Security Midwest Bancorp, Inc.

What they do

The company operates as a bank holding company for Security Bank, s.b., a savings institution that takes deposits and makes loans in the Springfield, Illinois market area. Its lending activities include commercial real estate and commercial and industrial loans, as well as lending to small businesses and families in its market. The company also references the cannabis industry in its risk factors, indicating potential lending or banking relationships in that sector. Each director of the holding company also serves as a director of Security Bank.

Revenue drivers

• Commercial real estate lending — The company states a strategic focus on increasing commercial real estate lending, and its risk factors cite a high concentration of loans secured by real estate in its market area.
• Commercial and industrial lending — Management lists success in increasing commercial and industrial lending as a stated priority alongside commercial real estate lending.
• Deposit funding — The company relies on deposits as its primary funding source, noting that access to cost-effective funding and maintaining adequate liquidity depend primarily on deposits.

Recent performance

Net income declined to $298,732 for fiscal 2025 from $682,983 for fiscal 2024, a decrease of approximately 56%. Diluted EPS for 2025 was $0.36. Operating cash flow rose to $2.6 million in 2025 from $1.2 million in 2024. As of June 30, 2026, total assets were $244.5 million, total liabilities were $220.7 million, and shareholder equity was $23.7 million. Cash and equivalents stood at $20.3 million at June 30, 2026.

Strategy

Management states a focus on increasing commercial real estate and commercial and industrial lending. The company aims to maintain or improve asset quality as it grows these commercial loan categories. It also seeks to attract and maintain deposits and to introduce new financial products. Liquidity is managed primarily through deposits, and the company notes the importance of accessing cost-effective funding. The company operates as a public reporting company, and its risk factors cite the costs associated with doing so.

Risks

• Geographic and real estate concentration — A high concentration of loans secured by real estate in the company's Springfield, Illinois market area could amplify losses if local real estate values decline.
• Net income decline — Net income fell about 56% to $298,732 in 2025 from $682,983 in 2024, and diluted EPS was only $0.36.
• Credit risk from commercial lending — The company's strategy to increase commercial real estate and commercial and industrial lending could lead to higher loan delinquencies or write-offs if borrowers' cash flows weaken.
• Small size and limited scale — With $244.5 million in total assets and 889,781 shares outstanding as of March 23, 2026, the company has limited scale to absorb regulatory costs and competitive pressures.

Outlook

The company's forward-looking statements describe risks including general economic conditions, interest rate changes, competition, and credit risks of lending activities. It cites no specific earnings or growth guidance in the provided excerpts. Management notes it is under no obligation to update forward-looking statements after the date of the report. The outlook is qualified by many uncertainties, including inflation, recessionary conditions, and regulatory changes.