Security Midwest Bancorp, Inc.

Company and business model

• Security Midwest Bancorp, Inc. is a bank holding company incorporated in Maryland in September 2024. It converted from a mutual to stock form and completed the conversion on July 31, 2025, selling 889,781 shares of common stock at $10.00 per share.
• The company’s sole banking subsidiary is Security Bank, a state‑chartered Illinois savings bank. Security Bank conducts traditional deposit and lending activities and operates a Cannabis‑Related Banking (CRB) program that provides deposit and cash‑management services to cannabis organizations.
• Primary activities:
  • Attract retail deposits (including CRB deposits) and invest them in:
    • One‑ to four‑family residential real estate loans
    • Commercial real estate loans
    • Commercial and industrial (C&I) loans
    • Investment securities (mortgage‑backed securities, CMOs, municipal bonds, U.S. government and agency securities)
  • Maintain access to liquidity facilities, including the Federal Home Loan Bank of Chicago and other credit sources
• Geographic focus and market:
  • Primary lending and non‑CRB deposits in Sangamon County, Illinois (Springfield area)
  • CRB deposits and lending footprint includes Illinois, Michigan, Ohio, and Kentucky; authorized to conduct CRB activities in Missouri

Financial snapshot (as of December 31, 2025)

• Consolidated assets: $256.6 million
• Loans outstanding: $117.8 million
• Deposits: $196.5 million
• Shareholders’ equity: $22.6 million
• Net income (year ended December 31, 2025): $299,000
• Uninsured deposits: $87.3 million; 104 uninsured depositors; average uninsured balance per uninsured depositor: approximately $840,000
• Brokered deposits: none as of 12/31/2025 (total at 12/31/2024 was $10,000)
• Deposits by type (12/31/2025):
  • Non‑interest bearing demand: $69.092 million (35.2%)
  • Money market and demand: $57.412 million (29.2%)
  • Savings: $25.717 million (13.1%)
  • Certificates of deposit: $44.284 million (22.5%)
  • Average deposit rate: 1.17%
• Uninsured deposits are primarily non‑interest‑bearing (CRB deposits are included in the non‑brokered deposit totals)
• Employees: 50 full‑time and 4 part‑time (as of 12/31/2025)
• Branches and properties (owned):
  • Main Office: 510 E. Monroe, Springfield, IL 62701‑1588 — opened 1960; 14,312 sq ft
  • Branch: 3001 Chatham Road, Springfield, IL 62704‑4103 — opened 2000; 3,200 sq ft
  • Branch: 2500 Stevenson Drive, Springfield, IL 62703‑4329 — opened 1998; 2,300 sq ft
  • Net book value of properties: $3.1 million
• Borrowings:
  • Advances from Federal Home Loan Bank of Chicago outstanding: $35.0 million (as of 12/31/2025); weighted‑average interest rate 4.02%; maturing February 2026
  • Additional borrowing capacity: approximately $31.6 million from FHLB; $3.0 million from a private bankers’ bank (as of 12/31/2025)

Customer and market context

• The CRB program serves cannabis‑related businesses. CRB deposits are included within the bank’s non‑brokered deposit base.
• As of 12/31/2025, there were 104 depositors with uninsured deposits, with an average uninsured balance near $840,000.

Lending and loan portfolio (as of December 31, 2025)

• Total loans: $119.1 million (reported total loans $119,056 thousand; net loans after allowances $117,817 thousand)
• Loan mix (dollars in thousands; percent of total loans)
  • One‑to‑four family: $35,146 (29.5%)
  • Multifamily: $4,024 (3.4%)
  • Commercial: $54,409 (45.7%)
  • Construction and development: $4,064 (3.4%)
  • Farmland: $4,387 (3.7%)
  • Consumer: $4,471 (3.8%)
  • Commercial and industrial: $12,555 (10.5%)
  • Total real estate and other loans: $119,056 (100%)
• Allowance for credit losses: $1,034 thousand (year‑end)
• Net loans receivable: $117,817 thousand
• Credit quality highlights:
  • Nonaccrual loans (aggregate): $317 thousand
  • Non‑performing loans as a percent of total loans: 0.27%
  • Non‑performing assets as a percent of total assets: 0.12%
  • Largest single credit relationship: $4.5 million (two CRE loans, plus one unsecured loan and one auto loan)

Concentration and lending limits

• Regulatory lending limit to any one borrower: 25% of capital plus reserves (approximately $6.2 million as of 12/31/2025)
• Internal lending limit policy: 80% of regulatory limit ($5.0 million as of 12/31/2025)
• At 12/31/2025, no borrower exceeded the internal limit; largest relationship was $4.5 million

Credit loss framework (CECL)

• The allowance for credit losses is determined quarterly based on current and forecast conditions and includes both collective (pool) and individual evaluations
• The allowance is allocated across loan categories and reported relative to non‑performing loans and total loans

Investment activities

• Investment policy prioritizes safety, liquidity, regulatory compliance, and alignment with interest‑rate risk management
• Holdings include U.S. government and agency securities, municipal bonds (taxable and non‑taxable), mortgage‑backed securities (including pass‑throughs), collateralized mortgage obligations, and asset‑backed securities
• All debt securities except certificates of deposit are designated as available‑for‑sale

Regulation and supervision

• Security Bank is regulated by the FDIC and the Illinois Division of Banking
• Security Midwest Bancorp is regulated by the Federal Reserve Board as a bank holding company
• The company and bank are subject to safety‑and‑soundness standards, capital requirements, liquidity rules, and restrictions on permissible activities

Competitive and market context

• Competitors include large banks, regional banks, community banks, credit unions, mortgage companies, and fintech firms
• Most recent CRA rating: Satisfactory
• The bank must comply with CRA, AML, privacy, cybersecurity, and other federal and state requirements

All figures are as of December 31, 2025, unless otherwise noted.