FIRST NORTHERN COMMUNITY BANCORP 10-K

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Management’s Report on Internal Control over Financial Reporting 61 Report of Independent Registered Public Accounting Firm (PCAOB ID # 659 ) 62 Consolidated Balance Sheets as of December 31, 2025 and 2024 64 Consolidated Statements of Income for Years Ended December 31, 2025 and 2024 65 Consolidated Statements of Comprehensive Income for Years Ended December 31, 2025 and 2024 66 Consolidated Statement of Stockholders’ Equity for Years Ended December 31, 2025 and 2024 67 Consolidated Statements of Cash Flows for Years Ended December 31, 2025 and 2024 68 Notes to Consolidated Financial Statements 69 60 Table of Contents Management ’ s Report FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY MANAGEMENT ’ S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of First Northern Community Bancorp and subsidiary (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2025. 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 accounting principles generally accepted in the United States of America (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and (iii) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Management recognizes that even a highly effective internal control system has inherent risks, including the possibility of human error and the circumvention or overriding of controls, and that the effectiveness of an internal control system can change with circumstances. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. Under the supervision and with the participation of management, including the principal executive officer and principal financial officer, the Company conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management of the Company has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2025. /s/ Jeremiah Z. Smith Jeremiah Z. Smith President/Chief Executive Officer/Director (Principal Executive Officer) /s/ Kevin Spink Kevin Spink Executive Vice President/Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 12, 2026 61 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of First Northern Community Bancorp Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of First Northern Community Bancorp and subsidiary (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements 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 audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting in accordance with the standards of the PCAOB. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated 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 consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses on Loans – Qualitative and Environmental Factors Critical Audit Matter Description As described in Notes 1 and 3 to the consolidated financial statements, the Company’s allowance for credit losses balance was $14.5 million as of December 31, 2025, and is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is a valuation account that is deducted from the loan’s amortized cost basis to present the net amount expected to be collected on the loans and is a material and complex estimate requiring significant management judgement in the estimation of expected lifetime losses within the loan portfolio at the balance sheet date. 62 Table of Contents We identified management’s estimation of qualitative and environmental factors within the calculation of the allowance for credit losses as a critical audit matter. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolio to determine estimated credit losses through a reasonable and supportable forecast period. The qualitative and environmental factors are used to adjust the allowance for credit losses model forecasts for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. Qualitative and environmental factors also consider the impact of portfolio concentrations, changes in underwriting practices, imprecision of economic forecasts, and other risk factors that might influence the Company’s loss estimation process. Auditing management’s judgements regarding the qualitative and environmental factors applied to the allowance for credit losses involved a high degree of subjectivity. How We Addressed the Matter in Our Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures related to the allowance for credit losses included the following, among others: ● Tested the mathematical accuracy and computation of the allowance for credit losses on loans, including the mathematical accuracy of the application of the qualitative and environmental factor adjustments used in the calculation. ● Performed an independent sensitivity analysis to evaluate the reasonableness of the qualitative and environmental factors used by management. ● Obtained management’s analysis and supporting documentation related to the qualitative and environmental factors and tested whether the qualitative and environmental factors used in the calculation of the allowance for credit losses are supported by the documentation provided by management. /s/ BAKER TILLY US, LLP Sacramento, California March 12, 2026 We have served as the Company’s auditor since 2006. 63 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Consolidated Balance Sheets December 31, 2025 and 2024 (in thousands, except shares and share amounts) 2025 2024 Assets Cash and cash equivalents $ 145,554 $ 119,448 Certificates of deposit 10,180 16,074 Investment securities – available-for-sale, at estimated fair value, net of allowance for credit losses of $ 0 ; amortized cost of $ 639,532 at December 31, 2025 and $682,346 at December 31, 2024 617,243 633,853 Loans – net of allowance for credit losses of $ 14,519 at December 31, 2025 and $ 15,885 at December 31, 2024 1,050,473 1,046,852 Stock in Federal Home Loan Bank and other equity securities, at cost 10,871 10,518 Premises and equipment, net 8,711 9,248 Other real estate owned 1,241 — Intangible assets, net 4,332 3,321 Interest receivable and other assets 62,345 52,408 Total Assets $ 1,910,950 $ 1,891,722 Liabilities and Stockholders’ Equity Liabilities: Deposits: Demand $ 632,128 $ 670,580 Interest-bearing transaction deposits 438,901 421,094 Savings and MMDAs 466,453 458,445 Time, $250,000 or less 88,031 108,598 Time, over $250,000 53,630 41,372 Total Deposits 1,679,143 1,700,089 Interest payable and other liabilities 19,789 15,301 Total Liabilities 1,698,932 1,715,390 Commitments and contingencies (Note 10 and 11) Stockholders’ Equity: Common stock, no par value; 32,000,000 shares authorized; 16,406,281 and 15,943,051 shares issued and outstanding at December 31, 2025 and 2024, respectively 134,566 127,902 Additional paid-in capital 977 977 Retained earnings 91,953 81,304 Accumulated other comprehensive loss, net ( 15,478 ) ( 33,851 ) Total Stockholders’ Equity 212,018 176,332 Total Liabilities and Stockholders’ Equity $ 1,910,950 $ 1,891,722 See accompanying notes to consolidated financial statements. 64 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Consolidated Statements of Income Years Ended December 31, 2025 and 2024 (in thousands, except per share amounts) 2025 2024 Interest and dividend income: Interest and fees on loans $ 57,999 $ 55,389 Due from banks interest bearing accounts 4,865 7,201 Investment securities: Taxable 16,783 13,795 Non-taxable 1,642 1,216 Other earning assets 1,018 1,051 Total interest and dividend income 82,307 78,652 Interest expense: Time deposits over $250,000 1,443 1,045 Other deposits 13,317 13,247 FHLB advances 75 — Total interest expense 14,835 14,292 Net interest income 67,472 64,360 Reversal of provision for credit losses — ( 250 ) Net interest income after reversal of provision for credit losses 67,472 64,610 Non-interest income: Service charges on deposit accounts 1,684 1,718 Losses on sales/calls of available-for-sale securities ( 199 ) ( 234 ) Gains on sales of loans held-for-sale 45 52 Debit card income 2,711 2,762 Other income 1,856 1,721 Total non-interest income 6,097 6,019 Non-interest expenses: Salaries and employee benefits 25,375 23,850 Occupancy and equipment 5,067 4,736 Data processing 4,573 4,224 Stationery and supplies 339 313 Advertising 491 460 Director fees 300 309 Amortization of core deposit intangible 731 820 Other expense 9,288 8,077 Total non-interest expenses 46,164 42,789 Income before provision for income tax 27,405 27,840 Provision for income tax 6,277 7,806 Net income $ 21,128 $ 20,034 Basic income per share $ 1.30 $ 1.20 Diluted income per share $ 1.27 $ 1.19 See accompanying notes to consolidated financial statements. 65 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Consolidated Statements of Comprehensive Income Years Ended December 31, 2025 and 2024 (in thousands) 2025 2024 Net income $ 21,128 $ 20,034 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) on securities arising during the current period, net of tax effect of $ 7,757 and ($ 224 ) for the years ended December 31, 2025 and 2024, respectively 18,248 ( 546 ) Reclassification adjustment due to losses realized on sales of securities, net of tax effect of $ 59 and $ 67 for the years ended December 31, 2025 and 2024, respectively 140 167 Officers’ retirement plan equity adjustments, net of tax effect of $ 4 and $ 116 for the years ended December 31, 2025 and 2024, respectively 14 277 Directors’ retirement plan equity adjustments, net of tax effect of ($ 13 ) and ($ 8 ) for the years ended December 31, 2025 and 2024, respectively ( 29 ) ( 22 ) Total other comprehensive income (loss), net of tax effect of $ 7,807 and ($ 49 ) for the years ended December 31, 2025 and 2024, respectively 18,373 ( 124 ) Comprehensive income $ 39,501 $ 19,910 See accompanying notes to consolidated financial statements. 