Bank First Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ ​ ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 686 ) ​ 69 ​ ​ ​ Consolidated Financial Statements: ​ ​ Consolidated balance sheets ​ 72 Consolidated statements of income ​ 73 Consolidated statements of comprehensive income ​ 74 Consolidated statements of changes in shareholders’ equity ​ 75 Consolidated statements of cash flows ​ 76-77 Notes to consolidated financial statements ​ 78-113 ​ ​ ​ 67 Table of Contents Bank First Corporation and Subsidiaries Manitowoc, Wisconsin Consolidated Financial Statements Years Ended December 31, 2024, 2023 and 2022 ​ ​ ​ TABLE OF CONTENTS ​ ​ ​ ​ ​ Report of Independent Registered Public Accounting Firm ​ 70 ​ ​ ​ Consolidated Financial Statements: ​ ​ Consolidated Balance Sheets ​ 73 Consolidated Statements of Income ​ 74 Consolidated Statements of Comprehensive Income ​ 75 Consolidated Statements of Stockholders’ Equity ​ 76 Consolidated Statements of Cash Flows ​ 77-78 Notes to Consolidated Financial Statements ​ 79-114 ​ ​ ​ ​ 68 Table of Contents Report of Independent Registered Public Accounting Firm ​ Board of Directors and Stockholders Bank First Corporation ​ Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Bank First Corporation and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (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. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. 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. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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 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. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definitions and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles. 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, 69 Table of Contents 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter 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. 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 $44.1 million as of December 31, 2024. To estimate the ACL – Loans the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements. Loans with similar risk characteristics are evaluated in pools and the Company utilizes a discounted cash flow (“DCF”) method where probability of default and loss given default assumptions are applied to a projective model of the pool’s cash flows while considering prepayment and principal curtailment effects. The Company utilizes peer call report data to measure historical credit loss experience with similar risk characteristics within the segments over an economic cycle and has incorporated macroeconomic drivers to adjust the historical loss experience estimate for reasonable and supportable forecasts that are quantitatively related to the Company’s historical credit loss experience. The expected credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses and include lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions. We identified the qualitative factor adjustments included in the ACL-Loans as a critical audit matter. The principal considerations for our determination included the high degree of judgment and subjectivity in auditing management’s identification and measurement of qualitative factor adjustments. This required a high degree of effort, specialized skills and knowledge, and significant judgment. 70 Table of Contents 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: 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. ● Evaluated management’s judgments and assumptions related to the qualitative adjustments by assessing relevant trends in credit quality and evaluating the relationship of the trends to the qualitative adjustments applied to the ACL-Loans. ​ /s/ Forvis Mazars, LLP We have served as the Company’s auditor since 2019. Atlanta, Georgia February 28, 2025 ​ 71 Table of Contents Bank First Corporation and Subsidiaries Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 ​ ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 59,164 ​ $ 69,973 Interest-bearing deposits ​ 202,168 ​ 177,495 Cash and cash equivalents ​ 261,332 ​ 247,468 Securities held to maturity, at amortized cost ( $ 109,424 and $ 103,626 fair value at December 31, 2024 and December 31, 2023, respectively) ​ 110,756 ​ 103,324 Securities available for sale, at fair value ( $ 235,909 and $ 154,318 amortized cost at December 31, 2024 and December 31, 2023, respectively) ​ 223,061 ​ 142,197 Loans held for sale ​ ​ 3,088 ​ ​ 3,012 Loans ​ ​ 3,517,168 ​ ​ 3,342,974 Allowance for credit losses - loans ("ACL-Loans") ​ ​ ( 44,151 ) ​ ​ ( 43,609 ) Loans, net ​ 3,473,017 ​ 3,299,365 Premises and equipment, net ​ 71,108 ​ 69,891 Goodwill ​ 175,106 ​ 175,106 Other investments ​ 22,643 ​ 21,366 Cash value of life insurance ​ 61,542 ​ 61,292 Core deposit intangibles, net ​ 21,203 ​ 26,996 Mortgage servicing rights ("MSR") ​ ​ 13,369 ​ ​ 13,668 Other real estate owned (“OREO”) ​ 741 ​ 2,573 Investment in Ansay and Associates, LLC ("Ansay") ​ 34,093 ​ 32,926 Other assets ​ 24,001 ​ 22,658 TOTAL ASSETS ​ $ 4,495,060 ​ $ 4,221,842 Liabilities and Stockholders’ Equity ​ ​ ​ Liabilities: ​ ​ Deposits: ​ ​ Interest-bearing deposits ​ $ 2,636,192 ​ $ 2,382,185 Noninterest-bearing deposits ​ 1,024,881 ​ 1,050,735 Total deposits ​ 3,661,073 ​ 3,432,920 Securities sold under repurchase agreements ​ — ​ 75,747 Notes payable ​ 135,372 ​ 35,270 Subordinated notes ​ 12,000 ​ 12,000 Junior subordinated debenture ​ ​ — ​ ​ 4,124 Other liabilities ​ 46,932 ​ 41,983 Total liabilities ​ 3,855,377 ​ 3,602,044 Stockholders’ equity: ​ ​ Serial preferred stock - $ 0.01 par value ​ ​ Authorized - 5,000,000 shares ​ — ​ — Common stock - $ 0.01 par value ​ ​ Authorized - 20,000,000 shares ​ ​ Issued - 11,515,130 shares as of December 31, 2024 and December 31, 2023 ​ ​ Outstanding - 10,012,088 and 10,365,131 shares as of December 31, 2024 and December 31, 2023, respectively ​ 115 ​ 115 Additional paid-in capital ​ 333,842 ​ 333,815 Retained earnings ​ 398,002 ​ 348,001 Treasury stock, at cost - 1,503,042 and 1,149,999 shares as of December 31, 2024 and December 31, 2023, respectively ​ ( 82,925 ) ​ ( 53,387 ) Accumulated other comprehensive loss ​ ( 9,351 ) ​ ( 8,746 ) Total stockholders’ equity ​ 639,683 ​ 619,798 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY ​ $ 4,495,060 ​ $ 4,221,842 ​ See accompanying notes to consolidated financial statements. ​ 72 Table of Contents Bank First Corporation and Subsidiaries Consolidated Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ ​ 2024 2023 2022 ​ ​ (In Thousands, except per share amounts) Interest income: ​ ​ ​ ​ ​ ​ ​ Loans, including fees ​ $ 189,007 ​ $ 168,815 ​ $ 106,951 Securities: ​ ​ ​ ​ ​ ​ Taxable ​ 10,338 ​ 8,460 ​ 5,887 Tax-exempt ​ 964 ​ 1,035 ​ 1,801 Other ​ 6,096 ​ 4,173 ​ 1,895 Total interest income ​ 206,405 ​ 182,483 ​ 116,534 Interest expense: ​ ​ ​ Deposits ​ 64,168 ​ 42,367 ​ 10,268 Securities sold under repurchase agreements ​ 22 ​ 1,813 ​ 542 Borrowed funds ​ 4,415 ​ 4,823 ​ 1,639 Total interest expense ​ 68,605 ​ 49,003 ​ 12,449 Net interest income ​ 137,800 ​ 133,480 ​ 104,085 Provision for credit losses ​ ( 800 ) ​ 4,682 ​ 2,200 Net interest income after provision for credit losses ​ 138,600 ​ 128,798 ​ 101,885 Noninterest income: ​ ​ ​ ​ ​ ​ Service charges ​ 8,043 ​ 7,033 ​ 5,810 Income from Ansay ​ 3,502 ​ 2,922 ​ 2,558 Income from UFS, LLC (“UFS”) ​ — ​ 2,265 ​ 3,055 Loan servicing income ​ 2,938 ​ 2,860 ​ 1,922 Valuation adjustment on MSR ​ ​ ( 299 ) ​ ​ 395 ​ ​ 2,865 Net gain on sales of mortgage loans ​ 1,298 ​ 897 ​ 1,560 Gain on sale of UFS ​ ​ — ​ ​ 38,904 ​ ​ — Other ​ 4,198 ​ 2,839 ​ 1,931 Total noninterest income ​ 19,680 ​ 58,115 ​ 19,701 Noninterest expense: ​ ​ ​ ​ ​ ​ Salaries, commissions, and employee benefits ​ 40,901 ​ 40,355 ​ 33,155 Occupancy ​ 5,957 ​ 5,670 ​ 5,467 Data processing ​ 9,692 ​ 8,011 ​ 6,324 Postage, stationery, and supplies ​ 885 ​ 1,084 ​ 771 Net (gain) loss on sales and valuations of OREO ​ ( 694 ) ​ 2,133 ​ ( 146 ) Net loss on sale of securities ​ ​ 34 ​ ​ 7,901 ​ ​ — Advertising ​ 313 ​ 326 ​ 271 Charitable contributions ​ 793 ​ 944 ​ 718 Federal deposit insurance ​ ​ 1,850 ​ ​ 1,831 ​ ​ 1,098 Outside service fees ​ 4,560 ​ 4,519 ​ 5,629 Amortization of intangibles ​ 5,793 ​ 6,324 ​ 2,318 Other ​ 8,683 ​ 9,021 ​ 6,348 Total noninterest expense ​ 78,767 ​ 88,119 ​ 61,953 Income before provision for income taxes ​ 79,513 ​ 98,794 ​ 59,633 Provision for income taxes ​ 13,950 ​ 24,280 ​ 14,419 Net Income ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Earnings per share - basic ​ $ 6.50 ​ $ 7.28 ​ $ 5.58 Earnings per share - diluted ​ $ 6.50 ​ $ 7.28 ​ $ 5.58 ​ See accompanying notes to consolidated financial statements. ​ 73 Table of Contents Bank First Corporation and Subsidiaries Consolidated Statements of Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In Thousands) Net Income ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Other comprehensive income (loss): ​ ​ ​ Unrealized gains (losses) on available for sale securities: ​ ​ ​ Unrealized holding gains (losses) arising during period ​ ( 760 ) ​ 1,302 ​ ( 26,266 ) Amortization of unrealized holding gains on securities transferred from available for sale to held to maturity ​ — ​ ( 1 ) ​ ( 1 ) Reclassification adjustment for losses included in net income ​ 34 ​ 7,901 ​ — Income tax benefit (expense) ​ 121 ​ ( 2,382 ) ​ 7,092 Total other comprehensive income (loss) ​ ( 605 ) ​ 6,820 ​ ( 19,175 ) Comprehensive income ​ $ 64,958 ​ $ 81,334 ​ $ 26,039 ​ See accompanying notes to consolidated financial statements. ​ 74 Table of Contents Bank First Corporation and Subsidiaries Consolidated Statements of Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ Serial ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ Other ​ Total ​ ​ Preferred ​ Common ​ Paid-in ​ Retained ​ Treasury ​ Comprehensive ​ Stockholders’ ​ ​ Stock ​ Stock ​ Capital ​ Earnings ​ Stock ​ Income (loss) ​ Equity (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at January 1, 2022 ​ $ — ​ $ 85 ​ $ 93,149 ​ $ 258,104 ​ $ ( 32,294 ) ​ $ 3,609 ​ $ 322,653 Net income ​ — ​ — ​ — ​ 45,214 ​ — ​ — ​ 45,214 Other comprehensive loss ​ — ​ — ​ — ​ — ​ — ​ ( 19,175 ) ​ ( 19,175 ) Purchase of treasury stock ​ — ​ — ​ — ​ — ​ ( 14,314 ) ​ — ​ ( 14,314 ) Sale of treasury stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 114 ​ ​ — ​ ​ 114 Cash dividends ( $ 0.94 per share) ​ — ​ — ​ — ​ ( 7,822 ) ​ — ​ — ​ ( 7,822 ) Amortization of stock-based compensation ​ — ​ — ​ 1,662 ​ — ​ — ​ — ​ 1,662 Vesting of restricted stock awards ​ — ​ — ​ ( 1,303 ) ​ — ​ 1,303 ​ — ​ — Shares issued in the acquisition of Denmark Bancshares, Inc. ( 1,579,530 shares) ​ ​ — ​ ​ 16 ​ ​ 124,755 ​ ​ — ​ ​ — ​ ​ — ​ ​ 124,771 Balance at December 31, 2022 ​ $ — ​ $ 101 ​ $ 218,263 ​ $ 295,496 ​ $ ( 45,191 ) ​ $ ( 15,566 ) ​ $ 453,103 Net income ​ — ​ — ​ — ​ 74,514 ​ — ​ — ​ 74,514 Other comprehensive income ​ — ​ — ​ — ​ — ​ — ​ 6,820 ​ 6,820 Purchase of treasury stock ​ — ​ — ​ — ​ — ​ ( 10,046 ) ​ — ​ ( 10,046 ) Sale of treasury stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 195 ​ ​ — ​ ​ 195 Cash dividends ( $ 1.15 per share) ​ — ​ — ​ — ​ ( 11,959 ) ​ — ​ — ​ ( 11,959 ) Amortization of stock-based compensation ​ — ​ — ​ 2,142 ​ — ​ — ​ — ​ 2,142 Vesting of restricted stock awards ​ — ​ — ​ ( 1,655 ) ​ — ​ 1,655 ​ — ​ — Adoption of new accounting pronouncement ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 10,050 ) ​ ​ — ​ ​ — ​ ​ ( 10,050 ) Shares issued in the acquisition of Hometown Bancorp, Ltd. ( 1,450,272 shares) ​ ​ — ​ ​ 14 ​ ​ 115,065 ​ ​ — ​ ​ — ​ ​ — ​ ​ 115,079 Balance at December 31, 2023 ​ $ — ​ $ 115 ​ $ 333,815 ​ $ 348,001 ​ $ ( 53,387 ) ​ $ ( 8,746 ) ​ $ 619,798 Net income ​ — ​ — ​ — ​ 65,563 ​ — ​ — ​ 65,563 Other comprehensive loss ​ — ​ — ​ — ​ — ​ — ​ ( 605 ) ​ ( 605 ) Purchase of treasury stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 31,928 ) ​ — ​ ( 31,928 ) Sale of treasury stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 245 ​ ​ — ​ ​ 245 Cash dividends ( $ 1.55 per share) ​ — ​ — ​ — ​ ( 15,562 ) ​ — ​ — ​ ( 15,562 ) Amortization of stock-based compensation ​ — ​ — ​ 2,172 ​ — ​ — ​ — ​ 2,172 Vesting of restricted stock awards ​ ​ — ​ — ​ ( 2,145 ) ​ — ​ 2,145 ​ — ​ — Balance at December 31, 2024 ​ $ — ​ $ 115 ​ $ 333,842 ​ $ 398,002 ​ $ ( 82,925 ) ​ $ ( 9,351 ) ​ $ 639,683 ​ See accompanying notes to consolidated financial statements. ​ 75 Table of Contents Bank First Corporation and Subsidiaries Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ ​ 2024 2023 2022 ​ ​ (In Thousands) Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Provision for credit losses ​ ( 800 ) ​ 4,682 ​ 2,200 Depreciation and amortization of premises and equipment ​ 2,253 ​ 2,073 ​ 1,656 Amortization of intangibles ​ 5,793 ​ 6,324 ​ 2,318 Net (accretion) amortization of securities ​ ( 3,411 ) ​ ( 2,377 ) ​ 315 Amortization of stock-based compensation ​ 2,172 ​ 2,142 ​ 1,662 Accretion of purchase accounting valuations ​ ( 4,635 ) ​ ( 6,884 ) ​ ( 2,559 ) Net change in deferred loan fees and costs ​ ( 488 ) ​ ( 1,434 ) ​ ( 881 ) Expense (benefit) from deferred income taxes ​ ​ 1,773 ​ ​ ( 1,724 ) ​ ​ ( 869 ) Change in fair value of MSR and other investments ​ 296 ​ ( 693 ) ​ ( 3,028 ) Loss from sale and disposal of premises and equipment ​ 375 ​ 363 ​ 57 Net (gain) loss on sale of OREO and valuation allowance ​ ( 694 ) ​ 2,133 ​ ( 146 ) Proceeds from sales of mortgage loans ​ 118,240 ​ 74,693 ​ 85,471 Originations of mortgage loans held for sale ​ ( 117,018 ) ​ ( 76,160 ) ​ ( 83,774 ) Gain on sales of mortgage loans ​ ( 1,298 ) ​ ( 897 ) ​ ( 1,560 ) Realized loss on sale of securities ​ 34 ​ 7,901 ​ — Realized gain on sale of UFS ​ ​ — ​ ​ ( 38,904 ) ​ ​ — Undistributed income of UFS joint venture ​ — ​ ( 2,265 ) ​ ( 3,055 ) Undistributed income of Ansay joint venture ​ ( 3,502 ) ​ ( 2,922 ) ​ ( 2,558 ) Net earnings on life insurance ​ ( 1,661 ) ​ ( 1,534 ) ​ ( 925 ) (Increase) decrease in other assets ​ ( 2,994 ) ​ ( 2,006 ) ​ 2,877 Increase (decrease) in other liabilities ​ 5,849 ​ 15,920 ​ ( 2,407 ) Net cash provided by operating activities ​ 65,847 ​ 52,945 ​ 40,008 Cash flows from investing activities, net of effects of business combination: ​ ​ ​ Activity in securities available for sale and held to maturity: ​ ​ ​ Sales ​ 10,206 ​ 76,038 ​ — Maturities, prepayments, and calls ​ 206,357 ​ 126,737 ​ 14,690 Purchases ​ ( 302,209 ) ​ ( 26,646 ) ​ ( 142,414 ) Proceeds from other investments ​ ​ — ​ ​ 248 ​ ​ — Net increase in loans ​ ( 168,856 ) ​ ( 37,410 ) ​ ( 198,000 ) Proceeds from sale of UFS ​ ​ — ​ ​ 51,674 ​ ​ — Dividends received from UFS ​ — ​ 1,747 ​ 