Business Context and Reporting Period
Fifth District Bancorp, Inc. (FDSB) is a Maryland corporation and the holding company for Fifth District Savings Bank, a federally-chartered savings bank operating primarily in the New Orleans-Metairie Metropolitan Statistical Area. The Company converted from a mutual to a stock form of organization in July 2024. This Form 10-K covers the fiscal year ended December 31, 2025. The Company is classified as a smaller reporting company and an emerging growth company.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Assets | $534.4 million | $527.3 million |
| Total Loans (Net) | $376.4 million | $367.3 million |
| Total Deposits | $393.2 million | $391.5 million |
| Net Interest Income | $12.8 million | $10.1 million |
| Net Income (Loss) | $4.1 million | ($1.1 million) |
| Return on Average Assets | 0.76% | (0.21%) |
| Return on Average Equity | 3.17% | (0.98%) |
| Net Interest Margin | 2.55% | 2.13% |
| Allowance for Credit Losses | $1.7 million | $1.7 million |
| Stockholders' Equity | $129.8 million | $125.8 million |
Material Changes vs. Prior Period
- Profitability Turnaround: The Company reported net income of $4.1 million in 2025, a significant improvement from a net loss of $1.1 million in 2024. This was driven by a $2.8 million increase in net interest income and a $4.4 million increase in non-interest income.
- Non-Interest Income Surge: Non-interest income jumped from $11,000 in 2024 to $4.4 million in 2025. This was primarily due to a $3.5 million gain on Bank Owned Life Insurance (BOLI) proceeds and the absence of a $1.1 million realized loss on investment securities that occurred in 2024.
- Asset Growth: Total assets increased by $7.1 million (1.3%). Loans receivable grew by $9.1 million, driven by commercial real estate and commercial/industrial loans, while residential mortgages decreased slightly. Investment securities increased by $6.1 million.
- Asset Quality Improvement: Non-performing assets decreased to $586,000 (0.11% of total assets) from $1.1 million (0.21%) in 2024. Non-accrual loans dropped to $544,000 from $1.1 million.
- Stock Repurchases: The Company repurchased 173,711 shares of common stock in Q4 2025 under a program authorized in August 2025, reducing outstanding shares.
Guidance, Outlook, and Risks
Management Commentary: Management emphasizes a strategy of originating fixed-rate residential mortgages, moderately increasing commercial lending, and maintaining strong asset quality through conservative underwriting. The Company aims to grow low-cost core deposits to support loan growth and improve net interest margins.
Market Risk: The primary market risk is interest rate risk. As of December 31, 2025, an instantaneous 200 basis point increase in interest rates would result in a 16.57% decrease in net interest income and a 25.90% decrease in Economic Value of Equity (EVE).
Risks and Contingencies:
- Credit Risk: Concentration in residential mortgages (86.3% of portfolio) exposes the Company to local economic conditions and real estate value fluctuations.
- Regulatory Risk: Subject to comprehensive regulation by the OCC, FDIC, and Federal Reserve. Failure to meet capital requirements could restrict operations.
- Cybersecurity: The Company faces risks from cyberattacks and operational failures, though it maintains an Incident Response Plan and NIST-aligned security framework.
- Liquidity: While the Company maintains strong liquidity with $33.9 million in cash and access to $188.7 million in FHLB advances, deposit flows are influenced by market rates and competition.
Investor Verification Checklist
- BOLI Proceeds: Verify the sustainability of the $3.5 million gain on BOLI proceeds, as this was a significant one-time driver of 2025 profitability.
- Loan Concentration: Assess the impact of the 86.3% concentration in one-to-four family residential mortgages on the portfolio's resilience to local housing market downturns.
- Stock Repurchase Program: Monitor the remaining capacity of the stock repurchase program (345,513 shares remaining as of Dec 31, 2025) and its impact on earnings per share.
- Interest Rate Sensitivity: Review the Company's asset/liability management strategies given the significant negative sensitivity of EVE to rising interest rates.
- Regulatory Capital: Confirm the "well-capitalized" status remains intact, noting the high capital ratios (Total Capital to Risk-Weighted Assets at 41.79%).