66 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Consolidated Statement of Stockholders’ Equity Years Ended December 31, 2025 and 2024 (in thousands, except share data) Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amounts Capital Earnings Income/(Loss) Total Balance at December 31, 2023 15,482,332 $ 123,235 $ 977 $ 68,760 $ ( 33,727 ) $ 159,245 Net income 20,034 20,034 Other comprehensive loss, net of tax ( 124 ) ( 124 ) Stock dividend adjustment 2,671 325 ( 325 ) — 5 % stock dividend declared in 2025 759,192 7,158 ( 7,158 ) — Cash in lieu of fractional shares ( 148 ) ( 7 ) ( 7 ) Stock-based compensation 846 846 Common shares issued related to restricted stock grants and ESPP, net of restricted stock forfeited 77,816 102 102 Stock options exercised, net 10,259 — — Stock repurchase and retirement ( 389,071 ) ( 3,764 ) ( 3,764 ) Balance at December 31, 2024 15,943,051 $ 127,902 $ 977 $ 81,304 $ ( 33,851 ) 176,332 Net income 21,128 21,128 Other comprehensive income, net of tax 18,373 18,373 Stock dividend adjustment ( 616 ) 352 ( 352 ) — 5 % stock dividend declared in 2026 781,251 10,119 ( 10,119 ) — Cash in lieu of fractional shares ( 129 ) ( 8 ) ( 8 ) Stock-based compensation 849 849 Common shares issued related to restricted stock grants and ESPP, net of restricted stock forfeited 80,306 93 93 Stock options exercised, net 27,098 — — Stock repurchase and retirement ( 424,680 ) ( 4,749 ) ( 4,749 ) Balance at December 31, 2025 16,406,281 $ 134,566 $ 977 $ 91,953 $ ( 15,478 ) $ 212,018 See accompanying notes to consolidated financial statements. 67 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Consolidated Statements of Cash Flows Years Ended December 31, 2025 and 2024 (in thousands) 2025 2024 Cash flows from operating activities: Net income $ 21,128 $ 20,034 Adjustments to reconcile net income to net cash provided by operating activities: Reversal of provision for credit losses — ( 250 ) Amortization of core deposit intangible 731 820 Stock-based compensation 849 846 Depreciation and amortization of bank premises and equipment 996 1,057 Accretion and amortization of investment securities premiums and discounts, net ( 1,392 ) 230 Net loss on sales/calls of available-for-sale securities 199 234 Gain on sale of loans held-for-sale ( 45 ) ( 52 ) (Benefit) provision for deferred income taxes ( 355 ) 603 Proceeds from sales of loans held-for-sale 3,163 4,590 Originations of loans held-for-sale ( 3,118 ) ( 4,538 ) Increase in deferred loan origination costs, net ( 591 ) ( 64 ) Amortization of operating lease right-of-use asset 925 918 Gain on tax credit purchase ( 1,215 ) — Purchase of tax credit ( 14,218 ) — Increase in interest receivable and other assets ( 6,044 ) ( 412 ) Increase (decrease) in interest payable and other liabilities 5,885 ( 4,479 ) Net cash provided by operating activities 6,898 19,537 Cash flows from investing activities: Proceeds from maturities of available-for-sale securities 60,170 85,775 Proceeds from sales of available-for-sale securities 31,875 6,563 Principal repayments on available-for-sale securities 86,436 75,500 Purchase of available-for-sale securities ( 134,474 ) ( 230,334 ) Proceeds from maturities of certificates of deposit 7,064 9,336 Purchases of certificates of deposit ( 1,170 ) ( 5,700 ) Purchases of stock in Federal Home Loan Bank and other equity securities, at cost ( 353 ) — Net (increase) decrease in loans ( 3,030 ) 5,927 Purchases of bank premises and equipment, net ( 1,700 ) ( 343 ) Net cash provided by (used in) investing activities 44,818 ( 53,276 ) Cash flows from financing activities: Net (decrease) increase in deposits ( 20,946 ) 7,645 FHLB advances 20,000 — FHLB repayments ( 20,000 ) — Cash dividends paid in lieu of fractional shares ( 8 ) ( 7 ) Common stock issued 93 102 Repurchases of common stock ( 4,749 ) ( 3,764 ) Net cash (used in) provided by financing activities ( 25,610 ) 3,976 Net increase (decrease) in cash and cash equivalents 26,106 ( 29,763 ) Cash and cash equivalents at beginning of year 119,448 149,211 Cash and cash equivalents at end of year $ 145,554 $ 119,448 Supplemental Consolidated Statements of Cash Flows Information (Note 20) See accompanying notes to consolidated financial statements. 68 Table of Contents FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY Notes to Consolidated Financial Statements Years Ended December 31, 2025 and 2024 (dollar in thousands, except shares and share amounts) ( 1 ) Summary of Significant Accounting Policies First Northern Community Bancorp (the “Company”) is a bank holding company whose only subsidiary, First Northern Bank of Dixon (“Bank”), a California state-chartered bank, conducts general banking activities, including collecting deposits and originating loans, and serves Solano, Yolo, Sacramento, Placer, El Dorado, Glenn, and Colusa Counties. All intercompany transactions between the Company and the Bank have been eliminated in consolidation. The consolidated financial statements also include the accounts of Yolano Realty Corporation, a wholly-owned subsidiary of the Bank. Yolano Realty Corporation was formed in September 2009 for the purpose of managing selected other real estate owned properties. Yolano Realty Corporation was an inactive subsidiary in 2025. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates applied in the preparation of the accompanying consolidated financial statements. For the Company, the most significant accounting estimates are the allowance for credit losses on loans and business combinations. A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows. Revision of Prior Period Financial Information During the preparation of the Consolidated Financial Statements for the year ended December 31, 2025, management identified and corrected an error in its prior period Consolidated Financial Statements related to the classification of certain deposits between Demand deposits and Interest-bearing transaction deposits. As a result, the Company revised its Consolidated Balance Sheet for the year ended December 31, 2024, with a decrease in Demand deposits of $ 44,844 and a corresponding increase in Interest-bearing transaction deposits of $ 44,844 . Management evaluated the materiality of the revision from a quantitative and qualitative perspective and concluded that the revision is immaterial to the Consolidated Financial Statements. This reclassification revision had no impact on the Company’s Total Deposits as previously reported. The revision also had no impact on the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity or Cash Flows. (a) Cash Equivalents For purposes of the consolidated statements of cash flows, the Company considers due from banks, federal funds sold for one -day periods and short-term bankers acceptances to be cash equivalents. At times, the Company maintains deposits with other financial institutions in amounts that may exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with correspondent banks. (b) Investment Securities and Allowance for Credit Losses Investment securities consist of U.S. Treasury securities, U.S. Agency securities, obligations of states and political subdivisions, obligations of U.S. Corporations, collateralized mortgage obligations and mortgage-backed securities. At the time of purchase of a security the Company designates the security as held-to-maturity or available-for-sale, based on its investment objectives, operational needs, and intent to hold. The Company does not purchase securities with the intent to engage in trading activity. Held-to-maturity securities are recorded at amortized cost, adjusted for amortization or accretion of premiums or discounts. Available-for-sale securities are recorded at fair value with unrealized holding gains and losses, net of the related tax effect, reported as a separate component of stockholders’ equity until realized. The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date using the effective interest method. Such amortization and accretion is included in investment income, along with interest and dividends. The cost of securities sold is based on the specific identification method; realized gains and losses resulting from such sales are included in earnings. 69 Table of Contents For available-for-sale debt securities in an unrealized loss position, the Company first 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 basis. If either of the criteria regarding intent or requirement to sell is met, an allowance for credit losses is recorded to bring the security's amortized cost basis down to fair value. For debt securities available-for-sale that do not meet the aforementioned criteria, 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 basis 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 an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities is excluded from the estimate of credit losses. Accrued interest receivable on available-for-sale debt securities totaled $ 2,787 and $ 2,785 as of December 31, 2025 and December 31, 2024 , respectively, and is included in interest receivable and other assets on the Consolidated Balance Sheets. (c) Federal Home Loan Bank Stock and Other Equity Securities, at Cost The Bank is a member of the Federal Home Loan Bank of San Francisco ("FHLB") and is required to obtain and hold a specific number of shares of capital stock of the FHLB. FHLB stock represents an equity interest that does not have a readily determinable fair value because its ownership is restricted and it lacks a market (liquidity). FHLB stock and other equity securities are recorded at cost and evaluated for impairment as of each reporting period. (d) Loans and Allowance for Credit Losses Loans are reported at the principal amount outstanding, net of deferred loan fees and costs and the allowance for credit losses. Loan fees net of certain direct costs of origination, which represent an adjustment to interest yield are deferred and amortized over the contractual term of the loan using the interest method. Unearned discount on installment loans is recognized as income over the terms of the loans by the interest method. Interest on other loans is calculated by using the simple interest method on the daily balance of the principal amount outstanding. Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest on loans is discontinued either when reasonable doubt exists as to the full and timely collection of interest or principal or when a loan becomes contractually past due by ninety days or more with respect to interest or principal. When a loan is placed on non-accrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. Accrual of interest on loans that are modified commence after a sustained period of performance. Interest is generally accrued on such loans in accordance with the new terms. The allowance for credit losses (ACL) is a valuation account that is deducted from the loan's amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the recorded loan balance is confirmed as uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company measures its ACL using the current expected credit loss (CECL) methodology in accordance with Accounting Standards Codification Topic 326, Financial Instruments - Credit Losses (Topic 326 ). 