Loans and Allowance for Credit Losses

9 Months Ended

Dec. 31, 2025

Note 3 - LOANS AND ALLOWANCE FOR Credit LOSSES

A summary of loans by major category as of December 31, 2025 and March 31, 2025 is as follows:


	December 31, 2025			March 31, 2025
	(Dollars in thousands)
Real Estate - Construction	$	25,062		$	15,069
Real Estate - Commercial		129,128			120,184
Real Estate - Residential		161,228			161,144
Commercial Non-Real Estate		44,834			32,007
Agriculture		44,520			42,835
Other Consumer		11,381			14,649
Land Development and Sanitary & Improvement Districts (SIDs)		14,155			16,327
Total loans		430,308			402,215
Allowance for credit losses		(5,586	)		(5,441	)
Net deferred origination costs & fees		(65	)		(18	)
Total loans, net	$	424,657		$	396,756

Related Party Loans: In the normal course of business, loans are made to directors and officers of the Association. Loans to Association directors and key officers outstanding as of December 31, 2025 and March 31, 2025 were $1.8 million. Additionally, the Association had loans totaling $881,000 and $940,000 as of December 31, 2025 and March 31, 2025 to related parties that were originated by the Association, sold to Federal Home Loan Mortgage Company and are serviced by the Association.

The following tables present the activity in the allowance for credit losses for the three and nine months ended December 31, 2025 and 2024:


	Three Months Ended December 31, 2025
	Beginning								Ending
	Allowance		Provision for		Loans				Allowance
	Balance		Credit Losses		Charged off		Recoveries		Balance
	(Dollars in thousands)
Real Estate - Construction	$	285	$	—	$	—	$	—	$	285
Real Estate - Commercial		1,688		—		—		—		1,688
Real Estate - Residential		1,800		—		—		—		1,800
Commercial Non-Real Estate		795		—		—		—		795
Agricultural		559		—		—		—		559
Other Consumer		168		—		—		—		168
Land Development and SIDs		228		—		—		63		291
Total	$	5,523	$	—	$	—	$	63	$	5,586


	Nine Months Ended December 31, 2025
	Beginning										Ending
	Allowance		Provision for			Loans					Allowance
	Balance		Credit Losses			Charged off			Recoveries		Balance
	(Dollars in thousands)
Real Estate - Construction	$	246	$	39		$	—		$	—	$	285
Real Estate - Commercial		1,572		116			—			—		1,688
Real Estate - Residential		1,926		(126	)		—			—		1,800
Commercial Non-Real Estate		667		128			—			—		795
Agricultural		476		83			—			—		559
Other Consumer		262		(90	)		(7	)		3		168
Land Development and SIDs		292		(64	)		—			63		291
Total	$	5,441	$	86		$	(7	)	$	66	$	5,586


	Three Months Ended December 31, 2024
	Beginning									Ending
	Allowance		Provision for			Loans				Allowance
	Balance		Credit Losses			Charged off		Recoveries		Balance
	(Dollars in thousands)
Real Estate - Construction	$	289	$	(2	)	$	—	$	—	$	287
Real Estate - Commercial		2,023		60			—		—		2,083
Real Estate - Residential		1,876		(8	)		—		—		1,868
Commercial Non-Real Estate		658		(14	)		—		—		644
Agricultural		406		82			—		—		488
Other Consumer		370		(75	)		—		—		295
Land Development and SIDs		236		14			—		—		250
Total	$	5,858	$	57		$	—	$	—	$	5,915


	Nine Months Ended December 31, 2024
	Beginning										Ending
	Allowance		(Reversal of)			Loans					Allowance
	Balance		Credit Losses			Charged off			Recoveries		Balance
	(Dollars in thousands)
Real Estate - Construction	$	246	$	41		$	—		$	—	$	287
Real Estate - Commercial		2,245		(162	)		—			—		2,083
Real Estate - Residential		1,829		39			—			—		1,868
Commercial Non-Real Estate		759		(115	)		—			—		644
Agricultural		228		260			—			—		488
Other Consumer		327		(31	)		(4	)		3		295
Land Development and SIDs		226		24			—			—		250
Total	$	5,860	$	56		$	(4	)	$	3	$	5,915

The ACL on loans excludes $215,000 as of December 31, 2025 and March 31, 2025 of allowance for off-balance sheet exposures and is recorded within accounts payable, accrued expenses and other liabilities on the Consolidated Balance Sheets.

