Catalyst Bancorp: Lakeside earned $1.88M in 2025
Lakeside’s 2025 results pair higher net income with lower operating cash flow than in 2024.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Catalyst Bancorp (CLST) completed its previously announced acquisitions of Lakeside Bancshares, Inc. and its wholly owned subsidiary, Lakeside Bank, on July 14, 2026. This amendment adds the acquired businesses’ audited 2025 and 2024 financial statements, unaudited statements for the quarter ended March 31, 2026, and unaudited pro forma combined financial statements.
Lakeside Bancshares reported net income of $1,875,898 for 2025, compared with $1,537,772 for 2024. Net cash provided by operating activities was $1,540,872 in 2025, compared with $1,772,109 in 2024. For the quarter ended March 31, 2026, it reported net income of $552,000, compared with $396,000 a year earlier. The pro forma information is for informational purposes only, not a representation of actual combined historical results or a projection; purchase-accounting fair-value assessments are preliminary, and actual results may differ materially from their assumptions.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate point2025 net income at Lakeside Bancshares was $1,875,898, versus $1,537,772 in 2024.
Negative
- Moderate pointOperating cash flow at Lakeside Bancshares was $1,540,872 in 2025, versus $1,772,109 in 2024.
8-K Event Classification
Key Figures
Key Terms
pro forma financial information financial
purchase accounting entries financial
available-for-sale financial
allowance for credit losses financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
When did CLST complete its Lakeside acquisition?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) |
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | ( |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class | Trading | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Explanatory Note
This Current Report on Form 8-K/A (this “Amendment”) amends the Current Report on Form 8-K filed by Catalyst Bancorp, Inc. (“Catalyst Bancorp”) with the Securities and Exchange Commission on July 14, 2026 (the “Original Report”) in connection with the consummation on July 14, 2026 of Catalyst Bancorp’s previously announced acquisitions of Lakeside Bancshares, Inc., a Louisiana corporation (“Lakeside Bancshares”), and Lakeside Bank, a Louisiana banking corporation and the wholly-owned subsidiary of Lakeside Bancshares.
This Amendment amends and supplements the Original Report solely to provide the financial statements and pro forma financial information relating to the merger required by Items 9.01(a) and 9.01(b) of Form 8-K and should be read in conjunction with the Original Report. This Amendment does not include other updates or amendments to the Original Report. The pro forma financial information included in this Amendment has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that Catalyst Bancorp and Lakeside Bancshares would have achieved had the companies been combined during the periods presented in the pro forma financial information and is not intended to project the future financial results and results of operations that the combined company may achieve after completion of the acquisitions. In addition, the fair value assessments presented in the pro forma financial information are preliminary assessments, as the purchase accounting entries have not yet been finalized, and are based upon available information and certain assumptions, which Catalyst Bancorp believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the unaudited pro forma condensed combined financial statements.
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ITEM 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The audited consolidated financial statements of Lakeside Bancshares as of and for the years ended December 31, 2025 and 2024, together with the notes thereto and the related independent auditor’s report, are filed as Exhibit 99.1 hereto and incorporated by reference.
The consolidated balance sheets of Lakeside Bancshares as of March 31, 2026 (unaudited) and December 31, 2025, and the related unaudited consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the three months ended March 31, 2026 and 2025, together with the notes thereto, are filed as Exhibit 99.2 hereto and incorporated by reference.
(b) Pro forma Financial Information
The unaudited pro forma condensed combined consolidated balance sheet as of March 31, 2026, and the unaudited pro forma condensed combined consolidated statement of income for the three months ended March 31, 2026 and the year ended December 31, 2025, of Catalyst Bancorp required by this item, including the related notes thereto, are filed as Exhibit 99.3 to this Form 8-K/A and incorporated herein by reference.
(d) Exhibits
The following exhibits are included herein:
Exhibit Number | Description | |
23.1 | Consent of Langley, Williams & Company, L.L.C. | |
99.1 | Audited consolidated financial statements of Lakeside Bancshares, Inc. as of December 31, 2025 and 2024, and for each of the fiscal years ended December 31, 2025 and 2024. | |
99.2 | Unaudited consolidated financial statements of Lakeside Bancshares, Inc. as of and for the three months ended March 31, 2026 and 2025. | |
99.3 | Unaudited pro forma condensed combined consolidated financial statements as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025. | |
104 | Cover Page Interactive Data File. Embedded within the Inline XBRL document. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CATALYST BANCORP, INC. | ||||
Date: | September 29, 2026 | By: | /s/ Joseph B. Zanco | |
Joseph B. Zanco | ||||
President and Chief Executive Officer | ||||
4
Exhibit 99.1
CONSOLIDATED FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
LAKESIDE BANCSHARES AND SUBSIDIARY,
LAKESIDE BANK
December 31, 2025 and 2024
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS:
CONSOLIDATED STATEMENTS OF OPERATIONS AND
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’
SUPPLEMENTAL INFORMATION:
LAKESIDE BANK:
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INDEPENDENT AUDITORS’ REPORT
To the Board of Directors and Stockholders
Lakeside Bancshares, Inc. and Subsidiary
Lake Charles, Louisiana
Opinion
We have audited the accompanying consolidated financial statements of Lakeside Bancshares, Inc. and Subsidiary (a Louisiana corporation), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lakeside Bancshares, Inc. and Subsidiary as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of Lakeside Bancshares, Inc. and Subsidiary and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Lakeside Bancshares, Inc. and Subsidiary’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
3
audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Lakeside Bancshares, Inc. and Subsidiary’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Lakeside Bancshares, Inc. and Subsidiary’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Report on Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The separate bank information starting on page 42 is presented for the purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and related directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.
/s/ Langley, Williams & Company, L.L.C.
Lake Charles, Louisiana
March 26, 2026
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||
CONSOLIDATED BALANCE SHEETS | ||||
December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
ASSETS | | | | |
| | | | |
Cash and due from banks | | $ 2,397,012 | | $ 3,466,200 |
Interest-bearing bank deposits | | 3,956,548 | | 30,840,906 |
Federal funds sold | | 25,000 | | 250,000 |
Cash and cash equivalents | | 6,378,560 | | 34,557,106 |
Investment securities available-for-sale | | 88,411,954 | | 13,007,476 |
Investment securities held-to-maturity, net of allowance for credit losses | | 42,904,012 | | 64,599,474 |
Restricted stock | | 3,072,400 | | 2,915,400 |
Loans, net of allowance for credit losses | | 233,657,131 | | 238,801,817 |
Prepaid income taxes | | - | | 284,311 |
Bank premises and equipment, net of accumulated depreciation | | 6,549,231 | | 7,485,924 |
Accrued interest receivable | | 2,137,089 | | 761,362 |
Deferred tax asset | | 19,992 | | - |
Foreclosed properties | | - | | 250,000 |
Bank owned life insurance | | 2,253,700 | | 2,181,546 |
Other assets | | 360,073 | | 607,102 |
TOTAL ASSETS | | $ 385,744,142 | | $ 365,451,518 |
The accompanying notes are an integral part of these consolidated financial statements.
5
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||
CONSOLIDATED BALANCE SHEETS - CONTINUED | ||||
December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | |
Deposits: | | | | |
Non-interest bearing | | $ 49,382,179 | | $ 57,176,255 |
Interest-bearing | | 238,163,039 | | 211,432,732 |
Total deposits | | 287,545,218 | | 268,608,987 |
| | | | |
Federal Home Loan Bank ("FHLB") advances | | 60,000,000 | | 61,032,386 |
| | | | |
Other liabilities: | | | | |
Accrued interest payable | | 1,698,779 | | 1,395,680 |
Accrued expenses | | 225,575 | | 188,163 |
Income tax payable | | 32,734 | | - |
Allowance for credit losses on off-balance sheet exposures | | 100,000 | | 100,000 |
Deferred tax liability | | - | | 68,085 |
Other liabilities | | 78,568 | | 79,435 |
Total other liabilities | | 2,135,656 | | 1,831,363 |
| | | | |
Commitments and contingent liabilities | | | | |
| | | | |
Stockholders' equity: | | | | |
Common stock; $1 par value; 10,000,000 shares authorized; | | | | |
2,098,133 shares issued and outstanding | | | | |
for 2025 and 2024 | | 2,098,133 | | 2,098,133 |
Additional paid-in-capital | | 30,341,053 | | 29,141,053 |
Retained earnings | | 3,630,325 | | 2,954,427 |
Accumulated other comprehensive loss | | (6,243) | | (214,831) |
Total stockholders' equity | | 36,063,268 | | 33,978,782 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ 385,744,142 | | $ 365,451,518 |
The accompanying notes are an integral part of these consolidated financial statements.
6
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
For the Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
Interest income: | | | | |
Interest and fees on loans | | $ 13,539,220 | | $ 13,864,839 |
Interest on investment securities | | 2,789,690 | | 1,553,926 |
Interest on federal funds sold | | 18,748 | | 5,388 |
Other interest income | | 1,232,168 | | 648,445 |
Total interest income | | 17,579,826 | | 16,072,598 |
Interest expense: | | | | |
Interest on deposits | | 5,542,652 | | 4,105,880 |
Interest on borrowed funds | | 2,663,727 | | 2,644,979 |
Total interest expense | | 8,206,379 | | 6,750,859 |
Net interest income | | 9,373,447 | | 9,321,739 |
Credit loss expenses-loans | | 986,000 | | 428,000 |
Net interest income after credit loss expense | | 8,387,447 | | 8,893,739 |
Non-interest income | | 1,967,350 | | 1,314,293 |
Non-interest expenses | | (7,993,379) | | (8,284,920) |
Net income before income tax expense | | 2,361,418 | | 1,923,112 |
Income tax expense | | 485,520 | | 385,340 |
Net income | | 1,875,898 | | 1,537,772 |
| | | | |
Other comprehensive income: | | | | |
Change in unrealized holding gains (losses) in available-for-sale | | | | |
securities arising during the period, net of income tax expense (benefit) | | | | |
of $55,448 in 2025 and $(48,888) in 2024 | | 208,588 | | (183,912) |
Comprehensive income | | $ 2,084,486 | | $ 1,353,860 |
| | | | |
Per common share data: | | | | |
Basic income per share | | $ 0.89 | | $ 0.73 |
| | | | |
Weighted average number of shares outstanding | | 2,098,113 | | 2,098,113 |
The accompanying notes are an integral part of these consolidated financial statements.
7
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||
For the Years Ended December 31, 2025 and 2024 | ||||||||||
| | | | | | | | | | |
| | | | | | | | Accumulated | | |
| | | | | | | | Other | | |
| | Common | | Additional | | Retained | | Comprehensive | | |
| | Stock | | Paid-in-Capital | | Earnings | | Income (Loss) | | Total |
Balance at January 1, 2024 | | $ 2,098,133 | | $ 27,756,053 | | $ 2,801,655 | | ($ 30,919) | | $ 32,624,922 |
| | | | | | | | | | |
Net income for the year ended | | - | | - | | 1,537,772 | | - | | 1,537,772 |
| | | | | | | | | | |
Release of retained earnings | | - | | 1,385,000 | | (1,385,000) | | - | | - |
| | | | | | | | | | |
Changes in net unrealized holding loss, | | | | | | | | | | |
net of income taxes | | - | | - | | - | | (183,912) | | (183,912) |
| | | | | | | | | | |
Balance at December 31, 2024 | | $ 2,098,133 | | $ 29,141,053 | | $ 2,954,427 | | ($ 214,831) | | $ 33,978,782 |
| | | | | | | | | | |
Net income for the year ended | | - | | - | | 1,875,898 | | - | | 1,875,898 |
| | | | | | | | | | |
Release of retained earnings | | - | | 1,200,000 | | (1,200,000) | | - | | - |
| | | | | | | | | | |
Changes in net unrealized holding gain, | | | | | | | | | | |
net of income taxes | | - | | - | | - | | 208,588 | | 208,588 |
Balance at December 31, 2025 | | $ 2,098,133 | | $ 30,341,053 | | $ 3,630,325 | | ($ 6,243) | | $ 36,063,268 |
The accompanying notes are an integral part of these consolidated financial statements.
8
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
For the Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
Cash flows from operating activities: | | | | |
Net income | | $ 1,875,898 | | $ 1,537,772 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Bank owned life insurance income | | (72,154) | | (70,178) |
Depreciation and amortization | | 393,256 | | 454,787 |
Gain on sale of fixed assets | | (293,343) | | - |
Gain on sale of other real estate | | (36,796) | | - |
Credit loss expense | | 986,000 | | 428,000 |
Amortization of investment securities, net | | (738,929) | | (202,099) |
Provision for deferred taxes | | (88,077) | | 142,193 |
Net change in operating assets and liabilities: | | | | |
Accrued income and other assets | | (1,141,672) | | (129,419) |
Accrued expenses and other liabilities | | 339,644 | | (38,287) |
Prepaid income taxes and income tax payable | | 317,045 | | (350,660) |
Net cash provided by operating activities | | 1,540,872 | | 1,772,109 |
| | | | |
Cash flows from investing activities: | | | | |
Maturities/calls of securities | | 41,732,564 | | 22,021,380 |
Purchases of securities | | (94,494,063) | | (14,675,000) |
Purchases of restricted stock | | (157,000) | | (925,100) |
Net decrease in loans | | 4,158,686 | | 875,199 |
Sale of other real estate | | 286,796 | | - |
Proceeds from sale of permises, equipment and software | | 870,500 | | - |
Purchases of premises, equipment and software | | (20,746) | | (33,330) |
Net cash (used) provided by investing activities | | (47,623,263) | | 7,263,149 |
| | | | |
Cash flows from financing activities: | | | | |
Net increase (decrease) in customer deposits | | 18,936,231 | | (14,136,796) |
(Repayments) proceeds from FHLB advances, net | | (1,032,386) | | 19,909,062 |
Net cash provided by financing activities | | 17,903,845 | | 5,772,266 |
The accompanying notes are an integral part of these consolidated financial statements.
9
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED | ||||
For the Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
| | | | |
Net (decrease) increase in cash and cash equivalents | | ($ 28,178,546) | | $ 14,807,524 |
Cash and cash equivalents - beginning of year | | 34,557,106 | | 19,749,582 |
Cash and cash equivalents - end of year | | $ 6,378,560 | | $ 34,557,106 |
| | | | |
Supplemental disclosures of cash flow information: | | | | |
Cash paid for interest | | $ 7,903,280 | | $ 6,643,876 |
| | | | |
Noncash transactions: | | | | |
| | | | |
Loans charged off | | $ 196,166 | | $ 1,888,007 |
| | | | |
Unrealized holding gains (losses), net of taxes | | $ 208,588 | | ($ 183,912) |
| | | | |
Transfer of foreclosed properties from loans | | $ - | | ($ 250,000) |
| | | | |
Cash paid for income taxes | | $ 311,000 | | $ 511,700 |
The accompanying notes are an integral part of these consolidated financial statements.