70 Table of Contents Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In determining the ACL, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including historical credit losses, have been statistically correlated with various econometrics, including national unemployment rate and national gross domestic product. The Company moved from California state loss drivers to national loss drivers at the beginning of 2024. The reason for the change is a higher credit loss correlation between the national loss driver variables than the state loss driver variables. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from Moody’s Analytics. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process. Loans that do not share similar risk characteristics are individually evaluated by management for potential impairment. Included in loans individually evaluated are collateral dependent loans. A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. Collateral dependent loans are considered to have unique risk characteristics and are individually evaluated. The ACL on collateral dependent loans is measured using the fair value of the underlying collateral, adjusted for costs to sell when applicable, less the amortized cost basis of the financial asset. If the value of underlying collateral is determined to be less than the recorded amount of the loan, a charge-off will be taken. The ACL is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments to evaluate and measure the ACL: Commercial : Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses. These loans are generally secured by the receivables, equipment, and other real property of the business and are susceptible to the related risks described above. Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Commercial Real Estate : Commercial real estate loans generally fall into two categories: owner-occupied and non-owner occupied. Loans secured by owner-occupied real estate are primarily susceptible to changes in the market conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions, and changes in business cycles. These same risks apply to commercial loans whether secured by equipment, receivables or other personal property or unsecured. Problem commercial real estate loans are generally identified by periodic review of financial information that may include financial statements, tax returns, payment history of the borrower, and site inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resulting over-supply of space. Losses are dependent on the value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means. 71 Table of Contents Agriculture : Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Agricultural loans are generally secured by inventory, receivables, equipment, and other real property. Agricultural loans primarily are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as adverse weather conditions such as drought, fire, or floods. Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Residential mortgage loans : Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks; non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfalls in collateral value. In general, non-payment is usually due to loss of employment and follows general economic trends in the economy, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts. Residential construction loans : Construction loans, whether owner-occupied or non-owner occupied residential development loans, are not only susceptible to the risks related to residential mortgage loans, but the added risks of construction, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion. Losses are primarily related to underlying collateral value and changes therein as described above. Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Consumer : Consumer loans, whether unsecured or secured, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfall in collateral value. In general, non-payment is usually due to loss of employment and will follow general economic trends in the economy, particularly the upward movements in the unemployment rate, loss of collateral value, inflation and demand shifts. Unfunded commitments : The estimated credit losses associated with these unfunded lending commitments is calculated using the same models and methodologies noted above and incorporate utilization assumptions at time of default. The reserve for unfunded commitments is maintained on the Consolidated Balance Sheets in other liabilities. Accrued interest receivable on loans is not included in the calculation of the ACL. Accrued interest receivable on loans totaled $ 4,561 and $ 4,875 as of December 31, 2025 and December 31, 2024 , respectively, and is included in interest receivable and other assets on the Consolidated Balance Sheets. (e) Loans Held-for-Sale Loans originated and held-for-sale are carried at the lower of cost or estimated fair value in the aggregate. Net fees and costs of originating loans held for sale are deferred and are included in the basis for determining the gain or loss on sales of loans held for sale. Net unrealized losses are recognized through a valuation allowance by charges to income. (f) Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed substantially by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the estimated useful lives of the improvements or the terms of the related leases, whichever is shorter. The useful lives used in computing depreciation are as follows: In Years Buildings and improvements 15 - 50 Furniture and equipment 3 - 10 72 Table of Contents (g) Other Real Estate Owned Other real estate acquired by foreclosure is carried at fair value less estimated selling costs. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the ACL, if necessary. Fair value of other real estate owned is generally determined based on an appraisal of the property. Any subsequent operating expenses or income, reduction in estimated values and gains or losses on disposition of such properties are included in other operating expenses. Gain recognition on the disposition of real estate is dependent upon the transaction meeting certain criteria relating to the nature of the property sold and the terms of the sale. Under certain circumstances, revenue recognition may be deferred until these criteria are met. The Bank held other real estate owned (“OREO”) totaling $ 1,241 and $ 0 as of December 31, 2025 and 2024 , respectively. OREO as of December 31, 2025 represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing it for sale. No impairment loss was recognized during the twelve months ended December 31, 2025. (h) Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of Long-lived assets and certain identifiable intangibles are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. (i) Intangible Assets Intangible assets represent the estimated fair value of the core deposit relationships acquired in a 2023 business combination less accumulated depreciation and other intangible assets. Core deposit intangibles are being amortized using the accelerated amortization method over an estimated life of ten years from the date of acquisition. Core deposit intangibles are evaluated on an annual basis for any events that would indicate impairment. Core deposit intangibles could also be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value below its carrying amount. Management performed an assessment of the core deposit intangible as of December 31, 2025 and noted no triggering events that would indicate impairment. Other intangible assets represent a customer-related intangible asset acquired and recorded at fair value during 2025. See Note 6 of Notes to Consolidated Financial Statements. (j) Pension Benefit Plans The Company and the Bank maintain unfunded non-contributory defined benefit pension plans for a select group of highly compensated employees and directors, as well as a supplemental executive retirement plan. Net periodic benefit cost is recognized over the approximate service period of plan participants and includes discount rate assumptions. See Note 17 of Notes to Consolidated Financial Statements. (k) Revenue from Contracts with Customers The following are descriptions of the Company’s sources of Non-interest income within the scope of the FASB's Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606 ) : Service charges on deposit accounts Service charges on deposit accounts include account maintenance and analysis fees and transaction-based fees. Account maintenance and analysis fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees consist of non-sufficient funds fees, wire fees, overdraft fees and fees on other products and services and are charged to deposit customers for specific services provided to the customer. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer. 73 Table of Contents Investment and brokerage services income The Bank earns investment and brokerage services fees for providing a broad range of alternative investment products and services through Raymond James Financial Services, Inc. Brokerage fees are generally earned in two ways. Brokerage fees for managed accounts charge a set annual percentage fee based on the underlying portfolio value and are earned and recognized on a quarterly basis. Brokerage fees for a standard commission account are charged on a per transaction fee and are earned and recognized at the time of the transaction. Debit card income Debit card income represents fees earned on Bank-issued debit card transactions. The Bank earns interchange fees from debit cardholder transactions through the related payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders’ account. Certain expenses directly associated with the debit card are recorded on a net basis with the interchange income. Other income Other income within the scope of Topic 606 includes check sales fees, bankcard fees, and merchant fees. Check sales fees, based on check sales volume, are received from check printing companies and are recognized monthly. Bankcard fees are earned from the Bank’s credit card program and are recognized monthly as the service period is completed. Merchant fees are earned for card payment services provided to its merchant customers. The Bank has a contract with a third party to provide card payment services to merchants that contract for those services. Merchant fees are recognized monthly as the service period is completed. (l) Gain or Loss on Sale of Loans and Servicing Rights Transfers and servicing of financial assets are accounted for and reported based on consistent application of a financial-components approach that focuses on control. Transfers of financial assets that are sales are distinguished from transfers that are secured borrowings. A sale is recognized when the transaction closes and the proceeds are other than beneficial interests in the assets sold. A gain or loss is recognized to the extent that the sales proceeds and the fair value of the servicing asset exceed or are less than the book value of the loan. The Company recognizes an asset for the fair value of the rights to service loans for others when loans are sold on a servicing-retained basis. The Company sold substantially all of its conforming long-term residential mortgage loans originated during the years ended December 31, 2025 and 2024 , for cash proceeds equal to the fair value of the loans. Mortgage servicing rights ("MSR") in loans sold are measured by allocating the previous carrying amount of the transferred assets between the loans sold and retained interest, if any, based on their relative fair value at the date of transfer. The Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures and reports its residential mortgage servicing assets initially at fair value and amortizes the servicing rights in proportion to, and over the period of, estimated net servicing revenues. Management assesses servicing rights for impairment as of each financial reporting date. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time are each separately reported. In determining the fair value of the MSR, the Company uses quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Key assumptions used in measuring the fair value of the MSR as of December 31, were as follows: 2025 2024 Constant prepayment rate 7.53 % 6.76 % Discount rate 9.50 % 10.00 % Weighted average life (years) 7.24 7.55 74 Table of Contents The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights. (m) Income Taxes The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to 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 in income in the period that includes the enactment date. A liability for uncertain tax positions is recorded for unrecognized tax benefits related to uncertain tax positions where it is more likely than not that the position will be sustained upon examination by a taxing authority. Interest and/or penalties related to income taxes are reported as a component of provision for income taxes. (n) Stock Based Compensation The Company accounts for share based compensation transactions whereby the Company receives employee services in exchange for equity instruments, including stock options and restricted stock. The Company recognizes in the Consolidated Statements of Income the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over their requisite service period (generally the vesting period). The fair value of options granted is determined on the date of the grant using a Black-Scholes-Merton pricing model. The grant date fair value of restricted stock is determined by the closing market price of the day prior to the grant date. The Company issues new shares of common stock upon the exercise of stock options. See Note 15 of Notes to Consolidated Financial Statements. (o) Earnings Per Share ( “ EPS ” ) Basic EPS includes no dilution and is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period, excluding non-vested restricted shares. Diluted EPS reflects the potential dilution of securities that could share in the earnings of an entity. The number of potential common shares included in annual diluted EPS is a year-to-date average of the number of potential common shares included in each quarter’s diluted EPS computation under the treasury stock method. The calculation of weighted average shares includes two classes of the Company’s outstanding common stock: common stock and restricted stock awards. Holders of restricted stock also receive dividends at the same rate as common shareholders, subject to vesting restrictions, and they both share equally in undistributed earnings. There are no unvested share-based payment awards that contain nonforfeitable rights to dividends. See Note 14 of Notes to Consolidated Financial Statements. (p) Advertising Costs Advertising costs were $ 491 and $ 460 for the years ended December 31, 2025 and 2024 , respectively. Advertising costs are expensed as incurred. (q) Comprehensive Income Accounting principles generally accepted in the United States require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gain and losses on available-for-sale securities and directors’ and officers’ retirement plans, are reported as a separate component of the equity section of the Consolidated Balance Sheet. Such items, along with net income, are components of comprehensive income. (r) Stock Dividend On January 23, 2025, the Company announced that its Board of Directors had declared a 5 % stock dividend which resulted in approximately 758,576 shares, which were paid on March 25, 2025 to shareholders of record as of February 28, 2025. On January 22, 2026, the Company announced that its Board of Directors had declared a 5 % stock dividend which will result in approximately 781,251 shares, which will be paid on March 25, 2026 to shareholders of record as of February 27, 2026. 75 Table of Contents Data for earnings per share and stock compensation plans for all periods presented have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026. December 31, 2025 figures included in the Consolidated Balance Sheets and Consolidated Statement of Stockholders’ Equity have been adjusted to reflect the estimated impact of the 2026 stock dividend. Figures that have been adjusted include common stock shares issued and outstanding, common stock balance and retained earnings balance. The December 31, 2024 and 2023 balances included in the Consolidated Balance Sheets and Statement of Stockholders’ Equity have not been adjusted to retroactively reflect the stock dividends, but instead show the historical rollforward of stock dividends declared. (s) Segment Reporting The Company is a holding company for a community bank, which offers a wide array of products and services to its customers. The Bank's primary business is that of a traditional banking institution, gathering deposits and originating loans in its respective primary market areas. Pursuant to its banking strategy, emphasis is placed on building relationships with its customers, as opposed to building specific lines of business. As a result, the Company is not organized around discernible lines of business and prefers to work as an integrated unit to customize solutions for its customers, with business line emphasis and product offerings changing over time as needs and demands change. The Company's operations are managed, and financial performance is evaluated, by our chief operating decision maker on a Company-wide basis. The performance of the Company is reviewed monthly by the Company's executive management and Board of Directors. As resource allocation and performance decisions are not made based on discrete financial information of individual lines of business, the Company considers its current business and operations as a single reportable operating segment. See Note 23 of Notes to Consolidated Financial Statements. (t) Business Combinations The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase consideration over the fair value of acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill and a deficit is recognized as a bargain purchase gain. Goodwill and intangible assets acquired in a business combination and that are determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has no goodwill arising from business combinations. The Company recognized a bargain purchase gain arising from business combinations in 2023. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible assets arising from business combinations are amortized on an accelerated basis reflecting the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. The total estimated life of the core deposit intangible is approximately 10 years. Other intangible assets represent a customer-related intangible asset acquired and recorded at fair value. The total estimated life of the customer-related intangible asset is approximately 5 years. (u) Impact of Recently Issued Accounting Standards Accounting Standards Adopted in 2025 In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures. Among other things, these amendments provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold. The amendments also require that entities disclose on an annual basis: 1 ) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2 ) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received). The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted this ASU retrospectively. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. For additional information, see Note 18 to the Consolidated Financial Statements in this Form 10 -K. 76 Table of Contents In March 2024, the FASB issued guidance within ASU 2024 - 01, Compensation — Stock Compensation (Topic 718 ): Scope Application of Profits Interest and Similar Awards . The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with a company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718 - 10 - 15 - 3 in determining if a profit interest award should be accounted for in accordance with Topic 718: Compensation—Stock Compensation. The amendment in ASC paragraph 718 - 10 - 15 - 3 is solely intended to improve the overall clarity and does not change the guidance. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If a company adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes the interim period. The amendments should be applied either ( 1 ) retrospectively to all prior periods presented in the financial statements or ( 2 ) on a prospective basis. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements, as the Company does not typically provide these types of awards. For additional information, see Note 15 to the Consolidated Financial Statements in this Form 10 -K. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses. This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. In January 2025, the FASB issued ASU 2025 - 01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Clarifying the Effective Date. ASU 2025 - 01 amends the effective date of ASU 2024 - 03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024 - 03 is permitted. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements. In November 2025, the FASB issued ASU 2025 - 08, Financial Instruments - Credit Losses (Topic 326 ): Purchased Loans. This ASU expands the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements. In November 2025, the FASB issued ASU 2025 - 09, Derivatives and Hedging (Topic 815 ): Hedge Accounting Improvements. This ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: similar risk assessment for cash flow hedges, hedging forecasted interest payments on choose-your-rate debt instruments, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of ASU No. 2025 - 09. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements. In December 2025, the FASB issued ASU 2025 - 11, Interim Reporting (Topic 270 ): Narrow-Scope Improvements. This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU: clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP; incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity; and improve guidance about information included in and the format of interim financial statements. The amendments in this ASU are effective for pubic business entities for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements. 77 Table of Contents In December 2025, the FASB issued ASU 2025 - 12, Codification Improvements. The amendments in this ASU update the FASB ASC for a broad range of Topics arising from technical corrections, unintended application of the ASC, clarifications, and other minor improvements. The amendments in this ASU, which addresses 33 issues, affect a wide variety of Topics in the ASC and apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements. 78 Table of Contents ( 2 ) Investment Securities The amortized cost, unrealized gains and losses, estimated fair values and related allowance for credit losses on investments in debt and other securities at December 31, 2025 are summarized as follows: Amortized Unrealized Unrealized Estimated fair cost gains losses value ACL Investment securities available-for-sale: U.S. Treasury securities $ 87,578 $ 420 $ ( 442 ) $ 87,556 $ — Securities of U.S. government agencies and corporations 86,831 462 ( 1,949 ) 85,344 — Obligations of states and political subdivisions 77,796 448 ( 3,241 ) 75,003 — Collateralized mortgage obligations 103,364 155 ( 11,235 ) 92,284 — Mortgage-backed securities 283,963 1,640 ( 8,547 ) 277,056 — Total debt securities $ 639,532 $ 3,125 $ ( 25,414 ) $ 617,243 $ — The amortized cost, unrealized gains and losses, estimated fair values and related allowance for credit losses on investments in debt and other securities at December 31, 2024 are summarized as follows: Amortized Unrealized Unrealized Estimated fair cost gains losses value ACL Investment securities available-for-sale: U.S. Treasury securities $ 107,188 $ 134 $ ( 1,777 ) $ 105,545 $ — Securities of U.S. government agencies and corporations 100,218 62 ( 4,596 ) 95,684 — Obligations of states and political subdivisions 72,576 87 ( 5,072 ) 67,591 — Collateralized mortgage obligations 113,641 5 ( 18,701 ) 94,945 — Mortgage-backed securities 288,723 70 ( 18,705 ) 270,088 — Total debt securities $ 682,346 $ 358 $ ( 48,851 ) $ 633,853 $ — Gross realized gains from sales and calls of available-for-sale securities were $ 93 and $ 0 for the years ended December 31, 2025 and 2024 , respectively. Gross realized losses from sales of available-for-sale securities were $ 292 and $ 234 for the years ended December 31, 2025 and 2024 , respectively. The amortized cost and estimated fair value of debt and other securities at December 31, 2025 , by contractual maturity, are shown in the following table: Amortized Estimated cost fair value Maturity in years: Due in one year or less $ 49,807 $ 49,531 Due after one year through five years 118,999 117,517 Due after five years through ten years 38,904 38,235 Due after ten years 44,495 42,620 Subtotal 252,205 247,903 Mortgage-backed securities and Collateralized mortgage obligations 387,327 369,340 Total $ 639,532 $ 617,243 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. In addition, factors such as prepayments and interest rates may affect the yield on the carrying value of mortgage-related securities. 79 Table of Contents An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2025 , follows: Less than 12 months 12 months or more Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses U.S. Treasury securities $ 7,664 $ ( 7 ) $ 25,834 $ ( 435 ) $ 33,498 $ ( 442 ) Securities of U.S. government agencies and corporations 14,168 ( 46 ) 41,820 ( 1,903 ) 55,988 ( 1,949 ) Obligations of states and political subdivisions 1,144 ( 1 ) 47,845 ( 3,240 ) 48,989 ( 3,241 ) Collateralized mortgage obligations 13,402 ( 51 ) 58,408 ( 11,184 ) 71,810 ( 11,235 ) Mortgage-backed securities 21,385 ( 33 ) 127,245 ( 8,514 ) 148,630 ( 8,547 ) Total $ 57,763 $ ( 138 ) $ 301,152 $ ( 25,276 ) $ 358,915 $ ( 25,414 ) Thirty securities, all considered investment grade, which had a fair value of $ 57,763 and a total unrealized loss of $ 138 , have been in an unrealized loss position for less than twelve months as of December 31, 2025 . Three hundred forty-four securities, all considered investment grade, which had a fair value of $ 301,152 and total unrealized loss of $ 25,276 , have been in an unrealized loss position for more than twelve months as of December 31, 2025 . The unrealized losses on the Company's investment securities were caused by market conditions for these types of investments, particularly changes in risk-free interest rates. The decline in fair value is attributable to changes in interest rates and not credit quality, and the Company does not intend to sell the securities. The Company has concluded it is not more likely than not that the Company will be required to sell these securities prior to recovery of their anticipated cost basis. Therefore, as of December 31, 2025 and December 31, 2024 , the Company had not recorded an allowance for credit losses on these securities and the unrecognized or unrealized losses on these securities have not been recognized into income. The fair value of investment securities could decline in the future if the general economy deteriorates, inflation increases, credit ratings decline, the issuer's financial condition deteriorates, or the liquidity for securities declines. As a result, a credit loss may occur in the future. An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2024 , follows: Less than 12 months 12 months or more Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses U.S. Treasury Securities $ 27,055 $ ( 431 ) $ 42,603 $ ( 1,346 ) $ 69,658 $ ( 1,777 ) Securities of U.S. government agencies and corporation 22,383 ( 471 ) 58,585 ( 4,125 ) 80,968 ( 4,596 ) Obligations of states and political subdivision 33,078 ( 1,083 ) 29,025 ( 3,989 ) 62,103 ( 5,072 ) Collateralized mortgage obligations 28,937 ( 1,860 ) 62,320 ( 16,841 ) 91,257 ( 18,701 ) Mortgage-backed securities 110,599 ( 2,715 ) 143,892 ( 15,990 ) 254,491 ( 18,705 ) Total $ 222,052 $ ( 6,560 ) $ 336,425 $ ( 42,291 ) $ 558,477 $ ( 48,851 ) Investment securities carried at $ 95,479 and $ 53,589 at December 31, 2025 and 2024 , respectively, were pledged to secure public deposits or for other purposes as required or permitted by law. 80 Table of Contents ( 3 ) Loans and Allowance for Credit Losses The composition of the Company’s loan portfolio, by loan class, as of December 31, is as follows: 2025 2024 Commercial $ 146,178 $ 117,921 Commercial Real Estate 702,455 723,650 Agriculture 93,627 92,564 Residential Mortgage 100,684 105,886 Residential Construction 5,837 6,858 Consumer 15,478 15,716 1,064,259 1,062,595 Allowance for credit losses ( 14,519 ) ( 15,885 ) Deferred origination fees and costs, net 733 142 Loans, net $ 1,050,473 $ 1,046,852 At December 31, 2025 and 2024 , all loans were pledged under a blanket collateral lien to secure actual and potential borrowings from the Federal Home Loan Bank. Allowance for Credit Losses The following table summarizes the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the Consolidated Balance Sheets within other liabilities as of December 31, 2025 : Allowance for Credit Losses – Year ended December 31, 2025 Beginning balance Charge-offs Recoveries Provision (Recovery) Ending Balance Commercial $ 1,622 $ ( 648 ) 273 1,178 $ 2,425 Commercial Real Estate 10,245 ( 26 ) — ( 876 ) 9,343 Agriculture 1,555 ( 474 ) — ( 7 ) 1,074 Residential Mortgage 1,779 ( 5 ) — ( 769 ) 1,005 Residential Construction 433 — — ( 57 ) 376 Consumer 251 ( 19 ) 33 31 296 Allowance for credit losses on loans 15,885 ( 1,172 ) 306 ( 500 ) 14,519 Reserve for unfunded commitments 700 — — 500 1,200 Total $ 16,585 $ ( 1,172 ) $ 306 $ — $ 15,719 The following table summarizes the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the Consolidated Balance Sheets within other liabilities as of December 31, 2024 : Allowance for Credit Losses – Year ended December 31, 2024 Beginning balance Charge-offs Recoveries Provision (Recovery) Ending Balance Commercial $ 2,041 $ ( 956 ) $ 60 $ 477 $ 1,622 Commercial Real Estate 10,864 — — ( 619 ) 10,245 Agriculture 997 — — 558 1,555 Residential Mortgage 2,005 — — ( 226 ) 1,779 Residential Construction 334 — — 99 433 Consumer 355 ( 28 ) 13 ( 89 ) 251 Allowance for credit losses on loans 16,596 ( 984 ) 73 200 15,885 Reserve for unfunded commitments 1,150 — — ( 450 ) 700 Total $ 17,746 $ ( 984 ) $ 73 $ ( 250 ) $ 16,585 81 Table of Contents The Company utilizes three economic variables, forecasted