Form 8-K
8-K — EQUITY BANCSHARES INC
Accession: 0001193125-26-412873
Filed: 2026-10-05
Period: 2026-10-01
CIK: 0001227500
SIC: 6022 (STATE COMMERCIAL BANKS)
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — d16704d8k.htm (Primary)
EX-99.1 (d16704dex991.htm)
EX-99.2 (d16704dex992.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
Filename: d16704d8k.htm · Sequence: 1
8-K
EQUITY BANCSHARES INC 612-6000 false 0001227500 0001227500 2026-10-01 2026-10-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 1, 2026
EQUITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Kansas
001-37624
72-1532188
(State or other jurisdiction of
incorporation or organization)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
7701 East Kellogg Drive, Suite 300
Wichita, KS
67207
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: 316. 612.6000
Former name or former address, if changed since last report: Not Applicable
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:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol
Name of each exchange
on which registered
Class A, Common Stock, par value $0.01 per share
EQBK
New York Stock Exchange
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.
Item 8.01
Other Events.
Additional Financial Information
As previously reported, Equity Bancshares, Inc. (“the Company”) completed its merger with Frontier Holdings LLC (“Frontier”), the holding company of Frontier Bank, 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 Current Report on Form 8-K includes the unaudited condensed consolidated financial statements of Frontier as of and for the three month period ended December 31, 2025, which are being filed to comply with Securities and Exchange Commission requirements to provide updated financial statements for Frontier in connection with the filing of the Company’s registration statement on Form S-4 for the Company’s pending transaction with Lincoln Bancorp.
This Current Report on Form 8-K does not modify or update the condensed consolidated financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, Quarterly Report on Form 10-Q for the three months ended March 31, 2026 or the Quarterly Report on Form 10-Q for the three and six months ended June 30, 2026.
The historical unaudited consolidated balance sheet of Frontier as of December 31, 2025 and historical audited consolidated balance sheet of Frontier as of September 30, 2025, unaudited consolidated statements of income for the three months ended December 31, 2025 and 2024, unaudited consolidated statements of comprehensive income for the three months ended December 31, 2025 and 2024, unaudited consolidated statements of members’ equity for the period ended December 31, 2025 and audited consolidated statements of members’ equity for the period ended September 30, 2025, and unaudited consolidated statements of cash flows for the three months ended December 31, 2025 and 2024, together with the notes thereto, are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. Management’s discussion and analysis of financial condition and results of operations for such periods are filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No.
Description
99.1
Unaudited Consolidated Financial Statement for the Three Months Ended December 31, 2025 for Frontier Holdings LLC
99.2
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended December 31, 2025 for Frontier Holdings LLC
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Forward-Looking Statements
This Current Report on Form 8-K may contain forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and are intended to be covered by the safe harbor provisions provided by the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are
reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations include competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.
For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2026, as amended, and any updates to those risk factors set forth in the Company’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this Form 8-K are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company’s behalf may issue.
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: October 1, 2026
By:
/s/ Brad S. Elliott
Brad S. Elliott
Chief Executive Officer
EX-99.1
EX-99.1
Filename: d16704dex991.htm · Sequence: 2
EX-99.1
Exhibit 99.1
Frontier Holdings, LLC
Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Frontier Holdings, LLC
December 31, 2025 and September 30, 2025
Contents
Consolidated Financial Statements
Balance Sheets
1
Statements of Income
3
Statements of Comprehensive Income
4
Statements of Members’ Equity
5
Statements of Cash Flows
6
Notes to Financial Statements
8
Frontier Holdings, LLC
Consolidated Balance Sheets
December 31, 2025 and September 30, 2025
(in thousands)
(Unaudited)
12/31/2025
(Audited)
9/30/2025
Assets
Cash and due from banks
$
12,819
$
11,021
Cash and cash equivalents
12,819
11,021
Interest-bearing time deposits in banks
100
100
Securities
available-for-sale
83,597
84,260
Loans, including loans held for sale of $1,150 and $903 and net of allowance for credit losses of
$14,509 and $14,492, respectively
1,288,884
1,276,277
Operating lease
right-of-use asset
7,982
8,087
Premises and equipment, net
3,323
3,407
Interest receivable
10,599
10,902
Nonmarketable equity securities, at cost
6,849
6,908
Goodwill
15,213
15,213
Other assets
3,056
4,201
Total assets
$
1,432,422
$
1,420,376
1
Frontier Holdings, LLC
Consolidated Balance Sheets
December 31, 2025 and September 30, 2025
(in thousands)
(Unaudited)
(Audited)
12/31/2025
9/30/2025
Liabilities and Members’ Equity
Liabilities
Deposits
Demand
$
150,112
$
94,637
Demand-interest bearing
398,104
401,962
Savings
39,517
39,950
Time
543,982
558,919
Total Deposits
1,131,715
1,095,468
Short-term borrowings
—
35,000
Federal Home Loan Bank advances
141,135
135,280
Other borrowed funds
22,486
18,618
Operating lease liabilities
8,344
8,426
Interest payable and other liabilities
11,823
8,518
Total liabilities
1,315,503
1,301,310
Members’ Equity
Members’ equity
116,919
119,066
Total members’ equity
116,919
119,066
Total liabilities and members’ equity
$
1,432,422
$
1,420,376
2
Frontier Holdings, LLC
Consolidated Statements of Income
For the Three Months Ended December 31, 2025 and 2024
(in thousands)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Interest and Dividend Income
Loans, including fees
$
20,378
$
18,627
Securities
690
783
Federal funds sold and deposits with other financial institutions
159
170
Total interest and dividend income
21,227
19,580
Interest Expense
Deposits
8,432
8,615
Federal funds purchased
352
—
Federal Home Loan Bank advances and other borrowed funds
1,521
1,769
Total interest expense
10,305
10,384
Net Interest Income
10,922
9,196
Provision for Credit Losses
Loans
10
87
Off-balance sheet credit exposures
50
232
Total provision for credit loss expense
60
319
Net Interest Income After Provision for Credit Losses
10,862
8,877
Noninterest income
Net gain on loan sales
339
263
Net realized gain (loss) on
available-for-sale securities
—
16
Other
351
326
Total noninterest income
690
605
Noninterest Expense
Salaries and employee benefits
5,973
4,019
Occupancy and equipment
818
772
Other
5,652
1,763
Total noninterest expense
12,443
6,554
Net Income
$
(891
)
$
2,928
3
Frontier Holdings, LLC
Consolidated Statements of Comprehensive Income
For the Three Months Ended December 31, 2025 and 2024
(in thousands)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Net Income
$
(891
)
$
2,928
Other Comprehensive Income
Change in unrealized gains (losses) on available-for-sale securities
644
(2,133
)
Comprehensive Income
$
(247
)
$
795
4
Frontier Holdings, LLC
Consolidated Statements of Members’ Equity
For the Periods Ended December 31, 2025 and September 30, 2025
(in thousands except unit data)
Members’ Equity
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss)
Total
Units
Amounts
Balance, September 30, 2024 (Audited)
$
43,129
$
56,128
$
62,616
$
(9,399
)
$
109,345
Net income
—
—
2,928
—
2,928
Other comprehensive income
—
—
—
(2,133
)
(2,133
)
Distributions to members
—
—
(500
)
—
(500
)
Balance, December 31, 2024 (Unaudited)
43,129
56,128
65,044
(11,532
)
109,640
Issuance of members’ units
145
443
—
—
443
Net income
—
—
9,974
—
9,974
Other comprehensive income
—
—
—
2,609
2,609
Distributions to members
—
—
(3,600
)
—
(3,600
)
Balance, September 30, 2025 (Audited)
43,274
56,571
71,418
(8,923
)
119,066
Net income
—
—
(891
)
—
(891
)
Other comprehensive income
—
—
—
644
644
Distributions to members
—
—
(1,900
)
—
(1,900
)
Balance, December 31, 2025 (Unaudited)
$
43,274
$
56,571
$
68,627
$
(8,279
)
$
116,919
5
Frontier Holdings, LLC
Consolidated Statements of Cash Flows
For the Three Months Ended December 31, 2025 and 2024
(in thousands)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Operating Activities
Net income
$
(891
)
$
2,928
Items not requiring (providing) cash
Depreciation and amortization
145
140
Amortization of operating lease
right-of-use asset
106
127
Provision for credit losses
60
319
Amortization and accretion of securities, net
87
99
Net realized (gain) or loss on equity securities
1
(15
)
Net realized gain on sale of other real estate owned
—
(16
)
Changes in
Interest receivable
303
184
Other assets
1,145
1,002
Operating lease liability
(82
)
(101
)
Interest payable and other liabilities
3,303
(70
)
Net cash provided by operating activities
4,177
4,597
Investing Activities
Purchases of securities
(113
)
(366
)
Proceeds from maturities and paydowns of securities
1,334
1,692
Purchases of Federal Home Loan Bank stock
(617
)
(529
)
Redemptions of Federal Home Loan Bank stock
675
1,065
Net changes in loans
(12,667
)
(13,851
)
Purchases of premises and equipment
(61
)
(13
)
Proceeds from sale of foreclosed assets
—
168
Net cash used in investing activities
(11,449
)
(11,834
)
6
Frontier Holdings, LLC
Consolidated Statements of Cash Flows – Continued
For the Three Months Ended December 31, 2025 and 2024
(in thousands)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Financings Activities
Net change in deposit accounts
$
36,247
$
21,150
Proceeds from Federal Home Loan Bank advances
147,200
112,700
Repayment of Federal Home Loan Bank advances
(141,345
)
(145,800
)
Proceeds from other borrowed funds
12,767
25,812
Repayment of other borrowed funds
(8,899
)
(3,090
)
Net change in short-term borrowings
(35,000
)
—
Distributions to members
(1,900
)
(500
)
Net cash provided by financing activities
9,070
10,272
Decrease in cash and cash equivalents
1,798
3,035
Cash and cash equivalents, beginning of year
11,021
15,994
Cash and cash equivalents, end of year
$
12,819
$
19,029
Supplemental cash flows information
Interest paid
$
10,771
$
10,826
State deposit taxes paid
(6
)
22
7
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies
The accompanying unaudited condensed interim consolidated financial statements as of and for the period ended December 31, 2025 have been
prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission. Accordingly, they do not
include all the information and footnotes required by GAAP for complete financial information. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, the interim statements reflect all adjustments necessary for a fair presentation of the
financial position, results of operations and cash flows of the Company on a consolidated basis and all such adjustments are of a normal recurring nature. These financial statements and the accompanying notes should be read in conjunction with the
Company’s audited financial statements for the fiscal year ended September 30, 2025.
