640 and $10,815 as of September 30, 2025 and December 31, 2024, respectively		1,082,915			1,260,776
Premises and equipment, net		13,903			14,337
Accrued interest receivable		5,746			6,634
Bank-owned life insurance		13,636			13,606
Goodwill		4,379			4,379
Other intangible assets, net		813			948
Other assets		6,573			7,266

Total assets	$	1,314,647		$	1,542,651

Liabilities
Deposits	$	1,110,928		$	1,154,868
Federal funds purchased and repurchase agreements		1,784			2,302
Federal Home Loan Bank advances		30,096			205,189
Other borrowings		37,196			37,336
Subordinated debt		20,924			33,128
Allowance for credit losses on off-balance sheet credit exposures		1,746			1,746
Accrued interest payable		2,105			2,177
Other liabilities		7,660			8,671

Total liabilities		1,212,439			1,445,417

Stockholders' Equity
Common stock, par value $1 a share
Authorized - 1,000,000 shares; 620,912 shares issued and outstanding at September 30, 2025 and December 31, 2024		621			621
Capital surplus		33,277			33,277
Retained earnings		70,507			66,896
Accumulated other comprehensive loss		(2,197	)		(3,560	)

Total stockholders' equity		102,208			97,234

	$	1,314,647		$	1,542,651

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands, except per share data)

	Nine Months Ended September 30,
	2025		2024
Interest Income
Interest and fees on loans	$	54,685	$	56,681
Interest on debt securities
Taxable		1,046		940
Tax-exempt		797		866
Interest on federal funds sold and interest-bearing deposits in banks		1,459		1,360
Total interest income		57,987		59,847

Interest Expense
Deposits		26,357		26,883
Federal funds purchased and repurchase agreements		20		26
Borrowed funds		6,720		8,959
Subordinated debt		541		617
Total interest expense		33,638		36,485

Net interest income		24,349		23,362

Provision for credit losses		164		1,560
Net interest income after provision for credit losses		24,185		21,802

Non-Interest Income
Service charges on deposit accounts		304		338
Mortgage loan sales/originations/processing		467		387
Loss on sale of securities		-		(440	)
Earnings on bank-owned life insurance		331		288
ATM/debit card interchange fees		559		603
Other		645		727
Total non-interest income		2,306		1,903

Non-Interest Expense
Salaries and employee benefits		10,710		12,289
Occupancy		1,773		2,057
Data processing		864		806
Director fees		402		410
Legal and professional fees		1,601		949
FDIC assessment		1,088		1,304
Mortgage expense		145		101
Telephone		386		374
Loss on sale of assets		1,913		-
Loss on sale of foreclosed assets		99		-
Amortization of intangibles		135		846
Other		2,958		3,255
Total non-interest expense		22,074		22,391

Income before income taxes		4,417		1,314

Income tax expense (benefit)		806		(2,069	)

Net Income	$	3,611	$	3,383

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands, except per share data)

	Nine Months Ended September 30,
	2025			2024

Net Income	$	3,611		$	3,383

Other Comprehensive Income

Unrealized holding gains arising during period on debt securities available for sale		1,489			686
Reclassification adjustment for losses included in net income		-			440

Tax effect		(126	)		271

Net of tax		1,363			1,397

Other comprehensive gain, net		1,363			1,397

Comprehensive Income	$	4,974		$	4,780

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands, except per share data)

								Accumulated
								Other
	Common		Capital		Retained			Comprehensive			Treasury
	Stock		Surplus		Earnings			(Loss)			Stock			Total

Balance at December 31, 2023	$	592	$	27,994	$	61,098		$	(3,388	)	$	(1,305	)	$	84,991

Net income		-		-		3,383			-			-			3,383

Other comprehensive gain		-		-		-			1,397			-			1,397

Treasury stock sold		-		50		-			-			52			102

Cash dividends		-		-		(81	)		-			-			(81	)

Balance at September 30, 2024	$	592	$	28,044	$	64,400		$	(1,991	)	$	(1,253	)	$	89,792