unemployment, gross domestic product and single-family home prices, as loss drivers for its allowance for credit losses. The Company recorded no provision expense for the year ended December 31, 2025, primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in forecasted loss rates and improvements in qualitative risk factors. Management believes that the allowance for credit losses at December 31, 2025 appropriately reflected expected credit losses in the loan portfolio at that date. Collateral-Dependent Loans In accordance with ASC 326, a loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. All loans individually analyzed were collateral-dependent loans as of December 31, 2025 and December 31, 2024 . The following table presents the amortized cost basis of collateral-dependent loans by class, which are individually evaluated to determine expected credit losses as of December 31, 2025 and December 31, 2024 : December 31, 2025 Secured by 1-4 Family Residential Properties-1st lien Secured by 1-4 Family Residential Properties-junior lien Secured by 1-4 Family Residential Properties-revolving Commercial Construction and land development Commercial $ — $ — $ — $ 139 $ — Commercial Real Estate — — — — — Agriculture — — — — — Residential Mortgage 174 — — — — Residential Construction — — — — — Consumer — 255 382 — — Total $ 174 $ 255 $ 382 $ 139 $ — Secured by farmland Agriculture production loans Loans secured by owner-occupied, nonfarm nonresidential properties Loans secured by other nonfarm nonresidential properties Total Commercial $ — $ — $ — $ — $ 139 Commercial Real Estate — — — 657 657 Agriculture 662 3,761 — — 4,423 Residential Mortgage — — — — 174 Residential Construction — — — — — Consumer — — — — 637 Total $ 662 $ 3,761 $ — $ 657 $ 6,030 82 Table of Contents December 31, 2024 Secured by 1-4 Family Residential Properties-1st lien Secured by 1-4 Family Residential Properties-junior lien Secured by 1-4 Family Residential Properties-revolving Commercial Construction and land development Commercial $ — $ — $ — $ 139 $ — Commercial Real Estate — — — — — Agriculture — — — — — Residential Mortgage 202 — — — — Residential Construction — — — — — Consumer — 282 360 — — Total $ 202 $ 282 $ 360 $ 139 $ — Secured by farmland Agriculture production loans Loans secured by owner-occupied, nonfarm nonresidential properties Loans secured by other nonfarm nonresidential properties Total Commercial $ — $ — $ — $ — $ 139 Commercial Real Estate — — — 7,993 7,993 Agriculture 740 1,496 — — 2,236 Residential Mortgage — — — — 202 Residential Construction — — — — — Consumer — — — — 642 Total $ 740 $ 1,496 $ — $ 7,993 $ 11,212 83 Table of Contents Foreclosure Proceedings The Company had no residential real estate property in the process of foreclosure at December 31, 2025 and December 31, 2024 . Non-accrual and Past Due Loans The Company’s loans by delinquency and non-accrual status, as of December 31, 2025 and December 31, 2024 , was as follows: 30-59 days Past Due & Accruing 60-89 days Past Due & Accruing 90 days or More Past Due & Accruing Nonaccrual Loans Total Past Due & Nonaccrual Loans Current & Accruing Loans Total Loans Nonaccrual loans with No ACL December 31, 2025 Commercial $ 470 $ 597 $ — $ 139 $ 1,206 $ 144,972 $ 146,178 $ 139 Commercial Real Estate 231 — — 657 888 701,567 702,455 657 Agriculture — 1 — 4,423 4,424 89,203 93,627 4,423 Residential Mortgage 691 — — 174 865 99,819 100,684 174 Residential Construction — — — — — 5,837 5,837 — Consumer — — — 637 637 14,841 15,478 637 Total $ 1,392 $ 598 $ — $ 6,030 $ 8,020 $ 1,056,239 $ 1,064,259 $ 6,030 December 31, 2024 Commercial $ 2,287 $ — $ — $ 139 $ 2,426 $ 115,495 $ 117,921 $ 139 Commercial Real Estate — — — 7,993 7,993 715,657 723,650 7,993 Agriculture 1,354 500 — 2,236 4,090 88,474 92,564 2,236 Residential Mortgage 749 — — 202 951 104,935 105,886 202 Residential Construction — — — — — 6,858 6,858 — Consumer — 10 — 642 652 15,064 15,716 642 Total $ 4,390 $ 510 $ — $ 11,212 $ 16,112 $ 1,046,483 $ 1,062,595 $ 11,212 The Company recognized $ 421 and $ 450 of interest income on nonaccrual loans during the years ended December 31, 2025 and December 31, 2024 , respectively. Loan Modifications Occasionally, the Company modifies loans to borrowers in financial difficulty by providing principal forgiveness, term extension, payment delays or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction. 84 Table of Contents The following tables present the amortized cost basis of loans that were experiencing both financial difficulty and modification during the periods indicated, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below. The amortized cost basis of loans that were experiencing both financial difficulty and modification during the year ended December 31, 2025 were as follows: Term Extension Combination Term Extension and Interest Rate Reduction Combination Term Extension and Payment Delay Payment Delay Total Class of Financing Receivable Commercial $ 399 $ 1,000 $ 73 $ — 1.01 % Commercial Real Estate 1,456 — — — 0.21 % Agriculture — 548 — 835 1.48 % Residential Mortgage — — — — — Residential Construction — — — — — Consumer — — — — — Total $ 1,855 $ 1,548 $ 73 $ 835 0.41 % The Company had no commitments to lend additional funds to borrowers whose loans were modified at December 31, 2025 . The amortized cost basis of loans that were experiencing both financial difficulty and modification during the year ended December 31, 2024 were as follows: Term Extension Combination Term Extension and Interest Rate Reduction Total Class of Financing Receivable Commercial $ 1,832 $ 45 1.59 % Commercial Real Estate — — — Agriculture — — — Residential Mortgage — — — Residential Construction — — — Consumer — — — Total $ 1,832 $ 45 0.18 % The Company had no commitments to lend additional funds to borrowers whose loans were modified at December 31, 2024 . 85 Table of Contents The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during the year ended December 31, 2025 : Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in months) Commercial 0.50 % 10 Commercial Real Estate — 4 Agriculture 1.00 % 36 Residential Mortgage — — Residential Construction — — Consumer — — Total 0.68 % 12 The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during the year ended December 31, 2024 : Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in months) Commercial 3.00 % 9 Commercial Real Estate — — Agriculture — — Residential Mortgage — — Residential Construction — — Consumer — — Total 3.00 % 9 Loans that were modified within the previous twelve months were current on payments as of December 31, 2025 . There were no loans modified within the previous twelve months and for which there was a payment default during the year ended December 31, 2025 . Loans that were modified within the previous twelve months were current on payments as of December 31, 2024. There were no loans modified within the previous twelve months and for which there was a payment default during the year ended December 31, 2024. Upon the Company's determination that a modified loan (or portion of a loan) has subsequently become uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount. 86 Table of Contents Credit Quality Indicators All new loans are rated using the credit risk ratings and criteria adopted by the Company. Risk ratings are adjusted as future circumstances warrant. All credits risk rated 1, 2, 3, 4 or 5 equate to a Pass as indicated by Federal and State regulatory agencies; a 6 equates to a Special Mention; a 7 equates to Substandard; an 8 equates to Doubtful; and a 9 equates to a Loss. General definitions for each risk rating are as follows: Risk Rating “ 1 ” – Pass (Superior Quality): A Superior asset is a loan that is secured by cash or properly margined marketable securities held by the Bank. A superior asset represents the highest quality currently and a negligible potential for future credit risk based on every measurement. Repayment capacity is unquestionable. Risk Rating “ 2 ” – Pass (Excellent Quality): An Excellent asset has minimal risk based on a conservatively structured balance sheet, well diversified revenue streams, low operating cost structure or low risk business model. Other risks that may impact credit quality are remote or absorbable by the Borrower with no meaningful impact on its financial condition. . Risk Rating “ 3 ” – Pass (Good Quality): A good asset is one that has a well-structured balance sheet relative to peers, a stable and consistent income stream and well managed cost structure. While credit risk is considered low, risks may be present that could cause a minor financial operational impact sometime in the future. Risk Rating “ 4 ” – Pass (Acceptable Quality): An acceptable asset is one that’s primary repayment source is satisfactory to cover debt service under normal conditions. Financial strength and flexibility are adequate; however, financial strength would likely be weakened during prolonged periods of adversity or with the emergence of one or more inherent risks. Risk Rating “ 5 ” – Pass (Watch): A watch asset is one that reflects higher than acceptable risk; however, control features or other factors (e.g. structure, collateral and collateral monitoring, operational controls, including funds control, guarantors, etc.) mitigate inherent risks or other uncertainties that may otherwise warrant a more severe rating. Repayment capacity is generally adequate for debt service, but one or more factors or conditions exist that may result in repayment inadequacies. These factors or conditions are expected to change within a reasonable amount of time. Risk Rating “ 6 ” – Special Mention: A Special Mention asset has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Risk Rating “ 7 ” – Substandard: Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Risk Rating “ 8 ” – Doubtful: Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. Risk Rating “ 9 ” – Loss: Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Active Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been or are in the process of being liquidated and the borrower/guarantor may or may not be cooperative in repayment of the debt. Recovery prospects are unknown, but the Company is actively engaged in the collection of the loan. Inactive Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been liquidated and the borrower/guarantor has nothing of any value remaining to apply to the repayment of our loan. Any further collection activities would be of little value. 