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 Frontier Holdings, LLC and its wholly-owned
subsidiaries: Frontier Bank, Omaha, Nebraska (“the Bank”) and FH REM 1, LLC, a real estate holding company.
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.
8
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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.
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 $425,000 and $422,000 as of December 31, 2025 and
September 30, 2025, 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 December 31, 2025 and September 30, 2025.
9
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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.
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.
10
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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.
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.
•
Commercial
•
Commercial Real Estate
•
Residential Real Estate
•
Agricultural
•
Agricultural Real Estate
•
Consumer and Other
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.
11
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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.
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 $50,000 and $232,000 for the periods ended
December 31, 2025 and 2024, respectively. The Company has an allowance for credit loss on off-balance-sheet exposure of $435,000 and $385,000 as of December 31, 2025 and September 30, 2025,
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.
12
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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
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 periods ended December 31, 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.
13
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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 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 December 31, 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.
14
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 1:
Nature of Operations and Summary of Significant Accounting Policies - Continued
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.
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.
15
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 2:
Securities
The amortized cost and fair value, with gross unrealized gains and losses at December 31, 2025 and September 30, 2025 are as follows:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
12/31/2025 (Unaudited)
(in thousands)
Securities available for sale
U.S. Treasuries
$
17,432
$
—
$
(1,005
)
$
16,427
State and political subdivisions
34,504
—
(5,831
)
28,673
Mortgage-backed (GSE residential/commercial)
39,940
23
(1,466
)
38,497
$
91,876
$
23
$
(8,302
)
$
83,597
9/30/2025 (Audited)
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
The carrying value of securities pledged as collateral to secure public deposits and for other purposes, was
$19,425,000 and $26,505,000 at December 31, 2025 and September 30, 2025, respectively.
The amortized cost and fair value of
available for sale securities by contractual maturity at December 31, 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
$
2,572
One to five years
20,748
19,435
Five to ten years
8,792
7,581
After ten years
19,776
15,512
51,936
45,100
Mortgage-backed securities
39,940
38,497
Totals
$
91,876
$
83,597
16
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 2:
Securities – Continued
For the years ended December 31, 2025 and September 30, 2025 there were no gross
gains or gross losses.
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 December 31, 2025 and September 30, 2025, was $78,671,000 and $80,086,000, respectively, which is approximately 94% and 95%, 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 December 31, 2025 and September 30, 2025:
Less than 12 Months
12 Months or More
Total
Description of
Available-for-sale
Securities
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(in thousands)
12/31/2025 (Unaudited)
U.S Treasuries
$
—
$
—
$
16,427
$
(1,005
)
$
16,427
$
(1,005
)
State and political subdivisions
—
—
26,803
(5,831
)
26,803
(5,831
)
Mortgage-backed securities
(GSE residential/commercial)
—
—
35,441
(1,466
)
35,441
(1,466
)
Total temporarily impaired securities
$
—
$
—
$
78,671
$
(8,302
)
$
78,671
$
(8,302
)
9/30/2025 (Audited)
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
)
17
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31,
2025 and September 30, 2025, 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 December 31, 2025 and September 30, 2025, 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 December 31, 2025 and September 30, 2025, respectively.
18
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses
Classes of loans at December 31, 2025 and September 30, 2025, include:
(Unaudited)
12/31/2025
(Audited)
9/30/2025
(in thousands)
Commercial
$
158,697
$
165,914
Commercial real estate
498,663
492,330
Residential real estate
386,114
387,101
Agricultural
79,381
68,576
Agricultural real estate
172,035
168,404
Consumer and other
8,503
8,444
Gross loans
1,303,393
1,290,769
Less: Allowance for credit losses
14,509
14,492
Net loans
1,288,884
1,276,277
The following tables present the balance and activity in the allowance for credit losses based on portfolio segment for the
periods ended December 31, 2025 and December 31, 2024, respectively, (in thousands):
Commercial
Commercial
Real Estate
Residential
Real
Estate
Agricultural
Agricultural
Real Estate
Consumer
and Other
Total
12/31/2025 (Unaudited)
Allowance for Credit Losses
Balance, beginning of year
$
1,898
$
5,562
$
4,279
$
723
$
1,756
$
274
$
14,492
Provision charged to expense
7
25
130
68
(39
)
(181
)
10
Loans charged off
—
(6
)
(4
)
—
—
—
(10
)
Recoveries
2
—
15
—
—
—
17
Balance, end of year
$
1,907
$
5,581
$
4,420
$
791
$
1,717
$
93
$
14,509
19
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
Commercial
Commercial
Real Estate
Residential
Real
Estate
Agricultural
Agricultural
Real Estate
Consumer
and Other
Total
12/31/2024 (Unaudited)
Allowance for Credit Losses
Balance, beginning of year
$
1,956
$
5,067
$
3,853
$
657
$
1,858
$
105
$
13,496
Provision charged to expense
(52
)
431
231
208
(739
)
8
87
Loans charged off
—
(25
)
—
—
—
(2
)
(27
)
Recoveries
—
—
—
232
232
Balance, end of year
$
1,904
$
5,473
$
4,084
$
865
$
1,351
$
111
$
13,788
20
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
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.
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.
21
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
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 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.
22
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31, 2025 and September 30, 2025 (in thousands):
(Unaudited)
12/31/2025
2025
2024
2023
2022
2021
Prior
Revolving
Loans
Total
Commercial
Risk rating
Pass
21,690
14,503
13,107
5,473
3,378
12,156
79,730
150,037
Watch
—
—
—
59
1,092
415
134
1,700
Substandard
39
37
131
800
943
4,974
36
6,960
Total commercial
21,729
14,540
13,238
6,332
5,413
85,119
12,326
158,697
Commercial real estate
Risk rating
Pass
130,732
48,446
41,343
104,793
48,334
112,004
8,330
493,982
Watch
—
2,161
—
—
—
—
—
2,161
Substandard
—
1,215
—
—
—
—
1,305
2,520
Total commercial real estate
130,732
51,822
41,343
104,793
48,334
8,330
113,309
498,663
Residential real estate
Risk rating
Pass
85,951
57,516
36,337
45,090
49,567
70,338
33,369
378,168
Watch
—
327
860
855
—
1,075
4,270
7,387
Substandard
—
12
389
—
1
—
157
559
Total residential real estate
85,951
57,855
37,589
45,945
49,568
71,413
37,796
386,114
Agriculture
Risk rating
Pass
10,601
1,838
1,948
1,702
397
57,445
3,221
77,152
Watch
39
—
55
19
105
586
38
842
Substandard
45
—
—
—
—
1,292
50
1,387
Total agriculture
10,685
1,838
2,003
1,721
502
59,323
3,309
79,381
Agriculture real estate
Risk rating
Pass
32,073
6,681
12,703
21,672
22,146
24,140
44,753
164,168
Watch
500
—
108
2,699
545
1,342
19
5,213
Substandard
512
882
—
1,226
—
—
34
2,654
Total agriculture real estate
33,085
7,563
12,811
25,597
22,691
25,482
44,806
172,035
Consumer and other
Risk rating
Pass
2,735
1,415
746
1,162
36
1,506
888
8,488
Watch
—
—
—
—
—
—
15
15
Substandard
—
—
—
—
—
—
—
—
Total consumer and other
2,735
1,415
746
1,162
36
1,506
903
8,503
Total loans
Risk rating
Pass
283,782
130,399
106,184
179,892
123,858
241,489
206,391
1,271,995
Watch
539
2,488
1,023
3,632
1,742
3,418
4,476
17,318
Substandard
596
2,146
520
2,026
944
6,266
1,582
14,080
Total loans
284,917
135,033
107,727
185,550
126,544
251,173
212,449
1,303,393
23
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
(Audited)
9/30/2025
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
The Company evaluates the loan risk grading system definitions on an ongoing basis. No significant changes
were made during 2025.
24
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
The following tables present the Company’s loan portfolio aging analysis as of
December 31, 2025 and September 30, 2025 (in thousands):
(Unaudited)
12/31/2025
30-59 Days
Past Due
60-90 Days
Past Due
Greater Than
90 Days
Total Past
Due
Current
Total
Loans
Commercial
$
83
$
340
$
1,416
$
1,839
$
156,859
$
158,697
Commercial real estate
494
—
105
599
498,064
498,663
Residential real estate
5,387
—
5,353
10,740
375,373
386,114
Agriculture
—
—
—
—
79,381
79,381
Agriculture real estate
—
—
—
—
172,035
172,035
Consumer and other
18
—
—
18
8,485
8,503
Total
$
5,982
$
340
$
6,874
$
13,196
$
1,290,197
$
1,303,393
(Audited)
9/30/2025
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
25
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
The following table presents the Company’s nonaccrual loans at December 31, 2025
and September 30, 2025 (in thousands).
