Bank First Corp 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2024, included in our Annual Report and with our unaudited condensed accompanying notes set forth in this Quarterly Report on Form 10-Q for the quarterly period June 30, 2025. FORWARD-LOOKING STATEMENTS Certain statements contained in this report are forward-looking statements within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to the Company’s assets, business, cash flows, condition (financial or otherwise), credit quality, financial performance, liquidity, short and long-term performance goals, prospects, results of operations, strategic initiatives, potential future acquisitions, disposition and other growth opportunities. These statements, which are based upon certain assumptions and estimates and describe the Company’s future plans, results, strategies and expectations, can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” “projection” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates and projections will be achieved. Accordingly, the Company cautions investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict and that are beyond the Company’s control. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date of this report, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statement in this report including, without limitation, the risks and other factors set forth in the Company’s Registration Statements under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk factors.” Many of these factors are beyond the Company’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, investors should not place undue reliance on any such forward-looking statements. Any forward-looking statements speaks only as of the date of this report, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. We qualify all of our forward-looking statements by these cautionary statements. OVERVIEW Bank First Corporation is a Wisconsin corporation that was organized primarily to serve as the holding company for Bank First, N.A. Bank First, N.A., which was incorporated in 1894, is a nationally-chartered bank headquartered in Manitowoc, Wisconsin. It is a member of the Board of Governors of the Federal Reserve System (“Federal Reserve”), and is regulated by the Office of the Comptroller of the Currency (“OCC”). Including its headquarters in Manitowoc, Wisconsin, the Bank has twenty-seven banking locations in Manitowoc, Outagamie, Brown, Winnebago, Sheboygan, Shawano, Waupaca, Ozaukee, Monroe, Fond du Lac, Waushara, Dane, Columbia, Door and Jefferson counties in Wisconsin. The Bank offers loan, deposit and treasury management products at each of its banking locations. 27 Table of Contents ​ As with most community banks, the Bank derives a significant portion of its income from interest received on loans and investments. The Bank’s primary source of funding is deposits, both interest-bearing and noninterest-bearing. In order to maximize the Bank’s net interest income, or the difference between the income on interest-earning assets and the expense of interest-bearing liabilities, the Bank must not only manage the volume of these balance sheet items, but also the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. To account for credit risk inherent in all loans, the Bank maintains an ACL - Loans to absorb possible losses on existing loans that may become uncollectible. The Bank establishes and maintains this allowance by charging a provision for credit losses against operating earnings. Beyond its net interest income, the Bank further receives income through the net gain on sale of loans held for sale as well as servicing income which is retained on those sold loans. In order to maintain its operations and bank locations, the Bank incurs various operating expenses which are further described within the “Results of Operations” later in this section. 28 Table of Contents ​ SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following tables present certain selected historical consolidated financial data as of the dates or for the period indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the Three Months Ended ​ At or for the Six Months Ended ​ (In thousands, except per share data) 6/30/2025 3/31/2025 12/31/2024 9/30/2024 6/30/2024 6/30/2025 6/30/2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Results of Operations: ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 54,575 ​ $ 55,048 ​ $ 53,754 ​ $ 54,032 ​ $ 49,347 ​ $ 109,623 ​ $ 98,619 ​ Interest expense ​ 17,873 ​ 18,511 ​ 18,193 ​ 18,149 ​ 16,340 ​ 36,384 ​ 32,263 ​ Net interest income ​ 36,702 ​ 36,537 ​ 35,561 ​ 35,883 ​ 33,007 ​ 73,239 ​ 66,356 ​ Provision for credit losses ​ 200 ​ 400 ​ (1,000) ​ — ​ — ​ 600 ​ 200 ​ Net interest income after provision for credit losses ​ 36,502 ​ 36,137 ​ 36,561 ​ 35,883 ​ 33,007 ​ 72,639 ​ 66,156 ​ Noninterest income ​ 4,921 ​ 6,588 ​ 4,513 ​ 4,893 ​ 5,877 ​ 11,509 ​ 10,274 ​ Noninterest expense ​ 20,756 ​ 20,604 ​ 19,286 ​ 20,100 ​ 19,057 ​ 41,360 ​ 39,381 ​ Income before income tax expense ​ 20,667 ​ 22,121 ​ 21,788 ​ 20,676 ​ 19,827 ​ 42,788 ​ 37,049 ​ Income tax expense ​ 3,792 ​ 3,880 ​ 4,248 ​ 4,124 ​ 3,768 ​ 7,672 ​ 5,578 ​ Net income ​ $ 16,875 ​ $ 18,241 ​ $ 17,540 ​ $ 16,552 ​ $ 16,059 ​ $ 35,116 ​ $ 31,471 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share - basic ​ $ 1.71 ​ $ 1.82 ​ $ 1.75 ​ $ 1.65 ​ $ 1.59 ​ $ 3.53 ​ $ 3.10 ​ Earnings per common share - diluted ​ 1.71 ​ 1.82 ​ 1.75 ​ 1.65 ​ 1.59 ​ 3.53 ​ 3.10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic weighted average ​ 9,854,306 ​ 9,950,970 ​ 9,959,379 ​ 9,959,556 ​ 10,025,977 ​ 9,901,990 ​ 10,101,491 ​ Diluted weighted average ​ 9,868,739 ​ 9,972,152 ​ 9,988,781 ​ 9,980,544 ​ 10,039,862 ​ 9,922,369 ​ 10,122,564 ​ Outstanding ​ 9,833,476 ​ 9,973,276 ​ 10,012,088 ​ 10,011,428 ​ 10,031,350 ​ 9,833,476 ​ 10,031,350 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income / noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service charges ​ $ 2,053 ​ $ 2,011 ​ $ 2,119 ​ $ 2,189 ​ $ 2,101 ​ $ 4,064 ​ $ 3,735 ​ Income from Ansay ​ 1,153 ​ 1,181 ​ 82 ​ 1,062 ​ 1,379 ​ 2,334 ​ 2,358 ​ Loan servicing income ​ 733 ​ 732 ​ 744 ​ 733 ​ 735 ​ 1,465 ​ 1,461 ​ Valuation adjustment on mortgage servicing rights ​ ​ (99) ​ ​ 175 ​ ​ 18 ​ ​ (344) ​ ​ 339 ​ ​ 76 ​ ​ 27 ​ Net gain on sales of mortgage loans ​ 338 ​ 334 ​ 424 ​ 377 ​ 277 ​ 672 ​ 496 ​ Other noninterest income ​ 743 ​ 2,155 ​ 1,126 ​ 876 ​ 1,046 ​ 2,898 ​ 2,197 ​ Total noninterest income ​ $ 4,921 ​ $ 6,588 ​ $ 4,513 ​ $ 4,893 ​ $ 5,877 ​ $ 11,509 ​ $ 10,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel expense ​ $ 10,427 ​ $ 10,985 ​ $ 9,886 ​ $ 10,118 ​ $ 10,004 ​ $ 21,412 ​ $ 20,897 ​ Occupancy, equipment and office ​ 1,922 ​ 1,591 ​ 1,445 ​ 1,598 ​ 1,330 ​ 3,513 ​ 2,914 ​ Data processing ​ 2,620 ​ 2,444 ​ 2,687 ​ 2,502 ​ 2,114 ​ 5,064 ​ 4,503 ​ Postage, stationery and supplies ​ 270 ​ 240 ​ 229 ​ 213 ​ 205 ​ 510 ​ 443 ​ Net gain (loss) on sales and valuations of other real estate owned ​ (159) ​ — ​ (186) ​ — ​ (461) ​ (159) ​ (508) ​ Net loss on sales of securities ​ — ​ — ​ — ​ — ​ — ​ — ​ 34 ​ Advertising ​ 61 ​ 65 ​ 78 ​ 61 ​ 79 ​ 126 ​ 174 ​ Charitable contributions ​ 274 ​ 476 ​ 200 ​ 183 ​ 234 ​ 750 ​ 410 ​ Federal deposit insurance ​ ​ 630 ​ ​ 630 ​ ​ 495 ​ ​ 495 ​ ​ 443 ​ ​ 1,260 ​ ​ 860 ​ Outside service fees ​ 1,135 ​ 788 ​ 1,135 ​ 1,103 ​ 1,446 ​ 1,923 ​ 2,322 ​ Amortization of intangibles ​ 1,273 ​ 1,298 ​ 1,389 ​ 1,429 ​ 1,475 ​ 2,571 ​ 2,975 ​ Other noninterest expense ​ 2,303 ​ 2,087 ​ 1,928 ​ 2,398 ​ 2,188 ​ 4,390 ​ 4,357 ​ Total noninterest expense ​ $ 20,756 ​ $ 20,604 ​ $ 19,286 ​ $ 20,100 ​ $ 19,057 ​ $ 41,360 ​ $ 39,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period-end balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 120,328 ​ $ 300,865 ​ $ 261,332 ​ $ 204,427 ​ $ 98,950 ​ $ 120,328 ​ $ 98,950 ​ Investment securities available-for-sale, at fair value ​ 167,209 ​ 163,743 ​ 223,061 ​ 128,438 ​ 127,977 ​ 167,209 ​ 127,977 ​ Investment securities held-to-maturity, at cost ​ 109,854 ​ 110,241 ​ 110,756 ​ 109,236 ​ 110,648 ​ 109,854 ​ 110,648 ​ Loans ​ ​ 3,580,357 ​ ​ 3,548,070 ​ ​ 3,517,168 ​ ​ 3,470,920 ​ ​ 3,428,635 ​ ​ 3,580,357 ​ ​ 3,428,635 ​ Allowance for credit losses - loans ​ (44,292) ​ (43,749) ​ (44,151) ​ (45,212) ​ (45,118) ​ (44,292) ​ (45,118) ​ Premises and equipment ​ ​ 75,667 ​ ​ 72,670 ​ ​ 71,108 ​ ​ 69,710 ​ ​ 68,633 ​ ​ 75,667 ​ ​ 68,633 ​ Goodwill and other intangibles, net ​ 193,738 ​ 195,011 ​ 196,309 ​ 197,698 ​ 199,127 ​ 193,738 ​ 199,127 ​ Mortgage Servicing Rights ​ ​ 13,445 ​ ​ 13,544 ​ ​ 13,369 ​ ​ 13,351 ​ ​ 13,694 ​ ​ 13,445 ​ ​ 13,694 ​ Other Assets ​ ​ 148,776 ​ ​ 144,670 ​ ​ 146,108 ​ ​ 145,930 ​ ​ 143,274 ​ ​ 148,776 ​ ​ 143,274 ​ Total assets ​ 4,365,082 ​ 4,505,065 ​ 4,495,060 ​ 4,294,498 ​ 4,145,820 ​ 4,365,082 ​ 4,145,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 3,595,424 ​ 3,674,218 ​ 3,661,073 ​ 3,484,741 ​ 3,399,941 ​ 3,595,424 ​ 3,399,941 ​ Borrowings ​ ​ 121,915 ​ ​ 146,890 ​ ​ 147,372 ​ ​ 147,346 ​ ​ 102,321 ​ ​ 121,915 ​ ​ 102,321 ​ Other liabilities ​ ​ 35,410 ​ ​ 35,543 ​ ​ 46,932 ​ ​ 33,516 ​ ​ 28,979 ​ ​ 35,410 ​ ​ 28,979 ​ Total liabilities ​ ​ 3,752,749 ​ ​ 3,856,651 ​ ​ 3,855,377 ​ ​ 3,665,603 ​ ​ 3,531,241 ​ ​ 3,752,749 ​ ​ 3,531,241 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 612,333 ​ 648,414 ​ 639,683 ​ 628,895 ​ 614,579 ​ 612,333 ​ 614,579 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book value per common share ​ 62.27 ​ 65.02 ​ 63.89 ​ 62.82 ​ 61.27 ​ 62.27 ​ 61.27 ​ Tangible book value per common share (1) ​ 42.57 ​ 45.46 ​ 44.28 ​ 43.07 ​ 41.42 ​ 42.57 ​ 41.42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 29 Table of Contents ​ Average balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 3,560,945 ​ $ 3,541,995 ​ $ 3,482,974 ​ $ 3,450,423 ​ $ 3,399,906 ​ $ 3,551,522 ​ $ 3,377,526 ​ Interest-earning assets ​ 4,006,981 ​ 4,100,846 ​ 3,962,690 ​ 3,833,968 ​ 3,696,099 ​ 4,053,653 ​ 3,718,801 ​ Total assets ​ 4,407,112 ​ 4,498,891 ​ 4,360,469 ​ 4,231,112 ​ 4,094,542 ​ 4,452,748 ​ 4,119,719 ​ Deposits ​ 3,596,755 ​ 3,672,039 ​ 3,545,694 ​ 3,435,172 ​ 3,401,828 ​ 3,634,190 ​ 3,423,985 ​ Interest-bearing liabilities ​ 2,762,544 ​ 2,837,182 ​ 2,655,609 ​ 2,583,382 ​ 2,466,726 ​ 2,799,658 ​ 2,489,514 ​ Goodwill and other intangibles, net ​ 194,503 ​ 195,752 ​ 196,966 ​ 198,493 ​ 199,959 ​ 195,124 ​ 200,684 ​ Stockholders’ equity ​ 623,861 ​ 645,708 ​ 634,137 ​ 620,821 ​ 610,818 ​ 634,724 ​ 612,004 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial ratios (2): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets ​ 1.54 % 1.64 % 1.60 % 1.56 % 1.58 % 1.59 % 1.54 % Return on average common equity ​ 10.85 % 11.46 % 11.00 % 10.61 % 10.57 % 11.16 % 10.34 % Average equity to average assets ​ 14.16 % 14.35 % 14.54 % 14.67 % 14.92 % 14.25 % 14.86 % Stockholders’ equity to assets ​ 14.03 % 14.39 % 14.23 % 14.64 % 14.82 % 14.03 % 14.82 % Tangible equity to tangible assets (1) ​ 10.04 % 10.52 % 10.31 % 10.53 % 10.53 % 10.04 % 10.53 % Loan yield ​ 5.66 % 5.68 % 5.56 % 5.73 % 5.51 % 5.67 % 5.46 % Earning asset yield ​ 5.50 % 5.49 % 5.44 % 5.64 % 5.40 % 5.50 % 5.37 % Cost of funds ​ 2.59 % 2.65 % 2.73 % 2.79 % 2.66 % 2.62 % 2.61 % Net interest margin, taxable equivalent ​ 3.72 % 3.65 % 3.61 % 3.76 % 3.63 % 3.69 % 3.62 % Net loan charge-offs to average loans ​ — % 0.09 % 0.01 % 0.04 % (0.05) % 0.05 % (0.05) % Nonperforming loans to total loans ​ 0.38 % 0.19 % 0.24 % 0.32 % 0.31 % 0.38 % 0.31 % Nonperforming assets to total assets ​ 0.31 % 0.17 % 0.21 % 0.28 % 0.27 % 0.31 % 0.27 % Allowance for credit losses - loans to total loans ​ 1.24 % 1.23 % 1.26 % 1.30 % 1.32 % 1.24 % 1.32 % (1) These measures are not measures prepared in accordance with GAAP, and are therefore considered to be non-GAAP financial measures. See “GAAP reconciliation and management explanation of non-GAAP financial measures” for a reconciliation of these measures to their most comparable GAAP measures. (2) Income statement-related ratios for partial year periods are annualized. GAAP RECONCILIATION AND MANAGEMENT EXPLANATION OF NON-GAAP FINANCIAL MEASURES We identify certain financial measures discussed in the Report as being “non-GAAP financial measures.” The non-GAAP financial measures presented in this Report are tangible book value per common share and tangible equity to tangible assets. In accordance with the SEC’s rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in our selected historical consolidated financial data may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have presented in our selected historical consolidated financial data when comparing such non-GAAP financial measures. The following discussion and reconciliations provide a more detailed analysis of these non-GAAP financial measures. 30 Table of Contents ​ Tangible book value per common share and tangible equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by the Company’s management to evaluate capital adequacy. Because intangible assets such as goodwill and other intangibles vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare the Company’s capital position to other companies. The most directly comparable financial measures calculated in accordance with GAAP are book value per common share, return on average common equity and stockholders’ equity to total assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the Three Months Ended ​ At or for the Six Months Ended (In thousands, except per share data) 6/30/2025 3/31/2025 12/31/2024 9/30/2024 6/30/2024 6/30/2025 6/30/2024 Tangible Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 4,365,082 ​ $ 4,505,065 ​ $ 4,495,060 ​ $ 4,294,498 ​ $ 4,145,820 ​ $ 4,365,082 ​ $ 4,145,820 ​ Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ Core deposit intangible, net of amortization ​ (18,632) ​ (19,905) ​ (21,203) ​ (22,592) ​ (24,021) ​ (18,632) ​ (24,021) ​ Tangible assets ​ $ 4,171,344 ​ $ 4,310,054 ​ $ 4,298,751 ​ $ 4,096,800 ​ $ 3,946,693 ​ $ 4,171,344 ​ $ 3,946,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ $ 612,333 ​ $ 648,414 ​ $ 639,683 ​ $ 628,895 ​ $ 614,579 ​ $ 612,333 ​ $ 614,579 ​ Adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ (175,106) ​ Core deposit intangible, net of amortization ​ (18,632) ​ (19,905) ​ (21,203) ​ (22,592) ​ (24,021) ​ (18,632) ​ (24,021) ​ Tangible common equity ​ $ 418,595 ​ $ 453,403 ​ $ 443,374 ​ $ 431,197 ​ $ 415,452 ​ $ 418,595 ​ $ 415,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book value per common share ​ $ 62.27 ​ $ 65.02 ​ $ 63.89 ​ $ 62.82 ​ $ 61.27 ​ $ 62.27 ​ $ 61.27 ​ Tangible book value per common share ​ 42.57 ​ 45.46 ​ 44.28 ​ 43.07 ​ 41.42 ​ 42.57 ​ 41.42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity to total assets ​ 14.03 % 14.39 % 14.23 % 14.64 % 14.82 % 14.03 % 14.82 % Tangible common equity to tangible assets ​ 10.04 % 10.52 % 10.31 % 10.53 % 10.53 % 10.04 % 10.53 % ​ RESULTS OF OPERATIONS Results of Operations for the Three Months Ended June 30, 2025 and June 30, 2024 General . Net income increased $0.8 million to $16.9 million for three months ended June 30, 2025, compared to $16.1 million for the same period in 2024. This increase is primarily driven from new and renewed loans pricing at higher yields while deposits, particularly certificates, continue to reprice lower. Average balances of interest-earning assets grew $0.3 million period-over-period, amplifying the impact of higher yields on these new and renewed loans. Net Interest Income . The management of interest income and expense is fundamental to our financial performance. Net interest income, the difference between interest income and interest expense, is the largest component of the Company’s total revenue. Management closely monitors both total net interest income and the net interest margin (net interest income divided by average earning assets). We seek to maximize net interest income without exposing the Company to an excessive level of interest rate risk through our asset and liability policies. Interest rate risk is managed by monitoring the pricing, maturity and repricing options of all classes of interest-bearing assets and liabilities. Our net interest margin can also be adversely impacted by the reversal of interest on nonaccrual loans and the reinvestment of loan payoffs into lower yielding investment securities and other short-term investments. Net interest and dividend income increased by $3.7 million to $36.7 million for the three months ended June 30, 2025 compared to $33.0 million for three months ended June 30, 2024. Total average interest-earning assets were $4.01 billion for the three months ended June 30, 2025, up from $3.70 billion for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. Interest Income. Total interest income increased $5.3 million, or 10.6%, to $54.6 million for the three months ended June 30, 2025 compared to $49.3 million for the same period in 2024. The increase in total interest income was primarily due to an increase in in interest-earning assets coupled with higher average interest rates earned on interest-earning assets. The average balance of interest-earning assets increased by $310.9 million during the three months ended June 30, 2025 compared to the same period in 2024 and the average interest rate earned on these assets increased by 0.10% in the year-over-year second quarters. 31 Table of Contents ​ Interest Expense. Interest expense increased $1.6 million, or 9.4%, to $17.9 million for the three months ended June 30, 2025 compared to $16.3 million for the same period in 2024. The increase in interest expense was primarily due to higher levels of interest-bearing liabilities. Interest expense on interest-bearing deposits increased by $0.4 million to $16.2 million for the three months ended June 30, 2025 compared to $15.8 million for the same period in 2024. The average balance and rate of interest-bearing deposits was $2.62 billion and 2.48% for the three months ended June 30, 2025, compared to $2.42 billion and 2.63% for the same period in 2024. The Bank's cost of funds decreased by 0.07% from the second quarter of 2024, including a decrease of 0.44% in the average rate paid on the Bank's interest checking and 0.35% in average rate paid on the Bank’s certificate of deposits. Provision for Credit Losses. Credit risk is inherent in the business of making loans. We establish an allowance for credit losses through charges to earnings, which are shown in the statements of operations as the provision for credit losses. The provision for credit losses and level of allowance for each period are dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market area. The determination of the amount is complex and involves a high degree of judgment and subjectivity. We recorded a provision of $0.2 million for credit loss during the three months ended June 30, 2025 compared to no provision for credit loss during the same period in 2024. Economic forecasts, primarily US gross domestic product projections, decreased slightly during the second quarter of 2025 while projections for unemployment increased. We recorded minimal net charge-offs during the three months ended June 30, 2025 compared to net recoveries of $0.2 million during the three months ended June 30, 2024. Also, due to a reduction in unfunded loan commitments and an increase in outstanding loans, the Bank moved $0.4 million from its ACL-Unfunded Commitments to its ACL – Loans during the second quarter of 2025. The Bank’s loan portfolio continues to exhibit very little credit stress. The ACL - Loans was $44.3 million, or 1.24% of total loans, at June 30, 2025 compared to $45.1 million, or 1.32% of total loans at June 30, 2024. Noninterest Income. Noninterest income is an important component of our total revenues. A significant portion of our noninterest income has historically been associated with service charges and income from the Bank’s unconsolidated subsidiary, Ansay. Other sources of noninterest income include loan servicing fees and gains on sales of mortgage loans. Noninterest income decreased $1.0 million to $4.9 million for the three months ended June 30, 2025 compared to $5.9 million for the same period in 2024. Income provided by the Bank’s investment in Ansay & Associates, LLC totaled $1.2 million during the second quarter of 2025, down $0.2 million from the prior-year second quarter. Negative valuation adjustments to the Bank’s MSRs totaling $0.1 million during the second quarter of 2025 compared negatively to $0.3 million in positive valuation adjustments during the second quarter of 2024. Finally, the Bank benefited from a $0.4 million gain during the second quarter of 2024 from death benefits on bank-owned life insurance policies, creating a negative variance year-over-year in other non-interest income for the second quarter. The major components of our noninterest income are listed below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 2024 $ Change % Change (in thousands) ​ (In thousands) ​ Noninterest Income ​ ​ ​ ​ ​ Service charges ​ $ 2,053 ​ $ 2,101 ​ $ (48) ​ ​ (2) % ​ Income from Ansay ​ ​ 1,153 ​ ​ 1,379 ​ ​ (226) ​ ​ (16) % ​ Loan servicing income ​ 733 ​ 735 ​ (2) ​ (0) % ​ Valuation adjustment on MSR ​ ​ (99) ​ ​ 339 ​ ​ (438) ​ ​ NM ​ ​ Net gain on sales of mortgage loans ​ 338 ​ 277 ​ 61 ​ 22 % ​ Other ​ 743 ​ 1,046 ​ (303) ​ (29) % ​ Total noninterest income ​ $ 4,921 ​ $ 5,877 ​ $ (956) ​ ​ (16) % ​ ​ 32 Table of Contents ​ Noninterest Expense. Noninterest expense increased $1.7 million to $20.8 million for the three months ended June 30, 2025 compared to $19.1 million for the same period in 2024. Occupancy, equipment and office expense was elevated during the second quarter of 2025, up $0.6 million from the prior-year second quarter, the result of expenses from multiple branch remodels and the opening of a new branch in Sturgeon Bay, WI during the most recent quarter. Data processing expense was once again impacted in the most recent quarter by elevated expenditures related to the Bank’s upgrade of its digital banking platform. Outside service fees declined by $0.3 million in the most recent quarter compared to the second quarter of 2024. Included in outside service fees during the second quarter of 2025 was $0.1 million in commission expense from the sale of a former branch, which generated a $0.2 million gain. By contrast, the second quarter of 2024 included $0.4 million in commission expense from former branch sales, resulting in $0.5 million in gains. The major components of our noninterest expense are listed below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ 2025 2024 $ Change % Change ​ (In thousands) ​ Noninterest Expense ​ ​ ​ ​ Salaries, commissions, and employee benefits ​ $ 10,427 ​ $ 10,004 ​ $ 423 4 % Occupancy ​ 1,922 ​ 1,330 ​ 592 45 % Data processing ​ 2,620 ​ 2,114 ​ 506 24 % Postage, stationary, and supplies ​ 270 ​ 205 ​ 65 32 % Net gain on sales and valuations of other real estate owned ​ ​ (159) ​ ​ (461) ​ ​ 302 ​ (66) % Advertising ​ 61 ​ 79 ​ (18) (23) % Charitable contributions ​ 274 ​ 234 ​ 40 17 % Federal deposit insurance ​ ​ 630 ​ ​ 443 ​ ​ 187 42 % Outside service fees ​ 1,135 ​ 1,446 ​ (311) (22) % Amortization of intangibles ​ 1,273 ​ 1,475 ​ (202) (14) % Other ​ 2,303 ​ 2,188 ​ 115 5 % Total noninterest expenses ​ $ 20,756 ​ $ 19,057 ​ $ 1,699 9 % ​ Income Tax Expense. We recorded a provision for income taxes of $3.8 million for the three months ended June 30, 2025 compared to a provision of $3.8 million for the same period during 2024, reflecting effective tax rates of 18.3% and 19.0%, respectively. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios. Results of Operations for the Six Months Ended June 30, 2025 and June 30, 2024 General . Net income increased $3.6 million to $35.1 million for six months ended June 30, 2025, compared to $31.5 million for the same period in 2024. The Bank’s net income continues to benefit from new and renewed loans being priced at higher yields, while deposits continue to reprice lower. Net Interest Income . Net interest and dividend income increased by $6.8 million to $73.2 million for the six months ended June 30, 2025 compared to $66.4 million for six months ended June 30, 2024. As discussed earlier, the rise in net interest income was mainly driven by the repricing of new and renewed loans in a higher interest rate environment and overall growth in interest-earning assets. Comparing the first six months of 2025 to the first six months of 2024, rates earned on interest-earning assets increased by 0.13% while average interest-earning assets increased by $334.9 million. Tax equivalent net interest margin increased 0.07% to 3.69% for the six months ended June 30, 2025, up from 3.62% for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. Interest Income. Total interest income increased $11.0 million, or 11.2%, to $109.6 million for the six months ended June 30, 2025 compared to $98.6 million for the same period in 2024. The increase in total interest income was primarily due to the aforementioned increase in rates earned on higher average interest-earning assets over recent quarters. 33 Table of Contents ​ Interest Expense. Interest expense increased $4.1 million, or 12.8%, to $36.4 million for the six months ended June 30, 2025 compared to $32.3 million for the same period in 2024. The increase in interest expense was primarily due to elevated balances in average interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $310.1 million during the first six months of 2025 compared to the same period in 2024 and the average interest rate paid on these balances was 2.62% for the first half of 2025 compared to 2.61% for the first half of 2024. Interest expense on interest-bearing deposits totaled $33.1 million and $31.2 million for the six months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits was 2.51% for the six months ended June 30, 2025, compared to 2.57% for the same period in 2024. Provision for Credit Losses. We recorded a provision for credit losses of $0.6 million for the six months ended June 30, 2025 compared to $0.2 million for the same period in 2024. The increased provision for the first six months of 2025 was primarily related to loan growth. We recorded net charge-offs of $0.8 million for the six months ended June 30, 2025 compared to net recoveries of $0.8 million for the same period in 2024. As mentioned earlier, due to a reduction in unfunded loan commitments and an increase in outstanding loans, the Bank also transferred $0.4 million from its ACL-Unfunded Commitments to its ACL – Loans during the first six months of 2025. The ACL - Loans was $44.3 million, or 1.24% of total loans, at June 30, 2025 compared to $45.1 million, or 1.32% of total loans at June 30, 2024. Noninterest Income. Noninterest income is an important component of our total revenues. A significant portion of our noninterest income has historically been associated with service charges and income from the Bank’s unconsolidated subsidiary, Ansay. Other sources of noninterest income include loan servicing fees and gains on sales of mortgage loans. Noninterest income increased $1.2 million to $11.5 million for the six months ended June 30, 2025 compared to $10.3 million for the same period in 2024. Service charges increased $0.3 million for the first six months of 2025 compared to the same period in 2024 as the Bank continues to benefit from a vendor incentive program which was renegotiated in the second quarter of 2024 related to credit and debit card payments processing. During the first six months of 2025, the Bank recognized a $1.1 million gain from death benefits tied to its bank-owned life insurance portfolio, compared to $0.4 million in the same period of 2024. These amounts are recorded under other noninterest income. The major components of our noninterest income are listed below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 $ Change % Change ​ (In thousands) ​ Noninterest Income ​ ​ ​ ​ Service Charges ​ $ 4,064 ​ $ 3,735 ​ $ 329 9 % Income from Ansay ​ 2,334 ​ 2,358 ​ (24) (1) % Loan Servicing income ​ 1,465 ​ 1,461 ​ 4 0 % Valuation adjustment on MSR ​ ​ 76 ​ ​ 27 ​ ​ 49 181 % Net gain on sales of mortgage loans ​ 672 ​ 496 ​ 176 35 % Other ​ 2,898 ​ 2,197 ​ 701 32 % Total noninterest income ​ $ 11,509 ​ $ 10,274 ​ $ 1,235 12 % ​ ​ 34 Table of Contents ​ Noninterest Expense. Noninterest expense increased $2.0 million to $41.4 million for the six months ended June 30, 2025 compared to $39.4 million for the same period in 2024. Occupancy expense increased by $0.6 million, or 20.6%, over the first half of 2024 due to aforementioned branch construction and remodel projects competed during the first six months of 2025. Data processing expense increased by $0.6 million, or 12.5%, over the first two quarters of 2025 due to the aforementioned elevated expenditures related to the Bank’s upgrade of its digital banking platform. Also, federal deposit insurance increased primarily due to elevated deposit levels which occurred late in the fourth quarter of 2024 and persisted through much of the second quarter of 2025. Finally, gains on sales and valuations of OREO totaling $0.2 million during the first two quarters of 2025 was less than similar gains of $0.5 million during the first two quarters of 2024. The major components of our noninterest expense are listed below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 $ Change % Change ​ ​ (In thousands) ​ Noninterest Expense ​ ​ ​ ​ Salaries, commissions, and employee benefits ​ $ 21,412 ​ $ 20,897 ​ $ 515 2 % Occupancy ​ 3,513 ​ 2,914 ​ 599 21 % Data processing ​ 5,064 ​ 4,503 ​ 561 12 % Postage, stationary, and supplies ​ 510 ​ 443 ​ 67 15 % Net gain on sales and valuations of other real estate owned ​ ​ (159) ​ ​ (508) ​ ​ 349 ​ (69) % Net loss on sales of securities ​ — ​ 34 ​ (34) (100) % Advertising ​ 126 ​ 174 ​ (48) (28) % Charitable contributions ​ 750 ​ 410 ​ 340 83 % Federal deposit insurance ​ ​ 1,260 ​ ​ 860 ​ ​ 400 47 % Outside service fees ​ 1,923 ​ 2,322 ​ (399) (17) % Amortization of intangibles ​ 2,571 ​ 2,975 ​ (404) (14) % Other ​ 4,390 ​ 4,357 ​ 33 1 % Total noninterest expenses ​ $ 41,360 ​ $ 39,381 ​ $ 1,979 5 % ​ Income Tax Expense. We recorded a provision for income taxes of $7.7 million for the six months ended June 30, 2025 compared to a provision of $5.6 million for the same period during 2024, reflecting effective tax rates of 17.9% and 15.1%, respectively. The Company’s home state passed tax legislation during the third quarter of 2023 which exempted income from a significant portion of the Company’s loans from taxation in Wisconsin. Final rules relating to qualifying loans under this legislation were not published until the first quarter of 2024. Based on these final rules, the Company was able to further reduce its estimated tax liability from 2023 by $1.3 million, resulting in the lower provision for income taxes and effective tax rate during the first six months of 2024. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios. ​ 35 Table of Contents ​ NET INTEREST MARGIN Net interest income represents the difference between interest earned, primarily on loans and investments, and interest paid on funding sources, primarily deposits and borrowings. Interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate paid on total interest-bearing liabilities. Net interest margin is the amount of net interest income, on a fully taxable-equivalent basis, expressed as a percentage of average interest-earning assets. The average rate earned on earning assets is the amount of annualized taxable-equivalent interest income expressed as a percentage of average earning assets. The average rate paid on interest-bearing liabilities is equal to annualized interest expense as a percentage of average interest-bearing liabilities. The following tables set forth the distribution of our average assets, liabilities and stockholders’ equity, and average rates earned or paid on a fully taxable equivalent basis for each of the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ June 30, 2025 ​ June 30, 2024 ​ ​ ​ Interest ​ ​ ​ Interest ​ ​ ​ Average ​ Income/ ​ Rate Earned/ Paid ​ Average ​ Income/ ​ Rate Earned/ Paid ​ ​ Balance ​ Expenses (1) ​ (1) ​ Balance ​ Expenses (1) ​ (1) ​ ​ (dollars in thousands) ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets ​ ​ ​ ​ ​ Loans (2) ​ ​ ​ ​ ​ Taxable ​ $ 3,432,506 ​ $ 194,859 5.68 % $ 3,293,213 ​ $ 182,549 5.54 % Tax-exempt ​ 128,439 ​ 6,818 5.31 % 106,693 ​ 4,895 4.59 % Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable (available for sale) ​ 159,275 ​ 6,913 4.34 % 123,616 ​ 4,862 3.93 % Tax-exempt (available for sale) ​ 30,855 ​ 1,115 3.61 % 32,888 ​ 1,139 3.46 % Taxable (held to maturity) ​ 106,783 ​ 4,282 4.01 % 108,037 ​ 4,283 3.96 % Tax-exempt (held to maturity) ​ 2,404 ​ 66 2.75 % 3,217 ​ 85 2.64 % Cash and due from banks ​ 146,719 ​ 6,526 4.45 % 28,435 ​ 1,945 6.84 % Total interest-earning assets ​ 4,006,981 ​ 220,579 5.50 % 3,696,099 ​ 199,758 5.40 % Non interest-earning assets ​ 444,194 ​ ​ 442,843 ​ ​ Allowance for credit losses - loans ​ (44,063) ​ ​ (44,400) ​ ​ Total assets ​ $ 4,407,112 ​ ​ $ 4,094,542 ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ Interest-bearing deposits ​ ​ ​ ​ ​ Checking accounts ​ $ 453,918 ​ $ 11,443 2.52 % $ 400,135 ​ $ 11,825 2.96 % Savings accounts ​ 838,709 ​ 12,211 1.46 % 814,980 ​ 12,218 1.50 % Money market accounts ​ 667,685 ​ 16,142 2.42 % 595,018 ​ 14,193 2.39 % Certificates of deposit ​ 635,509 ​ 24,362 3.83 % 605,071 ​ 25,273 4.18 % Brokered deposits ​ 20,097 ​ 814 4.05 % 748 ​ 17 2.27 % Total interest-bearing deposits ​ 2,615,918 ​ 64,972 2.48 % 2,415,952 ​ 63,526 2.63 % Other borrowed funds ​ 146,626 ​ 6,713 4.58 % 50,774 ​ 2,195 4.32 % Total interest-bearing liabilities ​ 2,762,544 ​ 71,685 2.59 % 2,466,726 ​ 65,721 2.66 % Non-interest bearing liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 980,837 ​ ​ ​ 985,876 ​ ​ ​ Other liabilities ​ 39,870 ​ ​ ​ 31,122 ​ ​ ​ Total liabilities ​ 3,783,251 ​ ​ ​ 3,483,724 ​ ​ ​ Shareholders’ equity ​ 623,861 ​ ​ ​ 610,818 ​ ​ ​ Total liabilities & shareholders’ equity ​ $ 4,407,112 ​ ​ ​ $ 4,094,542 ​ ​ ​ Net interest income on a fully taxable equivalent basis ​ ​ 148,894 ​ ​ 134,037 ​ Less taxable equivalent adjustment ​ ​ (1,680) ​ ​ (1,285) ​ Net interest income ​ ​ $ 147,214 ​ ​ $ 132,752 ​ Net interest spread (3) ​ ​ ​ 2.91 % ​ 2.74 % Net interest margin (4) ​ ​ 3.72 % ​ 3.63 % (1). Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21% for the six months ended June 30, 2025 and 2024. (2). Nonaccrual loans are included in average amounts outstanding. (3). Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (4). Net interest margin represents net interest income on a fully tax equivalent basis as a percentage of average interest-earning assets. ​ 36 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, 2025 ​ June 30, 2024 ​ ​ ​ ​ ​ Interest ​ Rate ​ ​ ​ ​ Interest ​ Rate ​ ​ Average ​ Income/ ​ Earned/ ​ Average ​ Income/ ​ Earned/ ​ Balance Expenses (1) Paid (1) Balance Expenses (1) Paid (1) ​ ​ (dollars in thousands) ASSETS ​ ​ ​ ​ ​ Interest-earning assets ​ ​ ​ ​ ​ Loans (2) ​ ​ ​ ​ ​ Taxable ​ $ 3,421,445 ​ $ 194,542 5.69 % $ 3,270,089 ​ $ 179,602 5.49 % Tax-exempt ​ 130,077 ​ 6,852 5.27 % 107,437 ​ 4,873 4.54 % Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable (available for sale) ​ 169,740 ​ 7,435 4.38 % 142,985 ​ 6,143 4.30 % Tax-exempt (available for sale) ​ 31,771 ​ 1,132 3.56 % 33,409 ​ 1,140 3.41 % Taxable (held to maturity) ​ 107,210 ​ 4,274 3.99 % 107,193 ​ 4,266 3.98 % Tax-exempt (held to maturity) ​ 2,797 ​ 75 2.68 % 3,677 ​ 96 2.61 % Cash and due from banks ​ 190,613 ​ 8,445 4.43 % 54,011 ​ 3,484 6.45 % Total interest-earning assets ​ 4,053,653 ​ 222,755 5.50 % 3,718,801 ​ 199,604 5.37 % Non interest-earning assets ​ 443,235 ​ ​ 444,965 ​ ​ ​ Allowance for loan losses ​ (44,140) ​ ​ (44,047) ​ ​ ​ Total assets ​ $ 4,452,748 ​ ​ $ 4,119,719 ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ Interest-bearing deposits ​ ​ ​ ​ ​ Checking accounts ​ $ 485,115 ​ $ 12,098 2.49 % $ 410,955 ​ $ 11,669 2.84 % Savings accounts ​ 834,917 ​ 12,139 1.45 % 813,963 ​ 12,048 1.48 % Money market accounts ​ 675,522 ​ 16,412 2.43 % 616,236 ​ 14,674 2.38 % Certificates of deposit ​ 637,214 ​ 25,186 3.95 % 597,593 ​ 24,308 4.07 % Brokered deposits ​ 20,095 ​ 815 4.06 % 748 ​ 17 2.27 % Total interest-bearing deposits ​ 2,652,863 ​ 66,650 2.51 % 2,439,495 ​ 62,716 2.57 % Other borrowed funds ​ 146,795 ​ 6,721 4.58 % 50,019 ​ 2,165 4.33 % Total interest-bearing liabilities ​ 2,799,658 ​ 73,371 2.62 % 2,489,514 ​ 64,881 2.61 % Non-interest bearing liabilities ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 981,327 ​ ​ ​ 984,490 ​ ​ ​ Other liabilities ​ 37,039 ​ ​ ​ 33,711 ​ ​ ​ Total liabilities ​ 3,818,024 ​ ​ ​ 3,507,715 ​ ​ ​ Shareholders’ equity ​ 634,724 ​ ​ ​ 612,004 ​ ​ ​ Total liabilities & shareholders' equity ​ $ 4,452,748 ​ ​ ​ $ 4,119,719 ​ ​ ​ ​ Net interest income on a fully taxable equivalent basis ​ ​ 149,384 ​ ​ ​ 134,723 ​ Less taxable equivalent adjustment ​ ​ (1,693) ​ ​ ​ (1,283) ​ Net interest income ​ ​ ​ $ 147,691 ​ ​ ​ $ 133,440 ​ Net interest spread (3) ​ ​ ​ 2.87 % ​ 2.76 % Net interest margin (4) ​ ​ 3.69 % ​ 3.62 % (1). Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21% for the six months ended June 30, 2025 and 2024. (2). Nonaccrual loans are included in average amounts outstanding. (3). Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (4). Net interest margin represents net interest income on a fully tax equivalent basis as a percentage of average interest-earning assets. 37 Table of Contents ​ Rate/Volume Analysis The following tables describe the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volumes (changes in average balance multiplied by prior year average rate) and (ii) changes attributable to changes in rate (change in average interest rate multiplied by prior year average balance), while (iii) changes attributable to the combined impact of volumes and rates have been allocated proportionately to separate volume and rate categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2025 ​ Six Months Ended June 30, 2025 ​ ​ Compared with ​ Compared with ​ ​ Three Months Ended June 30, 2024 ​ Six Months Ended June 30, 2024 ​ ​ Increase/(Decrease) Due to Change in ​ Increase/(Decrease) Due to Change in ​ Volume Rate Total Volume Rate Total ​ (dollars in thousands) (dollars in thousands) Interest income ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ Taxable ​ $ 7,840 ​ $ 4,470 ​ $ 12,310 ​ $ 8,479 ​ $ 6,461 ​ $ 14,940 Tax-exempt ​ 1,086 ​ 837 ​ 1,923 ​ 1,121 ​ 858 ​ 1,979 Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable (AFS) ​ 1,509 ​ 542 ​ 2,051 ​ 1,170 ​ 122 ​ 1,292 Tax-exempt (AFS) ​ (72) ​ 48 ​ (24) ​ (57) ​ 49 ​ (8) Taxable (HTM) ​ (50) ​ 49 ​ (1) ​ 1 ​ 7 ​ 8 Tax-exempt (HTM) ​ (22) ​ 3 ​ (19) ​ (24) ​ 3 ​ (21) Cash and due from banks ​ 5,481 ​ (900) ​ 4,581 ​ 6,356 ​ (1,395) ​ 4,961 Total interest income ​ 15,772 ​ 5,049 ​ 20,821 ​ 17,046 ​ 6,105 ​ 23,151 Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Checking accounts ​ ​ 1,478 ​ ​ (1,860) ​ ​ (382) ​ ​ 1,953 ​ ​ (1,524) ​ ​ 429 Savings accounts ​ 351 ​ (358) ​ (7) ​ 307 ​ (216) ​ 91 Money market accounts ​ 1,754 ​ 195 ​ 1,949 ​ 1,435 ​ 303 ​ 1,738 Certificates of deposit ​ 1,232 ​ (2,143) ​ (911) ​ 1,580 ​ (702) ​ 878 Brokered Deposits ​ 774 ​ 23 ​ 797 ​ 775 ​ 23 ​ 798 Total interest bearing deposits ​ 5,589 ​ (4,143) ​ 1,446 ​ 6,050 ​ (2,116) ​ 3,934 Other borrowed funds ​ 4,381 ​ 137 ​ 4,518 ​ 4,424 ​ 132 ​ 4,556 Total interest expense ​ 9,970 ​ (4,006) ​ 5,964 ​ 10,474 ​ (1,984) ​ 8,490 Change in net interest income ​ $ 5,802 ​ $ 9,055 ​ $ 14,857 ​ $ 6,572 ​ $ 8,089 ​ $ 14,661 ​ CHANGES IN FINANCIAL CONDITION Total Assets. Total assets decreased $130.0 million, or 2.9%, to $4.37 billion at June 30, 2025, from $4.50 billion at December 31, 2024. Cash and Cash Equivalents. Cash and cash equivalents decreased by $141.0 million to $120.3 million at June 30, 2025, from $261.3 million at December 31, 2024. This decline resulted from the reduction in seasonal customer deposits during the first half of 2025 amplified by growth in the Bank’s loan portfolio. Investment Securities. The carrying value of total investment securities decreased by $56.7 million to $277.1 million at June 30, 2025, from $333.8 million at December 31, 2024. The decrease in investments was primarily attributed to the maturity of short-duration securities during the first half of 2025. These investments were acquired during the fourth quarter of 2024 to meet heightened needs for collateral due to a seasonal collateralized deposit increase. Loans. Net loans increased by $63.0 million, totaling $3.54 billion at June 30, 2025 compared to $3.47 billion at December 31, 2024. 38 Table of Contents ​ Deposits. Deposits decreased $65.6 million, or 1.8%, to $3.60 billion at June 30, 2025 from $3.66 billion at December 31, 2024. Borrowings. At June 30, 2025, borrowings consisted of advances from the FHLB of Chicago and subordinated debt to other banks and an individual. FHLB borrowings decreased $25.5 million, or 18.8%, to $109.9 million at June 30, 2025 from $135.4 million at December 31, 2024. Subordinated debt remained stable at $12.0 million at June 30, 2025 and December 31, 2024. Stockholders’ Equity. Total stockholders’ equity decreased $27.4 million, or 4.3%, to $612.3 million at June 30, 2025 from $639.7 million at December 31, 2024. Repurchases of the Company’s common stock totaling $22.0 million and dividends declared totaling $43.6 million offset the positive impact of earnings totaling $35.1 million during the first six months of the year. LOANS Our lending activities are principally conducted in the state of Wisconsin. The Bank makes commercial and industrial loans, commercial real estate loans, construction and development loans, residential real estate loans, and a variety of consumer loans and other loans. Much of the loans made by the Bank are secured by real estate collateral. The Bank’s commercial business loans are primarily made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower, with liquidation of the underlying real estate collateral typically being viewed as the primary source of repayment in the event of borrower default. Although commercial business loans are also often collateralized by equipment, inventory, accounts receivable, or other business assets, the liquidation of collateral in the event of default is often an insufficient source of repayment. Repayment of the Bank’s residential loans are generally dependent on the health of the employment market in the borrowers’ geographic areas and that of the general economy with liquidation of the underlying real estate collateral being typically viewed as the primary source of repayment in the event of borrower default. Our loan portfolio is our most significant earning asset, comprising 82.1% and 78.3% of our total assets as of June 30, 2025 and December 31, 2024, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer loans that comply with our credit policies and that produce revenues consistent with our financial objectives. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations. Loans increased $63.2 million, or 1.8%, to $3.58 billion as of June 30, 2025 compared to $3.52 billion as of December 31, 2024. This increase during the first six months of 2025 was primarily driven by solid demand for new credit from our existing customer relationships. This growth was comprised of an increase of $38.3 million or 6.5% in commercial and industrial loans, a decrease of $4.7 million or 0.6% in owner occupied commercial real estate loans, an increase of $9.4 million or 1.8% in non-owner occupied commercial real estate, an increase of $50.8 million or 15.6% in multi-family loans, a decrease of $28.1 million or 10.1% in construction and development loans, a decrease of $4.2 million or 0.5% in residential 1-4 family loans and an increase of $1.7 million or 2.4% in consumer and other loans. The following table presents the balance and associated percentage of each major category in our loan portfolio: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ December 31, 2024 ​ June 30, 2024 ​ Amount % of Total Amount % of Total Amount % of Total ​ (dollars in thousands) ​ Commercial & industrial $ 628,527 ​ 18 % $ 590,184 17 % $ 619,547 18 % Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied ​ 841,749 ​ 23 % 846,480 24 % 777,102 ​ 23 % Non-owner occupied ​ 518,636 ​ 14 % 509,257 15 % 521,421 ​ 15 % Multi-family ​ 377,218 ​ 11 % 326,408 9 % 333,461 ​ 10 % Construction & development ​ 249,857 ​ 7 % 277,971 8 % 229,934 ​ 7 % Residential 1-4 family ​ 891,685 ​ 25 % 895,886 25 % 879,216 ​ 26 % Consumer ​ 57,855 ​ 2 % 55,387 2 % 53,160 ​ 1 % Other loans ​ 14,830 ​ — % 15,595 — % 14,794 ​ — % Total Loans ​ $ 3,580,357 ​ 100 % $ 3,517,168 100 % $ 3,428,635 ​ 100 % ​ 39 Table of Contents ​ Loan categories The principal categories of our loan portfolio are discussed below: Commercial and Industrial (C&I). Our C&I portfolio totaled $628.5 million and $590.2 million at June 30, 2025 and December 31, 2024, respectively, and represented 18% of our total loans as of June 30, 2025 and 17% of our total loans as of December 31, 2024. Our C&I loan customers represent various 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. We actively communicate with our C&I loan customers regarding their operations, including the impacts of recently implemented tariffs on their input costs and customer relationships. We have not noted significant pressure on our customer base from the current uncertain economic environment, but we will continue to monitor the impact of these items on our loan portfolio and its credit quality. Commercial Real Estate (CRE). Our CRE loan portfolio totaled $1.74 billion and $1.68 billion at June 30, 2025 and December 31, 2024, respectively, and represented 48% of our total loans at those dates. The growth in our CRE loan portfolio through the first six months of 2025 consisted primarily of multi-family real estate as developers respond to a shortage of available dwellings in our markets. Management views owner occupied CRE as an extension of C&I lending as typically the primary repayment source on these loans is operating profits from the underlying business. Our CRE loans are secured by a variety of property types including multi-family dwellings, retail facilities, office buildings, commercial mixed use, lodging and industrial and warehouse properties. We do not have any specific industry or customer concentrations in our CRE portfolio. Our commercial real estate loans are generally for terms up to ten years, with loan-to-values that generally do not exceed 80%. Amortization schedules are long term and thus a balloon payment is generally due at maturity. Under most circumstances, the Bank will offer to rewrite or otherwise extend the loan at prevailing interest rates. Construction and Development (C&D). Our C&D loan portfolio totaled $249.9 million and $278.0 million at June 30, 2025 and December 31, 2024, respectively, and represented 7% of our total loans as of June 30, 2025 and 8% of our total loans as of December 31, 2024. Our C&D loans are generally for the purpose of creating value out of real estate through construction and development work, and also include loans used to purchase recreational use land. Borrowers typically provide a copy of a construction or development contract which is subject to bank acceptance prior to loan approval. Disbursements are handled by a title company. Borrowers are required to inject their own equity into the project prior to any note proceeds being disbursed. These loans are, by their nature, intended to be short term and are refinanced into other loan types at the end of the construction and development period. Residential 1 – 4 Family. Residential 1 – 4 family loans held in portfolio amounted to $891.7 million and $895.9 million at June 30, 2025 and December 31, 2024, respectively, and represented 25% of our total loans at those dates. We offer fixed and adjustable-rate residential mortgage loans with maturities up to 30 years. One-to-four family residential mortgage loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency, which is generally $726,200 for one-unit properties. In addition, we also offer loans above conforming lending limits typically referred to as “jumbo” loans. These loans are typically underwritten to the same guidelines as conforming loans; however, we may choose to hold a jumbo loan within its portfolio with underwriting criteria that does not exactly match conforming guidelines. 40 Table of Contents ​ We do not offer reverse mortgages nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on his loan, resulting in an increased principal balance during the life of the loan. We also do not offer “subprime loans” (loans that are made with low down payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation). Residential real estate loans are originated both for sale to the secondary market as well as for retention in the Bank’s loan portfolio. The decision to sell a loan to the secondary market or retain within the portfolio is determined based on a variety of factors including but not limited to our asset/liability position, the current interest rate environment, and customer preference. Servicing rights are retained on all loans sold to the secondary market. We were servicing mortgage loans sold to others without recourse of approximately $1.17 billion at June 30, 2025 and December 31, 2024. Loans sold with the retention of servicing assets result in the capitalization of servicing rights. Loan servicing rights are carried at fair value. The net balance of capitalized servicing rights amounted to $13.4 million at June 30, 2025 and December 31, 2024. Consumer Loans. Our consumer loan portfolio totaled $57.9 million and $55.4 million at June 30, 2025 and December 31, 2024, respectively, and represented 2% of our total loans at those dates. Consumer loans include secured and unsecured loans, lines of credit and personal installment loans. Consumer loans generally have greater risk compared to longer-term loans secured by improved, owner-occupied real estate, particularly consumer loans that are secured by rapidly depreciable assets. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan repayments are dependent on the borrower’s continuing financial stability and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Other Loans. Our other loans totaled $14.8 million and $15.6 million at June 30, 2025 and December 31, 2024, respectively, and are immaterial to the overall loan portfolio. The other loans category consists primarily of over-drafted depository accounts, loans utilized to purchase or carry securities and loans to nonprofit organizations. 41 Table of Contents ​ Loan Portfolio Maturities. The following tables summarize the dollar amount of loans maturing in our portfolio based on their loan type, fixed or variable rate of interest, and contractual terms to maturity at June 30, 2025. The tables do not include any estimate of prepayments, which can significantly shorten the average life of all loans and may cause our actual repayment experience to differ from that shown below. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One Year or ​ One to Five ​ Five to Fifteen ​ Over Fifteen ​ ​ ​ ​ ​ Less ​ Years ​ Years ​ Years ​ Total ​ ​ (dollars in thousands) Commercial & industrial $ 228,887 $ 262,200 $ 135,796 ​ $ 1,644 $ 628,527 Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner Occupied ​ ​ 118,952 ​ ​ 385,842 ​ ​ 271,973 ​ ​ 64,982 ​ ​ 841,749 Non-owner Occupied ​ ​ 67,147 ​ ​ 320,767 ​ ​ 128,202 ​ ​ 2,520 ​ ​ 518,636 Multi-family ​ ​ 32,230 ​ ​ 190,603 ​ ​ 153,895 ​ ​ 490 ​ ​ 377,218 Construction & Development ​ ​ 45,672 ​ ​ 87,320 ​ ​ 36,975 ​ ​ 79,890 ​ ​ 249,857 Residential 1-4 family ​ ​ 23,946 ​ ​ 89,744 ​ ​ 190,326 ​ ​ 587,669 ​ ​ 891,685 Consumer and other ​ ​ 16,393 ​ ​ 31,582 ​ ​ 17,309 ​ ​ 7,401 ​ ​ 72,685 Total ​ $ 533,227 ​ $ 1,368,058 ​ $ 934,476 ​ $ 744,596 ​ $ 3,580,357 Fixed Rate Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ $ 46,808 ​ $ 189,100 ​ $ 53,667 ​ $ — ​ $ 289,575 Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner Occupied ​ ​ 78,864 ​ ​ 304,033 ​ ​ 91,167 ​ ​ 20,101 ​ ​ 494,165 Non-owner Occupied ​ ​ 57,450 ​ ​ 275,094 ​ ​ 26,214 ​ ​ — ​ ​ 358,758 Multi-family ​ ​ 29,561 ​ ​ 163,170 ​ ​ 94,272 ​ ​ — ​ ​ 287,003 Construction & Development ​ ​ 32,104 ​ ​ 70,226 ​ ​ 10,519 ​ ​ 42,575 ​ ​ 155,424 Residential 1-4 family ​ ​ 14,386 ​ ​ 71,391 ​ ​ 148,747 ​ ​ 272,716 ​ ​ 507,240 Consumer and other ​ ​ 15,772 ​ ​ 30,865 ​ ​ 16,296 ​ ​ 7,401 ​ ​ 70,334 Total ​ $ 274,945 ​ $ 1,103,879 ​ $ 440,882 ​ $ 342,793 ​ $ 2,162,499 Floating Rate Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ $ 182,079 ​ $ 73,100 ​ $ 82,129 ​ $ 1,644 ​ $ 338,952 Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner Occupied ​ ​ 40,088 ​ ​ 81,809 ​ ​ 180,806 ​ ​ 44,881 ​ ​ 347,584 Non-owner Occupied ​ ​ 9,697 ​ ​ 45,673 ​ ​ 101,988 ​ ​ 2,520 ​ ​ 159,878 Multi-family ​ ​ 2,669 ​ ​ 27,433 ​ ​ 59,623 ​ ​ 490 ​ ​ 90,215 Construction & Development ​ ​ 13,568 ​ ​ 17,094 ​ ​ 26,456 ​ ​ 37,315 ​ ​ 94,433 Residential 1-4 family ​ ​ 9,560 ​ ​ 18,353 ​ ​ 41,579 ​ ​ 314,953 ​ ​ 384,445 Consumer and other ​ ​ 621 ​ ​ 717 ​ ​ 1,013 ​ ​ — ​ ​ 2,351 Total ​ $ 258,282 ​ $ 264,179 ​ $ 493,594 ​ $ 401,803 ​ $ 1,417,858 ​ NONPERFORMING ASSETS In order to operate with a sound risk profile, we focus on originating loans that we believe to be of high quality. We have established loan approval policies and procedures to assist us in maintaining the overall quality of our loan portfolio. When delinquencies in our loans exist, we rigorously monitor the levels of such delinquencies for any negative or adverse trends. From time to time, we may modify loans to extend the term or make other concessions to help a borrower with a deteriorating financial condition stay current on their loan and to avoid foreclosure. We generally do not forgive principal or interest on loans or modify the interest rates on loans to rates that are below market rates. Furthermore, we are committed to collecting on all of our loans and, as a result, at times have lower net charge-offs compared to many of our peer banks. We believe that our commitment to collecting on all of our loans results in higher loan recoveries. 42 Table of Contents ​ Our nonperforming assets consist of nonperforming loans and foreclosed real estate. Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 days past due on which interest continues to accrue. The composition of our nonperforming assets is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, As of December 31, As of June 30, ​ ​ 2025 ​ 2024 ​ 2024 ​ (dollars in thousands) ​ Nonperforming loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonaccrual loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ $ 6,732 ​ $ 2,268 ​ $ 4,301 ​ Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner Occupied ​ ​ 4,828 ​ ​ 3,525 ​ ​ 2,754 ​ Non-owner Occupied ​ ​ 113 ​ ​ 493 ​ ​ — ​ Multi-family ​ ​ — ​ ​ — ​ ​ — ​ Construction & Development ​ ​ — ​ ​ — ​ ​ — ​ Residential 1-4 family ​ ​ 1,306 ​ ​ 511 ​ ​ 218 ​ Consumer and other ​ ​ 55 ​ ​ 29 ​ ​ 10 ​ Total nonaccrual loans ​ ​ 13,034 ​ ​ 6,826 ​ ​ 7,283 ​ Loans past due > 90 days, but still accruing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ ​ 24 ​ ​ 328 ​ ​ 1,513 ​ Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner Occupied ​ ​ — ​ ​ — ​ ​ 979 ​ Non-owner Occupied ​ ​ — ​ ​ — ​ ​ — ​ Multi-family ​ ​ — ​ ​ — ​ ​ — ​ Construction & Development ​ ​ 3 ​ ​ — ​ ​ — ​ Residential 1-4 family ​ ​ 511 ​ ​ 1,294 ​ ​ 874 ​ Consumer and other ​ ​ 25 ​ ​ 48 ​ ​ 19 ​ Total loans past due > 90 days, but still accruing ​ ​ 563 ​ ​ 1,670 ​ ​ 3,385 ​ Total nonperforming loans ​ $ 13,597 ​ $ 8,496 ​ $ 10,668 ​ OREO ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate owned ​ $ — ​ $ — ​ $ — ​ Residential real estate owned ​ ​ — ​ ​ — ​ ​ — ​ Acquired bank property real estate owned ​ ​ — ​ ​ 741 ​ ​ 712 ​ Total OREO ​ $ — ​ $ 741 ​ $ 712 ​ Total nonperforming assets ("NPAs") ​ $ 13,597 ​ $ 9,237 ​ $ 11,380 ​ Accruing modified loans to borrowers experiencing financial difficulty ​ $ 14 ​ $ 16 ​ $ 19 ​ Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonaccrual loans to total loans ​ ​ 0.36 % ​ 0.19 % ​ 0.21 % NPAs to total loans plus OREO ​ ​ 0.38 % ​ 0.26 % ​ 0.33 % NPAs to total assets ​ ​ 0.31 % ​ 0.21 % ​ 0.27 % ACL - Loans to nonaccrual loans ​ ​ 340 % ​ 647 % ​ 619 % ACL - Loans to total loans ​ ​ 1.24 % ​ 1.26 % ​ 1.32 % ​ Nonaccrual Loans Loans are typically placed on nonaccrual status when any payment of principal and/or interest is 90 days or more past due, unless the collateral is sufficient to cover both principal and interest and the loan is in the process of collection. Loans are also placed on nonaccrual status when management believes, after considering economic and business conditions, that the principal or interest will not be collectible in the normal course of business. We monitor closely the performance of our loan portfolio. In addition to the monitoring and review of loan performance internally, we have also contracted with an independent organization to review our commercial and retail loan portfolios. The status of delinquent loans, as well as situations identified as potential problems, are reviewed on a regular basis by senior management. The increase in the amount of nonaccrual loans through the first six months of 2025 was primarily due to the deterioration of one customer relationship, which resulted in the loan being moved to nonaccrual status. 43 Table of Contents ​ ALLOWANCE FOR CREDIT LOSSES - LOANS The Company assesses the adequacy of its ACL - Loans at the end of each calendar quarter. The level of 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 other relevant factors. The ACL - Loans is increased by a provision for credit losses, which is charged to expense, when the analysis shows that an increase is warranted. The ACL – Loans is reduced by charge-offs, net of recoveries, when they occur. The ACL is believed adequate to absorb all expected future losses to be recognized over the contractual life of the loans in the portfolio. For further details on the Company’s ACL – Loans, refer to the footnotes along with the consolidated financial statements elsewhere in this report. At June 30, 2025, the ACL - Loans was $44.3 million (representing 1.24% of period end loans). The Bank recorded a provision for credit losses of $1.0 million during the first half of 2025. The ACL– Loans has remained consistent over recent quarters as economic conditions have remained stable and the Company’s overall asset quality remain strong. The Company recorded net charge-offs totaling $0.8 million during the first six months of 2025. The following table summarizes the changes in our ACL - Loans for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ Year ended ​ Six months ended ​ ​ ​ June 30, ​ December 31, ​ June 30, ​ ​ ​ 2025 ​ 2024 ​ 2024 ​ ​ (dollars in thousands) Balance of ACL - Loans at the beginning of period $ 44,151 $ 43,609 $ 43,609 Adoption of CECL ​ ​ — ​ ​ — ​ ​ — ​ ACL - Loans on PCD loans acquired ​ ​ — ​ ​ — ​ ​ — ​ Net loans charged-off (recovered): ​ ​ ​ ​ ​ ​ Commercial & industrial ​ (2) ​ 2 ​ 15 Commercial real estate - owner occupied ​ 802 ​ (615) ​ (860) Commercial real estate - non-owner occupied ​ — ​ — ​ — Commercial real estate - multi-family ​ ​ — ​ ​ — ​ ​ — ​ Construction & Development ​ — ​ — ​ — Residential 1-4 family ​ (32) ​ 31 ​ (5) Consumer ​ 21 ​ 73 ​ 4 Other Loans ​ 20 ​ 67 ​ 37 Total net loans recovered ​ 809 ​ (442) ​ (809) Provision charged to operating expense ​ 600 ​ (800) ​ 200 Transfer from (to) ACL - Unfunded Commitments ​ ​ 350 ​ ​ 900 ​ ​ 500 ​ Balance of ACL - Loans at end of period ​ $ 44,292 ​ $ 44,151 ​ $ 45,118 ​ Ratio of net charge-offs (recoveries) to average loans by loan composition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ — % — % — % Commercial real estate - owner occupied ​ 0.08 % (0.08) % (0.11) % Commercial real estate - non-owner occupied ​ — % — % — % Commercial real estate - multi-family ​ ​ — % ​ — % ​ — % Construction & Development ​ — % — % — % Residential 1-4 family ​ — % — % — % Consumer ​ 0.04 % 0.14 % 0.01 % Other Loans ​ 0.13 % 0.44 % 0.25 % Total net charge-offs (recoveries) to average loans ​ 0.02 % (0.01) % (0.02) % ​ 44 Table of Contents ​ The following table summarizes an allocation of the ACL - Loans and the related percentage of loans outstanding in each category for the periods below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ June 30, ​ ​ ​ 2025 ​ 2024 ​ 2024 ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ (in thousands, except %) Amount Loans Amount Loans Amount Loans ​ Loan Type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial & industrial ​ $ 6,740 18 % $ 6,737 17 % $ 8,160 18 % ​ Commercial real estate - owner occupied ​ 10,218 23 % 9,334 25 % 10,561 23 % ​ Commercial real estate - non-owner occupied ​ 4,967 14 % 5,213 14 % 6,120 15 % ​ Commercial real estate - multi-family ​ ​ 4,281 ​ 11 % ​ 3,739 ​ 9 % ​ 4,670 ​ 10 % ​ Construction & development ​ 4,499 7 % 5,223 8 % 4,154 7 % ​ Residential 1-4 family ​ 12,339 25 % 12,684 25 % 10,715 26 % ​ Consumer ​ 1,104 2 % 1,084 2 % 610 1 % ​ Other loans ​ 144 — % 137 — % 128 — % ​ Total allowance ​ $ 44,292 ​ 100 % $ 44,151 ​ 100 % $ 45,118 ​ 100 % ​ ​ SOURCES OF FUNDS General. Deposits have traditionally been our primary source of funds for our investment and lending activities. We also borrow from the FHLB of Chicago to supplement cash needs, to lengthen the maturities of liabilities for interest rate risk management purposes and to manage our cost of funds. Our additional sources of funds are scheduled payments and prepayments of principal and interest on loans and investment securities and fee income and proceeds from the sales of loans and securities. Deposits. Our current deposit products include non-interest bearing and interest-bearing checking accounts, savings accounts, money market accounts, and certificate of deposits. As of June 30, 2025, deposit liabilities accounted for approximately 82.4% of our total liabilities and equity. We accept deposits primarily from customers in the communities in which our branches and offices are located, as well as from small businesses and other customers throughout our lending area. We rely on our competitive pricing and products, quality customer service, and convenient locations and hours to attract and retain deposits. Deposit rates and terms are based primarily on current business strategies, market interest rates, liquidity requirements and our deposit growth goals. ​ Total deposits were $3.60 billion and $3.66 billion as of June 30, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits at June 30, 2025 and December 31, 2024, were $990.0 million and $1.02 billion, respectively, while interest-bearing deposits were $2.61 billion and $2.64 billion at June 30, 2025 and December 31, 2024, respectively. The Bank continue to see a shift in its deposit portfolio from noninterest-bearing deposits to interest-bearing deposits as prevailing interest rates have increased over the last several years. ​ At June 30, 2025, we had a total of $656.7 million in certificates of deposit, including $20.1 million of brokered deposits. Based on historical experience and our current pricing strategy, we believe we will retain a majority of these accounts upon maturity, although our long-term strategy is to minimize reliance on certificates of deposits by increasing relationship deposits in lower earning savings and demand deposit accounts. ​ 45 Table of Contents ​ The following tables set forth the average balances of our deposits for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended Year ended Six months ended ​ ​ ​ June 30, 2025 December 31, 2024 June 30, 2024 ​ ​ Amount Percent Amount Percent Amount Percent ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing demand deposits $ 981,327 27.0 % $ 1,000,772 29.0 % $ 984,490 28.8 % ​ Interest-bearing checking deposits ​ 485,115 13.3 % 401,990 11.6 % 410,955 12.0 % ​ Savings deposits ​ 834,917 23.0 % 816,410 23.6 % 813,963 23.8 % ​ Money market accounts ​ 675,522 18.6 % 616,964 17.9 % 616,236 18.0 % ​ Certificates of deposit ​ 637,214 17.5 % 613,593 17.7 % 597,593 17.5 % ​ Brokered deposits ​ 20,095 0.6 % 7,662 0.2 % 748 — % ​ Total ​ $ 3,634,190 100 % $ 3,457,391 ​ 100 % $ 3,423,985 100 % ​ ​ The following table provides information on maturities of certificates of deposits which exceed FDIC insurance limits of $250,000 as of June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time Deposits over FDIC ​ Portion of Time Deposits in ​ ​ Insurance Limits Excess of FDIC Insurance Limits ​ (dollars in thousands) 3 months or less remaining ​ $ 63,621 ​ $ 36,871 Over 3 to 6 months remaining ​ 47,644 ​ 20,394 Over 6 to 12 months remaining ​ 44,746 ​ 20,496 Over 12 months or more remaining ​ 14,220 ​ 7,220 Total ​ $ 170,231 ​ $ 84,981 ​ Borrowings The Company’s borrowings have historically consisted primarily of FHLB of Chicago advances collateralized by a blanket pledge agreement on the Company’s FHLB capital stock and retail and commercial loans held in the Company’s portfolio. There were $109.9 million and $135.4 million of advances outstanding from the FHLB at June 30, 2025 and December 31, 2024, respectively. ​ The total loans pledged as collateral were $1.14 billion and $1.47 billion at June 30, 2025 and December 31, 2024. There were no outstanding letters of credit from the FHLB at June 30, 2025 or December 31, 2024. ​ The following table summarizes borrowings from the FHLB, and the weighted average interest rates paid: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ Year ended ​ Six months ended ​ ​ (dollars in thousands) June 30, 2025 December 31, 2024 June 30, 2024 ​ ​ Average daily amount of borrowings outstanding during the period ​ $ 134,795 ​ $ 85,762 ​ $ 37,035 ​ ​ Weighted average interest rate on average daily borrowing ​ 4.53 % 4.42 % 4.01 % ​ Maximum outstanding borrowings at any month-end ​ $ 134,907 ​ $ 135,372 ​ $ 90,321 ​ ​ Borrowing outstanding at period end ​ $ 109,915 ​ $ 135,372 ​ $ 90,321 ​ ​ Weighted average interest rate on borrowing at period end ​ 4.21 % 4.37 % 4.38 % ​ ​ Lines of credit and other borrowings. During July 2020, the Company entered into subordinated note agreements with two separate commercial banks. As of June 30, 2025 and December 31, 2024, outstanding balances under these agreements totaled $6.0 million. These notes were issued with 10-year maturities, will 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. 