2,408 Dividends received from Ansay ​ 2,335 ​ 1,924 ​ 1,960 Proceeds from sale of OREO ​ 3,938 ​ 1,827 ​ 320 Net (purchase) sales of Federal Home Loan Bank (“FHLB”) stock ​ ( 1,274 ) ​ 262 ​ ( 635 ) Net purchases of Federal Reserve Bank (“FRB”) stock ​ ​ — ​ ​ ( 3,880 ) ​ ​ ( 3,627 ) Proceeds from life insurance ​ 1,411 ​ — ​ — Proceeds from sale of premises and equipment ​ 2,380 ​ — ​ — Purchases of premises and equipment ​ ( 7,225 ) ​ ( 13,484 ) ​ ( 6,872 ) Net cash received in business combination ​ — ​ 89,959 ​ 154,364 Net cash (used in) provided by investing activities ​ ( 252,937 ) ​ 268,996 ​ ( 177,806 ) ​ ​ 76 Table of Contents Bank First Corporation and Subsidiaries Consolidated Statements of Cash Flows - (continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ ​ 2024 2023 2022 ​ ​ (In Thousands) Cash flows from financing activities, net of effects of business combination: ​ ​ ​ ​ Net increase (decrease) in deposits ​ $ 228,070 ​ $ ( 159,410 ) ​ $ ( 72,879 ) Net increase (decrease) in securities sold under repurchase agreements ​ ( 75,747 ) ​ ( 21,449 ) ​ 56,074 Proceeds from advances of notes payable ​ 140,000 ​ 121,700 ​ 3,122,700 Repayment of notes payable ​ ( 40,000 ) ​ ( 93,107 ) ​ ( 3,129,584 ) Proceeds from issuance of subordinated notes ​ ​ — ​ ​ — ​ ​ 6,000 Repayment of subordinated notes ​ ​ — ​ ​ ( 11,500 ) ​ ​ — Repayment of junior subordinated debentures ​ ​ ( 4,124 ) ​ ​ ( 8,248 ) ​ ​ — Dividends paid ​ ( 15,562 ) ​ ( 11,959 ) ​ ( 7,822 ) Proceeds from sales of common stock ​ 245 ​ 195 ​ 114 Repurchase of common stock ​ ( 31,928 ) ​ ( 10,046 ) ​ ( 14,314 ) Net cash provided by (used in) financing activities ​ 200,954 ​ ( 193,824 ) ​ ( 39,711 ) Net increase (decrease) in cash and cash equivalents ​ 13,864 ​ 128,117 ​ ( 177,509 ) Cash and cash equivalents at beginning of year ​ 247,468 ​ 119,351 ​ 296,860 Cash and cash equivalents at end of year ​ $ 261,332 ​ $ 247,468 ​ $ 119,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures of cash flow information: ​ ​ ​ Cash paid during the year for: ​ ​ ​ Interest ​ $ 65,970 ​ $ 44,145 ​ $ 11,311 Income taxes ​ 14,086 ​ 23,806 ​ 14,135 Supplemental schedule of noncash activities: ​ ​ ​ ​ ​ ​ Loans transferred to OREO ​ 412 ​ — ​ 24 Closed branch building transferred to OREO ​ ​ 1,748 ​ ​ 2,623 ​ ​ 1,115 MSR resulting from sale of loans ​ 1,343 ​ 879 ​ 771 Amortization of unrealized holding gains on securities transferred from available for sale to held to maturity recognized in other comprehensive income, net of tax ​ — ​ ( 1 ) ​ ( 1 ) Change in unrealized gains and losses on investment securities available for sale, net of tax ​ ( 639 ) ​ ​ ( 1,080 ) ​ ​ ( 19,174 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition: ​ ​ ​ ​ ​ ​ ​ ​ Fair value of assets acquired ​ $ — ​ $ 615,105 ​ $ 685,840 Fair value of liabilities assumed ​ — ​ 549,564 ​ 612,700 Net assets acquired ​ $ — ​ $ 65,541 ​ $ 73,140 Common stock issued in acquisition ​ $ — ​ $ 115,079 ​ $ 124,771 ​ See accompanying notes to consolidated financial statements. ​ 77 Table of Contents Bank First Corporation and Subsidiaries Notes to Consolidated Financial Statements Note 1 Summary of Significant Accounting Policies The accounting and reporting policies of Bank First Corporation and Subsidiaries (“Company”) conform to generally accepted accounting principles (“GAAP”) in the United States and general practices within the financial institution industry. Significant accounting and reporting policies are summarized below. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Bank First, National Association (“Bank”). The Bank’s wholly owned subsidiaries are Bank First Investments, Inc., TVG Holdings, Inc. (“TVG") and BFC Title LLC. All significant intercompany balances and transactions have been eliminated. TVG has an investment in a minority-owned subsidiary, Ansay, which is accounted for using the equity method in the consolidated financial statements. TVG owns 40.0 % of Ansay. The Bank owned 49.8 % of UFS, which provides data processing solutions to over 60 banks in the Midwest. On October 1, 2023, it sold 100 % of its member interest in UFS to a third party. Organization The Company provides a variety of financial services to individual and business customers, primarily located in Wisconsin, through the Bank. The Bank is subject to competition from other traditional and nontraditional financial institutions and is also subject to the regulations of certain federal agencies and undergoes periodic examinations by those regulatory authorities including the Office of the Comptroller of the Currency and the Federal Reserve Bank. Use of Estimates in Preparation of Financial Statements The preparation of the accompanying consolidated financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates. The allowance for credit losses, carrying value of real estate owned, carrying value of goodwill, fair value of mortgage servicing rights, and fair values of financial instruments are inherently subjective and are susceptible to significant change. Business Combinations The Company accounts for business combinations under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company recognizes the full fair value of the assets acquired and liabilities assumed and immediately expenses transaction costs. If the amount of consideration exceeds the fair value of assets purchased less the fair value of liabilities assumed, goodwill is recorded. Alternatively, if the amount by which the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration paid, a gain (bargain purchase gain) is recorded. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Results of operations of the acquired business are included in the statement of income from the effective date of the acquisition. Additional information regarding acquisitions is provided in Note 2. Cash and Cash Equivalents For purposes of reporting cash flows in the consolidated financial statements, cash and cash equivalents include cash on hand, interest-bearing and noninterest-bearing accounts in other financial institutions, and federal funds sold, all of which have original maturities of three months or less. Generally, federal funds are purchased and sold for one day periods. In the normal course of business, the Company maintains cash and due from bank balances with correspondent banks. Accounts at each institution that are insured by the Federal Deposit Insurance Corporation have up to $250,000 of insurance. Total uninsured balances held at December 31, 2024 and 2023 were approximately $ 1.6 million and $ 3.1 million, respectively. ​ 78 Table of Contents Securities Securities are classified as held to maturity (“HTM”) or available for sale (“AFS”) at the time of purchase. Investment securities classified as HTM, which management has the intent and ability to hold to maturity, are reported at amortized cost. Investment securities classified as AFS, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. The net carrying value of debt securities classified as HTM or AFS is adjusted for amortization of premiums and accretion of discounts utilizing the effective interest method over the expected estimated maturity. Such amortization and accretion is included as an adjustment to interest income from securities. Interest and dividends are included in interest income from securities. Transfers of debt securities into the HTM classification from the AFS classification are made at fair value as of the date of transfer. The unrealized holding gain or loss as of the date of transfer is retained in other comprehensive income and in the carrying value of the HTM securities, establishing the amortized cost of the security. These unrealized holding gains and losses as of the date of transfer are amortized or accreted over the remaining life of the security. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. The Bank evaluates securities for potential credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. For AFS securities, management determines whether the decline in fair value below the amortized cost basis (impairment) is due to credit-related or other factors. In making that evaluation, management considers the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Any impairment on AFS securities that is related to factors other than credit is recognized in other comprehensive income, net of related deferred income taxes. Credit-related impairment on AFS securities is recognized as an allowance for credit losses (“ACL”) on the balance sheet based on the amount by which the amortized cost basis exceeds the fair value, with a corresponding charge to net income. Both the ACL and charge to net income may be reversed if conditions change. However, if the Company intends to sell, or more likely than not will be required to sell, an impaired AFS security before recovering its amortized cost basis, the entire impairment must be recognized in net income with a corresponding adjustment to the security’s amortized cost basis rather than through the establishment of an ACL. For HTM securities, management determines whether an ACL is necessary after considering the facts and circumstances of the underlying investment securities and evaluates expected credit losses by security type, aggregated by similar risk characteristics, based on historical credit losses adjusted for current conditions and supportable forecasts. The Company’s HTM portfolio primarily consists of U.S. Treasury securities which have an explicit government guarantee; therefore, no ACL has been recorded for these securities. Other Investments Other investments are carried at cost, minus impairment if any, or, where available, recently observable market prices, which approximates fair value, and consist of FHLB stock, FRB stock, Bankers’ Bancorporation stock, and public and private company securities. Other investments are evaluated for impairment at least on an annual basis. Loans Held for Sale Loans originated and intended for sale in the secondary market, consisting of the current origination of certain fixed-rate mortgage loans, are carried at the lower of cost or estimated fair value in the aggregate. A gain or loss is recognized at the time of the sale reflecting the present value of the difference between the contractual interest rate of the loans sold and the yield to the investor, adjusted for the initial value of mortgage servicing rights associated with loans sold with servicing retained. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Loans and Related Interest Income - Originated Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are carried at their amortized cost basis, which is the unpaid principal balance outstanding, net of deferred loan fees and costs and any direct principal charge-offs. 79 Table of Contents Interest income is accrued on the unpaid principal balance using the simple interest method. The accrual of interest income on loans is discontinued when, in the opinion of management, there is reasonable doubt as to the borrower’s ability to meet payment of interest or principal when due. Loans are generally placed on nonaccrual status when contractually past due 90 days or more as to interest or principal, though they may be placed in such status earlier. Loans past due 90 days or more may continue on accrual only when they are well secured and/or in process of collection or renewal. When interest accrual is discontinued, all previously accrued but uncollected interest is reversed against current period interest income. Except in very limited circumstances, cash collections on nonaccrual loans are credited to the loan receivable balance and no interest income is recognized on those loans until the principal balance is paid in full. Accrual of interest may be resumed when the customer is current on all principal and interest payments and has been paying on a timely basis for a sustained period of time. A description of each segment of the loan portfolio, including the corresponding credit risk, is included below: Commercial / Industrial – Commercial and industrial loans are typically made to small and middle-market established businesses involved in professional services, accommodation and food services, health care, financial services, wholesale trade, manufacturing, distribution, retailing and non-profits. Most clients are privately owned with markets that range from local to national in scope. Many of the loans to this segment are secured by liens on corporate assets and the personal guarantees of the principals. The regional economic strength or weakness impacts the relative risks in this loan category. There is little concentration in any one business sector, and loan risks are generally diversified among many borrowers. Risks associated with commercial and industrial loans include monitoring the condition of the collateral which often consists of inventory, accounts receivable, and other non-real estate assets. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service this debt. Commercial Real Estate – Owner Occupied and Non-owner Occupied – Commercial real estate loans generally have terms of 10 years or less, although payments may be structured on a longer amortization basis. We evaluate each borrower on an individual basis and attempt to determine their business risks and credit profile. We attempt to reduce credit risk in the commercial real estate portfolio by emphasizing loans on owner-occupied industrial, office, and retail buildings where the loan-to-value ratio, established by independent appraisals, does not generally exceed 85 % of cost or appraised value. We also generally require that a borrower’s cash flow exceed 110 % of monthly debt service obligations. In order to ensure secondary sources of payment and liquidity to support a loan request, we typically review all of the personal financial statements of the principal owners and require their personal guaranties. Commercial real estate loans are generally viewed as having more risk of default than residential real estate loans. They are also typically larger than residential real estate loans and consumer loans and depend on cash flows from the owner’s business or the property to service the debt. Because our loan portfolio contains a number of commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in our levels of nonperforming assets. Non-owner occupied commercial real estate also carries an elevated risk of vacancy inhibiting cash flow and creating an inability to service the debt. Multi-Family – Multi-family loans are a subset of commercial real estate loans and generally carry similar terms and underwriting requirements. These loans are broken out as a separate segment due to unique risk characteristics that they exhibit. While similar in nature to other non-owner occupied commercial real estate, they are significantly impacted by the individual credit capacity of many more individual tenants than other commercial real estate as well as the condition and capacity of the local residential housing markets. The underlying real estate also has a lack of suitable alternative uses. Construction and Development – Construction and development loans are generally limited to a term of 9 to 24 months, although payments may be structured on a longer amortization basis. Most loans will mature and require payment in full upon completion and either the sale of the property or refinance into a permanent loan. We believe that construction and development loans generally carry a higher degree of risk than long-term financing of stabilized, rented, and owner-occupied properties because repayment depends on the ultimate completion of the project and usually on the subsequent sale of the property. We attempt to reduce risk associated with construction and development loans by obtaining personal guaranties and by keeping the maximum loan-to-value ratio at or below 85 % of the lesser of cost or appraised value, depending on the 80 Table of Contents project type. Generally, we do not have interest reserves built into loan commitments but require periodic cash payments for interest from the borrower’s cash flow. Residential 1-4 Family – We offer fixed and adjustable rate residential real estate loans with terms of up to 30 years. We also offer a variety of lot loan options to consumers to purchase the lot on which they intend build their home. We also offer traditional home equity loans and lines of credit. Our underwriting criteria for, and the risks associated with, home equity loans and lines of credit are generally the same as those for first mortgage loans. Home equity loans typically have terms of 20 years or less. We generally limit the extension of credit to 90 % of the available equity of each property. These loans carry risk associated with local employment and declining real estate values. Consumer – Consumer loans are underwritten based on the borrower’s income, current debt level, past credit history, and the availability and value of collateral. Consumer rates are both fixed and variable, with negotiable terms. Our installment loans typically amortize over periods up to seven years . Although we typically require monthly principal and interest payments on our loan products, we will offer consumer loans at interest only with a single maturity date when a specific source of repayment is available. Consumer loans are generally considered to have greater risk than first or second mortgages on real estate because they may be unsecured, or, if they are secured, the value of the collateral may be difficult to assess and more likely to decrease in value than real estate. Other – We make loans utilized to purchase or carry securities as well as loans to nonprofit organizations. Other loans also include overdrawn depository accounts. Loans and Related Interest Income - Acquired Loans purchased in acquisition transactions are acquired loans, and are recorded at their fair value at the acquisition date. Acquired loans that have evidence of more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At acquisition, an estimate of expected credit losses is made for PCD loans. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair value to establish the initial cost basis of the PCD loans. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors, resulting in a discount or premium that is accreted or amortized to interest income. For acquired loans not deemed PCD loans at acquisition, the difference between the initial fair value mark and the unpaid principal balance is recognized in interest income over the estimated life of the loans. In addition, an initial allowance for expected credit losses is estimated and recorded as provision expense at the acquisition date. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans. Allowance for Credit Losses - Loans The ACL – Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date. The Company estimates the ACL – Loans based on the amortized cost basis of the underlying loan and has made an accounting policy election to exclude accrued interest from the loan’s amortized cost basis and the related measurement of the ACL – Loans. Estimating the amount of the ACL – Loans is a function of a number of factors, including but not limited to changes in the loan portfolio, net charge-offs, trends in past due and nonaccrual loans, the level of potential problem loans, and expected future economic conditions, all of which may be susceptible to significant change. We establish the ACL – Loans through charges to earnings, which are shown in the statements of income as the provision for credit losses. Specifically identifiable and quantifiable known losses are promptly charged off against the allowance. 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. 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; calculates the historical loss rates for the segmented loan pools; applies the loss rates over the calculated life of the pooled loans; adjusts the forecasted macro-level economic conditions; 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 81 Table of Contents 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. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the ACL - Loans. Such agencies may require the Bank to recognize additions to the allowance based on their judgments of information available to them at the time of their examination. Allowance for Credit Losses – Unfunded Commitments In addition to the ACL – Loans, the Company has established an allowance for unfunded commitments, included in other liabilities on the consolidated balance sheets, representing expected credit losses over the contractual period for which the Company is exposed to credit risk resulting from a contractual obligation to extend credit. The ACL – Unfunded Commitments is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL – Loans. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets. Premises and equipment acquired in corporate acquisitions are recorded at estimated fair value on the date of acquisition. Maintenance and repair costs are charged to expense as incurred. Gains or losses on disposition of premises and equipment are reflected in income. Premises and equipment, and other long-term assets, are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value. Depreciation expense is computed using the straight-line method over the following estimated useful lives. ​ ​ ​ ​ Buildings and improvements 40 years Land improvements 20 years Furniture, fixtures and equipment 2 - 7 years ​ Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure as well as buildings that the Company no longer utilizes in its operations are held for sale and are initially recorded at fair value at the date of foreclosure or abandonment less estimated costs to sell the asset, establishing a new cost basis. Any write downs at the time of foreclosure are charged to the allowance for credit loss. OREO properties acquired in conjunction with corporate acquisitions are recorded at fair value on the date of acquisition. Subsequent to foreclosure, valuations are periodically performed by management, and a valuation allowance is established if fair value declines below carrying value. Costs relating to the development and improvement of the property are capitalized. Revenue and expenses from operations and changes in the valuation allowance are included in other expenses. Company Owned Life Insurance The Company has purchased life insurance policies on certain key executives, and also holds life insurance that was previously purchased by institutions that were subsequently acquired by the Company. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Company owned life insurance is included in other assets. ​ Intangible Assets and Goodwill Intangible assets consist of the value of core deposits, mortgage servicing assets and the excess of purchase price over fair value of net assets (goodwill). See Note 2 for additional information on an acquisition completed in 2023. The value of core deposits are typically recorded in connection with a whole bank or branch acquisition. The value of the core deposit intangible represents the estimated value of the long-term deposit relationships acquired in the transaction. 82 Table of Contents Determining the value of core deposits and their average lives involves multiple assumptions and estimates and is typically determined by performing a discounted cash flow analysis, which involves a combination of any or all of the following assumptions: customer attrition/runoff, alternative funding costs, deposit servicing costs, and discount rates. The value of core deposits are stated at cost less accumulated amortization and are amortized on a sum of the year’s digits basis over a period of one to ten years . Mortgage servicing rights are recognized as separate assets when rights are acquired through purchase or through sale of mortgage loans with servicing retained. Servicing rights acquired through sale of financial assets are recorded based on the fair value of the servicing right. The determination of fair value is based on a valuation model and includes stratifying the mortgage servicing rights by predominant characteristics, such as interest rates and terms, and estimating the fair value of each stratum based on the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as costs to service, a discount rate, and prepayment speeds. 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 evaluated goodwill and core deposit intangibles for impairment during 2024, 2023 and 2022, determining that there was no goodwill or core deposit intangible impairment. Income Taxes The Company files one consolidated federal income tax return, a state tax return in its home state of Wisconsin, and other returns in states where the Company deems its business activity necessitates filing. Federal income tax expense is allocated to each subsidiary based on an intercompany tax sharing agreement. Deferred tax assets and liabilities have been determined using the liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities and the current enacted tax rates which will be in effect when these differences are expected to reverse. Provision (benefit) for deferred taxes is the result of changes in the deferred tax assets and liabilities. Treasury Stock Common stock shares repurchased by the Company are recorded as treasury stock at cost. Securities Sold Under Repurchase Agreements The Company sells securities under repurchase agreements. These transactions are accounted for as collateralized financing transactions and are recorded at the amounts at which the securities were sold. The Company may have to provide additional collateral to the counterparty, as necessary. Off-Balance-Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments including commitments to extend credit, unfunded commitments under lines of credit, and letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. Advertising Advertising costs are generally expensed as incurred. Earnings Per Share Computations Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options ( none for the years ended December 31, 2024, 2023, or 2022). 83 Table of Contents Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that there are any such matters that will have a material effect on the consolidated financial statements at December 31, 2024 and 2023. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Bank, the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets and the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity. Comprehensive Income GAAP normally requires that recognized revenues, expenses, gains and losses be included in net income. In addition to net income, another component of comprehensive income includes the after-tax effect of changes in unrealized gains and losses on available for sale securities. This item is reported as a separate component of stockholders’ equity. The Company presents comprehensive income in the statement of comprehensive income. Stock-based Compensation The Company uses the fair value method of recognizing expense for stock-based compensation based on the fair value of restricted stock awards at the date of grant as prescribed by accounting standards codification Topic 781-10 Compensation/Stock Compensation. Rate Lock Commitments Commitments to fund mortgage loans, at a set interest rate, (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest rate on the loan is locked. The Bank enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into in order to hedge the change in interest rates resulting from its commitments to fund loans. The forward commitments for the future delivery of mortgage loans are based on the Bank’s “best efforts” and therefore the Bank is not penalized if a loan is not delivered to the investor if the loan did not get originated. The fair values of the Company’s rate lock commitments to customers as of December 31, 2024 and 2023 were not material and have not been recorded. Operating Segments While the Company’s chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. ​ Reclassifications Certain 2023 and 2022 amounts have been reclassified to conform to the presentation used in 2024. These reclassifications had no effect on the operations, financial condition or cash flows of the Company. 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. 84 Table of Contents 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. New Accounting Pronouncements That Have Not Yet Been Adopted In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements. This ASU modifies the disclosure or presentation requirements of a variety of topics in the Codification. The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements for certain codification topics. The effective date for each amendment will be the date on which the Security and Exchange Commission’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If, by June 30, 2027, the Securities and Exchange Commission has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. 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. 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 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): Disaggregation of Income Statement Expenses . This ASU is intended to improve the disclosures about a public entity’s income statement expense categories and addresses requests from investors and other decision makers for additional, more detailed information about income statement expense categories. The amendment applies to all public entities that are required to report income statement categories in accordance with Topic 280. The effective date for this update was amended by ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): 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. Note 2 Acquisition Hometown Bancorp, Ltd. On February 10, 2023, the Company completed a merger with Hometown Bancorp, Ltd. (“Hometown”), a bank holding company headquartered in Fond du Lac, Wisconsin, pursuant to the Agreement and Plan of Bank Merger (“Merger Agreement”), dated as of July 25, 2022 by and among the Company and Hometown, whereby Hometown merged with and into the Company, and Hometown Bank, Hometown’s wholly-owned banking subsidiary, merged with and into the Bank. 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 . 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. 85 Table of Contents The fair value of the assets acquired and liabilities assumed on February 10, 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As Recorded by Fair Value ​ As Recorded by ​ ​ Hometown Adjustments the Company Cash, cash equivalents and securities ​ $ 174,582 ​ $ ( 1,010 ) ​ $ 173,572 Other investments ​ 1,195 ​ — ​ ​ 1,195 Loans, net ​ 406,168 ​ ( 10,367 ) ​ ​ 395,801 Premises and equipment, net ​ 7,577 ​ ( 1,109 ) ​ ​ 6,468 Core deposit intangible ​ 405 ​ 16,085 ​ ​ 16,490 Other assets ​ 28,011 ​ ( 6,432 ) ​ ​ 21,579 Total assets acquired ​ $ 617,938 ​ $ ( 2,833 ) ​ $ 615,105 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ $ 532,165 ​ $ 209 ​ $ 532,374 Other borrowings ​ 5,000 ​ ( 331 ) ​ 4,669 Junior subordinated debentures ​ ​ 12,372 ​ ​ ( 1,464 ) ​ ​ 10,908 Other liabilities ​ 469 ​ 1,144 ​ 1,613 Total liabilities assumed ​ $ 550,006 ​ $ ( 442 ) ​ $ 549,564 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Excess of assets acquired over liabilities assumed ​ $ 67,932 ​ $ ( 2,391 ) ​ $ 65,541 Less: purchase price ​ ​ ​ 130,452 Goodwill ​ ​ ​ ​ ​ ​ ​ ​ 64,911 Refinement to fair value estimates (1) ​ ​ ​ ​ ​ ​ ​ ​ ( 30 ) Goodwill (after refinement) ​ ​ ​ $ 64,881 (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. ​ 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. The carrying value of these loans at acquisition was as follows: ​ ​ ​ ​ ​ ​ ​ February 10, 2023 Purchase price of PCD loans at acquisition ​ $ 25,778 Non-credit discount on PCD loans at acquisition ​ ​ 4,498 Allowance for credit losses on PCD loans at acquisition ​ ​ 5,534 Par value of PCD acquired loans at acquisition ​ $ 35,810 ​ The Company accounted for this transaction under the acquisition method of accounting, and thus, the financial position and results of operations of Hometown prior to the consummation date was not included in the accompanying consolidated financial statements. The Company determined the fair value of core deposit intangibles, securities, premises and equipment, loans, other assets and liabilities and deposits with the assistance of third-party valuations, appraisals and third-party advisors. The estimated fair values were subject to refinement for up to one year after deal consummation as additional information became available relative to the closing date fair values. ​ ​ 86 Table of Contents Note 3 Securities The following is a summary of available for sale securities (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Estimated ​ ​ ​ Cost ​ Gains ​ Losses ​ Fair Value ​ December 31, 2024 ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 99,656 ​ $ — ​ $ — ​ $ 99,656 ​ Obligations of U.S. Government sponsored agencies ​ ​ 27,766 ​ ​ 1 ​ ​ ( 3,026 ) ​ ​ 24,741 ​ Obligations of states and political subdivisions ​ ​ 62,992 ​ ​ 3 ​ ​ ( 6,638 ) ​ ​ 56,357 ​ Mortgage-backed securities ​ ​ 29,826 ​ ​ 3 ​ ​ ( 1,836 ) ​ ​ 27,993 ​ Corporate notes ​ 15,669 ​ — ​ ( 1,355 ) ​ 14,314 ​ Total available for sale securities ​ $ 235,909 ​ $ 7 ​ $ ( 12,855 ) ​ $ 223,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of U.S. Government sponsored agencies ​ $ 31,453 ​ $ 4 ​ $ ( 3,163 ) ​ $ 28,294 ​ Obligations of states and political subdivisions ​ ​ 63,929 ​ ​ 77 ​ ​ ( 5,760 ) ​ ​ 58,246 ​ Mortgage-backed securities ​ 37,789 ​ 5 ​ ( 1,664 ) ​ 36,130 ​ Corporate notes ​ 20,657 ​ — ​ ( 1,619 ) ​ 19,038 ​ Certificates of deposit ​ ​ 490 ​ ​ — ​ ​ ( 1 ) ​ ​ 489 ​ Total available for sale securities ​ $ 154,318 ​ $ 86 ​ $ ( 12,207 ) ​ $ 142,197 ​ ​ The following is a summary of held to maturity securities (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Estimated ​ ​ Cost ​ Gains ​ Losses ​ Fair Value December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 107,561 ​ $ 224 ​ $ ( 1,556 ) ​ $ 106,229 Obligations of states and political subdivisions ​ ​ 3,195 ​ ​ — ​ ​ — ​ ​ 3,195 Total held to maturity securities ​ $ 110,756 ​ $ 224 ​ $ ( 1,556 ) ​ $ 109,424 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ U.S. Treasury securities ​ $ 99,173 ​ $ 1,372 ​ $ ( 1,070 ) ​ $ 99,475 Obligations of states and political subdivisions ​ ​ 4,151 ​ ​ — ​ ​ — ​ ​ 4,151 Total held to maturity securities ​ $ 103,324 ​ $ 1,372 ​ $ ( 1,070 ) ​ $ 103,626 ​ 87 Table of Contents The following table shows the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less Than 12 Months ​ Greater Than 12 Months ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Fair Unrealized Fair Unrealized Fair ​ Unrealized ​ of ​ Value ​ Losses ​ Value ​ Losses ​ Value ​ Losses ​ Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 - Available for Sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of U.S. Government sponsored agencies $ 1,177 ​ $ ( 23 ) ​ $ 22,069 ​ $ ( 3,003 ) ​ $ 23,246 ​ $ ( 3,026 ) ​ 24 Obligations of states and political subdivisions ​ 10,380 ​ ​ ( 129 ) ​ ​ 44,686 ​ ​ ( 6,509 ) ​ ​ 55,066 ​ ​ ( 6,638 ) ​ 77 Mortgage-backed securities 3,913 ​ ( 140 ) ​ 23,863 ​ ( 1,696 ) ​ 27,776 ​ ( 1,836 ) 100 Corporate notes — ​ — ​ 13,168 ​ ( 1,355 ) ​ 13,168 ​ ( 1,355 ) 9 Totals $ 15,470 ​ $ ( 292 ) ​ $ 103,786 ​ $ ( 12,563 ) ​ $ 119,256 ​ $ ( 12,855 ) 210 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 - Held to Maturity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities $ 46,456 ​ $ ( 1,045 ) ​ $ 31,322 ​ $ ( 511 ) ​ $ 77,778 ​ $ ( 1,556 ) ​ 48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 - Available for Sale ​ ​ ​ ​ ​ Obligations of U.S. Government sponsored agencies $ 6,519 ​ $ ( 173 ) ​ $ 19,519 ​ $ ( 2,990 ) ​ $ 26,038 ​ $ ( 3,163 ) ​ 24 Obligations of states and political subdivisions ​ 6,806 ​ ​ ( 71 ) ​ ​ 40,959 ​ ​ ( 5,689 ) ​ ​ 47,765 ​ ​ ( 5,760 ) ​ 65 Mortgage-backed securities 5,751 ​ ( 95 ) ​ 28,693 ​ ( 1,569 ) ​ 34,444 ​ ( 1,664 ) 104 Corporate notes 4,926 ​ ( 68 ) ​ 12,487 ​ ( 1,551 ) ​ 17,413 ​ ( 1,619 ) 9 Certificate of deposits ​ — ​ ​ — ​ ​ 489 ​ ​ ( 1 ) ​ ​ 489 ​ ​ ( 1 ) ​ 2 Totals $ 24,002 ​ $ ( 407 ) ​ $ 102,147 ​ $ ( 11,800 ) ​ $ 126,149 ​ $ ( 12,207 ) ​ 204 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 - Held to Maturity ​ ​ ​ ​ ​ U.S. Treasury securities $ 31,785 ​ $ ( 99 ) ​ $ 35,362 ​ $ ( 971 ) ​ $ 67,147 ​ $ ( 1,070 ) ​ 49 Obligations of states and political subdivisions — ​ — ​ 220 ​ — ​ 220 ​ — ​ 1 Totals $ 31,785 ​ $ ( 99 ) ​ $ 35,582 ​ $ ( 971 ) ​ $ 67,367 ​ $ ( 1,070 ) ​ 50 ​ As of December 31, 2024, 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. This is based on the Company’s analysis of the risk characteristics, including credit ratings, and other qualitative factors related to these securities. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. As of December 31, 2024, the Company did not intend to sell these securities and it was more likely than not that the Company would not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity. The unrealized losses have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. Furthermore, the Company monitors the credit quality of debt securities held to maturity quarterly through the use of credit ratings. U.S. Treasury securities at December 31, 2024 were all rated AAA and have the full faith and credit backing of the United States Government. Obligations of states and political subdivisions in an unrealized loss position at December 31, 2024 are not material to the financial statements. 88 Table of Contents Contractual maturities will differ from expected maturities for mortgage-backed securities because borrowers may have the right to call or prepay obligations without penalties. The following is a summary of amortized cost and estimated fair value of securities, by contractual maturity, as of December 31, 2024 (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale ​ Held to Maturity ​ Amortized Estimated Amortized Estimated ​ ​ Cost ​ Fair Value ​ Cost ​ Fair Value Due in one year or less ​ $ 101,493 ​ $ 101,495 ​ $ 23,471 ​ $ 23,370 Due after one year through 5 years ​ 18,170 ​ 17,741 ​ ​ 42,969 ​ ​ 42,466 Due after 5 years through 10 years ​ 42,220 ​ 37,714 ​ ​ 44,316 ​ ​ 43,588 Due after 10 years ​ 44,200 ​ 38,118 ​ ​ — ​ ​ — Subtotal ​ 206,083 ​ 195,068 ​ ​ 110,756 ​ ​ 109,424 Mortgage-backed securities ​ 29,826 ​ 27,993 ​ ​ — ​ ​ — Total ​ $ 235,909 ​ $ 223,061 ​ $ 110,756 ​ $ 109,424 ​ Following is a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, from the years ended December 31 (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Proceeds from sales of securities ​ $ 10,206 ​ $ 76,038 ​ $ — Gross gains on sales ​ — ​ 122 ​ — Gross losses on sales ​ ( 34 ) ​ ( 8,023 ) ​ — ​ The tax benefit for 2024 related to these net realized losses was negligible, and for 2023 was $ 1.7 million. ​ As of December 31, 2024 and 2023, the carrying values of securities pledged to secure public deposits, securities sold under repurchase agreements, and for other purposes required or permitted by law were approximately $ 273.4 million and $ 204.8 million, respectively. ​ At year-end 2024 and 2023, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity . ​ Note 4 Loans and Allowance for Credit Losses The composition of loans at December 31 is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Commercial/industrial ​ $ 501,042 ​ $ 488,498 Commercial real estate - owner occupied ​ 969,413 ​ 893,977 Commercial real estate - non-owner occupied ​ 459,516 ​ 473,829 Multi-family ​ ​ 326,573 ​ ​ 332,959 Construction and development ​ 278,639 ​ 201,823 Residential 1 ‑ 4 family ​ 912,985 ​ 888,412 Consumer ​ 55,164 ​ 50,741 Other ​ 15,593 ​ 14,980 Subtotals ​ 3,518,925 ​ 3,345,219 ACL - Loans ​ ( 44,151 ) ​ ( 43,609 ) Loans, net of ACL - Loans ​ 3,474,774 ​ 3,301,610 Deferred loan fees, net ​ ( 1,757 ) ​ ( 2,245 ) Loans, net ​ $ 3,473,017 ​ $ 3,299,365 ​ The ACL - Loans is based on the Company’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio and 89 Table of Contents other relevant factors. Loans with similar risk characteristics are evaluated in pools and the Company utilizes a discounted cash flow (“DCF”) method to estimate ACL for all loan pools. Under the DCF method, probability of default (“PD”) and loss given default (“LGD”) are applied to a projective model of the pool’s cash flows while considering prepayment and principal curtailment effects. The analysis produces expected cash flows for each instrument in the pool by pairing loan-level term information (maturity date, payment amount, interest rate, etc.) with top-down pool assumptions (default rates and prepayment speeds). Management has determined that peer loss experience provides the best basis for its assessment of expected credit losses to determine the ACL. The Company utilized peer call report data to measure historical credit loss experience with similar risk characteristics within the segments over an economic cycle. Management reviewed the historical loss information to appropriately adjust for differences in current asset specific risk characteristics. ​ The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience. 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. 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, 2024. 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. 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. ​ The expected credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following (including respective weighting): lending policy ( 10 % of factor), changes in nature and volume of loans ( 10 % of factor), staff experience ( 5 % of factor), changes in volume and trends of problem loans ( 10 % of factor), concentration risk ( 10 % of factor), trends in underlying collateral values ( 10 % of factor), external factors (i.e. competition, legal and regulatory requirements; 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. All other qualitative factors remained consistent throughout the year. ​ Expected credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis. Specific allocations of the ACL for credit losses on individually evaluated loans are estimated on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows. ​ 90 Table of Contents A summary of the activity in ACL - Loans by loan type as of December 31, 2024 is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate - ​ Real Estate  - ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial / ​ Owner ​ Non - Owner ​ Multi- ​ and ​ Residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Industrial ​ Occupied ​ Occupied ​ Family ​ Development ​ 1-4 Family ​ Consumer ​ Other ​ Total ACL - Loans - January 1, 2024 ​ $ 5,965 ​ $ 12,285 ​ $ 5,700 ​ $ 4,754 ​ $ 3,597 ​ $ 10,620 ​ $ 615 ​ $ 73 ​ $ 43,609 Charge-offs ​ ( 26 ) ​ ​ ( 294 ) ​ ​ — ​ ​ — ​ — ​ ( 44 ) ​ ( 110 ) ​ ( 92 ) ​ ( 566 ) Recoveries ​ 24 ​ ​ 909 ​ ​ — ​ ​ — ​ — ​ 13 ​ 37 ​ 25 ​ 1,008 Provision ​ ( 569 ) ​ ​ ( 1,867 ) ​ ​ ( 960 ) ​ ​ ( 1,015 ) ​ 1,626 ​ 2,212 ​ 542 ​ 131 ​ 100 ACL - Loans - December 31, 2024 ​ $ 5,394 ​ $ 11,033 ​ $ 4,740 ​ $ 3,739 ​ $ 5,223 ​ $ 12,801 ​ $ 1,084 ​ $ 137 ​ $ 44,151 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A summary of the activity in ACL - Loans by loan type as of December 31, 2023 is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Commercial ​ ​ ​ ​ ​ Real Estate - ​ Real Estate - ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial / ​ Owner ​ Non - Owner ​ Multi- ​ and ​ Residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Industrial ​ Occupied ​ Occupied ​ Family ​ Development ​ 1-4 Family ​ Consumer ​ Other ​ Total ACL - Loans - January 1, 2023 ​ $ 4,071 ​ $ 5,204 ​ $ 2,644 ​ $ 2,761 ​ $ 1,592 ​ $ 5,944 ​ $ 314 ​ $ 150 ​ $ 22,680 Adoption of ASU 2016-13 ​ ​ 1,859 ​ ​ 1,982 ​ ​ 1,161 ​ ​ 753 ​ ​ 2,063 ​ ​ 2,567 ​ ​ 620 ​ ​ ( 33 ) ​ ​ 10,972 ACL - Loans on PCD loans acquired ​ ​ 1,082 ​ ​ 4,424 ​ ​ — ​ ​ — ​ ​ — ​ ​ 28 ​ ​ — ​ ​ — ​ ​ 5,534 Charge-offs ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ( 4 ) ​ ( 84 ) ​ ( 88 ) Recoveries ​ 22 ​ ​ 70 ​ ​ — ​ ​ — ​ — ​ 106 ​ 4 ​ 17 ​ 219 Provision ​ ( 1,069 ) ​ ​ 605 ​ ​ 1,895 ​ ​ 1,240 ​ ( 58 ) ​ 1,975 ​ ( 319 ) ​ 23 ​ 4,292 ACL - Loans - December 31, 2023 ​ $ 5,965 ​ $ 12,285 ​ $ 5,700 ​ $ 4,754 ​ $ 3,597 ​ $ 10,620 ​ $ 615 ​ $ 73 ​ $ 43,609 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In addition to the ACL-Loans, the Company has established an ACL-Unfunded Commitments, classified in other liabilities on the consolidated balance sheets. This allowance is maintained to absorb losses arising from unfunded loan commitments related to fixed and variable rate commitments to extend credit, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans. This quarterly assessment includes consideration of the likelihood that funding of these commitments will eventually occur. The Company has identified the unfunded portion of certain lines of credit, credit card arrangements and letters of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is recorded for off-balance sheet credit exposures that are unconditionally cancelable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. The ACL - Unfunded Commitments was $ 2.9 million and $ 3.8 million at December 31, 2024 and 2023, respectively. See Note 20 for further information on commitments. ​ The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments including loans, investment securities, and off-balance sheet credit exposures after net charge-offs have been deducted to bring the ACL to a level that, in management’s judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. ​ The following table presents the components of the provision for credit losses (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ Provision for credit losses on: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 100 ​ $ 4,292 ​ $ 2,200 ​ Unfunded Commitments ​ ​ ( 900 ) ​ ​ 390 ​ ​ — ​ Total provision for credit losses ​ $ ( 800 ) ​ $ 4,682 ​ $ 2,200 ​ ​ 91 Table of Contents A summary of past due loans as of December 31, 2024 are as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ ​ Non-Accrual ​ ​ 30-89 Days ​ or more ​ ​ ​ ​ ​ ​ ​ with no ​ ​ Past Due ​ Past Due ​ Non- ​ ​ ​ ​ specifically ​ ​ Accruing ​ and Accruing ​ Accrual ​ Total ​ allocated ACL Commercial/industrial ​ $ 50 ​ $ 328 ​ $ 794 ​ $ 1,172 ​ $ 1 Commercial real estate - owner occupied ​ 446 ​ — ​ 4,999 ​ 5,445 ​ 800 Commercial real estate - non-owner occupied ​ — ​ — ​ 493 ​ 493 ​ 493 Multi-family ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Construction and development ​ 90 ​ — ​ — ​ 90 ​ — Residential 1 ‑ 4 family ​ 1,317 ​ 1,294 ​ 511 ​ 3,122 ​ 511 Consumer ​ 108 ​ 48 ​ 29 ​ 185 ​ 29 Other ​ — ​ — ​ — ​ — ​ — ​ ​ $ 2,011 ​ $ 1,670 ​ $ 6,826 ​ $ 10,507 ​ $ 1,834 ​ A summary of past due loans as of December 31, 2023 are as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ ​ Non-Accrual ​ ​ 30-89 Days ​ or more ​ ​ ​ ​ ​ ​ ​ with no ​ ​ Past Due ​ Past Due ​ Non- ​ ​ ​ ​ specifically ​ ​ Accruing ​ and Accruing ​ Accrual ​ Total ​ allocated ACL Commercial/industrial ​ $ 4,303 ​ $ 106 ​ $ 1,344 ​ $ 5,753 ​ $ 365 Commercial real estate - owner occupied ​ 180 ​ 252 ​ 3,877 ​ 4,309 ​ 343 Commercial real estate - non-owner occupied ​ 14 ​ — ​ — ​ 14 ​ — Multi-family ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Construction and development ​ — ​ — ​ — ​ — ​ — Residential 1 ‑ 4 family ​ 871 ​ 507 ​ 429 ​ 1,807 ​ 394 Consumer ​ 68 ​ 28 ​ 12 ​ 108 ​ 11 Other ​ — ​ — ​ — ​ — ​ — ​ ​ $ 5,436 ​ $ 893 ​ $ 5,662 ​ $ 11,991 ​ $ 1,113 ​ A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the estimated fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following tables present collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation (dollar amounts in thousands). A significant portion of the loan balances in these tables and essentially all of the allowance allocations relate to PCD loans which were acquired from Hometown. Real estate collateral primarily consists of operating facilities of the underlying borrowers. Other business assets collateral primarily consists of receivables and inventory of the underlying borrowers. ​ 92 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral Type ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ Other ​ ​ ​ ​ Without an ​ With an ​ Allowance ​ ​ Real Estate ​ Business Assets ​ Total ​ Allowance ​ Allowance ​ Allocation Commercial/industrial ​ $ — ​ $ 793 ​ $ 793 ​ $ — ​ $ 793 ​ $ 793 Commercial real estate - owner occupied ​ 7,795 ​ — ​ 7,795 ​ 800 ​ 6,995 ​ 1,601 Commercial real estate - non-owner occupied ​ — ​ — ​ — ​ — ​ — ​ — Multi-family ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Construction and development ​ — ​ — ​ — ​ — ​ — ​ — Residential 1 ‑ 4 family ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ — ​ — ​ — ​ — ​ — ​ — Other ​ — ​ — ​ — ​ — ​ — ​ — Total Loans ​ $ 7,795 ​ $ 793 ​ $ 8,588 ​ $ 800 ​ $ 7,788 ​ $ 2,394 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral Type ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ Other ​ ​ ​ ​ Without an ​ With an ​ Allowance ​ ​ Real Estate ​ Business Assets ​ Total ​ Allowance ​ Allowance ​ Allocation Commercial/industrial ​ $ — ​ $ 5,320 ​ $ 5,320 ​ $ 47 ​ $ 5,273 ​ $ 1,089 Commercial real estate - owner occupied ​ 8,131 ​ — ​ 8,131 ​ 794 ​ 7,337 ​ 3,156 Commercial real estate - non-owner occupied ​ — ​ — ​ — ​ — ​ — ​ — Multi-family ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Construction and development ​ — ​ — ​ — ​ — ​ — ​ — Residential 1 ‑ 4 family ​ 35 ​ — ​ 35 ​ 35 ​ — ​ — Consumer ​ — ​ — ​ — ​ — ​ — ​ — Other ​ — ​ — ​ — ​ — ​ — ​ — Total Loans ​ $ 8,166 ​ $ 5,320 ​ $ 13,486 ​ $ 876 ​ $ 12,610 ​ $ 4,245 ​ The Company utilizes a numerical risk rating system for commercial relationships and certain residential 1-4 family relationships that have commercial characteristics. All other types of relationships (ex: most residential, consumer, other) are assigned a “Pass” rating, unless they have fallen 90 days past due or more, at which time they receive a rating of 7. The Company uses split ratings for government guaranties on loans. The portion of a loan that is supported by a government guaranty is included with other Pass credits. ​ The determination of a commercial loan risk rating begins with completion of a matrix, which assigns scores based on the strength of the borrower’s debt service coverage, collateral coverage, balance sheet leverage, industry outlook, and customer concentration. A weighted average is taken of these individual scores to arrive at the overall rating. This rating is subject to adjustment by the loan officer based on facts and circumstances pertaining to the borrower. Risk ratings are subject to independent review. Commercial borrowers with ratings between 1 and 5 are considered Pass credits, with 1 being most acceptable and 5 being just above the minimum level of acceptance. Commercial borrowers rated 6 have potential weaknesses which may jeopardize repayment ability. Borrowers rated 7 have a well-defined weakness or weaknesses such as the inability to demonstrate significant cash flow for debt service based on analysis of the company’s financial information. These loans remain on accrual status provided full collection of principal and interest is reasonably expected. Otherwise they are deemed impaired and placed on nonaccrual status. Borrowers rated 8 are the same as 7 rated credits with one exception: collection or liquidation in full is not probable. 93 Table of Contents The following tables present total loans by risk ratings and year of origination. Loans acquired from other previously acquired institutions have been included in the table based upon the actual origination date (dollar amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Cost Basis by Origination Year ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Revolving ​ to Term ​ Total Commercial/industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 82,243 $ 55,703 $ 66,599 $ 49,142 $ 44,118 $ 21,121 $ 77,853 $ - $ 396,779 Grade 5 ​ 16,551 ​ 3,076 ​ 45,395 ​ 4,508 ​ 2,266 ​ 318 ​ 16,574 ​ - ​ 88,688 Grade 6 ​ 274 ​ 403 ​ 608 ​ 1,027 ​ 7 ​ - ​ 541 ​ - ​ 2,860 Grade 7 ​ 362 ​ 854 ​ 316 ​ 5,766 ​ 416 ​ 752 ​ 4,249 ​ - ​ 12,715 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 99,430 $ 60,036 $ 112,918 $ 60,443 $ 46,807 $ 22,191 $ 99,217 $ - $ 501,042 Current-period gross charge-offs $ - $ - $ 9 $ 15 $ - $ 2 $ - $ - $ 26 Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 92,953 $ 63,421 $ 105,388 $ 161,227 $ 93,903 $ 177,068 $ 41,293 $ - $ 735,253 Grade 5 ​ 48,644 ​ 21,142 ​ 19,031 ​ 20,585 ​ 8,741 ​ 42,643 ​ 8,902 ​ - ​ 169,688 Grade 6 ​ - ​ - ​ 3,095 ​ 1,674 ​ 5,658 ​ 1,931 ​ 3,468 ​ - ​ 15,826 Grade 7 ​ 149 ​ 840 ​ 8,633 ​ 3,444 ​ 3,594 ​ 28,997 ​ 2,989 ​ - ​ 48,646 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 141,746 $ 85,403 $ 136,147 $ 186,930 $ 111,896 $ 250,639 $ 56,652 $ - $ 969,413 Current-period gross charge-offs $ - $ - $ - $ 293 $ - $ 1 $ - $ - $ 294 Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 27,703 $ 54,919 $ 61,803 $ 123,875 $ 47,293 $ 96,008 $ 9,883 $ - $ 421,484 Grade 5 ​ 1,723 ​ 1,935 ​ 2,827 ​ 2,627 ​ 3,502 ​ 13,008 ​ - ​ - ​ 25,622 Grade 6 ​ - ​ - ​ 1,489 ​ - ​ - ​ 2,590 ​ 1,565 ​ - ​ 5,644 Grade 7 ​ - ​ - ​ - ​ 5,906 ​ 351 ​ 509 ​ - ​ - ​ 6,766 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 29,426 $ 56,854 $ 66,119 $ 132,408 $ 51,146 $ 112,115 $ 11,448 $ - $ 459,516 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Multi-family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 1,724 $ 26,209 $ 32,891 $ 100,950 $ 71,584 $ 82,936 $ 3,385 $ - $ 319,679 Grade 5 ​ 779 ​ 1,014 ​ 1,307 ​ 994 ​ - ​ 118 ​ - ​ - ​ 4,212 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ 442 ​ - ​ - ​ - ​ - ​ 2,240 ​ - ​ - ​ 2,682 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 2,945 $ 27,223 $ 34,198 $ 101,944 $ 71,584 $ 85,294 $ 3,385 $ - $ 326,573 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction and development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 66,756 $ 45,018 $ 60,063 $ 11,608 $ 3,666 $ 4,921 $ 1,566 $ - $ 193,598 Grade 5 ​ 23,486 ​ 52,351 ​ 2,529 ​ 1,033 ​ 603 ​ 199 ​ 522 ​ - ​ 80,723 Grade 6 ​ 233 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ 233 Grade 7 ​ - ​ 676 ​ - ​ 2,489 ​ 160 ​ 760 ​ - ​ - ​ 4,085 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 90,475 $ 98,045 $ 62,592 $ 15,130 $ 4,429 $ 5,880 $ 2,088 $ - $ 278,639 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Residential 1 ‑ 4 family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 98,107 $ 96,939 $ 179,313 $ 176,752 $ 139,663 $ 100,537 $ 93,957 $ - $ 885,268 Grade 5 ​ 2,785 ​ 2,971 ​ 6,266 ​ 2,221 ​ 3,017 ​ 1,621 ​ 1,064 ​ - ​ 19,945 Grade 6 ​ - ​ 151 ​ 350 ​ - ​ - ​ 197 ​ - ​ - ​ 698 Grade 7 ​ - ​ - ​ 537 ​ 1,282 ​ 854 ​ 2,900 ​ 1,501 ​ - ​ 7,074 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 100,892 $ 100,061 $ 186,466 $ 180,255 $ 143,534 $ 105,255 $ 96,522 $ - $ 912,985 Current-period gross charge-offs $ - $ - $ - $ - $ - $ 44 $ - $ - $ 44 Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 25,766 $ 12,581 $ 8,063 $ 3,825 $ 2,774 $ 1,624 $ 466 $ - $ 55,099 Grade 5 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ 10 ​ 11 ​ 15 ​ 9 ​ - ​ 20 ​ - ​ - ​ 65 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 25,776 $ 12,592 $ 8,078 $ 3,834 $ 2,774 $ 1,644 $ 466 $ - $ 55,164 Current-period gross charge-offs $ 88 $ 15 $ 4 $ - $ 3 $ - $ - $ - $ 110 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 1,901 $ 119 $ 573 $ 483 $ 605 $ 9,070 $ 2,557 $ - $ 15,308 Grade 5 ​ - ​ 50 ​ 31 ​ - ​ - ​ - ​ 204 ​ - ​ 285 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 1,901 $ 169 $ 604 $ 483 $ 605 $ 9,070 $ 2,761 $ - $ 15,593 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ 92 $ - $ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans $ 492,591 $ 440,383 $ 607,122 $ 681,427 $ 432,775 $ 592,088 $ 272,539 $ - $ 3,518,925 Total current-period gross charge-offs $ 88 $ 15 $ 13 $ 308 $ 3 $ 47 $ 92 $ - $ 566 94 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Cost Basis by Origination Year ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ Prior ​ Revolving ​ to Term ​ Total Commercial/industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 59,526 $ 133,469 $ 62,894 $ 54,552 $ 10,380 $ 20,575 $ 78,439 $ - $ 419,835 Grade 5 ​ 6,127 ​ 5,367 ​ 11,641 ​ 4,208 ​ 1,180 ​ 3,039 ​ 21,420 ​ - ​ 52,982 Grade 6 ​ 671 ​ 93 ​ 61 ​ 206 ​ - ​ - ​ 627 ​ - ​ 1,658 Grade 7 ​ 365 ​ 271 ​ 5,756 ​ 2,351 ​ 30 ​ 1,687 ​ 3,563 ​ - ​ 14,023 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 66,689 $ 139,200 $ 80,352 $ 61,317 $ 11,590 $ 25,301 $ 104,049 $ - $ 488,498 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial real estate - owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 55,239 $ 105,187 $ 167,124 $ 108,680 $ 47,115 $ 178,586 $ 33,220 $ - $ 695,151 Grade 5 ​ 7,586 ​ 24,734 ​ 24,890 ​ 12,955 ​ 11,168 ​ 26,179 ​ 21,519 ​ - ​ 129,031 Grade 6 ​ - ​ 1,161 ​ 1,694 ​ 110 ​ 867 ​ 6,552 ​ 699 ​ - ​ 11,083 Grade 7 ​ 3,143 ​ 9,988 ​ 10,061 ​ 2,313 ​ 14,775 ​ 15,777 ​ 2,655 ​ - ​ 58,712 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 65,968 $ 141,070 $ 203,769 $ 124,058 $ 73,925 $ 227,094 $ 58,093 $ - $ 893,977 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial real estate - non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 54,774 $ 72,336 $ 127,450 $ 53,341 $ 45,898 $ 84,129 $ 9,870 $ - $ 447,798 Grade 5 ​ 944 ​ 4,819 ​ 2,872 ​ 3,516 ​ 97 ​ 10,081 ​ - ​ - ​ 22,329 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ - ​ - ​ 64 ​ 366 ​ 2,722 ​ 550 ​ - ​ - ​ 3,702 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 55,718 $ 77,155 $ 130,386 $ 57,223 $ 48,717 $ 94,760 $ 9,870 $ - $ 473,829 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial real estate - multi-family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 25,099 $ 28,144 $ 103,804 $ 74,083 $ 25,640 $ 61,589 $ 2,149 $ - $ 320,508 Grade 5 ​ 672 ​ 1,092 ​ 10,660 ​ - ​ - ​ 27 ​ - ​ - ​ 12,451 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 25,771 $ 29,236 $ 114,464 $ 74,083 $ 25,640 $ 61,616 $ 2,149 $ - $ 332,959 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction and development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 65,134 $ 67,396 $ 35,017 $ 5,013 $ 1,853 $ 4,281 $ 779 $ - $ 179,473 Grade 5 ​ 11,796 ​ 1,190 ​ 6,060 ​ 743 ​ - ​ 84 ​ 808 ​ - ​ 20,681 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ 707 ​ - ​ - ​ 172 ​ - ​ 790 ​ - ​ - ​ 1,669 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 77,637 $ 68,586 $ 41,077 $ 5,928 $ 1,853 $ 5,155 $ 1,587 $ - $ 201,823 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Residential 1 ‑ 4 family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 102,529 $ 199,295 $ 197,713 $ 160,489 $ 44,411 $ 77,644 $ 80,659 $ - $ 862,740 Grade 5 ​ 3,816 ​ 4,819 ​ 6,269 ​ 119 ​ 612 ​ 2,465 ​ 604 ​ - ​ 18,704 Grade 6 ​ 158 ​ 319 ​ 810 ​ - ​ - ​ 180 ​ 249 ​ - ​ 1,716 Grade 7 ​ 316 ​ 366 ​ 29 ​ 1,022 ​ 400 ​ 2,947 ​ 172 ​ - ​ 5,252 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 106,819 $ 204,799 $ 204,821 $ 161,630 $ 45,423 $ 83,236 $ 81,684 $ - $ 888,412 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 23,711 $ 12,497 $ 6,570 $ 4,498 $ 1,194 $ 1,326 $ 925 $ - $ 50,721 Grade 5 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ - ​ - ​ - ​ - ​ - ​ 20 ​ - ​ - ​ 20 Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 23,711 $ 12,497 $ 6,570 $ 4,498 $ 1,194 $ 1,346 $ 925 $ - $ 50,741 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ 4 $ - $ 4 Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grades 1-4 $ 347 $ 663 $ 551 $ 1,076 $ 38 $ 9,697 $ 2,520 $ - $ 14,892 Grade 5 ​ - ​ - ​ - ​ - ​ - ​ - ​ 88 ​ - ​ 88 Grade 6 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 7 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Grade 8 ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - ​ - Total $ 347 $ 663 $ 551 $ 1,076 $ 38 $ 9,697 $ 2,608 $ - $ 14,980 Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ 84 $ - $ 84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans $ 422,660 $ 673,206 $ 781,990 $ 489,813 $ 208,380 $ 508,205 $ 260,965 $ - $ 3,345,219 Total current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ 88 $ - $ 88 ​ ​ 95 Table of Contents Note 5 Related Party Matters Directors, executive officers, and principal shareholders of the Company, including their families and firms in which they are principal owners, are considered to be related parties. 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. ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Balances at beginning ​ $ 63,892 ​ $ 70,151 Net increase from change in composition of officers and directors ​ ​ 19,047 ​ ​ — New loans and advances ​ 56,330 ​ 24,495 Repayments ​ ( 76,418 ) ​ ( 30,754 ) Balance at end ​ $ 62,851 ​ $ 63,892 ​ Deposits from directors, executive officers, principal shareholders, and their affiliates totaled approximately $ 22.5 million and $ 19.1 million as of December 31, 2024 and 2023, respectively. ​ Note 6 Mortgage Servicing Rights Loans serviced for others are not included in the accompanying consolidated balance sheets. MSRs are recognized as separate assets when loans sold in the secondary market are sold with servicing retained. The Company utilizes a third-party consulting firm to assist in determining an accurate assessment of the mortgage servicing rights fair value. The third-party firm collects relevant data points from numerous sources. Some of these data points relate directly to the pricing level or relative value of the mortgage servicing while other data points relate to the assumptions used to derive fair value. In addition, the valuation evaluates specific collateral types, and current and historical performance of the collateral in question. The valuation process focuses on the non-distressed secondary servicing market, common industry practices and current regulatory standards. The primary determinants of the fair value of mortgage servicing rights are servicing fee percentage, ancillary income, expected loan life or prepayment speeds, discount rates, costs to service, delinquency rates, foreclosure losses and recourse obligations. The valuation data also contains interest rate shock analyses for monitoring fair value changes in differing interest rate environments. Following is an analysis of activity in servicing rights assets that are measured at fair value (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Year Ended ​ ​ December 31, 2024 ​ December 31, 2023 Fair value at beginning of period ​ $ 13,668 ​ $ 9,582 ​ ​ ​ ​ ​ ​ ​ Servicing asset additions ​ 1,343 ​ 879 Loan payments and payoffs ​ ( 1,735 ) ​ ( 1,624 ) Changes in valuation inputs and assumptions used in the valuation model ​ 93 ​ 1,140 Amount recognized through earnings ​ ​ ( 299 ) ​ ​ 395 MSR asset acquired ​ — ​ 3,691 Fair value at end of period ​ $ 13,369 ​ $ 13,668 ​ ​ ​ ​ ​ ​ ​ Unpaid principal balance of loans serviced for others ​ $ 1,172,311 ​ $ 1,175,709 Mortgage servicing rights as a percent of loans serviced for others ​ 1.14 ​ 1.16 ​ During the years ended December 31, 2024 and 2023, 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 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. 96 Table of Contents The assumptions used by the Company are hypothetical and supported by a third-party valuation. The Company’s methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. The carrying value of the mortgage servicing rights approximates fair market value at December 31, 2024 and 2023. ​ Note 7 Premises and Equipment An analysis of premises and equipment at December 31 follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Land and land improvements ​ $ 11,082 ​ $ 13,594 Buildings and building improvements ​ 66,096 ​ 60,790 Furniture and equipment ​ 6,904 ​ 7,169 Totals ​ 84,082 ​ 81,553 Less accumulated depreciation ​ 14,559 ​ 13,245 Right-of-use lease asset (see Note 21) ​ ​ 1,585 ​ ​ 1,583 Premises and equipment, net ​ $ 71,108 ​ $ 69,891 ​ Included in buildings and improvements at December 31, 2024 and 2023, is $ 0.8 million and $ 5.7 million, respectively, in construction in progress. These amounts relate to branch locations which were under construction. These balances begin accumulating depreciation upon being placed in service. Depreciation and amortization of premises and equipment charged to operating expense totaled approximately $ 2.3 million, $ 2.1 million, and $ 1.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. ​ Note 8 Other Real Estate Owned Changes in OREO for the years ended December 31 were as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Beginning of year ​ $ 2,573 ​ $ 2,520 Transfers in ​ 1,412 ​ 2,623 Assets Acquired ​ ​ — ​ ​ 1,390 Gain (loss) on sale of OREO and valuation allowance ​ 694 ​ ( 2,133 ) Sales ​ ( 3,938 ) ​ ( 1,827 ) End of year ​ $ 741 ​ $ 2,573 ​ Activity in the valuation allowance for the years ended December 31 was as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Beginning of year ​ $ 1,591 ​ $ — ​ $ 187 Additions charged to expense ​ — ​ 1,591 ​ 24 Valuation relieved due to sale of OREO ​ ( 1,591 ) ​ — ​ ( 211 ) End of year ​ $ — ​ $ 1,591 ​ $ — ​ ​ Note 9 Investment in Minority-owned Subsidiaries TVG, the insurance subsidiary of the Bank, maintained a 40.0 % investment in Ansay at December 31, 2024 and 2023. Ansay is an independent insurance agency that has operated in southeastern Wisconsin since 1946, managing the insurance and risk needs of commercial and personal insurance clients in Wisconsin and the Midwest. As of December 31, 2024 and 2023, Ansay had total assets of $ 87.1 million and $ 86.9 million and liabilities of $ 38.5 million and $ 41.4 million, respectively. The Company’s investment in Ansay, which is accounted for using the equity method, was $ 34.1 million and $ 32.9 million at December 31, 2024 and 2023, respectively. The Company recognized undistributed earnings of approximately $ 3.5 million, $ 2.9 million and $ 2.6 million and received dividends of $ 2.3 million, $ 1.9 million and $ 2.0 million from its investment in Ansay during the years ended December 31, 2024, 2023 and 2022, respectively. 97 Table of Contents As of December 31, 2024 and 2023, Ansay had term loans with the Bank totaling approximately $ 19.0 million and $ 19.7 million, respectively. Ansay also has available revolving lines of credit totaling $ 12.0 million with the Company with an outstanding balance of $ 0.2 million as of December 31, 2024. There were no outstanding balances as of December 31, 2023. Ansay maintained deposits at the Bank totaling $ 8.5 million and $ 11.5 million as of December 31, 2024 and 2023, respectively. The CEO of Ansay, Michael G. Ansay, served as a member of the Board of the Company until retiring on January 15, 2024. As a related party, during 2024, 2023 and 2022 the Company received insurance consulting services and purchased director and officer fidelity bond and commercial insurance coverage through Ansay spending approximately $ 0.5 million, $ 0.4 million and $ 0.4 million, respectively. The Company’s proportionate share of earnings of Ansay flow through to its tax return. Deferred income taxes of approximately $ 1.1 million and $ 0.9 million were provided to account for the difference in the tax and book basis of assets and liabilities held at Ansay as of December 31, 2024 and 2023, respectively. ​ The Company had a 49.8 % membership interest in UFS which it sold on October 1, 2023, resulting in a $ 38.9 million gain on sale. 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 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. Note 10  Core Deposit Intangibles The gross carrying amount and accumulated amortization of core deposit intangibles for the years ended December 31 are as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ Gross ​ Intangible Net Gross ​ Intangible Net ​ ​ Carrying ​ Accumulated ​ Carrying ​ Carrying ​ Accumulated ​ Carrying ​ ​ Amount ​ Amortization ​ Value ​ Amount ​ Amortization ​ Value Core deposit intangible ​ $ 40,240 ​ $ 19,037 ​ $ 21,203 ​ $ 40,240 ​ $ 13,244 ​ $ 26,996 ​ Amortization expense was $ 5.8 million, $ 6.3 million and $ 2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. The following table shows the estimated future amortization expense of core deposit intangibles. The projections of amortization expense are based on existing asset balances as of December 31, 2024 (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ Core ​ ​ Deposit ​ ​ Intangible 2025 ​ $ 5,003 2026 ​ 4,297 2027 ​ 3,590 2028 ​ 2,884 2029 ​ 2,225 Thereafter ​ 3,204 Total ​ $ 21,203 ​ ​ Note 11 Goodwill Goodwill was $ 175.1 million at December 31, 2024 and 2023. ​ 98 Table of Contents Note 12 Deposits The composition of deposits at December 31 is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Noninterest-bearing demand deposits ​ $ 1,024,881 ​ $ 1,050,735 Interest-bearing demand deposits ​ 194,988 ​ 204,760 Savings deposits ​ 1,790,100 ​ 1,595,395 Time deposits ​ 631,020 ​ 581,283 Brokered certificates of deposit ​ 20,084 ​ 747 Total deposits ​ $ 3,661,073 ​ $ 3,432,920 ​ Time deposits of $250,000 or more were approximately $ 77.8 million and $ 70.2 million at December 31, 2024 and 2023, respectively. The scheduled maturities of time deposits at December 31, 2024, are summarized as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ 2025 $ 558,937 2026 ​ 63,837 2027 ​ 6,269 2028 ​ 6,932 2029 ​ 7,654 Thereafter ​ 7,475 Total ​ $ 651,104 ​ ​ Note 13 Securities Sold Under Repurchase Agreements Securities sold under repurchase agreements have contractual maturities up to one year from the transaction date with variable and fixed rate terms. The agreements to repurchase securities require that the Company (seller) repurchase identical securities as those that are sold. The securities underlying the agreements were under the Company’s control. Information concerning securities sold under repurchase agreements at December 31 consists of the following (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Outstanding balance at the end of the year ​ $ — ​ $ 75,747 ​ $ 97,196 ​ Weighted average interest rate at the end of the year ​ — % 5.31 % 4.31 % Average balance during the year ​ $ 414 ​ $ 36,833 ​ $ 25,749 ​ Average interest rate during the year ​ 5.33 % 4.92 % 2.11 % Maximum month end balance during the year ​ $ — ​ $ 75,747 ​ $ 97,196 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 99 Table of Contents Note 14 Notes Payable There were $ 135.5 million and $ 35.5 million of advances outstanding from the FHLB at December 31, 2024 and 2023, respectively. From time to time the Bank utilized short-term FHLB advances to fund liquidity during these years. The advances, rate, and maturities of FHLB advances as of December 31 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity Rate ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) Fixed rate, fixed term 06/30/2025 5.16 % 25,000 ​ — Fixed rate, fixed term ​ 03/23/2026 ​ 4.02 % ​ 10,000 ​ ​ 10,000 Fixed rate, fixed term ​ 05/26/2026 ​ 1.95 % ​ 5,000 ​ ​ 5,000 Fixed rate, fixed term ​ 06/29/2026 ​ 4.77 % ​ 15,000 ​ ​ — Fixed rate, fixed term ​ 03/23/2027 ​ 3.91 % ​ 10,000 ​ ​ 10,000 Fixed rate, fixed term ​ 06/28/2027 ​ 4.57 % ​ 15,000 ​ ​ — Fixed rate, fixed term ​ 03/23/2028 ​ 3.85 % ​ 10,000 ​ ​ 10,000 Fixed rate, fixed term ​ 07/05/2028 ​ 4.41 % ​ 20,000 ​ ​ — Fixed rate, fixed term ​ 07/09/2029 ​ 4.31 % ​ 25,000 ​ ​ — Fixed rate, fixed term 04/22/2030 0.00 % 508 ​ 508 ​ ​ ​ ​ ​ ​ ​ 135,508 ​ ​ 35,508 Purchase accounting adjustment ​ ​ ​ ​ ​ ​ ( 136 ) ​ ​ ( 238 ) Total notes payable ​ ​ ​ ​ ​ $ 135,372 ​ $ 35,270 ​ Future maturities of borrowings were as follows (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ 1 year or less $ 25,000 ​ $ — 1 to 2 years ​ ​ 30,000 ​ — 2 to 3 years ​ ​ 25,000 ​ 15,000 3 to 4 years ​ ​ 30,000 ​ 10,000 4 to 5 years ​ ​ 25,000 ​ 10,000 Over 5 years ​ ​ 508 ​ ​ 508 ​ ​ $ 135,508 ​ $ 35,508 ​ At December 31, 2024 and 2023, respectively, total loans available to be pledged as collateral on FHLB borrowings were approximately $ 1.47 billion and $ 1.49 billion and, of that total, $ 818.2 million and $ 841.8 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. At December 31, 2024 and 2023, the Bank had available liquidity of $ 682.6 million and $ 806.2 million for future draws, respectively. FHLB stock is included in other investments at December 31, 2024 and 2023. This stock is recorded at cost, which approximates fair value. ​ Note 15 Subordinated Debt During July 2020, the Company entered into subordinated note agreements with two separate commercial banks. The Company had through December 31, 2020, to borrow funds up to a maximum availability of $ 6.0 million under each agreement, or $ 12.0 million total. These notes were issued with 10 -year maturities, carry interest at a fixed rate of 5.0 % through June 30, 2025, and at a variable rate thereafter, payable quarterly. These notes are callable on or after January 1, 2026 and qualify for Tier 2 capital for regulatory purposes. The Company had outstanding balances of $ 6.0 million under these agreements at December 31, 2024 and 2023. ​ During August 2022, the Company entered into subordinated note agreements with an individual. The Company had outstanding balances of $ 6.0 million under these agreements as of December 31, 2024 and 2023. These notes were issued with 10 -year maturities, carry interest at a fixed rate of 5.25 % through August 6, 2027, and at a variable rate thereafter, payable quarterly. These notes are callable on or after August 6, 2027 and qualify for Tier 2 capital for regulatory purposes. ​ 100 Table of Contents 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 The components of the provision for income taxes for the years ended December 31 are as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Current tax expense: ​ ​ ​ Federal ​ $ 14,824 ​ $ 20,158 ​ $ 10,328 State ​ ( 1,740 ) (1) 3,399 ​ 4,960 Deferred tax benefit: ​ ​ ​ ​ ​ ​ Federal ​ 866 ​ ( 1,234 ) ​ ( 617 ) State ​ 616 ​ ( 490 ) ​ ( 252 ) Change in valuation allowance ​ ​ ( 616 ) ​ ​ 2,447 ​ ​ — Total provision for income taxes ​ $ 13,950 ​ $ 24,280 ​ $ 14,419 (1) The state of Wisconsin produced legislation during 2023 which exempted a significant portion of the Company’s interest income from taxability. Wisconsin did not produce guidelines for application of this new legislation until late in the first quarter of 2024. The Company’s 2023 Wisconsin tax obligation was estimated utilizing the best understanding of what the final guidelines would stipulate. When the final guidelines were produced, the Company’s actual 2023 Wisconsin tax obligation was $ 1.7 million less than estimated. The state tax benefit noted above consists of the difference between the initial estimate and the actual obligation for 2023. ​ 101 Table of Contents A summary of the sources of differences between income taxes at the federal statutory rate and the provision for income taxes for the years ended December 31 follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 2022 Tax expense at statutory rate ​ $ 16,698 ​ $ 20,747 ​ $ 12,523 Increase (decrease) in taxes resulting from: ​ ​ ​ ​ ​ ​ Tax-exempt interest ​ ( 1,075 ) ​ ( 995 ) ​ ( 1,079 ) State taxes (net of federal benefit) ​ ( 1,375 ) ​ 2,685 ​ 3,719 Cash surrender value of life insurance ​ ( 455 ) ​ ( 322 ) ​ ( 194 ) ESOP dividend ​ ( 88 ) ​ ( 88 ) ​ ( 77 ) Nondeductible expenses associated with acquisition ​ — ​ 61 ​ 189 Change in valuation allowance ​ ( 616 ) ​ 2,447 ​ — Other ​ 861 ​ ( 255 ) ​ ( 662 ) Total provision for income taxes ​ $ 13,950 ​ $ 24,280 ​ $ 14,419 ​ 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. Deferred taxes are included in other liabilities of the balance sheet. The major components of the net deferred tax asset (liability) as of December 31 are presented below (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 Deferred tax assets: ​ ​ ​ Deferred compensation ​ $ — ​ $ 15 Premises and equipment ​ 477 ​ 357 Allowance for credit losses ​ 12,759 ​ 12,856 Accrued vacation and severance ​ — ​ 80 Other real estate owned ​ — ​ 262 Compensation ​ ​ 619 ​ ​ 611 Purchase accounting ​ ​ 2,591 ​ ​ 3,855 Unrealized loss on securities available for sale ​ 3,497 ​ 3,375 Net operating loss carry forward ​ 1,086 ​ 592 Other ​ 353 ​ — Total deferred tax assets ​ 21,382 ​ 22,003 Deferred tax liabilities: ​ ​ ​ ​ Investment discount accretion ​ ( 1,516 ) ​ ( 863 ) Mortgage servicing rights ​ ( 3,622 ) ​ ( 3,703 ) Other investments ​ ( 911 ) ​ ( 795 ) Other real estate owned ​ ( 45 ) ​ — Investment in minority owned subsidiaries ​ ​ ( 1,114 ) ​ ​ ( 944 ) Goodwill and other intangibles ​ ( 5,312 ) ​ ( 6,591 ) Other ​ — ​ ( 117 ) Total deferred tax liabilities ​ ( 12,520 ) ​ ( 13,013 ) Valuation allowance ​ ​ ( 3,063 ) ​ ​ ( 2,447 ) Net deferred tax asset ​ $ 5,799 ​ $ 6,543 ​ 102 Table of Contents In assessing the ability of the Company to realize the benefit of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, availability of operating loss carrybacks, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods which deferred tax assets are deductible, management believes it is more likely than not the Company will generate sufficient federally taxable income to realize the benefits of these deductible differences at December 31, 2024. Due to legislation during 2023 related to exempting interest income on significant portions of the Company’s loan portfolio to taxability in the state of Wisconsin, however, management estimates that future state taxable income will be insufficient to fully realize the benefits of these deductible differences, resulting in a valuation allowance of $ 3.1 million and $ 2.4 million on the net deferred tax asset related to state income taxes at December 31, 2024 and 2023, respectively. Tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. When applicable, interest and penalties on uncertain tax positions are calculated based on the guidance from the relevant tax authority and included in income tax expense. At December 31, 2024 and 2023, there was no liability for uncertain tax positions. Federal income tax returns for 4 years ended December 31, 2021 through 2024 remain open and subject to review by applicable tax authorities. State income tax returns for 5 years ended December 31, 2020 through 2024 remain open and subject to review by applicable tax authorities. Note 17 Employee Benefit Plans Employee Stock Ownership Plan The Company has a defined contribution profit sharing 401(k) plan which includes the provisions for an employee stock ownership plan (“ESOP”). 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. 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. As of December 31, 2024 and 2023, the plan held 221,214 and 272,132 shares, respectively. These shares are included in the calculation of the Company’s earnings per share. 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. Total expense associated with the plans was approximately $ 1.3 million, $ 1.6 million and $ 1.2 million in 2024, 2023 and 2022, respectively. Share-based Compensation The Company has made restricted share grants during 2024, 2023 and 2022 pursuant to the Bank First Corporation 2020 Equity Plan. The purpose of the Plan is to provide financial incentives for selected employees and for the non-employee Directors of the Company, thereby promoting the long-term growth and financial success of the Company. The Company stock to be offered under the Plan pursuant to Stock Appreciation Rights, performance unit awards, and restricted stock and unrestricted Company stock awards must be Company stock previously issued and outstanding and reacquired by the Company. The number of shares of Company stock that may be issued pursuant to awards under the 2020 Plan shall not exceed, in the aggregate, 700,000 . As of December 31, 2024, 100,954 shares of Company stock has been awarded under the 2020 Plan. Compensation expense for restricted stock is based on the fair value of the awards of Bank First Corporation common stock at the time of grant. The value of restricted stock grants that are expected to vest is amortized into expense over the vesting periods of the respective grants. For the years ended December 31, 2024, 2023 and 2022, compensation expense of $ 2.2 million, $ 2.1 million and $ 1.7 million, respectively, was recognized related to restricted stock awards. 103 Table of Contents As of December 31, 2024, there was $ 1.9 million of unrecognized compensation cost related to non-vested restricted stock awards granted under the plan. That cost is expected to be recognized over a weighted average period of 1.16 years. The aggregate grant date fair value of restricted stock awards that vested during 2024 was approximately $ 2.1 million. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the period ended ​ For the period ended ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ Weighted- ​ Weighted- ​ ​ ​ ​ Average Grant- ​ ​ ​ Average Grant- ​ ​ Shares ​ Date Fair Value ​ Shares ​ Date Fair Value Restricted Stock ​ ​ Outstanding at beginning of period 58,196 ​ $ 72.28 59,272 ​ $ 65.85 Granted 24,581 ​ 85.85 25,506 ​ 80.15 Vested ( 30,143 ) ​ 71.14 ( 25,762 ) ​ 64.25 Forfeited or cancelled — ​ — ( 820 ) ​ 67.02 Outstanding at end of period 52,634 ​ $ 79.27 58,196 ​ $ 72.28 ​ Deferred Compensation Plan The Company has a deferred compensation agreement with one of its former executive officers. The benefits were payable beginning June 30, 2009, the date of termination of employment with the Company via retirement. The estimated annual cash benefit payment upon retirement at the age of 70 under the salary continuation plan is $ 108,011 . 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. Note 18 Stockholders’ Equity and Regulatory Matters The Bank, as a national bank, is subject to the dividend restrictions set forth by the Office of the Comptroller of the Currency. Under such restrictions, the Bank may not, without the prior approval of the Office of the Comptroller of the Currency, declare dividends in excess of the sum of the current year’s earnings (as defined) plus the retained earnings (as defined) from the prior two years. The dividends that the Bank could declare without the prior approval of the Office of the Comptroller of the Currency as of December 31, 2024 totaled approximately $ 101.1 million. The payment of dividends may be further limited because of the need for the Bank to maintain capital ratios satisfactory to applicable regulatory agencies. Banks and certain bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under regulatory guidance for non-advanced approaches institutions, the Bank and Company are required to maintain minimum amounts and ratios of common equity Tier I capital to risk-weighted assets, including an additional conservation buffer determined by banking regulators. As of December 31, 2024 and 2023, this buffer was 2.50 %. As of December 31, 2024 and 2023, the Bank and Company met all capital adequacy requirements to which they are subject. ​ 104 Table of Contents Actual and required capital amounts and ratios are presented below (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ To Be Well ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Capitalized Under ​ ​ ​ ​ ​ ​ ​ For Capital ​ Adequacy with ​ Prompt Corrective ​ ​ Actual ​ Adequacy Purposes ​ Capital Buffer ​ Action Provisions ​ Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2024 ​ ​ ​ ​ ​ Total capital (to risk-weighted assets): ​ ​ ​ ​ ​ Company ​ $ 509,763 14.14 % $ 288,325 8.00 % $ 378,427 10.50 % ​ NA NA ​ Bank ​ $ 438,549 12.18 % $ 288,152 8.00 % $ 378,200 10.50 % $ 360,190 10.00 % Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ Company ​ $ 457,749 12.70 % $ 216,244 6.00 % $ 306,346 8.50 % ​ NA NA ​ Bank ​ $ 398,535 11.06 % $ 216,114 6.00 % $ 306,162 8.50 % $ 288,152 8.00 % Common Equity Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ Company ​ $ 457,749 12.70 % $ 162,183 4.50 % $ 252,285 7.00 % ​ NA NA ​ Bank ​ $ 398,535 11.06 % $ 162,086 4.50 % $ 252,133 7.00 % $ 234,124 6.50 % Tier 1 capital (to average assets): ​ ​ ​ ​ ​ ​ ​ Company ​ $ 457,749 10.96 % $ 167,134 4.00 % $ 167,134 4.00 % ​ NA NA ​ Bank ​ $ 398,535 9.54 % $ 167,019 4.00 % $ 167,019 4.00 % $ 208,774 5.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ To Be Well ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Capitalized Under ​ ​ ​ ​ ​ ​ ​ For Capital ​ Adequacy with ​ Prompt Corrective ​ ​ Actual ​ Adequacy Purposes ​ Capital Buffer ​ Action Provisions ​ Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2023 ​ ​ ​ ​ ​ Total capital (to risk-weighted assets): ​ ​ ​ ​ ​ Company ​ $ 484,398 13.99 % $ 276,904 8.00 % $ 363,437 10.50 % ​ NA NA ​ Bank ​ $ 446,634 12.91 % $ 276,726 8.00 % $ 363,202 10.50 % $ 345,907 10.00 % Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ Company ​ $ 437,979 12.65 % $ 207,678 6.00 % $ 294,211 8.50 % ​ NA NA ​ Bank ​ $ 412,215 11.92 % $ 207,544 6.00 % $ 294,021 8.50 % $ 276,726 8.00 % Common Equity Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ Company ​ $ 433,979 12.54 % $ 155,759 4.50 % $ 242,291 7.00 % ​ NA NA ​ Bank ​ $ 412,215 11.92 % $ 155,658 4.50 % $ 242,135 7.00 % $ 224,840 6.50 % Tier 1 capital (to average assets): ​ ​ ​ ​ ​ ​ ​ Company ​ $ 437,979 11.05 % $ 158,581 4.00 % $ 158,581 4.00 % ​ NA NA ​ Bank ​ $ 412,215 10.40 % $ 158,585 4.00 % $ 158,585 4.00 % $ 198,231 5.00 % ​ ​ Note 19 Segment Information The Company’s reportable segment is determined by the Chief Executive Officer, who is the designated chief operating decision maker, based upon information provided by the Company’s products and services offered, primarily banking operations. The segment is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review the performance of various components of the business such as branches, which are then aggregated as operating performance, products and services, and customers are similar. The chief operating decision maker will then evaluate the financial performance of the Company’s business components such as by evaluating significant revenues and expenses and budget to actual results in assessing the Company’s segment and in the determination of allocating resources. The chief decision maker uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The chief decision maker uses consolidated net income and return on assets to benchmark the Company against its competitors. The benchmarking analysis, coupled with monitoring of budget to actual results, are used in the assessment of performance and in establishing compensation. Loans, investments, service charges, and deposits in other banks provide the significant revenues in the banking operation. Interest expense, provisions for credit losses, data processing and payroll provide the significant expenses in banking operation. 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. ​ Note 20 Commitments and Contingencies The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). Rate lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. The fair values of the Company’s rate lock commitments to customers as of December 31, 2024 and 2023 were not material and have not been recorded. The notional amount of rate lock commitments at December 31, 2024 and 2023, respectively, was $ 8.2 million and $ 5.9 million. 105 Table of Contents The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Bank’s exposure to credit loss is represented by the contractual or notional amount of these commitments. The Bank follows the same credit policies in making commitments as it does for on-balance-sheet instruments. Since some of the commitments are expected to expire without being drawn upon and some of the commitments may not be drawn upon to the total extent of the commitment, the notional amount of these commitments does not necessarily represent future cash requirements. The following commitments were outstanding at December 31 (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional Amount ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Commitments to extend credit: ​ ​ Fixed ​ $ 46,856 ​ $ 92,113 Variable ​ 706,353 ​ 707,285 Credit card arrangements ​ 24,399 ​ 21,213 Letters of credit ​ 11,055 ​ 9,785 ​ Commitments to extend credit are agreements to lend to a customer at fixed or variable rates as long as there is no violation of any condition established in the contract. Commitments have fixed expiration dates or other termination clauses and may require payment of a fee. The amount of collateral obtained upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable; inventory; property, plant, and equipment; real estate; and stocks and bonds. Letters of credit include $ 11.1 million of standby letters of credit and no direct pay letters of credit. Standby letters of credit are conditional lending commitments issued by the Company to guaranty the performance of a customer to a third party. Direct pay letters of credit generally are issued to support the marketing of industrial development revenue and housing bonds and provide that all debt service payments will be paid by drawing on the letter of credit. The letter of credit draws are then repaid by draws from the customer’s bank account. Generally, all standby letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting these commitments. The majority of the Company’s loans, commitments, and letters of credit have been granted to customers in the Company’s market area. The concentrations of credit by type are set forth in Note 4. Standby letters of credit were granted primarily to commercial borrowers. Management believes the diversity of the local economy will prevent significant losses in the event of an economic downturn. Note 21 Leases In accordance with GAAP, leases where the Company is the lessee are recognized on-balance sheet through a right-of-use (“ROU”) model that requires recognition of a ROU lease asset and liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. 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, 2024 and 2023. 106 Table of Contents 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 The Company’s lessee leases are operating leases, and consist of leased real estate for branches. Options to extend and renew leases are generally exercised under normal circumstances. Advance notification is required prior to termination, and any noticing period is often limited to the months prior to renewal. Rent escalations are generally specified by a payment schedule, or are subject to a defined formula. 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. Generally, leases do not include guaranteed residual values, but instead typically specify that the leased premises are to be returned in satisfactory condition with the Company liable for damages. For operating leases, the lease liability and ROU asset (before adjustments) are recorded at the present value of future lease payments. The Company is electing to utilize the Wall Street Journal Prime Rate on the date of lease commencement as the lease interest rate. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended (dollars in thousands) December 31, 2024 December 31, 2023 Amortization of ROU Assets - Operating Leases ​ $ ( 2 ) ​ $ ( 2 ) ​ Interest on Lease Liabilities - Operating Leases ​ 87 ​ ​ 87 ​ Operating Lease Cost (Cost resulting from lease payments) ​ 86 ​ ​ 85 ​ Weighted Average Lease Term (Years) - Operating Leases ​ 29.00 ​ ​ 30.00 ​ Weighted Average Discount Rate - Operating Leases ​ 5.50 % ​ 5.50 % ​ A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ December 31, 2024 Operating lease payments due: ​ ​ Within one year ​ $ 86 After one but within two years ​ ​ 94 After two but within three years ​ ​ 94 After three but within four years ​ ​ 94 After four years but within five years ​ ​ 94 After five years ​ ​ 2,949 Total undiscounted cash flows ​ ​ 3,411 Discount on cash flows ​ ​ ( 1,826 ) Total operating lease liabilities ​ $ 1,585 ​ ​ 107 Table of Contents Note 22 Fair Value of Financial Instruments Accounting guidance establishes a fair value hierarchy to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. ​ ​ ​ Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. ​ ​ Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ​ ​ Level 3: 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. ​ Information regarding the fair value of assets measured at fair value on a recurring basis is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Instruments Markets Other Significant ​ ​ Measured ​ for Identical ​ Observable ​ Unobservable ​ ​ At Fair ​ Assets ​ Inputs ​ Inputs ​ ​ Value ​ (Level 1) ​ (Level 2) ​ (Level 3) December 31, 2024 ​ ​ ​ ​ Assets ​ ​ ​ ​ Securities available for sale ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 99,656 ​ $ 99,656 ​ $ — ​ $ — Obligations of U.S. Government sponsored agencies ​ ​ 24,741 ​ ​ — ​ ​ 24,741 ​ ​ — Obligations of states and political subdivisions ​ 56,357 ​ — ​ 56,357 ​ — Mortgage-backed securities ​ ​ 27,993 ​ ​ — ​ ​ 27,993 ​ ​ — Corporate notes ​ 14,314 ​ — ​ 14,314 ​ — Mortgage servicing rights ​ 13,369 ​ — ​ 13,369 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ Assets ​ ​ ​ ​ Securities available for sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of U.S. Government sponsored agencies ​ $ 28,294 ​ $ — ​ $ 28,294 ​ $ — Obligations of states and political subdivisions ​ 58,246 ​ — ​ 58,246 ​ — Mortgage-backed securities ​ ​ 36,130 ​ ​ — ​ ​ 36,130 ​ ​ — Corporate notes ​ 19,038 ​ — ​ 19,038 ​ — Certificates of deposit ​ ​ 489 ​ ​ — ​ ​ 489 ​ ​ — Mortgage servicing rights ​ 13,668 ​ — ​ 13,668 ​ — ​ There were no assets measured on a recurring basis using significant unobservable inputs (Level 3) during these periods. ​ 108 Table of Contents Information regarding the fair value of assets measured at fair value on a non-recurring basis is as follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ ​ In Active ​ Significant ​ ​ ​ ​ ​ Assets ​ Markets ​ Other ​ Significant ​ ​ Measured ​ for Identical ​ Observable ​ Unobservable ​ ​ At Fair ​ Assets ​ Inputs ​ Inputs ​ ​ Value ​ (Level 1) ​ (Level 2) ​ (Level 3) December 31, 2024 ​ ​ ​ ​ OREO ​ $ 741 ​ $ — ​ $ — ​ $ 741 Loans individually evaluated, net of reserve ​ ​ 6,194 ​ ​ — ​ ​ — ​ ​ 6,194 ​ ​ $ 6,935 ​ $ — ​ $ — ​ $ 6,935 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ OREO ​ $ 2,573 ​ $ — ​ $ — ​ $ 2,573 Loans individually evaluated, net of reserve ​ 9,242 ​ — ​ — ​ 9,242 ​ ​ $ 11,815 ​ $ — ​ $ — ​ $ 11,815 ​ The following is a description of the valuation methodologies used by the Company for the items noted in the table above, including the general classification of such instruments in the fair value hierarchy. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral for collateral-dependent loans, or the estimated liquidity of the note. For OREO, the fair value is based upon the estimated fair value of the underlying collateral adjusted for the expected costs to sell. The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Unobservable ​ Range of ​ Average ​ ​ Valuation Technique ​ Inputs ​ Discounts Discount ​ As of December 31, 2024 ​ OREO Third party appraisals, sales contracts or brokered price options Collateral discounts and estimated costs to sell 0 % 0 % Loans individually evaluated Third party appraisals and discounted cash flows Collateral discounts and discount rates 0 % - 100 % 28 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ OREO Third party appraisals, sales contracts or brokered price options Collateral discounts and estimated costs to sell 3 % - 71 % 38 % Loans individually evaluated Third party appraisals and discounted cash flows Collateral discounts and discount rates 0 % - 53 % 31 % ​ ​ 109 Table of Contents The carrying value and estimated fair value of financial instruments at December 31 follows (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 amount Level 1 Level 2 Level 3 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 261,332 ​ $ 261,332 ​ $ — ​ $ — ​ $ 261,332 Securities held to maturity ​ 110,756 ​ 106,229 ​ 3,195 ​ — ​ 109,424 Loans held for sale ​ 3,088 ​ — ​ 3,088 ​ — ​ 3,088 Loans, net ​ 3,473,017 ​ — ​ — ​ 3,285,498 ​ 3,285,498 Other investments ​ 22,643 ​ — ​ — ​ 22,643 ​ 22,643 Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ $ 3,661,073 ​ $ — ​ $ — ​ $ 3,388,650 ​ $ 3,388,650 Notes payable ​ ​ 135,372 ​ ​ — ​ ​ 135,372 ​ ​ — ​ ​ 135,372 Subordinated notes ​ 12,000 ​ ​ — ​ ​ 12,000 ​ ​ — ​ ​ 12,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ amount ​ Level 1 ​ Level 2 ​ Level 3 ​ Total Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 247,468 ​ $ 247,468 ​ $ — ​ $ — ​ $ 247,468 Securities held to maturity ​ 103,324 ​ 99,475 ​ 4,151 ​ — ​ 103,626 Loans held for sale ​ 3,012 ​ — ​ 3,012 ​ — ​ 3,012 Loans, net ​ 3,299,365 ​ — ​ — ​ 3,168,749 ​ 3,168,749 Other investments ​ 21,366 ​ — ​ — ​ 21,366 ​ 21,366 Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ $ 3,432,920 ​ — ​ — ​ 3,153,512 ​ ​ 3,153,512 Securities sold under repurchase agreements ​ ​ 75,747 ​ ​ — ​ ​ 75,747 ​ ​ — ​ ​ 75,747 Notes payable ​ 35,270 ​ ​ — ​ ​ 35,270 ​ ​ — ​ ​ 35,270 Subordinated notes ​ 12,000 ​ ​ — ​ ​ 12,000 ​ ​ — ​ ​ 12,000 Junior subordinated debentures ​ ​ 4,124 ​ ​ — ​ ​ 4,124 ​ ​ — ​ ​ 4,124 ​ The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters that could affect the estimates. Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. ​ Deposits with no stated maturities are defined as having a fair value equivalent to the amount payable on demand. This prohibits adjusting fair value derived from retaining those deposits for an expected future period of time. This component, commonly referred to as a deposit base intangible, is neither considered in the above amounts nor is it recorded as an intangible asset on the consolidated balance sheet. Significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. 110 Table of Contents Note 23 Parent Company Only Financial Statements Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 ​ 2024 2023 ​ ​ (In Thousands) Assets ​ ​ ​ ​ Cash and cash equivalents ​ $ 72,705 ​ $ 37,360 Securities ​ ​ 1,847 ​ ​ 1,935 Investment in Bank ​ 580,523 ​ 598,033 Other assets ​ 317 ​ 272 TOTAL ASSETS ​ $ 655,392 ​ $ 637,600 Liabilities and Stockholders’ Equity ​ ​ Liabilities ​ ​ Subordinated notes ​ $ 12,000 ​ $ 12,000 Junior subordinated notes ​ ​ — ​ ​ 4,124 Other liabilities ​ 3,709 ​ 1,678 Total liabilities ​ 15,709 ​ 17,802 Stockholders’ equity: ​ ​ Common stock ​ 115 ​ 115 Additional paid-in capital ​ 333,842 ​ 333,815 Retained earnings ​ 398,002 ​ 348,001 Treasury stock, at cost ​ ( 82,925 ) ​ ( 53,387 ) Accumulated other comprehensive income (loss) ​ ( 9,351 ) ​ ( 8,746 ) Total stockholders’ equity ​ 639,683 ​ 619,798 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY ​ $ 655,392 ​ $ 637,600 ​ ​ Statements of Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31 ​ 2024 2023 2022 ​ ​ (In Thousands) Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends received from Bank ​ $ 84,561 ​ $ 68,573 ​ $ 22,281 Equity in undistributed earnings of subsidiaries ​ ( 16,959 ) ​ 10,271 ​ 25,258 Other income ​ 144 ​ — ​ 9 Total income ​ 67,746 ​ 78,844 ​ 47,548 Other expenses ​ 2,946 ​ 5,951 ​ 3,204 Benefit for income taxes ​ ( 763 ) ​ ( 1,621 ) ​ ( 870 ) Net income ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 ​ 111 Table of Contents Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 2022 ​ ​ (In thousands) Cash flow from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Adjustments to reconcile net income to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Stock compensation ​ 2,172 ​ 2,142 ​ 1,662 Equity in earnings of subsidiaries (includes dividends) ​ ( 67,602 ) ​ ( 78,844 ) ​ ( 47,539 ) Changes in other assets and liabilities: ​ ​ ​ ​ ​ ​ Other assets ​ ( 11 ) ​ 403 ​ ( 772 ) Other liabilities ​ 2,031 ​ ( 623 ) ​ ( 2,054 ) Net cash used in operating activities ​ 2,153 ​ ( 2,408 ) ​ ( 3,489 ) Cash flows from investing activities, net of effects of business combination: ​ ​ ​ ​ ​ ​ Dividends received from Bank ​ 84,561 ​ 69,982 ​ 22,355 Dividends received from Veritas ​ — ​ 37 ​ — Net cash used in business combination ​ — ​ ( 4,554 ) ​ 5,159 Proceeds from other investments ​ — ​ 248 ​ — Net cash provided by investing activities ​ 84,561 ​ 65,713 ​ 27,514 Cash flows from financing activities, net of effects of business combination: ​ ​ ​ ​ ​ ​ Repayment of junior subordinated debentures ​ ( 4,124 ) ​ ( 8,248 ) ​ — Repayment of subordinate notes ​ — ​ ( 11,500 ) ​ — Proceeds from subordinated notes ​ — ​ — ​ 6,000 Cash dividends paid ​ ( 15,562 ) ​ ( 11,106 ) ​ ( 7,248 ) Issuance of common stock ​ 245 ​ 195 ​ 114 Repurchase of common stock ​ ( 31,928 ) ​ ( 10,046 ) ​ ( 14,314 ) Net cash used in financing activities ​ ( 51,369 ) ​ ( 40,705 ) ​ ( 15,448 ) Net increase in cash and cash equivalents ​ 35,345 ​ 22,600 ​ 8,577 Cash and cash equivalents at beginning ​ 37,360 ​ 14,760 ​ 6,183 Cash and cash equivalents at end ​ $ 72,705 ​ $ 37,360 ​ $ 14,760 ​ ​ 112 Table of Contents Note 24 Earnings Per Common Share See Note 1 for the Company’s accounting policy regarding per share computations. Earnings per common share, earnings per share assuming dilution, and related information are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in thousands, except per share data) 2024 2023 2022 Basic ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income available to common shareholders ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Less: Earnings allocated to participating securities ​ ​ ( 349 ) ​ $ ( 425 ) ​ $ ( 330 ) Net income allocated to common shareholders ​ $ 65,214 ​ $ 74,089 ​ $ 44,884 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding including participating securities ​ ​ 10,083,647 ​ ​ 10,231,569 ​ ​ 8,104,117 Less: Participating securities ​ ​ ( 53,746 ) ​ ​ ( 58,359 ) ​ ​ ( 59,211 ) Average shares ​ ​ 10,029,901 ​ ​ 10,173,210 ​ ​ 8,044,906 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per common shares ​ $ 6.50 ​ $ 7.28 ​ $ 5.58 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income available to common shareholders ​ $ 65,563 ​ $ 74,514 ​ $ 45,214 Weighted average common shares outstanding for basic earnings per common share ​ ​ 10,029,901 ​ ​ 10,173,210 ​ ​ 8,044,906 Add: Dilutive effects of stock based compensation awards ​ ​ 24,667 ​ ​ 25,783 ​ ​ 24,354 Average shares and dilutive potential common shares ​ ​ 10,054,568 ​ ​ 10,198,993 ​ ​ 8,069,260 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share ​ $ 6.50 ​ $ 7.28 ​ $ 5.58 ​ ​ ​ ​ ​ ​ ​ ​ ​ 113 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ​