Equity Bancshares Inc 8-K/A, filed Mar 18, 2026
Equity Bancshares Inc (EQBK)
About this 8-K/A
Equity Bancshares Inc filed this 8-K/A on March 18, 2026, reporting on events of January 1, 2026.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
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 |
(Commission File Number) |
(IRS Employer |
||
|
|
|
|
|
|
||||
|
||||
(Address of Principal Executive Offices) |
|
(Zip Code) |
||
Registrant’s Telephone Number, Including Area Code: |
|
(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:
Securities registered pursuant to Section 12(b) of the Act:
|
|
Trading |
|
|
|
|
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. ☐
On January 2, 2026, Equity Bancshares, Inc. (the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8-K (the “Initial 8-K”) to disclose that it had completed its previously announced merger (the “Merger”) with Frontier Holdings, LLC (“Frontier”) pursuant to an Agreement and Plan of Reorganization, dated August 29, 2025, by and among the Company, Winston Merger Sub, Inc, and Frontier effective January 1, 2026.
This 8-K/A amends the Initial 8-K to provide financial statements and pro forma financial information for the Merger that are described in parts (a) and (b) of Item 9.01 below. Except as provided in this Form 8-K/A, the Initial 8-K remains unchanged.
Item 9.01 Financial Statements and Exhibits.
The audited consolidated balance sheets of Frontier as of September 30, 2025 and 2024, and the related consolidated statements of income, comprehensive income, changes in members’ equity and cash flows for each of the two years in the period ended September 30, 2025, and the related notes and report of independent auditors thereto, required by this item are included as Exhibit 99.1 and incorporated by reference herein.
The unaudited pro forma condensed consolidated combined balance sheet as of December 31, 2025 and the unaudited pro forma condensed consolidated combined statements of income for the years ended December 31, 2025, required by this item are included as exhibit 99.2 and incorporate by reference herein.
(d) Exhibits
Exhibit No. |
Description |
23.1 |
|
99.1 |
|
99.2 |
|
104 |
Cover Page Interactive Data File (formatted as inline XBRL document) |
SIGNATURES
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.
|
|
|
Equity Bancshares, Inc. |
|
|
|
|
Date: |
March 18, 2026 |
By: |
/s/ Chris M. Navratil |
|
|
|
Chris M. Navratil |
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITOR
We consent to the use in this Current Report on Form 8-K/A of Equity Bancshares, Inc. of our report dated January 28, 2026, with respect to the consolidated financial statements of Frontier Holdings, LLC for each of the years in the two-year period ended September 30, 2025, included herein.
We further consent to the incorporation by reference in the Registration Statements on Forms S-8 (Nos. 333-209862, 333-217197, 333-225220, 333-232826, 333-264988, 333-279114) and Form S-3 (Nos. 333-289491) of Equity Bancshares, Inc. of our report dated January 28, 2026, with respect to the consolidated financial statements of Frontier Holdings, LLC as of and for each of the years in the two-year period ended September 30, 2025, included herein.
/s/ Forvis Mazars, LLP
Omaha, Nebraska
March 18, 2026
Exhibit 99.1
Frontier Holdings, LLC
Independent Auditor’s Report and
Consolidated Financial Statements
September 30, 2025 and 2024
Frontier Holdings, LLC
September 30, 2025 and 2024
Contents |
|
Independent Auditor’s Report |
1 |
Consolidated Financial Statements |
|
Balance Sheets |
4 |
Statements of Income |
6 |
Statements of Comprehensive Income |
7 |
Statements of Members’ Equity |
8 |
Statements of Cash Flows |
9 |
Notes to Financial Statements |
11 |
Independent Auditor’s Report
Audit Committee and Board of Directors
Frontier Holdings, LLC
Omaha, Nebraska
Opinion
We have audited the consolidated financial statements of Frontier Holdings, LLC and its subsidiaries, which comprise the consolidated balance sheets as of September 30, 2025 and 2024, and the related consolidated statements of income, comprehensive income, members' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Frontier Holdings, LLC and its subsidiaries as of September 30, 2025 and 2024, and the results of their operations and their 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 (GAAS). Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We are required to be independent of Frontier Holdings, LLC 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 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 Frontier Holdings, LLC’s ability to continue as a going concern within one year after the date that these consolidated financial statements are available to be issued.
Auditor’s 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 auditor’s 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 audit conducted in accordance with GAAS 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 GAAS, 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 financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
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 Frontier Holdings, LLC’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.
/s/ Forvis Mazars, LLP
Omaha, Nebraska
January 28, 2026
Frontier Holdings, LLC
Consolidated Balance Sheets
September 30, 2025 and 2024
(amounts in thousands)
Assets |
2025 |
|
2024 |
||
Cash and due from banks |
$ |
11,021 |
|
$ |
15,994 |
Cash and cash equivalents |
|
11,021 |
|
|
15,994 |
|
|
|
|
|
|
Interest-bearing time deposits in banks |
|
100 |
|
|
348 |
Securities available-for-sale |
|
84,260 |
|
|
89,738 |
|
|
|
|
|
|
Loans, including loans held for sale of $903 and $1,827 |
|
|
|
|
|
and net of allowance for credit losses of $14,492 and |
|
|
|
|
|
$13,496, respectively |
|
1,276,277 |
|
|
1,169,632 |
|
|
|
|
|
|
Operating lease right-of-use asset |
|
8,087 |
|
|
8,498 |
Premises and equipment, net |
|
3,407 |
|
|
3,336 |
|
|
|
|
|
|
Interest receivable |
|
10,902 |
|
|
9,393 |
Nonmarketable equity securities, at cost |
|
6,908 |
|
|
7,311 |
Goodwill |
|
15,213 |
|
|
15,213 |
Other assets |
|
4,201 |
|
|
4,383 |
Total assets |
$ |
1,420,376 |
|
$ |
1,323,846 |
4
Liabilities and Members’ Equity |
|
|
|
||
|
2025 |
|
2024 |
||
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Demand |
$ |
94,637 |
|
$ |
105,898 |
Demand-interest bearing |
|
401,962 |
|
|
402,357 |
Savings |
|
39,950 |
|
|
43,572 |
Time |
|
558,919 |
|
|
476,321 |
Total Deposits |
|
1,095,468 |
|
|
1,028,148 |
|
|
|
|
|
|
Short-term borrowings |
|
35,000 |
|
|
— |
Federal Home Loan Bank advances |
|
135,280 |
|
|
145,615 |
Other borrowed funds |
|
18,618 |
|
|
24,012 |
Operating lease liabilities |
|
8,426 |
|
|
8,741 |
Interest payable and other liabilities |
|
8,518 |
|
|
7,985 |
Total liabilities |
|
1,301,310 |
|
|
1,214,501 |
Members’ Equity |
|
|
|
|
|
Members’ equity |
|
119,066 |
|
|
109,345 |
|
|
|
|
|
|
Total members’ equity |
|
119,066 |
|
|
109,345 |
Total liabilities and members’ equity |
$ |
1,420,376 |
|
$ |
1,323,846 |
5
Frontier Holdings, LLC
Consolidated Statements of Income
Years Ended September 30, 2025 and 2024
(amounts in thousands)
Interest and Dividend Income |
2025 |
|
2024 |
||
Loans, including fees |
$ |
77,217 |
|
$ |
69,651 |
Securities |
|
2,956 |
|
|
3,330 |
Federal funds sold and deposits with other financial institutions |
|
688 |
|
|
771 |
|
|
|
|
|
|
Total interest and dividend income |
|
80,861 |
|
|
73,752 |
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
Deposits |
|
33,736 |
|
|
33,487 |
Federal funds purchased |
|
692 |
|
|
94 |
Federal Home Loan Bank advances and other borrowed funds |
|
6,696 |
|
|
6,738 |
|
|
|
|
|
|
Total interest expense |
|
41,124 |
|
|
40,319 |
|
|
|
|
|
|
Net Interest Income |
|
39,737 |
|
|
33,433 |
|
|
|
|
|
|
Provision for Credit Losses |
|
|
|
|
|
Loans |
|
1,193 |
|
|
961 |
Off-balance sheet credit exposures |
|
70 |
|
|
315 |
|
|
|
|
|
|
Total provision for credit loss expense |
|
1,263 |
|
|
1,276 |
|
|
|
|
|
|
Net Interest Income After Provision for Credit Losses |
|
38,474 |
|
|
32,157 |
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
Net gain on loan sales |
|
1,075 |
|
|
770 |
Net realized gain (loss) on available-for-sale securities |
|
— |
|
|
(314) |
Other |
|
1,333 |
|
|
1,812 |
|
|
|
|
|
|
Total noninterest income |
|
2,408 |
|
|
2,268 |
|
|
|
|
|
|
Noninterest Expense |
|
|
|
|
|
Salaries and employee benefits |
|
17,600 |
|
|
16,315 |
Occupancy and equipment |
|
3,359 |
|
|
3,157 |
Other |
|
7,021 |
|
|
7,929 |
|
|
|
|
|
|
Total noninterest expense |
|
27,980 |
|
|
27,401 |
Net Income |
$ |
12,902 |
|
$ |
7,024 |
6
Frontier Holdings, LLC
Consolidated Statements of Comprehensive Income
Years Ended September 30, 2025 and 2024
(amounts in thousands)
|
2025 |
|
2024 |
||
|
|
|
|
||
Net Income |
$ |
12,902 |
|
$ |
7,024 |
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
Unrealized appreciation on |
|
|
|
|
|
available-for-sale securities |
|
476 |
|
|
5,748 |
Reclassification adjustment for (gains) losses |
|
|
|
|
|
included in net income |
|
— |
|
|
314 |
|
|
476 |
|
|
6,062 |
Comprehensive Income |
|
13,378 |
|
|
13,086 |
7
Frontier Holdings, LLC
Consolidated Statements of Members’ Equity
Years Ended September 30, 2025 and 2024
(amounts in thousands except unit data)
|
Members’ Equity |
|
Retained Earnings |
|
Accumulated Other Comprehensive (Loss) |
|
Total |
|||
Units |
|
Amounts |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Balance, October 1, 2023 |
|
43,047 |
$ |
55,882 |
$ |
57,542 |
$ |
(15,461) |
$ |
97,963 |
Issuance of members’ units |
|
82 |
|
246 |
|
— |
|
— |
|
246 |
Net income |
|
— |
|
— |
|
7,024 |
|
— |
|
7,024 |
Other comprehensive income |
|
— |
|
— |
|
— |
|
6,062 |
|
6,062 |
Distributions to members |
|
— |
|
— |
|
(1,950) |
|
— |
|
(1,950) |
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2024 |
|
43,129 |
|
56,128 |
|
62,616 |
|
(9,399) |
|
109,345 |
|
|
|
|
|
|
|
|
|
|
|
Issuance of members’ units |
|
145 |
|
443 |
|
— |
|
— |
|
443 |
Net income |
|
— |
|
— |
|
12,902 |
|
— |
|
12,902 |
Other comprehensive income |
|
— |
|
— |
|
— |
|
476 |
|
476 |
Distributions to members |
|
— |
|
— |
|
(4,100) |
|
— |
|
(4,100) |
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2025 |
|
43,274 |
$ |
56,571 |
$ |
71,418 |
$ |
(8,923) |
$ |
119,066 |
8
Frontier Holdings, LLC
Consolidated Statements of Cash Flows
Years Ended September 30, 2025 and 2024
(amounts in thousands)
|
2025 |
|
2024 |
||
Operating Activities |
$ |
12,902 |
|
$ |
7,024 |
Net income |
|
|
|
|
|
|
|
|
|
|
|
Items not requiring (providing) cash |
|
|
|
|
|
Depreciation and amortization |
|
609 |
|
|
648 |
Amortization of operating lease right-of-use asset |
|
411 |
|
|
394 |
Issuance of member incentive plan units |
|
443 |
|
|
246 |
Provision for credit losses |
|
1,263 |
|
|
1,276 |
Amortization and accretion of securities, net |
|
357 |
|
|
457 |
Net realized loss on available-for-sale securities |
|
— |
|
|
314 |
Net realized loss on equity securities |
|
22 |
|
|
— |
Net realized loss on property, plant & equipment |
|
— |
|
|
21 |
Net realized gain on sale of other real estate owned |
|
(16) |
|
|
— |
Net realized gain on sale of Frontier Insurance Services, LLC |
|
— |
|
|
(337) |
Changes in |
|
|
|
|
|
Interest receivable |
|
(1,509) |
|
|
(212) |
Other assets |
|
30 |
|
|
614 |
Operating lease liability |
|
(315) |
|
|
(286) |
Interest payable and other liabilities |
|
463 |
|
|
1,480 |
|
|
|
|
|
|
Net cash provided by operating activities |
|
14,660 |
|
|
11,639 |
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
Net change in interest-bearing deposits with banks |
|
248 |
|
|
245 |
Purchases of securities |
|
(671) |
|
|
(4,862) |
Proceeds from sales of securities |
|
— |
|
|
4,280 |
Proceeds from maturities and paydowns of securities |
|
6,268 |
|
|
6,689 |
Purchases of Federal Home Loan Bank stock |
|
(6,730) |
|
|
(5,283) |
Redemptions of Federal Home Loan Bank stock |
|
7,111 |
|
|
6,815 |
Net changes in loans |
|
(107,838) |
|
|
(52,723) |
Purchases of premises and equipment |
|
(680) |
|
|
(129) |
Proceeds from sale of foreclosed assets |
|
168 |
|
|
— |
Proceeds from sale of Frontier Insurance Services, LLC |
|
— |
|
|
1,787 |
|
|
|
|
|
|
Net cash used in investing activities |
|
(102,124) |
|
|
(43,181) |
9
See Notes to Consolidated Financial Statements
Frontier Holdings, LLC
Consolidated Statements of Cash Flows - Continued
Years Ended September 30, 2025 and 2024
(amounts in thousands)
|
2025 |
|
2024 |
||
Financings Activities |
|
|
|
|
|
Net change in deposit accounts |
$ |
67,320 |
|
$ |
54,124 |
Proceeds from Federal Home Loan Bank advances |
|
545,055 |
|
|
394,768 |
Repayment of Federal Home Loan Bank advances |
|
(555,390) |
|
|
(417,690) |
Proceeds from other borrowed funds |
|
3,465 |
|
|
5,290 |
Repayment of other borrowed funds |
|
(8,859) |
|
|
(4,823) |
Net change in short-term borrowings |
|
35,000 |
|
|
— |
Distributions to members |
|
(4,100) |
|
|
(1,950) |
|
|
|
|
|
|
Net cash provided by financing activities |
|
82,491 |
|
|
29,719 |
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
(4,973) |
|
|
(1,823) |
|
|
|
|
|
|
Cash and cash equivalents, beginning of year |
|
15,994 |
|
|
17,817 |
|
|
|
|
|
|
Cash and cash equivalents, end of year |
