Ottawa Bancorp, Inc. reported net income of $0.3 million ($0.14 per share) for the three months ended December 31, 2025, compared with $0.5 million ($0.21 per share) for the three months ended December 31, 2024.

Ottawa Bancorp, Inc. (the "Company") (OTCQX: OTTW), the holding company for OSB Community Bank (the "Bank"), announced net income of $0.3 million, or $0.14 per basic and diluted common share, for the three months ended December 31, 2025, compared to net income of $0.5 million, or $0.21 per basic and diluted common share, for the three months ended December 31, 2024. For the twelve months ended December 31, 2025, the Company announced net income of $1.7 million, or $0.71 per basic and diluted common share, compared to net income of $0.8 million, or $0.31 per basic and diluted common share for the twelve months ended December 31, 2024. The loan portfolio, net of allowance, increased to $305.8 million as of December 31, 2025 from $301.7 million as of December 31, 2024 as originations exceeded payments and payoffs. Non-performing loans decreased to $1.2 million at December 31, 2025 from $4.8 million at December 31, 2024. This was due to a large payment on a commercial relationship which was placed on non-performing status during the third quarter of 2023. Thus, the ratio of non-performing loans to gross loans decreased from 1.58% at December 31, 2024 to 0.38% at December 31, 2025.

As previously announced, the Company completed its seventh stock repurchase program, which was approved on April 24, 2025, during the quarter ended September 30, 2025. The Company repurchased a total of 120,996 shares of its common stock under the stock repurchase program at an average price of $15.01 per share. Through December 31, 2025, the Company repurchased a total of 1,202,370 shares of its common stock under all of its stock repurchase programs at an average price of $13.68 per share.

Craig M. Hepner, President and Chief Executive Officer said, "While fourth-quarter earnings were below the prior year period due to higher operating expenses, higher loan loss provision and lower other income, our core margin components continued to strengthen as our yield on earning-assets increased while our average cost of funds continued to decline during the quarter. We saw our net interest margin increase by 14.5% during the year reflecting our disciplined balance sheet management strategies and a focused effort to reduce our reliance on more costly wholesale funding sources."

Mr. Hepner went on to say, "Although loan origination activity remained muted during the year, especially in the residential lending area as mortgage interest rates remained elevated and housing inventory levels in our primary markets remained relatively low, we did see meaningful increases in higher yielding commercial and commercial real estate loans during the year, and we are optimistic that this trend will continue as we progress through 2026. Our credit quality has remained consistently strong as a result of our sound loan underwriting practices, and it improved further during the fourth quarter as we were able to resolve a significant portion of a substandard commercial credit. In addition, we completed a number of initiatives throughout the year designed to improve operating efficiencies and increase non-interest income going forward."  

Mr. Hepner concluded by saying, "As always, our Board remains committed to improving performance and deploying sound capital management strategies designed to enhance shareholder value. We thank our shareholders for their continued investment in and support of the Company, and we look forward to continuing to serve the financial needs of our customers and communities in 2026."

Comparison of Results of Operations for the Three Months Ended December 31, 2025 and December 31, 2024

Net income for the three months ended December 31, 2025 was $0.3 million compared to $0.5 million for the three months ended December 31, 2024. Total interest and dividend income was $4.6 million for the three months ended December 31, 2025 compared to $4.3 million for the three months ended December 31, 2024 due to an increase in the average yield on interest-earning assets. The yield on interest-earning assets increased by 0.10% to 5.25%. Interest expense decreased to $1.8 million for the three months ended December 31, 2025 from $1.9 million for the three months ended December 31, 2024, as our average cost of funds decreased to 2.29% from 2.42%. Net interest income after provision for credit losses increased by $0.1 million to $2.6 million for the three months ended December 31, 2025 as compared to $2.5 million for the three months ended December 31, 2024. Total other income was $0.3 million for the three months ended December 31, 2025 compared to $0.4 million for the three months ended December 31, 2024. Total other expenses were $2.4 million for the three months ended December 31, 2025 compared to $2.2 million for the three months ended December 31, 2024. An increase in salaries and employee benefits expense accounted for most of this increase.

The Company recorded a provision for credit losses of approximately $120 thousand for the three months ended December 31, 2025 compared to a recovery of approximately $64 thousand for the three months ended December 31, 2024. The allowance for credit losses ("ACL") on loans was $4.2 million, or 1.35% of total gross loans, at December 31, 2025 compared to $4.3 million, or 1.41% of gross loans, at December 31, 2024. Net recoveries during the fourth quarter of 2025 were approximately $1 thousand compared to net recoveries of $40 thousand during the fourth quarter of 2024. The current period adjustment to the ACL is the result of the quarterly calculation of Current Expected Credit Losses (CECL). The required reserves on non-performing loans as of December 31, 2025 decreased by approximately $226 thousand compared to the required reserves as of December 31, 2024.

The Company recorded income tax expense of $0.2 million for the three-month period ended December 31, 2025 as compared to income tax expense of $0.2 million for the three months ended December 31, 2024.  

Comparison of Results of Operations for the Twelve Months Ended December 31, 2025 and December 31, 2024

Net income was $1.7 million for the twelve months ended December 31, 2025 compared to $0.8 million for the twelve months ended December 31, 2024. Total interest and dividend income was $17.3 million for the twelve months ended December 31, 2025 compared to $16.2 million for the twelve months ended December 31, 2024 as the average yield on interest-earning assets improved to 5.12% from 4.87%. Interest expense for the twelve months ended December 31, 2025 was $0.3 million lower as a result of the reduction in short-term interest rates that began in late 2024 and a reduction in our higher-cost wholesale funding. This has resulted in a decrease in our average cost of funds from 2.36% to 2.22%. Due to the increase in yield on earning assets and lower interest expense, net interest income for the twelve months ended December 31, 2025 increased to $10.3 million as compared to $8.9 million for the twelve months ended December 31, 2024. Total other income was $1.2 million for both the twelve months ended December 31, 2025 and the twelve months ended December 31, 2024. Total other expenses were $0.1 million lower, decreasing to $9.1 million for the twelve months ended December 31, 2025 as compared to $9.2 million for the twelve months ended December 31, 2024.

The Company recorded a recovery of about $44 thousand for the twelve month period ended December 31, 2025 to decrease the ACL position. This compares to a recovery of about $150 thousand for the twelve month period ended December 31, 2024.  Net charge-offs during the twelve months ended December 31, 2025 were approximately $38 thousand compared to net recoveries of approximately $40 thousand during the twelve months ended December 31, 2024.  The current period adjustment to the ACL is the result of the quarterly calculation of CECL.

We recorded an income tax expense of approximately $0.8 million for the twelve months ended December 31, 2025 compared to an income tax expense of $0.3 million for the twelve months ended December 31, 2024. This increase is due primarily to higher pre-tax earnings in 2025 as compared to 2024.

Comparison of Financial Condition at December 31, 2025 and December 31, 2024

Total consolidated assets as of December 31, 2025 were $362.6 million, an increase of $8.9 million, or 2.5%, from $353.7 million at December 31, 2024.  The increase was due primarily to an increase of $7.4 million in cash and cash equivalents, a $4.0 million increase in loans, net of allowance, and an increase of $1.0 million in other assets. These increases were partially offset by a decrease of $1.2 million in federal funds sold, a decrease of $0.2 million in loans held for sale, a $0.8 million decrease in securities available for sale, a $0.1 million decrease in premises and equipment, net, a decrease of $0.4 million in deferred tax assets and a decrease in accrued interest receivable of $0.7 million

Cash and cash equivalents increased $7.4 million, or 59.1%, to $19.9 million at December 31, 2025 from $12.5 million at December 31, 2024. The increase in cash and cash equivalents was primarily the result of cash provided by operating activities of $2.1 million and cash provided by financing activities of $6.1 million exceeding cash used in investing activities of $0.8 million.

Securities available for sale decreased $0.8 million, or 4.9%, to $16.0 million at December 31, 2025 from $16.8 million at December 31, 2024 as payments, calls and maturities during the period exceeded purchases and market value fluctuations.

Net loans increased $4.0 million, or 1.3%, to $305.8 million at December 31, 2025 compared to $301.7 million at December 31, 2024 primarily due to an increase of $10.2 million in non-residential real estate loans, and an increase of $6.0 million in commercial loans. These increases were partially offset by a decrease of $6.2 million in one-to-four family residential loans, a decrease of $4.5 million in multi-family residential loans and a decrease of $1.6 million in consumer direct loans. The ACL on loans decreased by $0.1 million at December 31, 2025.     

Total deposits increased $15.4 million, or 5.4%, to $298.2 million at December 31, 2025 from $282.9 million at December 31, 2024. During the twelve months ended December 31, 2025 certificate of deposit accounts increased by $9.5 million, interest bearing DDA accounts increased by $4.6 million, non-interest bearing DDA accounts increased by $0.5 million and money market accounts increased $1.6 million. Partially offsetting these increases were decreases in savings accounts of $0.8 million.

FHLB advances decreased $6.4 million, or 28.7%, to $15.9 million at December 31, 2025 compared to $22.3 million at December 31, 2024.

Stockholders' equity decreased to $39.6 million at December 31, 2025 as compared to $40.2 million at December 31, 2024. The decrease reflects $1.8 million used to repurchase and retire 120,996 outstanding shares of Company common stock and $1.0 million in cash dividends. Net income was $1.7 million for the twelve months ended December 31, 2025. In addition, there was a $0.9 million increase in other comprehensive income due to an increase in fair value of securities available for sale during the year.

Date of 2026 Annual Meeting of Shareholders

The Company also announced today that the Company's annual meeting of shareholders will be held on Wednesday, May 20, 2026.

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