Business Context and Reporting Period
Central Plains Bancshares, Inc. (CPBI) is a Maryland corporation and the holding company for Home Federal Savings and Loan Association of Grand Island (Home Federal Bank). The company operates as a community bank focused on southcentral Nebraska, offering residential and commercial real estate loans, agricultural loans, and consumer deposits. This Form 10-K covers the fiscal year ended March 31, 2026.
Key Financial Metrics
| Metric | 2026 (in thousands) | 2025 (in thousands) |
|---|---|---|
| Total Assets | $558,647 | $508,702 |
| Total Loans (Gross) | $448,406 | $402,215 |
| Total Deposits | $460,356 | $416,201 |
| Net Interest Income | $18,674 | $16,489 |
| Net Income | $4,000 | $3,654 |
| Allowance for Credit Losses (ACL) | $5,809 | $5,441 |
| Stockholders' Equity | $88,990 | $83,332 |
| Net Interest Margin | 3.80% | 3.56% |
| Earnings Per Share (Diluted) | $1.05 | $0.96 |
Material Changes vs. Prior Period
- Asset Growth: Total assets increased 9.8% ($49.9 million), driven primarily by an 11.5% increase in the loan portfolio ($46.1 million). Commercial non-real estate loans saw the largest growth at 51.2%.
- Deposit Expansion: Total deposits grew 10.6% ($44.2 million). This included a significant increase in brokered deposits, which rose from $7.3 million to $27.6 million to support liquidity and growth.
- Profitability: Net income increased 9.5% to $4.0 million. Net interest income rose 12.8% due to higher loan yields (5.99% vs. 5.68%) and volume growth.
- Expense Management: Non-interest expense increased 11.6% to $16.0 million. Notable increases included salaries and benefits (due to equity compensation plans) and occupancy expenses (due to new branch openings in Lincoln and Hastings).
- Asset Quality: Non-performing assets increased slightly to $1.9 million (0.35% of total assets) from $1.4 million. The ACL as a percentage of total loans decreased to 1.30% from 1.35%.
Guidance, Outlook, and Risks
Management Commentary: Management continues to focus on growing the loan portfolio while maintaining asset quality. The company has expanded its commercial lending focus and utilized brokered deposits to fund growth. The company repurchased 43,183 shares of common stock during the year.
Risks and Contingencies:
- Interest Rate Risk: The company is sensitive to changes in market interest rates. A 200 basis point increase in rates is projected to increase Net Interest Income (NII) by 0.92%, while a 200 basis point decrease would reduce NII by 0.63%.
- Credit Concentration: Significant exposure to commercial real estate (28.82% of loans) and agricultural loans (12.19%). Deterioration in these sectors could impact asset quality.
- Regulatory Compliance: As a "well-capitalized" institution, the company must maintain strict capital ratios. It is also subject to evolving cybersecurity and anti-money laundering regulations.
- Operational Risks: Reliance on third-party vendors for technology and data processing introduces operational risk.
Investor Verification Checklist
- Brokered Deposit Reliance: Verify the sustainability of the $27.6 million in brokered deposits and the associated cost of funds compared to core deposits.
- Commercial Real Estate Exposure: Review the specific underwriting standards and concentration limits for the 28.82% of the portfolio in commercial real estate.
- Non-Performing Asset Trends: Monitor the migration of agricultural loans to non-accrual status, which contributed to the increase in non-performing assets.
- Capital Ratios: Confirm that the company maintains its "well-capitalized" status (Total Capital Ratio of 17.30%) to ensure dividend flexibility.
- Expense Growth: Assess whether the 11.6% increase in non-interest expenses is sustainable relative to revenue growth.