$ |
11,021 |
|
$ |
15,994 |
|
|
|
|
|
|
Supplemental cash flows information |
|
|
|
|
|
|
|
|
|
|
|
Interest paid |
$ |
41,114 |
|
$ |
38,716 |
|
|
|
|
|
|
State deposit taxes paid |
|
420 |
|
|
561 |
10
See Notes to Consolidated Financial Statements
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Nature of Operations
Frontier Holdings, LLC (“the Company”) is a financial holding company whose principal activity is ownership and management of its wholly-owned subsidiaries.
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Frontier Bank, Omaha, Nebraska (“the Bank”) and FH REM 1, LLC, a real estate holding company.
In November 2023, the Company sold Frontier Insurance Services for $1,787,000 which resulted in a gain (included in other income on the consolidated statement of income) of approximately $337,000.
The Company is engaged in banking services in the midwestern United States, primarily in the state of Nebraska. The Bank is subject to competition from other financial institutions. The Bank is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its subsidiary, and the subsidiary Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses and fair values of financial instruments.
Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold, all which have original maturities of three months or less.
At September 30, 2025, the Company’s cash accounts exceeded federally insured limits by approximately $599,000.
11
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Interest-bearing Time Deposits in Banks
Interest-bearing time deposits in banks have original maturities of one to five years and are carried at cost.
Securities
Available for sale securities are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.
Allowance for Credit Losses – Available-for-Sale Debt Securities
For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more-likely-than-not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through other expense. For available-for-sale securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In such assessment, the Company considers the extent to which fair value is less than amortized cost, if there are any changes to the investment grade of the security by a rating agency, and if there are any adverse conditions that impact the security. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses (ACL) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any estimated unrealized losses that have not been recorded through ACL are recognized in other comprehensive income/(loss).
The Company has elected to exclude accrued interest from the estimate of credit losses for available-for-sale debt securities which totaled $422,000 and $451,000 as of September 30, 2025 and 2024, respectively. As part of its non-accrual policy, the Company charges-off uncollectible interest at the time it is determined to be uncollectable. There were no credit losses for available-for-sale debt securities recorded at September 30, 2025 and 2024.
Loans Held for Sale
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income. Gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are recognized in noninterest income upon sale of the loan.
12
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Loans
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for charge-offs and the allowance for credit losses.
The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well secured and in process of collection. Past-due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.
All interest accrued but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Allowance for Credit Losses - Loans
The allowance for credit losses is a valuation account that is deducted from loan’s amortized cost basis to present the net amount expected to be collected on loans. The provision for credit losses is charged to income. Credit losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
The allowance for credit losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and current and forecasted economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
Groups of loans with similar risk characteristics are collectively evaluated. Loans that do not share risk characteristics are evaluated on an individual basis. Loans with similar risk characteristics are grouped into homogeneous segments, or pools, for analysis.
A loan is individually evaluated for allowance for credit loss when the loan is assigned a substandard rating and is considered impaired by management. Factors considered by management in determining individual evaluation include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.
13
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Allowance for Credit Losses – Loans - Continued
A weighted average remaining maturity, or WARM method is used to determine the allowance for credit losses for loan pools. The WARM method requires the use of historic loan loss data across a comparable data set and the application of an adjusted loss rate applied to each loan over their expected remaining term, taking into consideration loan segmentation and expected economic conditions over the relevant timeframe.
Application of the WARM method to estimate a current expected credit loss (CECL) reserve requires judgement, including (i) the appropriate historical loss rate reference data, (ii) the expected timing and amount of future loan fundings and repayments and (iii) the current quality of our portfolio and our expectations of performance and market conditions over the relevant time period. The internal risk rating of each loan is considered the primary credit quality indicator underlying the CECL assessment.
The CECL reserve is measured on a collective basis wherever similar risk characteristics exist within a pool of similar assets. We have identified the following pools and measure the reserve for credit losses based on these identified loan segments.
In addition, qualitative factors are used that are determined to be relevant in assessing expected credit losses within the loan portfolio. Various risks that may be considered are as follows.
i) Changes in the value of the underlying collateral for loans that are non-collateral dependent.
ii) Actual and expected changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan pools.
iii) Changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries.
iv) Changes in the nature and volume of the loan pools and in the terms of the underlying loans.
v) Changes in the volume and severity of past due financial assets, the volume of nonaccrual assets, and the volume and severity of adversely classified or graded assets.
14
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Allowance for Credit Losses – Loans - Continued
vi) The existence, growth, and effect of any concentration of credit
vii) Changes in the experience, ability, and depth of our lending management and staff
viii) Changes in the quality of our credit review function
ix) Changes in legal/regulatory environment.
Allowance for Credit Losses - Off-Balance-Sheet Credit Exposures
The allowance for credit losses on off-balance-sheet credit exposure is a liability account, representing expected credit losses over the contractual period for which the company is exposed to credit risk resulting from a contractual obligation to extend credit. Commitments are evaluated in pools under a WARM methodology, similar to what is done for the loan portfolio, while incorporating managements assumptions for funding. No allowance is recognized if the Company has the unconditional right to cancel the obligation. The allowance is reported as a component of interest payable and other liabilities in the consolidated balance sheets. Adjustments to the allowance are reported in the consolidated statement of income as a component of provision for credit loss expense which totaled $70,000 and $315,000 for the year ended September 30, 2025 and 2024, respectively. The Company has an allowance for credit loss on off-balance-sheet exposure of $385,000 and $315,000 as of September 30, 2025 and 2024, respectively.
Premises and Equipment
Land is carried at cost. Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and depreciated using the straight-line method over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured.
Maintenance and repairs, which neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Gains or losses on dispositions of premises and equipment are included in income.
The estimated useful lives for each major depreciable classification of premises and equipment are as follows:
Buildings and improvements 35-40 years
Leasehold improvements 5-10 years
Furniture and fixtures 3-7 years
15
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Long-Lived Asset Impairment
The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. No asset impairment was recognized during the years ended September 30, 2025 and 2024.
Nonmarketable Equity Securities
The Company, as a member of one of the Federal Home Loan Banks (FHLB), is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. Management reviews for impairment based on the ultimate recoverability of the cost basis in the FHLB stock.
Foreclosed Assets Held for Sale
Assets acquired through, or in lieu of, loan foreclosure are held for sale (included in other assets) and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in noninterest income or expense.
Goodwill
Goodwill is evaluated annually for impairment or more frequently if impairment indicators are present. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements.
Income and State Depository Taxes
The Company’s members have elected to have the Company’s income taxed as an “S” Corporation under provisions of the Internal Revenue Code and a similar section of the state income tax laws. Therefore, taxable income or loss is reported to the individual stockholders for inclusion in their respective tax returns and no provision for federal and state income taxes is included in these
16
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
statements. The provision for income taxes reflected in these statements is for state income taxes only and shown in other noninterest expenses.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company—put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.
Comprehensive Income
Comprehensive income consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains or losses on securities available for sale.
Member Unit Incentive Plan
At September 30, 2025 and 2024, the Company recognizes the calculated price of unit-based awards to employees as compensation over the requisite service period. The unit-based employee compensation plan is described more fully in Note 14.
Revenue Recognition
The Company applies Financial Accounting Standards Board Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) to some of its revenue. The majority of the
Company’s revenues come from interest income from securities and loans that are outside the scope of Topic 606. The Company’s services that fall within the scope of Topic 606 are presented within non-interest income in the accompanying statements of income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of Topic 606 include service charges on deposits (e.g., overdraft fees and ATM fees) and the gain on sale of foreclosed assets.
A description of the Company’s revenue streams accounted for under Topic 606 are as follows:
Deposit Services. The Company generates revenues through fees charged to depositors related to deposit account maintenance fees, overdrafts, ATM fees, wire transfers, and additional miscellaneous services provided at the request of the depositor. For deposit-related services, revenue is recognized when performance obligations are satisfied, which is, generally, at a point in time.
17
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 1: Nature of Operations and Summary of Significant Accounting Policies - Continued
Gains/Losses on Sales of Foreclosed Assets. The Company records a gain or loss from the sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of foreclosed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.
Reclassifications
Certain reclassifications have been made to the 2024 consolidated financial statements to conform to the 2025 consolidated financial statement presentation. These reclassifications had no effect on net earnings.
Nebraska Department of Banking and Finance Requirements
The audits of the Company were designed to meet the minimum requirements of 45 NAC 25-001 of the Nebraska Department of Banking and Finance for Nebraska.
Adoption of New Accounting Standard in Prior Period
On October 1, 2023, the Company adopted ASU 2016-13: Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires credit losses to be measured using a current expected credit loss (CECL) methodology over the expected life of certain financial assets. The Company adopted ASC 326 using a modified retrospective method. Reporting periods beginning after October 1, 2023 are presented under ASC 326 while prior periods amounts continue to be reported in accordance with previously applicable GAAP. The standard applies to loans, debt securities, and off-balance sheet credit exposures. The Company did not record an adjustment in relation to the cumulative effect of adopting ASC 326.