Balance at December 31, 2024	$	621	$	33,277	$	66,896		$	(3,560	)	$	-		$	97,234

Net income		-		-		3,611			-			-			3,611

Other comprehensive gain		-		-		-			1,363			-			1,363

Balance at September 30, 2025	$	621	$	33,277	$	70,507		$	(2,197	)	$	-		$	102,208

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2025			2024
Operating Activities
Net income	$	3,611		$	3,383
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses		164			1,560
Depreciation		542			558
Amortization of core deposit intangibles		135			134
Net loss on sales of debt securities		-			440
Net loss on sales of foreclosed assets		99			-
Net loss on sales of premises and equipment		25			-
Net loss on sales of loans		1,887			-
Deferred tax benefit		(122	)		(122	)
Amortization of discounts and premiums on debt securities		(1,229	)		(212	)
Earnings on bank-owned life insurance policies		(412	)		(288	)
Changes in assets and liabilities
Net increase (decrease) in loans held-for-sale		1,566			(1,324	)
Accrued interest receivable		888			(456	)
Other assets		(17	)		(623	)
Accrued interest payable		(72	)		111
Other liabilities		(584	)		(1,171	)

Total adjustments		2,870			(1,393	)

Net Cash Provided by Operating Activities		6,481			1,990

Investing Activities
Proceeds from maturities, paydowns, and sales of debt securities available for sale		5,466			27,608
Proceeds from maturities and paydowns of debt securities held to maturity		137			130
Purchases of debt securities available for sale		(1,104	)		(27,835	)
Proceeds from redemption of restricted stock		11,560			3,003
Purchases of restricted stock		(3,550	)		(6,099	)
Increase (decrease) in loans, net		177,861			(87,427	)
Purchases of premises and equipment		(134	)		(157	)

Net Cash Provided by (Used in) Investing Activities		190,236			(90,777	)

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2025 and 2024 (Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2025			2024
Financing Activities
Increase (decrease) in deposits		(43,940	)		36,550
Proceeds from FHLB advances		3,020,000			4,560,500
Repayments of FHLB advances		(3,195,093	)		(4,506,590	)
Proceeds from subordinated debt		-			8,700
Repayments of subordinated debt		(12,203	)		-
Repayments of other borrowings		(139	)		(177	)
Net change in fed funds purchased and repurchase agreements		(518	)		(633	)
Dividends paid		-			(81	)

Net Cash (Used in) Provided by Financing Activities		(231,893	)		98,269

Net Change in Cash and Cash Equivalents		(35,176	)		9,482

Cash and Cash Equivalents, Beginning of Year		164,083			157,840

Cash and Cash Equivalents, End of Year	$	128,907		$	167,322

Supplemental Schedule of Operating and Investing Activities
Interest paid	$	24,880		$	36,374
Income taxes paid	$	2,420		$	666

See Notes to Consolidated Financial Statements

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 1 - Basis for Presentation and Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements of Wichita Falls Bancshares, Inc. (Bancshares) and its wholly-owned subsidiaries, First National Bank (Bank) and 114 Dove LLC (which are referred to collectively herein as the Company), have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited interim consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended December 31, 2024. In the opinion of management, all adjustments necessary for a fair presentation have been made and consist only of normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the year.

Allowance for Credit Losses – Held to Maturity Securities

Management measures expected credit losses on held to maturity debt securities on a collective basis by major security type. Accrued interest receivable on held to maturity debt securities totaled approximately $0 at September 30, 2025 and December 31, 2024, and is excluded from the estimate of credit losses.

Allowance for Credit Losses – Available for Sale Securities

Accrued interest receivable on available for sale debt securities totaled approximately $313,000 and $529,000 at September 30, 2025 and December 31, 2024, respectively and is excluded from the estimate of credit losses.

Loans

Accrued interest receivable totaled approximately $5,433,000 and $6,104,000 at September 30, 2025 and December 31, 2024, respectively, and is reported in accrued interest receivable on the consolidated balance sheets and is excluded from the estimate of credit losses.

Subsequent Events

The Company has evaluated subsequent events through November 14, 2025, the date which the consolidated financial statements were available to be issued.

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 2 - Debt Securities

The following tables summarize the Company’s available for sale and held to maturity debt securities at September 30, 2025 and December 31, 2024 (in thousands):

	September 30, 2025
			Gross		Gross			Allowance
	Amortized		Unrealized		Unrealized			for		Fair
	Cost		Gains		Losses			Credit Losses		Value
Available for sale
Obligations of states and municipal subdivisions	$	27,546	$	-	$	(2,809	)	$	-	$	24,737
Mortgage-backed securities		14,387		208		(280	)		-		14,315
Collateralized mortgage obligations		11,873		191		(89	)		-		11,975
Corporate bonds		1,000		-		(3	)		-		997
Total available for sale	$	54,806	$	399	$	(3,181	)	$	-	$	52,024

