The multi-loan commercial relationship that was identified in 2022 as being impaired, meaning that it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreements was substantially resolved during the first quarter of 2025. The relationship as of December 31, 2024 had balances of approximately $0.7 million with a specific allocation of $0.2 million. As of March 31, 2025, this relationship has a remaining balance of $0.1 million with no specific allocation. No additional reserves will be required to resolve these impaired loans and we do not anticipate any further losses as we work to resolve the remainder of the relationship.

The Company recorded a recovery of approximately $90 thousand for the three months ended March 31, 2025 to decrease the Allowance for Credit Losses (ACL) position. During the three months ended March 31, 2024, there was a recovery of approximately $37 thousand. The ACL on loans was $4.1 million, or 1.36% of total gross loans, at March 31, 2025 compared to $4.3 million, or 1.40% of gross loans, at March 31, 2024. Net charge-offs during the first quarter of 2025 were approximately $120 thousand compared to net recoveries of $5 thousand during the first 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 March 31, 2025 decreased by $156 thousand from the required reserves as of March 31, 2024.

The Company recorded income tax expense of $0.2 million for the three-month period ended March 31, 2025 as compared to $0.1 million for the three months ended March 31, 2024 as pre-tax income during the three months ended March 31, 2025 was higher as compared to pre-tax income in the three months ended March 31, 2024.

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

Total consolidated assets as of March 31, 2025 were $351.7 million, a decrease of $2.0 million, or 0.54%, from $353.7 million at December 31, 2024. The decrease was due primarily to a decrease of $6.6 million in the net loan portfolio, a $0.2 million decrease in loans held for sale, a $0.1 million decrease in furniture, fixtures and equipment, a $0.1 decrease in accrued interest receivable, a decrease of $0.3 million in deferred tax assets and a decrease in other assets of $0.6 million. These decreases were partially offset by an increase of $4.0 million in cash and cash equivalents, a $1.1 million increase in securities available for sale and an increase of $0.9 million in federal fund sold.

Cash and cash equivalents increased $4.0 million, or 31.9%, to $16.5 million at March 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 $1.9 and cash provided by investing activities of $5.3 million exceeding cash used in financing activities of $3.2 million.

Securities available for sale increased $1.1 million, or 6.7%, to $17.9 million at December 31, 2025 from $16.8 million at December 31, 2024 as a result of purchases and market value fluctuations during the first three months ended March 31, 2025 exceeding calls, payments and maturities.

Net loans decreased $6.6 million, or 2.2%, to $295.1 million at March 31, 2025 compared to $301.7 million at December 31, 2024 primarily due to a decrease of $3.7 million in one-to-four family loans, a decrease of $5.5 million in multi-family loans and a decrease of $0.5 million in consumer loans. These decreases were partially offset by an increase of $2.9 million in non-residential real estate loans. The allowance for credit losses on loans decreased by $0.2 million at March 31, 2025.

Total deposits increased $0.4 million, or 0.15%, to $283.2 million at March 31, 2025 from $282.8 million at December 31, 2024. During the three months ended March 31, 2025 non-interest bearing checking increased by $3.4 million, interest bearing checking accounts increased by $3.0 million, money market accounts increased $1.7 million, and savings accounts increased by 0.7 million. Offsetting these increases was an $8.4 million decrease in certificate of deposit account balances.

FHLB advances decreased $3.3 million, or 14.6%, to $19.0 million at March 31, 2025 compared to $22.3 million at December 31, 2024.

Stockholders’ equity remained at $40.2 million at March 31, 2025 as compared to $40.2 million at December 31, 2024. Net income was $0.4 million for the three months ended March 31, 2025. There were $0.3 million in cash dividends paid during the first quarter and a $0.6 million adjustment to increase the maximum cash obligation related to ESOP shares. In addition, there was a $0.5 million increase in other comprehensive income due to an increase in fair value of securities available for sale during the first quarter.

Approval of Stock Repurchase Program

The Company also announced today that the Company’s Board of Directors has approved a stock repurchase program authorizing the purchase of up to 120,996 shares, or 5%, of the Company’s outstanding common stock. Stock repurchases will be conducted through open market purchases, which will include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. Repurchases will be made from time to time depending on market conditions and other factors. The Company’s stock repurchase program will terminate upon the completion of the purchase of up to 120,996 shares or April 23, 2026 if not all shares have been purchased by that date.

About Ottawa Bancorp, Inc.

Ottawa Bancorp, Inc. is the holding company for OSB Community Bank which provides various financial services to individual and corporate customers in the United States. The Bank offers various deposit accounts, including checking, money market, regular savings, club savings, certificates of deposit, and various retirement accounts. Its loan portfolio includes one-to-four family residential mortgage, multi-family and non-residential real estate, commercial, and construction loans as well as auto loans and home equity lines of credit. OSB Community Bank was founded in 1871 and is headquartered in Ottawa, Illinois. For more information about the Company and the Bank, please visit www.myosb.bank.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, market disruptions, our ability to pay future dividends and if so at what level, our ability to receive any required regulatory approval or non-objection for the payment of dividends from the Bank to the Company or from the Company to stockholders, and our efforts to maximize stockholder value, including our ability to execute any capital management strategies, such as the repurchase of shares of the Company’s common stock, and our ability to execute any controlled growth and balance sheet strategies designed to lower the cost of funds and enhance earnings and liquidity. Ottawa Bancorp, Inc. undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under applicable law.

Contact:
Craig Hepner
President and Chief Executive Officer
(815) 366-5437