87 Table of Contents The following tables present the loan portfolio by loan class, origination year, and internal risk rating as of December 31, 2025 and December 31, 2024 . Generally, existing term loans that were re-underwritten are reflected in the table in the year of renewal. Lines of credit that have a conversion feature at the time of origination, such as construction to permanent loans, are presented by year of origination. Revolving loans converted to term loans totaled $ 1,780 and $ 3,121 as of December 31, 2025 and December 31, 2024 , respectively. Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total Commercial Pass $ 53,724 $ 37,264 $ 9,628 $ 9,008 $ 4,473 $ 4,964 $ 24,740 $ 143,801 Special Mention 73 — — — — — 324 397 Substandard 45 83 1 44 — 635 1,172 1,980 Doubtful/Loss — — — — Total Commercial loans $ 53,842 $ 37,347 $ 9,629 $ 9,052 $ 4,473 $ 5,599 $ 26,236 $ 146,178 Year-to-date Charge-offs — ( 119 ) ( 83 ) — ( 13 ) — ( 433 ) ( 648 ) Year-to-date Recoveries — 1 256 — — 16 — 273 Year-to-date Net Charge-offs — ( 118 ) 173 — ( 13 ) 16 ( 433 ) ( 375 ) Commercial Real Estate Pass $ 48,023 $ 60,279 $ 109,879 $ 152,463 $ 158,456 $ 141,544 $ 373 $ 671,017 Special Mention 1,084 2,854 — 12,487 2,013 2,786 — 21,224 Substandard 372 — 657 3,415 — 5,770 — 10,214 Doubtful/Loss — — — — — — — — Total Commercial Real Estate loans $ 49,479 $ 63,133 $ 110,536 $ 168,365 $ 160,469 $ 150,100 $ 373 $ 702,455 Year-to-date Charge-offs — — ( 26 ) — — — — ( 26 ) Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — ( 26 ) — — — — ( 26 ) Agriculture Pass $ 11,029 $ 2,970 $ 3,426 $ 15,496 $ 17,593 $ 13,004 $ 19,121 $ 82,639 Special Mention — — — — — — — — Substandard — — 58 2,717 4,739 — 3,474 10,988 Doubtful/Loss — — — — — — — — Total Agriculture loans $ 11,029 $ 2,970 $ 3,484 $ 18,213 $ 22,332 $ 13,004 $ 22,595 $ 93,627 Year-to-date Charge-offs — — — ( 176 ) — — ( 298 ) ( 474 ) Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — ( 176 ) — — ( 298 ) ( 474 ) 88 Table of Contents Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total Residential Mortgage Pass $ 3,451 $ 4,755 $ 17,156 $ 22,718 $ 24,516 $ 27,642 $ — $ 100,238 Special Mention — — — — — — — — Substandard — — — 270 32 144 — 446 Doubtful/Loss — — — — — — — — Total Residential Mortgage loans $ 3,451 $ 4,755 $ 17,156 $ 22,988 $ 24,548 $ 27,786 $ — $ 100,684 Year-to-date Charge-offs ( 5 ) — — — — — — ( 5 ) Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs ( 5 ) — — — — — — ( 5 ) Residential Construction Pass $ 1,665 $ 1,451 $ 1,176 $ 487 $ 1,058 $ — $ — $ 5,837 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful/Loss — — — — — — — — Total Residential Construction loans $ 1,665 $ 1,451 $ 1,176 $ 487 $ 1,058 $ — $ — $ 5,837 Year-to-date Charge-offs — — — — — — — — Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — — — — — — Consumer Pass $ 233 $ 59 $ 69 $ 1,063 $ 94 $ 376 $ 12,923 $ 14,817 Special Mention — — — — — — — — Substandard — — — — — — 661 661 Doubtful/Loss — — — — — — — — Total Consumer loans $ 233 $ 59 $ 69 $ 1,063 $ 94 $ 376 $ 13,584 $ 15,478 Year-to-date Charge-offs ( 16 ) ( 3 ) — — — — — ( 19 ) Year-to-date Recoveries 8 — — — — — 25 33 Year-to-date Net Charge-offs ( 8 ) ( 3 ) — — — — 25 14 Total Loans Pass $ 118,125 $ 106,778 $ 141,334 $ 201,235 $ 206,190 $ 187,530 $ 57,157 $ 1,018,349 Special Mention 1,157 2,854 — 12,487 2,013 2,786 324 21,621 Substandard 417 83 716 6,446 4,771 6,549 5,307 24,289 Doubtful/Loss — — — — — — — — Total Loans $ 119,699 $ 109,715 $ 142,050 $ 220,168 $ 212,974 $ 196,865 $ 62,788 $ 1,064,259 Year-to-date Charge-offs $ ( 21 ) $ ( 122 ) $ ( 109 ) $ ( 176 ) $ ( 13 ) $ — $ ( 731 ) $ ( 1,172 ) Year-to-date Recoveries $ 8 $ 1 $ 256 $ — $ — $ 16 $ 25 $ 306 Year-to-date Net Charge-offs $ ( 13 ) $ ( 121 ) $ 147 $ ( 176 ) $ ( 13 ) $ 16 $ ( 706 ) $ ( 866 ) 89 Table of Contents Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total Commercial Pass $ 36,065 $ 14,319 $ 11,885 $ 11,894 $ 3,442 $ 8,030 $ 27,272 $ 112,907 Special Mention — — 874 1,561 — — 1,590 4,025 Substandard 227 — — 32 471 — 259 989 Doubtful/Loss — — — — — — — — Total Commercial loans $ 36,292 $ 14,319 $ 12,759 $ 13,487 $ 3,913 $ 8,030 $ 29,121 $ 117,921 Year-to-date Charge-offs ( 47 ) ( 508 ) ( 224 ) ( 5 ) ( 163 ) ( 9 ) — ( 956 ) Year-to-date Recoveries — — 4 — — 56 — 60 Year-to-date Net Charge-offs ( 47 ) ( 508 ) ( 220 ) ( 5 ) ( 163 ) 47 — ( 896 ) Commercial Real Estate Pass $ 68,278 $ 113,937 $ 178,142 $ 160,484 $ 39,913 $ 121,862 $ 6,529 $ 689,145 Special Mention 2,909 — — 7,156 — 5,737 — 15,802 Substandard — 381 — 2,052 1,638 14,632 — 18,703 Doubtful/Loss — — — — — — — — Total Commercial Real Estate loans $ 71,187 $ 114,318 $ 178,142 $ 169,692 $ 41,551 $ 142,231 $ 6,529 $ 723,650 Year-to-date Charge-offs — — — — — — — — Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — — — — — — Agriculture Pass $ 4,857 $ 6,562 $ 14,846 $ 17,245 $ 5,675 $ 10,252 $ 20,420 $ 79,857 Special Mention — — 3,884 5,477 726 — 300 10,387 Substandard — — — 740 — — 1,580 2,320 Doubtful/Loss — — — — — — — — Total Agriculture loans $ 4,857 $ 6,562 $ 18,730 $ 23,462 $ 6,401 $ 10,252 $ 22,300 $ 92,564 Year-to-date Charge-offs — — — — — — — — Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — — — — — — 90 Table of Contents Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Total Residential Mortgage Pass $ 4,873 $ 20,162 $ 22,408 $ 26,123 $ 13,233 $ 18,886 $ — $ 105,685 Special Mention — — — — — — — — Substandard 79 — — 34 — 88 — 201 Doubtful/Loss — — — — — — — — Total Residential Mortgage loans $ 4,952 $ 20,162 $ 22,408 $ 26,157 $ 13,233 $ 18,974 $ — $ 105,886 Year-to-date Charge-offs — — — — — — — — Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — — — — — — Residential Construction Pass $ 1,525 $ 2,117 $ 1,998 $ 1,218 $ — $ — $ — $ 6,858 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful/Loss — — — — — — — — Total Residential Construction loans $ 1,525 $ 2,117 $ 1,998 $ 1,218 $ — $ — $ — $ 6,858 Year-to-date Charge-offs — — — — — — — — Year-to-date Recoveries — — — — — — — — Year-to-date Net Charge-offs — — — — — — — — Consumer Pass $ 212 $ 145 $ 1,129 $ 109 $ 122 $ 286 $ 13,071 $ 15,074 Special Mention — — — — — — — — Substandard — — — — — — 642 642 Doubtful/Loss — — — — — — — — Total Consumer loans $ 212 $ 145 $ 1,129 $ 109 $ 122 $ 286 $ 13,713 $ 15,716 Year-to-date Charge-offs ( 28 ) — — — — — — ( 28 ) Year-to-date Recoveries 10 — — — — 3 — 13 Year-to-date Net Charge-offs ( 18 ) — — — — 3 — ( 15 ) Total Loans Pass $ 115,810 $ 157,242 $ 230,408 $ 217,073 $ 62,385 $ 159,316 $ 67,292 $ 1,009,526 Special Mention 2,909 — 4,758 14,194 726 5,737 1,890 30,214 Substandard 306 381 — 2,858 2,109 14,720 2,481 22,855 Doubtful/Loss — — — — — — — — Total Loans $ 119,025 $ 157,623 $ 235,166 $ 234,125 $ 65,220 $ 179,773 $ 71,663 $ 1,062,595 Year-to-date Charge-offs $ ( 75 ) $ ( 508 ) $ ( 224 ) $ ( 5 ) $ ( 163 ) $ ( 9 ) $ — $ ( 984 ) Year-to-date Recoveries $ 10 $ — $ 4 $ — $ — $ 59 $ — $ 73 Year-to-date Net Charge-offs $ ( 65 ) $ ( 508 ) $ ( 220 ) $ ( 5 ) $ ( 163 ) $ 50 $ — $ ( 911 ) 91 Table of Contents ( 4 ) Mortgage Operations The Company recognizes a gain or loss and a related asset for the fair value of the rights to service loans for others when loans are sold and servicing is retained. The Company sold a substantial portion of its portfolio of conforming long-term residential mortgage loans originated during the year ended December 31, 2025 on a servicing retained basis, for cash proceeds equal to the fair value of the loans. At December 31, 2025 and 2024 , the Company serviced real estate mortgage loans for others totaling $ 162,644 and $ 174,464 , respectively. The recorded value of mortgage servicing rights is amortized in proportion to, and over the period of, estimated net servicing revenues. The Company assesses capitalized mortgage servicing rights for impairment based upon the fair value of those rights at each reporting date. For purposes of measuring impairment, the rights are stratified based upon the product type, term and interest rates. Fair value is determined by discounting estimated net future cash flows from mortgage servicing activities using discount rates that approximate current market rates and estimated prepayment rates, among other assumptions. The amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing rights for a stratum exceeds their fair value. Impairment, if any, is recognized through a valuation allowance for each individual stratum. Changes in the carrying amount of mortgage servicing rights are reported in earnings under other operating income on the Consolidated Statements of Income. The following table summarizes the activity related to the Company’s mortgage servicing rights assets for the years ended December 31, 2025 and 2024 . Mortgage servicing rights are included in Interest Receivable and Other Assets on the Consolidated Balance Sheets. December 31, 2024 Additions Reductions December 31, 2025 Mortgage servicing rights $ 1,312 $ 35 $ ( 188 ) $ 1,159 Valuation allowance — — — — Mortgage servicing rights, net of valuation allowance $ 1,312 $ 35 $ ( 188 ) $ 1,159 December 31, 2023 Additions Reductions December 31, 2024 Mortgage servicing rights $ 1,482 $ 38 $ ( 208 ) $ 1,312 Valuation allowance — — — — Mortgage servicing rights, net of valuation allowance $ 1,482 $ 38 $ ( 208 ) $ 1,312 At December 31, 2025 and December 31, 2024 , the estimated fair market value of the Company's mortgage servicing rights asset was $ 1,748 and $ 1,910 , respectively. The changes in fair value of mortgage servicing rights during 2025 and 2024 were primarily due to amortization and increase in estimated prepayment speeds. The Company received contractually specified servicing fees of $ 427 and $ 450 for the years ended December 31, 2025 and 2024 , respectively. Contractually specified servicing fees are included in Other Income on the Consolidated Statements of Income. 