What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 239 added, 203 removed, 1320 unchanged (25% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2025 (unaudited) and December 31, 2024

June 30, 2025 (unaudited) and December 31, 2024

(derived from audited financial statements)

(in thousands, except share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 67,454 $ 50,172

Available for sale ("AFS") securities, at fair value (amortized cost of $ 160,504 , net of allowance for credit losses of $ 0 at March 31, 2025 and amortized cost of $ 165,604 , net of allowance for credit losses of $ 0 at December 31, 2024)

Available for sale ("AFS") securities, at fair value (amortized cost of $ 155,503 , net of allowance for credit losses of $ 0 at June 30, 2025 and amortized cost of $ 165,604 , net of allowance for credit losses of $ 0 at December 31, 2024)

134,773 142,851

Held to maturity ("HTM") securities, at amortized cost (fair value of $ 66,191 , net of allowance for credit losses of $ 0 at March 31, 2025 and fair value of $ 65,622 , net of allowance for credit losses of $ 0 at December 31, 2024)

Held to maturity ("HTM") securities, at amortized cost (fair value of $ 65,012 , net of allowance for credit losses of $ 0 at June 30, 2025 and fair value of $ 65,622 , net of allowance for credit losses of $ 0 at December 31, 2024)

83,029 85,504

31 unchanged sentences

Consolidated Statements of Operations (unaudited)

Three Months Ended March 31, 2025 and 2024

Three and Six Months Ended June 30, 2025 and 2024

(in thousands, except per share data)

Three Months Ended

March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Interest and dividend income:

8 unchanged sentences

Net interest income before provision for credit losses 13,311 11,576 24,905 23,481

(Negative) provision for credit losses ( 250 ) ( 800 )

Provision for credit losses 1,350 ( 1,525 ) 1,100 ( 2,325 )

Net interest income after provision for credit losses 11,961 13,101 23,805 25,806

5 unchanged sentences

Loan fees and service charges 237 309 357 539

Net realized gains on debt securities — —

Net gains on equity securities 10 167

Net gains (losses) on equity securities 99 ( 658 ) 109 ( 491 )

Bank Owned Life Insurance (BOLI) death benefit — 184 — 184

Other 240 257 483 510

9 unchanged sentences

Professional services 432 347 940 913

Losses on repossessed assets, net 4 —

Losses (gains) on repossessed assets, net — ( 18 ) 4 ( 18 )

Other 649 756 1,313 1,824

10 unchanged sentences

Consolidated Statements of Comprehensive Income (unaudited)

Three months ended March 31, 2025 and 2024

Three and Six months ended June 30, 2025 and 2024

(in thousands)

Three Months Ended

March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Net income attributable to common stockholders $ 3,270 $ 3,675 $ 6,467 $ 7,763

2 unchanged sentences

Net unrealized gains (losses) arising during period, net of tax 81 503 1,536 ( 199 )

Reclassification for net loss on exchanged security, included in net income, net of tax — 130 — 130

Other comprehensive income (loss), net of tax 81 633 1,536 ( 69 )

3 unchanged sentences

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

(in thousands, except shares and per share data)

11 unchanged sentences

Balance at March 31, 2025 9,989,536 100 114,477 80,439 ( 14,965 ) 180,051

Net income — — — 3,270 — 3,270

Other comprehensive income, net of tax — — — — 81 81

Surrender of restricted shares of common stock to satisfy the withholding taxes due upon vesting ( 539 ) — ( 7 ) — — ( 7 )

Common stock options exercised 3,000 — 33 — — 33

Stock based compensation expense — — 34 — — 34

Balance at June 30, 2025 9,991,997 $ 100 $ 114,537 $ 83,709 $ ( 14,884 ) $ 183,462

See accompanying condensed notes to unaudited consolidated financial statements.

37 unchanged sentences

Consolidated Statements of Cash Flows (unaudited)

Three Months Ended March 31, 2025 and 2024

Six Months Ended June 30, 2025 and 2024

(in thousands)

Three Months Ended

March 31, 2025 March 31, 2024

Six Months Ended

June 30, 2025 June 30, 2024

Cash flows from operating activities:

3 unchanged sentences

Depreciation expense 1,044 1,113

Negative provision for credit losses ( 250 ) ( 800 )

Net gain on equity securities ( 10 ) ( 167 )

Provision for credit losses 1,100 ( 2,325 )

Net (gains) losses on equity securities ( 109 ) 491

Increase in mortgage servicing rights resulting from transfers of financial assets ( 173 ) ( 130 )

2 unchanged sentences

Stock based compensation expense 102 316

Gain on sale of office properties and equipment — ( 13 )

(Increase) decrease in deferred income taxes ( 152 ) 355

Increase in cash surrender value of life insurance ( 392 ) ( 560 )

Net loss from disposals of foreclosed and repossessed assets 19 —

Net gains from disposals of foreclosed and repossessed assets ( 11 ) ( 18 )

Provision for valuation allowance on foreclosed properties 15 —

10 unchanged sentences

Cash flows from investing activities:

Proceeds from Bank Owned Life Insurance ("BOLI") death benefit — 499

Purchase of available for sale securities ( 1,948 ) —

Proceeds from principal payments and maturities of available for sale securities 8,874 7,045

Proceeds from calls of available for sale securities 3,200 —

Proceeds from principal payments and maturities of held to maturity securities 2,468 2,618

9 unchanged sentences

Change in short term Federal Home Loan Bank advances, net — ( 27,500 )

Federal Home Loan Bank advance call payments — ( 10,000 )

Federal Home Loan Bank advance long-term maturities ( 5,000 ) ( 10,530 )

Net increase in deposits 35,506 8,393

Other borrowings principal reductions — ( 6,083 )

Net (decrease) increase in deposits ( 9,732 ) 448

Repurchase shares of common stock — ( 1,834 )

3 unchanged sentences

Net cash from financing activities ( 18,459 ) ( 58,964 )

Net decrease in cash and cash equivalents 50,027 ( 8,500 )

Net increase (decrease) in cash and cash equivalents 17,282 ( 252 )

Cash and cash equivalents at beginning of period 50,172 37,138

23 unchanged sentences

Additionally, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the balance sheet date of March 31, 2025, through the date on which the consolidated financial statements were available to be issued on May 8, 2025, for items that should potentially be recognized or disclosed in these consolidated financial statements.

In preparing these consolidated financial statements, we evaluated the events and transactions that occurred subsequent to the balance sheet date of June 30, 2025, through the date on which the consolidated financial statements were available to be issued on August 7, 2025, for items that should potentially be recognized or disclosed in these consolidated financial statements.

The accompanying consolidated interim financial statements are unaudited.

10 unchanged sentences

those items described under the caption “Risk Factors” in Item 1A of the annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025;

the matters described in Forward-Looking Statements in Part 1, Item 2 of the quarterly report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 8, 2025;

the matters described in Forward-Looking Statements in Part 1, Item 2 of this Form 10-Q;

5 unchanged sentences

Available for Sale and Held to Maturity – Management determines the appropriate classification of investment securities at the time of purchase and reevaluates such designation as of the date of each balance sheet.

are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity.

Securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity.

Held to maturity securities are stated at amortized cost.

19 unchanged sentences

The Company has elected to not measure an ACL on accrued interest on available for sale and held to maturity securities, as it would write off accrued interest in a timely manner if the related security was determined to have a credit loss.

Accrued interest receivable on available-for-sale and held-to-maturity securities was $ 903 and $ 920 at March 31, 2025 and December 31, 2024, respectively.

The Company has no available for sale securities or held to maturity securities which it deems to have a credit loss at March 31, 2025.

Accrued interest receivable on available-for-sale and held-to-maturity securities was $ 864 and $ 920 at June 30, 2025 and December 31, 2024, respectively.

The Company has no available for sale securities or held to maturity securities which it deems to have a credit loss at June 30, 2025.

Equity investments - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities.

20 unchanged sentences

Based on management’s quarterly evaluation, no impairment has been recorded on these securities.

Other investments totaling $ 12,496 at March 31, 2025 consisted of $ 3,856 of FHLB stock, $ 5,722 of Federal Reserve Bank stock and $ 2,918 of Bankers’ Bank stock.

Other investments totaling $ 12,379 at June 30, 2025, consisted of $ 3,738 of FHLB stock, $ 5,723 of Federal Reserve Bank stock and $ 2,918 of Bankers’ Bank stock.

Other investments totaling $ 12,500 at December 31, 2024, consisted of $ 3,865 of FHLB stock and $ 5,717 of Federal Reserve Bank stock and $ 2,918 of Bankers’ Bank stock.

55 unchanged sentences

The Company has elected to not measure an ACL on accrued interest as it writes off accrued interest in a timely manner.

Accrued interest receivable on loans was $ 4,554 and $ 4,467 at March 31, 2025 and December 31, 2024, respectively.

Accrued interest receivable on loans was $ 4,881 and $ 4,467 at June 30, 2025 and December 31, 2024, respectively.

Allowance for Credit Losses - Unfunded Commitments - The ACL on unfunded commitments is a liability for credit losses on commitments to originate or fund loans, and standby letters of credit.

38 unchanged sentences

A reporting unit is defined as any distinct, separately identifiable component of the Company’s one operating segment for which complete, discrete financial information is available and reviewed regularly by the segment’s management.

The Company has one reporting unit as of March 31, 2025, which is related to its banking activities.

The Company has one reporting unit as of June 30, 2025, which is related to its banking activities.

The impairment testing process is conducted by assigning net assets and goodwill to the Company’s reporting unit.

18 unchanged sentences

As such, the Company is not the primary beneficiary of the VIE and

the LLC’s have not been consolidated.

the LLCs have not been consolidated.

With the adoption of ASU 2023-02 on January 1, 2023, the investments are accounted for using the proportional amortization method, which requires amortizing the investment in the period of and in proportion to the recognition of the related tax credit.

1 unchanged sentence

Prior to the adoption of ASU 2023-02 the investment was accounted for using the equity method of accounting and was amortized through non-interest expense.

As of March 31, 2025, the carrying amount of this investment, which is included in other assets in the consolidated balance sheets, was $ 4,220 .

As of June 30, 2025, the carrying amount of this investment, which is included in other assets in the consolidated balance sheets, was $ 3,960 .

The risk of loss with this investment is limited to its carrying value and is tied to its ability to operate in compliance with the rules and regulations necessary for the qualification of the tax credit generated by the investment.

As of March 31, 2025, there were no known instances of noncompliance associated with either investment.

As of June 30, 2025, there were no known instances of noncompliance associated with either investment.

Leases - We determine if an arrangement is a lease at inception.

11 unchanged sentences

These variable costs are recognized when incurred and are also included in lease expense.

Federal Home Loan Bank (“FHLB”) advances - The Bank held no short-term or long-term FHLB advances as of March 31, 2025.

Federal Home Loan Bank (“FHLB”) advances - The Bank held no short-term or long-term FHLB advances as of June 30, 2025.

The Bank held no short-term FHLB advances and $ 5,000 long-term FHLB advances as of December 31, 2024.

24 unchanged sentences

Accordingly, the Company’s evaluation is based on current tax laws as well as management’s expectations of future performance.

The Company’s effective tax rates were 19.6 % and 21.3 % for the three months ended March 31, 2025 and March 31, 2024, respectively.

The Company’s effective tax rates were 19.2 % and 22.1 % for the three months ended June 30, 2025 and June 30, 2024, respectively, and 19.4 % and 21.6 % for the six months ended June 30, 2025 and June 30, 2024, respectively.

Revenue Recognition - The Company’s primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method.

38 unchanged sentences

However, the fair value of the forward loan sale agreement related to such loan commitment should increase by substantially the same amount, effectively eliminating the Company’s interest rate and price risks.

At March 31, 2025, the Company had $ 5,414 of loan commitments outstanding related to loans being originated for sale, all of which were subject to interest rate lock commitments and corresponding forward loan sale agreements, as described above.

The net fair values of outstanding interest rate-lock commitments and forward sale agreements were considered immaterial to the Company’s consolidated financial statements as of March 31, 2025.

At June 30, 2025, the Company had $ 6,243 of loan commitments outstanding related to loans being originated for sale, all of which were subject to interest rate lock commitments and corresponding forward loan sale agreements, as described above.

The net fair values of outstanding interest rate-lock commitments and forward sale agreements were considered immaterial to the Company’s consolidated financial statements as of June 30, 2025.

Common Stock Repurchased -The Company is incorporated in Maryland.

1 unchanged sentence

Other Comprehensive Income — Accumulated and other comprehensive income or loss is comprised of the unrealized and realized gains and losses on securities available for sale, net of tax, and is shown on the accompanying consolidated statements of comprehensive income.

Operating Segments— The Chi e f Operating Decision Maker regularly reviews consolidated financial statements, as well as detailed revenue and net interest income and expense results in order to assess the Company’s performance and allocate resources.

Operating Segments— The Chi e f Operating Decision Maker (as defined in Note 13) regularly reviews consolidated financial statements, as well as detailed revenue and net interest income and expense results in order to assess the Company’s performance and allocate resources.

Wh i le the Chi e f Operating Decision Maker monitors the revenue streams of the various banking products and services, financial performance is evaluated and resource allocation decisions are made on a Company-wide basis.

10 unchanged sentences

ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to SEC’s Disclosure Update and Simplification Initiative – This ASU, issued in October 2023, provides for changes to clarify or improve consistency of disclosure and presentation requirements on a variety of topics.

This ASU has various effective dates, coinciding with the SEC’s removal of each specific change from Regs X-S and S-K, with early adoption permitted.

This ASU has various effective dates, coinciding with the SEC’s removal of each specific change from Regs S-X and S-K, with early adoption permitted.

