AUBURN NATIONAL BANCORPORATION, INC 10-Q

ITEM 1. FINANCIAL STATEMENTS AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) March 31, December 31, (Dollars in thousands, except share data) 2026 2025 Assets: Cash and due from banks $ 13,844 $ 22,335 Federal funds sold 33,340 21,322 Interest-bearing bank deposits 98,989 104,175 Cash and cash equivalents 146,173 147,832 Securities available-for-sale 226,785 233,259 Loans held for sale — 172 Loans, net of unearned income 582,040 565,354 Allowance for credit losses ( 6,776 ) ( 7,176 ) Loans, net 575,264 558,178 Premises and equipment, net 45,248 45,600 Bank-owned life insurance 18,036 17,927 Other assets 15,440 15,829 Total assets $ 1,026,946 $ 1,018,797 Liabilities: Deposits: Noninterest-bearing $ 260,580 $ 268,026 Interest-bearing 670,529 654,900 Total deposits 931,109 922,926 Accrued expenses and other liabilities 2,776 3,818 Total liabilities 933,885 926,744 Stockholders' equity: Preferred stock of $ .01 par value; authorized 200,000 shares; no shares issued — — Common stock of $ .01 par value; authorized 8,500,000 shares; issued 3,959,302 shares at March 31, 2026 and 3,957,135 shares at December 31, 2025 39 39 Additional paid-in capital 3,866 3,864 Retained earnings 120,496 119,241 Accumulated other comprehensive loss, net ( 19,639 ) ( 19,390 ) Less treasury stock, at cost - 463,436 shares at both March 31, 2026 and December 31, 2025, respectively ( 11,701 ) ( 11,701 ) Total stockholders’ equity 93,061 92,053 Total liabilities and stockholders’ equity $ 1,026,946 $ 1,018,797 S ee accompanying notes to consolidated financial statements Table of Contents 4 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) Quarter ended March 31, (Dollars in thousands, except share and per share data) 2026 2025 Interest income: Loans, including fees $ 7,933 $ 7,543 Securities 1,223 1,349 Federal funds sold and interest-bearing bank deposits 1,205 969 Total interest income 10,361 9,861 Interest expense: Deposits 2,628 2,816 Total interest expense 2,628 2,816 Net interest income 7,733 7,045 Provision for credit losses ( 76 ) ( 10 ) Net interest income after provision for credit losses 7,809 7,055 Noninterest income: Service charges on deposit accounts 153 155 Mortgage lending 172 93 Bank-owned life insurance 108 105 Other 460 394 Total noninterest income 893 747 Noninterest expense: Salaries and benefits 3,370 3,310 Net occupancy and equipment 575 714 Professional fees 449 287 Other 1,507 1,569 Total noninterest expense 5,901 5,880 Earnings before income taxes 2,801 1,922 Income tax expense 603 392 Net earnings $ 2,198 $ 1,530 Net earnings per share: Basic and diluted $ 0.63 $ 0.44 Weighted average shares outstanding: Basic 3,494,229 3,493,699 Diluted 3,496,518 3,493,699 S ee accompanying notes to consolidated financial statements Table of Contents 5 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (Unaudited) Quarter ended March 31, (Dollars in thousands) 2026 2025 Net earnings $ 2,198 $ 1,530 Other comprehensive (loss) income, net of tax: Unrealized net holding (loss) gain on securities, net of tax benefit (expense) of $ 84 and $( 1,421 ), respectively ( 249 ) 4,236 Other comprehensive (loss) income ( 249 ) 4,236 Comprehensive income $ 1,949 $ 5,766 S ee accompanying notes to consolidated financial statements Table of Contents 6 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (Unaudited) Accumulated Common Additional other shares Common paid-in Retained comprehensive Treasury (Dollars in thousands, except share data) outstanding stock capital earnings loss stock Total Quarter ended March 31, 2026 Balance, December 31, 2025 3,493,699 $ 39 3,864 119,241 ( 19,390 ) ( 11,701 ) $ 92,053 Net earnings — — — 2,198 — — 2,198 Other comprehensive loss — — — — ( 249 ) — ( 249 ) Cash dividends paid ($ .27 per share) — — — ( 943 ) — — ( 943 ) Stock-based compensation expense — — 24 — — — 24 Common stock issued under equity compensation plans, net 2,167 — ( 22 ) — — — ( 22 ) Balance, March 31, 2026 3,495,866 $ 39 3,866 120,496 ( 19,639 ) ( 11,701 ) $ 93,061 Quarter ended March 31, 2025 Balance, December 31, 2024 3,493,699 $ 39 3,802 115,759 ( 29,607 ) ( 11,701 ) $ 78,292 Net earnings — — — 1,530 — — 1,530 Other comprehensive income — — — — 4,236 — 4,236 Cash dividends paid ($ .27 per share) — — — ( 943 ) — — ( 943 ) Balance, March 31, 2025 3,493,699 $ 39 3,802 116,346 ( 25,371 ) ( 11,701 ) $ 83,115 S ee accompanying notes to consolidated financial statements Table of Contents 7 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Quarter ended March 31, (Dollars in thousands) 2026 2025 Cash flows from operating activities: Net earnings $ 2,198 $ 1,530 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for credit losses ( 76 ) ( 10 ) Depreciation and amortization 557 528 Premium amortization and discount accretion, net 338 354 Net gain on sale of loans held for sale ( 95 ) ( 8 ) Loans originated for sale ( 3,313 ) ( 1,470 ) Proceeds from sale of loans 3,557 1,182 Increase in cash surrender value of bank-owned life insurance ( 108 ) ( 105 ) Stock-based compensation expense 24 — Net decrease in other assets 439 713 Net decrease in accrued expenses and other liabilities ( 986 ) ( 87 ) Net cash provided by operating activities 2,535 2,627 Cash flows from investing activities: Proceeds from prepayments and maturities of securities available-for -sale 5,803 5,847 (Increase) decrease in loans, net ( 17,088 ) 3,303 Net purchases of premises and equipment ( 120 ) ( 211 ) Increase in FHLB stock ( 29 ) — Net cash (used in) provided by investing activities ( 11,434 ) 8,939 Cash flows from financing activities: Net (decrease) increase in noninterest-bearing deposits ( 7,446 ) 10,875 Net increase in interest-bearing deposits 15,629 3,804 Dividends paid ( 943 ) ( 943 ) Net cash provided by financing activities 7,240 13,736 Net change in cash and cash equivalents ( 1,659 ) 25,302 Cash and cash equivalents at beginning of period 147,832 93,354 Cash and cash equivalents at end of period $ 146,173 $ 118,656 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 2,610 $ 2,822 Income taxes — — See accompanying