What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-28 · 94 added, 126 removed, 1211 unchanged (15% of the section changed)

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Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

To the Board of Directors and Stockholders

Bank First Corporation

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(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

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Basis for Opinion

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,

and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Loans – Qualitative Factor Adjustments

Description of the Critical Audit Matter

As described in Note 4 to the financial statements the Company’s allowance for credit losses on loans (“ACL-Loans”) was $44.4 million as of December 31, 2025.

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This required a high degree of effort, specialized skills and knowledge, and significant judgment.

How the Critical Audit Matter Was Addressed in the Audit

The primary procedures we performed to address this critical audit matter included:

● Evaluated the design and operating effectiveness of controls relating to the ACL-Loans, including:

Controls over the completeness and accuracy of data included in the model used to determine the ACL-Loans, and

Controls over management’s review and approval of the ACL-Loans, including management’s estimation of the qualitative factor adjustments applied within the qualitative framework.

o Controls over the completeness and accuracy of data included in the model used to determine the ACL-Loans, and

o Controls over management’s review and approval of the ACL-Loans, including management’s estimation of the qualitative factor adjustments applied within the qualitative framework.

● Evaluated the reasonableness of management’s qualitative factor adjustments, including testing management’s identification of qualitative factors, the application of qualitative factor adjustments within the model, and assessing the completeness and accuracy of data utilized in development of the qualitative adjustments.

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December 31, 2024

(In thousands, except share and per share data)

(in thousands, except shares and per share data)

Cash and due from banks

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Total deposits

Securities sold under repurchase agreements

Notes payable

Subordinated notes

Junior subordinated debenture

Other liabilities

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Reclassification adjustment for losses included in net income

Income tax benefit (expense)

Income tax (expense) benefit

Total other comprehensive income (loss)

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Stockholders’

Income (loss)

(dollars in thousands)

Balance at January 1, 2023

Other comprehensive loss

Other comprehensive income

Purchase of treasury stock

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Vesting of restricted stock awards

Shares issued in the acquisition of Denmark Bancshares, Inc.

Adoption of new accounting pronouncement

Shares issued in the acquisition of Hometown Bancorp, Ltd.

( 1,450,272 shares)

Balance at December 31, 2023

Other comprehensive income

Other comprehensive loss

Purchase of treasury stock

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Vesting of restricted stock awards

Adoption of new accounting pronouncement

Shares issued in the acquisition of Hometown Bancorp, Ltd.

( 1,450,272 shares)

Balance at December 31, 2024

Other comprehensive loss

Other comprehensive income

Purchase of treasury stock

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Amortization of intangibles

Net (accretion) amortization of securities

Net accretion of securities

Amortization of stock-based compensation

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Net earnings on life insurance

(Increase) decrease in other assets

Increase (decrease) in other liabilities

Increase in other assets

(Decrease) increase in other liabilities

Net cash provided by operating activities

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Net increase (decrease) in deposits

Net increase (decrease) in securities sold under repurchase agreements

Net decrease in securities sold under repurchase agreements

Proceeds from advances of notes payable

Repayment of notes payable

( 3,129,584 )

Proceeds from issuance of subordinated notes

Repayment of subordinated notes

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Repurchase of common stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

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Supplemental disclosures of cash flow information:

Cash paid during the year for:

Cash paid during the period for:

Supplemental schedule of noncash activities:

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Amortization of unrealized holding gains on securities transferred from available for sale to held to maturity recognized in other comprehensive income, net of tax

Change in unrealized gains and losses on investment securities available for sale, net of tax

Change in unrealized loss on investment securities available for sale, net of tax

Fair value of assets acquired

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The Company uses a current expected loss model (“CECL”) to evaluate the reasonable value of the ACL - Loans.

This methodology considers historical loss rates and other qualitative adjustments, as well as a forward-looking component that considers reasonable and supportable forecasts over the expected life of each loan.

This methodology to estimate credit losses over the expected life of each loan considers historical loss rates and other qualitative adjustments, as well as a forward-looking component that considers reasonable and supportable forecasts.