18
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 2: Securities
The amortized cost and fair value, with gross unrealized gains and losses at September 30, 2025 and 2024 are as follows:
|
|
Amortized Cost |
|
Gross Unrealized Gains |
|
Gross Unrealized Losses |
|
Fair Value |
||||
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
2025 |
|
(in thousands) |
||||||||||
Securities available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasuries |
|
$ |
17,470 |
$ |
|
— |
$ |
|
(1,163) |
$ |
|
16,307 |
State and political subdivisions |
|
|
34,531 |
|
|
— |
|
|
(6,230) |
|
|
28,301 |
Mortgage-backed (GSE residential/commercial) |
|
|
41,182 |
|
|
15 |
|
|
(1,545) |
|
|
39,652 |
|
|
$ |
93,183 |
$ |
|
15 |
$ |
|
(8,938) |
$ |
|
84,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasuries |
|
$ |
17,620 |
$ |
|
— |
$ |
|
(1,487) |
$ |
|
16,133 |
State and political subdivisions |
|
|
34,768 |
|
|
— |
|
|
(6,078) |
|
|
28,690 |
Mortgage-backed (GSE residential/commercial) |
|
|
46,749 |
|
|
10 |
|
|
(1,844) |
|
|
44,915 |
|
|
$ |
99,137 |
$ |
|
10 |
$ |
|
(9,409) |
$ |
|
89,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The carrying value of securities pledged as collateral to secure public deposits and for other purposes, was $26,505,000 and $27,793,000 at September 30, 2025 and 2024, respectively.
The amortized cost and fair value of available for sale securities by contractual maturity at September 30, 2025 are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
|
|
Amortized Cost |
|
Fair Value |
||
|
|
|
||||
|
|
(in thousands) |
||||
|
|
|
|
|
|
|
Within one year |
|
$ |
2,620 |
|
$ |
2,551 |
One to five years |
|
|
16,573 |
|
|
15,449 |
Five to ten years |
|
|
11,456 |
|
|
10,087 |
After ten years |
|
|
21,352 |
|
|
16,521 |
|
|
|
52,001 |
|
|
44,608 |
Mortgage-backed securities |
|
|
41,182 |
|
|
39,652 |
|
|
|
|
|
|
|
Totals |
|
$ |
93,183 |
|
$ |
84,260 |
|
|
|
|
|
|
|
19
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 2: Securities – Continued
For the years ended September 30, 2025 and 2024 there were no gross gains. For the year ended September 30, 2025 there were no gross losses. For the year ended September 30, 2024 there were gross losses of $314,000, resulting from the sales of available-for-sale securities that were realized.
Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at September 30, 2025 and 2024, was $80,086,000 and $89,591,000, respectively, which is approximately 95% and 99%, respectively, of the Company’s available-for-sale investment portfolio.
The following tables show the investment’s gross unrealized losses and fair value of the investments for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 and 2024:
Description of Available-for-sale Securities |
Less than 12 Months |
|
12 Months or More |
Total |
|||||||||||||||
|
|
Fair Value |
|
Unrealized Losses |
|
|
Fair Value |
|
Unrealized Losses |
|
Fair Value |
|
Unrealized Losses |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(in thousands) |
|||||||||||||||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S Treasuries |
|
$ |
— |
|
$ |
— |
|
$ |
16,307 |
|
|
$ |
(1,163) |
|
$ |
16,307 |
|
$ |
(1,163) |
State and political subdivisions |
|
|
— |
|
|
— |
|
|
26,408 |
|
|
|
(6,230) |
|
|
26,408 |
|
|
(6,230) |
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(GSE residential/commercial) |
|
|
5 |
|
|
(1) |
|
|
37,366 |
|
|
|
(1,544) |
|
|
37,371 |
|
|
(1,545) |
Total temporarily impaired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities |
|
$ |
5 |
|
$ |
(1) |
|
$ |
80,081 |
|
|
$ |
(8,937) |
|
$ |
80,086 |
|
$ |
(8,938) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S Treasuries |
|
$ |
— |
|
|
— |
|
$ |
16,133 |
|
|
$ |
(1,487) |
|
$ |
16,133 |
|
$ |
(1,487) |
State and political subdivisions |
|
|
— |
|
|
— |
|
|
28,690 |
|
|
|
(6,078) |
|
|
28,690 |
|
|
(6,078) |
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(GSE residential/commercial) |
|
|
3,279 |
|
|
(25) |
|
|
41,489 |
|
|
|
(1,819) |
|
|
44,768 |
|
|
(1,844) |
Total temporarily impaired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securities |
|
$ |
3,279 |
|
|
(25) |
|
$ |
86,312 |
|
|
$ |
(9,384) |
|
$ |
89,591 |
|
$ |
(9,409) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 2: Securities – Continued
U. S. Treasury Securities
The unrealized losses on the Company’s investment in U. S. Treasury securities were caused by interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company has not recorded an allowance for credit losses on those investments at September 30, 2025 and 2024, respectively.
Mortgage-backed Securities
The unrealized losses on the Company’s investment in mortgage-backed securities, including private-labeled mortgage-backed securities, were caused by interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company has not recorded an allowance for credit losses on those investments at September 30, 2025 and 2024, respectively.
State and Political Subdivisions
The unrealized losses on the Company’s investments in securities of state and political subdivisions were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company has not recorded an allowance for credit losses on those investments at September 30, 2025 and 2024, respectively.
21
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses
Classes of loans at September 30, 2025 and 2024, include:
|
|
2025 |
|
2024 |
||
|
|
|
|
|
||
|
|
(in thousands) |
||||
|
|
|
|
|
|
|
Commercial |
|
$ |
165,914 |
|
$ |
164,427 |
Commercial real estate |
|
|
492,330 |
|
|
437,052 |
Residential real estate |
|
|
387,101 |
|
|
345,947 |
Agricultural |
|
|
68,576 |
|
|
59,141 |
Agricultural real estate |
|
|
168,404 |
|
|
167,364 |
Consumer and other |
|
|
8,444 |
|
|
9,197 |
|
|
|
|
|
|
|
Gross loans |
|
|
1,290,769 |
|
|
1,183,128 |
|
|
|
|
|
|
|
Less: Allowance for credit losses |
|
|
14,492 |
|
|
13,496 |
|
|
|
|
|
|
|
Net loans |
|
|
1,276,277 |
|
|
1,169,632 |
The following tables present the balance and activity in the allowance for credit losses based on portfolio segment as of and for years ended September 30, 2025 and 2024, respectively, (in thousands):
|
Commercial |
Commercial Real Estate |
|
Residential Real Estate |
Agricultural |
Agricultural Real Estate |
Consumer and Other |
Total |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of year |
$ |
1,956 |
$ |
5,067 |
$ |
3,853 |
|
$ |
657 |
$ |
1,858 |
$ |
105 |
$ |
13,496 |
Provision charged to expense |
|
(24) |
|
616 |
|
476 |
|
|
67 |
|
(102) |
|
160 |
|
1,193 |
Loans charged off |
|
(40) |
|
(121) |
|
(50) |
|
|
(2) |
|
— |
|
— |
|
(213) |
Recoveries |
|
6 |
|
— |
|
— |
|
|
1 |
|
— |
|
9 |
|
16 |
Balance, end of year |
$ |
1,898 |
$ |
5,562 |
$ |
4,279 |
|
$ |
723 |
$ |
1,756 |
$ |
274 |
$ |
14,492 |
22
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses - Continued
|
Commercial |
Commercial Real Estate |
|
Residential Real Estate |
Agricultural |
Agricultural Real Estate |
Consumer and Other |
Total |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance prior to adoption of ASC326 |
$ |
1,677 |
$ |
5,126 |
$ |
3,575 |
|
$ |
597 |
$ |
1,395 |
$ |
161 |
$ |
12,531 |
Impact of ASC326 adoption |
|
120 |
|
(281) |
|
(124) |
|
|
26 |
|
306 |
|
(47) |
|
— |
Balance, beginning of year |
|
1,797 |
|
4,845 |
|
3,451 |
|
|
623 |
|
1,701 |
|
114 |
|
12,531 |
Provision charged to expense |
|
151 |
|
222 |
|
414 |
|
|
33 |
|
157 |
|
(16) |
|
961 |
Losses charged off |
|
— |
|
— |
|
(313) |
|
|
— |
|
— |
|
(6) |
|
(19) |
Recoveries |
|
8 |
|
— |
|
1 |
|
|
1 |
|
— |
|
13 |
|
23 |
Balance, end of year |
$ |
1,956 |
$ |
5,067 |
$ |
3,853 |
|
$ |
657 |
$ |
1,858 |
$ |
105 |
$ |
13,496 |
Internal Risk Categories
Loan grades are numbered 1 through 8. Grades 1 through 4 are considered satisfactory grades. The grade of 5, or Watch or Special Mention, represents loans of lower quality and is considered criticized. The grades of 6, or Substandard, and 7, or Doubtful, refer to assets that are classified. The use and application of these grades by the Bank will be uniform and shall conform to the Bank’s policy.
Prime (1) loans are of superior quality with excellent credit strength and repayment ability providing a nominal credit risk.
Good (2) loans are of above average credit strength and repayment ability providing only a minimal credit risk.
Satisfactory (3) loans of reasonable credit strength and repayment ability providing an average credit risk due to one or more underlying weaknesses.
Acceptable (4) loans of the lowest acceptable credit strength and weakened repayment ability providing a cautionary credit risk due to one or more underlying weaknesses. New borrowers are typically not underwritten within this classification.
Special Mention (5) assets have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Ordinarily, special mention credits have characteristics which corrective management action would remedy.
23
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses - Continued
Internal Risk Categories - Continued
Substandard (6) loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Doubtful (7) loans classified as doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current known facts, conditions, and values, highly questionable and improbable.
Loss (8) loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off even though partial recovery may be affected in the future.
Risk characteristics applicable to each segment of the loan portfolio are described as follows.
Commercial and Financing Leases: The commercial and financing lease portfolios include loans to commercial customers for use in financing working capital needs and equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.
Commercial Real Estate: Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values, and the local economies in the Company’s market areas.
Residential Real Estate: The residential 1-4 family real estate loans are generally collateralized by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Company’s market areas that might impact either property values or a borrower’s personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.
Agricultural and Agriculture Real Estate: Agricultural and agricultural real estate loans are generally collateralized by livestock, equipment and real estate used for farm production or grazing. Repayment of agricultural loans is dependent on the successful operation or management of the farm property collateralizing the loan. The success of the loan may also be affected by many
24
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses - Continued
factors outside the control of the farm borrower. Weather presents one of the greatest risks as hail; drought, floods, or other conditions can severely limit crop yields and thus impair loan repayments and the value of the underlying collateral. This risk can be reduced with a variety of insurance coverages which can help to ensure loan repayment. Government support programs and the Company generally require farm borrowers to procure crop insurance coverage. Grain and livestock prices also present a risk as prices may decline prior to sale resulting in a failure to cover production costs. These risks may be reduced by the farmer with the use of futures contracts or hedges to mitigate price risk.
Consumer and Other: The consumer and other loan portfolios consist of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from borrowers’ income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s market area) and the creditworthiness of a borrower.
