Citizens Community Bancorp Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm ( Crowe LLP ; Oak Brook Terrace, Illinois ; PCAOB ID 173 ) Consolidated Statements of Operations Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 53 Crowe LLP Independent Member Crowe Global REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and the Board of Directors of Citizens Community Bancorp, Inc. Eau Claire, Wisconsin 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the 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. 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 54 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 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses on Collectively Evaluated Loans – Quantitative Calculation As discussed in Notes 1 and 3 to the consolidated financial statements, the Company’s allowance for credit losses (ACL) totaled $22.4 million as of December 31, 2025. The ACL is based on expected credit losses over the contractual life of loans, incorporating relevant information including historical loss experience, current economic conditions, and reasonable and supportable forecasts. Management utilizes a loss rate model for estimating credit losses, applying risk drivers based on loan pool characteristics. 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. The primary procedures we performed to address this critical audit matter included: Testing the design and operating effectiveness of controls over the quantitative portion of the ACL on collectively evaluated loans, including controls addressing: • Relevance and reliability of data used in the in the quantitative allowance for credit losses calculation. • Reasonableness of significant assumptions and judgments applied within the quantitative allowance for credit losses calculation including the appropriateness of peer group and selection of the forecast utilized. • The results of the third-party ACL validation for the loss rate model. Substantively testing management’s process, including evaluating their judgments and assumptions, for developing the ACL on loans collectively evaluated, which included: • Testing completeness and accuracy of loan data used in the quantitative allowance for credit loss model including the use of internal specialists to assist in testing the accuracy and completeness of the statistical models and peer data used. 55 • Evaluating management’s assumptions and judgments in the selection and application of economic forecasts. • Using the work of specialists to assist in evaluating the relevance and reliability of data used by the Company’s third-party vendor to develop forecast scenarios. • Testing the mathematical accuracy of the calculation and the appropriate application of the methodology as designed. /s/ Crowe LLP We have served as the Company’s auditor since 2024. Oakbrook Terrace, Illinois March 5, 2026 56 CITIZENS COMMUNITY BANCORP, INC. Consolidated Balance Sheets (in thousands, except share data) December 31, 2025 December 31, 2024 Assets Cash and cash equivalents $ 118,853 $ 50,172 Available-for-sale ("AFS") securities, at fair value (amortized cost of $ 151,618 , net of allowance for credit losses of $ 0 at December 31, 2025 and amortized cost of $ 165,604 , net of allowance for credit losses of $ 0 at December 31, 2024) 134,103 142,851 Held-to-maturity ("HTM") securities, at amortized cost (fair value of net of $ 64,117 , net of allowance for credit losses of $ 0 at December 31, 2025 and fair value of $ 65,622 , net of allowance for credit losses of $ 0 at December 31, 2024) 80,210 85,504 Equity investments 5,840 4,702 Other investments 12,506 12,500 Loans receivable 1,340,325 1,368,981 Allowance for credit losses ( 22,401 ) ( 20,549 ) Loans receivable, net 1,317,924 1,348,432 Loans held for sale 4,954 1,329 Mortgage servicing rights, net 3,494 3,663 Office properties and equipment, net 16,357 17,075 Accrued interest receivable 6,126 5,653 Intangible assets 395 979 Goodwill 31,498 31,498 Foreclosed and repossessed assets, net 857 915 Bank owned life insurance ("BOLI") 26,908 26,102 Other assets 21,730 17,144 TOTAL ASSETS $ 1,781,755 $ 1,748,519 Liabilities and Stockholders’ Equity Liabilities: Deposits $ 1,524,099 $ 1,488,148 Federal Home Loan Bank ("FHLB") advances — 5,000 Other borrowings 51,804 61,606 Other liabilities 17,913 14,681 Total liabilities 1,593,816 1,569,435 Commitments and contingent liabilities Stockholders’ Equity: Common stock— $ 0.01 par value, authorized 30,000,000 ; 9,617,245 and 9,981,996 shares issued and outstanding, respectively 96 100 Additional paid-in capital 110,315 114,564 Retained earnings 89,995 80,840 Accumulated other comprehensive loss ( 12,467 ) ( 16,420 ) Total stockholders’ equity 187,939 179,084 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,781,755 $ 1,748,519 See accompanying notes to audited consolidated financial statements. 57 CITIZENS COMMUNITY BANCORP, INC. Consolidated Statements of Operations (in thousands, except per share data) For the year ended December 31, 2025 For the year ended December 31, 2024 Interest and dividend income: Interest and fees on loans $ 77,500 $ 79,738 Interest on cash and investments 10,130 9,877 Total interest and dividend income 87,630 89,615 Interest expense: Interest on deposits 33,102 37,985 Interest on FHLB borrowed funds 13 1,281 Interest on other borrowed funds 3,331 3,875 Total interest expense 36,446 43,141 Net interest income before provision for credit losses 51,184 46,474 Provision (provision reversal) for credit losses 1,950 ( 3,175 ) Net interest income after provision for credit losses 49,234 49,649 Non-interest income: Service charges on deposit accounts 1,763 1,924 Interchange income 2,186 2,247 Loan servicing income 2,366 2,271 Gain on sale of loans 2,925 2,216 Loan fees and service charges 676 996 Net gains (losses) on equity securities 234 ( 856 ) Bank Owned Life Insurance (BOLI) death benefit — 184 Other 993 1,125 Total non-interest income 11,143 10,107 Non-interest expense: Compensation and related benefits 23,875 22,741 Occupancy 4,975 5,159 Data processing 6,775 6,530 Amortization of intangible assets 584 715 Mortgage servicing rights expense, net 621 534 Advertising, marketing and public relations 906 793 FDIC premium assessment 773 798 Professional services 1,777 1,763 Losses on repossessed assets, net 33 294 Other 2,617 2,979 Total non-interest expense 42,936 42,306 Income before provision for income taxes 17,441 17,450 Provision for income taxes 3,021 3,699 Net income attributable to common stockholders $ 14,420 $ 13,751 Per share information: Basic earnings $ 1.46 $ 1.34 Diluted earnings $ 1.46 $ 1.34 Cash dividends paid $ 0.36 $ 0.32 See accompanying notes to audited consolidated financial statements. 58 CITIZENS COMMUNITY BANCORP, INC. Consolidated Statements of Comprehensive Income (in thousands) For the year ended December 31, 2025 For the year ended December 31, 2024 Net income attributable to common stockholders $ 14,420 $ 13,751 Other comprehensive income, net of tax: Securities available-for-sale Net unrealized gains arising during period, net of tax 3,953 778 Reclassification for net loss on exchanged security, included in net income, net of tax — 130 Other comprehensive income, net of tax 3,953 908 Comprehensive income $ 18,373 $ 14,659 See accompanying notes to audited consolidated financial statements. 59 CITIZENS COMMUNITY BANCORP, INC. Consolidated Statements of Changes in Stockholders’ Equity (in thousands, except Shares) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Shares Amount Balance, December 31, 2023 10,440,591 $ 104 $ 119,441 $ 71,117 $ ( 17,328 ) $ 173,334 Net income — — — 13,751 — 13,751 Other comprehensive income, net of tax — — — — 908 908 Forfeiture of unvested shares ( 246 ) — — — — — Surrender of restricted shares of common stock ( 10,010 ) — ( 119 ) — — ( 119 ) Restricted common stock awarded under the equity incentive plan 16,955 — — — — — Restricted common stock issued upon achievement of the 2021 performance criteria 8,805 — — — — — Common stock options exercised 2,000 — 22 — — 22 Common stock repurchased ( 476,099 ) ( 4 ) ( 5,411 ) ( 682 ) — ( 6,097 ) Stock based compensation expense — — 631 — — 631 Cash dividends ($ 0.32 per share) — — — ( 3,346 ) — ( 3,346 ) Balance, December 31, 2024 9,981,996 $ 100 $ 114,564 $ 80,840 $ ( 16,420 ) $ 179,084 Net income — — — 14,420 — 14,420 Other comprehensive income, net of tax — — — — 3,953 3,953 Surrender of restricted shares of common stock ( 12,020 ) — ( 190 ) — — ( 190 ) Restricted common stock issued upon achievement of the 2022 performance criteria 16,021 — — — — — Common stock options exercised 16,500 — 179 — — 179 Common stock repurchased ( 385,252 ) ( 4 ) ( 4,384 ) ( 1,667 ) — ( 6,055 ) Stock based compensation expense — — 146 — — 146 Cash dividends ($ 0.36 per share) — — — ( 3,598 ) — ( 3,598 ) Balance, December 31, 2025 9,617,245 $ 96 $ 110,315 $ 89,995 $ ( 12,467 ) $ 187,939 See accompanying notes to audited consolidated financial statements. 60 CITIZENS COMMUNITY BANCORP, INC. Consolidated Statements of Cash Flows (in thousands) For the year ended December 31, 2025 For the year ended December 31, 2024 Cash flows from operating activities: Net income attributable to common stockholders $ 14,420 $ 13,751 Adjustments to reconcile net income to net cash provided by operating activities: Net accretion on debt securities ( 64 ) ( 78 ) Depreciation expense 2,029 2,174 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 621 534 Amortization of intangible assets 584 715 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 gains from disposals of foreclosed and repossessed assets ( 15 ) ( 19 ) Provision for valuation allowance on foreclosed properties 48 313 Gain on sale of loans held for sale, net ( 2,925 ) ( 2,216 ) Proceeds from sale of loans held for sale 83,812 60,347 Originations of loans held for sale ( 84,512 ) ( 53,687 ) Amortization of debt issuance costs 203 224 Net change in: Accrued interest receivable and other assets ( 5,286 ) ( 1,775 ) Other liabilities 3,232 2,711 Total adjustments ( 2,727 ) 6,649 Net cash from operating activities 11,693 20,400 Cash flows from investing activities: Proceeds from Bank Owned Life Insurance (“BOLI”) death benefit — 499 Purchase of available-for-sale securities ( 9,949 ) — 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 Equity investment capital distribution 197 276 Purchase of equity investments ( 1,200 ) ( 450 ) Net sales of other investments 93 520 Proceeds from sales of foreclosed and repossessed assets 70 877 Proceeds from insurance claim on foreclosed and repossessed assets — 27 Net decrease in loans 28,513 92,317 Net capital expenditures ( 1,311 ) ( 889 ) Proceeds from disposal of office properties and equipment — 13 Net cash from investing activities 45,706 113,739 Cash flows from financing activities: Change in short term in Federal Home Loan Bank advances, net — ( 44,000 ) Federal Home Loan Bank advance call payments — ( 10,000 ) 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 increase (decrease) in deposits 35,951 ( 30,952 ) Repurchase shares of common stock ( 6,055 ) ( 6,097 ) Surrender of restricted shares of common stock ( 190 ) ( 119 ) Common stock options exercised 179 22 Cash dividends paid ( 3,598 ) ( 3,346 ) Net cash from financing activities 11,282 ( 121,105 ) 61 Net increase in cash and cash equivalents 68,681 13,034 Cash and cash equivalents at beginning of period 50,172 37,138 Cash and cash equivalents at end of period $ 118,853 $ 50,172 Supplemental cash flow information: Cash paid during the period for: Interest on deposits $ 34,995 $ 34,446 Interest on borrowings $ 3,614 $ 5,116 Income taxes $ 2,065 $ 2,318 Supplemental noncash disclosure: Transfers from loans receivable to other real estate owned (“OREO”) $ — $ 274 See accompanying notes to audited consolidated financial statements. 62 CITIZENS COMMUNITY BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share data) NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements of Citizens Community Federal N.A. (the “Bank”) included herein have been included by its parent company, Citizens Community Bancorp, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As used in this annual report, the terms “we”, “us”, “our”, and “Citizens Community Bancorp, Inc.” mean the Company and its wholly owned subsidiary, the Bank, unless the context indicates other meaning. The Bank is a national banking association (a “National Bank”) and operates under the title of Citizens Community Federal National Association (“Citizens Community Federal N.A.” or “Bank”). The Company is a bank holding company, supervised by the Federal Reserve Bank of Minneapolis (the “FRB”), and operates under the title of Citizens Community Bancorp, Inc. The Office of the Comptroller of the Currency (the “OCC”), is the primary federal regulator for the Bank. The consolidated income of the Company is principally derived from the income of the Bank, the Company’s wholly owned subsidiary, serving customers primarily in Wisconsin and Minnesota through 21 branch locations. Its primary markets include the Chippewa Valley Region in Wisconsin, Mankato and Twin Cities markets in Minnesota, and various rural communities around these areas. The Bank offers traditional community banking services to businesses, agricultural operators and consumers, including one-to-four family residential mortgages. The Bank is subject to competition from other financial institutions and non-financial institutions providing financial products. 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 occurring subsequent to the balance sheet date of December 31, 2025, through the date on which the consolidated financial statements were available to be issued on March 5, 2026, for items that should potentially be recognized or disclosed in these consolidated financial statements. Unless otherwise stated herein, and except for share and per share amounts, all amounts are in thousands. Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Company and the Bank. All significant inter-company accounts and transactions have been eliminated. Use of Estimates— Preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, fair value of financial instruments, the allowance for credit losses, mortgage servicing rights, foreclosed and repossessed assets, valuation of intangible assets arising from acquisitions, useful lives for depreciation and amortization, valuation of goodwill and long-lived assets, stock based compensation, deferred tax assets, uncertain income tax positions and contingencies. Management does not anticipate any material changes to estimates made herein in the near term. Factors that may cause sensitivity to the aforementioned estimates include but are not limited to: those items described under the caption “Risk Factors” in Item 1A of the accompanying annual report on Form 10-K for the year ended December 31, 2025, and external market factors such as market interest rates and unemployment rates, changes to operating policies and procedures, and changes in applicable banking regulations. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the consolidated financial statements in any individual reporting period. Cash and Cash Equivalents— For purposes of reporting cash flows in the consolidated financial statements, cash and cash equivalents include cash, due from banks, and interest bearing deposits with original maturities of three months or less. Investment Securities; 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. 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. 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 63 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. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities. Allowance for Credit Losses - Available-for-sale Securities - The Company measures the allowance for credit losses on available-for-sale debt securities by evaluating securities in an unrealized loss position using a two-step process. First, the Company assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost. If it is determined that the Company intends or will be required to sell the security, it is written down to its fair value as net gains or losses on investment securities in our consolidated statement of operations. For agency mortgage-backed and asset-backed securities that do not meet the criteria in step one, there are no expected credit losses as they are guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. For other debt securities that do not meet the criteria in step one, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and the allowance for credit losses on available-for-sale investments is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Allowance for Credit Losses - Held-to-Maturity Securities - The Company measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. For agency mortgage-backed securities there are no expected credit losses as they are guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. For other securities, the estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. 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 $ 924 at December 31, 2025. The Company has no available-for-sale securities or held-to-maturity securities which it deems to have a credit loss at December 31, 2025. Equity investments - The Company is required to maintain an investment in Federal Agricultural Mortgage Corporation (“Farmer Mac”) equity securities. Farmer Mac equity securities are carried at their fair market value, which is readily determinable. Changes in fair value are recognized as net (losses) gains on equity securities in the consolidated statements of operations. Included in equity investments are preferred shares of a community development financial institution, which are carried at their fair market value. As no ready market exists for this investment, the Company utilizes significant unobservable inputs (Level 3 inputs) to determine fair value. We record the unrealized gains and losses resulting from changes in the fair value of this investment as net gains or losses on investment securities in our consolidated statements of operations. Also included in equity investments are the Company’s investments in a Volcker Rule-compliant Small Business Investment Company (SBIC) and an investment fund. The SBIC and investment fund meet the definition of investment companies, as defined in ASC 946, Financial Services - Investment Companies. These investments seek returns by investing in various small businesses and do not have redemption rights. Distributions from the investments will be received as the underlying investments, which generally have a life of 10 years, are liquidated or earlier distributions are made. We elected the practical expedient available in Topic 820, Fair Value Measurements, which permits the use of net asset value ("NAV") per share or equivalent to value investments in entities that are or are similar to investment companies. SBICs and investment funds report their investments at estimated fair value. We record the unrealized gains and losses resulting from changes in the fair value of these investments as gains or losses on equity securities in our consolidated statements of operations. The carrying value of these investments is equal to the capital account balance as provided by the investee and adjusted as necessary. Other investments - As a member of the Federal Reserve Bank (“FRB”) System and the Federal Home Loan Bank (“FHLB”) System, the Bank is required to maintain an investment in the capital stock of these entities. These securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. 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. Cash dividends are reported as interest on investments in the consolidated statement of operations. 64 Also included in other investments is stock of our correspondent bank, Bankers’ Bank, without readily determinable fair value. This stock is carried at cost plus or minus changes resulting from observable price changes in orderly transactions for this stock, less impairment charges, if any. Management’s evaluation for impairment of these other investments includes consideration of the financial condition and other available relevant information of the issuer. Based on management’s quarterly evaluation, no impairment has been recorded on these securities. Other investments totaling $ 12,506 at December 31, 2025, consisted of $ 3,717 of FHLB stock, $ 5,726 of Federal Reserve Bank stock and $ 3,063 of Bankers’ Bank stock. Other investments totaling $ 12,500 at December 31, 2024, consisted of $ 3,865 of FHLB stock, $ 5,717 of Federal Reserve Bank stock and $ 2,918 of Bankers’ Bank stock. Loans receivable – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs. Interest income is accrued on the unpaid principal balance of these loans and is presented as a separate line item on the consolidated balance sheets. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method over the contractual life of the loan with no prepayments assumed. If the loan is prepaid, any unamortized net fee is recognized at that time. Late charge fees are recognized into income when collected. Interest income on commercial, mortgage and consumer loans is discontinued according to the following schedules: • Commercial/agricultural real estate loans past due 90 days or more; • Commercial and industrial/agricultural operating loans past due 90 days or more; • Closed end consumer installment loans past due 120 days or more; and • Residential mortgage loans and open ended consumer installment loans past due 180 days or more. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for a loan placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual status. 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 (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. Commercial/agricultural real estate, commercial and industrial and agricultural operating 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 90 days or more. 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. Loan losses are charged against the ACL when management believes that the collectability of a loan balance is unlikely. Subsequent recoveries, if any, are credited to the ACL. In determining the allowance, the company estimates credit losses over the loan’s entire contractual term, adjusted for expected prepayments when appropriate. The allowance estimate considers relevant available information from internal and external sources relating to historical loss experience; known and inherent risks in our portfolio; information about specific borrowers’ ability to repay; estimated collateral values; current economic conditions; reasonable and supportable forecasts for future conditions; and other relevant factors determined by management. To ensure that the ACL is maintained at an adequate level, a detailed analysis is performed on a quarterly basis and an appropriate provision is made to adjust the allowance. 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 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. The ACL on loans collectively evaluated is measured using the loss rate model. The Company categorizes its loan portfolio into four segments based on similar risk characteristics. Loans within each segment are pooled based on individual loan characteristics. 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/ 65 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. For commercial and industrial/agricultural operating, residential, and consumer loans, the loss rate is then combined with the loans balance and contractual maturity, to determine expected future losses. Qualitative adjustments are made to the allowance calculated on collectively evaluated loans to incorporate factors not included in the model. Qualitative factors include but are not limited to, lending policies and procedures, the experience and ability of lending and other staff, the volume and severity of problem credits, quality of the loan review system, and other external factors. Loans that exhibit different risk characteristics from the pool are individually evaluated and not included in the collective evaluation. Loans can be identified for individual evaluation for a variety of reasons including delinquency, nonaccrual status, risk rating and loan modification. Accruing loans that exhibit different risk characteristics from their pool may also be within scope. On these loans, an allowance may be established so that the loan is reported, net, at the lower of (a) its amortized cost; (b) the present value of the loan’s estimated future cash flows using the loan’s existing rate; or (c) at the fair value of any loan collateral, less estimated disposal costs, if the loan is collateral dependent. Collateral dependency is determined using the practical expedient when: (1) the borrower is experiencing financial difficulty; and (2) repayment is expected to be provided substantially through the sale or operation of the collateral. However, if it is probable that the Company will foreclose on the collateral, the use of the fair value of the collateral to calculate the allowance for credit loss is required. 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 $ 4,841 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. It is included in “Other liabilities” on the consolidated balance sheets. Expected credit losses are estimated over the contractual period in which the Company is exposed to credit risk via a commitment that cannot be unconditionally canceled, adjusted for projected prepayments when appropriate. In addition, the estimate of the liability considers the likelihood that funding will occur. The ACL on unfunded commitments is adjusted through provision for credit losses on the consolidated statements of operations. Because the business processes and risks associated with unfunded commitments are essentially the same as loans, the Company uses the same process to estimate the liability. Loans Held for Sale — Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They are carried at the lower of aggregate cost or fair value. Gains and losses on sales of loans are recognized at settlement dates, and are determined by the difference between the sales proceeds and the carrying value of the loans after allocating costs to servicing rights retained. Such gains and losses are included as non-interest income in the consolidated statement of operations. All sales are made without recourse. Interest rate lock commitments on mortgage loans to be funded and sold are valued at fair value, and are included in other assets or liabilities, if material. Transfers of financial assets— Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the entity, (2) the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and (3) the entity does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity. Mortgage Servicing Rights— Mortgage servicing rights (“MSR”) assets result as the Company sells loans to investors in the secondary market and retains the rights to service mortgage loans sold to others. MSR assets are initially measured at fair value; assessed for impairment at least annually; and carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. MSR assets are amortized in proportion to and over the period of estimated net servicing income, with the amortization recorded as “Mortgage servicing rights expense, net” in non-interest expense in the consolidated statements of operations. The valuation of MSRs and related amortization, included in mortgage servicing rights expense in the consolidated statements of operations, thereon are based on numerous factors, assumptions and judgments, such as those for: changes in the mix of loans, interest rates, prepayment speeds, and default rates. 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. 66 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. The fees are based on a contractual percentage of outstanding principal; or a fixed amount per loan and are recorded as income when earned. Office Properties and Equipment— Premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Maintenance and repair costs are charged to expense as incurred. Gains or losses on disposition of office properties and equipment are reflected in income. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 10 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line (or accelerated) method with useful lives ranging from 3 to 10 years. Leasehold improvements are depreciated using the straight-line (or accelerated) method with useful lives based on the lesser of (a) the estimated life of the lease, or (b) the estimated useful life of the leasehold improvement. Depreciation expense is included in non-interest expense on the consolidated statements of operations. Goodwill and other intangible assets— The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles - Goodwill and Other.” The Company records the excess of the cost of acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. The Company amortizes acquired intangible assets, primarily Core Deposit Intangibles (CDI) with definite useful economic lives over their useful economic lives originally ranging from 72 to 111 months utilizing the straight-line method. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amounts of the intangible assets may be impaired. Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. 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 December 31, 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. An initial qualitative evaluation is made to assess the likelihood of impairment and determine whether further quantitative testing to calculate the fair value is necessary. When the qualitative evaluation indicates that impairment is more likely than not, quantitative testing is required whereby the fair value of the Company’s reporting unit is calculated and compared to the recorded book value, “step one.” If the calculated fair value of the Company’s reporting unit exceeds its carrying value, goodwill is not considered impaired and “step two” is not considered necessary. If the carrying value of the company’s reporting unit exceeds its calculated fair value, the impairment test continues (“step two”) by comparing the carrying value of the Company’s reporting unit’s goodwill to the implied fair value of goodwill. An impairment charge is recognized if the carrying value of goodwill exceeds the implied fair value of goodwill. The Company has performed the required annual goodwill impairment test and has determined that goodwill was not impaired as of October 31, 2025, and no circumstances arose after October 31, 2025, that indicated impairment existed at December 31, 2025, per the quarterly analysis. See Note 6 for additional information on goodwill and other intangible assets. Foreclosed and Repossessed Assets – Assets acquired through foreclosure or repossession are initially recorded at fair value, less estimated costs to sell, which establishes a new cost basis. If the fair value declines subsequent to foreclosure or repossession, a write-down is recorded through expense. Costs incurred after acquisition are expensed and are included in non-interest expense, other in the consolidated statements of operations. Bank Owned Life Insurance (BOLI)— The Bank invests in bank-owned life insurance (BOLI) as a source of funding for employee benefit expenses. BOLI involves the purchasing of life insurance by the Bank on a select group of employees. The Bank is the owner and beneficiary of the policies. Income from the increase in cash surrender value of the policies as well as the receipt of death benefits is included in non-interest income on the consolidated statements of operations. New Markets Tax Credits - As a part of its commitment to the communities it serves, in the first quarter of 2022 and the third quarter of 2024, the Company made investments in LLC’s that are sponsoring community development projects that have been awarded New Markets Tax Credits (“NMTC”) through the U.S. Department of the Treasury’s Community Development Financial Institutions Fund. These investments are Community Reinvestment Act eligible and are designed to generate a return primarily through the realization of the tax credit. These LLC’s are considered a Variable Interest Entity (VIE) as the Company represents the holder of the equity investment at risk. However, the Company does not have the ability to direct the activities that most significantly affect the performance of the LLC. As such, the Company is not the primary beneficiary of the VIE and the LLC’s 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. 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. 67 As of December 31, 2025, the carrying amount of this investment, which is included in other assets in the consolidated balance sheets, was $ 7,707 . 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 December 31, 2025, there were no known instances of noncompliance associated with the investment. Leases - We determine if an arrangement is a lease at inception. All of our existing leases have been determined to be operating leases under ASC 842. Right-of-use (“ROU”) assets are included in other assets in our consolidated balance sheets. Operating lease liabilities are included in other liabilities in our consolidated balance sheets. Lease expense is included in non-interest expense, “Occupancy” in the consolidated statements of operations. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date, based on the present value of lease payments over the lease term. As none of our existing leases provide an implicit rate, we use our incremental borrowing rate, based on information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, when it is reasonably certain that we will exercise that option. Lease expense is recognized based on the total contractually required lease payments, over the term of the lease, on a straight-line basis. Some of the Bank’s leases require it to make variable payments for the Bank’s share of property taxes, insurance, common area maintenance and other costs. These variable costs are recognized when incurred and are also included in lease expense. 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. Debt issuance costs that originated in 2020 and thereafter, are amortized through the first Company call option date of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Senior note debt issuance costs, are amortized over the contractual term of the corresponding debt, as a component of interest expense on other borrowed funds in the consolidated statements of operations. Specific costs associated with the issuance of shares of the Company’s common or preferred stock are netted against proceeds and recorded in stockholders’ equity, as additional paid in capital, on the consolidated balance sheets, in the period of the share issuance. Share-Based Compensation— The Company may grant restricted stock awards and other stock-based awards to plan participants, subject to forfeiture upon the occurrence of certain events until the dates specified in the participant’s award agreement. The Company accounts for forfeitures as they occur. Forfeited restricted shares are canceled and returned to authorized and unissued shares. 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 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. Performance based restricted shares are earned over a three-year period based on Board approved performance metrics and expense is recorded based on expected shares vesting. The performance based restricted stock award participants do not have voting rights and do not receive dividends or other distributions paid with respect to the performance based restricted shares. Upon vesting of restricted stock, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the Consolidated Statements of Operations. Advertising, Marketing and Public Relations Expense— The Company expenses all advertising, marketing and public relations costs as they are incurred. Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes.” Under this guidance, deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. The Company regularly reviews the carrying amount of its net deferred tax assets to determine if the establishment of a valuation allowance is necessary. 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 68 assets. 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. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. 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 17.3 % and 21.2 % for the twelve months ended December 31, 2025 and December 31, 2024, respectively. 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 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. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts or other similar contracts. The Company accounts for revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Topic 606 provides that revenue from contracts with customers be recognized when performance obligations under the terms of a contract are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing service. The Company does not have any materially significant payment terms as payment is received shortly after the satisfaction of the performance obligation. The statement of operations line items recognized under the scope of Topic 606 are as follows: Service charges on deposit accounts - Service charges on accounts consist of monthly service fees, transaction-based fees, overdraft fees and other deposit account related fees. The Company’s performance obligation for monthly services fees is generally satisfied over the period in which the service is provided. Revenue for these monthly fees is recognized during the service period. Other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied at the time the service is provided. Payment for service charges on deposit accounts are primarily received immediately or in the following month through a direct charge to a customer’s account. Interchange income - The Company earns interchange fees when cardholder debit card transactions are processed through card association networks. The interchange rates are generally set by the card association based upon purchase volumes and other factors. Interchange fees represent a percentage of the underlying transaction value. The Company has a continuous contract, based on customary business practices, with the card association networks to make funds available for settlement of card transactions. The Company’s performance obligation is satisfied over time as it makes funds available, and the related income is recognized when received. Gain (loss) on repossessed assets - The Company records a gain or loss from the sale of repossessed assets, when control of the property or asset transfers to the buyer, which generally occurs at the time of an executed deed or sales agreement. When the company finances the sale of repossessed assets to a buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the repossessed asset is derecognized and the gain or loss on sale is recorded upon transfer of control of the property to the buyer. In determining the gain on sale or loss on the sale, the Company adjusts the transaction price and related gain or loss on sale if a significant financing component is present. Non-interest income outside of the scope of Revenue from Contracts with Customers, Topic 606 is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income outside of the scope of Topic 606 includes mortgage banking activities, loan fees and service charges, net gains (losses) on investment securities, and other, which is primarily made up of BOLI related income. 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. 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, 69 issued to meet customer financial needs. Such financial instruments are recorded in the financial statements when they become payable. See Note 11, “Commitments and Contingencies” in Notes to Consolidated Financial Statements. Derivatives--Rate-lock Commitments and Forward Sale Agreements — The Company enters into commitments to originate loans, whereby the interest rate on the loan is determined prior to funding (rate-lock commitment). Rate-lock commitments on mortgage loans held for sale are derivative instruments. If material, derivative instruments are carried on the consolidated balance sheets at fair value, and changes in the fair value thereof are recognized in the consolidated statements of operations. The Company originates single-family residential loans for sale, pursuant to programs primarily with the Federal Home Loan Mortgage Corporation (FHLMC) and other similar third parties. In connection with these programs, at the time the Company initially issues a loan commitment, it does not lock in a specific interest rate. At the time the interest rate is locked in by the borrower, the Company concurrently enters into a forward loan sale agreement with the prospective loan purchaser, at a specific price, in order to manage the interest rate risk inherent to the rate-lock commitment. The forward sale agreement also meets the definition of a derivative instrument. Any change in the fair value of the loan commitment after the borrower locks in the interest rate is substantially offset by the corresponding change in the fair value of the forward loan sale agreement related to such loan. The period from the time the borrower locks in the interest rate, to the time the Company funds the loan and sells the loan to a third party varies, and could be up to 90 days. The fair value of each instrument will rise and fall in response to changes in market interest rates, subsequent to the dates the interest rate locks and forward sale agreements are entered into. In the event that interest rates rise after the Company enters into an interest rate lock, the fair value of the loan commitment will decline. 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 December 31, 2025, the Company had $ 5,456 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 December 31, 2025. Common Stock Repurchased -The Company is incorporated in Maryland. Under Maryland Law, shares repurchased are canceled and returned to authorized and unissued shares and recorded as a reduction of each of the applicable captions within stockholders’ equity on the consolidated balance sheets and consolidated statement of changes in stockholders’ equity. 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 (loss) 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. 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. Accordingly, all of the Company’s banking operations are considered by the Chi e f Operating Decision Maker to be the Company’s sole reportable operating segment. Reclassifications— Certain items previously reported were reclassified for consistency with the current presentation. Recent Accounting Pronouncements— The Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (ASC). This section provides a summary description of recent ASUs that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future. Recent Accounting Pronouncements—Adopted 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 70 ASU 2024-03, Income Statement, Reporting of Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses— This ASU, issued in November 2024, is effective for fiscal years beginning after December 15, 2027, and interim periods therein, with early adoption permitted. This ASU requires more detailed note disclosure about the types of expenses in commonly presented expense captions. 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. 71 NOTE 2 – INVESTMENT SECURITIES The amortized cost, estimated fair value and related unrealized gains and losses on securities available-for-sale and unrecognized gains and losses on securities held-to-maturity as of December 31, 2025 and December 31, 2024, respectively, were as follows: Available-for-sale securities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value December 31, 2025 U.S. government agency obligations $ 10,811 $ 15 $ 53 $ 10,773 Mortgage-backed securities 82,264 — 15,580 66,684 Corporate debt securities 42,394 152 1,864 40,682 Student loan asset-backed securities 16,149 10 195 15,964 Total available-for-sale securities $ 151,618 $ 177 $ 17,692 $ 134,103 December 31, 2024 U.S. government agency obligations $ 13,853 $ 28 $ 128 $ 13,753 Mortgage-backed securities 87,762 — 19,376 68,386 Corporate debt securities 44,931 111 3,326 41,716 Student loan asset-backed securities 19,058 43 105 18,996 Total available-for-sale securities $ 165,604 $ 182 $ 22,935 $ 142,851 Held-to-maturity securities Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Estimated Fair Value December 31, 2025 Obligations of states and political subdivisions $ 400 $ — $ 12 $ 388 Mortgage-backed securities 79,810 6 16,087 63,729 Total held-to-maturity securities $ 80,210 $ 6 $ 16,099 $ 64,117 December 31, 2024 Obligations of states and political subdivisions $ 500 $ — $ 22 $ 478 Mortgage-backed securities 85,004 4 19,864 65,144 Total held-to-maturity securities $ 85,504 $ 4 $ 19,886 $ 65,622 At December 31, 2025, the Bank has pledged certain of its mortgage-backed securities with a carrying value of $ 32,056 as collateral to secure a line of credit with the Federal Reserve Bank. As of December 31, 2025, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2025, the Bank has pledged certain of its U.S. Government Agency securities with a carrying value of $ 213 and mortgage-backed securities with a carrying value of $ 1,790 as collateral against specific municipal deposits. As of December 31, 2025, the Bank also has mortgage-backed securities with a carrying value of $ 401 pledged as collateral to the Federal Home Loan Bank of Des Moines. At December 31, 2024, the Bank has 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. As of December 31, 2024, there were no borrowings outstanding on this Federal Reserve Bank line of credit. As of December 31, 2024, the Bank has pledged certain of its U.S. 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, 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 . This total loss of $ 438 was recognized on the June 30, 2024, consolidated statement of operations as net losses on equity securities. 72 The estimated fair value of available-for-sale securities at December 31, 2025 and December 31, 2024, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities on mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Expected maturities may differ from contractual maturities on certain securities due to the call feature. Securities not due at a single maturity date are shown separately. December 31, 2025 December 31, 2024 Available-for-sale securities Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 2,013 $ 2,006 $ 4,526 $ 4,487 Due after one year through five years 8,533 8,574 8,652 8,715 Due after five years through ten years 38,403 36,617 41,380 38,033 Due after ten years 20,405 20,222 23,284 23,230 Total securities with contractual maturities 69,354 67,419 77,842 74,465 Mortgage-backed securities 82,264 66,684 87,762 68,386 Total available-for-sale securities $ 151,618 $ 134,103 $ 165,604 $ 142,851 December 31, 2025 December 31, 2024 Held-to-maturity securities Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 100 $ 100 $ 100 $ 100 Due after one year through five years 300 288 400 378 Due after five years through ten years — — — — Total securities with contractual maturities 400 388 500 478 Mortgage-backed securities 79,810 63,729 85,004 65,144 Total held-to-maturity securities $ 80,210 $ 64,117 $ 85,504 $ 65,622 73 Securities with unrealized losses for which an allowance for credit losses has not been recorded at December 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: Less than 12 Months 12 Months or More Total Available-for-sale securities Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss December 31, 2025 U.S. government agency obligations $ 1,275 $ 4 $ 5,997 $ 49 $ 7,272 $ 53 Mortgage-backed securities — — 66,684 15,580 66,684 15,580 Corporate debt securities 2,075 48 25,134 1,816 27,209 1,864 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 December 31, 2024 U.S. government agency obligations $ 5,472 $ 25 $ 3,334 $ 103 $ 8,806 $ 128 Mortgage-backed securities 2,732 112 65,654 19,264 68,386 19,376 Corporate debt securities — — 36,806 3,326 36,806 3,326 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, 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. Furthermore, the Company does not intend to sell, and it is likely that management will not be required to sell, the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The issuers continue to make timely principal and interest payments on their bonds. 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. 74 NOTE 3 – LOANS, ALLOWANCE FOR CREDIT LOSSES Portfolio Segments: Commercial and agricultural real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75 %. Commercial and industrial (“C&I”) loans are primarily underwritten based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Agricultural operating loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets or other business assets, as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields. Residential mortgage loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower’s documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home’s appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential mortgage portfolio due to relatively small loan account balances spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis. Consumer installment loans are comprised of other consumer loans secured primarily by automobiles and other personal assets and originated indirect paper loans secured primarily by boats and recreational vehicles. Consumer loan underwriting terms often depend on the collateral type, debt to income ratio and the borrower’s creditworthiness as evidenced by their credit score. In the event of a consumer installment loan default, collateral value alone may not provide an adequate source of repayment of the outstanding loan balance. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral. 75 Loans are stated at the principal amount outstanding net of unearned net deferred fees and costs and loans in process, unearned discounts on acquired loans, and allowance for credit losses (“ACL”). Unearned net deferred fees and costs includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at December 31, 2025, and December 31, 2024, follows: December 31, 2025 December 31, 2024 Amortized Cost % of Total Amortized Cost % of Total Commercial/Agricultural real estate: Commercial real estate $ 681,646 50.9 % $ 707,009 51.7 % Agricultural real estate 69,042 5.1 % 72,738 5.3 % Multi-family real estate 245,491 18.3 % 220,706 16.1 % Construction and land development 75,399 5.6 % 78,146 5.7 % Commercial/Agricultural operating: Commercial and industrial 105,756 7.9 % 115,535 8.4 % Agricultural operating 33,364 2.5 % 31,017 2.3 % Residential mortgage: Residential mortgage 121,666 9.1 % 131,892 9.6 % Purchased HELOC loans 1,739 0.1 % 2,956 0.2 % Consumer installment: Originated indirect paper 2,225 0.2 % 3,970 0.3 % Other consumer 3,997 0.3 % 5,012 0.4 % Total loans receivable $ 1,340,325 100 % $ 1,368,981 100 % Less Allowance for credit losses ( 22,401 ) ( 20,549 ) Net loans receivable $ 1,317,924 $ 1,348,432 76 Credit Quality/Risk Ratings: Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant. Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio ratings are presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows: 1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better. 5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future. 6 - Special Mention. A “Special Mention” loan has one or more potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future. 7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. 8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. 9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. 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 December 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. 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. 77 Below is a summary of the amortized cost of loans summarized by class, credit quality risk rating and year of origination as of December 31, 2025, and gross charge-offs for the twelve months ended December 31, 2025: Amortized Cost Basis by Origination Year 2025 2024 2023 2022 2021 Prior Revolving Revolving to Term Total Commercial/Agricultural real estate: Commercial real estate Risk rating 1 to 5 $ 74,334 $ 48,318 $ 70,001 $ 92,337 $ 180,767 $ 176,626 $ 10,920 $ — $ 653,303 Risk rating 6 — 775 1,513 6,836 7,053 3,459 24 — 19,660 Risk rating 7 — 164 1,516 1,059 1,952 3,992 — — 8,683 Total $ 74,334 $ 49,257 $ 73,030 $ 100,232 $ 189,772 $ 184,077 $ 10,944 $ — $ 681,646 Current period gross charge-offs $ — $ — $ — $ 51 $ — $ — $ — $ — $ 51 Agricultural real estate Risk rating 1 to 5 $ 18,677 $ 2,403 $ 6,052 $ 16,064 $ 9,234 $ 14,711 $ 518 $ — $ 67,659 Risk rating 6 780 — — — — 139 — — 919 Risk rating 7 — — 192 — — 272 — — 464 Total $ 19,457 $ 2,403 $ 6,244 $ 16,064 $ 9,234 $ 15,122 $ 518 $ — $ 69,042 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Multi-family real estate Risk rating 1 to 5 $ 25,772 $ 6,688 $ 20,719 $ 55,742 $ 85,892 $ 41,297 $ 411 $ — $ 236,521 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — 8,970 — — — 8,970 Total $ 25,772 $ 6,688 $ 20,719 $ 55,742 $ 94,862 $ 41,297 $ 411 $ — $ 245,491 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Construction and land development Risk rating 1 to 5 $ 44,202 $ 7,722 $ 12,952 $ 8,949 $ 255 $ 1,084 $ 178 $ — $ 75,342 Risk rating 6 — — — — — — 57 — 57 Risk rating 7 — — — — — — — — — Total $ 44,202 $ 7,722 $ 12,952 $ 8,949 $ 255 $ 1,084 $ 235 $ — $ 75,399 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial/Agricultural operating: Commercial and industrial Risk rating 1 to 5 $ 14,210 $ 15,418 $ 7,815 $ 18,357 $ 7,781 $ 8,097 $ 24,870 $ — $ 96,548 Risk rating 6 219 223 1,458 3,268 487 122 899 — 6,676 Risk rating 7 — 612 274 734 360 — 552 — 2,532 Total $ 14,429 $ 16,253 $ 9,547 $ 22,359 $ 8,628 $ 8,219 $ 26,321 $ — $ 105,756 Current period gross charge-offs $ — $ — $ 36 $ 23 $ — $ — $ 35 $ — $ 94 Agricultural operating Risk rating 1 to 5 $ 4,880 $ 1,056 $ 2,355 $ 2,155 $ 279 $ 898 $ 21,602 $ — $ 33,225 Risk rating 6 — — — — — — 139 — 139 Risk rating 7 — — — — — — — — — Total $ 4,880 $ 1,056 $ 2,355 $ 2,155 $ 279 $ 898 $ 21,741 $ — $ 33,364 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 78 Continued Amortized Cost Basis by Origination Year 2025 2024 2023 2022 2021 Prior Revolving Revolving to Term Total Residential mortgage: Residential mortgage Risk rating 1 to 5 $ 11,089 $ 7,971 $ 23,556 $ 27,863 $ 6,666 $ 26,112 $ 16,334 $ — $ 119,591 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — 133 1,842 100 — 2,075 Total $ 11,089 $ 7,971 $ 23,556 $ 27,863 $ 6,799 $ 27,954 $ 16,434 $ — $ 121,666 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Purchased HELOC loans Risk rating 1 to 5 $ — $ — $ — $ — $ — $ — $ 1,622 $ — $ 1,622 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — — 117 — 117 Total $ — $ — $ — $ — $ — $ — $ 1,739 $ — $ 1,739 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer installment: Originated indirect paper Risk rating 1 to 5 $ — $ — $ — $ — $ — $ 2,197 $ — $ — $ 2,197 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — 28 — — 28 Total $ — $ — $ — $ — $ — $ 2,225 $ — $ — $ 2,225 Current period gross charge-offs $ — $ — $ — $ — $ — $ 2 $ — $ — $ 2 Other consumer Risk rating 1 to 5 $ 1,347 $ 784 $ 658 $ 395 $ 174 $ 109 $ 528 $ — $ 3,995 Risk rating 6 — — — — — — — — — Risk rating 7 — 1 — — — — 1 — 2 Total $ 1,347 $ 785 $ 658 $ 395 $ 174 $ 109 $ 529 $ — $ 3,997 Current period gross charge-offs $ — $ 5 $ 10 $ — $ — $ 1 $ 4 $ — $ 20 Total loans receivable $ 195,510 $ 92,135 $ 149,061 $ 233,759 $ 310,003 $ 280,985 $ 78,872 $ — $ 1,340,325 Total current period gross charge-offs $ — $ 5 $ 46 $ 74 $ — $ 3 $ 39 $ — $ 167 79 Below is a summary of the amortized cost of loans summarized by class, credit quality risk rating and year of origination as of December 31, 2024, and gross charge-offs for the twelve months ended December 31, 2024: Amortized Cost Basis by Origination Year 2024 2023 2022 2021 2020 Prior Revolving Revolving to Term Total Commercial/Agricultural real estate: Commercial real estate Risk rating 1 to 5 $ 49,580 $ 76,381 $ 123,806 $ 207,155 $ 89,539 $ 141,264 $ 7,669 $ — $ 695,394 Risk rating 6 173 1,406 2,238 138 — — — — 3,955 Risk rating 7 — — 553 2,445 214 4,448 — — 7,660 Total $ 49,753 $ 77,787 $ 126,597 $ 209,738 $ 89,753 $ 145,712 $ 7,669 $ — $ 707,009 Current period gross charge-offs $ — $ — $ — $ 39 $ — $ — $ — $ — $ 39 Agricultural real estate Risk rating 1 to 5 $ 3,556 $ 10,870 $ 17,160 $ 10,098 $ 7,335 $ 16,642 $ 715 $ — $ 66,376 Risk rating 6 — — — — — 140 — — 140 Risk rating 7 — 202 477 5,102 — 441 — — 6,222 Total $ 3,556 $ 11,072 $ 17,637 $ 15,200 $ 7,335 $ 17,223 $ 715 $ — $ 72,738 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Multi-family real estate Risk rating 1 to 5 $ 8,777 $ 7,790 $ 40,426 $ 101,213 $ 43,115 $ 19,005 $ 380 $ — $ 220,706 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — — — — — Total $ 8,777 $ 7,790 $ 40,426 $ 101,213 $ 43,115 $ 19,005 $ 380 $ — $ 220,706 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Construction and land development Risk rating 1 to 5 $ 23,832 $ 25,102 $ 10,186 $ 346 $ 1,297 $ 868 $ 16,412 $ — $ 78,043 Risk rating 6 — — — — — 103 — — 103 Risk rating 7 — — — — — — — — — Total $ 23,832 $ 25,102 $ 10,186 $ 346 $ 1,297 $ 971 $ 16,412 $ — $ 78,146 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial/Agricultural operating: Commercial and industrial Risk rating 1 to 5 $ 17,599 $ 13,049 $ 28,343 $ 13,629 $ 8,787 $ 4,197 $ 24,809 $ — $ 110,413 Risk rating 6 — — 3,062 13 — — 292 626 3,993 Risk rating 7 — 500 74 401 — — 154 — 1,129 Total $ 17,599 $ 13,549 $ 31,479 $ 14,043 $ 8,787 $ 4,197 $ 25,255 $ 626 $ 115,535 Current period gross charge-offs $ — $ 131 $ 7 $ — $ 5 $ — $ — $ — $ 143 Agricultural operating Risk rating 1 to 5 $ 3,373 $ 3,062 $ 3,144 $ 563 $ 198 $ 1,884 $ 17,609 $ — $ 29,833 Risk rating 6 — 49 — 37 240 — 65 — 391 Risk rating 7 — — 473 320 — — — — 793 Total $ 3,373 $ 3,111 $ 3,617 $ 920 $ 438 $ 1,884 $ 17,674 $ — $ 31,017 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 80 Continued Amortized Cost Basis by Origination Year 2024 2023 2022 2021 2020 Prior Revolving Revolving to Term Total Residential mortgage: Residential mortgage Risk rating 1 to 5 $ 13,400 $ 28,598 $ 30,386 $ 7,369 $ 2,141 $ 30,004 $ 17,349 $ — $ 129,247 Risk rating 6 — — — — — — — — — Risk rating 7 — — 130 — — 2,507 8 — 2,645 Total $ 13,400 $ 28,598 $ 30,516 $ 7,369 $ 2,141 $ 32,511 $ 17,357 $ — $ 131,892 Current period gross charge-offs $ — $ — $ — $ — $ — $ 4 $ — $ — $ 4 Purchased HELOC loans Risk rating 1 to 5 $ — $ — $ — $ — $ — $ — $ 2,839 $ — $ 2,839 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — — 117 — 117 Total $ — $ — $ — $ — $ — $ — $ 2,956 $ — $ 2,956 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer installment: Originated indirect paper Risk rating 1 to 5 $ — $ — $ — $ — $ — $ 3,944 $ — $ — $ 3,944 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — 26 — — 26 Total $ — $ — $ — $ — $ — $ 3,970 $ — $ — $ 3,970 Current period gross charge-offs $ — $ — $ — $ — $ — $ 17 $ — $ — $ 17 Other consumer Risk rating 1 to 5 $ 1,519 $ 1,229 $ 811 $ 385 $ 341 $ 214 $ 511 $ — $ 5,010 Risk rating 6 — — — — — — — — — Risk rating 7 2 — — — — — — — 2 Total $ 1,521 $ 1,229 $ 811 $ 385 $ 341 $ 214 $ 511 $ — $ 5,012 Current period gross charge-offs $ — $ 4 $ 3 $ 1 $ — $ — $ 10 $ — $ 18 Total loans receivable $ 121,811 $ 168,238 $ 261,269 $ 349,214 $ 153,207 $ 225,687 $ 88,929 $ 626 $ 1,368,981 Total current period gross charge-offs $ — $ 135 $ 10 $ 40 $ 5 $ 21 $ 10 $ — $ 221 81 Certain directors and executive officers of the Company are defined as related parties. These related parties, including their immediate families and companies in which they are principal owners, were loan customers of the Bank during the twelve months ended December 31, 2025 and December 31, 2024. A summary of the changes in those loans is as follows: Twelve months ended Twelve months ended December 31, 2025 December 31, 2024 Balance—beginning of period $ 34,742 $ 36,592 New loan originations 646 1,006 Repayments ( 3,491 ) ( 2,856 ) Balance—end of period $ 31,897 $ 34,742 Available and unused lines of credit $ — $ 19 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. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, the borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and modifications, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. 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 twelve months ended December 31, 2025 and December 31, 2024: Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total Twelve months ended December 31, 2025 Allowance for Credit Losses - Loans: ACL - Loans, at beginning of period $ 16,516 $ 1,330 $ 2,489 $ 214 $ 20,549 Charge-offs ( 51 ) ( 94 ) — ( 22 ) ( 167 ) Recoveries 92 51 53 29 225 Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations 1,097 1,071 ( 312 ) ( 62 ) 1,794 ACL - Loans, at end of period $ 17,654 $ 2,358 $ 2,230 $ 159 $ 22,401 82 Commercial/Agricultural Real Estate C&I/Agricultural operating Residential Mortgage Consumer Installment Total Twelve months ended December 31, 2024 Allowance for Credit Losses - Loans: ACL - Loans, at beginning of period $ 18,784 $ 1,105 $ 2,744 $ 275 $ 22,908 Charge-offs ( 39 ) ( 143 ) ( 4 ) ( 35 ) ( 221 ) Recoveries 56 36 7 22 121 Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations ( 2,285 ) 332 ( 258 ) ( 48 ) ( 2,259 ) ACL - Loans, at end of period $ 16,516 $ 1,330 $ 2,489 $ 214 $ 20,549 Allowance for Credit Losses - Unfunded Commitments - In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of $ 490 at December 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 twelve months ended December 31, 2025 and December 31, 2024. December 31, 2025 and Twelve Months Ended December 31, 2024 and Twelve Months Ended ACL - Unfunded Commitments - beginning of period $ 334 $ 1,250 Additions (reversals) to ACL - Unfunded Commitments via provision for credit losses charged to operations 156 ( 916 ) ACL - Unfunded Commitments - End of period $ 490 $ 334 83 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 Past Due Current Total Loans December 31, 2025 Commercial/Agricultural real estate: Commercial real estate $ 471 $ 572 $ 467 $ 1,510 $ 680,136 $ 681,646 Agricultural real estate 192 — — 192 68,850 69,042 Multi-family real estate — — 8,970 8,970 236,521 245,491 Construction and land development 57 — — 57 75,342 75,399 Commercial/Agricultural operating: Commercial and industrial 665 — 1,143 1,808 103,948 105,756 Agricultural operating — — — — 33,364 33,364 Residential mortgage: Residential mortgage 1,419 132 44 1,595 120,071 121,666 Purchased HELOC loans 117 — — 117 1,622 1,739 Consumer installment: Originated indirect paper — — — — 2,225 2,225 Other consumer 29 2 1 32 3,965 3,997 Total $ 2,950 $ 706 $ 10,625 $ 14,281 $ 1,326,044 $ 1,340,325 (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 Loans December 31, 2024 Commercial/Agricultural real estate: Commercial real estate $ 857 $ 322 $ 367 $ 1,546 $ 705,463 $ 707,009 Agricultural real estate 26 — 556 582 72,156 72,738 Multi-family real estate — — — — 220,706 220,706 Construction and land development — — — — 78,146 78,146 C&I/Agricultural operating: Commercial and industrial 566 50 564 1,180 114,355 115,535 Agricultural operating — — 793 793 30,224 31,017 Residential mortgage: Residential mortgage 1,873 796 500 3,169 128,723 131,892 Purchased HELOC loans — — 117 117 2,839 2,956 Consumer installment: Originated indirect paper 25 — — 25 3,945 3,970 Other consumer 27 — — 27 4,985 5,012 Total $ 3,374 $ 1,168 $ 2,897 $ 7,439 $ 1,361,542 $ 1,368,981 84 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 Commercial/Agricultural real estate: Commercial real estate $ 4,652 $ 4,454 $ — Agricultural real estate 464 272 — Multi-family real estate 8,970 — — Construction and land development — — — Commercial/Agricultural operating: Commercial and industrial 1,282 921 — Agricultural operating — — — Residential mortgage: Residential mortgage 368 368 — Purchased HELOC loans 117 117 — Consumer installment: Originated indirect paper — — — Other consumer — — 1 Total $ 15,853 $ 6,132 $ 1 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: Commercial real estate $ 4,594 $ 4,374 $ — Agricultural real estate 6,222 6,020 — Multi-family real estate — — — Construction and land development 103 103 — Commercial/Agricultural operating: Commercial and industrial 597 564 — Agricultural operating 793 793 — Residential mortgage: Residential mortgage 741 548 186 Purchased HELOC loans 117 117 — Consumer installment: Originated indirect paper 1 1 — Other consumer — — — Total $ 13,168 $ 12,520 $ 186 85 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: • Commercial/agricultural real estate loans past due 90 days or more; • Commercial and industrial/agricultural operating loans past due 90 days or more; • Closed ended consumer installment loans past due 120 days or more; and • Residential mortgage and open ended consumer installment loans past due 180 days or more. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. 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. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status. The amount of interest income recognized by the Company for the twelve months ended December 31, 2025 and December 31, 2024, due to nonaccrual loan payoffs was $ 971 and $ 473 , respectively. Collateral Dependent Loans - A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the 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. However, if it is probable that the Company will foreclose on the collateral, the use of the fair value of the collateral to calculate the allowance for credit loss is required. The following table presents 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 December 31, 2025 and December 31, 2024. Collateral Type December 31, 2025 Real Estate Other Assets Total Without an Allowance With an Allowance Allowance Allocation Commercial/Agricultural real estate: Commercial real estate $ 8,808 $ — $ 8,808 $ 6,581 $ 2,227 $ 422 Agricultural real estate 464 — 464 272 192 99 Multi-family real estate 8,970 — 8,970 — 8,970 1,471 Construction and land development — — — — — — Commercial/Agricultural operating: Commercial and industrial — 3,176 3,176 1,784 1,392 429 Agricultural operating — — — — — — Residential mortgage: Residential mortgage 2,077 — 2,077 2,077 — — Purchased HELOC loans — — — — — — Consumer installment: Originated indirect paper — 28 28 28 — — Other consumer — 2 2 2 — — Total $ 20,319 $ 3,206 $ 23,525 $ 10,744 $ 12,781 $ 2,421 There were no outstanding commitments to borrowers experiencing financial difficulty as of December 31, 2025. There were unused lines of credit totaling $ 61 on loans with borrowers experiencing financial difficulties as of December 31, 2025. 86 Collateral Type December 31, 2024 Real Estate Other Assets Total Without an Allowance With an Allowance Allowance Allocation Commercial/Agricultural real estate: Commercial real estate $ 9,004 $ — $ 9,004 $ 6,597 $ 2,407 $ 258 Agricultural real estate 6,222 — 6,222 6,020 202 99 Multi-family real estate — — — — — — Construction and land development 103 — 103 103 — — Commercial/Agricultural operating: Commercial and industrial — 1,806 1,806 1,146 660 49 Agricultural operating — 793 793 793 — — Residential mortgage: Residential mortgage 3,066 — 3,066 2,773 293 49 Purchased HELOC loans — — — — — — Consumer installment: Originated indirect paper — 25 25 25 — — Other consumer — 2 2 2 — — 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. 87 The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended December 31, 2025: Term Extension Loan Class Amortized Cost Basis at December 31, 2025 % of Total Class of Financing Receivables Commercial and industrial $ 48 0.05 % Other-Than-Insignificant Payment Delay Loan Class Amortized Cost Basis at December 31, 2025 % of Total Class of Financing Receivables Commercial real estate $ 4,264 0.63 % Agricultural real estate $ 192 0.28 % Residential mortgage $ 120 0.10 % The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2025: Term Extension Loan Class Financial Effect Commercial and industrial A weighted average of 3 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 Agricultural real estate Payments were deferred a weighted average of 9 months Residential mortgage Payments were deferred a weighted average of 3 months 88 The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended December 31, 2024: Term Extension Loan Class Amortized Cost Basis at December 31, 2024 % of Total Class of Financing Receivables Commercial real estate $ 225 0.03 % Commercial and industrial $ 741 0.64 % Residential mortgage $ 20 0.02 % Other-Than-Insignificant Payment Delay Loan Class Amortized Cost Basis at 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 % The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024: Term Extension 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 13 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 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 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 89 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 December 31, 2025. Current 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due Commercial real estate $ 4,264 $ — $ — $ — Agricultural real estate — 192 — — Commercial and industrial — — — 48 Residential mortgage — — 120 — Total $ 4,264 $ 192 $ 120 $ 48 The following table shows the performance of such loans that have been modified during the twelve months ended December 31, 2024. Current 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due Commercial real estate $ 1,407 $ — $ — $ — Commercial and industrial 1,513 — 50 — Residential mortgage 256 — — — Other consumer 2 — — — Total $ 3,178 $ — $ 50 $ — 90 NOTE 4 – MORTGAGE SERVICING RIGHTS 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 December 31, 2025 and December 31, 2024, were $ 474,045 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 $ 2,841 and $ 2,430 , at December 31, 2025 and December 31, 2024, respectively. Mortgage servicing rights activity for the years ended December 31, 2025 and December 31, 2024, were as follows: As of and for the twelve months ended As of and for the twelve months ended December 31, 2025 December 31, 2024 Mortgage servicing rights: Mortgage servicing rights, beginning of period $ 3,663 $ 3,865 Increase in mortgage servicing rights resulting from transfers of financial assets 452 332 Amortization during the period ( 621 ) ( 534 ) Mortgage servicing rights, end of period 3,494 3,663 Valuation allowance, beginning of period — — Additions — ( 41 ) Recoveries — 41 Valuation allowance, end of period — — Mortgage servicing rights, net $ 3,494 $ 3,663 Fair value of mortgage servicing rights, end of period $ 4,652 $ 5,227 Residential mortgage loans serviced for others $ 474,045 $ 479,578 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 $ 1,209 and $ 1,236 for the years ended December 31, 2025 and December 31, 2024, respectively. Servicing fees are included in loan servicing income on the consolidated statement of operations. Late fees and ancillary fees related to loan servicing are not material. To estimate the fair value of the MSR asset, a valuation model is applied at the loan level to calculate the present value of the expected future cash flows. The valuation model incorporates various assumptions that would impact market participants’ estimations of future servicing income. Central to the valuation model is the discount rate. Fair value at December 31, 2025, was determined using discount rates ranging from 9.500 % to 12.500 %. Fair value at December 31, 2024, was determined using discount rates ranging from 10.000 % to 13.000 %. 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. 91 The estimated amortization expense is based on existing mortgage servicing asset balances. The timing of amortization expense actually recognized in future periods may differ significantly based on actual prepayment speeds, mortgage interest rates and other factors. At December 31, 2025, the estimated future aggregate amortization expense for the mortgage servicing rights is as follows. Amortization Expense 2026 $ 627 2027 498 2028 383 2029 324 2030 267 After 2030 1,395 Total $ 3,494 NOTE 5 - OFFICE PROPERTIES AND EQUIPMENT Office properties and equipment for each of the periods shown below consisted of the following: December 31, 2025 December 31, 2024 Land $ 4,302 $ 3,876 Buildings 16,663 16,210 Furniture, equipment and vehicles 11,986 11,554 Subtotals 32,951 31,640 Less--Accumulated depreciation ( 16,594 ) ( 14,565 ) Office properties and equipment, net $ 16,357 $ 17,075 Depreciation expense was $ 2,029 for the year ended December 31, 2025, and $ 2,174 for the year ended December 31, 2024, which is included in Occupancy on the consolidated statements of operations. NOTE 6 - GOODWILL AND INTANGIBLE ASSETS Goodwill— The beginning and ending balance of goodwill was $ 31,498 during the periods ended December 31, 2025 and December 31, 2024. There were no changes to goodwill during either period. Intangible assets-- Intangible assets consist of core deposit intangibles arising from various bank acquisitions. A summary of intangible assets and related amortization for the periods shown below follows: Year ended Year Ended December 31, 2025 December 31, 2024 Gross carrying amount $ 12,180 $ 12,180 Accumulated amortization ( 11,785 ) ( 11,201 ) Net book value $ 395 $ 979 Amortization during the period $ 584 $ 715 At December 31, 2025, the estimated future aggregate amortization expense for the intangible assets are as follows: Intangible Assets 2026 $ 395 Total $ 395 92 NOTE 7 - LEASES We have operating leases for 1 corporate office, 3 bank branch offices, 1 former bank branch office, and 1 ATM location. Our leases have remaining lease terms of 0.83 years to 2.67 years. Some of the leases include an option to extend, the longest of which is for two 5 year terms. As of December 31, 2025, we have no additional lease commitments that have not yet commenced. Lease costs are included in non-interest expense/occupancy in the consolidated statement of operations. 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. Twelve Months Ended December 31, 2025 December 31, 2024 The components of total lease costs were as follows: Operating lease cost $ 415 $ 450 Variable lease cost 81 112 Total lease cost $ 496 $ 562 The components of total lease income were as follows: Operating lease income $ 85 $ 59 Supplemental cash flow information related to leases was as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 513 $ 546 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 304 $ 2 December 31, 2025 December 31, 2024 Supplemental balance sheet information related to leases was as follows: Operating lease right-of-use assets (1) $ 764 $ 815 Operating lease liabilities (2) $ 950 $ 1,076 Weighted average remaining lease term in years; operating leases 2.30 3.08 Weighted average discount rate; operating leases 3.39 % 3.15 % (1) Operating lease right-of-use assets are recorded as other assets in the consolidated balance sheets. (2) Operating lease liabilities are recorded as other liabilities in the consolidated balance sheets. 93 Cash obligations and receipts under lease contracts as of December 31, 2025, are as follows: Fiscal years ending December 31, Payments Receipts 2026 $ 523 $ 43 2027 458 17 2028 209 16 2029 — 11 2030 — — Thereafter — — Total lease payments 1,190 $ 87 Less: effects of discounting ( 240 ) Lease liability recognized $ 950 NOTE 8 - DEPOSITS The following is a summary of deposits by type at December 31, 2025 and December 31, 2024, respectively: December 31, 2025 December 31, 2024 Non interest bearing demand deposits $ 264,394 $ 252,656 Interest bearing demand deposits 367,958 355,750 Savings accounts 151,525 159,821 Money market accounts 392,900 369,534 Certificate accounts 347,322 350,387 Total deposits $ 1,524,099 $ 1,488,148 At December 31, 2025, the scheduled maturities of time deposits were as follows: 2026 $ 330,213 2027 14,711 2028 1,390 2029 709 2030 299 Total $ 347,322 Time deposits of $250 or more were $ 57,136 and $ 68,977 at December 31, 2025 and December 31, 2024, respectively. Brokered deposits were $ 5,168 and $ 19,125 at December 31, 2025 and December 31, 2024, respectively. Deposits from the Company’s directors, executive officers, principal stockholders and their affiliates held by the Bank at December 31, 2025 and December 31, 2024, amounted to $ 38,280 , and $ 38,889 , respectively. 94 NOTE 9 – FEDERAL HOME LOAN BANK ADVANCES AND OTHER BORROWINGS A summary of Federal Home Loan Bank (FHLB) advances and other borrowings at December 31, 2025 and December 31, 2024, is as follows: December 31, 2025 December 31, 2024 Stated Maturity Amount Range of Stated Rates Stated Maturity Amount Range of Stated Rates Federal Home Loan Bank advances (1), (2), (3) 2025 $ 0 — % — % 2025 $ 5,000 1.45 % 1.45 % Federal Home Loan Bank advances $ 0 $ 5,000 Other borrowings: 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 % 2032 35,000 4.75 % 4.75 % 2032 35,000 4.75 % 4.75 % $ 35,000 $ 50,000 Unamortized debt issuance costs ( 196 ) ( 394 ) Total other borrowings $ 51,804 $ 61,606 Totals $ 51,804 $ 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 pledged balances of $ 1,017,631 and $ 1,075,001 at December 31, 2025 and 2024, respectively. At December 31, 2025, the Bank’s available and unused portion under the FHLB borrowing arrangement was approximately $ 433,654 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 twelve months ended December 31, 2025 and December 31, 2024, respectively. (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 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 %. (c) The $ 5,000 line of credit was terminated by the Company in October 2025. 95 (5) Subordinated notes resulted from the following: (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 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. Federal Home Loan Bank Letters of Credit The Bank has an irrevocable Standby Letter of Credit Master Reimbursement Agreement with the Federal Home Loan Bank. 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 $ 171,000 and $ 209,750 at December 31, 2025 and 2024, respectively. Federal Funds Purchased Lines of Credit 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. There were no borrowings outstanding on these lines of credit as of December 31, 2025 or December 31, 2024. Federal Reserve Borrowings At December 31, 2025 and 2024, the Bank had the ability to borrow $ 24,484 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 $ 32,056 and $ 33,994 as of December 31, 2025 and 2024, respectively. There were no Federal Reserve borrowings outstanding as of December 31, 2025 and 2024. 96 NOTE 10 - CAPITAL MATTERS Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Although these terms are not used to represent overall financial condition, if adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of December 31, 2025 and 2024, the most recent notifications from our regulatory agency categorized the Bank as “Well Capitalized” under the regulatory framework for Prompt Corrective Action. There are no conditions or events since these notifications that management believes have changed the Bank’s category. The Bank’s Tier 1 (leverage) and risk-based capital ratios at December 31, 2025 and 2024, respectively, are presented below: Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 Total capital (to risk weighted assets) $ 212,898 14.6 % $ 116,492 > = 8.0 % $ 145,615 > = 10.0 % Tier 1 capital (to risk weighted assets) 194,639 13.4 % 87,369 > = 6.0 % 116,492 > = 8.0 % Common equity tier 1 capital (to risk weighted assets) 194,639 13.4 % 65,527 > = 4.5 % 94,650 > = 6.5 % Tier 1 leverage ratio (to adjusted total assets) 194,639 11.3 % 68,711 > = 4.0 % 85,888 > = 5.0 % As of December 31, 2024 Total capital (to risk weighted assets) $ 225,432 15.6 % $ 115,755 > = 8.0 % $ 144,693 > = 10.0 % Tier 1 capital (to risk weighted assets) 207,749 14.4 % 86,816 > = 6.0 % 115,755 > = 8.0 % Common equity tier 1 capital (to risk weighted assets) 207,749 14.4 % 65,112 > = 4.5 % 94,051 > = 6.5 % 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 December 31, 2025 and 2024, respectively, are presented below: 97 Actual For Capital Adequacy Purposes Amount Ratio Amount Ratio As of December 31, 2025 Total capital (to risk weighted assets) $ 222,910 15.3 % $ 116,686 > = 8.0 % Tier 1 capital (to risk weighted assets) 169,621 11.6 % 87,514 > = 6.0 % Common equity tier 1 capital (to risk weighted assets) 169,621 11.6 % 65,636 > = 4.5 % Tier 1 leverage ratio (to adjusted total assets) 169,621 9.9 % 68,806 > = 4.0 % As of December 31, 2024 Total capital (to risk weighted assets) $ 232,926 16.1 % $ 115,914 > = 8.0 % Tier 1 capital (to risk weighted assets) 165,243 11.4 % 86,936 > = 6.0 % Common equity tier 1 capital (to risk weighted assets) 165,243 11.4 % 65,202 > = 4.5 % Tier 1 leverage ratio (to adjusted total assets) 165,243 9.5 % 69,867 > = 4.0 % The Company is a legal entity separate and distinct from its banking subsidiary. As a bank holding company, the Company is subject to certain restrictions on its ability to pay dividends under applicable banking laws and regulations. Federal bank regulators are authorized to determine, under certain circumstances relating to the financial condition of a bank holding company or a bank, that the payment of dividends would be an unsafe or unsound practice, and to prohibit payment thereof. In particular, federal bank regulators have stated that paying dividends that deplete a banking organization’s capital base to an inadequate level would be an unsafe and unsound banking practice and that banking organizations should generally pay dividends only out of current operating earnings. 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 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. December 31, 2025 December 31, 2024 Cash dividends per share $ 0.36 $ 0.32 Stockholder record date 02/07/2025 02/09/2024 Dividend payment date 02/21/2025 02/23/2024 98 NOTE 11 - COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance-Sheet Risk— The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include off-balance-sheet credit instruments consisting of commitments to make loans. The face amounts for these items represent the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contract or notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The following table presents a summary of commitments described below as of December 31, 2025 and 2024, respectively: Contract or Notional Amount at December 31, Contract or Notional Amount at December 31, 2025 2024 Commitments to extend credit $ 198,817 $ 137,038 Commercial standby letter of credit $ 2,698 $ 2,061 Commitment to contribute capital to SBIC $ 1,050 $ 1,800 Commitment to contribute capital to investment company $ 2,190 $ 1,140 Commitments to extend credit— Commitments to extend credit are agreements to lend to a customer provided there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Letters of credit— Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The credit and collateral policy for commitments and letters of credit is comparable to that for granting loans. The Company has recorded no liability associated with standby letters of credit as of December 31, 2025 and 2024. Capital Contributions— The Company has commitments to invest in a SBIC and investment company that call for capital contributions up to an amount specified in the partnership agreements. Loss Contingencies— Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company sells the guaranteed portions of SBA 7(a) and 504 loans to third parties. The Company has a continuing involvement in each of the transferred lending arrangements by way of relationship management and servicing the loans, as well as being subject to normal and customary requirements of the SBA loan program and standard representations and warranties related to sold amounts. In the event of a loss resulting from default and a determination by the SBA that there is a deficiency in the manner in which the loan was originated, funded, or serviced by the Company, the SBA may require the Company to repurchase the loan, deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of the principal loss related to the deficiency from the Company. The Company must comply with applicable SBA regulations in order to maintain the guarantee. In addition, the Company retains the option to repurchase the sold guaranteed portion of an SBA loan if the loan defaults. Management has assessed estimated losses inherent in the outstanding portions of the SBA loans sold in accordance with ASC 450, Contingencies, and determined a recourse reserve based on the probability of future losses for these loans to be $ 530 and $ 420 at December 31, 2025 and 2024, respectively, which is reported in other liabilities on the Consolidated Balance Sheets. As of and For the Year Ended December 31, 2025 2024 Balance at the beginning of the period $ 420 $ — SBA recourse provision 110 420 Balance at the end of the period $ 530 $ 420 99 NOTE 12 - RETIREMENT PLAN 401(k) Plan— The Company sponsors a 401(k) profit sharing plan that covers all employees who qualify based on minimum age and length of service requirements. Employees may make pretax voluntary contributions to the plan, which are matched, in part, by the Company. Employer matching contributions to the plan were $ 673 and $ 628 for the year ended December 31, 2025 and 2024, respectively. 100 NOTE 13 - STOCK-BASED AND OTHER COMPENSATION On March 27, 2018, the stockholders of Citizens Community Bancorp, Inc. approved the 2018 Equity Incentive Plan. 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, 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. 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 December 31, 2025, there are no awarded unvested restricted shares and 35,500 awarded unexercised 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. Net compensation expense related to restricted stock awards from these plans was $ 146 and $ 631 for the years ended December 31, 2025 and 2024, respectively. The remaining unrecognized compensation expense on restricted stock awards is $ 4 at December 31, 2025. Restricted Common Stock Awards Year ended Year ended December 31, 2025 December 31, 2024 Number of Shares Weighted Average Grant Price Number of Shares Weighted Average Grant Price Restricted Shares Unvested and outstanding at beginning of year 39,171 $ 12.48 75,601 $ 12.41 Granted — — 16,955 11.88 Issued and vested ( 33,062 ) 12.50 ( 53,139 ) 12.19 Forfeited — — ( 246 ) 11.88 Unvested and outstanding at end of period 6,109 $ 12.36 39,171 $ 12.48 December 31, 2025 Number of Shares Weighted Average Grant Price Performance Based Restricted Shares Unvested at beginning of year 33,188 $ 13.09 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 Average Grant Price 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 $ 13.09 101 Common Stock Option Awards Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Year ended December 31, 2025 Outstanding at beginning of year 52,000 $ 11.62 Exercised ( 16,500 ) 10.84 Outstanding at end of period 35,500 $ 11.98 1.06 $ 207 Exercisable at end of period 35,500 $ 11.98 1.06 $ 207 Year ended December 31, 2024 Outstanding at beginning of year 54,000 $ 11.59 Exercised ( 2,000 ) 11.00 Outstanding at end of year 52,000 $ 11.62 1.85 $ 243 Exercisable at end of year 52,000 $ 11.62 1.85 $ 243 Information related to the 2008 Equity Incentive Plan during each period follows: Year ended December 31, Year ended December 31, 2025 2024 Intrinsic value of options exercised $ 84 $ 12 Cash received from options exercised $ 179 $ 22 Tax benefit realized from options exercised $ — $ — Other Compensation On January 23, 2025, 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 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. 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 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, 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. 102 NOTE 14 – INCOME TAXES Income tax expense (benefit) for 2025 consisted of the following: Year ended December 31, 2025 Current tax provision Federal $ 4,098 State 361 4,459 Deferred tax provision (benefit) Federal ( 1,355 ) State ( 83 ) ( 1,438 ) 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, 2024 Current tax provision Federal $ 2,742 State 578 3,320 Deferred tax provision (benefit) Federal 496 State ( 1,235 ) ( 739 ) Change in valuation allowance 1,118 Total $ 3,699 103 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, 2025 Amount Rate Tax expense at statutory rate $ 3,662 21.0 % State income taxes, net of federal 220 1.2 % 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. 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, 2024: Year ended December 31, 2024 Amount Rate 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 % Other ( 112 ) ( 0.6 ) % Total $ 3,699 21.2 % Federal and state income taxes paid were as follows: Year ended December 31, 2025 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. 104 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. The following is a summary of the significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and December 31, 2024, respectively: Year ended December 31, Year ended December 31, 2025 2024 Deferred tax assets: Allowance for credit losses $ 6,263 $ 5,361 Deferred loan costs/fees 655 574 Restricted stock 48 231 Economic performance accruals 1,161 988 Other real estate owned 126 314 Loan discounts 31 218 Lease liability 260 276 Net operating loss 1,498 970 Net unrealized losses on securities available-for-sale 4,792 6,333 Other 296 199 Deferred tax assets $ 15,130 $ 15,464 Deferred tax liabilities: Office properties and equipment ( 1,544 ) ( 2,160 ) Federal Home Loan Bank stock ( 129 ) ( 121 ) Intangibles ( 789 ) ( 788 ) Net gain on equity securities ( 596 ) ( 715 ) Prepaid expenses ( 267 ) ( 233 ) Mortgage servicing rights ( 956 ) ( 940 ) Leases; right of use asset ( 209 ) ( 209 ) Deferred tax liabilities $ ( 4,490 ) $ ( 5,166 ) Valuation allowance ( 3,160 ) ( 2,852 ) Net deferred tax assets $ 7,480 $ 7,446 The Company regularly reviews the carrying amount of its deferred tax assets to determine if the establishment of a valuation allowance is necessary, as further discussed in Note 1 “Nature of Business and Summary of Significant Accounting Policies”, above. Management determined a valuation allowance of $ 3,160 was necessary at December 31, 2025, and a valuation allowance of $ 2,852 was necessary at December 31, 2024, due to changes in the realization of deferred tax assets due to a Wisconsin change in the non-taxation of loans under $5 million reducing the effective tax rate. The Company’s income tax returns are subject to review and examination by federal, state and local government authorities. As of December 31, 2025, years open to examination by the U.S. Internal Revenue Service include taxable years ended December 31, 2022 to present. 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. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company applied the foregoing accounting standard to all of its tax positions for which the statute of limitations remained open as of the date of the accompanying consolidated financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of other non-interest expense. The Company recognized no material expense on income tax related interest or penalties during any of the periods presented. 105 NOTE 15 – FAIR VALUE ACCOUNTING ASC Topic 820-10, “ Fair Value Measurements and Disclosures ” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value: Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3- Significant unobservable inputs that reflect the Company’s assumptions about the factors that market participants would use in pricing an asset or liability. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement. The fair value of securities available-for-sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs). 106 Assets Measured on a Recurring Basis The following tables present the financial instruments measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024. Fair Value Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Investment securities: U.S. government agency obligations $ 10,773 $ — $ 10,773 $ — Mortgage-backed securities 66,684 — 66,684 — Corporate debt securities 40,682 — 40,682 — Student loan asset-backed securities 15,964 — 15,964 — Total investment securities 134,103 — 134,103 — Equity investments: Farmer Mac equity securities 505 505 — — Preferred equity 1,125 — — 1,125 Equity investments measured at NAV(1) 4,210 — — — Total equity investments 5,840 505 — 1,125 Total $ 139,943 $ 505 $ 134,103 $ 1,125 December 31, 2024 Investment securities: U.S. government agency obligations $ 13,753 $ — $ 13,753 $ — Mortgage-backed securities 68,386 — 68,386 — Corporate debt securities 41,716 — 41,716 — Student loan asset-backed securities 18,996 — 18,996 — Total Investment Securities 142,851 — 142,851 — Equity investments: Farmer Mac equity securities 569 569 — — Preferred equity 1,362 — — 1,362 Equity investments measured at NAV(1) 2,771 — — — Total equity investments 4,702 569 — 1,362 Total $ 147,553 $ 569 $ 142,851 $ 1,362 (1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B. 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 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. 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. 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 107 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. Assets Measured on a Nonrecurring Basis The following tables present the financial instruments measured at fair value on a nonrecurring basis as of December 31, 2025 and December 31, 2024: Carrying Value Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Foreclosed and repossessed assets, net $ 857 $ — $ — $ 857 Collateral dependent loans 10,360 — — 10,360 Total $ 11,217 $ — $ — $ 11,217 December 31, 2024 Foreclosed and repossessed assets, net $ 915 $ — $ — $ 915 Collateral dependent loans 3,107 — — 3,107 Total $ 4,022 $ — $ — $ 4,022 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 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 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. Fair Value Valuation Techniques (1) Significant Unobservable Inputs (2) Range December 31, 2025 Foreclosed and repossessed assets, net $ 857 Appraisal value Estimated costs to sell 10 % - 15 % Collateral dependent loans with allocated allowances $ 10,360 Appraisal value / Internal collateral valuations Estimated costs to sell 10 % - 15 % December 31, 2024 Foreclosed and repossessed assets, net $ 915 Appraisal value Estimated costs to sell 10 % - 15 % Collateral dependent loans with allocated allowances $ 3,107 Appraisal value / Internal collateral valuations Estimated costs to sell 10 % - 15 % (1) Fair value is generally determined through independent third-party appraisals of the underlying collateral, which generally includes various level 3 inputs which are not observable. (2) The fair value basis of collateral dependent loans, and real estate owned may be adjusted to reflect management estimates of disposal costs including, but not limited to, real estate brokerage commissions, legal fees, and delinquent property taxes. 108 The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows: December 31, 2025 December 31, 2024 Valuation Method Used Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets: Cash and cash equivalents (Level I) $ 118,853 $ 118,853 $ 50,172 $ 50,172 Securities available-for-sale "AFS" (Level II) 134,103 134,103 142,851 142,851 Securities held-to-maturity "HTM" (Level II) 80,210 64,117 85,504 65,622 Farmer Mac equity securities (Level I) 505 505 569 569 Preferred equity (Level III) 1,125 1,125 1,362 1,362 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 Loans receivable, net (Level III) 1,317,924 1,297,841 1,348,432 1,315,657 Loans held for sale - Residential mortgage (Level I) 2,338 2,338 441 441 Loans held for sale - SBA / FSA (Level II) 2,616 2,616 888 888 Mortgage servicing rights (Level III) 3,494 4,652 3,663 5,227 Accrued interest receivable (Level I) 6,126 6,126 5,653 5,653 Financial liabilities: Deposits (excluding demand deposits) (Level III) $ 891,747 $ 891,663 $ 879,742 $ 879,086 FHLB advances (Level II) — — 5,000 4,979 Other borrowings (Level II) 51,804 49,988 61,606 58,625 Accrued interest payable (Level I) 3,680 3,680 5,842 5,842 (1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B. 109 NOTE 16 - EARNINGS PER SHARE Earnings per share is based on the weighted average number of shares outstanding for the year. A reconciliation of the basic and diluted earnings per share is as follows: Year ended Year ended (Share count in thousands) December 31, 2025 December 31, 2024 Basic Net income attributable to common shareholders $ 14,420 $ 13,751 Weighted average common shares outstanding 9,899 10,257 Basic earnings per share $ 1.46 $ 1.34 Diluted Net income attributable to common shareholders $ 14,420 $ 13,751 Weighted average common shares outstanding 9,899 10,257 Add: Dilutive stock options outstanding 8 6 Average shares and dilutive potential common shares 9,907 10,263 Diluted earnings per share $ 1.46 $ 1.34 Additional common stock option shares that have not been included due to their antidilutive effect — 20 Dilutive shares outstanding consist of exercisable stock options whose strike prices were less than the annual average closing price of the Company’s common stock. At December 31, 2025 and December 31, 2024, there were 0 and 20 exercisable stock options, respectively, with a potentially dilutive effect. However their strike prices were higher than the annual average closing prices of the Company’s common stock and thus, excluded from diluted shares outstanding. 110 NOTE 17 – OTHER COMPREHENSIVE INCOME The following table shows the tax effects allocated to each component of other comprehensive income: For the year ended, December 31, For the year ended, December 31, 2025 2024 Before-Tax Amount Tax Benefit (Expense) Net-of-Tax Amount Before-Tax Amount Tax Benefit (Expense) Net-of-Tax Amount Unrealized gains on securities: Net unrealized gains arising during the period $ 5,238 $ ( 1,285 ) $ 3,953 $ 1,080 $ ( 302 ) $ 778 Reclassification for net loss on exchanged security, included in net income, net of tax — — $ — 168 ( 38 ) 130 Other comprehensive income $ 5,238 $ ( 1,285 ) $ 3,953 $ 1,248 $ ( 340 ) $ 908 The changes in the accumulated balances for each component of other comprehensive income, net of tax for the years ended December 31, 2025 and December 31, 2024, were as follows: Unrealized Gains (Losses) on AFS Securities Other Accumulated Comprehensive Income (Loss), net of tax Ending Balance, December 31, 2023 $ ( 24,001 ) $ ( 17,328 ) Current year-to-date other comprehensive income 1,248 908 Ending balance, December 31, 2024 $ ( 22,753 ) $ ( 16,420 ) Current year-to-date other comprehensive income 5,238 3,953 Ending balance, December 31, 2025 $ ( 17,515 ) $ ( 12,467 ) 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 Unrealized gains and losses Debt security exchanged for equity security $ ( 168 ) Net (losses) gains on investment securities Tax effect 38 Provision for income taxes Total reclassifications for the period $ ( 130 ) Net loss attributable to common shareholders (1) Amounts in parentheses indicate decreases to profit/loss. 111 NOTE 18 - CONDENSED FINANCIAL INFORMATION – PARENT COMPANY ONLY The following condensed balance sheets as of December 31, 2025 and 2024, and condensed statements of operations and cash flows for the years ended December 31, 2025 and 2024, for Citizens Community Bancorp, Inc. should be read in conjunction with the accompanying consolidated financial statements and the notes thereto. Condensed Balance Sheets December 31, December 31, 2025 2024 Assets Cash and cash equivalents $ 24,895 $ 17,786 Equity investments 2,233 1,851 Other assets 319 383 Investment in subsidiary 212,958 221,589 Total assets $ 240,405 $ 241,609 Liabilities and Stockholders' Equity Other borrowings $ 51,804 $ 61,606 Other liabilities 662 919 Total liabilities 52,466 62,525 Total stockholders’ equity 187,939 179,084 Total liabilities and stockholders’ equity $ 240,405 $ 241,609 Statements of Operations Year ended December 31, Year ended December 31, 2025 2024 Interest income $ — $ — Interest expense 3,332 3,875 Net interest expense ( 3,332 ) ( 3,875 ) Dividend income from bank subsidiary 30,500 18,750 Non-interest gain (loss) 129 ( 15 ) Non-interest expense ( 1,037 ) ( 898 ) Net income before benefit for income taxes and equity in undistributed income of subsidiaries 26,260 13,962 Benefit for income taxes 890 1,006 Net earnings before equity in undistributed income of subsidiaries 27,150 14,968 Equity in undistributed income of subsidiaries ( 12,730 ) ( 1,217 ) Net income $ 14,420 $ 13,751 112 Statements of Cash Flows Year ended December 31, Year ended December 31, 2025 2024 Change in cash and cash equivalents: Cash flows from operating activities: Net income $ 14,420 $ 13,751 Depreciation expense — — 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 ) Net change in: Other assets 64 19 Other liabilities ( 257 ) 183 Net cash used in operating activities ( 3,672 ) ( 3,565 ) Cash flows from investing activities: Purchase of equity investments ( 450 ) ( 450 ) Equity investment capital distribution 197 275 Dividend from bank subsidiary 30,500 18,750 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 ) Surrender of restricted shares of common stock ( 190 ) ( 119 ) Common stock options exercised 179 22 Cash dividends paid ( 3,598 ) ( 3,346 ) 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 Cash and cash equivalents at end of year $ 24,895 $ 17,786 NOTE 19 - 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. Banking operations consist primarily of lending, deposit and investment activities. The segment is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review the performance of various components of the business. Components of the Company’s business include various lending and deposit product offerings, the Company’s investment portfolio, banking branches and market geographies. The chief operating decision maker will evaluate the financial performance of the Company’s business components, such as by evaluating revenue, interest margins, significant expenses, and budget to actual operating results in assessing the Company’s segment and in determining the allocation of resources. The chief operating decision maker uses consolidated net income to benchmark the Company against competitors. Loans, investments, and deposits provide the revenue streams of the banking operation. Interest expense, provisions for credit losses, and compensation costs provide the significant expenses of the operation. All operations are domestic. 113 Year ended December 31, Year ended December 31, 2025 2024 Interest and dividend income $ 87,630 $ 89,615 Reconciliation of revenue Other Revenue 11,143 10,107 Total consolidated revenues 98,773 99,722 Less: Interest expense 36,446 43,141 Segment net interest income and non-interest income 62,327 56,581 Less: Provision (provision reversal) for credit losses 1,950 ( 3,175 ) Compensation and related benefits (expense) 23,875 22,741 Other expenses 19,061 19,565 Provision for income taxes (expense) 3,021 3,699 Segment net income/consolidated net income $ 14,420 $ 13,751 Other segment disclosures: Interest income $ 87,630 $ 89,615 Interest expense $ 36,446 $ 43,141 Depreciation $ 2,029 $ 2,174 Amortization $ 584 $ 715 Other significant noncash items: Provision (provision reversal) for credit losses $ 1,950 $ ( 3,175 ) Reconciliation of assets: Total assets for reportable segments $ 1,781,755 $ 1,748,519 Other assets — — Total consolidated assets $ 1,781,755 $ 1,748,519 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None