Arizona Tribune - Sturgis Bancorp, Inc. Reports Financial Results for Full-Year 2025

Tier 1 Capital

The Bank maintained strong capital ratios, exceeding well capitalized requirements, with Tier 1 leverage capital at 8.11%.

Key Quarterly Highlights

• Net income was $2.0 million.

• Earnings per share of $0.93.

• Paid dividend of $0.17 per share.

• Total assets remained at $999 million.

• Deposits decreased to $885 million.

Key Full-Year Highlights

• Net income was $7.5 million.

• Earnings per share of $3.45.

• Quarterly dividends totaled $0.68 per share for the year.

• Total assets increased by $42.3 million during the year.

• Deposits increased by $70.8 million during the year.

From Jason J. Hyska, Sturgis Bancorp, Inc. Chief Executive Officer

"The Bank ended 2025 on a very positive note. Overall, non-brokered deposit growth of $118 million with reduced reliance on wholesale funds helped the Bank to increase tax equivalent net interest margin by 37 basis points and grow core relationships across our footprint. This resulted in a Bank ROA of 0.92%. Relationship banking is still the core tenant of the Bank's Strategic Plan, and our employees remain focused on growing core relationships into 2026. The Bank is looking forward to 2026 as we continue to develop our newer markets."

Quarterly Income Statement Highlights

• Net income for the quarter (4Q25) was $2.0 million, decreasing from last quarter's (3Q25) $2.4 million net income, while equaling the net income of $2.0 million for the same quarter of the prior year (4Q24). The decrease from 3Q25 was substantially due to increases in noninterest expenses.

• Earnings per share were $0.93 for 4Q25, $1.09 for 3Q25, and $0.91 for 4Q24.

• Net interest income after the provision for credit losses was $8.8 million during 4Q25, a 4.93% increase from 3Q25's $8.4 million. This also is a 16.05% increase from 4Q24's $7.6 million. The change from the same quarter a year ago was primarily due to:

  • Interest and dividend income of $12.7 million in 4Q25, compared to $12.1 million in 4Q24; and

  • Interest expense of $4.2 million in 4Q25, compared to $4.7 million in 4Q24.

• Tax equivalent net interest margin increased to 3.66% for 4Q25 from 3.54% for 3Q25, and from 3.33% for 4Q24.

• During 4Q25, there was a reversal of the allowance for credit losses of $279,000, due to annual historic loss updates, qualitative factor adjustments, and lower specific reserves. There were also reversals of the allowance of $62,000 and $216,000 during 3Q25 and 4Q24, respectively.

• Noninterest income totaled $2.7 million during 4Q25, a 10.54% increase from 3Q25's $2.4 million, and a 12.49% increase from 4Q24's $2.4 million. These fluctuations were primarily due to:

  • Investment brokerage commission income of $829,000; $759,000; and $697,000 for 4Q25, 3Q25, and 4Q24, respectively; and

  • Other income of $406,000; $23,000; and $16,000 for 4Q25, 3Q25, and 4Q24, respectively.

    • $310,000 of the 4Q25 other income were the gains recognized from selling an office building and a rental property.

• Noninterest expenses totaled $9.0 million during 4Q25, a 14.35% increase from 3Q25's $7.9 million, and a 17.40% increase from 4Q24's $7.7 million. These fluctuations were primarily due to:

  • Compensation and benefits in 4Q25 were $5.1 million, compared to $4.9 million for 3Q25, and $4.2 million for 4Q24. Most of this difference was due to typical wage increases along with a year-end one-time bonus for achieving certain strategic goals.

Full-Year Income Statement Highlights

• Net income for 2025 was $7.5 million, compared to $2.8 million for 2024, as further discussed below.

• Earnings per share were $3.45 for 2025 and $1.32 for 2024.

• Net interest income after the provision for credit losses was $33.0 million for 2025, a 40.65% increase from 2024's $23.4 million. This increase was due to:

  • Interest and fee income on loans increased $2.2 million to $44.8 million in 2025 compared to $42.5 million in 2024;

  • Interest expense on borrowed funds decreased $1.7 million to $1.9 million in 2025 from $3.6 million in 2024; and

  • During 2025, $383,000 was booked as a reversal to the allowance for credit losses, compared to $4.6 million provided to the allowance for credit losses for 2024. This decrease was primarily due to:

    • A one-time charge-off of one customer's loans totaling $5.5 million occurred in 1Q24.

• Noninterest income totaled $9.5 million for 2025, compared to $10.1 million for 2024. This is a 5.97% decrease. This decrease was primarily due to:

  • Recording $1.1 million in 2024 for gain on termination of interest rate swaps, while having no such gain in 2025; and

  • Increases in other areas for 2025 compared to 2024 were $400,000 for investment brokerage commission income and $200,000 for other income items.

• Noninterest expenses totaled $33.2 million in 2025, compared to $30.4 million in 2024. This is a 9.52% increase. This increase was primarily comprised of:

  • Compensation and benefits expense of $19.8 million in 2025, compared to $17.7 million in 2024; and

  • Occupancy and equipment expense of $4.7 million in 2025, compared to $4.3 million in 2024.

Balance Sheet Highlights

• Total assets increased to $999 million as of the end of 4Q25, nearly identical to the end of 3Q25's $999 million, and a 4.42% increase from the end of 4Q24's $956 million. This net increase from the prior year was comprised of:

  • Cash and cash equivalents ended 4Q25 at $41.4 million, compared to $46.0 million as of the end of 3Q25, and $20.8 million as of the end of 4Q24.

  • Debt securities - available-for-sale increased to $85.6 million as of the end of 4Q25, compared to $77.1 million as of the end of 3Q25, and $77.1 million as of the end of 4Q24.

  • Net loans ended 4Q25 at $780 million, compared to $781 million as of the end of 3Q25, and $768 million as of the end of 4Q24.

  • Real estate owned ended 4Q25 at $804,000, compared to $485,000 as of the end of 3Q25, and $152,000 as of the end of 4Q24.

• Total deposits as of the end of 4Q25 were $885 million, compared to $894 million as of the end of 3Q25, and $814 million as of the end of 4Q24. These net increases were comprised of:

  • Noninterest-bearing deposits increased to $166 million as of the end of 4Q25, from $163 million as of the end of 3Q25, and $158 million as of the end of 4Q24; and

  • Interest-bearing deposits decreased to $719 million as of the end of 4Q25, from $732 million as of the end of 3Q25, while increasing from $656 million as of the end of 4Q24.

    • Due to growth in other deposit areas, brokered certificates of deposit have been reduced by $47.0 million since 2024.

• Borrowed funds increased to $30.7 million as of the end of 4Q25, from $15.7 million as of the end of 3Q25, while decreasing from $61.1 million as of the end of 4Q24.

• Subordinated debentures were paid in full as of the end of 4Q25 after having balances of $15.0 and $14.9 million as of the end of 3Q25 and 4Q24, respectively.

• Total equity at the end of 4Q25 was $63.2 million, compared to $61.3 million as of the end of 3Q25, and $55.4 million as of the end of 4Q24.

• Book value per share was $29.17 ($25.07 tangible) at the end of 4Q25, compared to $28.29 ($24.15 tangible) as of the end of 3Q25, and $25.66 ($21.51 tangible) as of the end of 4Q24.

About Sturgis Bancorp, Inc.

Sturgis Bancorp, Inc. is the holding company for Sturgis Bank & Trust Company (the Bank), and its subsidiaries: Oakleaf Financial Services, Ayres/Oak Insurance, and Oak Title Services. The Bank provides a full array of trust, commercial, and consumer banking services from banking centers in: Sturgis, Bangor, Bronson, Centreville, Climax, Colon, Marshall, Niles, Portage, South Haven, St. Joseph, Three Rivers, and White Pigeon, Michigan. Oakleaf Financial Services offers a complete range of investment and financial-advisory services. Ayres/Oak Insurance offers various competitive commercial and consumer insurance products. Oak Title Services offers commercial and consumer title insurance services.

Forward-Looking Statements

This release contains statements that constitute forward-looking statements. These statements appear in several places in this release and include statements regarding intent, belief, outlook, objectives, efforts, estimates, or expectations of Sturgis Bancorp, Inc. (Bancorp), primarily with respect to future events and the future financial performance of Bancorp. Any such forward-looking statements are not guarantees of future events or performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements. Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; government and regulatory policy changes; the outcome of any pending or future litigation and contingencies; trends in consumer behavior and ability to repay loans; and changes in the world, national, and local economies. Bancorp undertakes no obligation to update, amend, or clarify forward-looking statements as a result of new information, future events, or otherwise. The numbers presented herein are unaudited.

For additional information, visit our website at www.sturgis.bank.

Sturgis Bancorp, Inc. Contacts

• Jason J. Hyska, CEO & President, or Brian P. Hoggatt, CFO - (269) 651-9345

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Dollar amounts in thousands except per share data)

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Dollar amounts in thousands except per share data)

CONSOLIDATED BALANCE SHEETS
(Unaudited - Dollar amounts in thousands except per share data)

SOURCE: Sturgis Bancorp, Inc.

View the original press release on ACCESS Newswire

H.Thompson--AT