The Company has adopted all applicable disclosure requirements set forth in this update with no material impact on the Company’s financial condition or results of operations.

12 unchanged sentences

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and fair value of securities available for sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income as of March 31, 2025 and December 31, 2024, respectively, were as follows:

The amortized cost and fair value of securities available for sale and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income as of June 30, 2025 and December 31, 2024, respectively, were as follows:

Available-for-sale securities Amortized

Losses Estimated

March 31, 2025

June 30, 2025

government agency obligations $ 12,193 $ 26 $ 78 $ 12,141

9 unchanged sentences

Total available-for-sale securities $ 165,604 $ 182 $ 22,935 $ 142,851

The amortized cost and fair value of securities held to maturity and the corresponding amounts of gross unrecognized gains and losses as of March 31, 2025 and December 31, 2024, respectively, were as follows:

The amortized cost and fair value of securities held to maturity and the corresponding amounts of gross unrecognized gains and losses as of June 30, 2025 and December 31, 2024, respectively, were as follows:

Held-to-maturity securities Amortized

Losses Estimated

March 31, 2025

June 30, 2025

Obligations of states and political subdivisions $ 400 $ — $ 19 $ 381

5 unchanged sentences

Total held-to-maturity securities $ 85,504 $ 4 $ 19,886 $ 65,622

At March 31, 2025, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $ 33,594 as collateral to secure a line of credit with the Federal Reserve Bank.

As of March 31, 2025, there were no borrowings outstanding on this Federal Reserve Bank line of credit.

As of March 31, 2025, the Bank has pledged certain of its U.S.

At June 30, 2025, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $ 33,158 as collateral to secure a line of credit with the Federal Reserve Bank.

As of June 30, 2025, there were no borrowings outstanding on this Federal Reserve Bank line of credit.

As of June 30, 2025, the Bank has pledged certain of its U.S.

Government Agency securities with a carrying value of $ 284 and mortgage-backed securities with a carrying value of $ 1,719 as collateral against specific municipal deposits.

As of March 31, 2025, the Bank also has mortgage-backed securities with a carrying value of $ 480 pledged as collateral to the Federal Home Loan Bank of Des Moines.

As of June 30, 2025, the Bank also has mortgage-backed securities with a carrying value of $ 444 pledged as collateral to the Federal Home Loan Bank of Des Moines.

At December 31, 2024 the Bank had pledged certain of its mortgage-backed securities with a carrying value of $ 33,994 as collateral to secure a line of credit with the Federal Reserve Bank.

3 unchanged sentences

As of December 31, 2024, the Bank also had mortgage-backed securities with a carrying value of $ 506 , pledged as collateral to the Federal Home Loan Bank of Des Moines.

For the three month periods ended March 31, 2025, and March 31, 2024, there were no sales of available for sale securities.

The estimated fair value of securities at March 31, 2025 and December 31, 2024, by contractual maturity, is shown below.

March 31, 2025 December 31, 2024

For the six month periods ended June 30, 2025, and June 30, 2024, there were no sales of available for sale securities.

The estimated fair value of securities at June 30, 2025 and December 31, 2024, by contractual maturity, is shown below.

June 30, 2025 December 31, 2024

Available-for-sale securities Amortized

9 unchanged sentences

Total available for sale securities $ 155,503 $ 134,773 $ 165,604 $ 142,851

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Held-to-maturity securities Amortized

8 unchanged sentences

Total held to maturity securities $ 83,029 $ 65,012 $ 85,504 $ 65,622

Securities with unrealized losses at March 31, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

Securities with unrealized losses at June 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

Less than 12 Months 12 Months or More Total

3 unchanged sentences

Value Unrealized

March 31, 2025

June 30, 2025

government agency obligations $ 1,489 $ 10 $ 5,688 $ 68 $ 7,177 $ 78

9 unchanged sentences

Total $ 9,143 $ 138 $ 118,004 $ 22,797 $ 127,147 $ 22,935

At March 31, 2025 no ACL was established for available for sale or held to maturity securities.

At June 30, 2025 no ACL was established for available for sale or held to maturity securities.

Substantially all the held to maturity portfolio is made up of agency backed mortgage securities.

1 unchanged sentence

government, are highly rated by major rating agencies, and have a long history of no credit losses.

At March 31, 2025, there were no past due held to maturity securities.

At June 30, 2025, there were no past due held to maturity securities.

Accordingly, the Company does not expect to incur credit losses on these securities.

32 unchanged sentences

Interest on substantially all loans is credited to income based on the principal amount outstanding.

A summary of loans at March 31, 2025, and December 31, 2024, follows:

March 31, 2025

A summary of loans at June 30, 2025, and December 31, 2024, follows:

June 30, 2025

December 31, 2024

38 unchanged sentences

This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.

As of March 31, 2025, and December 31, 2024, there were no loans classified as doubtful with a risk rating of 8 and no loans classified as loss with a risk rating of 9.

As of June 30, 2025, and December 31, 2024, there were no loans classified as doubtful with a risk rating of 8 and no loans classified as loss with a risk rating of 9.

Residential and consumer loans are typically not rated until they are past due 90 days at month-end which is why they are classified as pass graded 1-5 and once 90 days past due at month-end or nonaccrual, get assigned a grade 7.

Below is a summary of the amortized cost of loans summarized by class, credit quality risk rating and year of origination as of March 31, 2025, and gross charge-offs for the three months ended March 31, 2025:

Below is a summary of the amortized cost of loans summarized by class, credit quality risk rating and year of origination as of June 30, 2025, and gross charge-offs for the six months ended June 30, 2025:

Amortized Cost Basis by Origination Year

138 unchanged sentences

The Company estimates the appropriate level of allowance for credit losses by evaluating loans collectively on a pooled basis when similar risk characteristics exist, and on an individual basis when management determines that a loan does not share similar risk characteristics with other loans.

The following tables present the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the three months ended March 31, 2025:

The following tables present the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the three and six months ended June 30, 2025:

Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total

Three months ended March 31, 2025

Three months ended June 30, 2025

Allowance for Credit Losses - Loans:

2 unchanged sentences

Recoveries 52 1 — 5 58

(Reversals)/additions to ACL - Loans via provision for credit losses charged to operations ( 261 ) 75 ( 152 ) ( 13 ) ( 351 )

Additions/reversals to ACL - Loans via provision for credit losses charged to operations 868 294 9 ( 13 ) 1,158

ACL - Loans, at end of period $ 17,164 $ 1,658 $ 2,347 $ 178 $ 21,347

The following table presents the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the three months ended March 31, 2024:

Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total

Three months ended March 31, 2024

Six months ended June 30, 2025

Allowance for Credit Losses - Loans:

2 unchanged sentences

Recoveries 92 46 1 8 147

(Reversals)/additions to ACL - Loans via provision for credit losses charged to operations ( 568 ) 46 20 ( 23 ) ( 525 )

Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations 607 369 ( 143 ) ( 26 ) 807

ACL - Loans, at end of period $ 17,164 $ 1,658 $ 2,347 $ 178 $ 21,347

The following table presents the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the twelve months ended December 31, 2024:

The following table presents the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the three and six months ended June 30, 2024:

Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total

Twelve months ended December 31, 2024

Three months ended June 30, 2024

Allowance for Credit Losses - Loans:

4 unchanged sentences

ACL - Loans, at end of period $ 17,033 $ 1,117 $ 2,784 $ 244 $ 21,178

Allowance for Credit Losses - Unfunded Commitments - In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of $ 435 at March 31, 2025, and $ 334 at December 31, 2024, classified in other liabilities on the consolidated balance sheets.

