What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-05 compared with 2025-03-13 · 207 added, 244 removed, 1558 unchanged (22% of the section changed)

4 unchanged sentences

PCAOB ID 173 )

Report of Independent Registered Public Accounting Firm ( Eide Bailly LLP ;

Phoenix, Arizona ;

PCAOB ID 286 )

Consolidated Balance Sheets

Consolidated Statements of Operations

3 unchanged sentences

Notes to Consolidated Financial Statements

Independent Member Crowe Global

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

Eau Claire, Wisconsin

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Citizens Community Bancorp, Inc.

(the “Company”) as of December 31, 2024, the related consolidated statement of operations, comprehensive income, changes in stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

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

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Citizens Community Bancorp, Inc.

(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

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

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

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

(2013) issued by COSO.

Basis for Opinions

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

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

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

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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

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

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

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

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

We believe that our audits provide a reasonable basis for our opinion.

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

Our audits also included

performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

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Credit loss estimates are based on projected cash flows, adjusted for expected prepayments, economic conditions as forecasted by a third-party source.

We identified auditing the quantitative calculation of the ACL on collectively evaluated loans as a critical audit matter due to the complexity of the models used, the subjective assumptions and judgments involved, and the high degree of estimation

uncertainty required by management.

This required significant auditor judgment and effort to evaluate the appropriateness of the methodology, the accuracy of the data used and the reasonableness of assumptions utilized.

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March 5, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

CITIZENS COMMUNITY BANCORP, INC.

and Subsidiary

Eau Claire, Wisconsin

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Citizens Community Bancorp, Inc.

and Subsidiary (the Company) as of December 31, 2023, and the related consolidated statements of operations , comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

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

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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

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

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

We believe that our audit provides a reasonable basis for our opinion.

Change in Accounting Principle

As discussed in Note 3 to the financial statements, the Company adopted the provisions of FASB Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , as of January 1, 2023, using the modified retrospective approach with an adjustment at the beginning of the adoption period.

Our opinion is not modified with respect to this matter.

/s/ Eide Bailly, LLP

We served as the Company’s auditor from 2020 to 2023.

Phoenix, Arizona

March 5, 2024

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Balance Sheets

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Interest and fees on loans $ 77,500 $ 79,738

Interest on investments 9,877 10,671

Interest on cash and investments 10,130 9,877

Total interest and dividend income 87,630 89,615

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Net interest income before provision for credit losses 51,184 46,474

(Negative) provision for credit losses ( 3,175 ) ( 475 )

Provision (provision reversal) for credit losses 1,950 ( 3,175 )

Net interest income after provision for credit losses 49,234 49,649

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Loan fees and service charges 676 996

Net realized gains on debt securities — 12

Net (losses) gains on equity securities ( 856 ) 447

Net gains (losses) on equity securities 234 ( 856 )

Bank Owned Life Insurance (BOLI) death benefit — 184

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Net unrealized gains arising during period, net of tax 3,953 778

Reclassification adjustment for net gains included in net income, net of tax — ( 9 )

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

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Common stock repurchased ( 476,099 ) ( 4 ) ( 5,411 ) ( 682 ) — ( 6,097 )

Amortization of restricted stock — — 722 — — 722

Cumulative change in accounting principle for adoption of ASU2016-13 — — — ( 4,432 ) — ( 4,432 )

Cumulative change in accounting principle for adoption of ASU2023-02 — — — 130 — 130

Stock based compensation expense — — 631 — — 631

Cash dividends ($ 0.32 per share)

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Other comprehensive income, net of tax — — — — 3,953 3,953

Forfeiture of unvested shares ( 246 ) — — — — —

Surrender of restricted shares of common stock ( 12,020 ) — ( 190 ) — — ( 190 )

Restricted common stock awarded under the equity incentive plan 16,955 — — — — —

Restricted common stock issued upon achievement of the 2022 performance criteria 16,021 — — — — —

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Common stock repurchased ( 385,252 ) ( 4 ) ( 4,384 ) ( 1,667 ) — ( 6,055 )

Amortization of restricted stock — — 631 — — 631

Stock based compensation expense — — 146 — — 146

Cash dividends ($ 0.36 per share)

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Depreciation expense 2,029 2,174

Negative provision for credit losses ( 3,175 ) ( 475 )

Net loss (gain) on equity securities 856 ( 447 )

Net realized gain on sale of debt securities — ( 12 )

Deferred tax asset valuation allowance — 1,792

Provision (provision reversal) for credit losses 1,950 ( 3,175 )

Net (gains) losses on equity securities ( 234 ) 856

Increase in mortgage servicing rights resulting from transfers of financial assets ( 452 ) ( 332 )

Mortgage servicing rights amortization and impairment, net 534 615

Mortgage servicing rights amortization 621 534

Amortization of intangible assets 584 715

Amortization of restricted stock 631 722

Loss on closure of branch facilities — 380

Decrease in deferred income taxes 380 202

Stock based compensation expense 146 631

(Increase) decrease in deferred income taxes ( 1,058 ) 380

Increase in cash surrender value of life insurance ( 806 ) ( 954 )

Net (gain) loss from disposals of foreclosed and repossessed assets ( 19 ) 62

Net gains from disposals of foreclosed and repossessed assets ( 15 ) ( 19 )

Provision for valuation allowance on foreclosed properties 48 313

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Originations of loans held for sale ( 84,512 ) ( 53,687 )

Amortization of debt issuance costs 203 224

Net change in:

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

Net decrease in other interest bearing deposits — 249

Purchase of available-for-sale securities ( 9,949 ) —

Proceeds from principal payments of available-for-sale securities 14,842 16,594

Proceeds from sales of available-for-sale securities — 5,105

Proceeds from principal payments and maturities of available-for-sale securities 14,561 14,842