(Unaudited)
12/31/2025
Nonaccrual Loans
Without a Specific
Reserve
Total Nonaccrual
Loans Past Due
Over 89 Days and
Still Accruing
Commercial
$
1,415
$
1,415
$
—
Commercial real estate
—
—
105
Residential real estate
4,631
4,643
861
Agriculture
—
—
—
Agriculture real estate
—
—
—
Consumer and other
—
—
—
$
6,046
$
6,058
$
966
(Audited)
9/30/2025
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
—
—
26
Consumer and other
4
4
—
$
3,181
$
3,181
$
26
26
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 3:
Loans and Allowance for Credit Losses - Continued
The following tab presents the amortized cost basis of collateral-dependent loans as of
December 31, 2025 and September 30, 2025, respectively, by collateral type (in thousands).
2025
Real
Estate
12/31/2025
(Unaudited)
Business
Assets
Total
Commercial
$
—
$
1,179
$
1,179
Commercial real estate
—
—
—
Residential real estate
4,637
—
4,637
Agriculture
—
—
—
Agriculture real estate
34
—
34
Consumer and other
—
—
—
$
4,671
$
1,179
$
5,850
2024
Real
Estate
9/30/2025
(Audited)
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
The Company had no loans at December 31, 2025 and September 30, 2025 that were modified with
borrowers having financial difficulty.
27
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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.
28
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 4:
Leases - Continued
The lease cost and other required information for the three month periods ended
December 31, 2025 and 2024 are:
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
(in thousands)
Lease Cost
Operating lease cost
$
221
$
225
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
198
$
199
Future minimum lease payments under non-cancellable leases as of
December 31, 2025 were as follows:
Period Ending December 31,
(in thousands)
2026
$
814
2027
836
2028
850
2029
864
2030
879
Thereafter
7,886
Total future minimum lease payments
$
12,129
Less imputed interest
3,785
Lease liabilities
$
8,344
The weighted average remaining lease term for operating leases as of December 31, 2025 (unaudited) and
September 30, 2025 (audited) were 14 years and 14 years, respectively. The weighted average discount rate on operating leases as of December 31, 2025 (unaudited) and September 30, 2025 (audited) were 5.51% and 5.51%, respectively.
29
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 5:
Premises and Equipment
A summary of the cost and accumulated depreciation of premises and equipment at December 31, 2025 and September 30, 2025 is as
follows:
(Unaudited)
12/31/2025
(Audited)
9/30/2025
(in thousands)
Land
$
306
$
306
Buildings and improvements
2,884
2,842
Furniture and fixtures
4,701
4,683
Leasehold improvements
2,206
2,206
10,097
10,037
Less accumulated depreciation and amortization
(6,774
)
(6,630
)
Net premises and equipment
$
3,323
$
3,407
Note 6:
Goodwill
The changes in the carrying amount of goodwill for the years ended December 31, 2025 and September 30, 2025 were:
(Unaudited)
12/31/2025
(Audited)
9/30/2025
(in thousands)
Balance, October 1
Goodwill
$
15,213
$
15,213
Balance, December 31
$
15,213
$
15,213
Note 7:
Time Deposits
Time deposits in denominations of greater than $250,000 totaled $87,906,000 and $84,698,000 at December 31, 2025 and September 30,
2025, respectively.
30
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 7:
Time Deposits - Continued
At December 31, 2025 (unaudited), the scheduled annual maturities of time deposits (in thousands) are as follows:
2026
$
356,077
2027
81,177
2028
34,373
2029
19,400
2030
18,283
Thereafter
34,672
$
543,982
Brokered and reciprocal deposits totaled approximately $407,465 and $406,039 at December 31, 2025 and
September 30, 2025, respectively.
Note 8:
Borrowed Funds
Borrowed funds at December 31, 2025 and September 30, 2025 consist of the following:
(Unaudited)
12/31/2025
(Audited)
9/30/2025
(in thousands)
Long-term Federal Home Loan Bank advances
$
99,635
$
100,580
Lines of credit with Federal Home Loan Bank
41,500
34,700
Federal Funds Purchased
—
35,000
Line of credit with a bank
22,486
9,718
Notes payable to a bank
—
8,900
Total
$
163,621
$
188,898
The Federal Home Loan Bank advances are secured by mortgage loans totaling $421,637,000 and $428,081,000 at
December 31, 2025 and September 30, 2025, 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.
31
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 8:
Borrowed Funds - Continued
At December 31, 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 (3.89% at December 31, 2025 and 4.33% at September 30, 2025) with interest
payable monthly. At December 31, 2025 and September 30, 2025, the Company had combined remaining borrowing availability for FHLB advances and the line of credit of $270,495,000 and $282,794,000, 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 debt that had an
outstanding balance of $35,000,000 at September 30, 2025 which was fully repaid during the period ended December 31, 2025.
The
Company had a note payable with a bank with an outstanding principal balance of $8,900,000 at September 30, 2025 that was fully repaid during the period ended December 31, 2025.
At December 31, 2025 and September 30, 2025, 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 (6.75% at December 31, 2025 and 7.25% at September 30, 2025) 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 $22,486,000 and $9,718,000 at December 31, 2025 and September 30, 2025, respectively.
Aggregate annual maturities of the long-term borrowed funds at December 31, 2025 are (in thousands):
2026
$
11,805
2027
50,060
2028
18,500
2029
4,680
2030
7,425
Thereafter
7,165
Total
$
99,635
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 $159,000 and $138,000 for the three months ended December 31, 2025 and 2024, respectively.
32
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 three month periods ended December 31,
2025 and 2024.
Note 11:
Related Party Transactions
At December 31, 2025 and September 30, 2025, 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 $6,852,000 and $5,940,000, respectively. Deposits from related parties held by the Company at December 31, 2025
and September 30, 2025, totaled $21,303,000 and $22,016,000, 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 December 31, 2025 and September 30, 2025, that the Bank met all capital adequacy requirements to which it is subject.
33
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 12:
Minimum Regulatory Capital Requirements - Continued
As of December 31, 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.
Actual
Minimum Capital
Requirement
Minimum to Be
Well Capitalized
Under Prompt
Corrective Action
Provisions
Minimum Capital
Requirements
including Capital
Conservation
Buffer of 2.50
(Unaudited)
Amount
Ratio
Amount
Ratio
Amount
Ratio
Amount
Ratio
12/31/2025
Total capital to risk weighted assets
$
148,346
11.3
%
$
104,454
8.0
%
$
131,818
10.0
%
$
138,409
10.5
%
Tier 1 capital to risk weighted assets
133,402
10.1
%
79,091
6.0
%
105,454
8.0
%
112,045
8.5
%
Common equity Tier 1 capital to risk weighted assets
133,402
10.1
%
59,318
4.5
%
85,682
6.5
%
92,273
7.0
%
Tier 1 capital to average assets
133,402
9.5
%
56,198
4.0
%
70,248
5.0
%
91,322
6.5
%
(Audited)
9/30/2025
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
%
34
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31, 2025 and September 30, 2025, the following financial instruments were outstanding whose contract amounts represent
credit risk:
Contract Amount
(Unaudited)
12/31/2025
(Audited)
9/30/2025
(in thousands)
Commitments to extend credit
$
262,959
$
263,083
Standby letters of credit
2,772
2,285
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.
35
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31, 2025 and September 30, 2025, approximately 36% and 37%, 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, 2025, the Company had 816.4 nonvested shares with weighted-average grant- date fair value of $2,428 per share. During
2025, 145.4 shares were granted at an weighted-average grant-date fair value of $2,849. Subsequent to the period ending December 31, 2025, all shares were fully vested with change of control.
36
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31, 2025 and September 30, 2025:
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)
(Unaudited)
12/31/2025
U.S. Treasuries
$
16,427
$
—
$
16,427
$
—
State and political subdivisions
28,673
—
26,804
1,869
Mortgage-backed (GSE residential/commercial)
38,497
—
38,497
—
(Audited)
9/30/2025
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
—
37
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 period ended December 31, 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 there were no transfers in the periods ended December 31, 2025 and September 30, 2025. There were no gains or losses for the three month periods ended December 31, 2025 and December 31, 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 December 31, 2025 (Unaudited) and September 30, 2025 (Audited):
Fair Value at
12/31//2025
Valuation
Technique
Unobservable inputs
State & Political Subdivisions
1,869
Discounted Cash Flows
Unrated security yield and adjustment Marketability yield discount
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
38
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
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 December 31, 2025 and September 30, 2025.
Fair Value of Financial Instruments
The following tables present estimated fair values of the Company’s financial instruments at December 31, 2025 and
September 30, 2025:
(Unaudited)
12/31/2025
Carrying
Amount
Estimated
Fair Value
Level 1
Level 2
Level 3
(in thousands)
Financial assets
Cash and cash equivalents
$
12,819
$
12,819
$
12,819
$
—
$
—
Interest-bearing time deposits in banks
100
100
100
—
—
Available-for-sale
securities
83,597
83,597
—
81,728
1,869
Loans held for sale
1,150
1,150
—
1,150
—
Loans, net of allowance for credit losses
1,287,734
1,281,201
—
—
1,281,201
Interest receivable
10,599
10,599
—
10,599
—
Nonmarketable equity securities
6,849
6,849
—
6,849
—
Total assets
$
1,402,848
$
1,396,315
$
12,919
$
100,326
$
1,283,070
Financial liabilities
Deposits
1,131,715
1,051,889
—
1,051,889
—
Federal Home Loan Bank advances
141,135
140,403
—
140,403
—
Other borrowed funds
22,486
22,486
—
22,486
—
Interest payable
3,098
3,098
—
3,098
—
Total liabilities
$
1,298,434
$
1,217,876
$
—
$
1,217,876
$
—
39
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 15: Disclosures about Fair Value of Assets and Liabilities - Continued
(Audited)
9/30/2025
Carrying
Amount
Estimated
Fair Value
Level 1
Level 2
Level 3
(in thousands)
Financial assets
Cash and cash equivalents
$
11,021
$
11,021
$
11,021
$
—
$
—
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
$
1,389,468
$
1,367,773
$
11,121
$
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
$
—
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
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.