			Gross		Gross					Allowance
	Amortized		Unrecognized		Unrecognized			Fair		for
	Cost		Gains		Losses			Value		Credit Losses
Held to maturity
Obligations of states and municipal subdivisions	$	364	$	1	$	-		$	365	$	-
Total held to maturity	$	364	$	1	$	-		$	365	$	-

	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Allowance for Credit Losses		Fair Value
Available for sale
Obligations of states and municipal subdivisions	$	28,659	$	-	$	(3,278	)	$	-	$	25,381
Mortgage-backed securities		16,367		-		(689	)		-		15,678
Collateralized mortgage obligations		13,403		16		(293	)		-		13,126
Corporate bonds		1,000		-		(28	)		-		972
Total available for sale	$	59,429	$	16	$	(4,288	)	$	-	$	55,157

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value		Allowance for Credit Losses
Held to maturity
Obligations of states and municipal subdivisions	$	501	$	-	$	-	$	501	$	-
Total held to maturity	$	501	$	-	$	-	$	501	$	-

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

The amortized cost and fair value of debt securities at September 30, 2025, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
Available-for-sale
One year or less	$	265	$	263
After one year through five years		18,907		18,837
After five years through ten years		16,764		16,504
After ten years		18,870		16,420
Total	$	54,806	$	52,024

Held-to-maturity
One year or less	$	69	$	69
After five years through ten years		295		296
Total	$	364	$	365

There were no sales of available for sale debt securities during the nine months ended September 30, 2025. There were sales of available for sale debt securities of approximately $20,858,000 during the nine months ended September 30, 2024. There were losses of approximately $440,000 on those sales.

Debt securities available for sale with a fair value of approximately $31,471,000 and $21,017,000 at September 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes required or permitted by law.

Unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 are summarized as follows (in thousands):

	Continuous Unrealized					Continuous Unrealized
	Losses Existing for Less					Losses Existing for 12
	Than 12 Months					Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses

September 30, 2025
Obligations of states and municipal subdivisions	$	-	$	-		$	23,731	$	(2,809	)	$	23,731	$	(2,809	)
Mortgage-backed securities		1,326		(15	)		3,947		(265	)		5,273		(280	)
Collateralized mortgage obligations		-		-			1,091		(89	)		1,091		(89	)
Corporate bonds		-		-			997		(3	)		997		(3	)
Total available for sale	$	1,326	$	(15	)	$	29,766	$	(3,166	)	$	31,092	$	(3,181	)

There were no unrealized losses on held to maturity securities for the nine months ended September 30, 2025 or 2024.

There was no allowance for credit losses established for held to maturity or available for sale securities at September 30, 2025 or December 31, 2024.

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 3 - Loans and Allowance for Credit Losses

A summary of loans by major category at September 30, 2025 and December 31, 2024 are as follows (in thousands):

	September 30,			December 31,
	2025			2024

Commercial	$	80,177		$	86,573
Equipment finance leases		78			96
Commercial real estate		794,977			892,331
Residential real estate		212,348			285,242
Consumer		5,975			7,349

		1,093,555			1,271,591

Less allowance for credit losses		(10,640	)		(10,815	)

Loans, net	$	1,082,915		$	1,260,776

The following table presents the activity in the allowance for credit losses by portfolio segment for the nine months ended September 30, 2025 and year ended December 31, 2024 (in thousands):

	September 30, 2025
				Equipment		Commercial			Residential
	Commercial			Finance Leases		Real Estate			Real Estate			Consumer			Total
Allowance for Credit Losses
Balance, beginning of period	$	(113	)	$	-	$	2,411		$	8,517		$	-		$	10,815
Charge-offs		(218	)		-		-			(179	)		(19	)		(416	)
Recoveries		53			-		1			-			24			78
Provisions for credit losses		1,746			-		(1,661	)		(80	)		158			163

Balance, end of period	$	1,468		$	-	$	751		$	8,258		$	163		$	10,640

	December 31, 2024
				Equipment		Commercial		Residential
	Commercial			Finance Leases			Real Estate		Real Estate		Consumer			Total
Allowance for Credit Losses
Balance, beginning of period	$	878		$	-	$	1,246	$	8,141		$	73		$	10,338
Reallocation of ACL for off-balance sheet credit exposures		-			-		-		100			-			100
Charge-offs		(1,189	)		-		-		(96	)		(89	)		(1,374	)
Recoveries		85			-		-		-			6			91
Provisions for credit losses		113			-		1,165		372			10			1,660

Balance, end of period	$	(113	)	$	-	$	2,411	$	8,517		$	-		$	10,815

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

In addition to the allowance for credit losses on loans, the Company has established an allowance for credit losses on off-balance sheet exposures of approximately $1,746,000 at September 30, 2025 and at December 31, 2024. The following table presents the activity in the allowance for credit losses on off-balance sheet exposures for the nine months ended September 30, 2025 and 2024.

	Nine Months ended		Nine Months ended
	September 30, 2025		September 30, 2024

Balance, beginning of period	$	1,746	$	1,846

Balance, end of year	$	1,746	$	1,846

Credit Quality Indicators

The following tables present the Company’s loan portfolio by credit quality classification and original year (in thousands) at September 30, 2025 and December 31, 2024:

	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans Amortized
	2025		2024		2023		2022		2021		Prior		Cost Basis		Total
As of September 30, 2025
Commercial:
Pass	$	15,002	$	9,746	$	11,733	$	26,902	$	5,280	$	8,170	$	-	$	76,833
Special Mention		80		-		674		1,304		-		788		-		2,846
Substandard		-		-		372		101		25		-		-		498
Doubtful		-		-		-		-		-		-		-		-

Total commercial loans	$	15,082	$	9,746	$	12,779	$	28,307	$	5,305	$	8,958	$	-	$	80,177

Current period gross charge-offs	$	-	$	-	$	74	$	55	$	72	$	17	$	-	$	218

Equipment finance leases:
Pass	$	78	$	-	$	-	$	-	$	-	$	-	$	-	$	78
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-

Total equipment finance leases	$	78	$	-	$	-	$	-	$	-	$	-	$	-	$	78

Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial real estate:
Pass	$	6,638	$	20,541	$	103,786	$	324,955	$	222,887	$	110,606	$	-	$	789,413
Special Mention		-		-		-		24		44		1,478		-		1,546
Substandard		798		-		-		3,220		-		-		-		4,018
Doubtful		-		-		-		-		-		-		-		-

Total commercial real estate loans	$	7,436	$	20,541	$	103,786	$	328,199	$	222,931	$	112,084	$	-	$	794,977

Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Residential real estate:
Pass	$	21,688	$	99,924	$	45,017	$	38,034	$	3,470	$	-	$	-	$	208,133
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		3,513		702		-		-		-		4,215
Doubtful		-		-		-		-		-		-		-		-

Total residential real estate loans	$	21,688	$	99,924	$	48,530	$	38,736	$	3,470	$	-	$	-	$	212,348

Current period gross charge-offs	$	-	$	-	$	-	$	179	$	-	$	-	$	-	$	179

Consumer:
Pass	$	1,793	$	2,112	$	961	$	549	$	180	$	277	$	-	$	5,872
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		62		35		-		2		4		-		103
Doubtful		-		-		-		-		-		-		-		-

Total consumer loans	$	1,793	$	2,174	$	996	$	549	$	182	$	281	$	-	$	5,975

Current period gross charge-offs	$	-	$	9	$	-	$	6	$	-	$	4	$	-	$	19

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

	Term Loans Amortized Cost Basis by Origination Year
											Revolving
											Loans Amortized
	2024		2023		2022		2021		Prior		Cost Basis		Total
At December 31, 2024
Commercial:
Pass	$	24,692	$	16,642	$	20,842	$	5,614	$	4,255	$	10,689	$	82,734
Special Mention		471		758		1,376		-		-		100		2,705
Substandard		49		127		203		32		-		-		411
Doubtful		-		723		-		-		-		-		723
Total commercial loans	$	25,212	$	18,250	$	22,421	$	5,646	$	4,255	$	10,789	$	86,573

Current period gross charge-offs	$	-	$	626	$	366	$	128	$	68	$	1	$	1,189

Equipment finance leases:
Pass	$	87	$	-	$	-	$	9	$	-	$	-	$	96
Special Mention		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-
Total equipment finance leases	$	87	$	-	$	-	$	9	$	-	$	-	$	96

Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial real estate:
Pass	$	41,234	$	184,982	$	424,222	$	93,132	$	121,241	$	5,166	$	869,977
Special Mention		-		-		718		80		15,718		-		16,516
Substandard		-		835		4,490		-		56		457		5,838
Doubtful		-		-		-		-		-		-		-
Total commercial real estate loans	$	41,234	$	185,817	$	429,430	$	93,212	$	137,015	$	5,623	$	892,331

Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Residential real estate:
Pass	$	87,359	$	108,407	$	78,824	$	9,531	$	-	$	-	$	284,121
Special Mention		-		-		-		357		-		-		357
Substandard		-		-		764		-		-		-		764
Doubtful		-		-		-		-		-		-		-
Total residential real estate loans	$	87,359	$	108,407	$	79,588	$	9,888	$	-	$	-	$	285,242

Current period gross charge-offs	$	-	$	-	$	55	$	41	$	-	$	-	$	96

Consumer:
Pass	$	4,023	$	1,497	$	1,043	$	287	$	453	$	-	$	7,303
Special Mention		-		-		-		-		-		-		-
Substandard		-		19		27		-		-		-		46
Doubtful		-		-		-		-		-		-		-
Total consumer loans	$	4,023	$	1,516	$	1,070	$	287	$	453	$	-	$	7,349

Current period gross charge-offs	$	7	$	33	$	5	$	43	$	1	$	-	$	89

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing at September 30, 2025 and December 31, 2024 (in thousands):

	September 30, 2025
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
	for Credit Loss		Nonaccrual		Still Accruing
Commercial	$	86	$	160	$	42
Commercial real estate		338		338		-
Residential real estate		798		5,631		46
Consumer		-		104		-
Total	$	1,222	$	6,233	$	88

	December 31, 2024
	Nonaccrual With No Allowance for Credit Loss		Nonaccrual		Loans Past Due Over 89 Days Still Accruing
Commercial	$	103	$	424	$	87
Equipment finance leases		-		6		-
Commercial real estate		1		1		-
Residential real estate		2,410		6,630		837
Consumer		39		46		4
Total	$	2,553	$	7,107	$	928

The Company recognized approximately $12,000 and $158,000 of interest income on nonaccrual loans during the nine months ended September 30, 2025 and December 31, 2024, respectively.

The following table presents the amortized cost basis of collateral-dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related allowance for credit loss allocated to these loans at September 30, 2025 and December 31, 2024:

	September 30, 2025
	Collateral Type
	Real Estate		Equipment		Other		Total		ACL
Commercial	$	-	$	160	$	-	$	160	$	35
Equipment finance leases		-		-		-		-		-
Commercial real estate		338		-		-		338		-
Residential real estate		5,632		-		-		5,632		639
Consumer		-		-		103		103		20
Total	$	5,970	$	160	$	103	$	6,233	$	694

	December 31, 2024
	Collateral Type
	Real Estate		Equipment		Other		Total		ACL
Commercial	$	-	$	45	$	379	$	424	$	157
Equipment finance leases		-		6		-		6		-
Commercial real estate		1		-		-		1		-
Residential real estate		6,630		-		-		6,630		455
Consumer		-		-		46		46		7
Total	$	6,631	$	51	$	425	$	7,107	$	619

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

The following table presents the aging of the amortized cost basis in past due loans at September 30, 2025 and December 31, 2024 by class of loans (in thousands):

	30 - 89 Days		Over 89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due			Total
September 30, 2025
Commercial	$	864	$	42	$	906	$	79,271		$	80,177
Consumer		124		-		124		5,851			5,975
Equipment finance leases		126		-		126		(48	)		78
Commercial real estate		424		-		424		794,553			794,977
Residential real estate		2,646		46		2,692		209,656			212,348
	$	4,184	$	88	$	4,272	$	1,089,283		$	1,093,555

	30 - 89 Days		Over 89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due			Total
December 31, 2024
Commercial	$	434	$	87	$	521	$	86,052		$	86,573
Consumer		257		4		261		7,088			7,349
Equipment finance leases		213		-		213		(117	)		96
Commercial real estate		740		-		740		891,591			892,331
Residential real estate		5,259		837		6,096		279,146			285,242
	$	6,903	$	928	$	7,831	$	1,263,760		$	1,271,591

There were no modifications of loans to borrowers experiencing financial difficulty that occurred during the nine months ended September 30, 2025 or 2024, and no previously modified loans defaulted during the nine months ended September 30, 2025 or 2024. The Company has made no commitments to lend additional funds on modified loans to borrowers experiencing financial difficulty.

The Company has not purchased any loans during the nine months ended September 30, 2025 or 2024. The Company sold approximately $136,391,000 and $0 in mortgage loans for the nine months ended September 30, 2025 and 2024, respectively.