notes to consolidated financial statements Table of Contents 8 AUBURN NATIONAL BANCORPORATION, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Auburn National Bancorporation, Inc. (the “Company”) is a bank holding company whose primary business is conducted by its wholly-owned subsidiary, AuburnBank (the “Bank”). AuburnBank is a commercial bank located in Auburn, Alabama. The Bank provides a full range of banking services in its primary market area, Lee County, which includes the Auburn-Opelika Metropolitan Statistical Area. Basis of Presentation and Use of Estimates The unaudited consolidated financial statements in this report have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, these financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements include, in the opinion of management, all adjustments necessary to present a fair statement of the financial position and the results of operations for all periods presented. All such adjustments are of a normal recurring nature. The results of operations in the interim statements are not necessarily indicative of the results of operations that the Company and its subsidiaries may achieve for future interim periods or the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant intercompany transactions and accounts are eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of allowance for credit losses on loans and investment securities, the fair value of financial instruments, and the valuation of deferred tax assets and other real estate owned (“OREO”). Subsequent Events The Company has evaluated the effects of events and transactions through the date of this filing that have occurred subsequent to March 31, 2026. The Company does not believe there were any material subsequent events during this period that would have required further recognition or disclosure in the unaudited consolidated financial statements included in this report. Reclassifications Certain amounts reported in prior periods have been reclassified to conform to the current-period presentation. These reclassifications had no effect on the Company’s previously reported net earnings or total stockholders’ equity. Accounting Developments In the first quarter of 2026, the Company did not adopt any new accounting guidance. Table of Contents 9 NOTE 2: BASIC AND DILUTED NET EARNINGS PER SHARE Basic net earnings per share is computed by dividing net earnings by the weighted average common shares outstanding for the quarters ended March 31, 2026 and 2025, respectively. Diluted net earnings per share reflect the potential dilution that could occur upon exercise of securities or other rights for, or convertible into, shares of the Company’s common stock. During 2025, the Company granted restricted stock units (“RSUs”), which vested during the first quarter of 2026. These RSUs are included in the computation of diluted net earnings per share using the treasury stock method during the first quarter of 2026. No such securities were outstanding during the first quarter of 2025. The basic and diluted net earnings per share computations for the respective periods are presented below. Quarter ended March 31, (Dollars in thousands, except share and per share data) 2026 2025 Basic: Net earnings $ 2,198 $ 1,530 Weighted average common shares outstanding 3,494,229 3,493,699 Net earnings per share $ 0.63 $ 0.44 Diluted: Net earnings $ 2,198 $ 1,530 Weighted average common shares outstanding, basic 3,494,229 3,493,699 Dilutive effect of restricted stock units 2,289 — Weighted average common shares outstanding, diluted 3,496,518 3,493,699 Net earnings per share $ 0.63 $ 0.44 Table of Contents 10 NOTE 3: SECURITIES At March 31, 2026 and December 31, 2025, respectively, all securities within the scope of ASC 320, Investments – Debt and Equity Securities, were classified as available-for-sale. The fair value and amortized cost for securities available-for- sale by contractual maturity at March 31, 2026 and December 31, 2025, respectively, are presented below. 1 year 1 to 5 5 to 10 After 10 Fair Gross Unrealized Amortized (Dollars in thousands) or less years years years Value Gains Losses Cost March 31, 2026 Agency obligations (a) $ 552 34,328 17,761 — 52,641 — 4,862 $ 57,503 Agency MBS (a) — 20,274 18,399 118,069 156,742 — 19,141 175,883 State and political subdivisions — 2,981 8,250 6,171 17,402 — 2,222 19,624 Total available-for-sale $ 552 57,583 44,410 124,240 226,785 — 26,225 $ 253,010 December 31, 2025 Agency obligations (a) $ — 35,580 18,204 — 53,784 — 4,727 $ 58,511 Agency MBS (a) — 20,112 16,171 125,644 161,927 — 19,063 180,990 State and political subdivisions — 1,590 9,160 6,798 17,548 1 2,103 19,650 Total available-for-sale $ — 57,282 43,535 132,442 233,259 1 25,893 $ 259,151 (a) Includes securities issued by U.S. government agencies or government -sponsored entities. Expected lives of these securities may differ from contractual maturities because (i) issuers may have the right to call or repay such securities obligations with or without prepayment penalties and (ii) loans included in Agency MBS generally have the right to prepay such loan in whole or in part at any time. Securities with aggregate fair values of $ 203.7 million and $ 209.4 million at March 31, 2026 and December 31, 2025, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase, Federal Home Loan Bank of Atlanta (“FHLB – Atlanta”) advances, and for other purposes required or permitted by law. Included in other assets on the accompanying consolidated balance sheets are nonmarketable equity investments. The carrying amounts of nonmarketable equity investments were $ 1.4 million at both March 31, 2026 and December 31, 2025, respectively. Nonmarketable equity investments include FHLB - Atlanta stock, Federal Reserve Bank (“FRB”) stock, and stock in a privately held financial institution. Gross Unrealized Losses and Fair Value The fair values and gross unrealized losses on securities at March 31, 2026 and December 31, 2025, respectively, segregated by those securities that have been in an unrealized loss position for less than 12 months and 12 months or longer, are presented below. Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses March 31, 2026: Agency obligations $ — — 52,641 4,862 $ 52,641 4,862 Agency MBS 2,672 60 154,070 19,081 156,742 19,141 State and political subdivisions 1,627 8 13,680 2,214 15,307 2,222 Total $ 4,299 68 220,391 26,157 $ 224,690 26,225 December 31, 2025: Agency obligations $ — — 53,784 4,727 $ 53,784 4,727 Agency MBS — — 161,840 19,063 161,840 19,063 State and political subdivisions — — 14,827 2,103 14,827 2,103 Total $ — — 230,451 25,893 $ 230,451 25,893 Table of Contents 11 For the securities in the previous table, the Company assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis. Unrealized losses have not been recognized into income as the decline in fair value is largely due to changes in interest rates and not credit quality. For the securities in the previous table, as of March 31, 2026 the Company does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery. Agency Obligations Investments in agency obligations are guaranteed of full and timely payments by the issuing agency. Based on management's analysis and judgement, there were no credit losses attributable to the Company’s investments in agency obligations at March 31, 2026. Agency MBS Investments in agency MBS are issued by Ginnie Mae, Fannie Mae, and Freddie Mac. Each of these agencies provide a guarantee of full and timely payments of principal and interest by the issuing agency. Based on management's analysis and judgement, there were no credit losses attributable to the Company’s investments in agency MBS at March 31, 2026. State and Political Subdivisions Investments in state and political subdivisions are securities issued by various municipalities in the United States. The majority of the portfolio was rated AA or higher, with no securities rated below investment grade at March 31, 2026. Based on management's analysis and judgement, there were no credit losses attributable to the Company’s investments in state and political subdivisions at March 31, 2026. Realized Gains and Losses The Company had no realized gains or losses on sale of securities during the quarters ended March 31, 2026 and 2025, respectively. NOTE 4: LOANS AND ALLOWANCE FOR CREDIT LOSSES March 31, December 31, (Dollars in thousands) 2026 2025 Commercial and industrial $ 31,841 $ 33,887 Municipal 35,703 24,513 Construction and land development 60,248 56,436 Commercial real estate: Owner occupied 58,848 59,568 Hotel/motel 55,005 47,870 Multifamily 53,798 51,516 Other 166,951 166,567 Total commercial real estate 334,602 325,521 Residential real estate: Consumer mortgage 57,637 59,781 Investment property 53,506 56,773 Total residential real estate 111,143 116,554 Consumer installment 8,524 8,421 Total Loans, net of unearned income before basis adjustment 582,061 565,332 Basis adjustment associated with fair value hedge (1) ( 21 ) 22 Total Loans, net of unearned income $ 582,040 $ 565,354 (1) Represents the basis adjustment associated with application of hedge accounting on certain loans. The basis adjustment will be allocated to the amortized cost of associated loans within the portfolio if the hedge accounting is discontinued. Refer to Note 6 - Derivative Instruments for additional information. Table of Contents 12 Loans secured by real estate were approximately 86.9% of the Company’s total loan portfolio at March 31, 2026. At March 31, 2026, the Company’s geographic loan distribution was concentrated primarily in Lee County, Alabama, and surrounding areas. The loan portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. As part of the Company’s quarterly assessment of the allowance, the loan portfolio is disaggregated into the following portfolio segments: commercial and industrial, municipal, construction and land development, commercial real estate, residential real estate, and consumer installment. Where appropriate, the Company’s loan portfolio segments are further disaggregated into classes. A class is generally determined based on the initial measurement attribute, risk characteristics of the loan, and an entity’s method for monitoring and determining credit risk. During the first quarter of 2026, the Company refined its loan portfolio segmentation to separately identify municipal loans, which were previously included within commercial and industrial loans, due to their recent growth and distinct risk characteristics. The allowance for credit losses related to municipal loans is determined using a discounted cash flow methodology incorporating probability of default and loss given default assumptions derived from external data sources. As a result of this refinement, the total allowance decreased due to the lower expected credit losses associated with these loans. This refinement represents a change in accounting estimate and is accounted for prospectively. No adjustments were made to prior periods. The following describes the risk characteristics relevant to each of the portfolio segments and classes. Commercial and industrial — includes loans to finance business operations, equipment purchases, or other needs for small and medium-sized commercial customers. Also included in this category are loans to finance agricultural production. Generally, the primary source of repayment is the cash flow from business operations and activities of the borrower. Municipal — includes loans to state and local governmental entities and related public-sector organizations to finance capital projects, infrastructure improvements, and other governmental or public service needs. These loans are typically supported by general tax revenues, utility revenues, special assessments, or other dedicated revenue sources of the municipality. Repayment is primarily dependent on the financial capacity and revenue-generating ability of the governmental entity. Construction and land development — includes both loans and credit lines for the purpose of purchasing, carrying, and developing land into commercial developments or residential subdivisions. Also included are loans and lines for construction of residential, multi-family, and commercial buildings. Generally, the primary source of repayment is dependent upon the sale or refinancing of the real estate collateral. Commercial real estate — includes loans disaggregated in these classes: ● Owner occupied – includes loans secured by business facilities to finance business operations, equipment and owner-occupied facilities primarily for small and medium-sized commercial customers. Generally, the primary source of loan repayment are the cash flows from business operations and activities of the borrower, who owns the property. ● Hotel/motel – includes loans for hotels and motels. Generally, the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the borrower. ● Multifamily – primarily includes loans to finance income-producing multifamily properties. Loans in this class include loans for 5 or more unit residential property and apartments leased to residents. Generally, the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the respective borrower. ● Other – primarily includes loans to finance income-producing commercial. Loans in this class include loans for neighborhood retail centers, medical and professional offices, single retail stores, industrial buildings, and warehouses leased generally to local businesses and residents. Generally , the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into c onsideration the occupancy and rental rates, as well as the financial health of the borrower. Table of Contents 13 Residential real estate — includes loans disaggregated into two classes: ● Consumer mortgage – primarily includes first or second lien mortgages and home equity lines to consumers that are secured by a primary residence or second home. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history, and property value. ● Investment property – primarily includes loans to finance income-producing 1-4 family residential properties. Generally, the primary source of repayment is dependent upon income generated from leasing the property securing the loan. The underwriting of these loans takes into consideration the rental rates, as well as the financial health of the borrowers. Consumer installment — includes loans to individuals, both secured by personal property and unsecured. Loans include personal lines of credit, automobile loans, and other retail loans. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history, and, if applicable, property value. Table of Contents 14 The following is a summary of current, accruing past due, and nonaccrual loans by portfolio segment and class as of March 31, 2026 and December 31, 2025. Accruing Accruing Total 30-89 Days Greater than Accruing Non- Total (Dollars in thousands) Current Past Due 90 days Loans Accrual Loans March 31, 2026: Commercial and industrial $ 31,726 115 — 31,841 — $ 31,841 Municipal 35,703 — — 35,703 — 35,703 Construction and land development 60,208 40 — 60,248 — 60,248 Commercial real estate: Owner occupied 58,848 — — 58,848 — 58,848 Hotel/motel 53,352 1,653 — 55,005 — 55,005 Multifamily 53,798 — — 53,798 — 53,798 Other 166,951 — — 166,951 — 166,951 Total commercial real estate 332,949 1,653 — 334,602 — 334,602 Residential real estate: Consumer mortgage 57,185 384 — 57,569 68 57,637 Investment property 53,264 — 208 53,472 34 53,506 Total residential real estate 110,449 384 208 111,041 102 111,143 Consumer installment 8,515 9 — 8,524 — 8,524 Total $ 579,550 2,201 208 581,959 102 $ 582,061 December 31, 2025: Commercial and industrial $ 33,881 6 — 33,887 — $ 33,887 Municipal 24,513 — — 24,513 — 24,513 Construction and land development 56,395 41 — 56,436 — 56,436 Commercial real estate: Owner occupied 59,085 105 — 59,190 378 59,568 Hotel/motel 47,870 — — 47,870 — 47,870 Multifamily 51,516 — — 51,516 — 51,516 Other 166,567 — — 166,567 — 166,567 Total commercial real estate 325,038 105 — 325,143 378 325,521 Residential real estate: Consumer mortgage 58,993 720 — 59,713 68 59,781 Investment property 56,737 — — 56,737 36 56,773 Total residential real estate 115,730 720 — 116,450 104 116,554 Consumer installment 8,348 73 — 8,421 — 8,421 Total $ 563,905 945 — 564,850 482 $ 565,332 Table of Contents 15 Credit Quality Indicators The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. These categories are utilized to develop the associated allowance for credit losses using historical losses adjusted for qualitative and environmental factors and are defined as follows: ● Pass – loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral. ● Special Mention – loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification. ● Substandard Accruing – loans that exhibit a well-defined weakness which presently jeopardizes debt repayment, even though they are currently performing. These loans are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected. ● Nonaccrual – includes loans where management has determined that full payment of principal and interest is not e xpected. Table of Contents 16 The introduction of the municipal portfolio segment in 2026 impacts comparability of credit quality disclosures to prior periods. The following tables present credit quality indicators for the loan portfolio segments and classes by year of origination as of March 31, 2026 and December 31, 2025. Year of Origination 2026 2025 2024 2023 2022 Prior to 2022 Revolving Loans Total Loans (Dollars in thousands) March 31, 2026: Commercial and industrial Pass $ 1,711 7,413 4,323 3,662 3,437 10,533 549 31,628 Special mention — — 2 3 — — — 5 Substandard accruing 74 — — 1 133 — — 208 Nonaccrual — — — — — — — — Total commercial and industrial 1,785 7,413 4,325 3,666 3,570 10,533 549 31,841 Current period gross charge-offs — — — 5 — — — 5 Municipal Pass $ 11,980 — — 1,156 4,090 16,984 1,493 35,703 Special mention — — — — — — — — Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total municipal 11,980 — — 1,156 4,090 16,984 1,493 35,703 Current period gross charge-offs — — — — — — — — Construction and land development Pass 7,455 31,705 13,306 3,896 1,964 357 1,525 60,208 Special mention — — — — — — — — Substandard accruing — — — — 40 — — 40 Nonaccrual — — — — — — — — Total construction and land development 7,455 31,705 13,306 3,896 2,004 357 1,525 60,248 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 653 10,670 1,358 11,631 6,101 26,516 85 57,014 Special mention — 617 — — — 722 — 1,339 Substandard accruing — — 495 — — — — 495 Nonaccrual — — — — — — — — Total owner occupied 653 11,287 1,853 11,631 6,101 27,238 85 58,848 Current period gross charge-offs — — — — — 378 — 378 Hotel/motel Pass 8,731 4,954 14,153 6,084 3,878 12,225 4,980 55,005 Special mention — — — — — — — — Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 8,731 4,954 14,153 6,084 3,878 12,225 4,980 55,005 Current period gross charge-offs — — — — — — — — Table of Contents 17 Year of Origination 2026 2025 2024 2023 2022 Prior to 2022 Revolving Loans Total Loans (Dollars in thousands) March 31, 2026: Multifamily Pass 2,830 1,248 3,590 12,446 20,388 10,314 — 50,816 Special mention — — — — — — — — Substandard accruing — — — — — 2,982 — 2,982 Nonaccrual — — — — — — — — Total multi-family 2,830 1,248 3,590 12,446 20,388 13,296 — 53,798 Current period gross charge-offs — — — — — — — — Other Pass 3,948 34,963 39,753 16,820 27,873 39,015 4,071 166,443 Special mention — — 362 — — 146 — 508 Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total other 3,948 34,963 40,115 16,820 27,873 39,161 4,071 166,951 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 441 5,851 3,245 15,015 15,460 12,841 3,464 56,317 Special mention — — — — — 183 — 183 Substandard accruing — 244 — — — 825 — 1,069 Nonaccrual — — — 68 — — — 68 Total consumer mortgage 441 6,095 3,245 15,083 15,460 13,849 3,464 57,637 Current period gross charge-offs — — — — — — — — Investment property Pass 1,953 7,970 8,133 8,743 9,273 16,212 859 53,143 Special mention — — — — — — — — Substandard accruing — 236 — — 90 3 — 329 Nonaccrual — — — 34 — — — 34 Total investment property 1,953 8,206 8,133 8,777 9,363 16,215 859 53,506 Current period gross charge-offs — — — — — — — — Consumer installment Pass 1,182 3,582 1,736 741 695 205 363 8,504 Special mention — — 6 1 — — — 7 Substandard accruing — — 7 6 — — — 13 Nonaccrual — — — — — — — — Total consumer installment 1,182 3,582 1,749 748 695 205 363 8,524 Current period gross charge-offs — 20 — 13 — — — 33 Total loans Pass 40,884 108,356 89,597 80,194 93,159 145,202 17,389 574,781 Special mention — 617 370 4 — 1,051 — 2,042 Substandard accruing 74 480 502 7 263 3,810 — 5,136 Nonaccrual — — — 102 — — — 102 Total loans $ 40,958 109,453 90,469 80,307 93,422 150,063 17,389 $ 582,061 Total current period gross charge-offs $ — 25 — 13 — 378 — $ 416 Table of Contents 18 Year of Origination 2025 2024 2023 2022 2021 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) December 31, 2025: Commercial and industrial Pass $ 8,566 5,035 3,970 2,865 4,366 8,074 778 $ 33,654 Special mention 74 4 7 — — — — 85 Substandard accruing — — 7 139 2 — — 148 Nonaccrual — — — — — — — — Total commercial and industrial 8,640 5,039 3,984 3,004 4,368 8,074 778 33,887 Current period gross charge-offs 40 — 99 3 — — — 142 Municipal Pass $ 837 — 1,156 4,190 6,013 9,145 3,172 $ 24,513 Special mention — — — — — — — — Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total commercial and industrial 837 - 1,156 4,190 6,013 9,145 3,172 24,513 Current period gross charge-offs — — — — — — — — Construction and land development Pass 31,315 14,175 7,321 2,080 69 711 765 56,436 Special mention — — — — — — — — Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total construction and land development 31,315 14,175 7,321 2,080 69 711 765 56,436 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 9,755 1,312 11,889 6,235 13,830 11,618 2,682 57,321 Special mention 620 — — — — — 750 1,370 Substandard accruing — 499 — — — — — 499 Nonaccrual — — — — — 378 — 378 Total owner occupied 10,375 1,811 11,889 6,235 13,830 11,996 3,432 59,568 Current period gross charge-offs — — — — — 296 — 296 Hotel/motel Pass 5,012 14,161 6,143 8,976 2,948 10,630 — 47,870 Special mention — — — — — — — — Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 5,012 14,161 6,143 8,976 2,948 10,630 — 47,870 Current period gross charge-offs — — — — — — — — Table of Contents 19 Year of Origination 2025 2024 2023 2022 2021 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) December 31, 2025: Multifamily Pass 1,254 3,615 12,550 20,560 1,726 8,652 142 48,499 Special mention — — — — — — — — Substandard accruing — — — — — 3,017 — 3,017 Nonaccrual — — — — — — — — Total multi-family 1,254 3,615 12,550 20,560 1,726 11,669 142 51,516 Current period gross charge-offs — — — — — — — — Other Pass 25,027 41,004 12,501 28,033 17,244 24,310 17,589 165,708 Special mention — 364 — — 495 — — 859 Substandard accruing — — — — — — — — Nonaccrual — — — — — — — — Total other 25,027 41,368 12,501 28,033 17,739 24,310 17,589 166,567 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 6,413 4,344 16,249 16,527 2,263 10,977 1,692 58,465 Special mention — — — — — 184 65 249 Substandard accruing — — — — — 754 245 999 Nonaccrual — — 68 — — — — 68 Total consumer mortgage 6,413 4,344 16,317 16,527 2,263 11,915 2,002 59,781 Current period gross charge-offs — — — — — 61 — 61 Investment property Pass 9,332 8,045 10,016 9,849 6,790 10,375 1,999 56,406 Special mention — — — — — — — — Substandard accruing 236 — — 91 4 — — 331 Nonaccrual — — 36 — — — — 36 Total investment property 9,568 8,045 10,052 9,940 6,794 10,375 1,999 56,773 Current period gross charge-offs — — 2 — — — — 2 Consumer installment Pass 4,121 1,981 972 780 137 81 304 8,376 Special mention — 7 2 — — — — 9 Substandard accruing 8 7 21 — — — — 36 Nonaccrual — — — — — — — — Total consumer installment 4,129 1,995 995 780 137 81 304 8,421 Current period gross charge-offs 42 45 9 — — — — 96 Total loans Pass 101,632 93,672 82,767 100,095 55,386 94,573 29,123 557,248 Special mention 694 375 9 — 495 184 815 2,572 Substandard accruing 244 506 28 230 6 3,771 245 5,030 Nonaccrual — — 104 — — 378 — 482 Total loans $ 102,570 94,553 82,908 100,325 55,887 98,906 30,183 $ 565,332 T otal current period gross charge-offs $ 82 45 114 4 — 296 — $ 541 Table of Contents 20 Allowance for Credit Losses The allowance for credit losses is estimated under the Current Expected Credit Losses (“CECL”) methodology set forth in FASB ASC 326, Financial Instruments – Credit Losses . Under the CECL methodology, the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics, and for loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. The composition of the provision for credit losses for the respective periods is presented below. Quarter ended March 31, (Dollars in thousands) 2026 2025 Provision for credit losses: Loans $ 2 $ ( 57 ) Reserve for unfunded commitments ( 78 ) 47 Total provision for credit losses $ ( 76 ) $ ( 10 ) The provision for credit losses for the quarter reflects both changes in credit conditions and the impact of the refinement in portfolio segmentation, including the reclassification of loans previously included in commercial and industrial loans. The following table details the changes in the allowance for credit losses for loans, by portfolio segment, for the respective periods. (Dollars in thousands) Commercial and industrial Municipal Construction and land development Commercial real estate Residential real estate Consumer installment Total Quarter ended March 31, 2026 Beginning balance $ 1,129 — 1,304 3,777 837 129 $ 7,176 Charge-offs ( 5 ) — — ( 378 ) — ( 33 ) ( 416 ) Recoveries — — — — 2 12 14 Net (charge-offs) recoveries ( 5 ) — — ( 378 ) 2 ( 21 ) ( 402 ) Provision for credit losses ( 438 ) 154 ( 610 ) 657 190 49 2 Ending balance $ 686 154 694 4,056 1,029 157 $ 6,776 Quarter ended March 31, 2025: Beginning balance $ 1,244 n/a 1,059 3,842 588 138 $ 6,871 Charge-offs ( 99 ) n/a — — ( 1 ) — ( 100 ) Recoveries 28 n/a — — 2 6 36 Net (charge-offs) recoveries ( 71 ) n/a — — 1 6 ( 64 ) Provision for credit losses 46 n/a 342 ( 689 ) 272 ( 28 ) ( 57 ) Ending balance $ 1,219 n/a 1,401 3,153 861 116 $ 6,750 During the first quarter of 2026, the Company refined its loan portfolio segmentation to separately identify municipal loans, which were previously included within commercial and industrial loans, due to their recent growth and distinct risk characteristics. The allowance for credit losses related to municipal loans is determined using a discounted cash flow methodology incorporating probability of default and loss given default assumptions derived from external data sources. As a result of this refinement, the total allowance decreased due to the lower expected credit losses associated with these loans. This refinement represents a change in accounting estimate and is accounted for prospectively. No adjustments were made to prior periods. The Company designates certain individually evaluated loans on nonaccrual status as collateral -dependent loans. Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and amortized costs. If the fair value of the collateral exceeds the amortized cost, no allowance is required. Table of Contents 21 The Company had no collateral dependent loans which were individually evaluated at March 31, 2026. The following table presents the amortized cost basis of collateral dependent loans, which were individually evaluated to determine expected credit losses at December 31, 2025. (Dollars in thousands) Real Estate Total Loans December 31, 2025: Commercial real estate $ 378 $ 378 Total $ 378 $ 378 At March 31, 2026 and December 31, 2025, the Company had one additional individually evaluated commercial real estate loan in the amount of $3.0 million that was not considered collateral dependent and was accruing in accordance with its contractual terms. This loan had an allowance of $0.5 million at March 31, 2026 and December 31, 2025, respectively. The allowance for this loan was measured using the present value of expected future cash flows, discounted at the loan’s effective interest rate. Expected cash flows were developed using probability of default and loss given default assumptions specific to the borrower. The following table summarizes the Company’s nonaccrual loans by major categories for the respective periods. Nonaccrual Loans Nonaccrual Loans Total (Dollars in thousands) With No Allowance With An Allowance Nonaccrual Loans March 31, 2026 Residential real estate $ — 102 $ 102 Total $ — 102 $ 102 December 31, 2025 Commercial real estate $ 378 — $ 378 Residential real estate — 104 104 Total $ 378 104 $ 482 The Company did not recognize any interest income on nonaccrual loans during the quarters ended March 31, 2026 and 2025. There were no modifications to borrowers experiencing financial difficulty during the quarters ended March 31, 2026 and 2025. NOTE 5: STOCK-BASED COMPENSATION Restricted stock units (“RSUs”) granted on July 24, 2025 vested during the first quarter of 2026, resulting in no unvested awards outstanding at March 31, 2026. The Company recognized $ 24 thousand of stock-based compensation expense in the first quarter of 2026 related to these RSUs. Such expense is included in salaries and benefits expense, with a c orresponding increase to additional paid-in capital. Table of Contents 22 NOTE 6: DERIVATIVE INSTRUMENTS The Company enters into interest rate swaps to manage exposure to changes in interest rates on certain loans. The Company does not enter into derivative instruments for speculative or trading purposes. As of March 31, 2026, the Company had two pay-fixed, receive-variable interest rate swaps with an aggregate notional amount of $22.0 million. The swaps are designated as fair value hedges of changes in the fair value of specified loans attributable to changes in the benchmark interest rate (SOFR) and qualify for the shortcut method under ASC 815, Derivatives and Hedging . Under the terms of the swaps, the Company pays fixed rates and receives variable rates based on SOFR. Because the hedges qualify for the shortcut method, the hedge relationships are assumed to be perfectly effective, and therefore no hedge ineffectiveness is recognized. Accrued interest receivable related to the swaps is included in Other Assets or Other Liabilities, as applicable. The following table presents the fair value of derivative instruments designated as hedging instruments as of March 31, 2026 and December 31, 2025: Balance Sheet Fair Value Fair Value (Dollars in thousands) Location Asset Liability March 31, 2026: Interest rate swaps (fair value hedge) Other Assets $ 21 $ — Total interest rate swap agreements $ 21 $ — Balance Sheet Fair Value Fair Value (Dollars in thousands) Location Asset Liability December 31, 2025: Interest rate swap (fair value hedge) Other Liabilities $ — $ 22 Total interest rate swap agreements $ — $ 22 The following table presents the effect of fair value hedge accounting on the Consolidated Statements of Earnings for the quarter ended March 31, 2026: Amount of Gain Amount of Gain (Loss) Recognized Location of Gain (Loss) Recognized in Income on Hedged (Loss) Recognized in Income on Item Attributable (Dollars in thousands) in Income Derivative to Hedged Risk Quarter ended March 31, 2026: Interest rate swaps (fair value hedge) Interest Income (Loans) $ 43 $ ( 43 ) Total interest rate swap agreements $ 43 $ ( 43 ) The Company is exposed to credit risk in the event of nonperformance by the counterparty to the interest rate swaps. The Company manages this risk by transacting with a counterparty that meets established credit standards. The Company does not anticipate nonperformance by the counterparty. These derivatives are subject to a master netting arrangement; however, the Company does not offset derivative assets and liabilities on the Consolidated Balance Sheets. Table of Contents 23 NOTE 7: FAIR VALUE Fair Value Hierarchy “Fair value” is defined by ASC 820, Fair Value Measurements and Disclosures , as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for an asset or liability at the measurement date. GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1—inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable for the asset or liability, either directly or indirectly. Level 3—inputs to the valuation methodology are unobservable and reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset or liability. Level changes in fair value measurements Transfers between levels of the fair value hierarchy are generally recognized at the end of each reporting period. The Company monitors the valuation techniques utilized for each category of financial assets and liabilities to ascertain when transfers between levels have been affected. The nature of the Company’s financial assets and liabilities generally is such that transfers in and out of any level are expected to be infrequent. For the quarter ended March 31, 2026, there were no transfers between levels and no changes in valuation techniques for the Company’s financial assets and liabilities. Assets and liabilities measured at fair value on a recurring basis Securities available-for-sale Fair values of securities available for sale were primarily measured using Level 2 inputs. For these securities, the Company obtains pricing from third-party pricing services. These third-party pricing services consider observable data that may include broker quotes, market spreads, cash flows, market consensus prepayment speeds, benchmark yields, reported trades for similar securities, credit information, and the securities’ terms and conditions. On a quarterly basis, management reviews the pricing received from the third-party pricing services for reasonableness given current market conditions. As part of its review, management may obtain non-binding third-party broker quotes to validate the fair value measurements. In addition, management will periodically submit pricing provided by the third-party pricing services to another independent valuation firm on a sample basis. This independent valuation firm will compare the price provided by the third-party pricing service with its own price and will review the significant assumptions and valuation methodologies used with management. Interest Rate Swaps The fair values of the Company’s interest rate swaps are estimated using a discounted cash flow model. The model considers the present value of expected future cash flows under the terms of the swap and incorporates observable market data such as: relevant interest rate swap curves, benchmark yield curves (e.g., SOFR-based or other market-based curves), and forward interest rate expectations over the contractual term of the instruments. Because the significant inputs used in valuing the interest rate swaps are observable in active markets, the Company classifies these instruments with Level 2 of the fair value hierarchy. Table of Contents 24 The following table presents the balances of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, respectively, by caption, on the accompanying consolidated balance sheets by ASC 820 valuation hierarchy (as described above). Quoted Prices in Significant Active Markets Other Significant for Observable Unobservable Identical Assets Inputs Inputs (Dollars in thousands) Amount (Level 1) (Level 2) (Level 3) March 31, 2026: Securities available-for-sale: Agency obligations $ 52,641 — 52,641 — Agency MBS 156,742 — 156,742 — State and political subdivisions 17,402 — 17,402 — Total securities available -for-sale 226,785 — 226,785 — Other assets - interest rate swaps 21 — 21 — Total assets at fair value $ 226,806 — 226,806 — December 31, 2025: Securities available-for-sale: Agency obligations $ 53,784 — 53,784 — Agency MBS 161,927 — 161,927 — State and political subdivisions 17,548 — 17,548 — Total securities available -for-sale 233,259 — 233,259 — Total assets at fair value $ 233,259 — 233,259 — Other liabilities - interest rate swap 22 — 22 — Total liabilities at fair value $ 22 — 22 — Assets and liabilities measured at fair value on a nonrecurring basis Collateral dependent loans Collateral dependent loans are measured at the fair value of the collateral securing the loan less estimated selling costs. The fair value of real estate collateral is determined based on real estate appraisals which are generally based on recent sales of comparable properties which are then adjusted for property specific factors. Non-real estate collateral is valued based on various sources, including third party asset valuations and internally determined values based on cost adjusted for depreciation and other judgmentally determined discount factors. Collateral dependent loans are classified within Level 3 of the hierarchy due to the unobservable inputs used in determining their fair value such as collateral values and the borrower's underlying financial condition. Mortgage servicing rights, net MSRs, net, included in other assets on the accompanying consolidated balance sheets, are carried at the lower of cost or estimated fair value. MSRs do not trade in an active market with readily observable prices. To determine the fair value of MSRs, the Company engages an independent third party. The independent third party’s valuation model calculates the present value of estimated future net servicing income using assumptions that market participants would use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, and late fees. Periodically, the Company will review broker surveys and other market research to validate significant assumptions used in the model. The significant unobservable inputs include prepayment speeds or the constant prepayment rate (“CPR”) and the weighted average discount rate. Because the valuation of MSRs requires the use of significant unobservable inputs, all of the Company’s MSRs are classified within Level 3 of the valuation hierarchy. Table of Contents 25 The following table presents the balances of the assets and liabilities measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025, respectively, by caption, on the accompanying consolidated balance sheets and by ASC 820 valuation hierarchy (as described above): Quoted Prices in Active Markets Other Significant for Observable Unobservable Carrying Identical Assets Inputs Inputs (Dollars in thousands) Amount (Level 1) (Level 2) (Level 3) March 31, 2026: Other assets (2) $ 753 — — 753 Total assets at fair value $ 753 — — 753 December 31, 2025: Loans, net (1) $ 378 — — 378 Other assets (2) 771 — — 771 Total assets at fair value $ 1,149 — — 1,149 (1) Loans considered collateral dependent under ASC 326 Financial Instruments - Credit Losses . (2) Represents MSRs, net, carried at lower of cost or estimated fair value. Quantitative Disclosures for Level 3 Fair Value Measurements At March 31, 2026 and December 31, 2025, the Company had no Level 3 assets measured at fair value on a recurring basis. For Level 3 assets measured at fair value on a non-recurring basis at March 31, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements are presented below. Range of Weighted Carrying Significant Unobservable Average (Dollars in thousands) Amount Valuation Technique Unobservable Input Inputs of Input March 31, 2026: Mortgage servicing rights, net $ 753 Discounted cash flow Prepayment speed or CPR 7.0 - 7.4 % 7.0 % Discount rate 9.5 - 11.5 9.5 December 31, 2025: Collateral dependent loans $ 378 Appraisal Appraisal discounts 10.0 - 10.0 % 10.0 % Mortgage servicing rights, net 771 Discounted cash flow Prepayment speed or CPR 6.8 - 8.4 8.2 Discount rate 9.5 - 11.5 9.5 Fair Value of Financial Instruments ASC 825, Financial Instruments , requires disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of the Company’s financial instruments are explained below. Where quoted market prices are not available, fair values are based on estimates using discounted cash flow analyses. Discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following fair value estimates cannot be substantiated by comparison to independent markets and should not be considered representative of the liquidation value of the Company’s financial instruments, but rather are good-faith estimates of the fair value of financial instruments held by the Company. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Loans, net Fair values for loans were calculated using discounted cash flows. The discount rates reflected current rates at which similar loans would be made for the same remaining maturities. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments. The fair value of loans was measured using an exit price notion. Table of Contents 26 Loans held for sale Loans held for sale are recorded at the lower of cost or fair value. Fair values are determined using quoted secondary market prices for similar loans. Time Deposits Fair values for time deposits were estimated using discounted cash flows . The discount rates were based on rates currently offered for deposits with similar remaining maturities. The carrying value, related estimated fair value, and placement in the fair value hierarchy of the Company’s financial instruments at March 31, 2026 and December 31, 2025 are presented below. This table excludes financial instruments recorded at fair value on a recurring basis, and financial instruments for which the carrying amount approximates fair value. Financial assets for which fair value approximates carrying value included cash and cash equivalents. Financial liabilities for which fair value approximates carrying value included noninterest -bearing demand deposits, interest-bearing demand deposits, and savings deposits. Fair value approximates carrying value in these financial liabilities due to these products having no stated maturity. Additionally, financial liabilities for which fair value approximates carrying value included overnight borrowings such as federal funds purchased and securities sold under agreements to repurchase. The following table summarizes our fair value estimates: Fair Value Hierarchy Carrying Estimated Level 1 Level 2 Level 3 (Dollars in thousands) amount fair value inputs inputs Inputs March 31, 2026: Financial Assets: Loans, net (1) $ 575,264 $ 561,030 — — $ 561,030 Financial Liabilities: Time Deposits $ 180,957 $ 180,076 — 180,076 $ — December 31, 2025: Financial Assets: Loans, net (1) $ 558,178 $ 542,382 — — $ 542,382 Loans held for sale 172 179 — 179 — Financial Liabilities: Time Deposits $ 176,801 $ 176,137 — 176,137 $ — ( 1) Represents loans, net of allowance for credit losses. The fair value of loans was measured using an exit price notion. Table of Contents 27