10
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business and Nature of Operations
Lakeside Bancshares, Inc. and Subsidiary Lakeside Bank (the "Bank" and together with Bancshares, the “Company”) operates under a state bank charter and provides full banking service, excluding trust services. The Bank began operations on July 10, 2010. The Bank offers a broad range of traditional and online banking services to commercial, small business and retail customers, providing a variety of transaction and savings deposit products, secured and unsecured loan products (including revolving credit facilities), and letters of credit and similar financial guarantees. The Bank's primary deposit products are demand deposits, savings deposits, and certificates of deposits, and its primary lending products are commercial, business, real estate, and consumer loans. The primary area served by the Bank is Southwest Louisiana. In February 2018, Lakeside Bancshares, Inc. was formed for the purpose of becoming the holding company of Lakeside Bank by a stock exchange. A summary of significant accounting policies is as follows:
Basis of Presentation and Principles of Consolidation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and those generally practiced within the banking industry. These consolidated statements include the accounts of Lakeside Bancshares, Inc., the parent company, and its subsidiary, Lakeside Bank. All significant intercompany transactions and balances are eliminated in consolidation.
Use of estimates
U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.
The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.
The Bank's loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent on local economic conditions and the real estate industry.
While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Bank to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Other estimates that are susceptible to significant change in the near term relate to the determination of the valuation of deferred tax assets, other-than-temporary impairments of securities, bank premises and equipment, intangible asset, reserve for income tax uncertainties, other contingencies, and the fair value of financial instruments.
11
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Presentation of Cash Flows
For purposes of reporting cash flows, cash equivalents consist of cash on hand, funds due from banks and interest-bearing bank deposits. For purposes of the statements of cash flows, the Bank considers all highly liquid debt instruments that are readily convertible into cash to be cash equivalents.
Investment Securities
Securities are being accounted for in accordance with applicable guidance contained in the Accounting Standards Codification (ASC) which requires the classification of securities into one of three categories: trading, available-for-sale, or held-to-maturity. Management determines the appropriate classification of debt securities at the time of purchase and reevaluates this classification periodically.
Trading account securities are held for resale in anticipation of short-term market movements. The Bank had no trading account securities during the years ended December 31, 2025 and 2024.
Securities classified as available-for-sale are equity securities with readily determinable fair values and those debt securities that the Bank intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movement in interest rates, changes in the maturity mix of the Bank's assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. These securities are carried at estimated fair value based on information provided by a third-party pricing service with any unrealized gains or losses excluded from net income and reported in accumulated other comprehensive income (loss), which is reported as a separate component of stockholders' equity, net of the related deferred tax effect.
Securities classified as held-to-maturity are those debt securities the Bank has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost, adjusted for amortization of premium and accretion of discount, computed using the interest method, over their contractual lives.
Dividend and interest income, including amortization of premiums and accretion of discounts arising at acquisition, from all categories of investment securities are included in interest income in the consolidated statements of operations and comprehensive income.
Amortization, accretion, and accrued interest are included in interest income on securities. Gains and losses on the sale of securities available-for-sale are recorded on the trade date and are determined using the specific-identification method.
The accounting guidance related to the recognition and presentation of other-than-temporary impairment specifies that (a) if a company does not have the intent to sell a debt security prior to recovery and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporary impaired unless there is a credit loss. When an entity does not intend to sell the security, and it is more likely than not the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Credit Losses on Securities
At least quarterly, or more often when warranted, the Company performs an assessment of held to maturity debt securities for expected credit losses and available for sale debt securities for credit-related impairment, resulting in an allowance for credit losses, if applicable. The Company applies the practical expedient to exclude the accrued interest receivable balance from amortized cost basis of financing receivables. The allowance for credit losses on held to maturity debt securities is estimated at the individual security level when there is a more than inconsequential risk of default. The assessment uses probability of default and loss given default models based on public ratings, where available, or mapped internally developed risk grades to public ratings and forecasted cash flows using the same economic forecasts and probability weighting as used for the Company’s evaluation of the loan portfolio. Qualitative adjustments to the output of the quantitative calculation are made when management deems it necessary to reflect differences in current and forecasted conditions as compared to those during the historical loss period used in model development. The Company evaluates credit impairment on available for sale debt securities at an individual security level. This evaluation is done for securities whose fair value is below amortized cost with a more than inconsequential risk of default and where the Company has assessed the decline in fair value is significant enough to suggest a credit event occurred. Credit events are generally assessed based on adverse conditions specifically related to the security, an industry, or geographic area, changes in the financial condition of the issuer of the security, or in the case of an asset-backed debt security, changes in the financial condition of the underlying loan obligors. The allowance for credit losses for such securities is measured using a discounted cash flow methodology, through which management compares the present value of expected cash flows with the amortized cost basis of the security. The allowance for credit loss is limited to the amount by which the fair value is less than the amortized cost basis.
The Company records changes in the allowance for credit losses on securities with a corresponding adjustment recorded in the provision for credit loss expense. If the Company intends to sell the debt security, or more likely than not will be required to sell the security before recovery of its amortized cost basis, the security is charged down to fair value against the allowance for credit losses, with any incremental impairment reported in earnings.
Loans and allowance for Credit Loss
Loans are carried at the amount of unpaid principal, adjusted for deferred loan fees and origination costs. Interest on loans is accrued based on the principal amounts outstanding. Nonrefundable loan fees and related direct costs are deferred and the net amount is amortized to income as a yield adjustment over the life of the loan using the interest method. When principal or interest is delinquent for ninety days or more, the Bank evaluates the loan for nonaccrual status.
After a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Subsequent collections of interest payments on nonaccrual loans are recognized as interest income unless ultimate collectability of the loan is in doubt. Cash collections on loans where ultimate collectability remains in doubt are applied as reductions of the loan principal balance and no interest income is recognized until the principal balance has been collected. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Loans and Allowance for Credit Loss - (Continued)
The allowance for credit losses (ACL) is comprised of the allowance for loan and lease losses (ALLL), a valuation account available to absorb losses on loans and leases held for investment, and the reserve for unfunded lending commitments, a liability established to absorb credit losses for the expected life of the contractual term of on and off-balance sheet exposures as of the date of the determination. Quarterly, management estimates losses in the portfolio and unfunded exposures based on a number of factors, including the Company’s past loan loss experience, known and potential risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay, the estimated value of any underlying collateral, and current and forecasted economic conditions.
The analysis and methodology for estimating the ACL includes two primary elements: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated for credit loss. For the collective approach, the Company segments loans into commercial non-real estate, commercial real estate – owner occupied, commercial real estate – income producing, construction and land development, residential mortgage and consumer. Both quantitative and qualitative factors are applied at the portfolio segment levels. The Company applies the practical expedient that permits the exclusion of the accrued interest receivable balance from amortized cost basis of financing receivables for all classes of loans as our nonaccrual policy results in the timely write-off of interest accrued but uncollected.
The Company establishes specific reserves using an individually evaluated approach for nonaccrual loans, loans modified in troubled debt restructures, loans for which a troubled debt restructure is reasonably expected, and other financial instruments that are deemed to not share risk characteristics with other collectively evaluated financial assets. For loans individually evaluated, a specific allowance is recognized for any shortfall between the loan’s value and its recorded investment. The loan’s value is measured by either the loan’s observable market price, the fair value of the collateral of the loan (less liquidation costs) if it is collateral dependent, or by the present value of expected future cash flows discounted at the loan’s effective interest rate. The Company applies the practical expedient and defines collateral dependent loans as those where the borrower is experiencing financial difficulty and on which repayment is expected to be provided substantially through the operation or sale of the collateral. Loans individually analyzed are not incorporated into the pool analysis to avoid double counting.
It is the policy of the Company to promptly charge off all commercial and residential mortgage loans, or portions of loans, when available information reasonably confirms that they are wholly or partially uncollectible. Prior to recording a charge, the loan’s value is established based on an assessment of the value of the collateral securing the loan, the borrower’s and the guarantor’s ability and willingness to pay and the status of the account in bankruptcy court, if applicable. Consumer loans are generally charged down when the loan is 120 days past due for most secured and unsecured loans, unless the loan is clearly both well secured and in the process of collection. Loans are charged down to the fair value of the collateral, if any, less estimated selling costs. Loans are charged off against the allowance for loan losses, with subsequent recoveries added back to the allowance.
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate was influenced by historical losses, economic conditions, reasonable and supportable forecasts.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated depreciation and amortization. The provision for depreciation is computed using straight-line method based on the estimated useful lives of the assets, which range from 3-15 years for bank equipment and 39 years for bank buildings. Leasehold improvements are amortized over the lesser of the terms of the leases or their estimated useful lives. Expenditures for improvements, which extend the life of an asset, are capitalized and depreciated over the asset’s remaining useful life. Gains or losses realized on the disposition of properties and equipment are reflected in the consolidated statement of operations. Expenditures for repairs and maintenance are charged to operating expenses as incurred.
Foreclosed Properties
Foreclosed properties include properties that have been acquired in complete or partial satisfaction of a debt. These properties are initially recorded at fair value on the date of acquisition. Any write-downs at the time of acquisition are charged to the allowance for loan losses. Subsequent to acquisition, a valuation allowance is established, if necessary, to report these assets at the lower of (a) fair value minus estimated costs to sell or (b) cost. Gains and losses realized on the sale, and any adjustments resulting from periodic re-evaluation of the property are included in noninterest income or expense, as appropriate. Net costs of maintaining and operating the properties are expensed as incurred.
Bank Owned Life Insurance
The Bank purchased single-premium life insurance on certain employees of the Bank. Appreciation in value of the insurance policies is classified as noninterest income. These insurance policies can be surrendered subject to certain surrender penalties applied by the insurance carriers, as well as potential income taxes to be paid.
Income Taxes
The Bank follows the asset and liability method of accounting for income taxes, under which deferred income tax assets and liabilities are determined based on the difference between the financial reporting and income tax bases of assets and liabilities using the enacted marginal tax rates and laws expected to be in effect when the differences are expected to reverse. Temporary differences result primarily from allowance for loan loss and unrealized loss on available-for-sale securities. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. The deferred tax assets and liabilities represent the future return consequences of those differences that will either be taxable or deductible when the assets and liabilities are recovered or settled. The effect of a change in tax rates is recognized in the period that includes the enactment date.
In assessing the realization of deferred tax assets, management considers whether it is more-likely-than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation for future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
The Bank evaluates and measures all uncertain tax positions taken or to be taken on tax returns, and records liabilities for the amount of such positions that are not more-likely-than-not to be sustained, or may only partially be sustained, upon examination by relevant taxing authorities. It is management's opinion that there are no significant unsustainable tax positions taken by the Bank for the periods subject to examination. The Bank does not anticipate a significant increase in unrecognized tax benefits over the next 12 months. The Bank's income tax returns are no longer subject to examination
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Income Taxes – (Continued)
for a period beyond three years from the filing of those returns by tax authorities. The Bank's policy is to recognize interest and penalties, if any, related to income taxes as a component of income tax expense.
Federal Home Loan Bank Stock
As a member of the Federal Home Loan Bank (FHLB), the Company is required to purchase and hold shares of capital stock in the FHLB in an amount equal to a membership investment plus an activity-based investment determined according to the level of outstanding FHLB advances. The stock is reported as restricted stock in the consolidated balance sheet, which is restricted as to its marketability. Because no ready market exists for this investment and it has no quoted market value, the Bank's investment in this stock is carried at cost.
Derivative Instruments
The Bank recognizes all derivatives as either assets or liabilities in the Bank's consolidated balance sheet and measures those instruments at fair value. If certain conditions are met, a derivative may be specially designated as a hedge. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Bank is not currently engaged in any activities with derivatives.
Earnings Per Share
Basic earnings per share represent income available to common shareholders divided by the number of common shares outstanding during the period. The weighted-average number of shares outstanding were 2,098,113 in 2025 and 2024.
Comprehensive Income
Comprehensive income includes net income and other comprehensive income which, in the case of the Bank, includes only unrealized gains and losses on securities available-for-sale, net of income tax effect.
Credit Related Financial Information
In the ordinary course of business, the Bank has entered into commitments to extend credit, including commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded.
Revenue Recognition
In the ordinary course of business, the Company recognizes income from various revenue generating activities. Certain revenues are generated from contracts with customers where such revenues are recognized when, or as, services or products are transferred to customers for amounts to which the Company expects to be entitled. Certain specific policies related to revenue recognition from contracts with customers include:
Interest Income - Interest income is recognized on an accrual basis driven by written contracts, such as loan agreements or securities contracts. Loan origination fees and costs are recognized over the life of the loan as an adjustment to yield.
Service Charges on Deposit Accounts - Service charges on deposit accounts include transaction-based fees for non-sufficient funds, account analysis fees, and other service charges on deposits, including monthly account service fees. Non-sufficient funds fees are recognized at the time when the account overdraft occurs in accordance with regulatory
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)
Revenue Recognition – (continued)
guidelines. Account analysis fees consist of fees charged on certain business deposit accounts based upon account activity as well as other monthly account fees, and are recorded under the accrual method of accounting as services are performed.
Other service charges are earned by providing depositors safeguard and remittance of funds as well as by providing other elective services for depositors that are performed upon the depositor’s request. Charges for deposit services for the safeguard and remittance of funds are recognized at the end of the statement cycle, after services are provided, as the customer retains funds in the account. Revenue for other elective services is earned at the point in time the customer uses the service.
Bank Card and Automated Teller Machine (“ATM”) Fees - Bank card and ATM fees include credit card, debit card and ATM transaction revenue. The majority of this revenue is card interchange fees earned through a third-party network. Performance obligations are satisfied for each transaction when the card is used and the funds are remitted. The network establishes interchange fees that the merchant remits for each transaction, and costs are incurred from the network for facilitating the interchange with the merchant. Card fees also include merchant services fees earned for providing merchants with card processing capabilities. ATM income is generated from allowing customers to withdraw funds from other banks’ machines and from allowing a non-customer cardholder to withdraw funds from the Company’s machines. The Company satisfies its performance obligations for each transaction at the point in time that the withdrawal is processed. Bank card and ATM fee income is recorded on accrual basis as services are provided with the related expense reflected in data processing expense.
Secondary Mortgage Market Operations - Secondary mortgage market operations revenue is primarily comprised of service release premiums earned on the sale of closed-end mortgage loans to other financial institutions or government agencies that are recognized in revenue as each sales transaction occurs.