25
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses - Continued
The following tables present the amortized cost basis within each credit quality indicator by year of origination as of September 30, 2025 and 2024 (in thousands):
|
2025 |
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
Prior |
|
Revolving Loans |
|
Total |
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
14,919 |
|
16,720 |
|
18,763 |
|
5,941 |
|
3,854 |
|
13,954 |
|
82,194 |
|
156,345 |
Watch |
— |
|
— |
|
— |
|
74 |
|
1,130 |
|
— |
|
415 |
|
1,619 |
Substandard |
41 |
|
39 |
|
135 |
|
874 |
|
1,006 |
|
35 |
|
5,820 |
|
7,950 |
Total commercial |
14,960 |
|
16,759 |
|
18,898 |
|
6,889 |
|
5,990 |
|
13,989 |
|
88,429 |
|
165,914 |
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
91,593 |
|
55,391 |
|
45,759 |
|
110,956 |
|
51,911 |
|
121,503 |
|
9,955 |
|
487,068 |
Watch |
— |
|
2,161 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2,161 |
Substandard |
— |
|
1,215 |
|
— |
|
— |
|
— |
|
1,886 |
|
— |
|
3,101 |
Total commercial real estate |
91,593 |
|
58,767 |
|
45,759 |
|
110,956 |
|
51,911 |
|
123,389 |
|
9,955 |
|
492,330 |
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
60,082 |
|
68,836 |
|
38,181 |
|
51,424 |
|
51,336 |
|
36,333 |
|
72,494 |
|
378,686 |
Watch |
— |
|
331 |
|
860 |
|
721 |
|
— |
|
4,309 |
|
1,075 |
|
7,296 |
Substandard |
— |
|
11 |
|
389 |
|
561 |
|
1 |
|
157 |
|
— |
|
1,119 |
Total residential real estate |
60,082 |
|
69,178 |
|
39,430 |
|
52,706 |
|
51,337 |
|
40,799 |
|
73,569 |
|
387,101 |
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
4,017 |
|
3,102 |
|
2,370 |
|
2,207 |
|
680 |
|
3,230 |
|
50,506 |
|
66,112 |
Watch |
74 |
|
— |
|
55 |
|
21 |
|
169 |
|
63 |
|
620 |
|
1,002 |
Substandard |
45 |
|
35 |
|
— |
|
8 |
|
8 |
|
74 |
|
1,292 |
|
1,462 |
Total agriculture |
4,136 |
|
3,137 |
|
2,425 |
|
2,236 |
|
857 |
|
3,367 |
|
52,418 |
|
68,576 |
Agriculture real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
27,416 |
|
7,062 |
|
13,706 |
|
21,909 |
|
22,355 |
|
46,348 |
|
21,776 |
|
160,572 |
Watch |
500 |
|
— |
|
108 |
|
2,699 |
|
545 |
|
19 |
|
1,306 |
|
5,177 |
Substandard |
512 |
|
882 |
|
— |
|
1,226 |
|
— |
|
35 |
|
— |
|
2,655 |
Total agriculture real estate |
28,428 |
|
7,944 |
|
13,814 |
|
25,834 |
|
22,900 |
|
46,402 |
|
23,082 |
|
168,404 |
Consumer and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
1,882 |
|
1,652 |
|
821 |
|
1,262 |
|
63 |
|
904 |
|
1,860 |
|
8,444 |
Watch |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Substandard |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Total consumer and other |
1,882 |
|
1,652 |
|
821 |
|
1,262 |
|
63 |
|
904 |
|
1,860 |
|
8,444 |
Total loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
199,909 |
|
152,763 |
|
119,600 |
|
193,699 |
|
130,199 |
|
222,272 |
|
238,785 |
|
1,257,227 |
Watch |
574 |
|
2,492 |
|
1,023 |
|
3,515 |
|
1,844 |
|
4,391 |
|
3,416 |
|
17,255 |
Substandard |
598 |
|
2,182 |
|
524 |
|
2,669 |
|
1,015 |
|
2,187 |
|
7,112 |
|
16,287 |
Total loans |
201,081 |
|
157,437 |
|
121,147 |
|
199,883 |
|
133,058 |
|
228,850 |
|
249,313 |
|
1,290,769
|
26
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses – Continued
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
|
Prior |
|
Revolving Loans |
|
Total |
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
19,640 |
|
22,108 |
|
8,179 |
|
7,956 |
|
11,694 |
|
7,565 |
|
74,215 |
|
151,357 |
Watch |
183 |
|
— |
|
1,140 |
|
1,302 |
|
— |
|
— |
|
215 |
|
2,840 |
Substandard |
58 |
|
1,350 |
|
1,372 |
|
1,536 |
|
140 |
|
34 |
|
5,740 |
|
10,230 |
Total commercial |
19,881 |
|
23,458 |
|
10,691 |
|
10,794 |
|
11,834 |
|
7,599 |
|
80,170 |
|
164,427 |
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
54,287 |
|
70,115 |
|
109,874 |
|
46,190 |
|
39,248 |
|
104,623 |
|
2,664 |
|
427,001 |
Watch |
64 |
|
— |
|
— |
|
3,951 |
|
4,576 |
|
— |
|
— |
|
8,591 |
Substandard |
500 |
|
— |
|
943 |
|
— |
|
— |
|
17 |
|
— |
|
1,460 |
Total commercial real estate |
54,851 |
|
70,115 |
|
110,817 |
|
50,141 |
|
43,824 |
|
104,640 |
|
2,664 |
|
437,052 |
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
42,449 |
|
46,583 |
|
77,404 |
|
68,112 |
|
22,953 |
|
31,651 |
|
47,668 |
|
336,820 |
Watch |
344 |
|
— |
|
— |
|
441 |
|
5,106 |
|
358 |
|
1,300 |
|
7,549 |
Substandard |
— |
|
339 |
|
— |
|
1 |
|
— |
|
50 |
|
1,188 |
|
1,578 |
Total residential real estate |
42,793 |
|
46,922 |
|
77,404 |
|
68,554 |
|
28,059 |
|
32,059 |
|
50,156 |
|
345,947 |
Agriculture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
3,066 |
|
3,263 |
|
3,953 |
|
1,416 |
|
3,356 |
|
546 |
|
40,804 |
|
56,404 |
Watch |
500 |
|
186 |
|
18 |
|
242 |
|
207 |
|
32 |
|
766 |
|
1,951 |
Substandard |
— |
|
— |
|
— |
|
— |
|
9 |
|
3 |
|
774 |
|
786 |
Total agriculture |
3,566 |
|
3,449 |
|
3,971 |
|
1,658 |
|
3,572 |
|
581 |
|
42,344 |
|
59,141 |
Agriculture real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
8,377 |
|
16,194 |
|
24,242 |
|
27,793 |
|
11,620 |
|
46,530 |
|
26,805 |
|
161,561 |
Watch |
454 |
|
109 |
|
2,746 |
|
545 |
|
— |
|
26 |
|
478 |
|
4,358 |
Substandard |
— |
|
— |
|
1,365 |
|
80 |
|
— |
|
— |
|
— |
|
1,445 |
Total agriculture real estate |
8,831 |
|
16,303 |
|
28,353 |
|
28,418 |
|
11,620 |
|
46,556 |
|
27,283 |
|
167,364 |
Consumer and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
2,189 |
|
1,802 |
|
2,003 |
|
325 |
|
138 |
|
1,009 |
|
1,710 |
|
9,176 |
Watch |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Substandard |
— |
|
— |
|
— |
|
— |
|
4 |
|
17 |
|
— |
|
21 |
Total consumer and other |
2,189 |
|
1,802 |
|
2,003 |
|
325 |
|
142 |
|
1,026 |
|
1,710 |
|
9,197 |
Total loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk rating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass |
130,008 |
|
160,065 |
|
225,655 |
|
151,792 |
|
89,009 |
|
191,924 |
|
193,866 |
|
1,142,319 |
Watch |
1,545 |
|
295 |
|
3,904 |
|
6,481 |
|
9,889 |
|
416 |
|
2,759 |
|
25,289 |
Substandard |
558 |
|
1,689 |
|
3,680 |
|
1,617 |
|
153 |
|
121 |
|
7,702 |
|
15,520 |
Total loans |
132,111 |
|
162,049 |
|
233,239 |
|
159,890 |
|
99,051 |
|
192,461 |
|
204,327 |
|
1,183,128 |
27
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses – Continued
The Company evaluates the loan risk grading system definitions on an ongoing basis. No significant changes were made during 2025 or 2024.
The following tables present the Company’s loan portfolio aging analysis as of September 30, 2025 and 2024 (in thousands):
2025 |
|
30-59 Days Past Due |
|
60-90 Days Past Due |
|
Greater Than 90 Days |
|
Total Past Due |
|
Current |
|
Total Loans |
||||||
Commercial |
|
$ |
15 |
|
$ |
1,240 |
|
$ |
142 |
|
$ |
1,397 |
|
$ |
164,517 |
|
$ |
165,914 |
Commercial real estate |
|
|
1,315 |
|
|
— |
|
|
1,873 |
|
|
3,188 |
|
|
489,142 |
|
|
492,330 |
Residential real estate |
|
|
8,060 |
|
|
222 |
|
|
961 |
|
|
9,243 |
|
|
377,858 |
|
|
387,101 |
Agriculture |
|
|
74 |
|
|
43 |
|
|
— |
|
|
117 |
|
|
68,459 |
|
|
68,576 |
Agriculture real estate |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
168,404 |
|
|
168,404 |
Consumer and other |
|
|
80 |
|
|
— |
|
|
— |
|
|
80 |
|
|
8,364 |
|
|
8,444 |
Total |
|
$ |
9,544 |
|
$ |
1,505 |
|
$ |
2,976 |
|
$ |
14,025 |
|
$ |
1,276,744 |
|
$ |
1,290,769 |
2024 |
|
30-59 Days Past Due |
|
60-90 Days Past Due |
|
Greater Than 90 Days |
|
Total Past Due |
|
Current |
|
Total Loans |
||||||
Commercial |
|
$ |
84 |
|
$ |
— |
|
$ |
— |
|
$ |
84 |
|
$ |
164,343 |
|
$ |
164,427 |
Commercial real estate |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
437,052 |
|
|
437,052 |
Residential real estate |
|
|
620 |
|
|
410 |
|
|
1,217 |
|
|
2,247 |
|
|
343,700 |
|
|
345,947 |
Agriculture |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
59,141 |
|
|
59,141 |
Agriculture real estate |
|
|
484 |
|
|
— |
|
|
26 |
|
|
510 |
|
|
166,854 |
|
|
167,364 |
Consumer and other |
|
|
40 |
|
|
— |
|
|
— |
|
|
40 |
|
|
9,157 |
|
|
9,197 |
Total |
|
$ |
1,228 |
|
$ |
410 |
|
$ |
1,243 |
|
$ |
2,881 |
|
$ |
1,180,247 |
|
$ |
1,183,128 |
28
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses – Continued
The following table presents the Company’s nonaccrual loans at September 30, 2025 & 2024 (in thousands).
2025 |
|
Nonaccrual Loans Without a Specific Reserve |
|
Total Nonaccrual |
|
Loans Past Due Over 89 Days and Still Accruing |
|||
Commercial |
|
$ |
142 |
|
$ |
142 |
|
$ |
— |
Commercial real estate |
|
|
1,873 |
|
|
1,873 |
|
|
— |
Residential real estate |
|
|
1,111 |
|
|
1,111 |
|
|
— |
Agriculture |
|
|
51 |
|
|
51 |
|
|
— |
Agriculture real estate |
|
|
— |
|
|
— |
|
|
— |
Consumer and other |
|
|
4 |
|
|
4 |
|
|
— |
|
|
$ |
3,181 |
|
$ |
3,181 |
|
$ |
— |
2024 |
|
Nonaccrual Loans Without a Specific Reserve |
|
Total Nonaccrual |
|
Loans Past Due Over 89 Days and Still Accruing |
|||
Commercial |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Commercial real estate |
|
|
— |
|
|
— |
|
|
— |
Residential real estate |
|
|
10 |
|
|
1,228 |
|
|
— |
Agriculture |
|
|
2 |
|
|
2 |
|
|
— |
Agriculture real estate |
|
|
— |
|
|
— |
|
|
26 |
Consumer and other |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
12 |
|
$ |
1,230 |
|
$ |
26 |
29
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 3: Loans and Allowance for Credit Losses - Continued
The following tab presents the amortized cost basis of collateral-dependent loans as of September 30, 2025 and 2024, respectively, by collateral type (in thousands).
