Sturgis Bancorp (STBI) reported a strong Q2 2025 with net income increasing to $1.6 million and earnings per share reaching $0.76. The net interest margin improved significantly to 3.62%. Deposits grew by $40 million to $882 million. Wholesale funding dependence was reduced. However, noninterest expenses increased, and noninterest income decreased year-to-date. The bank maintains a strong capital position with a Tier 1 leverage ratio of 8.00%.
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Positive
Net income increased to $1.6 million in Q2 2025, up from $1.4 million in Q1 2025
Net interest margin improved to 3.62%, up 44 basis points year over year
Total deposits grew by $40.0 million to $882 million
Successfully reduced wholesale funding dependence with FHLB advances down $45.4 million YTD
Strong capital position maintained with Tier 1 leverage ratio at 8.00%
Negative
Noninterest expenses increased 10.80% year-over-year to $8.1 million
Noninterest income decreased 18.34% year-to-date compared to 2024
Noninterest-bearing deposits decreased from $169 million in Q2 2024 to $165 million
07/24/2025 – 02:55 PM
STURGIS, MI / ACCESS Newswire / July 24, 2025 / Sturgis Bancorp, Inc. (OTCQX:STBI) reported its Q2 2025 results today, showcasing a period of robust financial health driven by strategic shifts and a keen focus on core banking relationships.
Key Highlights
Net income reached $1.6 million, illustrating consistent profitability.
Earnings per share hit $0.76 offering solid returns for investors.
The net interest margin expanded to 3.62%, reflecting efficient asset management and revenue optimization. This represents an 11 basis points increase quarter-over-quarter, and a significant 44 basis points year-over-year.
A quarterly dividend of $0.17 per share underscores Sturgis Bancorp’s commitment to shareholder value.
Total assets swelled to $985 million, signaling strategic growth and market penetration.
Deposits surged by $40.0 million, reaching $882 million and highlighting strong customer confidence.
Prudent financial management saw FHLB advances and brokered CDs decline by $45.4 million and $17.0 million year-to-date, respectively, illustrating a move towards more organic funding sources.
With a Tier 1 leverage capital at 8.00%, the bank remains well-capitalized, exceeding regulatory requirements and ensuring long-term stability.
From Jason J. Hyska, Sturgis Bancorp, Inc. Chief Executive Officer
“Sturgis Bank enjoyed another strong quarter, bolstered by robust earnings growth. Our strategic emphasis on reducing wholesale funds and expanding core deposit gathering is clearly paying dividends. This is evident in both our NIM and our deposit growth year-to-date. Our focus on relationship banking continues to highlight the Bank’s areas of growth and positions us positively for the remainder of 2025. While we remain cautiously optimistic in light of prevailing economic uncertainties, our performance speaks volumes.”
Quarterly Income Statement Highlights
Net income for the quarter (2Q25) was $1.6 million, a marked increase from $1.4 million in the previous quarter (1Q25) and $1.3 million in the same quarter last year (2Q24).
Earnings per share demonstrated impressive growth, rising to $0.76 for 2Q25, compared to $0.67 for 1Q25, and $0.60 for 2Q24.
Net interest income climbed to $7.9 million ($7.942 million), an increase of 0.93% from $7.9 million ($7.869 million) in 1Q25. Year-over-year, this shows a substantial 18.98% increase from $6.7 million in 2Q24.
Net interest margin improved to 3.62% for 2Q25, surpassing 3.51% in 1Q25 and 3.18% in 2Q24.
Sturgis Bancorp allocated $117,000 to the allowance for credit losses in 2Q25, based on updated historic loss data, qualitative adjustments, and necessary reserves. This contrasts with a reversal of $158,000 in the previous quarter and an allocation of $165,000 in Q2 2024.
Noninterest income has remained consistently at $2.2 million for 2Q25, 1Q25, and 2Q24.
Noninterest expenses totaled $8.1 million during 2Q25, exhibiting a 2.34% decrease from $8.3 million in 1Q25, but a 10.80% increase from $7.3 million in 2Q24. These fluctuations primarily stemmed from changes in compensation and benefits, which stood at $4.8 million in 2Q25, compared to $5.0 million in 1Q25, and $4.3 million in 2Q24.
Year-to-Date Income Statement Highlights
Net income for the first six months of 2025 (YTD 2025) reached $3.1 million, a considerable improvement from a net loss of $(673,000) for the same period in 2024 (YTD 2024).
Earnings (loss) per share for YTD 2025 were $1.43, a stark contrast to $(0.31) for YTD 2024.
Net interest income for YTD 2025 was $15.8 million, reflecting a 15.67% increase from $13.6 million for YTD 2024, which was traced to;
Total interest and dividend income of $24.3 million for YTD 2025, compared to $22.7 million for YTD 2024; and
Total interest expense of $8.5 million for YTD 2025, down from $9.1 million for YTD 2024.
A reversal of the allowance for credit losses of $41,000 for YTD 2025 compares favorably against a provision of $4.8 million to the allowance for credit losses in YTD 2024.
Noninterest income totaled $4.3 million for YTD 2025, compared to $5.3 million for YTD 2024. This 18.34% decrease was largely due to a $1.1 million gain on the termination of interest rate swaps in YTD 2024, absent in YTD 2025.
Noninterest expenses reached $16.4 million for YTD 2025, compared to $15.1 million for YTD 2024, marking an 8.27% increase. The underlying factors were;
Compensation and benefits rose to $9.7 million for YTD 2025, compared to $8.9 million for YTD 2024; and
Other noninterest expenses totaled $6.6 million for YTD 2025, compared to $6.2 million for YTD 2024.
Balance Sheet Highlights
Total assets increased to $985 million as of the end of 2Q25, a 2.69% increase from the end of 1Q25’s $959 million, and a 4.52% increase from the end of
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