Other Miscellaneous Income - Other miscellaneous income represents a variety of revenue streams, including safe deposit box income, wire transfer fees, and any other income not reflected above. Income is recorded once the performance obligation is satisfied, generally on the accrual basis or on a cash basis if not material and/or considered constrained.
Recently issued accounting standards
In February 2026, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans (“ASU 2025-08”). The new guidance changes how the current expected credit loss model applies to loans acquired in a business combination or assets acquisition. To achieve this objective, the guidance expands the application of the gross-up method to an additional subset of financial assets referred to as purchased seasoned loans. Credit losses for both purchase credit deteriorated loans and purchased seasoned loans are accounted for differently than for originated loans and other purchased financial assets. ASU 2025-08 is effective for fiscal years beginning after December 16, 2026, including interim periods within those fiscal years. The Bank plans to implement the new standard in 2026 and is currently evaluating the impact of the adoption on its financial statements.
Advertising
The Bank expenses all advertising cost when incurred. Advertising expense for the years ended December 31, 2025 and 2024 was $369,041 and $401,892, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE B – CASH
The Bank is required to maintain certain cash balances relating to its deposit liabilities. This requirement is ordinarily satisfied by cash on hand.
NOTE C – INVESTMENT SECURITIES
Available-for-sale
Debt and equity securities have been classified in the consolidated balance sheets according to management's intent. The amortized cost and estimated fair value of securities classified as available-for-sale at December 31, 2025 and 2024, consisted of the following:
At December 31, 2025 and 2024, the Bank held no securities of any single issuer (excluding the U.S. government and federal agencies) with a book value that exceeded 10% of stockholders' equity.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE C – INVESTMENT SECURITIES – (Continued)
Available-for-sale – (continued)
The amortized costs and estimated market values of debt and equity securities, classified as available-for-sale, at December 31, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Information pertaining to available-for-sale securities with gross unrealized losses and fair value at December 31, 2025 and 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, follows:
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE C – INVESTMENT SECURITIES – (Continued)
Available-for-sale – (continued)
Most of these unrealized losses result from securities which were purchased at a premium in anticipation of a more stable interest rate environment. Management and the Asset/Liability Committee are continually monitoring the securities’ portfolios. Accordingly, management is able to effectively measure and monitor the unrealized loss position on these securities and because the Bank does not intend to sell the securities and it is not more-likely-than-not that the Bank will be required to sell the investments before recovery of their amortized cost bases, the Bank does not consider these securities to be other-than-temporarily impaired at December 31, 2025. Additionally, the Bank believes that its premium amortization policies are appropriate and will result in a reasonable return on these investments being recorded in the statements of income. The Bank determined the allowance of credit losses for available for sale securities to be immaterial for the years ended December 31, 2025 and 2024.
There was a realized loss from maturities, calls or sales of investment securities available-for-sale totaling $-0- with proceeds of $-0- and $2,634,444 in 2025 and 2024, respectively.
Held-to-maturity
Debt and equity securities have been classified in the balance sheets according to management's intent. The amortized cost and estimated fair value of securities classified as held-to-maturity at December 31, 2025 and 2024, consisted of the following:
The Bank determined the allowance of credit losses for held-to-maturity securities to be $20,000 and $-0- for the years ended December 31, 2025 and 2024, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE C – INVESTMENT SECURITIES – (Continued)
Held-to-maturity – (continued)
The amortized costs and estimated market values of debt securities, classified as held-to-maturity, at December 31, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
Information pertaining to held-to-maturity securities with gross unrealized losses and fair value at December 31, 2025 and 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, follows:
Investment securities with carrying values of approximately $67,939,188 and $54,474,901 for the years ended December 31, 2025 and 2024, respectively, were pledged to secure public deposits and for other purposes as required or permitted by law.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE C – INVESTMENT SECURITIES – (Continued)
Restricted Stock
As of December 31, 2025 and 2024 there was $3,072,400 and $2,915,400, respectively, of restricted stock holdings in the Federal Home Loan Bank. This stock is considered restricted stock as only banks, which are members of the organization, may acquire or redeem them. The stock is redeemable at its face value; therefore, there are no gross unrealized gains or losses associated with this investment.
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES
The components of loans in the consolidated balance sheets as of December 31, 2025 and 2024 were as follows:
The loan categories in the table above include net deferred fees and costs of $226,754 and $193,630 as of December 31, 2025 and 2024, respectively.
Residential real estate loans are secured by the improved real property of the borrower and are usually underwritten with a term of 1 to 5 years, but may be underwritten with terms up to 30 years. This category represents about 27.10% and 28.44% of the loan portfolio as of December 31, 2025 and 2024, respectively.
Commercial and industrial loans are originated for a variety of purposes which include working capital, equipment and accounts receivable financing. This category represents about 8.99% and 10.52% of the loan portfolio at December 31, 2025 and 2024, respectively. Loans in this category generally carry a variable interest rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited.
Nonfarm, residential loans are secured by improved real property which is generating income in the normal course of business. Debt service coverage, assuming stabilized occupancy, must be satisfied to support a permanent loan. The debt service coverage ratio is ordinarily at 1.25 to 1.00. These loans are generally underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 to 7 years, with amortization to a maximum of 25 years. This category represents about 55.49% and 51.14% of the loan portfolio at December 31, 2025 and 2024, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES – (Continued)
The Bank's construction and land development loans are secured by real property where the loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner- occupied commercial properties. Borrowers are generally required to put equity into the project at levels determined by the loan committee and usually are underwritten with a maximum term of 24 months. This category represents about 6.36% and 8.22% of the loan portfolio as of December 31, 2025 and 2024, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES – (Continued)
The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the balance sheet date. The Bank considers the allowance for loan losses of $2,631,252 adequate to cover loan losses inherent in the loan portfolio at December 31, 2025. The following table presents, by Call Report code, the changes in the allowance for loan losses and the recorded investment in loans.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES – (Continued)
The Bank's goal is to mitigate risks from an unforeseen threat to the loan portfolio as a result of an economic downturn or other negative influences. Plans that aid in mitigating these potential risks in managing the loan portfolio include: enforcing loan policies and procedures, evaluating the borrower's business plan through the loan term, identifying and monitoring primary and alternative sources of repayment, and obtaining adequate collateral to mitigate loss in the event of liquidation. Specific reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is used to estimate potential loss exposure and to provide a measuring system for setting general and specific reserve allocations.
Credit quality indicators as of December 31, 2025 and 2024 are as follows:
Internally assigned grade:
Pass — Loans not meeting the pass watch, special mention, substandard, doubtful, or loss ratings are considered to be pass rated loans. Usually, loans in this category have above average to average credit quality characteristics along with exceeding policy requirements and collateral coverage exceeds regulatory requirements. Customer has a good credit history and is in compliance with all loan covenants and agreements. This category also included loans secured by the Bank’s certificates of deposits and savings accounts or loans with a Farmers Home Administration (“FmHA”) or Small Business Administration (“SBA”) guarantee.
Pass Watch — Loans that display negative factors with some short-term risk. These credits may have deteriorating financial trends, collateral margins, and/or credit issues that require closer monitoring. The credits have adequate collateral protection, but the loan to collateral value is greater than policy limits but less than 100%.
Special Mention — Loans which do not presently expose the Bank to a sufficient degree of risk to warrant adverse classification but do possess credit deficiencies deserving of management's close attention. They constitute an undue and unwarranted credit risk. Economic or market conditions may affect the borrower in the future. Adverse trends or an unbalanced financial position have not reached a point where liquidation of the debt is jeopardized, but that point could be reached in the future if trends continue. These loans include those that display negative factors with some short-term risk that are currently protected but are potentially weak.
Substandard — Loans that are inadequately protected by the current sound worth and paying capacity of an obligor or of the collateral pledged, if any. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These loans are adequately reserved for in the allowance for loan losses.
Doubtful — Loans that have all the weaknesses inherent in one classified as substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES – (Continued)
Loss — Loans that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.
The information for each of the quality indicators is updated on a quarterly basis in conjunction with the determination of the adequacy of the allowance for loan losses.
Credit risk profile by internally assigned grade:
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – LOANS AND ALLOWANCE FOR LOAN LOSSES – (Continued)
Loans tested for impairment with outstanding balances totaling $2,066,260 and $2,028,183 as of December 31, 2025 and 2024, respectfully, resulted in specific allowances of $200,000 and $-0- for the years ended December 31, 2025 and 2024, respectively.
At December 31, 2025, there are no commitments to lend additional funds to any borrower whose loan terms have been modified in a trouble debt restructuring.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE E – AGE AND INTEREST ACCRUAL STATUS OF FINANCING RECEIVABLES
The following tables present informative data by class of financing receivables regarding their age and interest accrual status at December 31, 2025: 
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE F – TRANSACTIONS WITH DIRECTORS, OFFICERS AND EMPLOYEES
In the ordinary course of business, the Bank makes loans to executive officers, principal stockholders, directors, employees and to companies in which these borrowers are principal owners. In the opinion of management, such loans were made on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than normal risk of collectability or present other unfavorable features to the Bank. Loans to such borrowers are summarized as follows:
NOTE G – BANK PREMISES AND EQUIPMENT
Components of Bank premises and equipment included in the balance sheet at December 31, 2025 and 2024 were as follows:
Included in other assets is the cost of software, which is amortized over three years, with costs of $235,130 and $300,360 as of December 31, 2025 and 2024, respectively, and accumulated amortization of $(223,363) and $(275,620) as of December 31 2025 and 2024, respectively. Depreciation and amortization expenses amounted to $393,256 and $454,787 during the years ended December 31, 2025 and 2024, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE H – BANK OWNED LIFE INSURANCE
During 2021, the Bank purchased a $2,000,000 life insurance policy on key employees. The bank recognized $72,154 and $70,178 in noninterest income for the years ending December 31, 2025 and 2024, respectively. The cash surrender value as of December 31, 2025 and 2024 is $2,253,700 and $2,181,546, respectively.
NOTE I – DEPOSITS
Deposits at December 31, 2025 and 2024 consisted of the following:
At December 31, 2025, the scheduled maturities of all outstanding time deposits were as follows:
Included in deposits are $56,840,704 and $48,491,562 of certificates of deposit and other time deposits in denominations that meet or exceed FDIC insurance limits of $250,000 at December 31, 2025 and 2024, respectively.
Included in deposits are deposits from directors, officers, their immediate families, and related companies. These accounts totaled approximately $27,712,183 and $27,303,884 at December 31, 2025 and 2024, respectively.
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE J – OTHER BORROWED FUNDS AND LINES OF CREDIT
The Bank has established a federal funds line-of-credit with First National Bankers Bank (“FNBB”) in the amount of $9,300,000, a line-of-credit with The Independent Bankers’ Bank (“TIB”) in the amount of $15,000,000 to provide additional sources of operating funds, and a line-of-credit with the Federal Home Loan Bank of Dallas in the amount of $43,666,880. There were no funds drawn on the FNBB and TIB credit facilities as of December 31, 2025 and 2024. As of December 31, 2025 and 2024, advances from the Federal Home Loan Bank were as follows:
NOTE K – INCOME TAXES
The components of income tax expense during the years ended December 31, 2025 and 2024 are as follows:
The Bank records deferred income taxes on the tax effect of changes in temporary differences. Deferred tax assets are subject to a valuation allowance if their realization is less than 50% probable. The net deferred tax assets and (liabilities) were comprised of the following at December 31, 2025 and 2024:
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LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE K – INCOME TAXES – (Continued)
The source and tax effect of items reconciling income tax expense to the amount computed by applying the federal
income tax rates in effect to net income before income tax expense for the years ended December 31, 2025 and 2024 are as follows:
NOTE L – EMPLOYEE BENEFITS
In January 2013 the Bank began a 401K plan for employees. The Bank will match up to 3.5% of employee contributions of 6%. Employees with 30 hours per week and one year of service are eligible for participation in the plan. As a result of this change, the Bank terminated its SIMPLE IRA Salary Savings Plan ("Plan") which was for all full-time employees who have completed six months of service and who have attained age 20. Employees hired before or within nine months of opening qualify for immediate participation. Contributions to the Plan were at the discretion of the Board of Directors and were determined in September of each year for the following year. The Bank’s contributions to the 401K plan were $83,238 and $100,233 for the years ended December 31, 2025 and 2024, respectively.
NOTE M – FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
To meet the financing needs of its customers the Bank is a party to various financial instruments with off-balance sheet risk in the normal course of business. These financial instruments include commitments to extend credit, standby letters of credit, and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the statement of financial condition. The contract or notional amounts of those instruments reflect the extent of the involvement the Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, and commercial letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making these commitments and conditional obligations as it does for on-balance sheet instruments.
The following is a summary as of the years ended December 31, 2025 and 2024, of the various financial instruments entered into by the Bank:
32
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE M – FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK – (Continued)
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Certain commitments have fixed expiration dates, or other termination clauses, and may require payment of a fee. Many of the commitments are expected to expire without being drawn upon; accordingly, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral or other security obtained, if deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation. Collateral held varies but may include deposits held in financial institutions; U.S. Treasury securities; other marketable securities; accounts receivable; inventory; property and equipment; personal residences; income-producing commercial properties and land under development. Personal guarantees are also obtained to provide added security for certain commitments.
Letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to guarantee the installation of real property improvements and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds collateral and obtains personal guarantees supporting those commitments for which collateral or other security is deemed necessary.
NOTE N – MINIMUM REGULATORY CAPITAL REQUIREMENTS
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), of Tier I capital (as defined) to average assets (as defined), and Common Equity Tier 1 capital (as defined) to risk-weighted assets (as defined). Management believes, as of the years ended December 31, 2025 and 2024, the Bank meets all capital adequacy requirements to which it is subject.
A regulatory examination was performed by the Louisiana Office of Financial Institutions (the “OFI and FDIC”) utilizing financial information as of December 31, 2025. Per the exam, capital levels remain strong relative to the Bank’s overall risk profile. As of December 31, 2025, the date of the last regulatory examination, capital levels continue to exceed regulatory standards for well-capitalized institutions. To be categorized as well capitalized the Bank must maintain minimum common equity risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category. The final exit meeting for this exam is scheduled for April 20, 2026.
33
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE N – MINIMUM REGULATORY CAPITAL REQUIREMENTS – (Continued)
The Bank’s actual capital amounts and ratios at December 31, 2025 and 2024 are presented in the following tables:
The institution specific capital conservation buffer necessary to avoid limitations on distributions and discretionary bonus payments was 7.0188% as of December 31, 2025.
NOTE O – REVENUE FROM CONTRACT WITH CUSTOMERS
All of the Bank’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. Items outside the scope of ASC 606, which are included in non-interest income consists of service charges on deposit accounts, bank card and ATM fees, secondary market fees and other miscellaneous income.
