Tickers

1. Composite Trajectory Verdict

Given BSBK's business model as a community bank, the income statement and balance sheet carry the most weight for assessing financial performance, as net interest margin trends and asset quality directly drive sustainability, while cash flow patterns largely reflect balance sheet restructuring.

Composite Trajectory: Mixed

Earnings are improving: net income swung from a $2.17 million loss in FY 2024 to a $2.09 million gain in FY 2025 (10-K 2025-12-31, Consolidated Statements of Operations), and six-month 2026 net income rose to $1.5 million from $955 thousand in six-month 2025 (10-Q 2026-06-30, MD&A). Net interest margin expanded from 1.16% to 1.80% annually and from 1.70% to 2.06% over the comparable six-month periods (10-K 2025-12-31, Average Balance Sheets; 10-Q 2026-06-30, Average Balance Sheets). However, the balance sheet is deteriorating: total assets fell 6.9% in FY 2025 and a further 3.3% in H1 2026 (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition), deposits dropped $78.2 million (12%) in H1 2026 (10-Q 2026-06-30, Comparison of Financial Condition), and non-performing assets more than doubled to $27.8 million (3.2% of assets) at June 30, 2026 from $13.3 million (1.47%) at December 31, 2025 (10-Q 2026-06-30, Comparison of Financial Condition). Cash generation is mixed: operating cash flow turned positive in FY 2025 but net cash declined due to heavy financing outflows.

2. Red Flags

• Non-performing assets surged to $27.8 million (3.2% of total assets) at June 30, 2026 from $13.3 million (1.47%) at December 31, 2025, driven by a $10.9 million construction loan and two commercial real estate loans totaling $12.5 million (10-Q 2026-06-30, Comparison of Financial Condition).
• Deposits fell $78.2 million (12%) in the first half of 2026, with certificates of deposit declining $91.4 million (18.5%) (10-Q 2026-06-30, Comparison of Financial Condition).
• FHLB borrowings increased $47.7 million (51%) in H1 2026 to $141.0 million, offsetting deposit outflows (10-Q 2026-06-30, Comparison of Financial Condition).
• Loan portfolio contracted 9.0% in FY 2025 and a further 1.6% in H1 2026, reflecting weak origination demand (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition).
• At December 31, 2025, 67.6% of total deposits ($441.3 million) were certificates of deposit maturing within one year (10-K 2025-12-31, Liquidity and Capital Resources).
• Uninsured deposits represented 8.7% of total deposits ($59.3 million) at June 30, 2026 (10-Q 2026-06-30, Comparison of Financial Condition).
• No charge-offs recorded in any period, yet non-performing loans carry no specific reserves due to collateral coverage (10-K 2025-12-31, Comparison of Operating Results; 10-Q 2026-06-30, Comparison of Financial Condition).

3. Earnings Assessment (Income Statement)

Earnings Trajectory: Improving

Net income improved from a $(2.17) million loss in FY 2024 to $2.09 million in FY 2025 (10-K 2025-12-31, Consolidated Statements of Operations). Six-month 2026 net income reached $1.5 million versus $955 thousand in six-month 2025 (10-Q 2026-06-30, MD&A). Net interest income grew 46.6% annually to $15.47 million in FY 2025 from $10.55 million in FY 2024 (10-K 2025-12-31, Comparison of Operating Results), and rose 13.4% to $8.27 million in six-month 2026 from $7.29 million in six-month 2025 (10-Q 2026-06-30, Average Balance Sheets). Net interest margin expanded from 1.16% to 1.80% (annual) and from 1.70% to 2.06% (six-month). Non-interest income increased 31.1% annually to $1.77 million in FY 2025 (10-K 2025-12-31, Comparison of Operating Results), though Q2 2026 included a $300 thousand insurance claim recovery (10-Q 2026-06-30, Comparison of Operating Results). Non-interest expense rose 4.8% annually to $15.30 million in FY 2025 (10-K 2025-12-31, Comparison of Operating Results) but fell 5.2% in Q2 2026 versus Q2 2025 (10-Q 2026-06-30, Comparison of Operating Results). Provision for credit losses was a $130 thousand recovery in FY 2025 and zero in H1 2026 (10-K 2025-12-31, Comparison of Operating Results; 10-Q 2026-06-30, Comparison of Operating Results).

4. Cash Generation Assessment (Statement of Cash Flows)

Cash Trajectory: Mixed

Operating cash flow turned positive at $3.20 million in FY 2025 from $(2.56) million in FY 2024 (10-K 2025-12-31, Consolidated Statements of Cash Flows). Investing cash flow was strongly positive in both years ($50.1 million in FY 2025 vs $10.1 million in FY 2024), driven by net loan decreases of $64.0 million and security maturities (10-K 2025-12-31, Consolidated Statements of Cash Flows). Financing cash flow swung to $(69.9) million in FY 2025 from $19.7 million in FY 2024, primarily due to $69.4 million in long-term FHLB advance repayments (10-K 2025-12-31, Consolidated Statements of Cash Flows). Net cash decreased $16.6 million in FY 2025 after a $27.3 million increase in FY 2024 (10-K 2025-12-31, Consolidated Statements of Cash Flows). Quarterly cash flow statements for 2026 periods are not provided in the filings.

5. Balance Sheet Assessment

Balance Sheet Trajectory: Deteriorating

Total assets declined 6.9% to $904.9 million at December 31, 2025 from $971.5 million a year earlier (10-K 2025-12-31, Comparison of Financial Condition), and fell a further 3.3% to $875.0 million at June 30, 2026 (10-Q 2026-06-30, Comparison of Financial Condition). Net loans contracted 9.0% in FY 2025 to $647.6 million and 1.6% in H1 2026 to $637.3 million (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition). Total deposits rose 1.6% in FY 2025 to $652.4 million but plummeted 12.0% to $574.2 million in H1 2026 (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition). FHLB borrowings dropped 45.8% to $93.3 million at December 31, 2025 then surged 51.1% to $141.0 million at June 30, 2026 (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition). Total equity grew steadily to $140.9 million at December 31, 2025 and $142.0 million at June 30, 2026 (10-K 2025-12-31, Comparison of Financial Condition; 10-Q 2026-06-30, Comparison of Financial Condition). Non-performing assets more than doubled to $27.8 million (3.2% of assets) at June 30, 2026 from $13.3 million (1.47%) at December 31, 2025 (10-Q 2026-06-30, Comparison of Financial Condition).

6. Data Gaps

• Quarterly income statements and cash flow statements for Q1 2026, Q3 2025, and Q1 2025 are not fully presented in the provided filings.
• Detailed quarterly allowance for credit losses activity and loan charge-off/recovery data for 2026 quarters.
• Quarterly breakdown of non-interest expense components for 2026 periods.
• Full quarterly average balance sheets and rate/volume analyses for Q1 2026 and 2025 quarters.
• Quarterly regulatory capital ratios (CBLR) for 2026 periods.