Proceeds from calls of available-for-sale securities 9,450 —

Proceeds from principal payments and maturities of held-to-maturity securities 5,282 5,707

4 unchanged sentences

Proceeds from insurance claim on foreclosed and repossessed assets — 27

Net decrease (increase) in loans 92,317 ( 48,298 )

Net decrease in loans 28,513 92,317

Net capital expenditures ( 1,311 ) ( 889 )

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

Federal Home Loan Bank advances — 25,000

Federal Home Loan Bank maturities ( 20,530 ) ( 5,000 )

Amortization of debt issuance costs 224 223

Federal Home Loan Bank advance long-term maturities ( 5,000 ) ( 20,530 )

Proceeds from other borrowings, net of origination costs 4,995 —

Other borrowings principal reductions ( 15,000 ) ( 6,083 )

Net (decrease) increase in deposits ( 30,952 ) 94,361

Restricted common stock awarded under the equity incentive plan — 1

Net increase (decrease) in deposits 35,951 ( 30,952 )

Repurchase shares of common stock ( 6,055 ) ( 6,097 )

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Supplemental noncash disclosure:

Transfers from loans receivable to foreclosed and repossessed assets $ 274 $ 158

Transfers from office properties and equipment to foreclosed and repossessed assets $ — $ 724

Transfers from loans receivable to other real estate owned (“OREO”) $ — $ 274

See accompanying notes to audited consolidated financial statements.

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Investment securities not classified as held-to-maturity are classified as available-for-sale.

Available-for-sale securities are stated at fair value, with unrealized holding gains and losses

being reported in other comprehensive income (loss), net of tax.

Realized gains or losses on sales of available-for-sale securities are calculated with the specific identification method and are included in the consolidated statements of operations under net realized gains on debt securities.

Available-for-sale securities are stated at fair value, with unrealized holding gains and losses being reported in other comprehensive income (loss), net of tax.

Realized gains or losses on sales of available-for-sale securities

are calculated with the specific identification method and are included in the consolidated statements of operations under net realized gains on debt securities.

Interest income includes amortization of purchase premium or accretion of purchase discount.

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Therefore, they are less liquid than other exchange traded equity securities.

As no ready market exists for these stocks, and they have no quoted

market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value.

As no ready market exists for these stocks, and they have no quoted market value, these investments are carried at cost and periodically evaluated for impairment based on the ultimate recovery of par value.

Cash dividends are reported as interest on investments in the consolidated statement of operations.

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Loans are returned to accrual status when the collectability of principal and interest is probable including when payments are made that bring the loan account current with the contractual term of the loan and a six month payment history has been established.

Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible or a specific reserve is established, or (b) the loan becomes past due 180 days or more.

Residential mortgage loans and open ended consumer installment loans are charged off to estimated net realizable value less estimated selling costs at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 180 days or more.

Closed ended consumer installment loans are charged off to net realizable value at the earlier of when (a) the loan is deemed by management to be uncollectible, or (b) the loan becomes past due 120 days or more.

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Allowance for Credit Losses - Loans – The allowance for credit losses (“ACL”) on loans is a valuation allowance for current expected credit losses in the Company’s loan portfolio.

Prior to January 1, 2023, the valuation allowance was established for probable and inherent credit losses.

Loan losses are charged against the ACL when management believes that the collectability of a loan balance is unlikely.

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The entire ACL balance is available for any loan that, in management’s judgment, should be charged off.

The determination of the ACL requires significant judgement to estimate credit losses.

The determination of the ACL requires significant judgment to estimate credit losses.

The ACL on loans is measured collectively on a pooled basis when similar risk characteristics exist, and on an individual basis when management determines that the loan does not share similar risk characteristics with other loans.

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Loans within each segment are pooled based on individual loan characteristics.

Aggregated risk drivers are then calculated at a

Aggregated risk drivers are then calculated at a pool level.

Risk drivers are identified attributes that have proven to be predictive of loan loss rates and vary based on loan segment and type.

A loss rate is calculated and applied to the pool utilizing a model that combines the pool’s risk drivers, historical loss experience, and reasonable and supportable future economic forecasts to project lifetime losses.

For commercial/agricultural real estate loans, the loss rate is then combined with the loans balance and contractual maturity, adjusted for expected prepayments, to determine expected future losses.

For commercial/

agricultural real estate loans, the loss rate is then combined with the loans balance and contractual maturity, adjusted for expected prepayments, to determine expected future losses.

Future and supportable economic forecasts are based on national economic conditions and their reversion to the mean is implicit in the model and generally occurs over a period of two years.

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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 $ 4,467 at December 31, 2024.

Accrued interest receivable on loans was $ 4,841 and $ 4,467 at December 31, 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.

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Changes in these factors, assumptions and judgments may have a material effect on the valuation and amortization of MSRs.

Although management believes that the assumptions used to

evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

Although management believes that the assumptions used to evaluate the MSRs for impairment are reasonable, future adjustment may be necessary if future economic conditions differ substantially from the economic assumptions used to determine the value of MSRs.

Servicing fee income, which is reported on the consolidated statements of operations in non-interest income as loan servicing income, is recorded for fees earned for servicing loans.

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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.

Amortization of the investment is included in provision for income taxes and the

utilization of the tax credit is recorded as a reduction in provision for income taxes.

Amortization of the investment is included in provision for income taxes and the utilization of the tax credit is recorded as a reduction in provision for income taxes.

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.