40
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 15:
Disclosures about Fair Value of Assets and Liabilities – Continued
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.
41
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
The Company’s remaining assets and liabilities are not considered financial instruments
or are not material.
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:
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 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
)
42
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 18:
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
For the Periods Ended December 31, 2025 and September 30, 2025
(Dollar amounts in thousands, except per share data)
(Unaudited)
12/31/2025
(Audited)
9/30/2025
ASSETS
Cash and due from banks
$
293
$
236
Investment in bank subsidiary
140,078
136,194
Investment in nonbank subsidiary
4
4
Other assets
2,037
2,492
Total assets
$
142,412
$
138,926
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term borrowings
$
22,486
$
9,718
Long-term borrowings
—
8,900
Interest payable and other liabilities
3,007
1,242
Total liabilities
25,493
19,860
Stockholders’ equity
116,919
119,066
Total liabilities and stockholders’ equity
$
142,412
$
138,926
43
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 18:
Condensed Financial Information - Parent Company Only – Continued
Frontier Holdings, LLC
CONDENSED STATEMENTS OF INCOME
For the Three Months Ended December 31, 2025 and 2024
(Dollar amounts in thousands, except per share data)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Dividends from subsidiary bank
$
—
$
3,700
Other income
4
4
Total income
4
3,704
Expenses
Interest expense
276
379
Other expenses
3,858
934
Total expenses
4,134
1,313
Income (loss) before applicable income taxes
(4,130
)
2,391
Income tax
—
—
Income before undistributed income of subsidiaries
(4,130
)
2,391
Equity in undistributed income of subsidiaries
Bank subsidiary
3,239
537
Nonbank subsidiary
—
—
Net income
$
(891
)
$
2,928
44
Frontier Holdings, LLC
Notes to Consolidated Financial Statements
December 31, 2025 and September 30, 2025
Note 18:
Condensed Financial Information - Parent Company Only - Continued
CONDENSED STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 2025 and 2024
(Dollar amounts in thousands)
(Unaudited)
12/31/2025
(Unaudited)
12/31/2024
Operating Activities
Net income
$
(891
)
$
2,928
Items not requiring (providing) cash
Investment in Bank subsidiary
(3,239
)
(4,237
)
Depreciation and amortization
18
12
Amortization of operating lease
right-of-use asset
8
10
Net changes in:
Other assets
428
378
Operating lease liability
(7
)
(8
)
Interest payable and other liabilities
1,771
(43
)
Net cash provided by operating activities
(1,912
)
(960
)
Investing activities
Dividends received from Bank Subsidiary
—
3,700
Net cash used in investing activities
—
3,700
Financing activities
Proceeds from other borrowed funds
12,767
750
Repayment of other borrowed funds
(8,899
)
(2,890
)
Distributions to members
(1,900
)
(500
)
Net cash provided by financing activities
1,968
(2,640
)
Net change in cash and cash equivalents
56
100
Cash and cash equivalents, beginning of year
236
54
Cash and cash equivalents, end of year
$
292
$
154
45
EX-99.2
EX-99.2
Filename: d16704dex992.htm · Sequence: 3
EX-99.2
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF FRONTIER HOLDINGS, LLC.
The following discussion and analysis is to focus on material changes in the financial condition and results of operation of Frontier over
the indicated periods. This discussion and analysis is intended to highlight and supplement information presented elsewhere in the consolidated financial statements and related notes included with this prospectus. This discussion and analysis
contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that management believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors may
cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Neither Frontier nor Equity assumes any obligation to update any of these forward-looking
statements.
Overview
Frontier
is a registered financial holding company headquartered in Omaha, Nebraska. Through its wholly owned subsidiary, Frontier Bank, a Nebraska state bank, Frontier provides a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since its inception in 1937, Frontier’s priority has been and continues to be creating member value through the
establishment of an attractive commercial banking franchise in Nebraska. Frontier considers its primary market to include Douglas, Lancaster, Madison, Richardson and Thurston Counties in Eastern Nebraska. As of December 31, 2025, Frontier had
total assets of $1.4 billion, total deposits of $1.1 billion, and total members’ equity of $116.9 million.
As a
financial holding company operating through one reportable operating segment, community banking, Frontier generates most of its revenues from interest income on loans, loan fees, and interest income from securities. It incurs interest expense on
deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. Frontier analyzes its ability to maximize income generated from interest-earning assets and expense of its liabilities through
its net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and
securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.
Changes in the market interest rates and the interest rates Frontier earns on interest-earning assets or pays on interest-bearing liabilities,
as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and members’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net
interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international
conditions, and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in Frontier’s loan portfolio are affected by, among other factors, economic and competitive conditions in its markets and
across the region, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within its markets.
Critical Accounting Estimates
Frontier’s consolidated financial statements are prepared in accordance with GAAP and with general practices within the financial
services industry. Application of these principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Frontier bases its estimates on historical experience and
on various other assumptions that it believes to be reasonable under current circumstances. These assumptions form the basis for its judgments about the carrying values of assets and liabilities that are not readily available from independent,
objective sources. Frontier evaluates its estimates on an ongoing basis. Use of alternative assumptions may have resulted in significantly different estimates. Actual results may differ from these estimates. Frontier’s accounting policies are
described in “NOTE 1 – Nature of Operations and Summary of Significant Accounting Policies” in the Condensed Notes to Interim Financial Statement.
1
Frontier has identified the following critical accounting policies and estimates that, due
to the difficult, subjective or complex judgments and assumptions inherent in those policies and estimates and the potential sensitivity of its financial statements to those judgments and assumptions, are critical to an understanding of its
financial condition and results of operations. Frontier believes that the judgments, estimates and assumptions used in the preparation of its financial statements are appropriate.
Allowance for Credit Losses
The
determination of the amount of Frontier’s allowance for credit loss, or ACL, is a critical accounting estimate and includes management’s estimate of future credit losses. Loans are charged-off
against the ACL when management believes a loan is uncollectable and credited if subsequent recoveries are made. Changes in the ACL, and the related loan loss provision, can materially affect net income.
On October 1, 2023, Frontier adopted ASC 326, Financial Instruments – Credit Losses to estimate its allowance for credit losses.
This standard is known as the current expected credit loss standard, or CECL, and replaces the incurred loss approach. CECL requires an estimate of the credit losses expected over the life of financial instruments. The incurred loss approach delays
the recognition of a credit loss until the “probable” loss event was “incurred”. The ACL is an estimate that is subject to uncertainty due to the assumptions and significant judgements used in the estimation process.
The estimate of the ACL using the CECL approach is based on relevant information about past events, current conditions, and reasonable and
supportable forecasts that affect the collectability of loans. The historical loss experience is the starting point for estimating expected credit losses. Frontier considers whether the historical loss experience should be adjusted for asset
specific risk characteristics or current conditions at the reporting date that did not exist over the historical reporting period. These qualitative adjustments can include changes in the economy, loan underwriting standards, and delinquency trends.
It then considers future economic conditions as part of the one-year reasonable and supportable forecast period. The one-year reasonable and supportable forecast period
includes estimates of economic conditions which affect the performance of the loan portfolios. After the one-year reasonable and supportable forecast period, losses are based on historical loss rates, or
reversion rate, for the remaining expected life of the loan.
Collateral dependent loans are not considered to share the risk
characteristics with our non-collateral dependent portfolio. A loan is considered to be collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided
substantially through the sale or operation of the collateral. For loans which are considered to be collateral dependent, Frontier has elected to estimate the expected credit loss based on the fair value of the collateral less selling costs. If the
fair value of the collateral less selling costs is less than the loan’s amortized cost basis, it records a partial charge-off to reduce the loan’s amortized cost basis for the difference between
the collateral fair value less selling costs and the amortized cost basis.
Available-for-sale investment securities in an unrealized loss position are evaluated for impairment. Frontier 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 investment securities amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, Frontier evaluates whether the decline in fair value has resulted from credit losses or other
factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among
other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the investment security are compared to the amortized cost basis of the security. If the present value of cash flows
expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been
recorded through an ACL is recognized in other comprehensive income. Frontier has not recorded an ACL related to its available-for-sale investment securities.
2
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.
Results of Operations
Performance
Summary
For the three months ended, December 31, 2025, net loss available to members was $891 thousand or ($20.59) per
member unit, compared to net income available to members of $2.9 million, or $68.35 per member unit, for the same period in 2024. Annualized consolidated return on average assets declined to (0.25)% for the three months ended December 31,
2025, compared to 0.89% for the same period in 2024. Annualized return on average members’ equity decreased to (3.01)% for the three months ended December 31, 2025, from 10.89% in the prior-year
period.
Net Interest Income
The operating results of Frontier depend primarily on its net interest income, calculated as the difference between interest income on
interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Fluctuations in market interest rates impact the yield and rates paid on interest sensitive assets and
liabilities. Changes in the amount and type of interest-earning assets and interest-bearing liabilities also impact net interest income. The variance driven by the changes in the amount and mix of interest-earning assets and interest-bearing
liabilities is referred to as a “volume change.” Changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds are referred to as a “rate change.”
