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Note 21 - Subsequent Event
12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 21 - Subsequent Events

 

Subsequent to December 31, 2025, the Bank announced the closure of its Bellevue branch, with operations scheduled to cease on April 30, 2026. The decision followed management’s evaluation of branch performance, customer migration to digital channels, and alignment of the Company’s long‑term strategic objectives. The Company recorded $631,000 in other noninterest expense and $50,000 in compensation expense for the year ended December 31,2025, which included one‑time closure‑related expenses for anticipated lease termination costs, severance, and equipment decommissioning. Additional costs may be recognized in future periods. The branch’s deposits and customer relationships will continue to be serviced through the Bank's online and mobile platforms, ATM network and branches with minimal service disruption.

 

 

 

Also subsequent to December 31, 2025, the Company signed an agreement to redeem its general partnership interest in MWGC in full at par and received the cash distribution of $150,000 in February 2026. No gain or loss was recorded as a result of this redemption. At the same time, the Bank signed a redemption agreement which sets forth the path to unwind its $6.0 million limited partnership investment in the Hero Fund through capital distributions beginning in April 2026. The Bank anticipates receiving the full amount invested, with no gain or loss recorded, as a result of the future redemption.

 

On March 10, 2026, the Company became aware that its $2.0 million investment in subordinated debt may be approaching payment default. The issuer has requested a loan modification in advance of the interest payment due on March 15, 2026. If a modification agreement is not reached, there is a strong likelihood that the issuer will not be able to meet the scheduled interest payment due no later than March 25, 2026, including the 10-day grace period, which would place the subordinated debt in default. Management is actively monitoring the situation. Management is also assessing the likelihood and timing of recovery, including possible legal actions. No adjustments have been made to the December 31, 2025, financial statements as this event occurred after the balance sheet date.