Collateral dependent loans individually evaluated for purposes of the ACL by collateral type were as follows at December 31, 2025 and March 31, 2025:


	December 31, 2025
	Real Estate		Other		ACL Allocation
	(Dollars in thousands)
Portfolio Segment
Real Estate - Construction	$	—	$	—	$	—
Real Estate - Commercial		—		—		—
Real Estate - Residential		79		—		—
Commercial Non-Real Estate		—		—		—
Agricultural		—		—		—
Other Consumer		3		—		—
Land Development and SIDs		—		—		—
Total	$	82	$	—	$	—


	March 31, 2025
	Real Estate		Other		ACL Allocation
	(Dollars in thousands)
Portfolio Segment
Real Estate - Construction	$	—	$	—	$	—
Real Estate - Commercial		359		—		—
Real Estate - Residential		150		—		68
Commercial Non-Real Estate		—		—		—
Agricultural		—		—		—
Other Consumer		—		13		9
Land Development and SIDs		807		—		39
Total	$	1,316	$	13	$	116

Credit Risk—The Association monitors the credit risk within the loan portfolio by assessing the strength of the borrower’s repayment capacity and the probability of default. The Association first assesses the paying capacity of the borrower; then, it analyzes the sound worth of any pledged collateral or guarantees. In estimating the allowance for credit losses management also uses a quarterly Loan Concentration Report to monitor any concentrations that may develop in any specific category of the loan portfolio. It identifies four varying degrees of credit worthiness:

•

Pass Loans: Loans in the pass category are loans that do not raise Association concerns.

•

Special Mention Loans: Loans in this category may have a potential for weakness which, if not corrected, could weaken the asset and increase the risk in the future. By classifying a loan as Special Mention the Association can give the loan the attention needed to remedy any credit deficiencies or potential weaknesses.

•

Substandard Loans: Loans identified as Substandard are assets that are inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Loans in this classification category must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Association will sustain some loss if the deficiencies are not corrected. If a loan is classified as Substandard, a determination based upon objective evidence must be made as to any specific or general valuation allowance within the guidelines of generally accepted accounting principles.

•

Doubtful Loans: Loans in this category have all the weaknesses inherent in Substandard loans with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. If a loan is classified as Doubtful, a determination based upon objective evidence must be made as to any specific or general valuation allowance within the guidelines of generally accepted accounting principles.

The following tables present the credit risk profile of the Association's loan portfolio based on risk rating category and year of origination as of December 31, 2025 and March 31, 2025.


	As of December 31, 2025
	Term Loans by Origination Year (Fiscal Year)												Revolving
	2026		2025		2024		2023		2022		Prior		Loans		Total
	(Dollars in thousands)
Real Estate - Construction
Pass	$	9,338	$	11,936	$	2,004	$	—	$	—	$	—	$	1,784	$	25,062
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Construction	$	9,338	$	11,936	$	2,004	$	—	$	—	$	—	$	1,784	$	25,062
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Real Estate - Commercial
Pass		16,197		17,189		13,642		25,867		25,000		29,415		55	$	127,365
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		385		—		—		1,378		—		1,763
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Commercial	$	16,197	$	17,189	$	14,027	$	25,867	$	25,000	$	30,793	$	55	$	129,128
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Real Estate - Residential
Pass		18,363		15,549		12,633		20,472		43,013		40,117		10,755	$	160,902
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		37		16		273		—		326
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Residential	$	18,363	$	15,549	$	12,633	$	20,509	$	43,029	$	40,390	$	10,755	$	161,228
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Commercial - Non-Real Estate
Pass		20,288		5,802		3,973		1,668		1,641		5,290		5,729	$	44,391
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		112		—		231		100		443
Doubtful		—		—		—		—		—		—		—		—
Total Commercial - Non-Real Estate	$	20,288	$	5,802	$	3,973	$	1,780	$	1,641	$	5,521	$	5,829	$	44,834
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Agricultural
Pass		7,074		13,853		1,310		2,746		1,941		2,859		13,742	$	43,525
Special mention		—		—		—		—		—		—		—		—
Substandard		—		347		—		165		—		—		483		995
Doubtful		—		—		—		—		—		—		—		—
Total - Agricultural	$	7,074	$	14,200	$	1,310	$	2,911	$	1,941	$	2,859	$	14,225	$	44,520
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Other Consumer
Pass		1,775		1,761		3,540		3,480		166		611		—	$	11,333
Special mention		—		—		—		—		—		—		—		—
Substandard		—		42		3		—		3		—		—		48
Doubtful		—		—		—		—		—		—		—		—
Total Other Consumer	$	1,775	$	1,803	$	3,543	$	3,480	$	169	$	611	$	—	$	11,381
Current year-to-date gross write-offs		7		—		—		—		—		—		—		7
Land Development and SIDs
Pass		767		939		1,141		5,328		5,079		901		—	$	14,155
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Land Development and SIDs	$	767	$	939	$	1,141	$	5,328	$	5,079	$	901	$	—	$	14,155
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Total loans	$	73,802	$	67,418	$	38,631	$	59,875	$	76,859	$	81,075	$	32,648	$	430,308


	As of March 31, 2025
	Term Loans by Origination Year (Fiscal Year)												Revolving
	2025		2024		2023		2022		2021		Prior		Loans		Total
	(Dollars in thousands)
Real Estate - Construction
Pass	$	9,809	$	2,908	$	367	$	—	$	—	$	—	$	1,985	$	15,069
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Construction	$	9,809	$	2,908	$	367	$	—	$	—	$	—	$	1,985	$	15,069
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Real Estate - Commercial
Pass		17,451		14,153		26,916		25,840		3,089		30,409		140	$	117,998
Special mention		—		—		—		—		—		—		—		—
Substandard		—		391		—		—		306		1,489		—		2,186
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Commercial	$	17,451	$	14,544	$	26,916	$	25,840	$	3,395	$	31,898	$	140	$	120,184
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Real Estate - Residential
Pass		18,914		19,970		22,674		46,132		31,265		12,861		9,078	$	160,894
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		135		—		—		115		—		250
Doubtful		—		—		—		—		—		—		—		—
Total Real Estate - Residential	$	18,914	$	19,970	$	22,809	$	46,132	$	31,265	$	12,976	$	9,078	$	161,144
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Commercial - Non-Real Estate
Pass		6,549		5,670		3,613		2,790		1,775		6,563		4,551	$	31,511
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		122		—		—		374		—		496
Doubtful		—		—		—		—		—		—		—		—
Total Commercial - Non-Real Estate	$	6,549	$	5,670	$	3,735	$	2,790	$	1,775	$	6,937	$	4,551	$	32,007
Current year-to-date gross write-offs		13		—		—		—		—		—		—		13
Agricultural
Pass		16,635		1,763		2,927		2,069		857		2,635		15,078	$	41,964
Special mention		—		—		—		—		—		—		—		—
Substandard		405		—		165		—		—		—		301		871
Doubtful		—		—		—		—		—		—		—		—
Total - Agricultural	$	17,040	$	1,763	$	3,092	$	2,069	$	857	$	2,635	$	15,379	$	42,835
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—
Other Consumer
Pass		2,779		5,021		5,252		359		224		996		—	$	14,631
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		5		8		—		13
Doubtful		5		—		—		—		—		—		—		5
Total Other Consumer	$	2,784	$	5,021	$	5,252	$	359	$	229	$	1,004	$	—	$	14,649
Current year-to-date gross write-offs		4		—		—		—		—		—		—		4
Land Development and SIDs
Pass		841		1,124		6,313		5,956		552		734		—	$	15,520
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		807		—		—		—		—		807
Doubtful		—		—		—		—		—		—		—		—
Total Land Development and SIDs	$	841	$	1,124	$	7,120	$	5,956	$	552	$	734	$	—	$	16,327
Current year-to-date gross write-offs		605		—		—		—		—		—		—		605
Total loans	$	73,388	$	51,000	$	69,291	$	83,146	$	38,073	$	56,184	$	31,133	$	402,215

Nonperforming and Past-Due Loans—All loans in the Association’s portfolio are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

The following table presents certain information with respect to loans on nonaccrual status as of and for the nine months ended December 31, 2025 and March 31, 2025:


	Nonaccrual		Nonaccrual with no		Nonaccrual with		Interest Income
	loans at		Allowance for Credit		Allowance for Credit		Recognized During
	December 31, 2025		Loss		Loss		the Period
December 31, 2025
Real Estate - Residential	$	79	$	79	$	—	$	2
Other Consumer		3		3		—		—
Total	$	82	$	82	$	—	$	2


	Nonaccrual loans		Nonaccrual with no		Nonaccrual with		Interest Income
	at March 31,		Allowance for Credit		Allowance for Credit		Recognized During
	2025		Loss		Loss		the Period
March 31, 2025
Real Estate - Commercial	$	359	$	359	$	—	$	29
Real Estate - Residential		150		81		69		10
Commercial Non-Real Estate		13		5		8		—
Other Consumer		807		768		39		27
Total	$	1,329	$	1,213	$	116	$	66

The following is an aging analysis of the contractually past due loans as of December 31, 2025 and March 31, 2025:


													Loans Past
					Greater than								Due 90 Days
	30–59 Days		60–89 Days		89 Days		Total						or More Still
	Past Due		Past Due		Past Due		Past Due		Current		Total		Accruing
December 31, 2025	(Dollars in thousands)
Real Estate - Construction	$	—	$	—	$	—	$	—	$	25,062	$	25,062	$	—
Real Estate - Commercial		—		—		—		—		129,128		129,128		—
Real Estate - Residential		649		284		126		1,059		160,169		161,228		126
Commercial Non-Real Estate		6		—		—		6		44,828		44,834		—
Agricultural		—		—		—		—		44,520		44,520		—
Other Consumer		77		244		184		505		10,876		11,381		184
Land Development and SIDs		—		—		—		—		14,155		14,155		—
Total	$	732	$	528	$	310	$	1,570	$	428,738	$	430,308	$	310


													Loans Past
					Greater than								Due 90 Days
	30–59 Days		60–89 Days		89 Days		Total						or More Still
	Past Due		Past Due		Past Due		Past Due		Current		Total		Accruing
March 31, 2025	(Dollars in thousands)
Real Estate - Construction	$	—	$	—	$	—	$	—	$	15,069	$	15,069	$	—
Real Estate - Commercial		—		—		—		—		120,184		120,184		—
Real Estate - Residential		486		—		87		573		160,571		161,144		3
Commercial Non-Real Estate		—		9		—		9		31,998		32,007		—
Agricultural		79		—		—		79		42,756		42,835		—
Other Consumer		112		345		112		569		14,080		14,649		99
Land Development and SIDs		—		—		—		—		16,327		16,327		—
Total	$	677	$	354	$	199	$	1,230	$	400,985	$	402,215	$	102

The Association may modify loans to borrowers experiencing financial difficulty by providing modifications to repayment terms; more specifically, modifications to loan interest rates. Management performs an analysis at the time of loan modification. Any reserve required is recorded through a provision to the allowance for credit losses on loans. There were no modifications on loans to borrowers experiencing financial difficulty during the nine months ended December 31, 2025 and 2024.