# Security Midwest Bancorp, Inc. > Clarifo company profile — qualitative business description generated from > the company's filings. Financial statements, charts and ratios are > available on Clarifo (https://www.clarifo.com/fi/companies/Security Midwest Bancorp, Inc.). ## Overview Security Midwest Bancorp, Inc. is a U.S. savings institution holding company centered on Security Bank and its banking subsidiaries. The company provides deposit, lending, and cash-management services, with a notable focus on commercial banking relationships and cannabis-related business customers in its operating markets. ## Products & services • Demand, savings, and certificate of deposit accounts • Owner-occupied 1-4 family residential mortgage loans • Commercial real estate loans • Commercial and industrial loans • Cash management and treasury management services • Mobile banking and debit card services - **Deposit accounts** (45%) — Core funding products including demand, savings, and time deposits. - **Commercial lending** (30%) — Loans to businesses, including commercial real estate and C&I lending. - **Residential mortgage lending** (15%) — Owner-occupied one- to four-family residential real estate loans. - **Fee-based banking services** (10%) — Deposit account fees, debit card fees, loan sale gains, and servicing income. - Demand, savings, and certificate of deposit accounts - Owner-occupied 1-4 family residential mortgage loans - Commercial real estate loans - Commercial and industrial loans - Cash management and treasury management services - Mobile banking and debit card services ## Customers The company serves retail depositors, small and middle-market businesses, and commercial borrowers in its local banking footprint. A distinctive customer base is cannabis-related business (CRB) clients, which use the bank for commercial demand deposits and related cash-management services. It also serves mortgage borrowers and other consumers through deposit and lending products. - **Cannabis-related business (CRB) customers** (primary) — Commercial demand deposit clients using banking, cash handling, and treasury services; important because they are a concentrated funding source. - **Small and middle-market businesses** (primary) — Businesses buying demand accounts, cash management, and commercial loans to support working capital and expansion. - **Residential mortgage borrowers** (secondary) — Owner-occupants seeking one- to four-family residential real estate loans. - **Retail deposit customers** (secondary) — Individuals and households using savings and demand accounts for everyday banking and liquidity. - Retail and consumer depositors seeking local banking relationships - Small businesses using demand deposits and cash-management tools - Commercial borrowers needing CRE and C&I financing - Cannabis-related businesses needing banking access and treasury services - Homeowners and owner-occupants seeking 1-4 family mortgage loans ## Geography Security Midwest Bancorp operates as a regional U.S. community bank, with business concentrated in its local market area in the Midwest. The company has also expanded CRB services into additional states, including Kentucky, Ohio, Michigan, and Missouri, which broadens its deposit and service footprint. Geography matters because lending is tied to local real estate and business conditions, while CRB activity adds state-level regulatory complexity. - U.S.-based regional bank with a Midwest operating footprint - Lending is concentrated in local real estate and business markets - CRB services have been expanded into Kentucky, Ohio, Michigan, and Missouri - Local market conditions affect loan demand, deposit flows, and credit quality - State cannabis rules influence where CRB banking can be offered ## Strategy The company is focused on growing core deposits, especially consumer and business demand deposits, to support relationship banking and lower funding costs. It is also building its loan portfolio around owner-occupied residential real estate and commercial lending, while extending CRB services into additional states and improving digital and treasury tools. These priorities are intended to deepen customer relationships and diversify funding and fee income. - **Increase core deposits** (short-term) — Stable demand deposits improve funding flexibility and reduce reliance on higher-cost time deposits. - **Expand CRB banking relationships** (medium-term) — CRB clients are a distinctive niche that can deepen deposit relationships and service fees. - **Grow commercial lending** (medium-term) — Commercial loans are a core earning asset and support broader relationship banking. - Grow demand deposits and other lower-cost core funding - Expand CRB services into additional states - Increase commercial real estate and C&I lending - Strengthen mobile banking and digital account access - Enhance cash management and treasury management services ## Risks The company is exposed to credit risk from commercial real estate, C&I lending, and real estate-secured loans, where borrower performance and collateral values can change with local economic conditions. It also faces concentration risk from CRB deposits and regulatory risk because cannabis-related banking depends on state and federal policy. As a public bank, it must also manage cybersecurity, interest-rate sensitivity, and deposit competition. - **Commercial real estate and real-estate-secured credit exposure** [high] — A large share of lending is tied to local property values and borrower cash flows. - **Cannabis-related business regulatory exposure** [high] — CRB banking is sensitive to state and federal legal changes affecting customer access and compliance. - **Deposit concentration in CRB customers** [medium] — A meaningful portion of deposits comes from a specialized customer base, which can be less stable. - **Interest-rate and funding pressure** [medium] — Deposit pricing and asset yields move differently, affecting spread economics and deposit retention. - **Cybersecurity and operational disruption** [medium] — Digital banking, cash management, and third-party processors create operational attack surfaces. - Loan credit losses could rise if local borrowers weaken - Commercial real estate concentration increases collateral and refinancing risk - CRB banking depends on changing cannabis laws and regulations - Deposit concentration in CRB accounts creates funding volatility - Cybersecurity and third-party service failures could disrupt operations ## Accounting The most important accounting judgment is the allowance for credit losses, which depends on estimates of borrower performance, collateral values, and expected future losses under CECL. Deposit and loan mix also affects reported interest income and expense through repricing and seasonality, while loan sale gains and servicing fees can create quarter-to-quarter variability. As a smaller public bank, estimates around credit quality, fair value, and contingent exposures can materially affect reported results. - **Allowance for credit losses (CECL)** — Loan loss reserve and earnings - **Loan sale gains and mortgage servicing** — Noninterest income - **Deposit and funding cost repricing** — Net interest income - **Fair value and collateral estimates** — Asset values and impairment assessment - Allowance for credit losses depends on forward-looking loss estimates - CECL assumptions affect provision expense and loan carrying values - Loan sale gains can create quarter-to-quarter income volatility - Deposit mix and repricing affect interest expense and margin - CRB-related fee income may fluctuate with customer activity --- *Last updated: 2026-04-29T04:57:51.520505+00:00*