The following table presents the balance and activity in the ACL - Unfunded Commitments for the three months ended March 31, 2025, and the twelve months ended December 31, 2024.

March 31, 2025 and Three Months Ended December 31, 2024 and Twelve Months Ended

Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total

Six months ended June 30, 2024

Allowance for Credit Losses - Loans:

ACL - Loans, at beginning of period $ 18,784 $ 1,105 $ 2,744 $ 275 $ 22,908

Charge-offs — — — ( 17 ) ( 17 )

Recoveries 41 25 3 5 74

Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations ( 1,792 ) ( 13 ) 37 ( 19 ) ( 1,787 )

ACL - Loans, at end of period $ 17,033 $ 1,117 $ 2,784 $ 244 $ 21,178

Allowance for Credit Losses - Unfunded Commitments - In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of $ 627 at June 30, 2025, and $ 334 at December 31, 2024, classified in other liabilities on the consolidated balance sheets.

The following table presents the balance and activity in the ACL - Unfunded Commitments for the three and six months ended June 30, 2025, and the twelve months ended December 31, 2024.

June 30, 2025 and Three Months Ended June 30, 2025 and Six Months Ended

ACL - Unfunded Commitments - beginning of period $ 435 $ 334

Additions to ACL - Unfunded Commitments via provision for credit losses charged to operations 101 ( 916 )

Additions (reversals) to ACL - Unfunded Commitments via provision for credit losses charged to operations 192 293

ACL - Unfunded Commitments - End of period $ 627 $ 627

Provision for credit losses - The provision for credit losses is determined by the Company as the amount to be added (reversed) to the ACL loss accounts for various types of financial instruments (including loans and off-balance sheet credit exposures) after net charge-offs have been deducted to bring the ACL to a level that, in managements judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments.

The following table presents the components of the negative provision for credit losses.

March 31, 2025 and Three Months Ended March 31, 2024 and Three Months Ended

(Negative) provision for credit losses on:

The following table presents the components of the provision for credit losses.

June 30, 2025 and Three Months Ended June 30, 2024 and Three Months Ended June 30, 2025 and Six Months Ended June 30, 2024 and Six Months Ended

Provision for credit losses on:

Loans $ 1,158 $ ( 1,262 ) $ 807 $ ( 1,787 )

Unfunded Commitments 192 ( 263 ) 293 ( 538 )

Total (negative) provision for credit losses $ ( 250 ) $ ( 800 )

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of March 31, 2025, and December 31, 2024, respectively, was as follows:

Total provision for credit losses $ 1,350 $ ( 1,525 ) $ 1,100 $ ( 2,325 )

An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of June 30, 2025, and December 31, 2024, respectively, was as follows:

(Loan balances at amortized cost) 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due Total

Past Due Current Total

March 31, 2025

June 30, 2025

Commercial/Agricultural real estate:

31 unchanged sentences

Total $ 3,374 $ 1,168 $ 2,897 $ 7,439 $ 1,361,542 $ 1,368,981

Nonaccrual Loans - The following tables present the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated at March 31, 2025, December 31, 2024, and March 31, 2024, with no allowance for credit losses:

March 31, 2025 Total Nonaccrual Loans Nonaccrual with no Allowance for Credit Losses Loans Past Due over 89 Days Still Accruing

Nonaccrual Loans - The following tables present the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated at June 30, 2025, December 31, 2024, and June 30, 2024, with no allowance for credit losses:

June 30, 2025 Total Nonaccrual Loans Nonaccrual with no Allowance for Credit Losses Loans Past Due over 89 Days Still Accruing

Commercial/Agricultural real estate:

3 unchanged sentences

Commercial and industrial 600 453 —

Agricultural operating 725 725 —

Residential mortgage:

1 unchanged sentence

Purchased HELOC loans 117 117 —

Consumer installment:

Originated indirect paper 1 1 —

Total $ 11,609 $ 11,056 $ 521

13 unchanged sentences

Total $ 13,168 $ 12,520 $ 186

March 31, 2024 Total Nonaccrual Loans Nonaccrual with no Allowance for Credit Losses Loans Past Due over 89 Days Still Accruing

Commercial/Agricultural real estate:

Commercial real estate $ 5,340 $ 5,125 $ —

Agricultural real estate 382 383 —

C&I/Agricultural operating:

Commercial and industrial 440 289 —

Agricultural operating 1,106 1,106 —

Residential mortgage:

Residential mortgage 1,127 900 324

Consumer installment:

Originated indirect paper 17 17 —

Other consumer 1 1 2

Total $ 8,413 $ 7,821 $ 326

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is past due according to the following schedules:

11 unchanged sentences

For collateral dependent loans, expected credit losses are based on the fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral.

The following tables present the amortized cost basis of collateral dependent loans by portfolio segment and collateral type that were individually evaluated to determine expected credit losses and the related allowance for credit losses as of March 31, 2025, and December 31, 2024.

Collateral Type

March 31, 2025 Real Estate Other Assets Total Without an Allowance With an Allowance Allowance Allocation

June 30, 2025 Real Estate Other Assets Total Without an Allowance With an Allowance Allowance Allocation

Commercial/Agricultural real estate:

25 unchanged sentences

Total $ 18,395 $ 2,626 $ 21,021 $ 17,459 $ 3,562 $ 455

There was one outstanding commitment to borrowers experiencing financial difficulty as of March 31, 2025.

There were unused lines of credit totaling $ 9 on loans with borrowers experiencing financial difficulties as of March 31, 2025.

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the three months ended March 31, 2025:

There were no outstanding commitments to borrowers experiencing financial difficulty as of June 30, 2025.

There were unused lines of credit totaling $ 29 on loans with borrowers experiencing financial difficulties as of June 30, 2025.