To develop the ACL – Loans estimate under CECL, the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements;

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and determines qualitative adjustments based on factors and conditions unique to the Company’s portfolio.

The Company further individually evaluates PCD loans and other loans that no longer share similar risk characteristics with the collectively evaluated pools based on the amount and timing of

estimated future cash flows or collateral values and establishes specific reserves when these estimated future cash flows or collateral values do not justify the carrying value of the loan.

The Company further individually evaluates PCD loans and other loans that no longer share similar risk characteristics with the collectively evaluated pools based on

the amount and timing of estimated future cash flows or collateral values and establishes specific reserves when these estimated future cash flows or collateral values do not justify the carrying value of the loan.

Management believes that the ACL - Loans is adequate.

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Changes in fair value are recorded as an adjustment to earnings.

The Company performs a “qualitative” assessment of goodwill to determine whether further impairment testing of indefinite-lived intangible assets is necessary on at least an annual basis.

If it is determined, as a result of performing a qualitative assessment over goodwill, that it is more likely than not that goodwill is impaired, management will perform an impairment test to determine if the carrying value of goodwill is realizable.

The Company performs an assessment of goodwill to determine whether further impairment testing of indefinite-lived intangible assets is necessary on at least an annual basis.

If it is determined, as a result of performing an impairment assessment over goodwill, that it is more likely than not that goodwill is impaired, management will perform an impairment test to determine if the carrying value of goodwill is realizable.

The Company evaluated goodwill and core deposit intangibles for impairment during 2025, 2024 and 2023, determining that there was no goodwill or core deposit intangible impairment.

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Recently Implemented Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

It provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The updated guidance was originally effective for all entities from March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU 2022-06 which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

The Company has been diligent in responding to reference rate reform and no longer has any products tied to rates impacted by this reform.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU is intended to improve the disclosures about a public entity’s reportable segments and addresses requests from investors and other decision makers for additional, more detailed information about a reportable segment’s expenses.

The amendment applies to all public entities that are required to report segment information in accordance with Topic 280.

This update was effective for annual periods beginning after December 15, 2023, applied retrospectively to all periods presented.

Adoption of the amendment did not have a material impact on these consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU is intended to improve the transparency and decision usefulness of income tax disclosures by requiring specific categories in the rate reconciliation table and disaggregation of taxes paid by jurisdiction.

All public entities must also provide additional information for reconciling items that meet a specific quantitative threshold.

This update was effective for annual periods beginning after December 15, 2024.

Adoption of this update led to increased disclosure in Note 16 – Income Taxes, but did not cause any change in the accounting for operational results.

New Accounting Pronouncements That Have Not Yet Been Adopted

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The Company does not anticipate a significant impact to its financial statement disclosures as a result of this ASU.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

All public entities must also provide additional information for reconciling items that meet a specific quantitative threshold.

This update is effective for annual periods beginning after December 15, 2024.

The Company anticipates that this standard will require expanded disclosure related to its income tax exposure, but will not cause any change in the accounting for operational results.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220):

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Clarifying the Effective Date, and is now effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company anticipates that this standard may impact the level of detail in disclosures of expense categories, but will not cause any change in the accounting for operational results.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326):

Purchased Loans.

This ASU expands the population of acquired financial assets subject to the gross-up approach contained within Topic 326.

In accordance with this update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” are classified as purchased seasoned loans (“PSL”s) and accounted for using the gross-up approach at acquisition.

All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed to be PSLs.

This update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods, with early adoption permitted.

The Company intends to adopt this update early, and anticipates that it will have a significant impact on the accounting of its acquisition of Centre 1 Bancorp, Inc.

(“Centre”) which closed on January 1, 2026.

Non-PCD loans acquired as part of that transaction classified as PSL will be accounted for utilizing the gross-up approach.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) – Narrow Scope Improvements.

This ASU is intended to better clarify interim disclosure requirements and the applicability of Topic 270 by improving the navigability of the required interim disclosures and clarifying what guidance is applicable.

The amendments also provide additional guidance on what disclosures would be provided in interim reporting periods.

This update is effective for annual periods beginning after December 15, 2027, with early adoption permitted.

The Company anticipates that this standard may impact the specific disclosures it utilizes in interim reports, but will not cause any change in the accounting for operational results.

Note 2 Acquisition

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Hometown’s principal activity was the ownership and operation of Hometown Bank, a state-chartered banking institution that operated ten (10) branches in Wisconsin at the time of closing.

The merger consideration totaled approximately $ 130,452,000 .

The merger consideration totaled approximately $ 130.5 million.

Pursuant to the terms of the Merger Agreement, Hometown shareholders could elect to receive either 0.3962 shares of the Company’s common stock or $ 29.16 in cash for each outstanding share of Hometown common stock, subject to a maximum of 30 % cash consideration in total, with cash paid in lieu of any remaining fractional share.

Company stock issued totaled 1,450,272 shares valued at approximately $ 115,079,000 , with cash of $ 15,373,000 comprising the remainder of merger consideration.

The fair value of the assets acquired and liabilities assumed on February 10, 2023 was as follows:

Company stock issued totaled 1,450,272 shares valued at approximately $ 115.1 million, with cash of $ 15.4 million comprising the remainder of merger consideration.

The fair value of the assets acquired and liabilities assumed on February 10, 2023 was as follows (dollar amounts in thousands):

As Recorded by

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(1) Refinement consists of adjustments to the initial fair value estimates of other assets and liabilities.

Goodwill of $ 64,881,000 arising from the merger consisted largely of synergies and the cost saves resulting from the combining of operations of the companies, and is not expected to be deductible for income tax purposes.

Goodwill of $ 64.9 million arising from the merger consisted largely of synergies and the cost saves resulting from the combining of operations of the companies, and is not expected to be deductible for income tax purposes.

The Company purchased loans through this merger for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination.

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December 31, 2025

Treasury securities

Obligations of U.S.

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December 31, 2024

Treasury securities

Obligations of U.S.

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Corporate notes

Certificates of deposit

Total available for sale securities

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Corporate notes

Certificate of deposits

December 31, 2024 - Held to Maturity

Treasury securities

Obligations of states and political subdivisions

As of December 31, 2025, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as the Company does not believe any of the debt securities are credit impaired.

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For all loan pools, the Company utilizes and forecasts the national unemployment rate as a loss driver.

The Company also utilizes and forecasts national GDP growth as a second loss driver for its commercial real estate – owner occupied and construction and development pools, the CRE (SA) interest rates and price index as a second loss driver for its commercial real estate – non-owner occupied pool, the real retail and food services sales index as a second loss driver for its consumer loan pool, and the S&P Case-Schiller US home price index as a second loss driver for its residential 1-4 family pool.

The Company also utilizes and forecasts national GDP growth as a second loss driver for its commercial real estate – owner occupied and construction and development pools, the CRE (SA) interest rates and price index as a second loss driver for its commercial real estate – non-owner occupied pool, and the S&P Case-Schiller US home price index as a second loss driver for its residential 1-4 family pool.

The real retail and food services sales index was used as a second loss driver for its consumer loan pool through 2024, but was replaced by the GDP forecast for 2025 due to the GDP forecast being a more reliably forecastable driver and because our loss driver study indicated changes to GDP had a higher correlation to historic losses in this pool.

This change did not have a material impact on the ACL.

For both national unemployment and national GDP growth the Company utilized a twelve-month forecast period, followed by a twelve-month reversion to the mean.

The Company utilized the high-end range of the Federal Reserve Bank Open Market Committee forecast for national unemployment and the low-end range for national GDP growth at December 31, 2025.

As of December 31, 2024, the Company anticipates the national unemployment rate to rise during the forecast period and the national GDP growth rate to decline.

As of December 31, 2025, the Company anticipates the national unemployment rate to remain consistent during the forecast period and the national GDP growth rate to rise slightly.

The Company utilized long-term averages for the remaining loss drivers.

The reasonable and supportable period and reversion period are re-evaluated each quarter by the Company and are dependent on the current economic environment among other factors.

The Company performed a loss driver refresh study to determine whether the utilized loss drivers remained appropriate along with a study analyzing assumptions around prepayments, curtailments and funding within the model during 2024.

While the fundamental methodology remained unchanged, these studies along with improved economic forecasts throughout 2024 served to marginally reduce the risk of loss projected within the model.

As noted above, the Company performed its annual loss driver refresh study to determine whether the utilized loss drivers remained appropriate and also performed its annual study analyzing assumptions around prepayments, curtailments and funding within the model during 2025.

While the fundamental methodology remained unchanged, these annual studies along with improved economic forecasts throughout 2025 served to marginally reduce the risk of loss projected within the model.

The expected credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

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20 % of factor), quality of loan review system ( 5 % of factor) and changes in economic conditions ( 20 % of factor).

Changes in economic conditions, changes in volume and trends of problem loans, and changes in underlying collateral values were adjusted to reflect slight reductions to the risk characteristics in each during 2024.

Changes in external factors, primarily the overall easing of the regulatory environment, led to management reducing the associated risk related to this component during 2025.

All other qualitative factors remained consistent throughout the year.

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ACL - Loans - January 1, 2024

Adoption of ASU 2016-13

ACL - Loans on PCD loans acquired

ACL - Loans - December 31, 2024

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A summary of past due loans as of December 31, 2025 are as follows (dollar amounts in thousands):

allocated ACL

Commercial/industrial

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A summary of past due loans as of December 31, 2024 are as follows (dollar amounts in thousands):

allocated ACL

Commercial/industrial

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Loans to officers, directors, and shareholders owning 10% or more of the Company, that we are aware of, were made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others and did not involve more than the normal risk of collectability or present other unfavorable features.

Such transactions were entered into in the ordinary course of business and in compliance with applicable laws and regulations governing insider transactions.

A summary of loans to directors, executive officers, principal shareholders, and their affiliates for the years ended December 31 is as follows (dollar amounts in thousands):

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Deposits from directors, executive officers, principal shareholders, and their affiliates totaled approximately $ 20.9 million and $ 22.5 million as of December 31, 2025 and 2024, respectively.

See Note 9 for additional information regarding transactions with related parties.

Note 6 Mortgage Servicing Rights

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Amount recognized through earnings

MSR asset acquired

Fair value at end of period

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During the years ended December 31, 2025 and 2024, the Company utilized economic assumptions in measuring the initial value of MSRs for loans sold whereby servicing is retained by the Company.

The economic assumptions used at December 31, 2024 and 2023 included constant prepayment speed of 8.2 and 7.5 months and a discount rate of 10.18 % and 10.19 %, respectively.

The economic assumptions used at December 31, 2025 and 2024 included constant prepayment speed of 8.5 and 8.2 months and a discount rate of 10.17 % and 10.18 %,

respectively.

The constant prepayment speeds are obtained from publicly available sources for each of the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation loan programs that the Company originates under.

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Ansay also has available revolving lines of credit totaling $ 22.0 million with the Company with an outstanding balance of $ 7.9 million as of December 31, 2025.

There were no outstanding balances as of December 31, 2023.

There was $ 0.2 million of outstanding balances as of December 31, 2024.

Ansay maintained deposits at the Bank totaling $ 4.5 million and $ 8.5 million as of December 31, 2025 and 2024, respectively.

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Prior to this sale, the investment was accounted for on the equity method.

The Company’s undistributed earnings from its investment in UFS prior to sale were approximately $ 2.3 million and $ 3.1 million for the years ended December 31, 2023 and 2022, respectively.

Data processing service fees paid by the Company to UFS were approximately $ 5.5 million and $ 4.3 million for the years ended December 31, 2023 and 2022, respectively.

The Company’s undistributed earnings from its investment in UFS prior to sale were approximately $ 2.3 million for the year ended December 31, 2023.

Data processing service fees paid by the Company to UFS were approximately $ 5.5 million for the year ended December 31, 2023.

The business operations of UFS consist of providing data processing and other information technology services to the Company and other financial institutions.

During 2023 and 2022 the Company received $ 1.7 million and $ 2.4 million in dividends from UFS, respectively.

During 2023 the Company received $ 1.7 million in dividends from UFS.

Note 10 Core Deposit Intangibles

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At December 31, 2025 and 2024, respectively, total loans available to be pledged as collateral on FHLB borrowings were approximately $ 1.10 billion and $ 1.47 billion and, of that total, $ 590.2 million and $ 818.2 million qualified as eligible collateral.

The Bank owned $ 6.3 million and $ 5.1 million of FHLB stock at December 31, 2024 and 2023, respectively.

The Bank owned $ 6.3 million of FHLB stock at December 31, 2025 and 2024.

At December 31, 2025 and 2024, the Bank had available liquidity of $ 480.1 million and $ 682.6 million for future draws, respectively.

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These notes are callable on or after August 6, 2027 and qualify for Tier 2 capital for regulatory purposes.

As a result of the acquisition of Hometown during February 2023, the Company acquired all of the common securities of Hometown’s wholly-owned subsidiaries, Hometown Bancorp, Ltd.

Capital Trust I (“Trust I”) and Hometown Bancorp, Ltd.

Capital Trust II (“Trust II”).

The Company also assumed adjustable rate junior subordinated debentures issued to these trusts.

The junior subordinated debentures issued to Trust I and Trust II totaled $ 4.1 million and $ 8.2 million, respectively, carried interest at floating rates resetting on each quarterly payment date, and were due on January 7, 2034 and December 15, 2036, respectively.

Applicable discounts originally totaling $ 1.5 million were recorded to carry the assumed debentures at their then estimated fair value and were being accreted to interest expense over the remaining life of the debentures.

Both junior subordinated debentures were redeemable by the Company, subject to prior approval by the Federal Reserve Bank, on any quarterly payment date.

The junior subordinated debentures represented the sole asset of Trust I and Trust II.

The trusts were not included in the Company’s consolidated financial statements.

The net effect of all agreements assumed with respect to Trust I and Trust II is that the Company, through payments on its debentures, was liable for the distributions and other payments required on the trusts’ preferred securities.

Trust I and Trust II also provided the Company with $ 12.0 million in Tier 1 capital for regulatory capital purposes.

The Company redeemed the junior subordinated debenture related to Trust II during December 2023, resulting in Trust II’s dissolution.

The Company redeemed the junior subordinated debenture related to Trust I on January 8, 2024, resulting in Trust I’s dissolution.

As a result of the redemption of the junior subordinated debenture related to Trust II and notification of the Company’s intent to redeem the junior subordinated debenture of Trust I prior to December 31, 2023, the Company amortized the remaining original fair value discounts into interest expense during 2023.

Note 16 Income Taxes

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Total provision for income taxes

State taxes were paid to Minnesota, Michigan, and Florida, and in each of these states the amounts paid were immaterial to these financial statements.

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities.

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Deferred tax assets:

Deferred compensation

Premises and equipment

Allowance for credit losses

Accrued vacation and severance

Other real estate owned

Purchase accounting

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The plan is available to all employees over 18 years of age after completion of three months of service.

Employees participating in the plan may elect to defer a minimum of 2 % of compensation up to the limits specified by law.

Employees participating in the plan may elect to defer a minimum of 2 % of compensation up to the limits specified

All participants of the 401(k) plan are eligible for the ESOP and may allocate their contributions to purchase shares of the Company’s stock.

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The Company may make discretionary contributions up to the limits established by IRS regulations.

The Company discretionary match was 60 % of participant contributions up to 10 % of the employee’s salary in 2024 and 35 % of participant contributions up to 10 % of the employee’s salary in 2023, and 2022.

With the increase in discretionary match, the Company discontinued the discretionary contributions to the plan in 2024.

The Company made additional discretionary contributions to the plan of $ 0.8 million and $ 0.6 million in 2023 and 2022, respectively.

The Company discretionary match was 60 % of participant contributions up to 10 % of the employee’s salary in 2025 and 2024, and 35 % of participant contributions up to 10 % of the employee’s salary in 2023.

With the increase in discretionary match starting in 2024, the Company discontinued the discretionary contributions to the plan.

Total expense associated with the plans was approximately $ 1.5 million, $ 1.3 million and $ 1.6 million in 2025, 2024 and 2023, respectively.

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The payoff is for the participant’s lifetime and is guaranteed to the participant or their surviving beneficiary for a minimum of 15 years.

Related expense for this agreement was approximately negligible for the years ended December 31, 2024, 2023 and 2022.

Related expense for this agreement was approximately $ 0.1 million for the years ended December 31, 2025 and 2024 and negligible for 2023.

Note 18 Stockholders’ Equity and Regulatory Matters

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Interest expense, provisions for credit losses, data processing and payroll provide the significant expenses in banking operation.

All operations are domestic.

All operations

are domestic.

Information reported internally for performance assessment by the chief operating decision maker is identical to that which is shown in the Consolidated Statements of Income.

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The Company leases certain properties under operating leases that resulted in the recognition of ROU lease assets of approximately $ 1.6 million and corresponding lease liabilities of similar value on the Company’s Consolidated Balance Sheets as of December 31, 2025 and 2024.

GAAP provides a number of optional practical expedients in transition.

The Company has elected the “ package of practical expedients,” which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs.

The Company also elected the use of the hindsight , a practical expedient which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised not available as of the lease’s inception.

The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months.

ROU assets or lease liabilities are not to be recognized for short-term leases.

The Company also elected the practical expedient to not separate lease and non-lease components for all leases, the majority of which consist of real estate common area maintenance expenses.

However, since these non-lease items are subject to change, they are treated and disclosed as variable payments in the quantitative disclosures below.

Lessee Leases

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Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

There were no liabilities measured at fair value on a recurring basis.

Information regarding the fair value of assets measured at fair value on a recurring basis is as follows (dollar amounts in thousands):

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Securities available for sale

Treasury securities

Obligations of U.S.

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Securities available for sale

Treasury securities

Obligations of U.S.

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Corporate notes

Certificates of deposit

Mortgage servicing rights

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As of December 31, 2025

Third party appraisals, sales contracts or brokered price options

Collateral discounts and estimated costs to sell

Loans individually evaluated

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Financial liabilities:

Securities sold under repurchase agreements

Notes payable

Subordinated notes

Junior subordinated debentures

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation.

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Subordinated notes

Junior subordinated notes

Other liabilities

4 unchanged sentences

Treasury stock, at cost

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Total stockholders’ equity

11 unchanged sentences

Cash flow from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Stock compensation

2 unchanged sentences

Other liabilities

Net cash used in operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities, net of effects of business combination:

7 unchanged sentences

Repayment of subordinate notes

Proceeds from subordinated notes

Cash dividends paid

2 unchanged sentences

Net cash used in financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning

17 unchanged sentences

Diluted earnings per common share

Note 25 Subsequent Merger Transaction

On January 1, 2026, the Company completed a merger with Centre, a bank holding company headquartered in Beloit, Wisconsin, pursuant to the merger agreement, dated as of July 17, 2025, by and between the Company and Centre, whereby Centre merged with and into the Company, and First National Bank and Trust, Centre’s wholly-owned banking subsidiary, merged with and into the Bank.

Centre’s principal activity was the ownership and operation of First National Bank and Trust, a federal-chartered banking institution that operated seventeen ( 17 ) branches in Wisconsin and Illinois at the time of closing.

The merger consideration totaled approximately $ 168.8 million.

Pursuant to the Merger Agreement, Centre shareholders were entitled to receive, for each share of Centre common stock that was outstanding immediately prior to the merger, 0.9200 shares of the Company’s common stock and cash in lieu of fractional shares.

Company stock issued totaled 1,382,940 shares valued at approximately $ 168.5 million, with cash of $ 0.3 million comprising the remainder of merger consideration.

After close the combined company had total assets of approximately $ 6.2 billion, loans of approximately $ 4.6 billion, and deposits of approximately $ 5.0 billion.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data