2025 |
|
Real Estate |
|
2025 Business Assets |
|
Total |
|||
Commercial |
|
$ |
— |
|
$ |
1,229 |
|
$ |
1,229 |
Commercial real estate |
|
|
1,873 |
|
|
— |
|
|
1,873 |
Residential real estate |
|
|
1,108 |
|
|
— |
|
|
1,108 |
Agriculture |
|
|
— |
|
|
51 |
|
|
51 |
Agriculture real estate |
|
|
35 |
|
|
— |
|
|
35 |
Consumer and other |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
3,016 |
|
$ |
1,280 |
|
$ |
4,296 |
2024 |
|
Real Estate |
|
2024 Business Assets |
|
Total |
|||
Commercial |
|
$ |
— |
|
$ |
2,663 |
|
$ |
2,663 |
Commercial real estate |
|
|
2,134 |
|
|
— |
|
|
2,134 |
Residential real estate |
|
|
376 |
|
|
— |
|
|
376 |
Agriculture |
|
|
— |
|
|
2 |
|
|
2 |
Agriculture real estate |
|
|
— |
|
|
— |
|
|
— |
Consumer and other |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
2,510 |
|
$ |
2,665 |
|
$ |
5,175 |
The Company had no loans at September 30, 2025 and 2024 that were modified with borrowers having financial difficulty.
30
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 4: Leases
The Company leases certain office space in various cities in Nebraska. The company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, and operating lease liabilities on the consolidated balance sheets. The Company leases for office space expire in various years through 2041. These leases generally contain renewal options for periods ranging from 5-10 years and require the Company to pay all executory costs (property taxes, maintenance, and insurance). Lease payments have an escalating fee schedule, which range from a 2% to 5% increase each year. Termination of the leases is generally prohibited unless there is a violation under the lease agreement.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise this option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company has no material related party leases. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
In determining the discount rate used to measure the right-of-use asset and lease liability, the Company uses rates implicit in the lease, or if not readily available, the Company uses its incremental borrowing rate based on information available at the commencement date of the lease to determine the present value of lease payments. Incremental borrowing rates were used to determine the present value of lease payments and were derived by utilizing the FHLB long term debt rates, corresponding to lease commencement date and estimated term, which are similar to the Company’s secured debt yields.
31
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 4: Leases - Continued
The lease cost and other required information for the year ended September 30, 2025 and 2024 are:
|
|
2025 |
|
2024 |
||
|
|
(in thousands) |
||||
Lease Cost |
|
|
|
|
|
|
Operating lease cost |
|
$ |
888 |
|
$ |
927 |
Other information |
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
Operating cash flows from operating leases |
|
$ |
792 |
|
$ |
819 |
Weighted Average Reaming Lease Term |
|
|
|
|
|
|
Operating leases |
|
|
14 years |
|
|
15 years |
Weighted Average Discount Rate |
|
|
|
|
|
|
Operating leases |
|
|
5.51% |
|
|
5.51% |
Future minimum lease payments under non-cancellable leases as of September 30, 2025 were as follows:
Year Ending September 30, |
|
|
2026 |
$ |
806 |
2027 |
|
833 |
2028 |
|
847 |
2029 |
|
861 |
2030 |
|
875 |
Thereafter |
|
8,106 |
Total future minimum lease payments |
$ |
12,328 |
Less imputed interest |
|
3,902 |
Lease liabilities |
$ |
8,426 |
32
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 5: Premises and Equipment
A summary of the cost and accumulated depreciation of premises and equipment at September 30, 2025 and 2024 is as follows:
|
|
2025 |
|
2024 |
||
|
|
|
|
|
||
|
|
(in thousands) |
||||
Land |
|
$ |
306 |
|
$ |
306 |
Buildings and improvements |
|
|
2,842 |
|
|
2,464 |
Furniture and fixtures |
|
|
4,683 |
|
|
4,380 |
Leasehold improvements |
|
|
2,206 |
|
|
2,207 |
|
|
|
10,037 |
|
|
9,357 |
Less accumulated depreciation and amortization |
|
|
(6,630) |
|
|
(6,021) |
|
|
|
|
|
|
|
Net premises and equipment |
|
$ |
3,407 |
|
$ |
3,336 |
Note 6: Goodwill
The changes in the carrying amount of goodwill for the years ended September 30, 2025 and 2024 were:
|
|
|
2025 |
|
|
2024 |
Beginning balance |
|
|
|
|
|
|
Goodwill |
|
$ |
15,213 |
|
$ |
16,270 |
Goodwill related to sale of Frontier Insurance Services, LLC |
|
|
— |
|
|
1,057 |
Ending balance |
|
$ |
15,213 |
|
$ |
15,213 |
Note 7: Time Deposits
Time deposits in denominations of greater than $250,000 totaled $84,698,000 and $71,768,000 at September 30, 2025 and 2024, respectively.
33
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 7: Time Deposits - Continued
At September 30, 2025, the scheduled annual maturities of time deposits (in thousands) are as follows:
2026 |
$ |
366,234 |
2027 |
|
83,679 |
2028 |
|
35,202 |
2029 |
|
20,151 |
2030 |
|
18,462 |
Thereafter |
|
35,191 |
|
$ |
558,919 |
Brokered and reciprocal deposits totaled approximately $406,039,000 and $369,484,000 at September 30, 2025 and 2024, respectively.
Note 8: Borrowed Funds
Borrowed funds at September 30, 2025 and 2024 consist of the following:
|
|
September 30, 2025 |
|
September 30, 2024 |
||
|
|
|
||||
|
|
(in thousands) |
||||
|
|
|
|
|
|
|
Long-term Federal Home Loan Bank advances |
|
$ |
100,580 |
|
$ |
107,315 |
Lines of credit with Federal Home Loan Bank |
|
|
34,700 |
|
|
38,300 |
Federal Funds Purchased |
|
|
35,000 |
|
|
— |
Line of credit with a bank |
|
|
9,718 |
|
|
14,753 |
Notes payable to a bank |
|
|
8,900 |
|
|
9,259 |
Total |
|
$ |
188,898 |
|
$ |
169,627 |
|
|
|
|
|
|
|
The Federal Home Loan Bank advances are secured by mortgage loans totaling $428,081,000 and $395,639,000 at September 30, 2025 and 2024, respectively. Advances, at interest rates from .82% to 5.08% maturing through March 2035 are subject to restrictions or penalties in the event of prepayment.
At September 30, 2025, the Company had a line of credit with the FHLB to meet short-term borrowing needs that matures and automatically renews daily at the discretion of the FHLB. The line of credit has a variable interest rate that adjusts daily (4.33% at September 30, 2025 and 5.04% at September 30, 2024) with interest payable monthly. At September 30, 2025 and 2024, the
34
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 8: Borrowed Funds - Continued
Company had combined remaining borrowing availability for FHLB advances and the line of credit of $282,794,000 and $250,024,000, respectively. The FHLB has sole discretion to deny additional advances.
In January of 2025, the Company opened a line of credit with the Federal Reserve Bank. The advances are secured by Commercial (non-real estate) loans totaling $130,874,000 at September 30, 2025. The advance had a maturity date of October 8, 2025 with a variable interest rate equal to the Fed Funds Rate.
At September 30, 2025 and 2024, the Company has a note payable with a bank with an outstanding principal balance of $8,900,000 and $9,259,000, respectively. The note has a maturity date of May 4, 2027 with a fixed interest rate of 4.25%. Principal and interest payments are due quarterly. The note is secured by 100% of the stock of the Company’s subsidiary bank.
At September 30, 2025 and 2024, the Company has a revolving line of credit with a bank, with maximum available credit of $27,500,000 maturing April 15, 2026. Interest is payable quarterly. The interest rate is the prime rate (7.0% at September 30, 2025 and 8.0% at September 30, 2024) with a floor of 4.25%. The line is collateralized by 100% of the common stock of the Company’s subsidiary bank and had an outstanding balance of $9,718,000 and $14,753,000 at September 30, 2025 and 2024, respectively.
Aggregate annual maturities of the long-term borrowed funds at September 30, 2025 are (in thousands):
2026 |
$ |
12,841 |
2027 |
|
22,869 |
2028 |
|
54,350 |
2029 |
|
3,795 |
2030 |
|
6,110 |
Thereafter |
|
9,515 |
Total |
$ |
109,480 |
Note 9: Employee Benefit Plans
The Company has a 401(k) profit sharing plan covering substantially all employees with one month of service. Contributions to the plan are determined by the Board of Directors with certain limitations. Plan expense was approximately $590,000 and $538,000 for the years ended September 30, 2025 and 2024, respectively.
35
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 10: Changes in Accumulated Comprehensive Income (AOCI) by Component
There were no amounts reclassified from AOCI to the consolidated statements of income during the year ended September 30, 2025 and there were net realized losses on available-for-sale securities of approximately $314,000 during the year end September 30, 2024.
Note 11: Related Party Transactions
At September 30, 2025 and 2024, certain officers, directors, stockholders, employees, their immediate families and companies in which they have significant beneficial ownership were indebted to the Company in the aggregate amount of approximately $5,940,000 and $6,000,000, respectively. Deposits from related parties held by the Company at September 30, 2025 and 2024, totaled $22,016,000 and $22,385,000, respectively.
In management’s opinion, such loans, other extensions of credit, and deposits were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. Further, in management’s opinion, these loans did not involve more than normal risk of collectability or present other unfavorable features.
Note 12: Minimum Regulatory Capital Requirements
The Company’s subsidiary bank is subject to various regulatory capital requirements administered by the federal and state 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 Company’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 U.S. GAAP, regulatory reporting requirements, and regulatory capital standards. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements. Prompt corrective actions are not applicable to bank holding companies.
Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined) to risk-weighted assets (as defined), common equity Tier I capital (as defined) to total risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of September 30, 2025 and 2024, that the Bank met all capital adequacy requirements to which it is subject.
36
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 12: Minimum Regulatory Capital Requirements - Continued
As of September 30, 2025, the most recent notification from the regulators categorized the Company’s subsidiary bank as well capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized, the bank must maintain minimum total risk-based capital, Tier I risk-based capital, common equity Tier I risk-based capital and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s categories.
The Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. The Bank’s actual capital amounts and ratios are also presented in the table.
37
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
|
|
Actual |
|
Minimum Capital Requirement |
|
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions |
|
Minimum Capital Requirements including Capital Conversation Buffer of 2.50 |
||||||||
|
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
|
Amount |
|
Ratio |
September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk weighted assets |
$ |
144,655 |
|
11.1% |
$ |
104,621 |
|
8.0% |
$ |
130,776 |
|
10.0% |
$ |
137,315 |
|
10.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to risk weighted assets |
|
130,163 |
|
10.0% |
|
78,466 |
|
6.0% |
|
104,621 |
|
8.0% |
|
111,160 |
|
8.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital to risk weighted assets |
|
130,163 |
|
10.0% |
|
58,849 |
|
4.5% |
|
85,004 |
|
6.5% |
|
91,543 |
|
7.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets |
|
130,163 |
|
9.4% |
|
55,642 |
|
4.0% |
|
69,553 |
|
5.0% |
|
90,419 |
|
6.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital to risk weighted assets |
$ |
139,891 |
|
11.5% |
$ |
97,155 |
|
8.0% |
$ |
121,444 |
|
10.0% |
$ |
127,516 |
|
10.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to risk weighted assets |
|
126,395 |
|
10.4% |
|
72,866 |
|
6.0% |
|
97,155 |
|
8.0% |
|
103,227 |
|
8.5% |
38
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity Tier 1 capital to risk weighted assets |
|
126,395 |
|
10.4% |
|
54,650 |
|
4.5% |
|
78,938 |
|
6.5% |
|
85,011 |
|
7.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to average assets |
|
126,395 |
|
9.8% |
|
51,755 |
|
4.0% |
|
64,693 |
|
5.0% |
|
84,101 |
|
6.5% |
39
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 13: Financial Instruments with Off-Balance-Sheet or Concentration-of Credit Risk
Credit Related Financial Instruments
The Company is party to credit related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and Small Business Investment commitments.
Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.
The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments.
At September 30, 2025 and 2024, the following financial instruments were outstanding whose contract amounts represent credit risk:
|
|
Contract Amount |
|
||||
|
|
2025 |
|
2024 |
|
||
|
|
(in thousands) |
|
|
|
||
Commitments to extend credit |
|
$ |
263,083 |
|
$ |
266,992 |
|
Standby letters of credit |
|
|
2,285 |
|
|
3,011 |
|
Unfunded Small Business Investment Company (SBIC) Commitments |
|
|
378 |
|
|
378 |
|
Commitments to extend credit are agreements to lend to customers as long as there is no violation of any condition established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Commitments may expire without being drawn upon. Therefore, total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company, is based on management’s credit assessment of the customer.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved when issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting those commitments if deemed necessary.
Unfunded SBIC commitments are unconditional obligations to invest as a Limited Partner in qualified small business investments. The credit risk to the Company is limited to its commitment of capital contributions.
40
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 13: Financial Instruments with Off-Balance-Sheet or Concentration-of Credit Risk - Continued
Collateral Requirements
To reduce credit risk related to credit-related financial instruments, the Company might deem it necessary to obtain collateral. The amount and nature of the collateral obtained is based on the Company’s credit evaluation of the customer. Collateral held varies but may include cash, securities, accounts receivable, inventory, property and equipment, various agricultural products, and real estate.
Other Credit Risks
The Company grants primarily agribusiness, commercial, installment and residential loans to customers in the trade areas surrounding the Company’s physical locations. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the agribusiness economic sector.
At September 30, 2025 and 2024, approximately 37% and 38%, respectively, of the Company’s total deposits consisted of short-term certificates of deposit which were issued through a broker and reciprocal balances, which generally had denominations less than $250,000
Note 14: Member Unit Incentive Plan
The Company’s Member Incentive Plan, which is member approved, permits the grant of member units to its employees. The Company believes that such awards better align the interests of its employees with those of its members. Units awarded are generally granted with an exercise price equal to book value. Each year units awarded will vest into an exercise price based on prevailing market conditions of the Company at the vesting date and is estimated by management. Units vest 10% a year for seven years with the remaining 30% vesting upon a change in control of the Company, an employee’s death or disability, or an employee becoming retirement eligible. The Company defines retirement eligible as the date when the sum of the employee’s age and years of service reaches 75.
As of September 30, 2024, the Company had 747.1 nonvested shares with weighted-average grant-date fair value of $2,590 per share. During 2024, 81.6 shares were granted and 48.8 shares were vested with weighted-average grand-date fair value of $2,908 and $2,932 per share, respectively. During 2025, 145.4 shares were granted at an weighted-average grant-date fair value of $2,849. Subsequent to year ending September 30, 2025, all shares were fully vested with change of control.
41
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 15: Disclosures About Fair Value of Assets and Liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices, such as 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 of the assets or liabilities
Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities
Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within Topic 820 fair value hierarchy in which the fair value measurements fall at September 30, 2025 and 2024:
|
|
Fair Value Measurements Using |
||
|
|
Quoted Prices |
|
|
|
|
in Active |
Significant |
|
|
|
Markets for |
Other |
Significant |
|
|
Identical |
Observable |
Unobservable |
|
Fair |
Assets |
Inputs |
Inputs |
|
Value |
(Level 1) |
(Level 2) |
(Level 3) |
September 30, 2025 |
|
|
|
|
U.S. Treasuries |
$ 16,307 |
$ —- |
$ 16,307 |
$ —- |
State and political subdivisions |
28,301 |
—- |
26,408 |
1,893 |
Mortgage-backed (GSE residential/commercial) |
39,652 |
—- |
39,652 |
—- |
|
|
|
|
|
September 30, 2024 |
|
|
|
|
U.S. Treasuries |
$ 16,133 |
$ —- |
$ 16,133 |
$ —- |
State and political subdivisions |
28,690 |
—- |
27,030 |
1,660 |
Mortgage-backed (GSE residential/commercial) |
44,915 |
—- |
44,915 |
—- |
42
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 15: Disclosures about Fair Value of Assets and Liabilities - Continued
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the year ended September 30, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Securities Available for Sale
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include marketable equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. government agencies, state and political subdivisions, corporates, and mortgage-backed securities. In cases where Level 1 and Level 2 inputs are not available, securities are classified as Level 3 of the hierarchy and include private equity securities and certain state and political subdivisions.
For Level 3 securities available for sale using significant unobservable inputs in their pricing methodology, there were $233,000 in purchases in the year ended September 30, 2025 and $1,000,000 in purchases in the year ended September 30, 2024. There were no maturities and paydowns for the years ended September 30, 2025 and 2024. There were no transfers in the year ended September 30, 2025 and 2024. There were no gains or losses for the periods ended September 30, 2025 and 2024 included in net income attributable to the change in unrealized gains or losses related to assets still held at the reporting date.
Unobservable (Level 3) Inputs
The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements at September 30, 2025 and 2024:
|
Fair Value at 9/30/2025 |
Valuation Technique |
Unobservable inputs |
State & Political Subdivisions |
$ 1,893 |
Discounted Cash Flows |
Unrated security yield and adjustment Marketability yield discount |
|
|
|
|
|
|
|
|
|
Fair Value at 9/30/2024 |
Valuation Technique |
Unobservable inputs |
State & Political Subdivisions |
$ 1,660 |
Discounted Cash Flows |
Unrated security yield and adjustment Marketability yield discount |
|
|
|
|
43
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 15: Disclosures about Fair Value of Assets and Liabilities - Continued
Nonrecurring Measurements
There were no assets or liabilities measured on a nonrecurring basis at September 30, 2025 and 2024.
Fair Value of Financial Instruments
The following tables present estimated fair values of the Company’s financial instruments at September 30, 2025 and 2024:
|
2025 |
|
|
||||||||||||||
|
|
Carrying Amount |
|
Estimated Fair Value |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
(in thousands) |
||||||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,121 |
|
$ |
11,121 |
|
$ |
11,121 |
|
|
$ |
—- |
|
$ |
—- |
|
Interest-bearing time deposits in banks |
|
|
100 |
|
|
100 |
|
|
100 |
|
|
|
—- |
|
|
—- |
|
Available-for-sale securities |
|
|
84,260 |
|
|
84,260 |
|
|
—- |
|
|
|
82,367 |
|
|
1,893 |
|
Loans held for sale |
|
|
903 |
|
|
903 |
|
|
—- |
|
|
|
903 |
|
|
—- |
|
Loans, net of allowance for credit losses |
|
|
1,275,374 |
|
|
1,253,679 |
|
|
—- |
|
|
|
—- |
|
|
1,253,679 |
|
Interest receivable |
|
|
10,902 |
|
|
10,902 |
|
|
—- |
|
|
|
10,902 |
|
|
—- |
|
Nonmarketable equity securities |
|
|
6,908 |
|
|
6,908 |
|
|
—- |
|
|
|
6,908 |
|
|
—- |
|
Total assets |
|
$ |
1,389,568 |
|
$ |
1,367,873 |
|
$ |
11,221 |
|
|
$ |
101,080 |
|
$ |
1,255,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,095,468 |
|
|
1,015,999 |
|
|
—- |
|
|
|
1,015,999 |
|
|
—- |
|
Federal funds purchased |
|
|
35,000 |
|
|
35,000 |
|
|
—- |
|
|
|
35,000 |
|
|
—- |
|
Federal Home Loan Bank advances |
|
|
135,280 |
|
|
134,874 |
|
|
—- |
|
|
|
134,874 |
|
|
—- |
|
Other borrowed funds |
|
|
18,618 |
|
|
18,204 |
|
|
—- |
|
|
|
18,204 |
|
|
—- |
|
Interest payable |
|
|
3,620 |
|
|
3,620 |
|
|
—- |
|
|
|
3,620 |
|
|
—- |
|
Total liabilities |
|
$ |
1,287,986 |
|
$ |
1,207,697 |
|
$ |
—- |
|
|
$ |
1,207,697 |
|
$ |
—- |
|
44
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 15: Disclosures about Fair Value of Assets and Liabilities – Continued
|
2024 |
|
|
||||||||||||||
|
|
Carrying Amount |
|
Estimated Fair Value |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
(in thousands) |
||||||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,944 |
|
$ |
15,944 |
|
$ |
15,944 |
|
|
$ |
—- |
|
$ |
—- |
|
Interest-bearing time deposits in banks |
|
|
348 |
|
|
348 |
|
|
348 |
|
|
|
—- |
|
|
—- |
|
Available-for-sale securities |
|
|
89,738 |
|
|
89,738 |
|
|
—- |
|
|
|
88,078 |
|
|
1,660 |
|
Loans held for sale |
|
|
1,827 |
|
|
1,827 |
|
|
—- |
|
|
|
1,827 |
|
|
—- |
|
Loans, net of allowance for credit losses |
|
|
1,167,805 |
|
|
1,119,173 |
|
|
—- |
|
|
|
—- |
|
|
1,119,173 |
|
Interest receivable |
|
|
9,393 |
|
|
9,393 |
|
|
—- |
|
|
|
9,393 |
|
|
—- |
|
Nonmarketable equity securities |
|
|
7,311 |
|
|
7,311 |
|
|
—- |
|
|
|
7,311 |
|
|
—- |
|
Total assets |
|
$ |
1,292,366 |
|
$ |
1,243,734 |
|
$ |
16,292 |
|
|
$ |
106,609 |
|
$ |
1,120,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,028,148 |
|
|
939,646 |
|
|
—- |
|
|
|
939,646 |
|
|
—- |
|
Federal funds purchased |
|
|
—- |
|
|
—- |
|
|
—- |
|
|
|
—- |
|
|
—- |
|
Federal Home Loan Bank advances |
|
|
145,615 |
|
|
144,885 |
|
|
—- |
|
|
|
144,885 |
|
|
—- |
|
Other borrowed funds |
|
|
24,012 |
|
|
23,193 |
|
|
—- |
|
|
|
23,193 |
|
|
—- |
|
Interest payable |
|
|
3,610 |
|
|
3,610 |
|
|
—- |
|
|
|
3,610 |
|
|
—- |
|
Total liabilities |
|
$ |
1,201,385 |
|
$ |
1,111,334 |
|
$ |
—- |
|
|
$ |
1,111,334 |
|
$ |
—- |
|
Fair Value of Financial Instruments
The following methods were used to estimate the fair value of all other financial instruments
recognized in the accompanying balance sheets at amounts other than fair value.
Cash and Cash Equivalents
The carrying amount approximates fair value.
Interest-Bearing Time Deposits in Banks
The carrying amount approximates fair value.
Nonmarketable Securities
45
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 15: Disclosures about Fair Value of Assets and Liabilities – Continued
Fair value is estimated at book value due to restrictions that limit the sale or transfer of such
Securities but where a price can be determined, the fair value was determined based on the quoted market price on the New York Stock Exchange as of the reporting date.
Loans
The fair value of loans is estimated by discounting the future cash flows using the market rates at
which similar loans would be made to borrowers with similar credit ratings and for the same
remaining maturities. The market rates used are based on current rates the Banks would impose for
similar loans and reflect a market participant assumption about risks associated with
nonperformance, illiquidity, and the structure and term of the loans along with local economic and
market conditions.
Deposits
Fair value of term deposits is estimated by discounting the future cash flows using rates of similar
deposits with similar maturities. The market rates used were obtained from similar-sized
institutions reviewed by the Company. The estimated fair value of demand, NOW, savings and money market deposits is the book value since rates are regularly adjusted to market rates and amounts are payable on demand at the reporting date.
Federal Funds Purchased
The carrying amounts of federal funds purchased approximate the estimated fair values of such
liabilities.
Federal Home Loan Bank Advances and Other Borrowed Funds
Fair value is estimated by discounting the future cash flows using rates of similar advances with
similar maturities. These rates were obtained from current rates offered by FHLB and the Wall Street Journal Prime Rate.
Interest Payable and Interest Receivable
The carrying amount approximates fair value.
Off-Balance-Sheet Instruments
Due to the short-term nature of such instruments and the relative insignificance of fees currently
charged to enter into similar agreements, no fair value has been assigned to off-balance-sheet
items.
The Company’s remaining assets and liabilities are not considered financial instruments or are not
material.
46
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 16: General Litigation
The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have material adverse effects on the financial position, results of operations and cash flows of the Company.
Note 17: Future Change in Accounting Principle
Issued but not yet adopted as of September 30, 2025.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The new guidance is effective for public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. Management is currently evaluating the impact of this standard on the Company’s consolidated financial statements and related disclosures.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326). The amendments in this update expand the use of the gross-up approach to certain acquired loans beyond purchased financial assets with credit deterioration. The new guidance is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The amendments in this update must be adopted prospectively to loans that are acquired on or after the initial application date. Management is evaluating the provisions of this ASU and do not expect this ASU to have a material impact on the Company’s consolidated financial statements.
The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company’s consolidated financial statements or do not apply to its operations.
Note 18: Change in Accounting Principle
The Company has recorded a change in accounting principle as of and for the year ended September 30, 2024, as the Company now meets the definition of a public business entity based on Accounting Standards Update (“ASU”) No. 2013-12 since the financial statements will be included in a 8-K filing of Equity Bancshares, Inc. and therefore, must be prepared in accordance with Regulation S-X requirements. The consolidated financial statements have been updated to reverse prior elections to apply certain private company guidance related to leases. The following summarizes the impact
47
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 18: Change in Accounting Principle - Continued
on the financial statement amounts. There was no change to the statement of operations as a result of the change in accounting principle.
The following illustrates the impact on the consolidated balance sheet:
|
As of September 30, 2024 (amount in thousands) |
|||||
|
|
As previously reported |
|
Restated |
||
Operating lease right-of-use asset |
|
$ |
9,430 |
|
$ |
8,498 |
Operating lease liabilities |
|
|
9,673 |
|
|
8,741 |
The following illustrates the impact on the consolidated statement of cash flows:
|
As of September 30, 2024 (amount in thousands) |
|||||
|
|
As previously reported |
|
Restated |
||
Amortization of operating lease right-of-use asset |
|
$ |
525 |
|
$ |
394 |
Operating lease liabilities |
|
|
(417) |
|
|
(286) |
48
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 19: Condensed Financial Information - Parent Company Only
Presented below is the condensed financial information as to financial position, results of operations and cash flows of the Parent Company.
Frontier Holdings, LLC
CONDENSED BALANCE SHEET
September 30, 2025 and 2024
(Dollar amounts in thousands, except per share data)
|
2025 |
|
2024 |
||
ASSETS |
|
|
|
||
Cash and due from banks |
$ |
236 |
|
$ |
54 |
Investment in bank subsidiary |
|
136,194 |
|
|
131,969 |
Investment in nonbank subsidiary |
|
4 |
|
|
4 |
Other assets |
|
2,492 |
|
|
2,645 |
Total assets |
$ |
138,926 |
|
$ |
134,672 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Short-term borrowings |
$ |
9,718 |
|
$ |
14,753 |
Long-term borrowings |
|
8,900 |
|
|
9,259 |
Interest payable and other liabilities |
|
1,242 |
|
|
1,315 |
Total liabilities |
|
19,860 |
|
|
25,327 |
Stockholders’ equity |
|
119,066 |
|
|
109,345 |
Total liabilities and stockholders’ equity |
$ |
138,926 |
|
$ |
134,672 |
49
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 19: Condensed Financial Information - Parent Company Only – Continued
Frontier Holdings, LLC
CONDENSED STATEMENTS OF INCOME
Twelve Months ended September 30, 2025 and 2024
(Dollar amounts in thousands, except per share data)
|
2025 |
|
2024 |
||
Dividends from subsidiary bank |
$ |
14,300 |
|
$ |
3,550 |
Gain on sale of nonbank subsidiary |
|
—- |
|
|
424 |
Other income |
|
15 |
|
|
16 |
Total income |
|
14,315 |
|
|
3,990 |
Expenses |
|
|
|
|
|
Interest expense |
|
1,288 |
|
|
1,683 |
Other expenses |
|
3,875 |
|
|
4,877 |
Total expenses |
|
5,163 |
|
|
6,560 |
Income (loss) before applicable income taxes |
|
9,152 |
|
|
(2,570) |
Income tax |
|
—- |
|
|
—- |
Income before undistributed income of subsidiaries |
|
9,152 |
|
|
(2,570) |
Equity in undistributed income of subsidiaries |
|
|
|
|
|
Bank subsidiary |
|
3,750 |
|
|
9,662 |
Nonbank subsidiary |
|
—- |
|
|
(68) |
Net income |
$ |
12,902 |
|
$ |
7,024 |
50
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 19: Condensed Financial Information - Parent Company Only – Continued
CONDENSED STATEMENTS OF CASH FLOWS
Years Ended September 30, 2025 and 2024
(Dollar amounts in thousands)
|
2025 |
|
2024 |
||
Operating Activities |
|
|
|
|
|
Net income |
$ |
12,902 |
|
$ |
7,024 |
|
|
|
|
|
|
Items not requiring (providing) cash |
|
|
|
|
|
Investment in Bank subsidiary |
|
(3,747) |
|
|
(9,662) |
Investment in nonbank subsidiary |
|
1 |
|
|
1,819 |
Issuance of members’ units |
|
443 |
|
|
246 |
Depreciation and amortization |
|
74 |
|
|
74 |
Amortization of operating lease right-of-use asset |
|
128 |
|
|
38 |
Net changes in: |
|
|
|
|
|
Other assets |
|
(50) |
|
|
1,252 |
Operating lease liability |
|
(120) |
|
|
(29) |
Interest payable and other liabilities |
|
46 |
|
|
21 |
Net cash provided by operating activities |
|
9,676 |
|
|
783 |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Net cash used in investing activities |
|
—- |
|
|
—- |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Proceeds from other borrowed funds |
|
3,465 |
|
|
5.290 |
Repayment of other borrowed funds |
|
(8,859) |
|
|
(4,823) |
Distributions to members |
|
(4,100) |
|
|
(1,950) |
Net cash provided by financing activities |
|
(9,494) |
|
|
(1,483) |
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
182 |
|
|
(700) |
|
|
|
|
|
|
Cash and cash equivalents, beginning of year |
|
54 |
|
|
754 |
Cash and cash equivalents, end of year |
$ |
236 |
|
$ |
54 |
51
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
September 30, 2025 and 2024
Note 20: Subsequent Events
Subsequent events have been evaluated through January 28, 2026 which is the date the financial statements were available to be issued.
On August 29, 2025, Equity Bancshares, Inc. (“Equity”) and the Company, entered into an Agreement and Plan of Reorganization (the “merger agreement”). Subject to the terms and conditions of the merger agreement, the Company will be merged with and into Equity. The Merger closed January 1, 2026.
52
Exhibit 99.2
SELECTED UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated combined financial information of Equity Bancshares, Inc. ("Equity") as of and for the year ended December 31, 2025, is presented to show the impact on Equity’s historical financial position and results of operations of:
• the merger; and
• the issuance of common stock of Equity to Frontier Holdings, LLC ("Frontier") unitholders and the cash consideration to be paid to Frontier unitholders in connection with the merger.
As a result of the merger, Frontier unitholders were entitled to receive an aggregate of 2,220,000 shares of Equity common stock and aggregate cash of approximately $32,500,000, subject to downward adjustment as described in the merger agreement. The calculation of the aggregate merger consideration assumes that no cash is paid in lieu of issuing fractional shares of Equity common stock and that no downward adjustment was made as described in the merger agreement:
• a closing price of Equity common stock of $44.65, which was the closing price of Equity common stock on December 31, 2025, the close price on the date immediately preceding the closing of the transaction; and
• Frontier’s consolidated capital, surplus and retained earnings accounts less all intangible assets and Frontier merger costs prior to the closing was greater than $99,416,508.
The unaudited Pro Forma Condensed Consolidated Combined Balance Sheet reflects the historical position of Equity and Frontier as of the most recent fiscal year end for each (see Note (a) to Notes Pro Forma Condensed Consolidated Combined Financial Statements below), with pro forma adjustments based on the assumption that the merger was completed on December 31, 2025. The pro forma adjustments are based on the acquisition method of accounting. The unaudited Pro Forma Condensed Consolidated Combined Statements of Income assume that the merger was completed on January 1, 2025. The adjustments are based on information available and certain assumptions that Equity believes are reasonable. The pro forma does not consider any potential impacts of current market conditions on revenues, potential revenue enhancements, anticipated cost savings and expense efficiencies, or asset dispositions among other factors. The final allocation of the purchase price for Frontier between stockholders’ equity and goodwill will be determined after the merger is completed and after completion of thorough analyses to determine the fair values of Frontier’s tangible and identifiable intangible assets and liabilities as of the date the merger is completed. Any change in the fair value of the net assets of Frontier will change the amount of the purchase price allocable to goodwill. Further, changes that would affect stockholders’ equity at Frontier, such as net income from December 31, 2025 through the date the merger is completed, will also change the amount of goodwill recorded. In addition, the final adjustments may be different from the unaudited pro forma adjustments presented in this filing.
The following unaudited pro forma condensed combined financial information and related notes are based on and should be read in conjunction with (i) the historical audited consolidated financial statements of Equity and the related notes included in Equity’s Annual Report on Form 10-K for the year ended December 31, 2025, and (ii) the historical audited consolidated financial statements of Frontier and the related notes included in Exhibit 99.1 to this Form 8-K.
The unaudited pro forma condensed consolidated combined financial information is intended for illustrative purposes only and is not necessarily indicative of the actual financial position or actual operating results of the combined company or of the financial position or operating results of the combined company that would have occurred had the merger been in effect as of the date or for the periods presented.
Exhibit 99.2
Unaudited Pro Forma Condensed Consolidated Combined Balance Sheet As of December 31, 2025 (Dollars in thousands) |
||||||||
ASSETS |
|
Equity Historical |
|
Frontier Historical (a) |
|
Pro Forma Adjustments |
|
Pro Forma Combined |
Cash and due from banks |
$ |
607,562 |
$ |
11,021 |
$ |
(43,520) |
(b) $ |
575,063 |
Federal funds sold |
|
255 |
|
— |
|
— |
|
255 |
Cash and cash equivalents |
|
607,817 |
|
11,021 |
|
(43,520) |
|
575,318 |
Interest-bearing time deposits in other banks |
|
575 |
|
100 |
|
— |
|
675 |
Investment securities |
|
1,035,816 |
|
84,260 |
|
— |
|
1,120,076 |
Loans held for sale |
|
1,392 |
|
903 |
|
— |
|
2,295 |
Loans held for investment |
|
4,198,180 |
|
1,289,866 |
|
(25,662) |
(c) |
5,462,384 |
Allowance for loan losses |
|
(52,756) |
|
(14,492) |
|
— |
(d) |
(67,248) |
Loans, net |
|
4,145,424 |
|
1,275,374 |
|
(25,662) |
|
5,395,136 |
Other real estate owned, net |
|
5,388 |
|
— |
|
— |
|
5,388 |
Premises and equipment, net |
|
136,720 |
|
3,407 |
|
— |
|
140,127 |
Bank owned life insurance |
|
148,301 |
|
— |
|
— |
|
148,301 |
Federal Reserve Bank and Federal Home Loan Bank stock |
|
34,053 |
|
6,908 |
|
— |
|
40,961 |
Interest receivable |
|
33,322 |
|
10,902 |
|
— |
|
44,224 |
Goodwill |
|
82,101 |
|
15,213 |
|
14,053 |
(e) |
111,367 |
Core deposit intangible, net |
|
21,634 |
|
— |
|
11,000 |
(f) |
32,634 |
Other assets |
|
120,629 |
|
12,288 |
|
9,127 |
(g) |
142,044 |
Total assets |
$ |
6,373,172 |
$ |
1,420,376 |
$ |
(35,002) |
$ |
7,758,546 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Non-interest-bearing deposits |
$ |
1,148,409 |
$ |
94,637 |
$ |
— |
$ |
1,243,036 |
Interest-baring transaction and savings |
|
3,004,987 |
|
441,912 |
|
— |
|
3,446,899 |
Time deposits |
|
984,868 |
|
558,919 |
|
(4,542) |
(h) |
1,539,245 |
Total deposits |
|
5,138,264 |
|
1,095,468 |
|
(4,542) |
|
6,299,190 |
Federal funds purchased and retail repurchase agreements |
|
39,864 |
|
— |
|
— |
|
39,864 |
Federal Home Loan Bank advances |
|
300,000 |
|
170,280 |
|
(1,309) |
(i) |
468,971 |
Back stock loan |
|
— |
|
18,618 |
|
(401) |
(j) |
18,217 |
Subordinated debentures |
|
98,145 |
|
— |
|
— |
|
98,145 |
Contractual obligations |
|
10,208 |
|
— |
|
— |
|
10,208 |
Interest payable and other liabilities |
|
54,637 |
|
16,944 |
|
— |
|
71,581 |
Total liabilities |
|
5,641,118 |
|
1,301,310 |
|
(6,252) |
|
6,936,176 |
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
249 |
|
— |
|
22 |
(k) |
271 |
Additional paid-in capital |
|
664,906 |
|
56,571 |
|
42,530 |
(k) |
764,007 |
Retained earnings |
|
205,328 |
|
71,418 |
|
(80,225) |
(l) |
196,521 |
Accumulated other comprehensive income(loss) |
|
7,032 |
|
(8,923) |
|
8,923 |
(l) |
7,032 |
Treasury stock |
|
(145,461) |
|
— |
|
— |
|
(145,461) |
Total stockholders’ equity |
|
732,054 |
|
119,066 |
|
(28,750) |
|
822,370 |
Total liabilities and stockholders’ equity |
$ |
6,373,172 |
$ |
1,420,376 |
$ |
(35,002) |
$ |
7,758,546 |
Exhibit 99.2
Unaudited Pro Forma Condensed Consolidated Combined Statement of Income For the year ended December 31, 2025 (Dollars in thousands, except per share data) |
||||||||
Interest and dividend income |
|
Equity Historical |
|
Frontier Historical (a) |
|
Pro Forma Adjustments |
|
Pro Forma Combined |
Loans, including fees |
$ |
277,138 |
$ |
77,217 |
$ |
6,011 |
(aa) $ |
360,366 |
Securities |
|
40,022 |
|
2,956 |
|
1,657 |
(bb) |
44,635 |
Other interest income |
|
13,675 |
|
688 |
|
— |
|
14,363 |
Total interest and dividend income |
|
330,835 |
|
80,861 |
|
7,668 |
|
419,364 |
Interest expense |
|
|
|
|
|
|
|
|
Deposits |
|
88,455 |
|
33,736 |
|
1,782 |
(cc) |
123,973 |
Federal funds purchased and retail repurchase agreements |
|
936 |
|
692 |
|
— |
|
1,628 |
Federal Home Loan bank advances |
|
8,208 |
|
5,433 |
|
514 |
(dd) |
14,155 |
Federal Reserve Bank borrowings |
|
— |
|
— |
|
— |
|
— |
Bank stock loan |
|
— |
|
1,263 |
|
262 |
(ee) |
1,525 |
Subordinated debentures |
|
7,155 |
|
— |
|
— |
|
7,155 |
Total interest expense |
|
104,754 |
|
41,124 |
|
2,558 |
|
148,436 |
Net interest income |
|
226,081 |
|
39,737 |
|
5,242 |
|
270,928 |
Provision for loan losses |
|
8,953 |
|
1,263 |
|
— |
|
10,216 |
Net interest income after provision for loan losses |
|
217,128 |
|
38,474 |
|
5,110 |
|
260,712 |
Non-interest income |
|
|
|
|
|
|
|
|
Service charges and fees |
|
9,321 |
|
364 |
|
— |
|
9,685 |
Debit card income |
|
11,414 |
|
735 |
|
— |
|
12,149 |
Mortgage banking |
|
567 |
|
1,075 |
|
— |
|
1,642 |
Increase in value of bank owned life Insurance |
|
7,717 |
|
— |
|
— |
|
7,717 |
Net gains on investment securities Transactions |
|
(53,174) |
|
— |
|
— |
|
(53,174) |
Other non-interest income |
|
8,127 |
|
234 |
|
— |
|
8,361 |
Total non-interest income |
|
(16,028) |
|
2,408 |
|
— |
|
(13,620) |
Non-interest expense |
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
84,786 |
|
17,600 |
|
— |
|
102,386 |
Net occupancy and equipment |
|
15,801 |
|
3,359 |
|
— |
|
19,160 |
Data processing |
|
20,279 |
|
2,597 |
|
— |
|
22,876 |
Professional fees |
|
6,467 |
|
440 |
|
— |
|
6,907 |
Amortization of core deposit intangible |
|
4,503 |
|
— |
|
1,962 |
(ff) |
6,465 |
Other real estate owned, net |
|
1,029 |
|
(28) |
|
— |
|
1,001 |
Loss on debt extinguishment |
|
1,361 |
|
— |
|
— |
|
1,361 |
Merger expenses |
|
8,065 |
|
— |
|
11,020 |
(hh) |
19,085 |
Other non-interest expense |
|
32,429 |
|
3,262 |
|
— |
|
35,691 |
Total non-interest expense |
|
174,720 |
|
27,230 |
|
12,982 |
|
214,932 |
Income before income taxes |
|
26,380 |
|
13,652 |
|
(7,872) |
|
32,160 |
Provision for income taxes |
|
3,654 |
|
750 |
|
1,066 |
(gg) |
5,470 |
Net income allocable to common stockholders |
$ |
22,726 |
$ |
12,902 |
$ |
(8,938) |
$ |
26,690 |
Basic earnings per share |
$ |
1.24 |
|
|
|
|
$ |
1.30 |
Weighted average shares outstanding |
|
18,296,090 |
|
|
|
|
|
20,516,090 |
Diluted earnings per share |
$ |
1.23 |
|
|
|
|
$ |
1.29 |
Weighted average shares outstanding |
|
18,456,676 |
|
|
|
|
|
20,676,676 |
Exhibit 99.2
Notes to Unaudited Pro Forma Condensed Consolidated Combined Financial Information
(Dollars in thousands, except per share amounts)
The following pro forma adjustments have been reflected in the unaudited pro forma condensed consolidated combined financial information. All adjustments are based on current assumptions and valuations which are subject to change.
(a) Frontier has a fiscal year end of September 30. For the purposes of the disclosures as of and for the periods ended December 31, 2025 Frontier results include audited financial results as of and for the most recently completed fiscal year.
Frontier financial information includes immaterial reclassifications to align with Equity financial reporting.
(b) This adjustment includes the cash portion of the merger consideration of $32.5 million and pre-tax direct-incremental merger and stock issuance costs of $11.0 million ($8.8 million, after-tax).
(c) This adjustment represents the $25.7 million interest-rate fair value adjustments on loans.
(d) This adjustment represents the elimination of Frontier’s allowance offset by a $14.5 million credit adjustment on acquired loans.
(e) This adjustment represents the purchase price allocation for the merger, calculated as follows:
Issue 2,220,000 Equity shares valued at the closing price for Equity common stock on December 31, 2025 |
$ |
99,123 |
Cash merger consideration, including cash in lieu of fractional shares |
|
32,500 |
Total purchase price |
|
131,623 |
Frontier’s equity at book value |
|
(119,066) |
Frontier’s beginning goodwill balance |
|
15,213 |
Allocated to loan fair value, less Frontier’s ending allowance |
|
25,662 |
Allocated to core deposit intangibles |
|
(11,000) |
Allocated to time deposit fair value |
|
(4,542) |
Allocated to debt |
|
(1,710) |
Allocated to net deferred tax assets |
|
(6,914) |
Estimated goodwill from transaction |
$ |
29,266 |
Frontier beginning goodwill balance |
$ |
15,213 |
Net goodwill adjustment |
$ |
14,053 |
(f) This adjustment represents the recognition of core deposit intangibles.
Exhibit 99.2
(g) This adjustment represents the impact on deferred income taxes and income tax benefits created in the accounting for the transaction, calculated as follows:
Loan fair value adjustments |
$ |
25,662 |
Core deposit intangibles |
|
(11,000) |
Deposits fair value adjustments |
|
(4,542) |
Debt fair value adjustments |
|
(1,710) |
Subtotal of fair value adjustments |
|
8,410 |
Calculated deferred taxes at an estimated rate of 21% |
|
1,768 |
S Corp to C Corp adjustment at an estimated rate of 21% |
|
5,146 |
Total deferred taxes adjustment |
$ |
6,914 |
Tax effect of merger expenses (item (b) above) |
|
2,213 |
|
|
|
Total Other asset adjustment |
$ |
9,127 |
(h) This adjustment reflects interest-bearing time deposits at their estimated fair values.
(i) This adjustment reflects Federal Home Loan Bank advances at their estimated fair values.
(j) This adjustment reflects the term Bank stock loan at its estimated fair value.
(k) This adjustment represents the elimination of the historical equity of Frontier, net of the issuance of
2,220,000 shares of Equity common stock, par value $0.01 per share, to unitholders of Frontier. Value of the shares issued is based on the closing price for Equity common stock on December 31, 2025.
(l) This adjustment represents the elimination of the historical equity of Frontier, net of after-tax merger expenses.
|
For the Year Ended December 31, 2025 |
|
(aa) Adjustment to loan interest income to reflect accretion of loan discount from interest rate and accretable credit fair value adjustments over an estimated 6.3 years. |
$ 6,011 |
|
(bb) Adjustment to security interest income to reflect accretion of discount over an expected 6 years. |
$ 1,657 |
|
(cc) Adjustment to deposit interest expense to reflect the amortization of the time deposit interest rate fair value mark over an estimated 2.5 years. |
$ 1,782 |
|
(dd) Adjustment to debt interest expense to reflect the amortization of the fair value mark on FHLB term borrowings over an estimated 2.5 years. |
$ 514 |
|
(ee) Adjustment to debt interest expense to reflect the amortization of the fair value mark on bank stock term borrowings over an estimated 1.5 years. |
$ 262 |
|
(ff) Adjustment to reflect amortization of the acquired Core Deposit Intangible using sum of years digits over 10 years. |
$ 1,962 |
|
(gg) Adjustment to reflect income taxes on Frontier earnings as well as the proforma adjustment at an estimated rate of approximately 21%. Frontier was a S Corp as of each disclosed period. |
$ 1,066 |
|
(hh) Recognition of the aggregate level of costs expected to be incurred by Frontier and Equity in facilitating the transaction. These expenses are expected to be realized in the first year and not be recurring. |
$ 11,020 |
|
|
|
|