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the three months ended June 30, 2025:

Term Extension

Loan Class Amortized Cost Basis at June 30, 2025 % of Total Class of Financing Receivables

Commercial real estate $ 164 0.02 %

Other-Than-Insignificant Payment Delay

Loan Class Amortized Cost Basis at March 31, 2025 % of Total Class of Financing Receivables

Loan Class Amortized Cost Basis at June 30, 2025 % of Total Class of Financing Receivables

Commercial real estate $ 4,263 0.62 %

Residential mortgage $ 120 0.09 %

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025:

Agricultural real estate $ 200 0.29 %

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2025:

Term Extension

Loan Class Financial Effect

Commercial real estate A weighted average of 2 months was added to the term of the loan

Other-Than-Insignificant Payment Delay

1 unchanged sentence

Commercial real estate Payments were deferred a weighted average of 3 months

Residential mortgage Payments were deferred a weighted average of 3 months

The tables below detail Loan Modifications made to Borrowers Experiencing Financial Difficulty during the twelve months ended March 31, 2025:

Agricultural real estate Payments were deferred a weighted average of 9 months

The tables below detail Loan Modifications made to Borrowers Experiencing Financial Difficulty during the twelve months ended June 30, 2025:

Term Extension

Loan Class Amortized Cost Basis at March 31, 2025 % of Total Class of Financing Receivables

Loan Class Amortized Cost Basis at June 30, 2025 % of Total Class of Financing Receivables

Commercial real estate $ 164 0.02 %

Commercial and industrial $ 661 0.61 %

2 unchanged sentences

Other-Than-Insignificant Payment Delay

Loan Class Amortized Cost Basis at March 31, 2025 % of Total Class of Financing Receivables

Loan Class Amortized Cost Basis at June 30, 2025 % of Total Class of Financing Receivables

Commercial real estate $ 5,738 0.83 %

Commercial and industrial $ 801 0.73 %

Agricultural real estate $ 200 0.29 %

Residential mortgage $ 120 0.10 %

Term Extension and Principal Forgiveness

Loan Class Amortized Cost Basis at March 31, 2025 % of Total Class of Financing Receivables

Loan Class Amortized Cost Basis at June 30, 2025 % of Total Class of Financing Receivables

Other consumer $ 2 — %

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the twelve months ended March 31, 2025:

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the twelve months ended June 30, 2025:

Term Extension

Loan Class Financial Effect

Commercial real estate A weighted average of 2 months was added to the term of the loans

Commercial and industrial A weighted average of 13 months was added to the term of the loans

4 unchanged sentences

Commercial real estate Payments were deferred a weighted average of 3 months

Commercial and industrial Payments were deferred a weighted average of 3 months

Agricultural real estate Payments were deferred a weighted average of 9 months

Residential mortgage Payments were deferred a weighted average of 3 months

2 unchanged sentences

Other consumer A weighted average of 3 months was added to the term of the loan and a principal balance of $ 2 was forgiven

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the three months ended March 31, 2024:

Term Extension

Loan Class Amortized Cost Basis at

March 31, 2024 % of Total Class of Financing Receivables

Commercial and industrial $ 2,300 1.80 %

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the three months ended June 30, 2024:

Other-Than-Insignificant Payment Delay

Loan Class Amortized Cost Basis at

March 31, 2024 % of Total Class of Financing Receivables

June 30, 2024 % of Total Class of Financing Receivables

Commercial and industrial $ 920 0.72 %

Residential mortgage $ 163 0.12 %

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024:

Term Extension

Loan Class Financial Effect

Commercial and industrial A weighted average of 11 months was added to the term of the loans

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the three months ended June 30, 2024:

Other-Than-Insignificant Payment Delay

Loan Class Financial Effect

Commercial and industrial Payments were deferred a weighted average of 3 months

Residential mortgage Payments were deferred a weighted average of 3 months

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended March 31, 2024:

The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended June 30, 2024:

Term Extension

Loan Class Amortized Cost Basis at

March 31, 2024 % of Total Class of Financing Receivables

June 30, 2024 % of Total Class of Financing Receivables

Commercial real estate $ 4,434 0.61 %

2 unchanged sentences

Loan Class Amortized Cost Basis at

March 31, 2024 % of Total Class of Financing Receivables

June 30, 2024 % of Total Class of Financing Receivables

Commercial and industrial $ 920 0.72 %

Residential mortgage $ 245 0.18 %

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the twelve months ended March 31, 2024:

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the twelve months ended June 30, 2024:

Term Extension

4 unchanged sentences

Loan Class Financial Effect

Commercial and industrial Payments were deferred a weighted average of 3 months

Residential mortgage Payments were deferred a weighted average of 3 months

The Company closely monitors the performance of loans that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table shows the performance of such loans that have been modified during the twelve months ended March 31, 2025.

The following table shows the performance of such loans that have been modified during the twelve months ended June 30, 2025.

Current 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due

Commercial real estate $ 5,902 $ — $ — $ —

Agricultural real estate 200 — — —

Commercial and industrial 661 — — —

3 unchanged sentences

Total $ 6,953 $ 120 $ — $ —

The following table shows the performance of such loans that have been modified during the twelve months ended March 31, 2024.

The following table shows the performance of such loans that have been modified during the twelve months ended June 30, 2024.

Current 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due

5 unchanged sentences

Mortgage servicing rights-- Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.

The unpaid balances of these loans as of March 31, 2025 and December 31, 2024 were $ 475,763 and $ 479,578 , respectively, and consisted of one to four family residential real estate loans.

The unpaid balances of these loans as of June 30, 2025 and December 31, 2024 were $ 475,220 and $ 479,578 , respectively, and consisted of one to four family residential real estate loans.

These loans are serviced primarily for the Federal Home Loan Mortgage Corporation, Federal Home Loan Bank and the Federal National Mortgage Association.

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $ 4,194 and $ 2,430 at March 31, 2025 and December 31, 2024, respectively.

Mortgage servicing rights activity for the three month periods ended March 31, 2025 and March 31, 2024, were as follows:

As of and for the Three Months Ended As of and for the Three Months Ended

March 31, 2025 March 31, 2024

Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in deposits were $ 4,798 and $ 2,430 at June 30, 2025 and December 31, 2024, respectively.

Mortgage servicing rights activity for the three and six month periods ended June 30, 2025 and June 30, 2024, were as follows:

As of and for the Three Months Ended As of and for the Three Months Ended As of and for the Six Months Ended As of and for the Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Mortgage servicing rights:

12 unchanged sentences

The current period change in valuation allowance, if applicable, is included in non-interest expense as mortgage servicing rights expense, net on the consolidated statement of operations.

Servicing fees totaled $ 300 and $ 311 for the three months ended March 31, 2025 and March 31, 2024, respectively.

Servicing fees totaled $ 301 and $ 310 for the three months ended June 30, 2025 and June 30, 2024, respectively.

Servicing fees totaled $ 602 and $ 621 for the six months ended June 30, 2025 and June 30, 2024, respectively.

Servicing fees are included in loan servicing income on the consolidated statement of operations.

3 unchanged sentences

Central to the valuation model is the discount rate.

Fair value at March 31, 2025, was determined using discount rates ranging from 9.625 % to 12.625 %.

Fair value at March 31, 2024, was determined using discount rates ranging from 9.75 % to 12.75 %.

Fair value at June 30, 2025, was determined using discount rates ranging from 9.5 % to 12.5 %.

Fair value at June 30, 2024, was determined using discount rates ranging from 9.9 % to 12.9 %.

Other assumptions utilized in the valuation model include, but are not limited to, prepayment speed, servicing costs, delinquencies, costs of advances, foreclosure costs, ancillary income, and income earned on float and escrow.

3 unchanged sentences

Some of the leases include an option to extend, the longest of which is for two 5 year terms.

As of March 31, 2025, we have no lease commitments that have not yet commenced.

As of June 30, 2025, we have no lease commitments that have not yet commenced and one lease commitment extension beginning on October 1, 2025.

The Company also leases a portion of some of its facilities and receives rental income from such lease agreements, all of which are considered operating leases.

Three Months Ended

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

The components of total lease cost were as follows:

7 unchanged sentences

Operating cash flows from operating leases $ 252 $ 274

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Supplemental balance sheet information related to leases was as follows:

14 unchanged sentences

NOTE 6 – DEPOSITS

The following is a summary of deposits by type at March 31, 2025 and December 31, 2024, respectively:

March 31, 2025 December 31, 2024

The following is a summary of deposits by type at June 30, 2025 and December 31, 2024, respectively:

June 30, 2025 December 31, 2024

Non-interest bearing demand deposits $ 260,248 $ 252,656

4 unchanged sentences

Total deposits $ 1,478,416 $ 1,488,148

At March 31, 2025, the scheduled maturities of certificate accounts were as follows for the year ended, except December 31, 2025, which is the nine months ended:

At June 30, 2025, the scheduled maturities of certificate accounts were as follows for the year ended, except December 31, 2025, which is the six months ended:

December 31, 2025 $ 196,618

5 unchanged sentences

Total $ 334,829

Certificate accounts of $250 or more were $ 59,438 and $ 68,977 at March 31, 2025 and December 31, 2024, respectively.

Brokered deposits were $ 10,542 at March 31, 2025 and consisted of $ 5,489 of brokered certificate accounts and $ 5,053 of brokered money market accounts.

Certificate accounts of $250 or more were $ 50,625 and $ 68,977 at June 30, 2025 and December 31, 2024, respectively.

Brokered deposits were $ 5,092 at June 30, 2025 and consisted of no brokered certificate accounts and $ 5,092 of brokered money market accounts.

Brokered Deposits were $ 19,125 at December 31, 2024 and consisted of $ 14,123 of brokered certificate accounts and $ 5,002 of brokered money market accounts.

At March 31, 2025, there was one brokered certificate account, totaling $ 5,489 , maturing in the year ended, December 31, 2028.

The Company can call this brokered certificate prior to the maturity date, with 15 calendar days prior written notice to the Payee.

During the quarter ended June 30, 2025, there was one brokered certificate account, totaling $ 5,489 , maturing in the year ended, December 31, 2028, that was called by the Company, and during the quarter ended March 31, 2025, there was one brokered certificate totaling $ 3,450 , maturing in the year ended, December 31, 2025, that was called by the Company.

NOTE 7 – FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS

A summary of Federal Home Loan Bank advances and other borrowings at March 31, 2025 and December 31, 2024, is as follows:

March 31, 2025

A summary of Federal Home Loan Bank advances and other borrowings at June 30, 2025 and December 31, 2024, is as follows:

June 30, 2025

December 31, 2024

9 unchanged sentences

Totals $ 61,722 $ 66,606

(1) The FHLB advances bear fixed rates, require interest-only monthly payments, and are collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $ 1,032,313 and $ 1,075,001 at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $ 501,532 compared to $ 424,658 as of December 31, 2024.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $ 5,000 and $ 81,000 , during the three months ended March 31, 2025 and the twelve months ended December 31, 2024, respectively.

(3) There were no FHLB borrowings outstanding as of March 31, 2025.

(1) The FHLB advance shown is a fixed rate advance, requires interest-only monthly payments, and is collateralized by a blanket lien on pre-qualifying first mortgages, home equity lines, multi-family loans and certain other loans which had a pledged balance of $ 1,027,330 and $ 1,075,001 at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $ 424,392 compared to $ 424,658 as of December 31, 2024.

(2) Maximum month-end borrowed amounts outstanding under this borrowing agreement were $ 5,000 and $ 81,000 , during the six months ended June 30, 2025 and the twelve months ended December 31, 2024, respectively.

(3) There were no FHLB borrowings outstanding as of June 30, 2025.

The weighted-average interest rate on FHLB borrowings, with maturities less than twelve months, outstanding as of December 31, 2024 was 1.45 %.

5 unchanged sentences

(a) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in August 2020, which bears a fixed interest rate of 6.00 % for five years .

In September 2025, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 591 basis points.

The note is callable by the Bank when, and anytime after, the floating rate is initially set.

Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

On July 7, 2025, the Board of Directors approved the redemption of the entire $ 15,000 balance of the 6 % subordinated debentures due September 1, 2030, which were scheduled to reprice on September 1, 2025, to SOFR plus 591 basis points.

The redemption will occur on September 1, 2025.

(b) The Company’s Subordinated Note Purchase Agreement entered into with certain purchasers in March 2022, which bears a fixed interest rate of 4.75 % for five years .

In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term Secured Overnight Financing Rate plus 329 basis points.

The note is callable by the Bank when, and anytime after, the floating rate is initially set.

In April 2027, the fixed interest rate will be reset quarterly to equal the three-month term SOFR plus 329 basis points.

The note is callable by the Bank when, and anytime after, the floating rate is

initially set.

Interest-only payments are due semi-annually each year during the fixed interest period and quarterly during the floating interest period.

2 unchanged sentences

This irrevocable standby letter of credit (“LOC”) is supported by loan collateral as an alternative to directly pledging investment securities on behalf of a municipal customer as collateral for their interest bearing deposit balances.

The letters of credit balances were $ 110,750 and $ 209,750 at March 31, 2025 and December 31, 2024, respectively.

The letters of credit balances were $ 110,750 and $ 209,750 at June 30, 2025 and December 31, 2024, respectively.

Federal Reserve Borrowings

At March 31, 2025 and December 31, 2024, the Bank had the ability to borrow $ 25,069 and $ 24,942 from the Federal Reserve Bank of Minneapolis.

The ability to borrow is based on mortgage-backed securities pledged with a carrying value of $ 33,594 and $ 33,994 as of March 31, 2025, and December 31, 2024, respectively.

There were no Federal Reserve borrowings outstanding as of March 31, 2025, and December 31, 2024.

At June 30, 2025 and December 31, 2024, the Bank had the ability to borrow $ 24,665 and $ 24,942 from the Federal Reserve Bank of Minneapolis.

The ability to borrow is based on mortgage-backed securities pledged with a carrying value of $ 33,158 and $ 33,994 as of June 30, 2025, and December 31, 2024, respectively.

There were no Federal Reserve borrowings outstanding as of June 30, 2025, and December 31, 2024.

Federal Funds Purchased Lines of Credit

As of March 31, 2025, the Bank maintains two unsecured federal funds purchased lines of credit with its banking partners which total $ 70,000 .

As of June 30, 2025, the Bank maintains two unsecured federal funds purchased lines of credit with its banking partners which total $ 70,000 .

As of December 31, 2024, the Bank maintained three unsecured federal funds purchased lines of credit with its banking partners which totaled $ 70,000 .

These lines bear interest at the lender bank’s announced daily federal funds rate, mature daily and are revocable at the discretion of the lending institution.

There were no borrowings outstanding on these lines of credit as of March 31, 2025 or December 31, 2024.

There were no borrowings outstanding on these lines of credit as of June 30, 2025 or December 31, 2024.

NOTE 8 - CAPITAL MATTERS

7 unchanged sentences

If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

At March 31, 2025, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2025, and December 31, 2024, respectively, are presented below:

At June 30, 2025, the Bank was categorized as “Well Capitalized”, under Prompt Corrective Action Provisions.

The Bank’s Tier 1 (leverage) and risk-based capital ratios at June 30, 2025, and December 31, 2024, respectively, are presented below:

Actual For Capital Adequacy

3 unchanged sentences

Amount Ratio Amount Ratio Amount Ratio

As of March 31, 2025

As of June 30, 2025

Total capital (to risk weighted assets) $ 226,623 15.7 % $ 115,689 > = 8.0 % $ 144,611 > = 10.0 %

7 unchanged sentences

Tier 1 leverage ratio (to adjusted total assets) 207,749 11.9 % 69,787 > = 4.0 % 87,234 > = 5.0 %

The Company’s Tier 1 (leverage) and risk-based capital ratios at March 31, 2025 and December 31, 2024, respectively, are presented below:

The Company’s Tier 1 (leverage) and risk-based capital ratios at June 30, 2025 and December 31, 2024, respectively, are presented below:

Actual For Capital Adequacy

Amount Ratio Amount Ratio

As of March 31, 2025

As of June 30, 2025

Total capital (to risk weighted assets) $ 235,486 16.3 % $ 115,867 > = 8.0 %

11 unchanged sentences

The aggregate number of shares of common stock initially reserved and available for issuance under the 2018 Equity Incentive Plan was 350,000 shares.

As of March 31, 2025, 331,968 restricted shares had been granted under this plan.

As of June 30, 2025, 331,968 restricted shares had been granted under this plan.

This amount includes 16,021 shares of performance based restricted stock granted in 2022 and issued in January 2025 upon achievement of the performance criteria and completion of the three-year performance period beginning in January 2022 and ending December 31, 2024.

The amount also includes 8,805 shares of performance based restricted stock granted in 2021 and issued in January 2024 upon achievement of the performance criteria and completion of the three year performance period beginning in January 2021 and ending December 31, 2023.

As of March 31, 2025, no stock options had been granted under this plan.

As of June 30, 2025, no stock options had been granted under this plan.

In February 2008, the Company’s stockholders approved the Company’s 2008 Equity Incentive Plan for a term of 10 years.

Due to the plan’s expiration, no new awards can be granted under this plan.

As of March 31, 2025, there are no awarded unvested restricted shares, and 49,000 awarded unexercised vested options remaining from the plan.

As of June 30, 2025, there are no awarded unvested restricted shares, and 49,000 awarded unexercised vested options remaining from the plan.

Options granted under this plan vested pro rata over a five-year period from the grant date and were fully vested as of October 2022.

Unexercised incentive stock options expire within 10 years of the grant date.

Stock based compensation expense related to restricted stock awards from these plans was $ 68 for the three months ended March 31, 2025, compared to $ 158 for three months ended March 31, 2024.

Stock based compensation expense related to restricted stock awards from these plans was $ 34 and $ 102 for the three and six months ended June 30, 2025, compared to $ 158 and $ 316 for the three and six months ended June 30, 2024.

Restricted Common Stock Award

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Number of Shares Weighted

6 unchanged sentences

Unvested and outstanding at end of period 6,109 $ 12.36 39,171 $ 12.48

March 31, 2025

June 30, 2025

Number of Shares Weighted

15 unchanged sentences

Term in Years Aggregate

March 31, 2025

June 30, 2025

Outstanding at beginning of year 52,000 $ 11.62

8 unchanged sentences

Information related to the 2008 Equity Incentive Plan for the respective periods follows:

Three months ended March 31, 2025 Twelve months ended December 31, 2024

Six months ended June 30, 2025 Twelve months ended December 31, 2024

Intrinsic value of options exercised $ 26 $ 12

17 unchanged sentences

At the end of each reporting period, the Company estimates its potential liability related to the Plan and records any change to this liability as compensation expense in the consolidated statement of operations.

At March 31, 2025 and December 31, 2024, the related liability was $ 150 and $ 190 , respectively, which is included in other liabilities on the consolidated balance sheet.

For the three months ended March 31, 2025 and March 31, 2024, the Company recorded related expense of $ 59 and $ 26 , respectively, which is included in compensation and related benefits/non-interest expense on the Company’s consolidated statement of operations.

At June 30, 2025 and December 31, 2024, the related liability was $ 222 and $ 190 , respectively, which is included in other liabilities on the consolidated balance sheet.

For the three months ended June 30, 2025 and June 30, 2024, the Company recorded related expense of $ 72 and $ 37 , respectively, which is included in compensation and related benefits/non-interest expense on the Company’s consolidated statement of operations.

For the six months ended June 30, 2025 and June 30, 2024, the Company recorded related expense of $ 131 and $ 63 , respectively, which is included in compensation and related benefits/non-interest expense on the Company’s consolidated statement of operations.

NOTE 10 – FAIR VALUE ACCOUNTING

11 unchanged sentences

Assets Measured on a Recurring Basis

The following tables present the financial instruments measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024:

The following tables present the financial instruments measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

Value Quoted Prices in

3 unchanged sentences

(Level 2) Significant

March 31, 2025

June 30, 2025

Investment securities:

25 unchanged sentences

During the three months ended June 30, 2024, senior debt of a community development financial institution, classified as available-for-sale securities was exchanged for preferred equity of the financial institution’s operating subsidiary.

At March 31, 2025, the Company owned $ 1,362 preferred equity investments for which the Company utilized significant unobservable inputs (Level 3 inputs) to determine fair value.

At June 30, 2025, the Company owned $ 1,362 preferred equity investments for which the Company utilized significant unobservable inputs (Level 3 inputs) to determine fair value.

At December 31, 2024, the Company owned $ 1,362 preferred equity investments for which the Company utilized significant unobservable inputs (Level 3 inputs) to determine fair value.

There were no transfers in or out of Level 1, Level 2 or Level 3 fair value measurements relating to the available-for-sale securities above during the three months ended March 31, 2025 and March 31, 2024, respectively..

There were no losses included in earnings attributable to the change in unrealized gains or losses relating to the available-for-sale securities above with fair value measurements utilizing significant unobservable inputs for the three months ended March 31, 2025 and March 31, 2024, respectively.

There were no transfers in or out of Level 1, Level 2 or Level 3 fair value measurements relating to the available-for-sale securities above during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, $ 2,082 of senior debt, previously measured as a Level 1 instrument, was exchanged for preferred equity, now measured as a Level 3 instrument, resulting in a transfer out of Level 1 fair value measurement to Level 3 fair value measurement.

The exchange resulted in $ 168 of unrealized losses on available-for-sale securities, previously included in other comprehensive income, being recognized on the June 30, 2024, consolidated statement of operations as loss on investment securities.

Assets Measured on Nonrecurring Basis

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024:

The following tables present the financial instruments measured at fair value on a nonrecurring basis as of June 30, 2025 and December 31, 2024:

Carrying Value Quoted Prices in

3 unchanged sentences

(Level 2) Significant

March 31, 2025

June 30, 2025

Foreclosed and repossessed assets, net $ 895 $ — $ — $ 895

5 unchanged sentences

Total $ 4,022 $ — $ — $ 4,022

The fair value of collateral dependent loans with allowances was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans.

The fair value of foreclosed and repossessed assets was determined by obtaining market price valuations from independent third parties wherever such quotes were available for other collateral owned.

The Company utilized independent third party appraisals to support the Company’s estimates and judgments in determining fair value for other real estate owned.

The fair value of mortgage servicing rights was estimated using discounted cash flows based on current market rates and other factors.

The following table represents additional quantitative information about assets measured at fair value on a

recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at

March 31, 2025 and December 31, 2024.

June 30, 2025 and December 31, 2024.

Value Valuation Techniques (1) Significant Unobservable Inputs (2) Range

March 31, 2025

June 30, 2025

Foreclosed and repossessed assets, net $ 895 Appraisal value Estimated costs to sell 10 % - 15 %

8 unchanged sentences

The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Valuation Method Used Carrying

24 unchanged sentences

A reconciliation of the basic and diluted earnings per share is as follows:

Three Months Ended

(Share count in thousands) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

(Share count in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Net income attributable to common stockholders $ 3,270 $ 3,675 $ 6,467 $ 7,763

8 unchanged sentences

Dilutive shares outstanding consist of exercisable stock options whose strike prices were less than the quarterly average closing price of the Company’s common stock.

At March 31, 2025 and March 31, 2024, there were 0 and 20 exercisable stock options, respectively, with a potentially dilutive effect.

At June 30, 2025 and June 30, 2024, there were 0 and 20 exercisable stock options, respectively, with a potentially dilutive effect.

However their strike prices were higher than the quarterly average closing prices of the Company’s common stock and thus, excluded from diluted shares outstanding.

NOTE 12 – OTHER COMPREHENSIVE INCOME (LOSS)

The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three months ended March 31, 2025 and 2024:

The following tables show the tax effects allocated to each component of other comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

March 31, 2025 March 31, 2024

June 30, 2025 June 30, 2024

Amount Tax Benefit

3 unchanged sentences

(Expense) Net-of-Tax

Unrealized gains on securities:

Net unrealized gains arising during the period $ 133 $ ( 52 ) $ 81 $ 669 $ ( 166 ) $ 503

Reclassification for net loss on exchanged security, included in net income, net of tax — — — 168 ( 38 ) 130

Other comprehensive income $ 133 $ ( 52 ) $ 81 $ 837 $ ( 204 ) $ 633

Six Months Ended

June 30, 2025 June 30, 2024

Amount Tax Benefit

(Expense) Net-of-Tax

Amount Before-Tax

Amount Tax Benefit

(Expense) Net-of-Tax

Unrealized gains (losses) on securities:

Net unrealized gains (losses) arising during the period $ 2,023 $ ( 487 ) $ 1,536 $ ( 223 ) $ 24 $ ( 199 )

Reclassification for net loss on exchanged security, included in net income, net of tax — — — 168 ( 38 ) 130

Other comprehensive income (loss) $ 2,023 $ ( 487 ) $ 1,536 $ ( 55 ) $ ( 14 ) $ ( 69 )

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2024 and the three months ended March 31, 2025 were as follows:

The changes in the accumulated balances for each component of other comprehensive income (loss), net of tax for the twelve months ended December 31, 2024 and the six months ended June 30, 2025 were as follows:

Gains (Losses)

6 unchanged sentences

Current year-to-date other comprehensive income 2,023 1,536

Ending balance, March 31, 2025 $ ( 20,862 ) $ ( 14,965 )

There were no reclassifications out of accumulated other comprehensive income (loss) for the three month periods ended March 31, 2025 and March 31, 2024.

Ending balance, June 30, 2025 $ ( 20,730 ) $ ( 14,884 )

Reclassifications out of accumulated other comprehensive income (loss) for the three and six month periods ended June 30, 2025 and June 30, 2024 were as follows:

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended June 30, 2025 Six months ended June 30, 2025 Affected Line Item on the Statement of Operations

Unrealized gains and losses

Sale of securities $ — $ — Net (losses) gains on investment securities

Tax effect — — Provision for income taxes

Total reclassifications for the period $ — $ — Net income attributable to common stockholders

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

Details about Accumulated Other Comprehensive Income (Loss) Components Three months ended June 30, 2024 Six months ended June 30, 2024 Affected Line Item on the Statement of Operations

Unrealized gains and losses

Debt security exchanged for equity security $ ( 168 ) $ ( 168 ) Net (losses) gains on investment securities

Tax effect 38 38 Provision for income taxes

Total reclassifications for the period $ ( 130 ) $ ( 130 ) Net loss attributable to common stockholders

NOTE 13 – SEGMENT INFORMATION

The Company’s reportable segment is determined by the Chief Financial Officer, who is the designated chief operating decision maker, based upon information provided about the performance of products and services offered in its banking operations.

The Company’s reportable segment is determined by the Chief Financial Officer, who is the designated chief operating decision maker (the “Chief Operating Decision Maker”), based upon information provided about the performance of products and services offered in its banking operations.

Banking operations consist primarily of lending, deposit and investment activities.

6 unchanged sentences

All operations are domestic.

Three Months Ended

March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30,2025 June 30, 2024

Interest and dividend income $ 22,502 $ 22,463 $ 43,605 $ 45,142

4 unchanged sentences

Segment net interest income and non-interest income 16,147 13,489 30,334 28,658

(Negative) provision for credit losses ( 250 ) ( 800 )

Provision for credit losses 1,350 ( 1,525 ) 1,100 ( 2,325 )

Compensation and related benefits (expense) 6,008 5,675 11,605 11,158

8 unchanged sentences

Other significant noncash items:

(Negative) provision for credit losses $ ( 250 ) $ ( 800 )

Provision for credit losses $ 1,350 $ ( 1,525 ) $ 1,100 $ ( 2,325 )

Reconciliation of assets:

March 31, 2025 December 31, 2024

June 30, 2025 June 30, 2024 June 30,2025 June 30, 2024

Total assets for reportable segments $ 1,735,164 $ 1,802,307 $ 1,735,164 $ 1,802,307

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements