Executive Summary

Q3 2025 delivered clear sequential and year-over-year improvement: net income rose to $3.44M and EPS to $0.75 vs $0.53 in Q2 2025 and $0.29 in Q3 2024, driven by stronger net interest income, higher noninterest income, and stable credit costs; 2024 was depressed by a one-time $1.3M securities loss .
Net interest income increased 18.3% YoY to $11.16M; noninterest income rose to $3.05M; total operating revenue (NII + noninterest) reached ~$14.21M; net income margin expanded meaningfully YoY as profitability recovered from last year’s repositioning loss .
Balance sheet trends were constructive: loans grew 5.1% YoY to $1.18B, assets to $1.57B, and book value per share to $16.95 (+6.1% YoY); the quarterly dividend was maintained at $0.36/share .
No formal guidance or Street consensus were provided; near-term stock catalysts center on continued NIM expansion and deposit remix away from wholesale funding, offset by higher operating expenses and a funding mix still leaning on FHLB advances .

What Went Well and What Went Wrong

What Went Well
- NIM momentum and core earnings power: “Our net interest margin continues to strengthen quarter over quarter, driven by the increase in higher-yielding assets and the runoff of lower-yielding ones,” supporting EPS acceleration to $0.75 .
- Revenue mix and fee breadth: Noninterest income increased YoY to $3.05M, complementing strong NII of $11.16M; management highlighted originations and secondary market mortgage sales ($46.0M in Q3) .
- Credit quality and capital: Asset quality “remains strong”; ACL on loans increased to $8.40M (from $7.37M) aligned with loan growth; book value per share rose to $16.95 (+6.1% YoY) .
What Went Wrong
- Operating expense pressure: Noninterest expenses rose 9.9% YoY to $10.34M on salaries, other expenses, and equipment/occupancy, tempering operating leverage .
- Funding mix still includes meaningful wholesale sources: FHLB advances rose YoY to $270.8M; brokered deposits stood at $65.3M at period end, though management is focused on growing core deposits to replace wholesale funds .
- Macro and regional sensitivities: Management noted localized drought affecting agriculture and, earlier, potential Canadian tourism headwinds, underscoring ongoing macro sensitivity in the footprint .

Metric	Q3 2024	Q2 2025	Q3 2025
Interest Income ($M)	$17.19	$18.72	$19.21
Interest Expense ($M)	$7.76	$8.28	$8.05
Net Interest Income ($M)	$9.43	$10.45	$11.16
Credit Loss Expense ($M)	$0.43	$0.22	$0.31
Noninterest Income ($M)	$2.63	$2.46	$3.05
Noninterest Expenses ($M)	$9.41	$10.49	$10.34
Income Before Taxes ($M)	$1.20	$2.50	$3.85
Income Tax Expense ($M)	$(0.12)	$0.10	$0.41
Net Income ($M)	$1.32	$2.40	$3.44
Diluted EPS ($)	$0.29	$0.53	$0.75
Net Income Margin %	12.48%*	18.45%*	24.21%*

Note: Total operating revenue (NII + noninterest income) was ~$12.06M in Q3 2024 ($9.43M + $2.63M) , ~$12.91M in Q2 2025 ($10.45M + $2.46M) , and ~$14.21M in Q3 2025 ($11.16M + $3.05M) .
Asterisk denotes values retrieved from S&P Global.
Balance sheet KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Total Assets ($B)	$1.52	$1.48	$1.57
Loans, net ($B)	$1.12	$1.10	$1.18
Total Deposits ($B)	$1.17	$1.10	$1.19
FHLB Advances ($M)	$230.7	$270.7	$270.8
Brokered Deposits ($M)	$80.0	$65.3	$65.3
Book Value/Share ($)	$15.98	$15.66	$16.95
Allowance for Credit Losses ($M)	$7.37	$8.31	$8.40
Qualifying Residential Loans Sold ($M)	$35.2 (Q3)	$31.0 (Q2)	$46.0 (Q3)

Estimates vs actuals (S&P Global consensus)
- S&P Global Wall Street consensus for Q3 2025 EPS and revenue was unavailable; as a result, beat/miss versus Street cannot be determined. Actual EPS was $0.75 and total operating revenue was ~$14.21M based on reported NII and noninterest income .

Metric	Period	Previous Guidance	Current Guidance	Change
Financial Guidance (Revenue, EPS, Margins)	FY/Quarter	None issued	None issued	Maintained (no formal guidance)
Dividend per Share	Q3 2025	$0.36 (declared for Q2; payable Aug 7, 2025)	$0.36 (payable Nov 6, 2025)	Maintained

No explicit forward-looking quantitative guidance was provided in the 8-Ks or press release .

No Q3 2025 earnings call transcript was available in the document set; management commentary came via the Q3 shareholder letter and press release .

Topic	Previous Mentions (Q2 2025, Q1 2025)	Current Period (Q3 2025)	Trend
Net Interest Margin	Q2: “slow but steady improvement” in asset yields/NIM	“NIM continues to strengthen quarter over quarter”	Improving
Deposit/Funding Mix	Use of brokered deposits and FHLB; focus on balance sheet growth	Emphasis on growing core deposits to replace wholesale funding	Improving mix (goal), wholesale still elevated
Asset Quality/Reserves	Minimal past dues; net recoveries; prudent ACL build	“Asset quality remains strong”; ACL up with loan growth	Stable/Strong
Regional/Macro	Q2: Potential Canadian tourism headwinds; monitoring	Q3: Drought affecting agriculture; tourism robust	Mixed macro sensitivities
Mortgage Banking	Secondary market sales: Q2 $31.0M	Q3 sales $46.0M; YTD $102.8M	Strengthening volumes

Strategic focus and earnings power: “Our net interest margin continues to strengthen quarter over quarter… coupled with a focus on growing core deposits to replace wholesale funding,” underscoring the path to sustainably higher earnings .
Execution and tone: “We are pleased with the strong financial performance… disciplined approach to asset growth, prudent expense management and a resilient loan portfolio,” signaling confidence in the run-rate .
Regional context: Management cited a “banner Fall Foliage tourism season” but also a localized drought impacting agriculture—illustrating balanced, pragmatic tone on macro .

Notable quotes:

“Our net interest margin continues to strengthen quarter over quarter…” — David S. Silverman, President & CEO .
“Our disciplined approach to asset growth… has resulted in meaningful earnings expansion.” — David S. Silverman .

No Q3 2025 earnings call transcript was available; there were no Q&A disclosures in the filings or press release .

S&P Global consensus for Q3 2025 EPS and revenue was unavailable; consequently, beat/miss vs Street cannot be determined. Actual EPS was $0.75 and total operating revenue was ~$14.21M (NII + noninterest income) .
With strengthening NIM and higher noninterest income, Street models (where they exist) may need to reflect higher core earnings power and modestly higher operating expense run-rate.

Core earnings inflecting: NII growth (+18% YoY) and higher fee income drove EPS to $0.75; margin expansion is the key earnings lever into 2026 if deposit remix progresses .
Funding mix is the swing factor: Continued replacement of brokered/wholesale funding with core deposits should support NIM and reduce sensitivity to rate volatility .
Expense discipline matters: Elevated noninterest expense (+9.9% YoY) is a watch item; maintaining positive operating leverage will be critical as growth continues .
Credit remains a support: Stable credit quality and appropriately built reserves (ACL up with loans) reduce downside earnings risk .
Capital accretion and shareholder returns: Book value per share rose to $16.95; dividend maintained at $0.36—supporting total return while growth investments continue .
Near-term trading setup: The narrative of margin expansion and EPS acceleration is positive; the stock’s reaction will hinge on evidence of sustained core deposit growth and operating expense control quarter-on-quarter .

Footnotes:

Net Income Margin % values marked with an asterisk (*) are retrieved from S&P Global. Values retrieved from S&P Global.