The following table presents the Bank’s sources of non-interest income for the years ending December 31, 2025 and 2024:
34
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE O – REVENUE FROM CONTRACT WITH CUSTOMERS – (Continued)
The Bank earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Bank satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance.
NOTE P – NON-INTEREST EXPENSE
Non-interest expense amounts are summarized as follows for the years ended December 31:
NOTE Q – FAIR VALUE MEASUREMENTS
FASB ASC 825, Financial Instruments, permits entities to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a Bank commitment. Subsequent changes must be recorded in earnings.
FASB ASC 820, Fair Value Measurement, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Under this guidance, fair value measurements are not adjusted for transaction costs. This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this guidance are described below.
Level 1 inputs are valuations for assets and liabilities traded in active exchange markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
35
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Q – FAIR VALUE MEASUREMENTS - (Continued)
Level 2 inputs are valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. As required by this guidance, the Bank does not adjust the quoted price for such instruments.
The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid equities, state, municipal and provincial obligations, and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy.
Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, management's best estimate is used.
Following is a description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not recorded at fair value (disclosures required by the Fair Value Measurements Topic of the FASB Accounting Standards Codification).
Impaired loans are evaluated and valued at the time the loan is identified as impaired, using the present value of expected cash flows, the loan's observable market price or the fair value of the collateral (less cost to sell) if the loans are collateral dependent. Market value is measured based on the value of the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. Collateral may be real estate and/or business assets including equipment, inventory and/or accounts receivable. The value of real estate collateral is determined based on appraisal by qualified licensed appraisers hired by the Bank. The value of business equipment, inventory and accounts receivable collateral is based on the net book value on the business' financial statements and, if necessary, discounted based on management's review and analysis.
Foreclosed properties are adjusted to fair value upon transfer of the loans to foreclosed properties. Subsequently, foreclosed properties are carried at the lower of carrying value or fair value. The estimated fair value for foreclosed properties included in Level 3 is determined by independent market based appraisals and other available market information. Discounts applied to appraisals have predominantly been in the range of 0% to 50%; however, in certain cases the discounts have ranged up to 75%, which include estimated costs to sell or other reductions based on market expectations or an executed sales contract. If fair value of the collateral deteriorates subsequent to initial recognition, the Company records the foreclosed properties as a nonrecurring Level 3 adjustment. Valuation techniques are consistent with those techniques applied in prior periods.
Appraised and reported values may be discounted based on management's historical knowledge, changes in market conditions from the time of valuation, and/or management's expertise and knowledge of the client and client's business.
36
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Q – FAIR VALUE MEASUREMENTS - (Continued)
Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above.
Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis
The table below presents the amounts of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
All assets and liabilities have been valued using a market approach. There have been no changes in valuation techniques and related inputs.
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37
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Q – FAIR VALUE OF FINANCIAL INSTRUMENTS – (Continued)
In accordance with the disclosure requirements of FASB ASC 825, Financial Instruments, the estimated fair values of the Bank's financial instruments are as follows:
The following methods and assumptions were used to estimate the fair value disclosures for financial instruments as of December 31, 2025 and 2024:
Cash and cash equivalents:
The fair value of cash and cash equivalents is estimated to approximate the carrying amounts.
Investment securities and restricted stock:
Fair values are based on quoted market prices, except for certain restricted stocks where fair value equals par value because of certain redemption restrictions.
Loans:
Fair values are estimated for portfolios of loans with similar financial characteristics. Each portfolio is further segmented into fixed and adjustable-rate interest terms by performing and non-performing categories.
The fair value of performing loans is calculated by discounting estimated cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The estimated cash flows do not anticipate prepayments.
38
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE Q – FAIR VALUE OF FINANCIAL INSTRUMENTS – (Continued)
Management has made estimates of fair value discount rates that it believes to be reasonable. However, because there is no market for many of these financial instruments, management has no basis to determine whether the fair value presented for loans would be indicative of the value negotiated in an actual sale.
Deposits:
The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, savings, NOW accounts and money market accounts, is equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.
NOTE R – CREDIT CONCENTRATION
The Bank maintains its cash in bank deposit accounts at various financial institutions. The balances, at times, may exceed federally insured limits. Management believes that the credit risk associated with these deposits is minimal.
NOTE S – COMMITMENTS AND CONTINGENCIES
The Bank has filed suit on Veritex Bank for any losses it may incur due to their negligence as trustee on a participation loan.
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management has reserved $65,200 and $75,000 as of December 31, 2025 and 2024, respectively, of potential losses included in other liabilities on the consolidated balance sheet.
NOTE T – RELEASE OF RETAINED EARNINGS
During 2025 and 2024, the Bank declared $1,200,000 and $1,385,000, respectively, of retained earnings as additional paid-in-capital surplus to allow for an increase in their legal lending limit.
NOTE U – REPURCHASE OF PARTICIPATION LOAN
During 2023, the Bank sold a loan participation for $2,000,000 to another financial institution. The Bank sold a participating interest of 14.7138%. The Bank was receiving interest at a rate of 3.5% from the original borrower and paying the participating bank 7.0% interest. This sale resulted in a loss of $427,156 which is recognized in non-interest income during the year ended December 31, 2023. In February 2025 the Bank purchased back the participation loan which resulted in a gain of $343,717 in non-interest income.
39
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE V – SUBSEQUENT EVENTS
Subsequent to December 31, 2025, the Bank entered into an LOI (Letter of Intent) to merge Lakeside Bancshares, Inc. into Catalyst Bancorp, Inc. The transaction is expected to close in 2026 subject to closing conditions, shareholder approval of both holding companies and regulatory approval. The financial impact of this transaction has not been reflected in the accompanying financial statements.
Management of the Bank has evaluated subsequent events through the date of the auditors’ report, the date which the financial statements were available to be issued. Except those disclosed in the above paragraph, the Bank is not aware of any subsequent events which would require recognition or disclosure in the consolidated financial statements.
40
SUPPLEMENTAL INFORMATION
41
LAKESIDE BANK | ||||
BALANCE SHEETS | ||||
December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
ASSETS | | | | |
| | | | |
Cash and due from banks - non interest bearing | | $ 2,397,012 | | $ 3,466,200 |
Cash and due from banks - interest bearing | | 3,956,548 | | 30,840,906 |
Federal funds sold | | 25,000 | | 250,000 |
Cash and cash equivalents | | 6,378,560 | | 34,557,106 |
Investment securities available-for-sale | | 88,411,954 | | 13,007,476 |
Investment securities held-to-maturity, net allowance for credit losses | | 42,904,012 | | 64,599,474 |
Restricted stock | | 3,072,400 | | 2,915,400 |
Loans, net of allowance for credit losses | | 233,657,131 | | 238,801,817 |
Prepaid income taxes | | - | | 284,311 |
Bank premises and equipment, net accumulated depreciation | | 6,549,231 | | 7,485,924 |
Accrued interest receivable | | 2,137,089 | | 761,362 |
Deferred tax asset | | 19,992 | | - |
Foreclosed properties | | - | | 250,000 |
Bank owned life insurance | | 2,253,700 | | 2,181,546 |
Other assets | | 360,073 | | 607,102 |
TOTAL ASSETS | | $ 385,744,142 | | $ 365,451,518 |
See the accompanying independent auditors’ report and notes to the consolidated financial statements.
42
LAKESIDE BANK | ||||
BALANCE SHEETS - CONTINUED | ||||
December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | |
Deposits: | | | | |
Non-interest bearing | | $ 49,407,514 | | $ 57,260,510 |
Interest bearing | | 238,163,039 | | 211,432,732 |
Total deposits | | 287,570,553 | | 268,693,242 |
| | | | |
FHLB advances | | 60,000,000 | | 61,032,386 |
| | | | |
Other liabilities: | | | | |
Accrued interest payable | | 1,698,779 | | 1,395,680 |
Accrued expenses | | 225,575 | | 188,181 |
Income tax payable | | 32,734 | | - |
Deferred tax liability | | - | | 68,085 |
Allowance for credit losses on off-balance sheet exposures | | 100,000 | | 100,000 |
Other liabilities | | 78,568 | | 79,435 |
Total other liabilities | | 2,135,656 | | 1,831,381 |
| | | | |
Stockholders' equity: | | | | |
| | | | |
Common stock; $1 par value; 10,000,000 shares authorized; | | | | |
2,092,633 shares issued and outstanding | | | | |
for 2025 and 2024 | | 2,092,633 | | 2,092,633 |
Additional paid-in-capital | | 30,278,178 | | 29,078,178 |
Retained earnings | | 3,673,365 | | 2,938,529 |
Accumulated other comprehensive loss | | (6,243) | | (214,831) |
Total stockholders' equity | | 36,037,933 | | 33,894,509 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ 385,744,142 | | $ 365,451,518 |
See the accompanying independent auditors’ report and notes to the consolidated financial statements.
43
LAKESIDE BANK | ||||
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
Interest income: | | | | |
Interest and fees on loans | | $ 13,539,220 | | $ 13,864,839 |
Interest on investment securities | | 2,789,690 | | 1,553,926 |
Interest on federal funds sold | | 18,748 | | 5,388 |
Other interest income | | 1,232,168 | | 648,445 |
Total interest income | | 17,579,826 | | 16,072,598 |
Interest expense: | | | | |
Interest on deposits | | 5,542,652 | | 4,105,880 |
Interest on borrowed funds | | 2,663,727 | | 2,644,979 |
Total interest expense | | 8,206,379 | | 6,750,859 |
Net interest income | | 9,373,447 | | 9,321,739 |
Credit loss expense-loans | | 986,000 | | 428,000 |
Net interest income after provision for loan losses | | 8,387,447 | | 8,893,739 |
Non-interest income | | 1,957,505 | | 1,304,093 |
Non-interest expenses | | (7,924,614) | | (8,209,579) |
Net income before income tax expense | | 2,420,338 | | 1,988,253 |
Income tax expense | | 485,520 | | 385,340 |
Net income | | 1,934,818 | | 1,602,913 |
| | | | |
Other comprehensive income: | | | | |
Change in unrealized holding gains (losses) on available-for-sale | | | | |
securities arising during the period, net of income tax expense (benefit) | | | | |
of $55,488 in 2025 and $(48,888) in 2024 | | 208,588 | | (183,912) |
Comprehensive income | | $ 2,143,406 | | $ 1,419,001 |
| | | | |
Per common share data: | | | | |
Basic income per share | | $ 0.92 | | $ 0.77 |
| | | | |
Weighted average number of shares outstanding | | 2,092,633 | | 2,092,633 |
See the accompanying independent auditors’ report and notes to the consolidated financial statements.
44
LAKESIDE BANK | ||||
STATEMENTS OF CASH FLOWS | ||||
For the Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
| | | | |
Cash flows from operating activities: | | | | |
Net income | | $ 1,934,818 | | $ 1,602,913 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
Bank owned life insurance income | | (72,154) | | (70,178) |
Depreciation and amortization | | 393,256 | | 454,787 |
Gain on sale of fixed assets | | (293,343) | | - |
Gain on sale of other real estate | | (36,796) | | - |
Credit loss expense | | 986,000 | | 428,000 |
Amortization of investment securities, net | | (738,929) | | (202,099) |
Provision for deferred taxes | | (88,077) | | 142,193 |
Net change in operating assets and liabilities: | | | | |
Accrued income and other assets | | (1,141,652) | | (129,429) |
Accrued expenses and other liabilities | | 339,624 | | (38,278) |
Income tax payable | | 317,045 | | (350,660) |
Net cash provided by operating activities | | 1,599,792 | | 1,837,249 |
| | | | |
Cash flows from investing activities: | | | | |
Maturities/calls of securities | | 41,732,564 | | 22,021,380 |
Purchases of securities | | (94,494,063) | | (14,675,000) |
Purchases of restricted stock | | (157,000) | | (925,100) |
Net decrease in loans | | 4,158,686 | | 875,199 |
Sale of other real estate | | 286,796 | | - |
Proceeds from sale of premises and equipment | | 870,500 | | - |
Purchases of premises and equipment | | (20,746) | | (33,330) |
Net cash (used) provided by investing activities | | (47,623,263) | | 7,263,149 |
| | | | |
Cash flows from financing activities: | | | | |
Net decrease in customer deposits | | 18,877,311 | | (14,101,936) |
(Repayments) proceeds from FHLB advance, net | | (1,032,386) | | 19,909,062 |
Distributions to stockholders' | | - | | (100,000) |
Net cash provided by financing activities | | 17,844,925 | | 5,707,126 |
See the accompanying independent auditors’ report and notes to the consolidated financial statements.
45
LAKESIDE BANK | ||||
STATEMENTS OF CASH FLOWS - CONTINUED | ||||
For the Years Ended December 31, 2025 and 2024 | ||||
| | | | |
| | 2025 | | 2024 |
| | | | |
Net (decrease) increase in cash and cash equivalents | | ($ 28,178,546) | | $ 14,807,524 |
Cash and cash equivalents - beginning of year | | 34,557,106 | | 19,749,582 |
Cash and cash equivalents - end of year | | $ 6,378,560 | | $ 34,557,106 |
| | | | |
Supplemental disclosures of cash flow information: | | | | |
Cash paid for interest | | $ 7,903,280 | | $ 6,643,876 |
| | | | |
Noncash transactions: | | | | |
Loans charged off | | $ 196,166 | | ($ 1,867,433) |
| | | | |
Unrealized holding gains (losses), net of taxes | | $ 208,588 | | ($ 183,912) |
| | | | |
Transfer of foreclosed properties from loans | | $ - | | $ 250,000 |
| | | | |
Cash paid for income taxes | | $ 311,000 | | $ 511,700 |
See the accompanying independent auditors’ report and notes to the consolidated financial statements.
46
Exhibit 99.2
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
TABLE OF CONTENTS
| | | ||
Financial Statements (Unaudited) | | | ||
| | | ||
Consolidated Statements of Financial Condition | | 2 | ||
| | | ||
Consolidated Statements of Income | | 3 | ||
| | | ||
Consolidated Statements of Comprehensive Income | | 4 | ||
| | | ||
Consolidated Statements of Changes in Shareholders' Equity | | 5 | ||
| | | ||
Consolidated Statements of Cash Flows | | 6 | ||
| | | ||
Notes to Unaudited Consolidated Financial Statements | | 7 | ||
| | | ||
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
| | (Unaudited) | | | | |
| | March 31, | | December 31, | ||
(Dollars in thousands, except per share and share data) | | 2026 | | 2025 | ||
ASSETS |
| | |
| | |
Non-interest-bearing cash | | $ | 3,023 | | $ | 2,397 |
Interest-bearing cash and due from banks | |
| 9,532 | |
| 3,982 |
Total cash and cash equivalents | |
| 12,555 | |
| 6,379 |
Investment securities: | |
| | |
| |
Securities available-for-sale, at fair value (amortized cost of $79,733 and $88,406, respectively) | |
| 78,999 | |
| 88,412 |
Securities held-to-maturity (fair value of $41,053 and $41,058, respectively) | |
| 42,902 | |
| 42,904 |
Loans receivable, net of unearned income | |
| 229,804 | |
| 236,288 |
Allowance for credit losses | |
| (2,799) | |
| (2,631) |
Loans receivable, net | |
| 227,005 | |
| 233,657 |
Accrued interest receivable | |
| 1,851 | |
| 2,137 |
Foreclosed assets | |
| - | |
| - |
Premises and equipment, net | |
| 6,468 | |
| 6,549 |
Stock in correspondent banks, at cost | |
| 3,110 | |
| 3,072 |
Bank-owned life insurance | |
| 2,272 | |
| 2,254 |
Other assets | |
| 529 | |
| 380 |
TOTAL ASSETS | | $ | 375,691 | | $ | 385,744 |
| |
| | |
| |
LIABILITIES | |
| | |
| |
Deposits | |
| | |
| |
Non-interest-bearing | | $ | 50,688 | | $ | 49,382 |
Interest-bearing | |
| 226,915 | |
| 238,163 |
Total deposits | |
| 277,603 | |
| 287,545 |
Borrowings | |
| 60,000 | |
| 60,000 |
Other liabilities | |
| 2,057 | |
| 2,136 |
TOTAL LIABILITIES | |
| 339,660 | |
| 349,681 |
| | | | | | |
SHAREHOLDERS' EQUITY | |
| | |
| |
Common stock, $1.00 par value - 10,000,000 shares authorized; 2,098,133 issued and outstanding, respectively | | | 2,098 | | | 2,098 |
Additional paid-in capital | | | 30,341 | | | 30,341 |
Retained earnings | |
| 4,182 | |
| 3,630 |
Accumulated other comprehensive loss | |
| (590) | |
| (6) |
TOTAL SHAREHOLDERS' EQUITY | |
| 36,031 | |
| 36,063 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 375,691 | | $ | 385,744 |
The accompanying Notes are an integral part of these consolidated financial statements.
2
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | Three Months Ended March 31, | ||||
(Dollars in thousands, except per share data) | | 2026 | | 2025 | ||
INTEREST INCOME | | | | | | |
Loans receivable, including fees | | $ | 3,453 | | $ | 3,395 |
Investment securities | |
| 1,092 | |
| 371 |
Cash and due from banks | |
| 39 | |
| 278 |
Other earning assets | |
| 38 | |
| 44 |
Total interest income | |
| 4,622 | |
| 4,088 |
INTEREST EXPENSE | |
| | |
| |
Deposits | |
| 1,375 | |
| 1,236 |
Borrowings | |
| 689 | |
| 666 |
Total interest expense | |
| 2,064 | |
| 1,902 |
Net interest income | |
| 2,558 | |
| 2,186 |
Provision for credit losses | |
| 180 | |
| 389 |
Net interest income after provision for credit losses | |
| 2,378 | |
| 1,797 |
NON-INTEREST INCOME | |
| | |
| |
Service charges on deposit accounts | |
| 166 | |
| 156 |
Bank-owned life insurance | |
| 18 | |
| 18 |
Loss on sale of investment securities | |
| (2) | |
| - |
Gain on sale of loans | |
| - | |
| 344 |
Gain on sale of fixed assets | |
| - | |
| 293 |
Other | |
| 139 | |
| 132 |
Total non-interest income | |
| 321 | |
| 943 |
NON-INTEREST EXPENSE | |
| | |
| |
Salaries and employee benefits | |
| 1,004 | |
| 1,308 |
Occupancy and equipment | |
| 176 | |
| 187 |
Data processing and communication | |
| 249 | |
| 231 |
Professional fees | |
| 154 | |
| 147 |
Foreclosed assets, net | |
| - | |
| - |
Advertising and marketing | |
| 105 | |
| 121 |
Regulatory fees and assessments | | | 85 | | | 63 |
Other | |
| 195 | |
| 161 |
Total non-interest expense | |
| 1,968 | |
| 2,218 |
Income before income tax expense | |
| 731 | |
| 522 |
Income tax expense | |
| 179 | |
| 126 |
NET INCOME | | $ | 552 | | $ | 396 |
| | | | | | |
Earnings per share - basic | | $ | 0.26 | | $ | 0.19 |
The accompanying Notes are an integral part of these consolidated financial statements.
3
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| | Three Months Ended March 31, | ||||
(Dollars in thousands) | | 2026 | | 2025 | ||
Net income | | $ | 552 | | $ | 396 |
Net change in unrealized (losses) gains on available-for-sale securities | |
| (740) | |
| 132 |
Income tax effect | |
| 156 | |
| (25) |
Total other comprehensive (loss) income | |
| (584) | |
| 107 |
Total comprehensive (loss) income | | $ | (32) | | $ | 503 |
The accompanying Notes are an integral part of these consolidated financial statements.
4
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| | | | Three Months Ended March 31, 2026 and 2025 | |||||||||||||
| | Common Stock | | | | | | | | Accumulated | | | | ||||
(Dollars in thousands, except share data) | | Shares | | Amount | | Additional Paid-in Capital | | Retained Earnings | | Other Comprehensive Loss | | Total | |||||
BALANCE, DECEMBER 31, 2025 | | 2,098,133 | | $ | 2,098 | | $ | 30,341 | | $ | 3,630 | | $ | (6) | | $ | 36,063 |
Net income | | - | |
| - | |
| - | |
| 552 | |
| - | |
| 552 |
Other comprehensive loss | | - | |
| - | |
| - | |
| - | | | (584) | |
| (584) |
BALANCE, MARCH 31, 2026 | | 2,098,133 | | $ | 2,098 | | $ | 30,341 | | $ | 4,182 | | $ | (590) | | $ | 36,031 |
| | | | | | | | | | | | | | | | | |
BALANCE, DECEMBER 31, 2024 | | 2,098,133 | | $ | 2,098 | | $ | 29,141 | | $ | 2,954 | | $ | (215) | | $ | 33,978 |
Net income | | - | |
| - | |
| - | |
| 396 | |
| - | |
| 396 |
Other comprehensive income | | - | |
| - | |
| - | |
| - | | | 107 | |
| 107 |
Release of retained earnings | | - | |
| - | |
| 1,200 | |
| (1,200) | | | - | |
| - |
BALANCE, MARCH 31, 2025 | | 2,098,133 | | $ | 2,098 | | $ | 30,341 | | $ | 2,150 | | $ | (108) | | $ | 34,481 |
The accompanying Notes are an integral part of these consolidated financial statements.
5
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | Three Months Ended March 31, | ||||
(Dollars in thousands) | | 2026 | | 2025 | ||
CASH FLOWS FROM OPERATING ACTIVITIES |
| | |
| | |
Net income | | $ | 552 | | $ | 396 |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | |
| |
Investment securities amortization, net | |
| 63 | |
| 3 |
Stock dividends from correspondent banks | |
| (37) | |
| (41) |
Provision for credit losses | |
| 180 | |
| 389 |
Increase in cash surrender value of bank-owned life insurance | | | (18) | | | (18) |
Loss on sales of investment securities | |
| 2 | |
| - |
Gain on sale of loans | |
| - | |
| (344) |
Gain on sale of fixed assets | |
| - | |
| (293) |
Depreciation of premises and equipment | |
| 82 | |
| 100 |
Decrease (increase) in other assets | |
| 291 | |
| (81) |
(Decrease) increase in other liabilities | |
| (78) | |
| 620 |
Net cash provided by operating activities | |
| 1,037 | |
| 731 |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | |
| |
Activity in available-for-sale securities: | |
| | |
| |
Proceeds from maturities, calls, and paydowns | |
| 5,605 | | | 2,026 |
Proceeds from sales | | | 3,005 | | | - |
Purchases | |
| - | | | (7,015) |
Activity in held-to-maturity securities: | |
| | |
| |
Proceeds from maturities, calls, and paydowns | | | - | | | 6,006 |
Purchases | |
| - | | | (1,155) |
Net decrease in loans | |
| 6,472 | | | 4,134 |
Purchases of premises and equipment | |
| (1) | | | (3) |
Proceeds from sale of premises and equipment | |
| - | | | 871 |
Net cash provided by investing activities | |
| 15,081 | |
| 4,864 |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | |
| |
Net decrease in deposits | |
| (9,942) | |
| (4,920) |
Repayments of borrowings from Federal Home Loan Bank of Dallas | | | - | | | (23) |
Net cash used in financing activities | |
| (9,942) | |
| (4,943) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | |
| 6,176 | |
| 652 |
CASH AND CASH EQUIVALENTS, beginning of period | |
| 6,379 | |
| 34,557 |
CASH AND CASH EQUIVALENTS, end of period | | $ | 12,555 | | $ | 35,209 |
| | | | | | |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES | |
| | |
| |
Acquisition of real estate in settlement of loans | | $ | - | | $ | - |
| | | | | | |
SUPPLEMENTAL SCHEDULE OF INTEREST PAID | |
| | |
| |
Cash paid for interest | | $ | 2,476 | | $ | 1,779 |
Cash paid for income taxes | | | 353 | | | 312 |
The accompanying Notes are an integral part of these consolidated financial statements.
6
LAKESIDE BANCSHARES, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Lakeside Bancshares, Inc.’s subsidiary, Lakeside Bank (the “Bank” and together with Lakeside Bancshares, Inc., the “Company”) operated under a state bank charter and provided full banking service, excluding trust services. The Bank began operations on July 10, 2010. The Bank offered a broad range of traditional and online banking services to commercial, small business and retail customers, providing a variety of transaction and savings deposit products, secured and unsecured loan products (including revolving credit facilities), and letters of credit and similar financial guarantees. The Bank’s primary deposit products were demand deposits, savings deposits, and certificates of deposits, and its primary lending products were commercial, business, real estate, and consumer loans. The primary area served by the Bank was Southwest Louisiana. In February 2018, Lakeside Bancshares, Inc. was formed for the purpose of becoming the holding company of the Bank through a share exchange.
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited consolidated interim financial statements were prepared in accordance with Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the interim periods presented are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto as of December 31, 2025 and 2024, and for each of the fiscal years ended December 31, 2025 and 2024.
Certain amounts reported in prior periods may have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported equity or net income.
Use of Estimates
Certain estimates involve significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when developing estimates are included in its audited consolidated financial statements for the year ended December 31, 2025. The accounting policy for the allowance for credit losses is the policy that management believes involves the most significant estimate to aid in fully understanding and evaluating financial results.
There were no material changes from the significant accounting policies or estimates previously disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2025. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.
7
NOTE 2. EARNINGS PER SHARE
Earnings per common share was computed based on the following:
| | Three Months Ended March 31, | ||||
(In thousands, except per share data) | | 2026 | | 2025 | ||
Numerator |
| | |
| | |
Net income available to common shareholders | | $ | 552 | | $ | 396 |
| | | | | | |
Denominator | |
| | |
| |
Weighted average common shares outstanding | |
| 2,098 | |
| 2,098 |
| | | | | | |
Basic earnings per common share | | $ | 0.26 | | $ | 0.19 |
The Company has no convertible securities or other contracts to issue common stock outstanding that if converted or exercised would result in potential dilution of earnings per share.
8
NOTE 3. INVESTMENT SECURITIES
Investment securities have been classified according to management’s intent. The amortized cost of securities and their approximate fair values are as follows:
| | March 31, 2026 | ||||||||||
(Dollars in thousands) | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | ||||
Securities available-for-sale | |
| | |
| | |
| | |
| |
U.S. Government and agency obligations | | $ | 77,157 | | $ | 2 | | $ | (707) | | $ | 76,452 |
Municipal obligations | |
| 1,573 | |
| - | |
| (31) | |
| 1,542 |
Mortgage-backed securities | |
| 3 | |
| - | |
| - | |
| 3 |
Corporate bonds | |
| 1,000 | |
| 2 | |
| - | |
| 1,002 |
Total available-for-sale | | $ | 79,733 | | $ | 4 | | $ | (738) | | $ | 78,999 |
Securities held-to-maturity |
| | |
| | |
| | |
| | |
U.S. Government and agency obligations | | $ | 40,996 | | $ | - | | $ | (1,759) | | $ | 39,237 |
Municipal obligations | |
| 926 | |
| - | |
| (108) | |
| 818 |
Corporate bonds | |
| 1,000 | |
| - | |
| (2) | |
| 998 |
Total held-to-maturity | | $ | 42,922 | | $ | - | | $ | (1,869) | | $ | 41,053 |
There were no securities transferred between classifications during the three months ended March 31, 2026.
Accrued interest receivable on the Company’s investment securities totaled $1.1 million and $1.3 million at March 31, 2026 and December 31, 2025, respectively.
Investment securities with a carrying amount of $60.7 million were pledged to secure public deposits as required or permitted by law at March 31, 2026.
The following is a summary of maturities of securities available-for-sale and held-to-maturity at March 31, 2026:
| | March 31, 2026 | ||||||||||
| | Available-for-Sale | | Held-to-Maturity | ||||||||
(Dollars in thousands) | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value | ||||
Amounts maturing in: |
| | |
| | |
| | |
| | |
One year or less | | $ | - | | $ | - | | $ | 10,501 | | $ | 10,376 |
After one through five years | |
| 11,584 | |
| 11,456 | |
| 30,710 | |
| 29,073 |
After five through ten years | |
| 68,146 | |
| 67,540 | |
| 1,711 | |
| 1,604 |
After ten years | |
| - | |
| - | |
| - | |
| - |
Subtotal | | | 79,730 | | | 78,996 | | | 42,922 | | | 41,053 |
Mortgage-backed securities | |
| 3 | |
| 3 | |
| - | |
| - |
Total | | $ | 79,733 | | $ | 78,999 | | $ | 42,922 | | $ | 41,053 |
Securities, other than mortgage-backed securities, are classified according to their contractual maturities without consideration of principal amortization, potential prepayments, or call options. The expected maturities may differ from contractual maturities because of the exercise of call options and potential paydowns. Accordingly, actual maturities may differ from contractual maturities.
9
Information pertaining to securities with gross unrealized losses at March 31, 2026 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:
| | March 31, 2026 | ||||||||||||||||
| | Less than 12 Months | | 12 Months or Greater | | Total | ||||||||||||
(Dollars in thousands) | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses | ||||||
Securities available-for-sale | |
| | |
| | |
| | |
| | |
| | |
| |
U.S. Government and agency obligations | | $ | 72,985 | | $ | (672) | | $ | 1,965 | | $ | (35) | | $ | 74,950 | | $ | (707) |
Municipal obligations | |
| 1,542 | |
| (31) | |
| - | |
| - | |
| 1,542 | |
| (31) |
Mortgage-backed securities | |
| - | |
| - | |
| 3 | |
| - | |
| 3 | |
| - |
Corporate bonds | |
| - | |
| - | |
| - | |
| - | |
| - | |
| - |
Total available-for-sale | | $ | 74,527 | | $ | (703) | | $ | 1,968 | | $ | (35) | | $ | 76,495 | | $ | (738) |
Securities held-to-maturity |
| | |
| | |
| | |
| | |
| | |
| | |
U.S. Government and agency obligations | | $ | - | | $ | - | | $ | 39,237 | | $ | (1,759) | | $ | 39,237 | | $ | (1,759) |
Municipal obligations | |
| - | |
| - | |
| 662 | |
| (108) | | | 662 | | | (108) |
Corporate bonds | |
| 998 | |
| (2) | |
| - | |
| - | |
| 998 | |
| (2) |
Total held-to-maturity | | $ | 998 | | $ | (2) | | $ | 39,899 | | $ | (1,867) | | $ | 40,897 | | $ | (1,869) |
Total | | $ | 75,525 | | $ | (705) | | $ | 41,867 | | $ | (1,902) | | $ | 117,392 | | $ | (2,607) |
At March 31, 2026, the Company held 93 securities with an unrealized loss. The total securities portfolio included 96 securities. The unrealized losses on investment securities relate principally to noncredit related factors, including changes in current interest rates for similar types of securities. The Company did not intend to sell these securities, and it was more likely than not that the Company would not be required to sell the securities before recovery of their amortized cost basis. Based on management’s evaluation of the securities portfolio, the Company determined the allowance for credit losses for held-to-maturity securities to be $20,000 at March 31, 2026.
10
NOTE 4. LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES
Loans receivable at March 31, 2026 and December 31, 2025 are summarized as follows:
| | | | | | |
| | March 31, | | December 31, | ||
(Dollars in thousands) | | 2026 | | 2025 | ||
Real estate loans |
| | |
| | |
One- to four-family residential | | $ | 45,954 | | $ | 45,715 |
Commercial real estate | |
| 126,756 | |
| 131,122 |
Construction and land | |
| 14,181 | |
| 15,258 |
Multi-family residential | |
| 18,875 | |
| 18,292 |
Total real estate loans | | | 205,766 | | | 210,387 |
Other loans | | | | | | |
Commercial and industrial | | | 19,749 | | | 21,246 |
Consumer | |
| 4,289 | |
| 4,655 |
Total other loans | | | 24,038 | | | 25,901 |
Total loans | | | 229,804 | | | 236,288 |
Less: Allowance for credit losses | | | (2,799) | | | (2,631) |
Net loans | | $ | 227,005 | | $ | 233,657 |
In comparison to the Company’s audited consolidated financial statements as of December 31, 2025, the following reclassifications were made to balances as of December 31, 2025 to conform to the current period presentation: multi-family loans are presented separately from one- to four-family residential loans; $224,000 of loans secured by farmland are reported with construction and land loans; and consumer loans are reported separately from loans secured by farmland.
At March 31, 2026 and December 31, 2025, real estate loans totaling $106.6 million and $101.5 million, respectively, were pledged as collateral to the Federal Home Loan Bank of Dallas for borrowings under a blanket lien agreement.
Accrued interest receivable on the Company’s loans totaled $764,000 and $775,000 at March 31, 2026 and December 31, 2025, respectively.
11
The following describes the general risk characteristics of each segment of the loan portfolio disclosed in this note:
One- to four-family residential – This category primarily consists of loans secured by residential real estate located in market. The performance of these loans may be adversely affected by, among other factors, unemployment rates, local residential real estate market conditions and the interest rate environment. Generally, these loans were underwritten with a term of one to five years but may be underwritten with terms up to 30 years.
Commercial real estate – This category generally consists of loans secured by retail and industrial use buildings, hotels, strip shopping centers and other properties used for commercial purposes. The performance of these loans may be adversely affected by, among other factors, conditions specific to the relevant industry, the real estate market for the property type and geographic region where the property or borrower is located.
Construction and land – This category consists of loans to finance the ground-up construction and/or improvement of residential and commercial properties and loans secured by land. The performance of these loans is generally dependent upon the successful completion of improvements and/or land development for the end user, the sale of the property to a third party, or a secondary source of cash flow from the owners. The successful completion of planned improvements and development may be adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays.
Multi-family residential – This category consists of loans secured by apartment or residential buildings with five or more units used to accommodate households on a temporary or permanent basis. The performance of multi-family loans is generally dependent on the receipt of rental income from the tenants who occupy the subject property. The occupancy rate of the subject property and the ability of the tenants to pay rent may be adversely affected by the location of the subject property and local economic conditions.
Commercial and industrial – This category primarily consists of secured and unsecured loans to small and mid-sized businesses to fund operations or purchase non-real estate assets. Secured loans are primarily secured by accounts receivable, inventory, equipment and certain other business assets. The performance of these loans may be adversely affected by, among other factors, conditions specific to the relevant industry, fluctuations in the value of the collateral and individual performance factors related to the borrower.
Consumer – This category consists of loans to individuals for household, family and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, unemployment rates and other factors affecting the borrower’s income available to service the debt.
12
The following tables outline the changes in the allowance for credit losses for the three months ended March 31, 2026.
| | For the Three Months Ended March 31, 2026 | |||||||||||||
(Dollars in thousands) | | Beginning Balance | | Provision (Reversal) | | Charge-offs | | Recoveries | | Ending Balance | |||||
Allowance for credit losses | | | | | | |
| | |
| | |
| | |
One- to four-family residential | | $ | 518 | | $ | 36 | | $ | - | | $ | - | | $ | 554 |
Commercial real estate | |
| 564 | |
| 100 | |
| - | |
| - | |
| 664 |
Construction and land | |
| 837 | |
| 11 | |
| (1) | |
| - | |
| 847 |
Multi-family residential | |
| 207 | |
| 15 | |
| - | |
| - | |
| 222 |
Commercial and industrial | |
| 480 | |
| 15 | |
| (4) | |
| - | |
| 491 |
Consumer | |
| 25 | |
| 3 | |
| (9) | |
| 2 | |
| 21 |
Total for loans | | $ | 2,631 | | $ | 180 | | $ | (14) | | $ | 2 | | $ | 2,799 |
Unfunded lending commitments | | | 100 | | | - | | | - | | | - | | | 100 |
Total | | $ | 2,731 | | $ | 180 | | $ | (14) | | $ | 2 | | $ | 2,899 |
| (1) | The allowance for credit losses on unfunded lending commitments is recorded within “other liabilities” on the statement of financial condition. The related provision for credit losses for unfunded lending commitments is recorded with the provision for credit losses on the income statement. |
The following tables outline the allowance for credit losses and the balance of loans by method of loss evaluation at March 31, 2026.
| | March 31, 2026 | |||||||
(Dollars in thousands) | | Individually Evaluated | | Collectively Evaluated | | Total | |||
Allowance for credit losses |
| | |
| | |
| | |
One- to four-family residential | | $ | - | | $ | 554 | | $ | 554 |
Commercial real estate | | | 150 | |
| 514 | |
| 664 |
Construction and land | | | - | |
| 847 | |
| 847 |
Multi-family residential | | | - | |
| 222 | |
| 222 |
Commercial and industrial | | | 32 | |
| 459 | |
| 491 |
Consumer | | | - | |
| 21 | |
| 21 |
Total | | $ | 182 | | $ | 2,617 | | $ | 2,799 |
Loans | |
| | |
| | |
| |
One- to four-family residential | | $ | - | | $ | 45,954 | | $ | 45,954 |
Commercial real estate | |
| 2,069 | |
| 124,687 | |
| 126,756 |
Construction and land | |
| - | |
| 14,181 | |
| 14,181 |
Multi-family residential | |
| - | |
| 18,875 | |
| 18,875 |
Commercial and industrial | |
| 32 | |
| 19,717 | |
| 19,749 |
Consumer | |
| - | | | 4,289 | |
| 4,289 |
Total | | $ | 2,101 | | $ | 227,703 | | $ | 229,804 |
At March 31, 2026, the commercial real estate loan balance individually evaluated for credit losses reflects the book balance of a purchased, commercial real estate loan participation. The Company filed suit against the lead bank for losses due to alleged negligence as trustee. The estimate of expected losses on this loan was the primary driver for the provision for credit losses during the three months ended March 31, 2026.
13
A summary of current and past due loans as of March 31, 2026 follows:
| | As of March 31, 2026 | ||||||||||||||||
(Dollars in thousands) | | Past Due 30-59 Days | | Past Due 60-89 Days | | Past Due 90 Days or Greater | | Total Past Due | | Current | | Total Loans | ||||||
One- to four-family residential | | $ | 678 | | $ | - | | $ | - | | $ | 678 | | $ | 45,276 | | $ | 45,954 |
Commercial real estate | |
| 318 | |
| - | |
| 2,069 | |
| 2,387 | |
| 124,369 | |
| 126,756 |
Construction and land | |
| 73 | |
| - | |
| - | |
| 73 | |
| 14,108 | |
| 14,181 |
Multi-family residential | |
| - | |
| - | |
| - | |
| - | |
| 18,875 | |
| 18,875 |
Commercial and industrial | |
| 390 | |
| - | |
| 297 | |
| 687 | |
| 19,062 | |
| 19,749 |
Consumer | |
| 100 | |
| - | |
| - | |
| 100 | |
| 4,189 | |
| 4,289 |
Total | | $ | 1,559 | | $ | - | | $ | 2,366 | | $ | 3,925 | | $ | 225,879 | | $ | 229,804 |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due based on contractual terms of the loan.
A summary of total non-accrual loans and accruing loans 90 days or more past due as of March 31, 2026 follows:
| | | | | | | | | | | | | | | |
| | March 31, 2026 | |||||||||||||
| | Non-accrual loans | | | | | | | |||||||
(Dollars in thousands) | | With Allowance for Credit Loss | | Without Allowance for Credit Loss | | Total Non-accrual Loans | | Accruing loans 90 days or more past due | | Total | |||||
One- to four-family residential | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - |
Commercial real estate | | | 2,069 | | | - | | | 2,069 | | | - | | | 2,069 |
Construction and land | | | - | | | - | | | - | | | - | | | - |
Multi-family residential | | | - | | | - | | | - | | | - | | | - |
Commercial and industrial | | | - | | | - | | | - | | | 297 | | | 297 |
Consumer | | | - | | | - | | | - | | | - | | | - |
Total | | $ | 2,069 | | $ | - | | $ | 2,069 | | $ | 297 | | $ | 2,366 |
The Company was not committed to lend any additional funds on non-accrual loans at March 31, 2026. The Company does not recognize interest income while loans are on non-accrual status. All payments received while on non-accrual status are applied against the principal balance of non-accrual loans.
At March 31, 2026 and December 31, 2025, the Company had no outstanding loans for which formal foreclosure proceedings were in process.
Occasionally loans are modified to assist borrowers experiencing financial difficulty. We consider modifications such as term extensions, principal forgiveness, payment delays or alternate payment schedules, and alternate interest rate terms. At March 31, 2026 and December 31, 2025, there were no loans with modifications for borrowers experiencing financial difficulty.
During the three months ended March 31, 2026, the Company did not grant any loan modifications to borrowers experiencing financial difficulty that resulted in a more than minor change in the timing or amount of contractual cash flows.
14
Loans are categorized by credit quality indicators based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. Credit quality classifications follow regulatory guidelines and are described in the footnotes to the Company’s audited consolidated financial statements as of December 31, 2025.
The following tables present the Company’s loan portfolio by credit quality classification as of March 31, 2026 and December 31, 2025.
| | March 31, 2026 | |||||||||||||
(Dollars in thousands) | | Pass | | Special Mention | | Substandard | | Doubtful | | Total | |||||
One- to four-family residential | | $ | 42,987 | | $ | 130 | | $ | 2,837 | | $ | - | | $ | 45,954 |
Commercial real estate | |
| 124,063 | |
| 624 | |
| - | |
| 2,069 | |
| 126,756 |
Construction and land | |
| 12,665 | |
| 1,516 | |
| - | |
| - | |
| 14,181 |
Multi-family residential | |
| 18,875 | |
| - | |
| - | |
| - | |
| 18,875 |
Commercial and industrial | |
| 19,490 | |
| 227 | |
| 32 | |
| - | |
| 19,749 |
Consumer | |
| 4,241 | |
| - | |
| 48 | |
| - | |
| 4,289 |
Total | | $ | 222,321 | | $ | 2,497 | | $ | 2,917 | | $ | 2,069 | | $ | 229,804 |
| | December 31, 2025 | |||||||||||||
(Dollars in thousands) | | Pass | | Special Mention | | Substandard | | Doubtful | | Total | |||||
One- to four-family residential | | $ | 42,387 | | $ | 487 | | $ | 2,841 | | $ | - | | $ | 45,715 |
Commercial real estate | |
| 129,056 | |
| - | |
| 2,066 | |
| - | |
| 131,122 |
Construction and land | |
| 15,258 | |
| - | |
| - | |
| - | |
| 15,258 |
Multi-family residential | |
| 18,292 | |
| - | |
| - | |
| - | |
| 18,292 |
Commercial and industrial | |
| 21,209 | |
| - | |
| 37 | |
| - | |
| 21,246 |
Consumer | |
| 4,655 | |
| - | |
| - | |
| - | |
| 4,655 |
Total | | $ | 230,857 | | $ | 487 | | $ | 4,944 | | $ | - | | $ | 236,288 |
In comparison to the Company’s audited consolidated financial statements as of December 31, 2025, the following reclassifications were made to balances as of December 31, 2025 to conform to the current period presentation: “pass watch” loans are reported as “pass”; “first mortgage loans” are segmented into one- to four family residential, commercial real estate, construction and land and multi-family loans; $224,000 of loans secured by farmland are reported with construction and land loans; and consumer loans are reported separately from loans secured by farmland.
15
NOTE 5. FAIR VALUE MEASUREMENTS
In accordance with fair value guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
Level 1 — Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2 — Valuation is based on inputs other than quoted prices included with Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the asset or liability.
Level 3 — Valuation is based on unobservable income inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.
Fair value is an exit price, representing the amount that would be received to sell an asset or to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy is used that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quotes priced in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Fair values of assets and liabilities measured on a recurring basis at March 31, 2026 follows:
| | Fair Value Measurements at Reporting Date Using | ||||||||||
(Dollars in thousands) | | Fair Value | | Level 1 | | Level 2 | | Level 3 | ||||
March 31, 2026 | | | | | | | | | | | | |
Securities available-for-sale: | | | | | | | | | | | | |
U.S. Government and agency obligations | | $ | 76,452 | | $ | - | | $ | 76,452 | | $ | - |
Municipal obligations | | | 1,542 | | | - | | | 1,542 | | | - |
Mortgage-backed securities | | | 3 | | | - | | | 3 | | | - |
Corporate bonds | | | 1,002 | | | - | | | 1,002 | | | - |
Total | | $ | 78,999 | | $ | - | | $ | 78,999 | | $ | - |
Fair values of assets and liabilities measured on a nonrecurring basis at March 31, 2026 follows:
| | Fair Value Measurements at Reporting Date Using | ||||||||||
(Dollars in thousands) | | Fair Value | | Level 1 | | Level 2 | | Level 3 | ||||
March 31, 2026 | | | | | | | | | | | | |
Loans individually evaluated for credit losses | | $ | 1,919 | | $ | - | | $ | - | | $ | 1,919 |
Total | | $ | 1,919 | | $ | - | | $ | - | | $ | 1,919 |
At March 31, 2026, the individually evaluated loans with a recorded investment of $2.1 million, were written down to fair value by a charge to the allowance for credit losses.
16
The following methods and assumptions were used to estimate the fair value of each class of financial instruments of which it is practicable to estimate that value. The derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Certain financial instruments and all nonfinancial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.
Cash and cash equivalents - The carrying amounts reported in the statements of financial condition for cash and cash equivalents approximate th+4ose assets’ fair values and are classified within Level 1 of the fair value hierarchy.
Investment securities - The fair market values of investments securities are based on a combination of observed market prices for identical or similar instruments and various matrix pricing programs. The fair market values of investment securities are classified within Level 2 of the fair value hierarchy.
Loans receivable, net – The fair value of loans are generally determined by discounting scheduled cash flows using discount rates determined with reference to current market rates at which similar loans would be made. Loans receivable are classified within Level 3 of the fair value hierarchy.
Bank-owned life insurance - The cash surrender value of bank-owned life insurance approximates its fair value and is classified within Level 2 of the fair value hierarchy.
Non-maturity deposit liabilities - The fair value of deposits with no stated maturity, such as non-interest-bearing and interest-bearing demand deposits, NOW, money market, and savings accounts, is equal to the amount payable on demand at the reporting date. These non-maturity deposit liabilities are classified within Level 1 of the fair value hierarchy.
Certificates of deposit – Fair values are estimated by discounting scheduled cash flows using the rates currently offered for deposits of similar remaining maturities. Certificates of deposit are classified within Level 2 of the fair value hierarchy.
Borrowings – The fair value is estimated by discounting the future contractual cash flows using current market rates at which debt with similar terms could be obtained. Borrowings are classified within Level 2 of the fair value hierarchy.
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business or the value of assets and liabilities that are not considered financial instruments.
17
The estimated fair values of the Company’s financial instruments as of March 31, 2026 are as follows:
| | March 31, 2026 | |||||||||||||
(Dollars in thousands) | | Carrying Amount | | Fair Value | | Level 1 | | Level 2 | | Level 3 | |||||
Financial Assets: | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 12,555 | | $ | 12,555 | | $ | 12,555 |
| $ | - |
| $ | - |
Investment securities: | |
| | |
| | |
| |
|
| |
|
| |
Available-for-sale | |
| 78,999 | |
| 78,999 | |
| - |
|
| 78,999 |
|
| - |
Held-to-maturity | |
| 42,902 | |
| 41,053 | |
| - |
|
| 41,053 |
|
| - |
Loans receivable, net | |
| 227,005 | |
| 223,561 | |
| - |
|
| - |
|
| 223,561 |
Bank-owned life insurance | | | 2,272 | | | 2,272 | | | - | | | 2,272 | | | - |
Financial Liabilities: | |
| | |
| | |
| |
|
| |
|
| |
Deposits | |
| 277,603 | |
| 277,869 | |
| 166,846 |
|
| 111,023 |
|
| - |
Borrowings | |
| 60,000 | |
| 60,199 | |
| - |
|
| 60,199 |
|
| - |
The carrying amounts in the preceding tables are included in the statement of financial condition under the applicable captions. It is not practical to estimate the fair value of stock in correspondent banks because the equity securities are not marketable. The carrying amount of investments without readily determinable fair value are reported in the statements of financial condition at historical cost.
NOTE 6. SUBSEQUENT EVENT
As reported on the Form 8-K filed on July 14, 2026 by Catalyst Bancorp, Inc., Lakeside Bancshares, Inc. and Lakeside Bank merged with and into Catalyst Bancorp, Inc. and Catalyst Bank, respectively, with Catalyst Bancorp, Inc. and Catalyst Bank surviving. The acquisition was completed on July 14, 2026 in accordance with the previously announced Agreement and Plan of Share Exchange and Merger, dated April 7, 2026, by and among Catalyst Bancorp, Inc., Catalyst Bank, Lakeside Bancshares, Inc. and Lakeside Bank.
Effective July 14, 2026, Catalyst Bancorp, Inc. acquired 100% of the outstanding shares of Lakeside Bancshares, Inc. in exchange for $19.58 per share in cash, or $41.1 million in aggregate.
18
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined consolidated financial information and notes thereto have been prepared to give effect to the merger and related transaction accounting adjustments (“pro forma adjustments”) described in the accompanying notes.
On July 14, 2026, Catalyst Bancorp, Inc. and Catalyst Bank (collectively referred to as “Catalyst”) completed the acquisitions of Lakeside Bancshares, Inc. and Lakeside Bank (collectively referred to as “Lakeside”) pursuant to an Agreement and Plan of Share Exchange and Merger dated April 7, 2026 (the “Merger Agreement”) by and among Catalyst and Lakeside. The Merger Agreement provided for the acquisition of all shares of common stock of Lakeside Bancshares, Inc. by Catalyst Bancorp, Inc. through a share exchange for cash, followed immediately by the merger of Lakeside Bancshares, Inc. with and into Catalyst Bancorp, Inc. and the subsequent merger of Lakeside Bank with and into Catalyst Bank, with Catalyst Bancorp, Inc. and Catalyst Bank continuing as the surviving entities.
The accompanying unaudited pro forma condensed combined consolidated balance sheet as of March 31, 2026 combines the historical consolidated balance sheets of Catalyst and Lakeside, giving effect to the merger as if it had been completed on March 31, 2026. The accompanying unaudited pro forma condensed combined consolidated income statements for the three months ended March 31, 2026 and the year ended December 31, 2025 combine the historical consolidated income statements of Catalyst and Lakeside, giving effect to the merger as if it had been completed on January 1, 2025.
The historical consolidated financial statements of Catalyst and Lakeside have been adjusted in the accompanying unaudited pro forma condensed combined consolidated financial information to give effect to the pro forma events that are necessary to account for the merger in accordance with accounting principles generally accepted in the United States of America. The unaudited pro forma adjustments are based on information and certain assumptions that Catalyst believes are reasonable. The following unaudited pro forma condensed combined consolidated financial information does not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies. Certain reclassifications have also been made to align Lakeside’s historical financial statement presentation to Catalyst’s.
The following unaudited pro forma condensed combined consolidated financial information and related accompanying notes should be read in conjunction with (i) the separate historical audited consolidated financial statements of Catalyst as of and for the year ended December 31, 2025, and the related notes, included in Catalyst’s Annual Report on Form 10-K for the period ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2026, (ii) the separate historical unaudited consolidated financial statements of Catalyst as of and for the three months ended March 31, 2026, and the related notes, included in Catalyst’s Form 10-Q for the period ended March 31, 2026, filed with the SEC on May 15, 2026, (iii) the separate historical audited consolidated financial statements of Lakeside as of and for the year ended December 31, 2025, and the related notes, included as Exhibit 99.1, and (iv) the separate historical unaudited consolidated financial statements of Lakeside as of and for the three months ended March 31, 2026, and the related notes, included as Exhibit 99.2.
The unaudited pro forma condensed combined consolidated financial information is provided for illustrative information purposes only. The unaudited pro forma condensed combined consolidated financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the merger been completed as of the dates indicated or that may be achieved in the future.
The merger is being accounted for as a business combination using the acquisition method, with Catalyst as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, the aggregate purchase consideration will be allocated to Lakeside’s assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The process of valuing Lakeside’s net assets immediately prior to the merger and evaluating accounting policies for conformity is preliminary. Any differences between the estimated fair value of the purchase consideration and the estimated fair value of the assets acquired and liabilities assumed will be recorded as goodwill.
The unaudited pro forma condensed combined consolidated financial information also does not consider any potential effects of changes in market conditions on revenues, expense efficiencies, severance and retention expenses, asset dispositions, and share repurchases, among other factors. In addition, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined consolidated financial information is subject to adjustment and may vary significantly from the actual purchase price allocation that will be recorded upon finalization of estimated fair values of the assets and liabilities acquired.
As of the date of this unaudited pro forma condensed combined consolidated financial information, Catalyst is in the process of completing its initial valuation analysis and calculations necessary to arrive at the required estimates of the fair values of the Lakeside assets acquired and liabilities assumed. Accordingly, the fair value estimates assigned to certain assets and liabilities of Lakeside are preliminary. Final adjustments may differ from the amounts reflected in the unaudited pro forma condensed combined consolidated financial information, and the differences may be material.
Further, Catalyst is in the process of identifying any adjustments necessary to conform Lakeside’s accounting policies to those of Catalyst. As more information becomes available, Catalyst will perform a more detailed review of Lakeside’s accounting policies. As a result of that review, differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company’s financial information.
As a result of the foregoing, the pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined consolidated financial information.
Fair value estimates related to the assets and liabilities from Lakeside are subject to adjustment for up to one year after the closing date of the acquisition as additional information becomes available. Any changes in the fair values of the net assets acquired or total purchase consideration compared with the information shown in the unaudited pro forma condensed combined consolidated financial information may change the amount of the total purchase consideration allocated to goodwill and other assets and liabilities and may impact the combined company’s statement of income. The final purchase consideration allocation may be materially different than the preliminary purchase consideration allocation presented in the unaudited pro forma condensed combined consolidated financial information.
2
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2026
| | | | | | | | Purchase | | | | | ||
| | Historical | | Historical | | Accounting | | | | Pro Forma | ||||
(Dollars in thousands) | | Catalyst | | Lakeside |
| Adjustments |
| Notes |
| Combined | ||||
ASSETS |
| | |
| | | | | | | | | | |
Cash and cash equivalents | | $ | 38,533 | | $ | 12,555 | | $ | (44,877) | | (1) | | $ | 6,211 |
Investment securities: | |
| | |
| | |
| | | | |
| |
Securities available-for-sale, at fair value | |
| 48,216 | |
| 78,999 | |
| - | | | |
| 127,215 |
Securities held-to-maturity | |
| 14,914 | |
| 42,902 | |
| (1,849) | | (2) | |
| 55,967 |
Loans receivable, net of unearned income | |
| 163,677 | |
| 229,804 | |
| (3,444) | | (3) | |
| 390,037 |
Allowance for credit losses | |
| (2,295) | |
| (2,799) | |
| (742) | | (4) | |
| (5,836) |
Loans receivable, net | |
| 161,382 | |
| 227,005 | |
| (4,186) | | | |
| 384,201 |
Accrued interest receivable | |
| 849 | |
| 1,851 | |
| - | | | |
| 2,700 |
Foreclosed assets | |
| 34 | |
| - | |
| - | | | |
| 34 |
Premises and equipment, net | |
| 5,749 | |
| 6,468 | |
| 3,152 | | (5) | |
| 15,369 |
Stock in correspondent banks, at cost | |
| 1,963 | |
| 3,110 | |
| - | | | |
| 5,073 |
Bank-owned life insurance | |
| 15,117 | |
| 2,272 | |
| - | | | |
| 17,389 |
Goodwill and other intangible assets, net | |
| - | |
| - | |
| 8,808 | | (6) | |
| 8,808 |
Other assets | |
| 1,751 | |
| 529 | |
| 85 | | (7) | |
| 2,365 |
TOTAL ASSETS | | $ | 288,508 | | $ | 375,691 | | $ | (38,867) | | | | $ | 625,332 |
| |
| | |
| | |
| | | | |
| |
LIABILITIES | |
| | |
| | |
| | | | |
| |
Deposits | |
| | |
| | |
| | | | |
| |
Non-interest-bearing | | $ | 34,739 | | $ | 50,688 | | $ | - | | | | $ | 85,427 |
Interest-bearing | |
| 160,634 | |
| 226,915 | |
| 266 | | (8) | |
| 387,815 |
Total deposits | |
| 195,373 | |
| 277,603 | |
| 266 | | | |
| 473,242 |
Borrowings | |
| 9,759 | |
| 60,000 | |
| 199 | | (9) | |
| 69,958 |
Other liabilities | |
| 1,167 | |
| 2,057 | |
| (42) | | (10) | |
| 3,182 |
TOTAL LIABILITIES | |
| 206,299 | |
| 339,660 | |
| 423 | | | |
| 546,382 |
| | | | | | | | | | | | | | |
SHAREHOLDERS' EQUITY | |
| | |
| | |
| | | | |
| |
Common stock | | | 41 | | | 2,098 | | | (2,098) | | (11) | | | 41 |
Additional paid-in capital | | | 37,303 | | | 30,341 | | | (30,341) | | (11) | | | 37,303 |
Unallocated common stock held by benefit plans | |
| (5,129) | |
| - | |
| - | | | |
| (5,129) |
Retained earnings | |
| 52,470 | |
| 4,182 | |
| (7,441) | | (12) | |
| 49,211 |
Accumulated other comprehensive loss | |
| (2,476) | |
| (590) | |
| 590 | | (11) | |
| (2,476) |
TOTAL SHAREHOLDERS' EQUITY | |
| 82,209 | |
| 36,031 | |
| (39,290) | | | |
| 78,950 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 288,508 | | $ | 375,691 | | $ | (38,867) | | | | $ | 625,332 |
The accompanying Notes are an integral part of these condensed combined consolidated financial statements.
3
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2026
| | Historical | | Historical | | Pro Forma | | | | Pro Forma | ||||
(Dollars in thousands, except per share data) | | Catalyst | | Lakeside | | Adjustments | | Notes | | Combined | ||||
INTEREST INCOME | | | | | | | | | | | | | | |
Loans receivable, including fees | | $ | 2,749 | | $ | 3,453 | | $ | 328 | | (13) | | $ | 6,530 |
Investment securities | |
| 522 | |
| 1,092 | |
| 192 | | (13) | |
| 1,806 |
Other earning assets | |
| 299 | |
| 77 | |
| (329) | | (14) | |
| 47 |
Total interest income | |
| 3,570 | |
| 4,622 | |
| 191 | | | |
| 8,383 |
INTEREST EXPENSE | |
| | |
| | |
| | | | |
| |
Deposits | |
| 939 | |
| 1,375 | |
| - | | | |
| 2,314 |
Borrowings | |
| 86 | |
| 689 | |
| (26) | | (15) | |
| 749 |
Total interest expense | |
| 1,025 | |
| 2,064 | |
| (26) | | | |
| 3,063 |
Net interest income | |
| 2,545 | |
| 2,558 | |
| 217 | | | |
| 5,320 |
(Reversal of) provision for credit losses | |
| (70) | |
| 180 | |
| - | | | |
| 110 |
Net interest income after (reversal of) provision for credit losses | |
| 2,615 | |
| 2,378 | |
| 217 | | | |
| 5,210 |
NON-INTEREST INCOME | |
| | |
| | |
| | | | |
| |
Service charges on deposit accounts | |
| 202 | |
| 166 | |
| - | | | |
| 368 |
Bank-owned life insurance | |
| 134 | |
| 18 | |
| - | | | |
| 152 |
Loss on sale of investment securities | |
| - | |
| (2) | |
| - | | | |
| (2) |
Other | |
| 16 | |
| 139 | |
| - | | | |
| 155 |
Total non-interest income | |
| 352 | |
| 321 | |
| - | | | |
| 673 |
NON-INTEREST EXPENSE | |
| | |
| | |
| | | | |
| |
Salaries and employee benefits | |
| 1,321 | |
| 1,004 | |
| - | | | |
| 2,325 |
Occupancy and equipment | |
| 209 | |
| 176 | |
| 32 | | (16) | |
| 417 |
Data processing and communication | |
| 180 | |
| 249 | |
| - | | | |
| 429 |
Professional fees | |
| 185 | |
| 128 | |
| - | | | |
| 313 |
Amortization of core deposit intangible | | | - | | | - | | | 223 | | (18) | | | 223 |
Directors' fees | |
| 121 | |
| 26 | |
| - | | | |
| 147 |
Foreclosed assets, net | |
| - | |
| - | |
| - | | | |
| - |
Advertising and marketing | |
| 33 | |
| 105 | |
| - | | | |
| 138 |
Regulatory fees and assessments | | | 33 | | | 85 | | | - | | | | | 118 |
Other | |
| 201 | |
| 195 | |
| - | | | |
| 396 |
Total non-interest expense | |
| 2,283 | |
| 1,968 | |
| 255 | | | |
| 4,506 |
Income before income tax expense | |
| 684 | |
| 731 | |
| (38) | | | |
| 1,377 |
Income tax expense | |
| 126 | |
| 179 | |
| (8) | | (19) | |
| 297 |
NET INCOME | | $ | 558 | | $ | 552 | | $ | (30) | | | | $ | 1,080 |
| | | | | | | | | | | | | | |
Earnings per share - basic | | $ | 0.16 | | $ | 0.26 | | | | | | | $ | 0.30 |
Earnings per share - diluted | | | 0.15 | | | 0.26 | | | | | | | | 0.30 |
| | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 3,587,000 | | | 2,098,133 | | | (2,098,133) | | (20) | | | 3,587,000 |
Weighted average common shares outstanding - diluted | | | 3,643,000 | | | 2,098,133 | | | (2,098,133) | | (20) | | | 3,643,000 |
The accompanying Notes are an integral part of these condensed combined consolidated financial statements.
4
UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2025
| | Historical | | Historical | | Pro Forma | | | | Pro Forma | ||||
(Dollars in thousands, except per share data) | | Catalyst | | Lakeside | | Adjustments | | Notes | | Combined | ||||
INTEREST INCOME | | | | | | | | | | | | | | |
Loans receivable, including fees | | $ | 11,161 | | $ | 13,539 | | $ | 1,640 | | (13) | | $ | 26,340 |
Investment securities | |
| 1,425 | |
| 2,790 | |
| 1,006 | | (13) | |
| 5,221 |
Other earning assets | |
| 1,310 | |
| 1,251 | |
| (1,795) | | (14) | |
| 766 |
Total interest income | |
| 13,896 | |
| 17,580 | |
| 851 | | | |
| 32,327 |
INTEREST EXPENSE | |
| | |
| | |
| | | | |
| |
Deposits | |
| 3,791 | |
| 5,543 | |
| (266) | | (15) | |
| 9,068 |
Borrowings | |
| 315 | |
| 2,664 | |
| (173) | | (15) | |
| 2,806 |
Total interest expense | |
| 4,106 | |
| 8,207 | |
| (439) | | | |
| 11,874 |
Net interest income | |
| 9,790 | |
| 9,373 | |
| 1,290 | | | |
| 20,453 |
Provision for credit losses | |
| 60 | |
| 986 | |
| - | | | |
| 1,046 |
Net interest income after provision for credit losses | |
| 9,730 | |
| 8,387 | |
| 1,290 | | | |
| 19,407 |
NON-INTEREST INCOME | |
| | |
| | |
| | | | |
| |
Service charges on deposit accounts | |
| 781 | |
| 927 | |
| - | | | |
| 1,708 |
Bank-owned life insurance | |
| 494 | |
| 72 | |
| - | | | |
| 566 |
Gain on sale of loans | | | - | | | 344 | | | - | | | | | 344 |
Gain on sale of fixed assets | | | - | | | 293 | | | - | | | | | 293 |
Other | |
| 83 | |
| 331 | |
| - | | | |
| 414 |
Total non-interest income | |
| 1,358 | |
| 1,967 | |
| - | | | |
| 3,325 |
NON-INTEREST EXPENSE | |
| | |
| | |
| | | | |
| |
Salaries and employee benefits | |
| 5,153 | |
| 4,401 | |
| - | | | |
| 9,554 |
Occupancy and equipment | |
| 823 | |
| 719 | |
| 126 | | (16) | |
| 1,668 |
Data processing and communication | |
| 718 | |
| 891 | |
| - | | | |
| 1,609 |
Professional fees | |
| 404 | |
| 368 | |
| 600 | | (17) | |
| 1,372 |
Amortization of core deposit intangible | | | - | | | - | | | 992 | | (18) | | | 992 |
Directors' fees | |
| 477 | |
| 98 | |
| - | | | |
| 575 |
Foreclosed assets, net | |
| (85) | |
| - | |
| - | | | |
| (85) |
Advertising and marketing | |
| 131 | |
| 470 | |
| - | | | |
| 601 |
Regulatory fees and assessments | | | 134 | | | 235 | | | - | | | | | 369 |
Other | |
| 829 | |
| 811 | |
| - | | | |
| 1,640 |
Total non-interest expense | |
| 8,584 | |
| 7,993 | |
| 1,718 | | | |
| 18,295 |
Income before income tax expense | |
| 2,504 | |
| 2,361 | |
| (428) | | | |
| 4,437 |
Income tax expense | |
| 452 | |
| 485 | |
| 36 | | (19) | |
| 973 |
NET INCOME | | $ | 2,052 | | $ | 1,876 | | $ | (464) | | | | $ | 3,464 |
| | | | | | | | | | | | | | |
Earnings per share - basic | | $ | 0.56 | | $ | 0.89 | | | | | | | $ | 0.95 |
Earnings per share - diluted | | | 0.56 | | | 0.89 | | | | | | | | 0.94 |
| | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 3,662,000 | | | 2,098,133 | | | (2,098,133) | | (20) | | | 3,662,000 |
Weighted average common shares outstanding - diluted | | | 3,675,000 | | | 2,098,133 | | | (2,098,133) | | (20) | | | 3,675,000 |
5
CATALYST BANCORP, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
On July 14, 2026, Catalyst completed the acquisition of Lakeside pursuant to the Merger Agreement by and among Catalyst and Lakeside. Effective July 14, 2026, Catalyst acquired 100% of the outstanding shares of Lakeside in exchange for $19.58 per share in cash, or $41.1 million in aggregate.
The accompanying unaudited pro forma condensed consolidated combined balance sheet as of March 31, 2026 combines the historical consolidated balance sheets of Catalyst and Lakeside, giving effect to the merger as if it had been completed on March 31, 2026. The accompanying unaudited pro forma condensed combined income statements for the three months ended March 31, 2026 and the year ended December 31, 2025 combine the historical consolidated income statements of Catalyst and Lakeside, giving effect to the merger as if it had been completed on January 1, 2025.
The merger is being accounted for as a business combination using the acquisition method, with Catalyst as the accounting acquirer in accordance with ASC 805. Under the acquisition method of accounting, the purchase consideration is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Any excess of the purchase consideration over the estimated fair value of the identifiable net assets acquired is recognized as goodwill.
The pro forma financial information includes estimated adjustments to record the assets and liabilities of Lakeside at their respective fair values and represents management’s estimates based on available information. The pro forma adjustments included herein may be revised as additional information becomes available and as additional analysis is performed. The final allocation of the purchase price will be determined after completion of a final analysis to determine the fair values of Lakeside’s tangible and identifiable intangible assets and liabilities as of the acquisition date and any differences could be material.
The unaudited pro forma condensed combined consolidated financial information does not reflect any anticipated synergies, operating efficiencies, or cost savings that may result from the merger, nor any acquisition and integration costs that may be incurred. The pro forma adjustments represent management’s best estimates and are based upon currently available information and certain assumptions that management believes are reasonable under the circumstances.
6
NOTE 2. PRO FORMA ADJUSTMENTS
The following pro forma adjustments have been reflected in the unaudited pro forma condensed combined consolidated financial information. All adjustments are based on current valuations, estimates and assumptions that are subject to change and such change could be material.
| (1) | Reflects the payment of $41.1 million in cash consideration to the shareholders of Lakeside as a result of the merger and estimated expenses to facilitate the merger of $3.8 million. |
| (2) | Reflects an estimated fair value discount on Lakeside’s investment securities classified as held-to-maturity and the elimination of Lakeside’s allowance for credit losses on held-to-maturity securities of $20,000. |
| (3) | Reflects an estimated interest rate fair value discount on the Lakeside loan portfolio. |
| (4) | Reflects the elimination of Lakeside’s historical allowance for credit losses (“ACL”) and the establishment of an estimated ACL of $3.5 million attributable to purchased seasoned loans and purchased credit deteriorated loans. |
| (5) | Reflects the estimated fair value adjustment for premises and equipment acquired. |
| (6) | Reflects the estimated goodwill of $3.3 million resulting from the merger and the recognition of the estimated fair value of acquired core deposit intangible of $5.5 million. |
| (7) | Reflects the estimated deferred tax effects associated with acquisition-related fair value adjustments. |
| (8) | Reflects the estimated fair value premium on fixed maturity deposits. |
| (9) | Reflects the estimated fair value premium on Federal Home Loan Bank advances. |
| (10) | Reflects the elimination of Lakeside’s ACL for unfunded commitments totaling $100,000 and the establishment of an estimated ACL of $58,000 for unfunded commitments associated with the acquired portfolio. |
| (11) | Reflects the elimination of Lakeside’s common stock, additional paid-in capital, and accumulated other comprehensive loss accounts as a result of the merger. |
| (12) | Reflects the elimination of Lakeside’s retained earnings and the estimated after-tax impact of expenses to facilitate the merger totaling $3.3 million. |
| (13) | Reflects the estimated accretion of the interest rate fair value discount. Pro forma accretion is being recognized over a weighted average period of approximately 3.5 years for loans and 3 years for investment securities using the sum-of-the-years digits method. |
| (14) | Reflects the estimated loss of interest income from cash and due from banks due to the cash consideration paid to the shareholders of Lakeside and the estimated expenses to facilitate the merger. |
| (15) | Reflects the accretion of the fair value premium on acquired fixed maturity deposits and borrowings. Pro forma accretion is being recognized over a weighted average period of approximately 6 months for deposits and 14 months for borrowings. |
| (16) | Reflects the additional depreciation expense related to the fair value of real estate acquired based on a 25-year useful life. |
| (17) | Reflects estimated legal and advisory expenses incurred by Catalyst to facilitate the merger. The remaining $3.2 million of estimated expenses to facilitate the merger, including change in control expenses and other legal and advisory fees, were expenses incurred by Lakeside prior to the effective date of the merger. |
| (18) | Reflects the amortization of the core deposit intangible over an estimated useful life of ten years using the sum-of-the-years digits method. |
| (19) | Represents the net federal tax effect of the pro forma adjustments using Catalyst’s statutory tax rate of 21.0%. The estimated professional fees incurred by Catalyst to facilitate the merger were treated as non-tax deductible. |
| (20) | Adjustment to eliminate Lakeside’s common shares. |
The pre-tax, pro forma estimated accretion and amortization for certain estimated pro forma fair value discounts and premiums are presented in the table below. The amounts for 2026 reflect the nine month period ending December 31, 2026 and the remaining periods are for the twelve months ending December 31.
| | Accretion (Amortization) | ||||||||||||||||
(Dollars in thousands) | | 2026 | | 2027 | | 2028 | | 2029 | | 2030 | | 2031 | ||||||
Investment securities | | $ | 431 | | $ | 240 | | $ | - | | $ | - | | $ | - | | $ | - |
Loans receivable, net | |
| 787 | |
| 590 | |
| 99 | |
| - | |
| - | |
| - |
Core deposit intangible | | | (670) | | | (794) | | | (694) | | | (595) | | | (496) | | | (397) |
Deposits | | | - | | | - | | | - | | | - | | | - | | | - |
Borrowings | |
| - | |
| - | |
| - | |
| - | |
| - | |
| - |
7
NOTE 3. PRO FORMA ALLOCATION OF PURCHASE PRICE
The following shows the pro forma allocation of the consideration paid for Lakeside’s common equity to the acquired identifiable assets and liabilities assumed and the pro forma goodwill generated from the transaction.
Preliminary Purchase Price Allocation | | | |
Cash consideration | | $ | 41,081 |
| | | |
Identifiable assets | | | |
Cash and cash equivalents | | $ | 12,555 |
Investment securities | |
| 120,052 |
Loans receivable, net | |
| 222,819 |
Premises and equipment, net | |
| 9,620 |
Stock in correspondent banks, at cost | |
| 3,110 |
Bank-owned life insurance | |
| 2,272 |
Core deposit intangible | | | 5,456 |
Other assets | |
| 1,928 |
Total | | $ | 377,812 |
| |
| |
Identifiable liabilities | |
| |
Deposits | | $ | 277,869 |
Borrowings | |
| 60,199 |
Other liabilities | |
| 2,015 |
Total | | $ | 340,083 |
| | | |
Net assets acquired | | | 37,729 |
Estimated goodwill | | $ | 3,352 |
8