Security Midwest Bancorp Reports 4.1% Increase in Net Income for Q1 2026

Security Midwest Bancorp, Inc. reported its financial results for the first quarter of 2026, revealing a net income of $418,143, a 4.1% increase from $401,545 in the same period last year. The company's total interest income rose to $3.07 million, up 21.1% from $2.53 million, driven by a significant increase in interest from loans and investment securities. Specifically, interest on loans increased by $291,000, while interest on investment securities surged by $378,000. However, total interest expense also rose sharply by 51.6% to $867,000, primarily due to increased borrowings, resulting in a net interest income of $2.2 million, a 12.2% increase from the previous year.

In terms of asset management, total assets decreased by 2.0% to $251.3 million as of March 31, 2026, down from $256.5 million at the end of 2025. This decline was largely attributed to a $14.5 million drop in cash and cash equivalents, which was partially offset by a $10.2 million increase in net loans, totaling $128 million. The company reported a notable increase in loan originations, which reached $15.7 million, a 161.7% increase compared to the same quarter last year. The growth in loans was primarily driven by increases in commercial real estate and residential mortgage loans.

Deposits also saw a decline, decreasing by $4.4 million to $192.1 million, primarily due to a drop in demand deposits. The company continues to focus on enhancing its deposit base, particularly through the expansion of services for cannabis-related businesses, which accounted for $49.5 million in deposits as of March 31, 2026. Additionally, the company maintained its advances from the Federal Home Loan Bank at $35 million, which were utilized to fund the purchase of investment securities.

Operationally, Security Midwest Bancorp has been actively managing its interest rate risk through an interest rate swap agreement with a notional value of $40 million, aimed at stabilizing borrowing costs amid fluctuating interest rates. The company’s capital position remains strong, with shareholders' equity increasing to $22.8 million, reflecting a well-capitalized status under regulatory guidelines. Looking ahead, the company anticipates continued growth in its loan portfolio and is committed to enhancing its liquidity and capital management strategies to navigate potential market challenges.