46 Table of Contents ​ During August 2022, the Company entered into subordinated note agreements with an individual. As of June 30, 2025 and December 31, 2024, outstanding balances under these agreements totaled $6.0 million. These notes were issued with 10-year maturities, will 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. INVESTMENT SECURITIES Our securities portfolio consists of securities available for sale and securities held to maturity. Securities are classified as held to maturity or available for sale at the time of purchase. Obligations of states and political subdivisions and mortgage-backed securities, all of which are issued by U.S. government agencies or U.S. government-sponsored enterprises, make up the largest components of the securities portfolio. We manage our investment portfolio to provide an adequate level of liquidity as well as to maintain neutral interest rate-sensitive positions, while earning an adequate level of investment income without taking undue or excessive risk. Securities available for sale consist of U.S. government sponsored agencies, obligations of states and political subdivision, mortgage-backed securities, and corporate notes. Securities classified as available for sale, 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 fair value of securities available for sale totaled $167.2 million and included $0.2 million gross unrealized gains and gross unrealized losses of $11.0 million at June 30, 2025. At December 31, 2024, the fair value of securities available for sale totaled $223.1 million and included negligible gross unrealized gains and gross unrealized losses of $12.9 million. ​ Securities classified as held to maturity consist of U.S. treasury securities and obligations of states and political subdivisions. These securities, which management has the intent and ability to hold to maturity, are reported at amortized cost. Securities held to maturity totaled $109.9 million at June 30, 2025 and $110.8 million at December 31, 2024. ​ The Company had recognized no net losses on sales of securities during the six months ended June 30, 2025. The Company had recognized net losses on sales of securities of $0.03 million during the six months ended June 30, 2024. ​ The following tables set forth the composition and maturities of investment securities as of June 30, 2025 and December 31, 2024. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After One, But ​ After Five, But ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within One Year ​ Within Five Years ​ Within Ten Years ​ After Ten Years ​ Total ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average At June 30, 2025 Cost Yield (1) Cost Yield (1) Cost Yield (1) Cost Yield (1) Cost Yield (1) ​ ​ (dollars in thousands) ​ Available for sale securities ​ ​ ​ ​ ​ ​ Obligations of U.S. Government sponsored agencies ​ ​ — — % ​ 1,884 3.6 % ​ 12,580 1.9 % ​ 10,147 2.2 % ​ 24,611 2.2 % Obligations of states and political subdivisions ​ 830 3.8 % 12,652 4.1 % 21,640 3.2 % 26,387 2.7 % 61,509 3.2 % Mortgage-backed securities ​ 10,707 4.6 % 47,703 4.2 % 7,577 4.2 % 10,268 3.7 % 76,255 4.2 % Corporate notes ​ — — % 5,000 8.7 % 9,600 3.3 % 1,072 10.1 % 15,672 5.5 % Total available for sale securities ​ $ 11,537 4.5 % $ 67,239 4.5 % $ 51,397 3.1 % $ 47,874 3.0 % $ 178,047 3.7 % Held to maturity securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ 23,186 3.4 % $ 37,721 3.9 % $ 46,552 4.4 % $ — — % $ 107,459 4.0 % Obligations of states and political subdivisions ​ ​ 691 2.6 % ​ 1,704 2.8 % ​ — — % ​ — — % ​ 2,395 ​ 2.7 % Total held to maturity securities ​ $ 23,877 ​ 3.4 % $ 39,425 ​ 3.8 % $ 46,552 4.4 % $ — — % $ 109,854 ​ 4.0 % Total ​ $ 35,414 3.8 % $ 106,664 4.2 % $ 97,949 3.7 % $ 47,874 3.0 % $ 287,901 3.8 % ​ 47 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After One, But ​ After Five, But ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within One Year ​ Within Five Years ​ Within Ten Years ​ After Ten Years ​ Total ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average ​ Amortized ​ Average At December 31, 2024 Cost Yield (1) Cost Yield (1) Cost Yield (1) Cost Yield (1) Cost Yield (1) ​ (dollars in thousands) ​ Available for sale securities ​ ​ ​ ​ ​ ​ U.S. Treasury securities $ 99,656 4.2 % $ — — % $ — — % $ — — % $ 99,656 4.2 % Obligations of U.S. Government sponsored agencies ​ ​ 1,493 5.0 % ​ 1,200 4.5 % ​ 13,761 2.0 % ​ 11,312 2.2 % ​ 27,766 2.3 % Obligations of states and political subdivisions ​ 344 4.9 % 11,970 4.1 % 18,853 3.1 % 31,825 2.8 % 62,992 3.2 % Mortgage-backed securities ​ 45 3.5 % 10,598 3.4 % 7,979 4.4 % 11,204 3.7 % 29,826 3.8 % Corporate notes ​ — — % 5,000 8.7 % 9,606 3.3 % 1,063 10.3 % 15,669 5.5 % Total available for sale securities ​ $ 101,538 4.2 % $ 28,768 4.7 % $ 50,199 3.0 % $ 55,404 3.0 % $ 235,909 3.7 % Held to maturity securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities $ 22,671 3.6 % $ 40,574 3.7 % $ 44,316 4.3 % $ — — % $ 107,561 3.9 % Obligations of states and political subdivisions ​ ​ 800 2.3 % ​ 2,395 2.7 % ​ — — % ​ — — % ​ 3,195 ​ 2.6 % Total held to maturity securities ​ $ 23,471 ​ 3.5 % $ 42,969 ​ 3.7 % $ 44,316 4.3 % $ — — % $ 110,756 ​ 3.9 % Total ​ $ 125,009 4.1 % $ 71,737 4.1 % $ 94,515 3.6 % $ 55,404 3.0 % $ 346,665 3.8 % (1) Weighted Average Yield is shown on a fully taxable equivalent basis using a federal tax rate of 21% and includes the amortization of premiums and discounts. As of June 30, 2025 and December 31, 2024, no allowance for credit losses on securities AFS was recognized. The Company does not consider its securities AFS with unrealized losses to be attributable to credit-related factors, as the unrealized losses in each category have occurred as a result of changes in noncredit-related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. Furthermore, as of June 30, 2025, the Company did not have the intent to sell any of these securities AFS and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The Company does not believe there are any expected credit losses in its HTM securities portfolio at June 30, 2025 or December 31, 2024. All U.S. Treasury securities have the full faith and credit backing of the United States government and the amount of obligations of states and political subdivisions in an unrealized loss position is immaterial to the financial statements. As of June 30, 2025, 198 debt securities had gross unrealized losses, with an aggregate depreciation of 3.6% from our amortized cost basis. The largest unrealized loss percentage of any single security was 24.6% (or $0.5 million) of its amortized cost. The largest unrealized dollar loss of any security was $0.8 million (or 21.0%). As of December 31, 2024, 210 debt securities had gross unrealized losses, with an aggregate depreciation of 4.1% from our amortized cost basis. The largest unrealized loss percentage of any single security was 24.6% (or $0.5 million) of its amortized cost. The largest unrealized dollar loss of any single security was $0.9 million (or 23.5%). The unrealized losses on these debt securities arose primarily due to changing interest rates and are considered to be temporary. 48 Table of Contents ​ LIQUIDITY AND CAPITAL RESOURCES Impact of Inflation and Changing Prices. Our consolidated financial statements and related notes have been prepared in accordance with GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration of changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on our performance than they would on industrial companies. Liquidity. Liquidity is defined as the Company’s ability to generate adequate cash to meet its needs for day-to-day operations and material long and short-term commitments. Liquidity is the risk of potential loss if we were unable to meet our funding requirements at a reasonable cost. We are expected to maintain adequate liquidity at the Bank to meet the cash flow requirements of customers who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Our asset and liability management policy is intended to cause the Bank to maintain adequate liquidity and, therefore, enhance our ability to raise funds to support asset growth, meet deposit withdrawals and lending needs, maintain reserve requirements and otherwise sustain our operations. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. We manage our liquidity based on demand and specific events and uncertainties to meet current and future financial obligations of a short-term nature. We also monitor our liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits. Our objective in managing liquidity is to respond to the needs of depositors and borrowers as well as to increase earnings enhancement opportunities in a changing marketplace. Our liquidity is maintained through our investment portfolio, deposits, borrowings from the FHLB, and lines available from correspondent banks. Our highest priority is placed on growing noninterest bearing deposits through strong community involvement in the markets that we serve. Borrowings and brokered deposits are considered short-term supplements to our overall liquidity but are not intended to be relied upon for long-term needs. The Company currently has $1.54 billion in availability between borrowings and brokered deposits for future funding if liquidity needs were to develop. We believe that our present position is adequate to meet our current and future liquidity needs, and management knows of no trend or event that will have a material impact on the Company’s ability to maintain liquidity at satisfactory levels. Capital Adequacy. Total stockholders’ equity was $612.3 million at June 30, 2025 compared to $639.7 million at December 31, 2024. Our capital management consists of providing adequate equity to support our current and future operations. The Bank is subject to various regulatory capital requirements administered by state and federal banking agencies, including the Federal Reserve and the OCC. Failure to meet minimum capital requirements may prompt certain actions by regulators that, if undertaken, could have a direct material adverse effect on our financial condition and results of operations. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measure of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and the classifications are also subject to qualitative judgment by the regulator in regard to components, risk weighting and other factors. 49 Table of Contents ​ The Bank is subject to the following risk-based capital ratios: a common equity Tier 1 (“CET1”) risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total capital ratio, which includes Tier 1 and Tier 2 capital. CET1 is primarily comprised of the sum of common stock instruments and related surplus net of treasury stock, retained earnings, and certain qualifying minority interests, less certain adjustments and deductions, including with respect to goodwill, intangible assets, mortgage servicing assets and deferred tax assets subject to temporary timing differences. Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock, tier 1 minority interests and grandfathered trust preferred securities. Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt, other preferred stock and certain hybrid capital instruments, and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria. The capital rules also define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset components of the risk-based capital rules, including, for example, certain “high volatility” commercial real estate, past due assets, structured securities and equity holdings. The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average assets net of goodwill, certain other intangible assets, and certain required deduction items. The required minimum leverage ratio for all banks is 4%. Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition. For example, only a well-capitalized depository institution may accept brokered deposits without prior regulatory approval. Failure to be well-capitalized or to meet minimum capital requirements could also result in restrictions on the Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth. The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), among other things, requires the federal bank regulatory agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements. FDICIA establishes five regulatory capital tiers: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”. A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation. FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. The FDICIA imposes progressively more restrictive restraints on operations, management and capital distributions, depending on the category in which an institution is classified. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit capital restoration plans for regulatory approval. A depository institution’s holding company must guarantee any required capital restoration plan, up to an amount equal to the lesser of 5 percent of the depository institution’s assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan. Federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution’s capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. All of the federal bank regulatory agencies have adopted regulations establishing relevant capital measures and relevant capital levels for federally insured depository institutions. The Bank was well capitalized at June 30, 2025, and brokered deposits are not restricted. 50 Table of Contents ​ To be well-capitalized, the Bank must maintain at least a 6.5% CET1 to risk-weighted assets ratio, an 8.0% Tier 1 capital to risk-weighted assets ratio, a 10.0% Total capital to risk-weighted assets ratio, and a 5.0% leverage ratio. The Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the then-applicable capital conservation buffer. Based on current estimates, we believe that the Bank will continue to exceed all applicable well-capitalized regulatory capital requirements and the capital conservation buffer in 2025. As a result of the Economic Growth Act, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank’s Tier 1 capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A “qualifying community bank” that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under prompt corrective action statutes. The federal banking agencies may consider a financial institution’s risk profile when evaluation whether it qualifies as a community bank for purposes of the capital ratio requirement. The federal banking agencies set the minimum capital for the new Community Bank Leverage Ratio at 9%. The Bank does not intend to opt into the Community Bank Leverage Ratio Framework. On December 21, 2018, federal banking agencies issued a joint final rule to revise their regulatory capital rules to (i) address the upcoming implementation of CECL accounting standard under GAAP; (ii) provide an optional three-year phase-in period for the day-one adverse regulatory capital effects that banking organizations are expected to experience upon adopting CECL; and (iii) require the use of CECL in stress tests beginning with the 2020 capital planning and stress testing cycle for certain banking organizations. For more information regarding Accounting Standards Update No. 2016-13, which introduced CECL as the methodology to replace the current “incurred loss” methodology for financial assets measured at amortized cost, and changed the approaches for recognizing and recording credit losses on available-for-sale debt securities and purchased credit impaired financial assets, including the required implementation date for the Company, see the Company’s Annual Report. Federal banking regulators have issued risk-based capital guidelines, which assign risk factors to asset categories and off-balance-sheet items. The following table reflects capital ratios computed utilizing the implemented Basel III regulatory capital framework discussed above: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital Required ​ ​ Minimum To Be Well- ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ ​ for Capital Adequacy Plus ​ ​ Capitalized Under prompt ​ ​ ​ ​ ​ ​ ​ ​ Required for Capital ​ ​ Capital Conservation Buffer ​ ​ corrective Action ​ ​ Actual ​ ​ Adequacy ​ ​ Basel III Phase-In Schedule ​ ​ Provisions ​ ​ Amount ​ Ratio ​ ​ Amount ​ Ratio ​ ​ Amount ​ Ratio ​ ​ Amount ​ Ratio ​ ​ (dollars in thousands) At June 30, 2025 ​ ​ ​ ​ ​ Bank First Corporation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 483,515 13.1 % $ 295,630 8.0 % $ 388,014 10.5 % ​ N/A N/A ​ Tier I capital (to risk-weighted assets) ​ ​ 428,868 11.6 % ​ 221,723 6.0 % ​ 314,107 8.5 % ​ N/A N/A ​ Common equity tier I capital (to risk-weighted assets) ​ ​ 428,868 11.6 % ​ 166,292 4.5 % ​ 258,676 7.0 % ​ N/A N/A ​ Tier I capital (to average assets) ​ ​ 428,868 10.2 % ​ 168,813 4.0 % ​ 168,813 4.0 % ​ N/A N/A ​ Bank First, N.A: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 450,082 12.2 % $ 295,422 8.0 % $ 387,741 10.5 % $ 369,277 10.0 % Tier I capital (to risk-weighted assets) ​ ​ 407,435 11.0 % ​ 221,566 6.0 % ​ 313,886 8.5 % ​ 295,422 8.0 % Common equity tier I capital (to risk-weighted assets) ​ ​ 407,435 11.0 % ​ 166,175 4.5 % ​ 258,494 ​ 7.0 % ​ 240,030 ​ 6.5 % Tier I capital (to average assets) ​ ​ 407,435 9.7 % ​ 168,765 4.0 % ​ 168,765 4.0 % ​ 210,956 5.0 % At December 31, 2024 ​ ​ ​ ​ ​ ​ Bank First Corporation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 509,763 14.1 % $ 288,325 8.0 % $ 378,427 10.5 % ​ N/A N/A ​ Tier I capital (to risk-weighted assets) ​ ​ 457,749 12.7 % ​ 216,244 6.0 % ​ 306,346 8.5 % ​ N/A N/A ​ Common equity tier I capital (to risk-weighted assets) ​ ​ 457,749 12.7 % ​ 162,183 4.5 % ​ 252,285 7.0 % ​ N/A N/A ​ Tier I capital (to average assets) ​ ​ 457,749 11.0 % ​ 167,134 4.0 % ​ 167,134 4.0 % ​ N/A N/A ​ Bank First, N.A: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total capital (to risk-weighted assets) ​ $ 438,549 12.2 % $ 288,152 8.0 % $ 378,200 10.5 % $ 360,190 10.0 % Tier I capital (to risk-weighted assets) ​ ​ 398,535 11.1 % ​ 216,114 6.0 % ​ 306,162 8.5 % ​ 288,152 8.0 % Common equity tier I capital (to risk-weighted assets) ​ ​ 398,535 11.1 % ​ 162,086 4.5 % ​ 252,133 ​ 7.0 % ​ 234,124 ​ 6.5 % Tier I capital (to average assets) ​ ​ 398,535 9.5 % ​ 167,019 4.0 % ​ 167,019 4.0 % ​ 208,774 5.0 % ​ As previously mentioned, the Company carried $12.0 million of subordinated debt as of June 30, 2025 and December 31, 2024, which qualifies as Tier II capital. These amounts are included in total capital for the Company in the tables above. 51 Table of Contents ​ FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK We are party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments primarily include commitments to originate and sell loans, standby and direct pay letters of credit, unused lines of credit and unadvanced portions of construction and development loans. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in these particular classes of financial instruments. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for loan commitments, standby and direct pay letters of credit and unadvanced portions of construction and development loans is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Off-Balance Sheet Arrangements. Our significant off-balance-sheet arrangements consist of the following: ● Unused lines of credit ● Standby and direct pay letters of credit ● Credit card arrangements Off-balance sheet arrangement means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the registrant is a party, under which the registrant has (1) any obligation under a guarantee contract, (2) retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement, (3) any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or (4) any obligation, including a contingent obligation, arising out of a variable interest. Loan commitments are made to accommodate the financial needs of our customers. Standby and direct pay letters of credit commit us to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to clients and are subject to our normal credit policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. Loan commitments and standby and direct pay letters of credit do not necessarily represent our future cash requirements because while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. Our off-balance sheet arrangements as of June 30, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts of Commitments Expiring - By Period as of June 30, 2025 ​ ​ ​ ​ Less Than One One to Three Three to Five ​ Other Commitments ​ Total Year Years Years After Five Years ​ (dollars in thousands) Unused lines of credit ​ $ 733,426 ​ $ 395,144 ​ $ 109,192 ​ $ 28,061 ​ $ 201,029 Standby and direct pay letters of credit ​ 9,384 ​ 8,318 ​ 320 ​ 726 ​ 20 Credit card arrangements ​ 24,985 ​ — ​ — ​ — ​ 24,985 Total commitments ​ $ 767,795 ​ $ 403,462 ​ $ 109,512 ​ $ 28,787 ​ $ 226,034 ​ ​ ​ ​ 52 Table of Contents ​