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

Federal Hold Loan Bank (“FHLB”) advances - The Bank holds both $ 0 and $ 44,000 short-term and $ 5,000 and $ 35,530 long-term FHLB advances as of December 31, 2024 and December 31, 2023, respectively.

For cash flow purposes the short-term FHLB advances are disclosed net with original maturities of three months or less.

Federal Hold Loan Bank (“FHLB”) advances - For cash flow purposes short-term FHLB advances are disclosed net with original maturities of three months or less.

Debt and equity issuance costs— Debt issuance costs, which consist primarily of fees paid to note lenders, are deferred and included in other borrowings in the consolidated balance sheets.

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While time based restricted shares are subject to forfeiture, time based restricted stock award participants may exercise full voting rights and will receive all dividends and other distributions paid with respect to the restricted shares.

The time based restricted shares granted under the 2018 Equity Incentive Plan (the “Plan”) are subject to a three-year vesting period.

The time based restricted shares granted under the 2018 Equity Incentive Plan are subject to a three-year vesting period.

Compensation expense for time based restricted stock is recognized over the requisite service period of three years for the entire award on a straight-line basis.

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If based on the available evidence, it is more likely than not that all or a portion of the Company’s net deferred tax assets will not be realized in future periods, a deferred tax valuation allowance would be established.

Consideration is given to various positive and negative factors that could affect the realization of the deferred tax assets.

Consideration is given to various positive and negative factors that could affect the realization of the deferred tax

In evaluating this available evidence, management considers, among other things, historical performance, expectations of future earnings, the ability to carry back losses to recoup taxes previously paid, the length of statutory carry forward periods, any experience with utilization of operating loss and tax credit carry forwards not expiring, tax planning strategies and timing of reversals of temporary differences.

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The Wisconsin state budget, signed July 5, 2023, effective January 1, 2023, made originated loans in Wisconsin for business purposes up to $5,000 non-taxable.

This change lowered the Company’s income tax rate for the twelve-month period ended December 31, 2023, before related valuation allowance.

Income tax expense in 2023 was impacted due to the retroactive, effect of this change.

This reduction of income tax expense was offset by a one-time tax expense of $ 1,828 in the period ended September 30, 2023, as the impact of the resulting lower incremental tax rate decreased the estimated future realization of an existing deferred tax asset resulting in a valuation allowance.

In 2024, the effective tax rate was lower than 2023, due to the establishment of the valuation allowance during 2023.

This resulted in a lower effective tax rate resulting in a one-time tax expense of $ 1,828 in the period ended September 30, 2023, as the impact of the resulting lower incremental tax rate decreased the estimated future realization of an existing deferred tax asset resulting in a valuation allowance.

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.

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Earnings Per Share – Basic earnings per common share is net income or loss divided by the weighted average number of common shares outstanding during the period.

Diluted earnings per common share includes the dilutive effect of additional

potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.

Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable during the period, consisting of stock options outstanding under the Company’s stock incentive plans that have an exercise price that is less than the Company’s stock price on the reporting date.

Loss Contingencies— Loss contingencies, including claims and legal actions arising in the normal course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount of loss can be reasonably estimated.

Off-Balance-Sheet Financial Instruments— In the ordinary course of business, the Bank has entered into off-balance sheet financial instruments consisting of commitments to extend credit and commitments under lines of credit arrangements, issued to meet customer financial needs.

issued to meet customer financial needs.

Such financial instruments are recorded in the financial statements when they become payable.

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Recent Accounting Pronouncements—Adopted

ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting-- These ASUs provide optional and temporary relief, in the form of optional expedients and exceptions, for applying GAAP to modifications of contacts, hedging relationships and other transactions affected by reference rate (e.g.

LIBOR) reforms.

ASU 2020-04 and ASU 2021-01 was effective immediately upon issuance and will remain in effect

through December 31, 2024.

The Company utilizes LIBOR, among other indexes, as a reference rate for underwriting variable rate loans.

Reference rate reform has not had, nor does the Company expect it to have, a material effect on the Company’s consolidated balance sheet, operations or cash flows.

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.

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.

ASU 2023-07, Segment Reporting (Topic 820):

Improvements to Reportable Segment Disclosures —This ASU, issued in November 2023, requires all public entities to provide enhanced disclosures about significant segment expenses.

This update has been applied retrospectively, and is effective for fiscal years beginning after December 15, 2023, and interim periods with fiscal years beginning after December 15, 2024.

Adoptions of ASU 2023-07 had no material effect on the Company’s consolidated balance sheet, operations or cash flows.

ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures – This ASU, issued in December 2023, became effective for fiscal years beginning after December 15, 2024.

This update requires expanded income tax-related note disclosures.

The Company adopted all applicable disclosure requirements set forth in the update in the notes to its financial statements as of and for the year ended December 31, 2025, on a prospective basis, with no material impact on the Company’s financial condition or results of operations.

Recently Issued, But Not Yet Effective Accounting Pronouncements

ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures – This ASU, issued in December 2023, is effective for fiscal years beginning after December 15, 2024, and interim periods therein, with early adoption permitted.

This ASU requires expanded income tax-related note disclosures.

The Company is currently evaluating the impact of these new disclosure requirements.

ASU 2024-03, Income Statement, Reporting of Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is currently evaluating the impact of these new disclosure requirements.

ASU 2025-08, Financial Instruments—Credit Losses (Topic 326);

Purchased Loans— This ASU, issued in November, 2025, is effective for fiscal years beginning after December 15, 2026 and interim periods within those annual reporting periods, with early adoption permitted.

The update requires purchased seasoned loans to be accounted for using the gross-up approach, enhancing comparability and consistency in the accounting of acquired financial assets.

The gross-up approach requires recognition of an allowance for credit losses for the estimated credit losses at the acquisition date, with an offsetting “gross up” to the purchase price of the acquired financial asset.

The Company is currently evaluating the potential impact of this update.

NOTE 2 – INVESTMENT SECURITIES

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Corporate debt securities 42,394 152 1,864 40,682

Asset-backed securities 19,058 43 105 18,996

Student loan asset-backed securities 16,149 10 195 15,964

Total available-for-sale securities $ 151,618 $ 177 $ 17,692 $ 134,103

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Corporate debt securities 44,931 111 3,326 41,716

Asset-backed securities 24,840 12 339 24,513

Student loan asset-backed securities 19,058 43 105 18,996

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

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Government Agency securities with a carrying value of $ 339 and mortgage-backed securities with a carrying value of $ 1,766 as collateral against specific municipal deposits.

As of December 31, 2023, the Bank also has mortgage-backed securities with a carrying value of $ 179 and U.S.

Government Agencies with a carrying value of $ 415 pledged as collateral to the Federal Home Loan Bank of Des Moines.

For the twelve-month period ended December 31, 2024, there were no sales of available-for-sale securities.

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

There were no sales of available-for-sale securities for the twelve-month periods ended December 31, 2025 and December 31, 2024, respectively.

In June 2024, senior debt of a community development financial institution, classified as available-for-sale securities with a carrying value of $ 2,082 , was exchanged for preferred equity of the financial institution’s operating subsidiary.

The exchange resulted in the recognition of $ 168 of unrealized losses on available-for-sale securities, previously included in other comprehensive income, as

well as an additional $ 270 loss, for a total loss of $ 438 .

The exchange resulted in the recognition of $ 168 of unrealized losses on available-for-sale securities, previously included in other comprehensive income, as well as an additional $ 270 loss, for a total loss of $ 438 .

This total loss of $ 438 was recognized on the June 30, 2024, consolidated statement of operations as net losses on equity securities.

For the twelve-month period ended December 31, 2023, gross sales of available-for-sale securities were $ 5,105 .

Gross gains on sale of available-for-sale securities for the twelve-month period ending December 31, 2023, were $ 12 .

Gross losses on sale of available-for-sale securities for the twelve-month period ended December 31, 2023, were $ 0 .

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

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Corporate debt securities 2,075 48 25,134 1,816 27,209 1,864

Asset-backed securities 939 1 12,210 104 13,149 105

Student loan asset-backed securities 4,308 13 10,783 182 15,091 195

Total $ 7,658 $ 65 $ 108,598 $ 17,627 $ 116,256 $ 17,692

3 unchanged sentences

Corporate debt securities — — 36,806 3,326 36,806 3,326

Asset-backed securities 3,348 22 20,008 317 23,356 339

Student loan asset-backed securities 939 1 12,210 104 13,149 105

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

At December 31, 2024, no ACL was established for available-for-sale securities.

At December 31, 2025 and December 31, 2024, no ACL was established for available-for-sale securities.

Unrealized losses on available-for-sale investment securities have not been recognized into income because the issuers’ bonds are agency backed securities or other securities that all principal and interest is expected to be received on a timely basis.

1 unchanged sentence

The issuers continue to make timely principal and interest payments on their bonds.

At December 31, 2024, no ACL was established for held-to-maturity securities based on the composition of the securities portfolio.

All of our available-for-sale and held-to-maturity investment securities are investment grade securities.

At December 31, 2025 and December 31, 2024, no ACL was established for held-to-maturity securities based on the composition of the securities portfolio.

All of our available-for-sale and held-to-maturity investment securities are investment grade securities at December 31, 2025 and December 31, 2024.

NOTE 3 – LOANS, ALLOWANCE FOR CREDIT LOSSES

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Construction and land development 75,399 5.6 % 78,146 5.7 %

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial 105,756 7.9 % 115,535 8.4 %

184 unchanged sentences

Available and unused lines of credit $ — $ 19

Allowance for Credit Losses - Loans- On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial instruments and transitioned to the Current Expected Credit Loss (“CECL”) model to estimate losses based on the lifetime of the loan.

Under the new methodology, the ACL is comprised of collectively evaluated and individually evaluated components.

The allowance for credit losses (“ACL”) represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining life of the assets.

Allowance for Credit Losses - Loans - The allowance for credit losses (“ACL”) is comprised of collectively evaluated and individually evaluated components.

The ACL represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining life of the assets.

The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses.

12 unchanged sentences

ACL - Loans, at end of period $ 17,654 $ 2,358 $ 2,230 $ 159 $ 22,401

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

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

Twelve months ended December 31, 2024

1 unchanged sentence

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

Cumulative effect of ASU 2016-13 adoption 4,510 ( 331 ) 1,119 216 ( 808 ) 4,706

Charge-offs ( 39 ) ( 143 ) ( 4 ) ( 35 ) ( 221 )

6 unchanged sentences

ACL - Unfunded Commitments - beginning of period $ 334 $ 1,250

Cumulative effect of ASU 2016-13 adoption — 1,537

Reversals to ACL - Unfunded Commitments via provision for credit losses charged to operations ( 916 ) ( 287 )

Additions (reversals) to ACL - Unfunded Commitments via provision for credit losses charged to operations 156 ( 916 )

ACL - Unfunded Commitments - End of period $ 490 $ 334

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 December 31, 2024 and December 31, 2023, respectively, was as follows:

An aging analysis of the Company’s commercial/agricultural real estate, commercial/agricultural operating, residential mortgage, consumer installment and purchased third party loans as of December 31, 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

6 unchanged sentences

Construction and land development 57 — — 57 75,342 75,399

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial 665 — 1,143 1,808 103,948 105,756

7 unchanged sentences

Total $ 2,950 $ 706 $ 10,625 $ 14,281 $ 1,326,044 $ 1,340,325

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

Past Due and Accruing Nonaccrual Loans Total Past Due Accruing and Nonaccrual Loans Current Total

(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

December 31, 2024

14 unchanged sentences

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

Nonaccrual Loans - The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated at December 31, 2024 and December 31, 2023, with no allowance for credit losses:

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

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

4 unchanged sentences

Construction and land development — — —

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial 1,282 921 —

7 unchanged sentences

Total $ 15,853 $ 6,132 $ 1

December 31, 2023 Total Nonaccrual Loans Nonaccrual with no Allowance for Credit Losses

December 31, 2024 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

Construction and land development 103 103 —

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial 597 564 —

14 unchanged sentences

Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income.

Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured.

Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured.

Interest on loans determined to be modified is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms.

13 unchanged sentences

Construction and land development — — — — — —

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial — 3,176 3,176 1,784 1,392 429

16 unchanged sentences

Construction and land development 103 — 103 103 — —

C&I/Agricultural operating:

Commercial/Agricultural operating:

Commercial and industrial — 1,806 1,806 1,146 660 49

7 unchanged sentences

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

There were no outstanding commitments to borrowers experiencing financial difficulty as of December 31, 2024.

There were unused lines of credit totaling $ 135 on loans with borrowers experiencing financial difficulties as of December 31, 2024.

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

2 unchanged sentences

December 31, 2025 % of Total Class of Financing Receivables

Commercial real estate $ 225 0.03 %

Commercial and industrial $ 48 0.05 %

Residential mortgage $ 20 0.02 %

Other-Than-Insignificant Payment Delay

2 unchanged sentences

Commercial real estate $ 4,264 0.63 %

Commercial and industrial $ 822 0.71 %

Agricultural real estate $ 192 0.28 %

Residential mortgage $ 120 0.10 %

Term Extension and Principal Forgiveness

Loan Class Amortized Cost Basis at

December 31, 2024 % of Total Class of Financing Receivables

Other consumer $ 2 0.04 %

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

1 unchanged sentence

Loan Class Financial Effect

Commercial real estate A weighted average of 6 months was added to the term of the loans

Commercial and industrial A weighted average of 3 months was added to the term of the loans

Residential mortgage A weighted average of 54 months was added to the term of the loans

Other-Than-Insignificant Payment Delay

1 unchanged sentence

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

Term Extension and Principal Forgiveness

Loan Type Financial Effect

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 twelve months ended December 31, 2024:

5 unchanged sentences

Residential mortgage $ 20 0.02 %

Other consumer $ 1 0.02 %

Other-Than-Insignificant Payment Delay

1 unchanged sentence

December 31, 2024 % of Total Class of Financing Receivables

Commercial real estate $ 1,182 0.17 %

Commercial and industrial $ 822 0.71 %

Residential mortgage $ 236 0.18 %

Term Extension and Principal Forgiveness

Loan Class Amortized Cost Basis at

December 31, 2024 % of Total Class of Financing Receivables

Other consumer $ 2 0.04 %

5 unchanged sentences

Residential mortgage A weighted average of 54 months was added to the term of the loans

Other consumer A weighted average of 12 months was added to the term of the loans

Other-Than-Insignificant Payment Delay

Loan Class Financial Effect

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

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

Residential mortgage Payments were deferred a weighted average of 3 months

Other consumer Payments were deferred a weighted average of 3 months

Term Extension and Principal Forgiveness

Loan Class Financial Effect

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

2 unchanged sentences

Commercial real estate $ 4,264 $ — $ — $ —

Agricultural real estate — 192 — —

Commercial and industrial — — — 48

Residential mortgage — — 120 —

Other consumer 2 — — —

Total $ 4,264 $ 192 $ 120 $ 48

102 unchanged sentences

Lease liability recognized $ 950

In November of 2024, we announced the closure of our Faribault, Minnesota branch in February 2025.

We considered the branch closure a triggering event and the remaining right of use asset will be amortized ratably over the period from the closure decision to the closure date.

In 2024, an additional $ 46 amortization expense was recorded in other non-interest expense in the consolidated statements of operations.

In June of 2024, we closed our St Peter, Minnesota branch.

In November of 2024, the St Peter lease was terminated.

The net impact of the right of use asset write down and lease termination was a net cost of $ 77 recorded in 2024.

This lease termination cost is included in other non-interest expense in the consolidated statements of operations.

In 2024, we recorded the remaining impairment of $ 66 for the Red Wing lease, previously closed in November 2022.

This impairment loss is included in other non-interest expense in the consolidated statements of operations.

NOTE 8 - DEPOSITS

18 unchanged sentences

Federal Home Loan Bank advances (1), (2), (3) 2025 $ 0 — % — % 2025 $ 5,000 1.45 % 1.45 %

2025 5,000 1.45 % 1.45 % 2025 5,000 1.45 % 1.45 %

2028 10,000 3.82 % 3.82 %

Federal Home Loan Bank advances $ 0 $ 5,000

1 unchanged sentence

Senior notes (4) 2039 $ 12,000 6.00 % 6.75 % 2039 $ 12,000 6.75 % 7.75 %

2040 5,000 6.00 % 6.25 % 0

$ 17,000 $ 12,000

Subordinated notes (5) 2030 $ 0 — % — % 2030 $ 15,000 6.00 % 6.00 %

7 unchanged sentences

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

(3) The weighted-average interest rates on FHLB borrowings, with maturities less than twelve months, outstanding as of December 31, 2024 and December 31, 2023, were 1.45 % and 4.16 %, respectively.

(4) In June 2024, the FHLB called the $ 10,000 , 3.82 % advance maturing in 2028.

(5) Senior notes, entered into by the Company in June 2019 consist of the following:

(a) A term note, which was subsequently refinanced in March 2022, modified in February of 2023, and refinanced in May 2024, requiring quarterly interest-only payments through January 2029, and quarterly principal and interest payments thereafter.

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

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

(4) Senior notes, entered into by the Company consist of the following:

(a) A term note, which was originally entered into in June 2019 and subsequently refinanced in March 2022, modified in February of 2023, and refinanced in May 2024, requiring quarterly interest-only payments through January 2029, and quarterly principal and interest payments thereafter.

Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 3.00 %.

(b) A $ 5,000 line of credit, maturing August 1, 2025, that remains undrawn upon.

(b) A $ 5,000 term note entered into in October 2025, requiring quarterly interest-only payments through October 2028, and quarterly principal and interest payments thereafter.

Interest is variable, based on US Prime rate minus 75 basis points with a floor rate of 4.00 %.

(5) Subordinated notes resulted from the following:

(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.

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

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 the Secured Overnight Financing Rate (“SOFR”) plus 591 basis points.

The redemption occurred 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.

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.

5 unchanged sentences

Federal Funds Purchased Lines of Credit

As of December 31, 2024, the Bank maintains two unsecured federal funds purchased lines of credit with its banking partners which total $ 70,000 .

As of December 31, 2023, the Bank maintained three unsecured federal funds purchased lines of credit with its banking partners which totaled $ 70,000 .

As of December 31, 2025 and 2024 , the Bank maintains two unsecured federal funds purchased lines of credit with its banking partners which total $ 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.

49 unchanged sentences

In addition, in the current financial and economic environment, the Federal Reserve has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.

The Company’s ability to pay dividends is also subject to the terms of its Subordinated Note Purchase Agreements dated August 27, 2020 and March 11, 2022, and Business Note Agreement dated June 26, 2019, which prohibits the Company from making dividend payments while an event of default has occurred and is continuing under the loan agreement or from allowing payment of a dividend which would create an event of default.

The Company’s ability to pay dividends is also subject to the terms of its Subordinated Note Purchase Agreement dated March 11, 2022, and Business Note Agreements dated June 26, 2019 and October 30, 2025, which prohibit the Company from making dividend payments while an event of default has occurred and is continuing under the loan agreement or from allowing payment of a dividend which would create an event of default.

The following table reflects the annual cash dividend paid in the years ended December 31, 2025 and 2024, respectively.

44 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 December 31, 2024, 315,947 restricted shares had been granted under this plan.

This amount 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.

This amount also includes 18,551 shares of performance based restricted stock granted in 2020 and issued in January 2023 upon achievement of the performance criteria and completion of the three year performance period beginning in January 2020 and ending December 31, 2022.

As of December 31, 2025, 331,968 restricted shares had been granted under this plan, including performance based restricted stock issued and vested during the current periods:

(1) 16,021 shares of performance-based restricted stock issued and vested in January 2025 upon achievement of the performance criteria and completion of the three-year performance period applicable to awards granted in January 2022;

and (2) 8,805 shares of performance-based restricted stock issued and vested in January 2024 upon achievement of the performance criteria and completion of the three-year performance period applicable to awards granted in January 2021.

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

14 unchanged sentences

Granted — — 16,955 11.88

Vested ( 53,139 ) 12.19 ( 45,879 ) 12.24

Issued and vested ( 33,062 ) 12.50 ( 53,139 ) 12.19

Forfeited — — ( 246 ) 11.88

4 unchanged sentences

Unvested at beginning of year 33,188 $ 13.09

Vested and issued ( 8,805 ) 10.78

Forfeited — —

2022 performance shares granted above target 1,154 14.00

Issued and vested ( 16,021 ) 14.00

Unvested at end of period 18,321 $ 12.36

December 31, 2024

Number of Shares Weighted

Performance Based Restricted Shares

Unvested at beginning of year 41,993 $ 12.61

Issued and vested ( 8,805 ) 10.78

Unvested at end of period 33,188 $ 13.09

Common Stock Option Awards

5 unchanged sentences

Exercised ( 16,500 ) 10.84

Forfeited or expired — —

Outstanding at end of period 35,500 $ 11.98 1.06 $ 207

3 unchanged sentences

Exercised ( 2,000 ) 11.00

Forfeited or expired ( 1,000 ) 13.76

Outstanding at end of year 52,000 $ 11.62 1.85 $ 243

8 unchanged sentences

The Plan allows certain employees to earn future cash awards linked to the Company’s future common share price for time and performance based cash awards.

The performance based cash awards vest based on a combination of a three-year time period and performance targets based on the Company’s return on equity.

For performance based awards, the ultimate cash payout of these awards will be based on the January 25, 2027 closing share price of the Company’s common stock.

The performance based cash awards vest based on a combination of a three-year time period from January 23, 2025 through December 31, 2027, and performance targets based on the Company’s return on equity.

For performance based awards, the ultimate cash payout of these awards will be paid within 60 days of December 31, 2027, based on the closing share price of the Company’s common stock as of the performance achievement approval date from the Compensation Committee.

The time based cash awards vest ratably over a three-year time period.

1 unchanged sentence

On January 23, 2025, time based awards were based on 15,044 shares and performance based awards were based on 15,049 shares.

On January 25, 2024, the Company’s board of directors approved a phantom stock plan as part of the Company’s long-term incentive plan.

The Plan allows certain employees to earn future cash awards linked to the Company’s future common share price for time and performance based cash awards.

The performance based cash awards vest based on a combination of a three-year time period from January 25, 2024 through December 31, 2026, and performance targets based on the Company’s return on equity.

For performance based awards, the ultimate cash payout of these awards will be paid within 60 days of December 31, 2026, based on the closing share price of the Company’s common stock as of the performance achievement approval date from the Compensation Committee.

The time based cash awards vest ratably over a three-year time period.

For time based awards, the ultimate cash payout of these awards will be based on the closing share price of the Company’s common stock on the anniversary of the award date each year.

On January 25, 2024, time based awards were based on 18,509 shares and performance based awards were based on 18,505 shares.

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 December 31, 2024, the related liability was $ 190 , which is included in other liabilities on the consolidated balance sheet.

For the year ended December 31, 2024, the Company recorded related expense of $ 190 , which is included in compensation and related benefits/non-interest expense on the Company’s consolidated statement of operations.

At December 31, 2025 and December 31, 2024, the related liability was $ 494 and $ 190 , respectively, which is included in other liabilities on the consolidated balance sheet.

For the twelve months ended months ended December 31, 2025 and December 31, 2024, the Company recorded related expense of $ 403 and $ 190 , respectively, which is included in compensation and related benefits/non-interest expense on the Company’s consolidated statement of operations.

NOTE 14 – INCOME TAXES

Income tax expense (benefit) for each of the periods shown below consisted of the following:

Year ended December 31, Year ended December 31,

Income tax expense (benefit) for 2025 consisted of the following:

Year ended December 31,

Current tax provision

Federal $ 4,098

State 578 448

Deferred tax provision (benefit)

Federal ( 1,355 )

Total $ 3,021

The Company is not subject to income taxes in any foreign jurisdictions.

Income tax expense (benefit) for 2024 consisted of the following:

Year ended December 31,

Current tax provision

Federal $ 2,742

Deferred tax provision (benefit)

State ( 1,235 )

( 739 ) ( 1,478 )

Change in valuation allowance 1,118

Total $ 3,699

The provision for income taxes differs from the amount of income tax determined by applying statutory federal income tax rates to pretax income as result of the following differences:

Year ended December 31, Year ended December 31,

Amount Rate Amount Rate

The provision for income taxes differs from the amount of income tax determined by applying statutory federal income tax rates to pretax income as a result of the following differences for the year ended December 31, 2025:

Year ended December 31,

Tax expense at statutory rate $ 3,662 21.0 %

1 unchanged sentence

Tax credits ( 441 ) ( 2.5 ) %

Non-taxable items

Bank owned life insurance ( 169 ) ( 1.0 ) %

Tax exempt interest ( 89 ) ( 0.5 ) %

Other ( 162 ) ( 0.9 ) %

Total $ 3,021 17.3 %

Tax credits are net of proportional amortization expenses.

State income tax expense for the state of Minnesota is more than 50% of state income tax expense.

Year ended December 31,

Tax expense at statutory rate $ 3,665 21.0 %

State income taxes, net of federal ( 519 ) ( 3.0 ) %

Tax credits ( 210 ) ( 1.2 ) %

Bank owned life insurance ( 162 ) ( 0.9 ) %

Tax exempt interest ( 81 ) ( 0.5 ) %

Change in valuation allowance 1,118 6.4 %

1 unchanged sentence

Total $ 3,699 21.2 %

Federal and state income taxes paid were as follows:

Year ended December 31,

Federal $ 1,800

State and local

Minnesota 240

All other states 25

Total $ 2,065

State income taxes paid in Wisconsin, Illinois and Missouri were not significant, i.e.were less than 5% of total income taxes paid, with state income taxes paid to Minnesota more than 5% of total income taxes paid.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

11 unchanged sentences

Net unrealized losses on securities available-for-sale 4,792 6,333

Other 296 199

Deferred tax assets $ 15,130 $ 15,464

2 unchanged sentences

Federal Home Loan Bank stock ( 129 ) ( 121 )

Core deposit intangible ( 788 ) ( 852 )

Intangibles ( 789 ) ( 788 )

Net gain on equity securities ( 596 ) ( 715 )

10 unchanged sentences

Internal Revenue Service include taxable years ended December 31, 2022 to present.

The years open to examination by state and local government authorities varies by jurisdiction.

The years open to examination by state and local government authorities vary by jurisdiction.

The tax effects from uncertain tax positions can be recognized in the consolidated financial statements, provided the position is more likely than not to be sustained on audit, based on the technical merits of the position.

28 unchanged sentences

Corporate debt securities 40,682 — 40,682 —

Asset-backed securities 18,996 — 18,996 —

Student loan asset-backed securities 15,964 — 15,964 —

Total investment securities 134,103 — 134,103 —

10 unchanged sentences

Corporate debt securities 41,716 — 41,716 —

Corporate asset backed securities 24,513 — 24,513 —

Student loan asset-backed securities 18,996 — 18,996 —

Total Investment Securities 142,851 — 142,851 —

1 unchanged sentence

Farmer Mac equity securities 569 569 — —

Preferred equity 1,362 — — 1,362

Equity investments measured at NAV(1)

4 unchanged sentences

At December 31, 2025, the Company owned $ 1,125 preferred equity investments for which the Company utilized significant unobservable inputs (Level 3 inputs) to determine fair value.

For the year ended December 31, 2023, the Company did not own any securities for which the Company utilized significant unobservable inputs (Level 3 inputs) to determine fair value.

During the year ended December 31, 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.

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 twelve months ended December 31, 2025.

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 year ended December 31, 2025.

measurement to Level 3 fair value measurement.

The exchange resulted in the recognition of $ 168 of unrealized losses on available-for-sale securities during the year ended December 31, 2024, previously included in other comprehensive income, as well as an additional $ 270 loss, for a total loss of $ 438 .

This total loss of $ 438 was recognized on the consolidated statement of operations as net losses on equity securities.

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 twelve months ended December 31, 2023.

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 year ended December 31, 2023, respectively.

Assets Measured on a Nonrecurring Basis

8 unchanged sentences

Collateral dependent loans 10,360 — — 10,360

Mortgage servicing rights 3,663 — — 5,227

Total $ 11,217 $ — $ — $ 11,217

2 unchanged sentences

Collateral dependent loans 3,107 — — 3,107

Mortgage servicing rights 3,865 — — 5,589

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 collateral dependent 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 December 31, 2025 and December 31, 2024.

3 unchanged sentences

Collateral dependent loans with allocated allowances $ 10,360 Appraisal value / Internal collateral valuations Estimated costs to sell 10 % - 15 %

Mortgage servicing rights $ 5,227 Discounted cash flows Discounted rates 10 % - 13 %

December 31, 2024

1 unchanged sentence

Collateral dependent loans with allocated allowances $ 3,107 Appraisal value / Internal collateral valuations Estimated costs to sell 10 % - 15 %

Mortgage servicing rights $ 5,589 Discounted cash flows Discounted rates 9.375 % - 12.375 %

(1) Fair value is generally determined through independent third-party appraisals of the underlying

15 unchanged sentences

Preferred equity (Level III) 1,125 1,125 1,362 1,362

Equity investments valued at NAV (1) N/A 2,771 N/A 2,727 2,727

Equity investments valued at NAV (1) N/A 4,210 N/A 2,771 N/A

Other investments (Level II) 12,506 12,506 12,500 12,500

5 unchanged sentences

Financial liabilities:

Deposits (Level III) $ 1,488,148 $ 1,487,492 $ 1,519,092 $ 1,517,361

Deposits (excluding demand deposits) (Level III) $ 891,747 $ 891,663 $ 879,742 $ 879,086

FHLB advances (Level II) — — 5,000 4,979

29 unchanged sentences

Net unrealized gains arising during the period $ 5,238 $ ( 1,285 ) $ 3,953 $ 1,080 $ ( 302 ) $ 778

Reclassification adjustment for gains included in net income — — — ( 12 ) 3 ( 9 )

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

9 unchanged sentences

Ending balance, December 31, 2025 $ ( 17,515 ) $ ( 12,467 )

Reclassifications out of accumulated other comprehensive income for the twelve months ended December 31, 2024 were as follows:

There were no reclassifications out of accumulated other comprehensive income for the twelve months ended December 31, 2025.

Reclassifications out of accumulated other comprehensive income (loss) for the twelve months ended December 31, 2024 were as follows:

Details about Accumulated Other Comprehensive Income (Loss) Components Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (1) Affected Line Item on the Statement of Operations

4 unchanged sentences

(1) Amounts in parentheses indicate decreases to profit/loss.

Reclassifications out of accumulated other comprehensive income (loss) for the twelve months ended December 31, 2023 were as follows:

Details about Accumulated Other Comprehensive Income (Loss) Components Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (1) Affected Line Item on the Statement of Operations

Unrealized gains and losses

Sale of securities $ 12 Net gains (losses) on investment securities

Tax effect ( 3 ) Provision for income taxes

Total reclassifications for the period $ 9 Net income attributable to common shareholders

(1) Amounts in parentheses indicate decreases to profit/loss.

NOTE 18 - CONDENSED FINANCIAL INFORMATION – PARENT COMPANY ONLY

20 unchanged sentences

Dividend income from bank subsidiary 30,500 18,750

Non-interest (loss) gain ( 15 ) 127

Non-interest gain (loss) 129 ( 15 )

Non-interest expense ( 1,037 ) ( 898 )

10 unchanged sentences

Depreciation expense — —

Net valuation (loss) gain on equity securities 15 ( 127 )

Net valuation gain (loss) on equity securities ( 129 ) 15

Adjustments to reconcile net income to net cash provided by operating activities - Equity in undistributed income of subsidiary ( 17,770 ) ( 17,533 )

7 unchanged sentences

Dividend from bank subsidiary 30,500 18,750

Net cash provided by (used in) investing activities 18,575 11,382

Net cash provided by investing activities 30,247 18,575

Cash flows from financing activities:

Proceeds from other borrowings, net of origination costs 5,000 —

Amortization of debt issuance costs 198 224

Other borrowings principal reductions — ( 6,083 )

Other borrowings called and repaid ( 15,000 ) —

Repurchase shares of common stock ( 6,055 ) ( 6,097 )

2 unchanged sentences

Cash dividends paid ( 3,598 ) ( 3,346 )

Net cash (used in) provided by financing activities ( 15,399 ) ( 8,505 )

Net decrease in cash and cash equivalents ( 389 ) ( 1,046 )

Net cash used in financing activities ( 19,466 ) ( 15,399 )

Net increase (decrease) in cash and cash equivalents 7,109 ( 389 )

Cash and cash equivalents at beginning of year 17,786 18,175

17 unchanged sentences

Segment net interest income and non-interest income 62,327 56,581

(Negative) provision for credit losses ( 3,175 ) ( 475 )

Provision (provision reversal) for credit losses 1,950 ( 3,175 )

Compensation and related benefits (expense) 23,875 22,741

8 unchanged sentences

Other significant noncash items:

(Negative) provision for credit losses $ ( 3,175 ) $ ( 475 )

Provision (provision reversal) for credit losses $ 1,950 $ ( 3,175 )

Reconciliation of assets:

4 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-K

Item 8. Financial Statements and Supplementary Data