To evaluate net interest income, Frontier measures and monitors (1) yields on loans and other interest-earning assets, (2) the costs
of deposits and other funding sources, (3) net interest spread and (4) net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest
margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and members’ equity also fund interest-earning assets, net interest
margin includes the benefit of these noninterest-bearing sources. Frontier calculates average assets, liabilities, and equity using a monthly average, and average yield/rate utilizing an actual 365-day count
convention
For the three months ended, December 31, 2025, net interest income totaled $10.9 million, and net interest margin
and net interest spread were 3.14% and 2.59%, respectively. For the three months ended December 31, 2024, net interest income totaled $9.2 million and net interest margin and net interest spread were 2.83% and 2.20%, respectively. The
average yield on the loan portfolio was 6.32%, for the three months ended December 31, 2025, compared to 6.24% for the three months ended December 31, 2024, and the average yield on total interest-earning assets was 6.10% for the three
months ended December 31, 2025, compared to 6.02% for the same period in 2024. For the three months ended December 31, 2025, overall cost of deposits (which includes noninterest-bearing deposits) decreased 25 basis points to 3.05%
compared to the three months ended December 31, 2024, primarily due to the decline in market interest rates since the last quarter of 2024.
The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets
and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts. The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities,
and the net interest margin on average total interest-earning assets for the same periods. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances
for the period. For the periods shown, interest income not recognized on nonaccrual loans was not material. Any nonaccrual loans have been included in the table as loans
3
carrying a zero yield. The average total loans reflected below is net of deferred loan fees and discounts. Acquired loans were recorded at fair value at acquisition and accrete interest income
over the remaining lives of the respective loans or expected cash flows. Averages presented in the table below, and throughout this report, are month-end averages. All dollars shown are the following table are
presented in thousands.
Three Months Ended December 31,
2025
2024
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
Interest-earning assets
Total loans
1,288,927
20,378
6.32
%
1,193,672
18,627
6.24
%
Taxable securities
74,567
634
3.40
%
78,382
726
3.70
%
Nontaxable securities
10,221
56
2.19
%
10,501
57
2.17
%
Other interest-earning assets
17,380
159
3.66
%
17,986
170
3.78
%
Total interest-earning assets
1,391,095
21,227
6.10
%
1,300,541
19,580
6.02
%
Noninterest-earning assets
29,930
31,750
Total assets
1,421,025
1,332,291
Interest-bearing liabilities
Interest-bearing demand deposits
169,414
901
2.13
%
154,256
821
2.13
%
Savings and money market
267,075
1,928
2.89
%
278,888
2,288
3.28
%
Time deposits
552,733
5,603
4.05
%
490,722
5,506
4.49
%
Total interest-bearing deposits
989,222
8,432
3.41
%
923,866
8,615
3.73
%
Federal funds purchased and retail repurchase agreements
35,043
352
4.02
%
—
—
—
%
Federal Home Loan Bank advances
126,867
1,245
3.93
%
139,834
1,391
3.98
%
Other borrowings
20,552
276
5.37
%
22,942
378
6.59
%
Total interest-bearing liabilities
1,171,684
10,305
3.52
%
1,086,642
10,384
3.82
%
Noninterest-bearing checking accounts
108,626
112,566
Noninterest-bearing liabilities
22,390
24,781
Members’ equity
118,325
108,302
Total liabilities and members’ equity
1,421,025
1,332,291
Net interest income
10,922
9,196
Net interest spread
2.59
%
2.20
%
Net interest margin
3.14
%
2.83
%
Total cost of deposits, including noninterest bearing deposits
1,097,848
8,432
3.05
%
1,036,432
8,615
3.30
%
Average interest-earning assets to interest bearing liabilities
118.73
%
119.68
%
(1)
Average loan balances include nonaccrual loans and loans held for sale.
(2)
Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing
liabilities.
(3)
Net interest margin is equal to net interest income divided by average interest-earning assets.
(4)
Tax exempt income is not included in the above table on a tax equivalent basis
4
The following table presents information regarding the dollar amount of changes in interest
income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in
interest rates. For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.
Three Months Ended December 31, 2025 over 2024
Increase (decrease) Due To:
(Dollars in thousands)
Volume
Yield/Rate
Total
Interest-Earning Assets
Loans
1,503
248
1,751
Taxable securities
(34
)
(58
)
(92
)
Nontaxable securities
(2
)
1
(1
)
Other assets
(6
)
(5
)
(11
)
Total interest-earning assets
1,461
186
1,647
Interest-Bearing Liabilities
Interest-bearing demand deposits
81
(1
)
80
Savings and money market
(94
)
(266
)
(360
)
Time deposits
658
(561
)
97
Total interest-bearing deposits
645
(828
)
(183
)
Federal Funds purchased and retail repurchase agreements
352
(0
)
352
FHLB advances
(127
)
(19
)
(146
)
Other borrowings
(37
)
(65
)
(102
)
Total interest-bearing liabilities
833
(912
)
(79
)
Net interest income
628
1,098
1,726
(1)
The effect of changes in volume is determined by multiplying the change in volume by the previous year’s
average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year’s volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the
volume variance and the rate variance in proportion on the relationship of the absolute dollar amount of the change in.
Provision for Credit Losses
Frontier’s provision for credit losses is a charge to income to bring its ACL to a level deemed appropriate by management. For a
description of the factors considered by management in determining the ACL see “—Financial Condition—Allowance for Credit Losses.” The provision expense for credit losses was $60 thousand and
$319 thousand for the three months ended December 31, 2025 and December 31, 2024, respectively.
Noninterest Income
Frontier’s primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller
machine (“ATM”) fee income and income from the origination, processing and sale of mortgage loans. The following tables present, for the periods indicated, the major categories of noninterest income:
5
Three Months Ended December 31,
(Dollars in thousands)
2025
2024
Increase
(Decrease)
Noninterest income:
Service charges on deposit accounts
$
110
$
92
$
18
Mortgage loan sales/originations/processing
339
263
76
Gain (loss) on sale of securities
(1
)
35
(36
)
ATM/debit card interchange fees
183
186
(3
)
Other
59
29
30
Total noninterest income
$
690
$
605
$
85
Noninterest Expense
Generally, noninterest expense is composed of all employee expenses and other costs of Frontier associated with operating its facilities,
obtaining and retaining customer relationships and providing bank services. The largest component of noninterest expense is salaries and employee benefits. Noninterest expense also includes operational expenses, such as occupancy expenses,
depreciation and amortization, professional and regulatory fees, including FDIC assessments, data processing expenses, and advertising and promotion expenses, among others.
For the three months ended December 31, 2025, Frontier recognized costs associated with its anticipated merger with Equity Bancshares,
Inc. within the Legal and professional fees line item. Comparable costs were not recognized in the three months ended December 31, 2024.
The following tables present, for the periods indicated, the major categories of noninterest expense:
Three Months Ended December 31,
(Dollars in thousands)
2025
2024
Increase
(Decrease)
Noninterest expense:
Salaries and employee benefits
$
5,973
$
4,019
$
1,954
Occupancy & equipment
818
772
46
Data processing
1,255
337
918
Legal and professional fees
3,355
503
2,852
FDIC assessment
324
267
57
Advertising
35
83
(48
)
Telephone
21
15
6
Other
662
558
104
Total noninterest expense
$
12,443
$
6,554
$
5,889
Income Tax Expense
Frontier did not recognize income tax expense for any of the periods summarized as it has elected to be taxed as a Subchapter S corporation for
federal income tax purposes.
6
Financial Condition
Assets
At
December 31, 2025, total assets were $1.43 billion, an increase of $12.0 million, or 3.4% annualized, from $1.42 billion as of September 30, 2025. The increase in total assets was primarily due to an increase in
Frontier’s loan portfolio over the period.
Loan Portfolio
Frontier’s primary source of income is interest on loans to individuals, professionals and small-to-midsized businesses in its markets. Frontier’s loan portfolio consists primarily of commercial loans and real estate loans secured by commercial and residential real estate properties located
in its primary market areas. The loan portfolio represents the highest yielding component of Frontier’s earning asset base.
As of
December 31, 2025, total loans, excluding mortgage loans held for sale, were $1.30 billion, an increase of $12.6 million, or 1.0%, compared to $1.29 billion as of September 30, 2025. Most of the growth relates to higher
agricultural loans in the fourth quarter. Additionally, as of December 31, 2025 and September 30, 2025, Frontier had mortgage loans classified as loans held for sale of $1.15 million and $903 thousand, respectively.
Total loans held for investment as a percentage of deposits were 115% and 118% as of December 31, 2025, and September 30, 2025,
respectively. Total loans held for investment as a percentage of assets were 90.92%, and 90.81% as of December 31, 2025, and September 30, 2025, respectively.
The following table summarizes Frontier’s held for investment loan portfolio by type of loan as of the dates indicated:
December 31, 2025
September 30, 2025
Amount
Percent
Amount
Percent
(Dollars in thousands)
Commercial real estate
$
498,663
38
%
$
492,330
38
%
Residential real estate
386,114
30
%
387,101
30
%
Agricultural real estate
172,035
13
%
168,404
13
%
Commercial
158,697
12
%
165,914
13
%
Agricultural
79,381
6
%
68,576
5
%
Consumer and other
8,503
1
%
8,444
1
%
Total loans
$
1,303,393
100
%
$
1,290,769
100
%
Commercial real estate loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in
the value of real estate, vacancy rates, and unemployment trends. These loans are usually repaid through permanent financing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property.
Commercial real estate loans increased $6.3 million, or 1.3%, to $498.7 million as of December 31, 2025, from
$492.3 million as of September 30, 2025. The increase in both periods is attributable to increased lending opportunities in the market.
Residential real estate loans include first and second lien 1-4 family residential real estate
loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the
borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide
permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property.
7
Residential real estate loans decreased $987 thousand, or less than 1% to
$386.1 million as of December 31, 2025, from $387.1 million as of September 30, 2025. The decline is attributable to a seasonally slower origination period combined with normal amortization.
Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans,
term loans, equipment financing, asset acquisition, expansion and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s
ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. Any interruption or
discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to
repay the loan.
Commercial loans decreased $7.2 million, or 4.3%, to $158.7 million as of December 31, 2025, from
$165.9 million as of September 30, 2025. Periodic decreases are attributable to seasonal factors.
Agriculture 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 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.
Agricultural Real Estate and Agricultural loans have been materially consistent in
each of the periods presented, representing 19.3% and 18.4% of total loans as of December 31, 2025 and September 30, 2025, respectively.
Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and
unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the
value of the real estate or personal property securing the consumer loan, if any. Balances of consumer and other loans at December 31, 2025 and September 30, 2025 represented less than 0.7% of its held for investment loan portfolio.
The contractual maturity ranges of loans in Frontier’s loan portfolio and the amount of such loans with fixed and floating interest
rates in each maturity range as of date indicated are summarized in the following tables:
8
As of December 31, 2025
(Dollars in thousands)
One Year
or Less
After One Year
through Five
Years
After Five Years
through Fifteen
Years
After
Fifteen
Years
Total
Real Estate:
Commercial real estate
$
118,509
$
243,746
$
92,480
$
43,928
$
498,663
Residential real estate
142,794
221,643
10,324
11,353
386,114
Agricultural real estate
49,112
50,889
29,561
42,473
172,035
Total real estate
310,415
516,278
132,365
97,754
1,056,812
Commercial
68,465
81,193
9,014
25
158,697
Agricultural
69,409
9,346
268
358
79,381
Consumer and other
1,894
5,616
118
875
8,503
Total
$
450,183
$
612,433
$
141,765
$
99,012
$
1,303,393
Loans with predetermined fixed interest rates
$
207,213
$
492,552
$
59,780
$
11,214
$
770,759
Loans with adjustable/floating interest rates
243,340
119,626
81,869
87,799
532,634
$
450,553
$
612,178
$
141,649
$
99,013
$
1,303,393
As of September 30, 2025
(Dollars in thousands)
One Year
or Less
After One Year
through Five
Years
After Five Years
through Fifteen
Years
After
Fifteen
Years
Total
Real Estate:
Commercial real estate
$
128,236
$
225,248
$
93,065
$
45,781
$
492,330
Residential real estate
153,725
212,906
9,013
11,457
387,101
Agricultural real estate
49,463
48,105
29,314
41,522
168,404
Total real estate
331,424
486,259
131,392
98,761
1,047,836
Commercial
96,039
60,734
9,116
25
165,914
Agricultural
59,137
8,637
442
360
68,576
Consumer and other
2,360
5,136
97
851
8,444
Total
$
488,960
$
560,766
$
141,047
$
99,996
$
1,290,769
Loans with predetermined fixed interest rates
$
234,776
$
470,811
$
56,867
$
10,571
$
773,025
Loans with adjustable/floating interest rates
254,184
89,907
84,227
89,426
517,744
$
488,960
$
560,718
$
141,094
$
99,997
$
1,290,769
Nonperforming Assets
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.
Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status
regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is generally reversed. Interest income is subsequently recognized only to the extent cash payments are received in
excess of principal due, or interest may be recognized on a cash basis as long as the remaining book balance of the loan is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are
brought current and future payments are reasonably assured.
9
Frontier has several procedures in place to assist in maintaining the overall quality of its
loan portfolio. It has established underwriting guidelines to be followed by its bankers, and it also monitors delinquency levels for any negative or adverse trends. However, there can be no assurance that Frontier’s loan portfolio will not
become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.
Frontier believes its
conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets. Frontier had $7.0 million and $3.2 million in nonperforming assets as of
December 31, 2025 and September 30, 2025, respectively. The increase in nonperforming assets for the three months ended December 31, 2025 was primarily attributable to an increase in residential real estate loans and an increase in
commercial loans.
The following tables present information regarding nonperforming loans at the dates indicated:
(Dollars in thousands)
December 31, 2025
September 30, 2025
Nonaccrual loans
$
6,058
$
3,181
Accruing loans 90 or more days past due
966
26
Total nonperforming loans
7,024
3,207
Other real estate loans
17
—
Total nonperforming assets
$
7,041
$
3,207
Ratio of nonperforming loans to total loans
0.55
%
0.25
%
Ratio of nonperforming assets to total assets
0.49
%
0.22
%
Ratio of nonaccrual loans to total loans
0.47
%
0.25
%
(Dollars in thousands)
Nonaccrual by category:
Commercial real estate
$
—
$
1,873
Residential real estate
4,643
1,111
Commercial
1,415
142
Agricultural
—
51
Agricultural real estate
—
26
Consumer and other
—
4
Total
$
6,058
$
3,207
Potential Problem Loans
From a credit risk standpoint, Frontier classifies loans in one of four categories: pass, special mention, substandard or doubtful. Loans
classified as loss are charged-off. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. Ratings are adjusted to reflect the degree of risk and loss
that is believed to be inherent in each credit. Frontier’s methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk of loss) or decreased in
accordance with improvement in credit quality (and a corresponding decrease in risk of loss).
Credits rated special mention show clear
signs of financial weaknesses or deterioration in credit worthiness; however, such concerns are not so pronounced that it generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform
within standard credit terms and credit exposure is not as prominent as credits with a lower rating.
10
Credits rated substandard are those in which the normal repayment of principal and interest
may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct
possibility. Prompt corrective action is therefore required to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary
support to the credit is performed.
Credits rated doubtful have all the weaknesses inherent in those rated substandard, with the added
characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The following tables summarize Frontier’s internal ratings of loans held for investment as of the dates indicated.
December 31, 2025
(Dollars in thousands)
Pass
Special Mention
Substandard
Total
Commercial real estate
$
493,982
$
2,161
$
2,520
$
498,663
Residential real estate
378,168
7,387
559
386,114
Ag real estate
164,168
5,213
2,654
172,035
Commercial
150,037
1,700
6,960
158,697
Agriculture
77,152
842
1,387
79,381
Consumer and other
8,488
15
—
8,503
$
1,271,995
$
17,318
$
14,080
$
1,303,393
September 30, 2025
(Dollars in thousands)
Pass
Special Mention
Substandard
Total
Commercial real estate
$
487,068
$
2,161
$
3,101
$
492,330
Residential real estate
378,686
7,296
1,119
387,101
Ag real estate
160,572
5,177
2,655
168,404
Commercial
156,345
1,619
7,950
165,914
Agriculture
66,112
1,002
1,462
68,576
Consumer and other
8,444
—
—
8,444
$
1,257,227
$
17,255
$
16,287
$
1,290,769
Allowance for Credit Losses
Frontier maintains an ACL, which includes both its allowance for loan losses and reserves for unfunded commitments, that represents
management’s best estimate of the credit losses and risks inherent in the loan portfolio. In determining the ACL, Frontier estimates losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably
determined. The balance of the ACL is based on internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the
estimated impact of current economic conditions on certain historical credit loss rates. For additional discussion of Frontier’s methodology, please refer to “—Critical Accounting Estimates—Allowance for Credit
Losses.”
In connection with its review of the loan portfolio, Frontier considers risk elements attributable to particular loan
types or categories in assessing the quality of individual loans. Some of the risk elements it considers include:
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.
11
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 Frontier’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 Frontier’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 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 Frontier 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 Frontier’s market area) and the creditworthiness of a borrower.
As of
December 31, 2025, the ACL totaled $14.5 million, or 1.11%, of total loans held for investment. As of September 30, 2025, the ACL totaled $14.5 million, or 1.12%, of total loans held for investment.
Three months ended
December 31, 2025
September 30, 2025
Ratio of ACL to end of period loans held for investment
1.11
%
1.12
%
Nonaccrual loans to end of period loans held for investment
0.47
%
0.25
%
Ratio of net charge-offs to average loans
0.00
%
0.01
%
12
For the Three Months Ended December 31,
2025
2024
(Dollars in thousands)
Net
Charge-
offs
% of
Average
Loans
Net
Charge-
offs
% of
Average
Loans
Commercial real estate
6
0.00
%
25
0.02
%
Residential real estate
(11
)
(0.03
)%
—
0.00
%
Commercial
(2
)
0.00
%
—
0.00
%
Agriculture
—
0.00
%
(232
)
(0.93
)%
Ag real estate
—
0.00
%
—
0.00
%
Consumer and other
—
0.00
%
2
0.07
%
Total net charge-offs
(7
)
0.00
%
(205
)
(0.07
)%
(1)
Net charge-offs as a percentage of loans expressed on an annualized basis.
Although Frontier believes that it has established its ACL in accordance with generally accepted accounting principles, or GAAP, and that the
ACL was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in its loan portfolio. If Frontier experiences economic declines or if asset
quality deteriorates, material additional provisions could be required.
The following table shows the allocation of the ACL among loan
categories and certain other information as of the dates indicated. The allocation of the ACL as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will
necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category.
As of
December 31, 2025
September 30, 2025
Amount
% to Total
Amount
% to Total
Commercial real estate
$
5,581
39
%
$
5,562
38
%
Residential real estate
4,420
30
%
4,279
30
%
Commercial
1,907
13
%
1,898
13
%
Agriculture
791
5
%
723
5
%
Ag real estate
1,717
12
%
1,756
12
%
Consumer and other
93
1
%
274
2
%
Total
$
14,509
100
%
$
14,492
100
%
Securities
Frontier uses its securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk,
meet collateral requirements, and meet regulatory capital requirements. As of December 31, 2025, the carrying amount of investment securities totaled $83.6 million, a decrease of $0.65 million, or 0.8%, compared to $84.3 million
as of September 30, 2025. Securities represented 5.8% of assets at both December 31, 2025 and September 30, 2025.
Frontier’s investment portfolio consists of securities classified as available for sale. The carrying values of its securities are
adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of other comprehensive income in members’ equity. For additional information see “NOTE 3
– Securities” in the Condensed Notes to Interim Consolidated Financial Statement.
13
All of Frontier’s mortgage-backed securities are agency securities. It did not hold
any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second
lien elements in its investment portfolio as of December 31, 2025.
The ACL encompasses potential expected credit losses related to
the securities portfolio for credit losses. The assessment includes reviewing historical loss data for both Frontier’s portfolio and similar types of investment securities to develop an estimate for the current securities portfolio.
Additionally, Frontier’s review of the securities portfolio for expected credit losses includes an evaluation of factors including the security issuer bond ratings, delinquency status, insurance or other available credit support, as well as
its expectations of the forecasted economic outlook relevant to these securities. The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio.
Prior to the adoption of ASU 2016-13, declines in the fair value of available-for-sale securities below their cost that were deemed to be other than temporary were reflected in earnings as realized losses. In estimating other-than-temporary impairment losses prior to
October 1, 2023, management considered, among other things, (1) the length of time and the extent to which the fair value had been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the
intent and Frontier’s ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
The following tables set forth the fair value, maturities and approximated weighted average yield based on estimated annual income divided by
the average amortized cost of the securities portfolio as of the dates indicated. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.
December 31, 2025
Due in one
year or less
Due after one
year through
five years
Due after five
years through
10 years
Due after 10
years
Total
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Available-for-sale
securities:
U.S. Treasury securities
$
2,453
0.75
%
$
13,974
1.21
%
$
—
—
$
—
—
$
16,427
1.14
%
Mortgage-backed securities
Government sponsored residential mortgage-backed securities
13
2.34
%
11,451
3.42
%
20,882
4.61
%
6,151
4.15
%
38,497
4.18
%
State and political subdivisions (1)
120
2.70
%
5,461
2.35
%
7,581
1.81
%
15,511
2.62
%
28,673
2.36
%
Total
available-for-sale securities
$
2,586
0.84
%
$
30,886
2.23
%
$
28,463
3.86
%
$
21,662
3.06
%
$
83,597
2.96
%
September 30, 2025
Due in one
year or less
Due after one
year through
five years
Due after five
years through
10 years
Due after 10
years
Total
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Carrying
Value
Yield
Available-for-sale
securities:
U.S. Treasury securities
$
2,431
0.75
$
13,876
1.21
%
$
—
—
$
—
—
$
16,307
1.14
%
Mortgage-backed securities
Government sponsored residential mortgage-backed securities
14
2.13
%
10,736
3.67
%
22,776
4.66
%
6,126
4.54
%
39,652
4.37
%
State and political subdivisions (1)
120
2.70
%
3,640
1.21
%
8,020
1.87
%
16,521
2.55
%
28,301
2.19
%
Total
available-for-sale securities
$
2,565
0.84
%
$
28,252
2.15
%
$
30,796
3.93
%
$
22,647
3.09
%
$
84,260
3.01
%
(1)
The calculated yield is not presented on a tax equivalent basis.
14
The contractual maturity of mortgage-backed securities, collateralized mortgage obligations
and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time. Mortgage-backed securities and asset-backed securities are typically issued with stated
principal amounts and are backed by pools of mortgage loans and other loans with varying maturities. The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay. Monthly paydowns on
mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity. During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience
heavy prepayments of principal and, consequently, the average life of this security will be lengthened. If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security. The weighted average life of
Frontier’s investment portfolio was 7.4 years with an estimated effective duration of 6.2 years as of December 31, 2025.
Frontier did not own securities of any one issuer for which aggregate adjusted cost exceeded 10% of the consolidated members’ equity as
of December 31, 2025 or September 30, 2025.
Deposits
Frontier offers a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time
accounts. It relies primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits.
Total deposits as of December 31, 2025 were $1.13 billion, an increase of $36.2 million, or 3.3%, compared to
$1.10 billion as of September 30, 2025. The increase in deposits for the three months ended December 31, 2025 was attributable to seasonal fluctuations, continuing efforts to raise funds to support lending combined with a large
agricultural producer deposit received late in the quarter.
Noninterest-bearing deposits as of December 31, 2025 were
$150.1 million, an increase of $55.5 million, or 59%, compared to $94.6 million as of September 30, 2025. This included the large deposit from the agricultural producer that accounted for approximately $35 million of the
increase.
Average deposits for the three months ended December 31, 2025 were $1.10 billion, an increase of $61.4 million,
or 5.9%, compared to average deposits of $1.04 billion for the quarter ended December 31, 2024. The average rate paid on total interest-bearing deposits decreased from 3.73% for the quarter ended December 31, 2024 to 3.41% for the
quarter ended December 31, 2025. The decrease in average rates was driven by declines in market interest rates while growing deposits at market rates to fund asset growth.
The following table presents the average balances and weighted average rates paid on deposits for the periods indicated:
For the Three Months Ended December 31,
2025
2024
Average Balance
Average Rate
Average Balance
Average Rate
(Dollars in thousands)
Non-interest-bearing checking accounts
$
108,626
0.00
%
$
112,566
0.00
%
Interest-bearing checking accounts
169,414
2.13
%
154,256
2.13
%
Money market accounts and savings
267,075
2.89
%
278,888
3.28
%
Time
552,733
4.05
%
490,722
4.49
%
Total deposits
$
1,097,848
3.05
%
$
1,036,432
3.30
%
The ratio of average noninterest-bearing deposits to average total deposits for the three months
December 31, 2025 was 9.9% and 10.9%, for the three months ended December 31, 2024.
15
The following table sets forth the contractual maturities of certificates of deposit at December 31,
2025:
CDs < $250,000
CDs > $250,000
Brokered CDs
3 months or less
$
97,498
$
26,891
$
1,749
3 months to 12 months
146,350
53,130
30,459
1 year through three years
33,410
7,095
75,045
Over three years
3,931
790
67,634
$
281,189
$
87,906
$
174,887
Borrowings
Frontier utilizes short-term and long-term borrowings to supplement deposits to fund its lending and investment activities. In addition, it
uses short-term borrowings to periodically repurchase outstanding member units and for general corporate purposes. Short-term borrowings and long-term borrowings include FHLB advances, an FHLB LOC, a bank LOC, and a note payable to a bank. For
additional information see “NOTE 9 – Borrowed Funds” in the Condensed Notes to Interim Consolidated Financial Statement.
Liquidity
and Capital Resources
Liquidity
Liquidity involves Frontier’s ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit
withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events. For the three months ended December 31, 2025, and the quarter ended September 30, 2025,
liquidity needs at the subsidiary bank level, where substantially all of Frontier’s activities and operations are conducted, were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios. In
addition, brokered deposits and short-term advances from FHLB were utilized.
The following table illustrates, during the periods
presented, the mix of Frontier’s funding sources and the average assets in which those funds are invested as a percentage of average total assets for the period indicated. Average assets totaled $1.42 billion and $1.33 billion for
the three months ended December 31, 2025 and December 31, 2024 respectively.
16
Source of Funds
Three months ended
12/31/2025
% of
Total
12/31/2024
% of
Total
Source of funds:
Deposits
Noninterest bearing
$
108,626
7.6
%
$
112,565
8.4
%
Interest bearing
989,222
69.7
%
923,866
69.4
%
FHLB advances, Federal Funds purchased and retail repurchase agreements
161,910
11.4
%
139,835
10.5
%
Other borrowed funds
20,552
1.4
%
22,942
1.7
%
Other liabilities
22,390
1.6
%
24,781
1.9
%
Members’ equity
118,325
8.3
%
108,302
8.1
%
Total
1,421,025
100.0
%
1,332,291
100.0
%
Use of funds:
Interest-bearing time deposits in banks
100
0.0
%
100
0.0
%
Taxable securities
74,567
5.2
%
78,382
5.9
%
Nontaxable securities
10,221
0.7
%
10,501
0.8
%
Other interest-earning assets
17,280
1.3
%
17,886
1.3
%
Total loans
1,288,927
90.7
%
1,193,672
89.6
%
Other nonearning assets
29,930
2.1
%
31,750
2.4
%
Total assets
$
1,421,025
100.0
%
$
1,332,291
100.0
%
Average non-interest-bearing deposits to average
deposits
9.9
%
10.9
%
Average loans to average deposits
117.4
%
115.2
%
Frontier’s primary source of funds is deposits, and its primary use of funds is loans. It does not
expect a change in the primary source or use of funds in the foreseeable future.
Capital Resources
Total members’ equity decreased to $116.9 million as of December 31, 2025, compared to $119.1 million as of
September 30, 2025, a decrease of $2.1 million, or 1.8%. The decrease in total members’ equity for the three months ended December 31, 2025 was primarily due to a net loss available to members of $891 thousand due to
merger-related expenses totaling $2.4 million and a $1.9 million member distribution, net of an improvement in the amount of Frontier’s accumulated other comprehensive loss of $644 thousand, resulting from the after-tax effect of unrealized gains in its investment securities portfolio during the period.
The
declaration and payment of dividends to Frontier’s members, as well as the amounts thereof, are subject to the discretion of the Board of Directors of Frontier and depend upon Frontier’s results of operations, financial condition,
capital levels, cash requirements, future prospects and other factors deemed relevant by the Board. As a holding company, Frontier’s ability to pay dividends is largely dependent upon the receipt of dividends from its bank subsidiary, and
Frontier has no obligation to declare and pay any dividends to its members.
Capital management consists of providing equity to support
current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to
maintain minimum capital relative to the amount and types of assets they hold. Because Frontier has fewer than $3.0 billion in assets, Frontier is subject to regulatory capital requirements only at the subsidiary bank level. As of
December 31, 2025 and September 30,
17
2025, the Bank was in compliance with all applicable regulatory capital requirements, and the Bank was classified as “well-capitalized” for purposes of the FDIC’s prompt
corrective action regulations. “Well capitalized” is the highest capital classification for FDIC-insured financial institutions in the United States. As Frontier employs its capital and continues to grow its operations, its regulatory
capital levels may decrease depending on its level of earnings and other factors. However, Frontier expects to monitor and control its growth in order to remain in compliance with all applicable regulatory capital standards.
For additional information, see “NOTE 13 – Minimum Regulatory Capital Requirements” in the Condensed Notes to Interim
Consolidated Financial Statements.
Contractual Obligations
The following tables summarize Frontier’s contractual obligations and other commitments to make future payments as of December 31,
2025 and September 30, 2025 (other than non-maturity deposit obligations), which consist of future cash payments associated with contractual obligations under FHLB advances, subordinated debt, revolving
line of credit, and non-cancelable future operating leases. Payments related to leases are based on actual payments specified in underlying contracts.
As of December 31, 2025
1 year or less
More than 1 but
less than 3
years
3 years or more
but less and 5
years
5 years or
more
Total
Time deposits
$
323,869
$
40,505
$
4,721
$
—
$
369,095
Brokered CDs
32,208
75,045
32,962
34,672
174,887
Other debt
22,486
—
—
—
22,486
Federal Home Loan Bank advances
53,305
68,560
12,105
7,165
141,135
Standby letter of credit
1,809
59
241
663
2,772
Commitments to extend credit and unfunded commitments
182,131
36,810
37,903
6,115
262,959
Total
$
615,808
$
220,979
$
87,932
$
48,615
$
973,334
In the normal course of business, Frontier enters into various transactions which, in accordance with GAAP,
are not included in its consolidated balance sheets. Frontier enters these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby and commercial letters of credit which involve,
to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets.
Frontier’s commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by
period as of the date indicated are summarized in the tables above. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding
requirements.
Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a
third party. In the event of nonperformance by the customer, Frontier has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. The
credit risk to Frontier in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the
contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.
18
Because many of the commitments are expected to expire without being fully drawn upon, the
total commitment amounts disclosed above do not necessarily represent future cash requirements. Frontier evaluates each customer’s creditworthiness on a
case-by-case basis.
The amount of collateral obtained, if
considered necessary by Frontier, upon extension of credit, is based on management’s credit evaluation of the customer.
For
additional information see “NOTE 14 Financial Instruments with Off Balance Sheet or Concentration of Credit Risk” in the Condensed Notes to Interim Consolidated Financial Statement.
Interest Rate Sensitivity and Market Risk
As a financial institution, Frontier’s primary component of market risk is sensitivity to movement in interest rates. Its asset and
liability management policy provides management with the guidelines for effective interest rate risk management, and Frontier has established a measurement system for monitoring interest rate sensitivity, which it manages within its established
guidelines.
Fluctuations in interest rates will ultimately impact the level of income and expense recorded on many of Frontier’s
assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities. Interest rate risk is the potential of economic losses due to interest rate changes. These economic losses can be reflected as a loss of
future net interest income and/or a loss of the current fair market value of Frontier’s equity. The objective of interest rate risk management is to measure the effect on net interest income and economic value of equity and to position the
balance sheet to minimize the risk of losses and maximize the amount of income without taking on unnecessary earning volatility.
Frontier
seeks to manage its exposure to interest rates by structuring its balance sheet in the ordinary course of business; however, it may enter into derivatives contracts to hedge interest rate risk if it is appropriate given its risk profile and policy
guidelines. Based upon the nature of its operations, Frontier is not subject to foreign exchange or commodity price risk. Frontier does not own any trading assets.
Frontier’s exposure to interest rate risk is managed by the asset-liability management committee of Frontier Bank, Frontier’s
banking subsidiary, in accordance with policies approved by its board of directors. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates,
potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and
market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow
flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk which include an analysis of relationships between interest-earning assets and interest- bearing
liabilities, and an interest rate shock simulation model.
Frontier uses interest rate risk simulation models and shock analysis to test
the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of
loans are incorporated into the model as are prepayment assumptions, maturity data and optionality. Deposit assumptions such as repricing betas and non-maturity balance decay rates are also incorporated into
the model. Model assumptions are revised and updated on a regular basis as directed by policy, and more frequently if conditions merit. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net
interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes, as
well as changes in market conditions, customer behavior, and the application and timing of various management strategies.
On at least a
quarterly basis, Frontier runs simulation models to calculate potential impacts to net interest income and the economic value of equity. Specific details of the simulations are reflected in policy as directed by the asset-liability management
committee.
19
The following table summarizes the simulated change in net interest income and fair value of
equity over a 12-month horizon as of the dates indicated:
December 31, 2025
September 30, 2025
Change in Interest Rates
(Basis Points)
Percent
Change in
Net Interest
Income
Percent
Change in
Fair Value
Of Equity
Percent
Change in
Net Interest
Income
Percent
Change in
Fair Value
Of Equity
+300
9.80
%
(0.15
)%
8.70
%
(2.06
)%
+200
7.62
%
0.66
%
6.75
%
(0.61
)%
+100
5.50
%
1.05
%
4.81
%
0.39
%
Base
—
—
—
—
-100
1.38
%
(2.13
)%
1.12
%
(1.69
)%
-200
(0.78
)%
(6.76
)%
(0.89
)%
(5.87
)%
-300
(3.65
)%
(15.51
)%
(3.40
)%
(13.71
)%
The results of the simulations are primarily driven by the contractual characteristics of all balance sheet
instruments and customer behavior.
Impact of Inflation
Frontier’s consolidated financial statements and related notes included elsewhere in this statement have been prepared in accordance with
GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.
Unlike many industrial companies, substantially all of Frontier’s assets and liabilities are monetary in nature. As a result, interest
rates have a more significant impact on its performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other
operating expenses do reflect general levels of inflation.
20
XML — IDEA: XBRL DOCUMENT
XML
Filename: R1.htm · Sequence: 8
v3.26.3
Document and Entity Information
Oct. 01, 2026
Cover [Abstract]
Entity Registrant Name
EQUITY BANCSHARES INC
Local Phone Number
612-6000
Amendment Flag
false
Entity Central Index Key
0001227500
Document Type
8-K
Document Period End Date
Oct. 01, 2026
Entity Incorporation State Country Code
KS
Entity File Number
001-37624
Entity Tax Identification Number
72-1532188
Entity Address, Address Line One
7701 East Kellogg Drive
Entity Address, Address Line Two
Suite 300
Entity Address, City or Town
Wichita
Entity Address, State or Province
KS
Entity Address, Postal Zip Code
67207
City Area Code
316
Written Communications
false
Soliciting Material
false
Pre Commencement Tender Offer
false
Pre Commencement Issuer Tender Offer
false
Security 12b Title
Class A, Common Stock, par value $0.01 per share
Trading Symbol
EQBK
Security Exchange Name
NYSE
Entity Emerging Growth Company
false
X
- Definition
Boolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
No definition available.
+ Details
Name:
dei_AmendmentFlag
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Area code of city
+ References
No definition available.
+ Details
Name:
dei_CityAreaCode
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Cover page.
+ References
No definition available.
+ Details
Name:
dei_CoverAbstract
Namespace Prefix:
dei_
Data Type:
xbrli:stringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
No definition available.
+ Details
Name:
dei_DocumentPeriodEndDate
Namespace Prefix:
dei_
Data Type:
xbrli:dateItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
No definition available.
+ Details
Name:
dei_DocumentType
Namespace Prefix:
dei_
Data Type:
dei:submissionTypeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Address Line 1 such as Attn, Building Name, Street Name
+ References
No definition available.
+ Details
Name:
dei_EntityAddressAddressLine1
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Address Line 2 such as Street or Suite number
+ References
No definition available.
+ Details
Name:
dei_EntityAddressAddressLine2
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the City or Town
+ References
No definition available.
+ Details
Name:
dei_EntityAddressCityOrTown
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Code for the postal or zip code
+ References
No definition available.
+ Details
Name:
dei_EntityAddressPostalZipCode
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the state or province.
+ References
No definition available.
+ Details
Name:
dei_EntityAddressStateOrProvince
Namespace Prefix:
dei_
Data Type:
dei:stateOrProvinceItemType
Balance Type:
na
Period Type:
duration
X
- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityCentralIndexKey
Namespace Prefix:
dei_
Data Type:
dei:centralIndexKeyItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Indicate if registrant meets the emerging growth company criteria.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityEmergingGrowthCompany
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
No definition available.
+ Details
Name:
dei_EntityFileNumber
Namespace Prefix:
dei_
Data Type:
dei:fileNumberItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Two-character EDGAR code representing the state or country of incorporation.
+ References
No definition available.
+ Details
Name:
dei_EntityIncorporationStateCountryCode
Namespace Prefix:
dei_
Data Type:
dei:edgarStateCountryItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityRegistrantName
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityTaxIdentificationNumber
Namespace Prefix:
dei_
Data Type:
dei:employerIdItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Local phone number for entity.
+ References
No definition available.
+ Details
Name:
dei_LocalPhoneNumber
Namespace Prefix:
dei_
Data Type:
xbrli:normalizedStringItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
+ Details
Name:
dei_PreCommencementIssuerTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
+ Details
Name:
dei_PreCommencementTenderOffer
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Title of a 12(b) registered security.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
+ Details
Name:
dei_Security12bTitle
Namespace Prefix:
dei_
Data Type:
dei:securityTitleItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
+ Details
Name:
dei_SecurityExchangeName
Namespace Prefix:
dei_
Data Type:
dei:edgarExchangeCodeItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
+ Details
Name:
dei_SolicitingMaterial
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
dei_TradingSymbol
Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration