Your loan book grew $83 million last year, funded almost entirely from the balance sheet.
A bank performing at the top of its class, with one trend worth getting ahead of.
Pioneer Bank is having an exceptional year. Return on assets of 2.28% and return on equity of 22.59% put it in rare company for a bank of any size. The efficiency ratio is 53.44%. Cost of funds is 0.96%, close to the theoretical floor for a community bank, and it produces a net interest margin of 4.78%. After 125 years the bank was just named the number one midsize workplace in New Mexico.
The lending engine is running hard. Over the trailing year loans and leases grew 14.44%, roughly $83 million of new balances, led by commercial real estate at plus 37%. Over the same twelve months total deposits edged down 0.35%. The gap between what the loan book added and what the deposit base funded comes to roughly $86 million in a single year.
That gap has been met from three places, and each of the three has a natural limit. The securities portfolio shrank 3.85%. Borrowings now stand at $127.9 million, about 11.7% of assets. Cash and balances due sit at $18.5 million, roughly 1.7% of assets.
Brokered deposits are zero, which is a deliberate and admirable choice, and it does mean the usual wholesale release valve is one the bank has chosen to keep closed.
At the reported margin of 4.78%, funding that $86 million gap with core deposits instead is worth roughly $4.1 million a year in net interest income, about 16% of annualized net income. Subchapter S status means most of it reaches shareholders rather than a corporate tax line. That is the deposits leg of GROW alone.
Strong results across the board, and one trend worth planning around.
Call Report period ended 03.31.2026, compared against the same quarter one year earlier. Every figure below is reported or is a direct arithmetic consequence of reported figures.
| Metric | 03.31.2026 | Year over year | What it signals |
|---|---|---|---|
| Net loans and leasesTotal loans, net of allowance | $657.6M | +14.44% | Loan demand is not the constraint. The lending engine is the strongest part of the story. |
| Total depositsDomestic offices | $825.1M | -0.35% | Deposits held roughly flat while the loan book grew. This is the trend the brief focuses on. |
| Total securitiesAvailable for sale plus held to maturity | $334.0M | -3.85% | The portfolio has been absorbing the difference, a role it can play for a finite time. |
| Other borrowed funds11.7% of total assets | $127.9M | Borrowings are covering part of the difference, with brokered deposits still at zero. | |
| Cash and balances due1.70% of total assets | $18.5M | Modest against the pace of lending, which limits how much further growth the balance sheet can fund on its own. | |
| Loan-to-deposit ratioNet loans to total deposits | 79.7% | Comfortable at first glance, and best read alongside the securities line, which absorbed much of the difference. | |
| Net interest marginNet interest income to average earning assets | 4.78% | -7.36% | Exceptional, and the reason each incremental deposit dollar is worth so much here. |
| Cost of fundsInterest expense to average funding | 0.96% | Close to the floor and a real competitive advantage, which argues for growing volume rather than rate. | |
| Return on assetsQuarterly, annualized basis | 2.28% | +6.54% | Top tier. Capital is being deployed extremely well. |
| Efficiency ratioNoninterest expense to revenue | 53.44% | -4.40% | Improving. Expenses are well managed, so the opportunity here sits on the revenue side. |
A loan-to-deposit ratio of 79.7% would normally suggest comfortable headroom, and it is worth reading alongside the rest of the balance sheet. With roughly 31% of assets in securities, the portfolio was able to absorb a year of lending growth that deposits did not fund, and it did. Set beside $127.9 million of borrowings and a cash position at 1.70% of assets, the picture is of a lending engine that has been moving faster than the funding base behind it. Core deposit growth is the one input that closes that without adding cost or wholesale dependence.
One data layer. Four engines. Three lines that move.
GROW is the discipline of turning enriched transaction data into the three growth lines a bank board actually tracks: deposits, loans and interchange. The four engines are the mechanism. Primacy is the intermediate outcome. The three lines are the result.
The diagnosis decides which line leads. At Pioneer the funding gap puts deposits first, with loans and interchange building on the same data layer at no additional integration.
Three lines, and what each one looks like here.
Each leg is anchored to a figure Pioneer Bank reported, not to a generic capability claim.
What the numbers say. Loans grew roughly $83M last year while deposits fell $2.9M, an $85.9M gap in twelve months. Securities absorbed part of it and borrowings of $127.9M absorbed the rest, with cash now at 1.70% of assets and brokered deposits at zero.
What GROW does. Identifies which existing customers have payroll landing at another institution, then removes the punch-out that kills switch completion. A captured paycheck is core funding at close to the bank's current 0.96% cost, which is the only kind of funding that does not erode a 4.78% margin.
What the numbers say. The book is heavily weighted to commercial real estate: CRE is 42.2% of loans and grew 37.18% in a year, with construction and land at 18.5% and multifamily at 8.5%. Consumer lending is 0.57% of the book, roughly $3.8M, and it contracted 10.28%. The bank already markets consumer and auto lending, so the product and the appetite are both in place.
What GROW does. When an existing customer connects an outside auto lender, card or mortgage, that is borrowing intent visible in real time, sourced from households the bank already serves. Instant Account Verification then removes friction at funding. This is the diversifying, higher-yield book that does not add to a concentrated commercial position.
What the numbers say. Noninterest income runs about $10.4M annualized, near 0.95% of assets. Pioneer issues both debit and credit cards and belongs to the MoneyPass network, so card economics are already a live line rather than something to be built from nothing.
What GROW does. Enriched data identifies which recurring payments (utilities, subscriptions, memberships) currently run as ACH, then targets those customers to move the payment onto the bank's card. It lifts recurring interchange and reduces ACH cost at the same time, and every card-on-file relationship is also a primacy signal.
At a 0.96% cost of funds, Pioneer holds something most banks would trade a great deal for, and it is worth protecting. Competing on rate to bring in balances would work against the very metric that produces a 4.78% margin and a 2.28% return on assets. The version of deposit growth that preserves those economics is primary relationship growth: households whose paycheck arrives at Pioneer and whose everyday spending runs through a Pioneer card. That is what GROW is built to produce.
One assumption. One reported rate.
The model deliberately avoids stacked assumptions. It multiplies one number the bank chooses (new core deposits raised) by one number the bank reported (net interest margin). Nothing else.
Model Inputs
The model counts no fee income, no interchange, no reduction in borrowing cost and no compounding from the additional lending capacity that funding unlocks. Those are upside, not inputs.
Annual incremental net interest income
The third row uses the bank's own reported figures. At $4.1 million it is roughly 16% of annualized net income. Subchapter S status means it is not diluted by a corporate tax line.
These are published results at institutions that deployed the capability. They are not an average across all clients, not a commitment, and not a projection for Pioneer Bank.
Institutions that faced the same constraint.
Matched on mechanism rather than asset size. The constraint was the same: strong lending, flat deposits, and a digital base with more to give.
Two ways in, and neither requires a core conversion.
Which path fits best is a scoping question for discovery rather than an assumption to make in a brief.
MX delivers its own experience alongside the bank's existing channels. The core and current digital banking platform are untouched, with no dependency on a third-party roadmap. The fastest way to prove the deposit motion against real Pioneer data.
Capabilities are delivered within the channel Pioneer customers already use. This path depends on an integration approach agreed between the bank, its digital banking provider and MX, and would be scoped jointly before any commitment.
Nothing in the deposit motion requires repricing a single account, which is what protects a 0.96% cost of funds and the 4.78% margin built on it. It can be proven on a defined segment of existing customers before any broad rollout, measured against the bank's own transaction file rather than a vendor projection. And the same data layer that proves the deposit case simultaneously produces the consumer lending pipeline, so the second GROW line costs nothing additional to switch on.
Let's put 45 minutes on the calendar.
Enough time to replace the one adjustable input in this model with Pioneer's own onboarding and payroll data, and to hear how you are already approaching it.
Working through Pioneer's reports has been a genuine pleasure. There are 125 years of them, and a bank still earning a 2.28% return on assets is a rare thing to read. I would love to find 45 minutes to share what we have learned helping community banks grow core deposits, and just as much to hear how you are already thinking about it.
Account Executive · MX Technologies · mx.com
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