Note 4 - Deposits

The carrying amount of deposits at September 30, 2025 and December 31, 2024 are as follows (in thousands):

	September 30,		December 31,
	2025		2024
Non-interest bearing demand accounts	$	208,099	$	217,335
Interest-bearing checking accounts		69,888		71,721
Limited access money market accounts		394,781		402,104
Savings accounts		27,382		25,511
Brokered CDs		-		70,000
Time deposits, less than $250		236,529		229,240
Time deposits, $250 and greater		174,249		138,957

Total deposits	$	1,110,928	$	1,154,868

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

At September 30, 2025, maturities of time deposits for the current and each of the next four years are (in thousands):

	Certificates of		Brokered
	Deposits		CDs
2025	$	150,580	$	-
2026		240,561		-
2027		14,176		-
2028		4,475		-
2029		836		-
Thereafter		150		-

	$	410,778	$	-

Deposits from stockholders, officers and directors of the Company amounted to approximately $9,317,000 and $7,335,000 at September 30, 2025 and December 31, 2024, respectively. The amounts are included in various interest-bearing and non-interest-bearing deposit accounts.

Note 5 - Advances from Federal Home Loan Bank and Other Borrowings

As part of its management of interest rate risk, the Company periodically borrows from the Federal Home Loan Bank (FHLB). These advances are at fixed interest rates and are used as a source of funds from which the Company makes fixed rate mortgage loans. These advances are collateralized by a blanket lien on qualifying mortgage loans totaling approximately $483,278,000 and $552,791,000 at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025 and December 31, 2024, the Company had approximately $444,165,000 and $336,584,000 available for additional borrowings under this line of credit, respectively.

The Company also occasionally pledges standby FHLB letters of credit for municipalities in lieu of pledging debt securities. The balances were $9,000,000 and $11,000,000 at September 30, 2025 and December 31, 2024, respectively.

At September 30, 2025 and December 31, 2024, the Company had varying short-term and long-term advances outstanding with principal due at maturity and interest due monthly. The Bank had short-term advances from FHLB of $30,096,000 and $205,000,000 at September 30, 2025 and December 31, 2024, respectively.

The Bank had no long-term advances from FHLB at September 30, 2025 and $189,000 at December 31, 2024.

FHLB borrowings consisted of various variable rate advances at September 30, 2025 and December 31, 2024 as follows (in thousands):

September 30, 2025								December 31, 2024
Aggregate					Weighted			Aggregate					Weighted
Advance		Interest			Average			Advance		Interest			Average
Amounts		Rates			Rate			Amounts		Rates			Rate
$	30,096		3.605% - 4.5	%		4.43	%	$	205,189		1.395% - 4.65	%		4.31	%

In addition to FHLB advances, the Company has 2 term notes from a financial institution. Outstanding borrowings on the notes totaled $32,000,000 at September 30, 2025 and December 31, 2024.

The Company also entered into a construction loan agreement with a financial institution. The fixed interest rate is set at 3.25 percent and the note is secured by a deed of trust for Lot 1, Block 1, La Paloma Addition in Southlake, TX. Principal and interest are due monthly and the note matures on October 30, 2029. At September 30, 2025 and December 31, 2024, outstanding borrowings totaled approximately $5,243,000 and $5,336,000, respectively.

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

The contractual maturities of short-term and long-term debt are as follows (in thousands):

Years ending December 31,
2025	$	35,645
2026		1,431
2027		1,845
2028		2,406
Thereafter		25,965
	$	67,292

Note 6 - Securities Sold Under Agreements to Repurchase

Repurchase agreements are secured borrowings. These repurchase agreements have carrying values of approximately $2,374,000 and $2,302,000 at September 30, 2025 and December 31, 2024, respectively. The Company pledges investment securities to secure those borrowings. Securities sold under agreements to repurchase are secured by securities with a carrying amount of $2,531,000 and $2,545,000 at September 30, 2025 and December 31, 2024, respectively.

Note 7 - Convertible Subordinated Debt

At September 30, 2025, the Company had outstanding an aggregate of $12,204,000 in convertible subordinated notes. There were no notes converted into shares of common stock during the nine months ended September 30, 2025.

Note 8 - Short-Term Borrowings

In addition to the borrowing capacity at FHLB, the Company has established $30,000,000 in unsecured lines of credit for overnight purchase of federal funds. These lines may be cancelled without any prior notification. At September 30, 2025 and December 31, 2024, there were no outstanding balances.

Note 9 - Off-Balance-Sheet Activities

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

At September 30, 2025 and December 31, 2024, the amounts of these financial instruments were as follows (in thousands):

	September 30,		December 31,
	2025		2024
Financial instruments whose contract amounts represent credit risks
Commitments to extend credit and unfunded commitments	$	86,461	$	207,668
Standby letters of credit		839		727

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 10 - Employee Benefit Plans

The Company maintains several individually designed supplemental deferred compensation agreements which provide a deferred compensation benefit payable at retirement or death. The liability under the agreements is recorded based upon the present value of the deferred compensation benefits. At September 30, 2025 and December 31, 2024, the Company’s accrued liability under the agreements totaled approximately $3,496,000and $3,562,000, respectively. Deferred compensation expense of approximately $0 and $246,000 was recorded for the nine months ended September 30, 2025 and 2024, respectively. The Company has purchased life insurance policies to fund the benefits payable pursuant to the agreements. The Company is owner and beneficiary of the life insurance policies with aggregate death benefits of approximately $27,848,000 and $27,980,000 at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025 and December 31, 2024, the life insurance policies have cash surrender values of approximately $13,636,000 and $13,606,000, respectively.

Note 11 - Regulatory Matters

At September 30, 2025 and December 31, 2024, the Bank’s actual and required capital amounts and ratios were as follows (dollars in thousands):

											Minimum Required					Required to be Well
											for Capital					Capitalized
						Minimum Required					Adequacy Purposes					under the Prompt
						for Capital					including Capital					Corrective Action
	Actual					Adequacy Purposes					Conservation Buffer					Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2025
Common Equity Tier 1 (to risk-weighted assets)	$	142,198		17.27	%	$	37,047		4.50	%	$	57,629		7.00	%	$	53,513		6.50	%

Total capital (to risk- weighted assets)	$	152,515		18.53	%	$	65,862		8.00	%	$	86,444		10.50	%	$	82,327		10.00	%

Tier 1 capital (to risk-weighted assets)	$	142,198		17.27	%	$	49,396		6.00	%	$	69,978		8.50	%	$	65,862		8.00	%

Tier 1 capital (to average weighted assets)	$	142,198		11.04	%	$	32,931		4.00	%	$	32,931		4.00	%	$	41,164		5.00	%


As of December 31, 2024
Common Equity Tier 1 (to risk-weighted assets)	$	146,028		14.33	%	$	45,844		4.50	%	$	71,313		7.00	%	$	66,220		6.50	%

Total capital (to risk- weighted assets)	$	158,589		15.57	%	$	81,501		8.00	%	$	106,970		10.50	%	$	101,876		10.00	%

Tier 1 capital (to risk-weighted assets)	$	146,028		14.33	%	$	61,126		6.00	%	$	86,595		8.50	%	$	81,501		8.00	%

Tier 1 capital (to average weighted assets)	$	146,028		10.32	%	$	40,751		4.00	%	$	40,751		4.00	%	$	50,938		5.00	%

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 12 - Fair Value of Financial Instruments

Fair Value Measurements

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in thousands):

	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
September 30, 2025
Available for sale
Obligations of states and municipal subdivisions	$	-	$	24,737	$	-	$	24,737
Mortgage-backed securities		-		14,315		-		14,315
Collateralized mortgage obligations		-		11,975		-		11,975
Corporate bonds		-		997		-		997

Totals	$	-	$	52,024	$	-	$	52,024

December 31, 2024
Available for sale
Obligations of states and municipal subdivisions	$	-	$	25,381	$	-	$	25,381
Mortgage-backed securities		-		15,678		-		15,678
Collateralized mortgage obligations		-		13,126		-		13,126
Corporate bonds		-		972		-		972
Loans held-for-sale		-		1,999		-		1,999

Totals	$	-	$	57,156	$	-	$	57,156

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements in accordance with generally accepted account principles. Fair values of assets measured on a nonrecurring basis at September 30, 2025 and December 31, 2024 were as follows (in thousands):

	Level 1		Level 2		Level 3		Total Fair
	Inputs		Inputs		Inputs		Value
September 30, 2025
Collateral dependent loans	$	-	$	-	$	5,539	$	5,539

	$	-	$	-	$	5,539	$	5,539

December 31, 2024
Collateral dependent loans	$	-	$	-	$	6,488	$	6,488

	$	-	$	-	$	6,488	$	6,488

The allowance for credit losses for collateral dependent loans are determined based on the fair value of collateral method. Under the fair value of collateral method, the allowance for credit loss is equal to the difference between the carrying value of the loan and the fair value of the collateral less estimated selling costs. The resulting fair value measurement is disclosed in the nonrecurring hierarchy table. Where estimates of fair value used for other collateral supporting commercial loans are based on assumptions not observable in the marketplace, such valuations have been classified as Level 3.

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or are measured at fair value on a non-recurring basis (in thousands):

			September 30, 2025
	Carrying		Total
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and due from banks	$	9,113	$	9,113	$	9,113	$	-	$	-
Interest bearing deposits in banks		119,794		119,794		119,794		-		-
Debt securities available for sale		52,024		52,024		-		52,024		-
Debt securities held to maturity		364		364		-		364		-
Loans, net		1,082,915		1,051,933		-		-		1,051,933
Interest receivable		5,746		5,746		-		-		5,746

Financial liabilities
Deposits	$	1,110,928	$	1,036,674	$	-	$	-	$	1,036,674
Federal funds and repurchase agreements		1,784		1,784		-		-		1,784
Federal Home Loan Bank advances		30,096		30,096		-		-		30,096
Other borrowings		37,196		37,196		-		-		37,196
Subordinated debentures		20,924		20,924		-		20,924		-
Interest payable		2,105		2,105		-		-		2,105

			December 31, 2024
	Carrying		Total
	Value		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and due from banks	$	25,191	$	25,191	$	25,191	$	-	$	-
Interest bearing deposits in banks		138,892		138,892		138,892		-		-
Debt securities available for sale		55,157		55,157		-		55,157		-
Debt securities held to maturity		501		501		-		501		-
Loans held-for-sale		1,999		1,942		-		1,942		-
Loans, net		1,260,776		1,224,705		-		-		1,224,705
Interest receivable		6,634		6,634		-		-		6,634

Financial liabilities
Deposits	$	1,154,868	$	1,077,677	$	-	$	-	$	1,077,677
Federal funds and repurchase agreements		2,302		2,302		-		-		2,302
Federal Home Loan Bank advances		205,189		205,189		-		-		205,189
Other borrowings		37,336		37,336		-		-		37,336
Subordinated debentures		33,128		33,128		-		33,128		-
Interest payable		2,177		2,177		-		-		2,177

Note 13 - Income Taxes

Income tax expense at September 30, 2025 was as follows:

Current expense	$	1,056
Deferred benefit		(250	)
Total	$	806

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

Note 14 – Parent Company Only Condensed Financial Information

Condensed financial information of Wichita Falls Bancshares, Inc., on a parent company only basis, follows:

CONDENSED BALANCE SHEETS

	September 30,		December 31,
	2025		2024
Assets
Cash and cash equivalents	$	7,174	$	11,391
Investment in subsidiaries		147,425		150,011
Other assets		540		1,022

Total assets	$	155,139	$	162,424

Liabilities and equity
Debt	$	52,924	$	65,128
Accrued expenses and other liabilities		7		62
Shareholders' equity		102,208		97,234

Total liabilities and shareholders' equity	$	155,139	$	162,424

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Nine Months ended September 30,

	2025			2024

Dividends from subsidiaries	$	12,546		$	50
Other income		16			19
Interest expense		(4,223	)		(3,611	)
Other expense		(302	)		(5	)


Loss before income tax and undistributed subsidiary income		8,037			(3,547	)
Income tax benefit		489			-
Equity in undistributed subsidiary income		(4,915	)		6,930

Net income	$	3,611		$	3,383

Comprehensive income	$	4,974		$	4,780

Wichita Falls Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2025 and 2024 (Unaudited)

CONDENSED STATEMENTS OF CASH FLOWS
Nine Months ended September 30,

	2025			2024

Operating Activities
Net income	$	3,611		$	3,383
Adjustments:
Equity in undistributed subsidiary income		4,914			(6,930	)
Change in other assets		485			5
Change in other liabilities		(58	)		(115	)
Net cash from operating activities		8,952			(3,657	)

Financing Activities
Proceeds from subordinated debt		-			8,700
Repayments of subordinated debt		(12,203	)		-
Paid in capital		(966	)		(6,500	)
Dividends paid		-			(81	)
Net cash from financing activities		(13,169	)		2,119

Net change in cash and cash equivalents		(4,217	)		(1,538	)

Beginning cash and cash equivalents		11,391			14,168

Ending cash and cash equivalents	$	7,174		$	12,630

Note 15 - Earnings Per Share

The factors used in the earnings per share computation follow:

	Nine Months ended
	September 30,
	2025		2024

Net Income	$	3,611	$	3,383

Average Shares		620,912		575,889

Earnings per common share	$	5.82	$	5.88