92 Table of Contents ( 5 ) Premises and Equipment Premises and equipment consisted of the following at December 31, of the indicated years: 2025 2024 Land $ 1,582 $ 2,823 Buildings 9,171 8,703 Furniture and equipment 15,781 15,279 Leasehold improvements 3,403 2,673 29,937 29,478 Less accumulated depreciation and amortization 21,226 20,230 $ 8,711 $ 9,248 Depreciation and amortization expense, included in occupancy and equipment expense, was $ 996 and $ 1,057 for the years ended December 31, 2025 and 2024 , respectively. ( 6 ) Intangible Assets Intangible assets represent the estimated fair value of the core deposit relationships acquired in the 2023 acquisition of three branches from Columbia State Bank less accumulated depreciation and other intangible assets. In 2025, the Company acquired a customer-related intangible asset that was recorded at a fair value of $ 1,742 . The following table summarizes the changes in the Company's intangible assets for the twelve months ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 Core Deposit Intangible Other Intangible Total Intangible Assets Core Deposit Intangible Other Intangible Total Intangible Assets Beginning Balance $ 3,321 $ — $ 3,321 $ 4,141 $ — $ 4,141 Additions 1,742 1,742 — — — Amortizations ( 731 ) — ( 731 ) ( 820 ) — ( 820 ) Ending Balance $ 2,590 $ 1,742 $ 4,332 $ 3,321 $ — $ 3,321 The following table presents the estimated amortization expense for intangible assets remaining at December 31, 2025: Estimated Amortization 2026 $ 989 2027 898 2028 808 2029 717 2030 627 Thereafter 293 Total $ 4,332 93 Table of Contents ( 7 ) Interest Receivable and Other Assets Interest receivable and other assets consisted of the following at December 31, of the indicated years: 2025 2024 Interest receivable $ 7,348 $ 7,660 Mortgage servicing rights asset (see Note 4) 1,159 1,312 Officer’s life insurance 16,547 16,058 Operating lease right-of-use asset (see Note 9) 5,393 3,155 Deferred tax assets, net (see Note 18) 12,965 19,042 Current tax receivable (payable) 10,800 ( 322 ) Prepaid and other 8,133 5,503 $ 62,345 $ 52,408 ( 8 ) Short-Term and Long-Term Borrowings The Company had no secured borrowings and no Federal Funds purchased at December 31, 2025 and December 31, 2024 . Additional short-term borrowings available to the Company consist of a line of credit and advances with the Federal Home Loan Bank ("FHLB") secured under terms of a blanket collateral agreement by a pledge of FHLB stock and all loans. At December 31, 2025 , the Company had a current collateral borrowing capacity with the FHLB of $ 390,191 and, at such date, also had unsecured formal lines of credit totaling $ 130,000 with correspondent banks. Average outstanding balances of short-term borrowings were $ 1,645 and $ 0 during 2025 and 2024, respectively. Short-term borrowings during 2025 consisted of FHLB advances. There were no short-term borrowings during 2024. Maturity of the FHLB advance during 2025 was 1 month at an interest rate of 4.55 %. There were no short-term borrowings at December 31, 2025 and December 31, 2024. The Company had no long-term borrowings at December 31, 2025 and 2024 . 94 Table of Contents ( 9 ) Leases The Company leases ten branch and administrative locations under operating leases expiring on various dates through 2035. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. The Bank had no financing leases as of December 31, 2025 . Most leases include options to renew, with renewal terms that can extend the lease term from 3 to 10 years. The exercise of lease renewal options is at the Company’s sole discretion. Most leases are currently in the extension period. For the remaining leases with options to renew, the Company has not included the extended lease terms in the calculation of lease liabilities as the options are not reasonably certain of being exercised. Certain lease agreements include rental payments that are adjusted periodically for inflation. The Company's lease agreements do not contain any residual value guarantees or restrictive covenants. The Company uses its FHLB advance fixed rates, which are its incremental borrowing rates for secured borrowings, as the discount rates to calculate lease liabilities. The Company had right-of-use assets totaling $ 5,393 and $ 3,155 as of December 31, 2025 and December 31, 2024 , respectively. Right-of-use assets are included in Interest receivable and other assets on the Consolidated Balance Sheets. The Company had lease liabilities totaling $ 5,795 and $ 3,645 as of December 31, 2025 and December 31, 2024 , respectively. Lease liabilities are included in Interest payable and other liabilities on the Consolidated Balance Sheets. The Company recognized lease expenses totaling $ 1,140 and $ 1,228 for the years ended December 31, 2025 and December 31, 2024 , respectively. Lease expense is included in Occupancy and Equipment expense on the Consolidated Statements of Income. The table below summarizes the payments of remaining lease liabilities at December 31: 2025 2026 $ 1,088 2027 1,029 2028 1,074 2029 1,025 2030 697 2031 and thereafter 1,671 Total lease payments 6,584 Less: interest ( 789 ) Present value of lease liabilities $ 5,795 The following table presents supplemental cash flow information related to leases for the year ended December 31: 2025 2024 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,125 $ 1,098 Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,163 $ — The following table presents the weighted average operating lease term and discount rate at December 31: 2025 2024 Weighted-average remaining lease term - operating leases, in years 6.52 4.87 Weighted-average discount rate - operating leases 3.51 % 2.36 % 95 Table of Contents ( 10 ) 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 commitments to extend credit in the form of loans or through standby letters of credit in addition to entering into commitments to sell loans in conjunction with our mortgage banking activities. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments, whose contract amounts represent credit risk at December 31 of the indicated periods, were as follows: 2025 2024 Undisbursed loan commitments $ 131,306 $ 140,092 Standby letters of credit 1,038 922 $ 132,344 $ 141,014 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank issues both financial and performance standby letters of credit. The financial standby letters of credit are primarily to guarantee payment to third parties. At December 31, 2025 , there were no financial standby letters of credit outstanding. The performance standby letters of credit are typically issued to municipalities as specific performance bonds. At December 31, 2025 , there was $ 1,038 issued in performance standby letters of credit and the Bank carried no liability. The Bank has experienced no draws on these letters of credit and does not expect to in the future; however, should a triggering event occur, the Bank either has collateral in excess of the letter of credit or imbedded agreements of recourse from the customer. The Bank has set aside a reserve for unfunded commitments in the amount of $ 1,200 and $ 700 at December 31, 2025 and 2024 , respectively, which is recorded in “interest payable and other liabilities” on the Consolidated Balance Sheets. Commitments to extend credit and standby letters of credit bear similar credit risk characteristics as outstanding loans. As of December 31, 2025 , the Company had no off-balance sheet derivatives requiring additional disclosure. The Company may enter into interest rate lock commitments in connection with its mortgage banking activities to fund residential mortgage loans within specified times in the future. There were no interest rate lock commitments at December 31, 2025 and 2024 . These commitments expose the Company to the risk that the price of the loan underlying the interest rate lock commitment might decline from the inception of the interest rate lock to the funding of the mortgage loan. To protect against this risk, the Company may enter into commitments to sell loans to economically hedge the risk of potential changes in the value of the loans that would result from the commitment. There were no commitments at December 31, 2025 and 2024 . Mortgage loans sold to investors may be sold with servicing rights retained, for which the Company makes only standard legal representations and warranties as to meeting certain underwriting and collateral documentation standards. Management believes that any liabilities that may result from such recourse provisions are not significant. 96 Table of Contents ( 11 ) Commitments and Contingencies At December 31, 2025 , the aggregate maturities for time deposits were as follows: Year ending December 31: 2026 $ 129,064 2027 9,751 2028 1,568 2029 644 2030 634 Thereafter — $ 141,661 The Company is subject to various legal proceedings in the normal course of its business. In the opinion of management, after having consulted with legal counsel, the outcome of the pending legal proceedings should not have a material adverse effect on the consolidated financial condition or results of operations of the Company. 97 Table of Contents ( 12 ) Capital Adequacy and Restriction on Dividends The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s and the Bank's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. Quantitative measures established by regulation to help ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below). In July 2013, the Federal Reserve and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory capital framework for U.S. banking organizations and to conform this framework to the guidelines published by the Basel Committee known as the Basel III Global Regulatory Framework for Capital and Liquidity. The Basel Committee is a committee of banking supervisory authorities from major countries in the global financial system which formulates broad supervisory standards and guidelines relating to financial institutions for implementation on a country-by-country basis. These rules adopted by the Federal Reserve and the other federal banking agencies (the U.S. Basel III Capital Rules) replaced the federal banking agencies’ general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules, in accordance with certain transition provisions. Banks, such as First Northern, became subject to the final rules on January 1, 2015. The final rules implemented higher minimum capital requirements, included a new common equity Tier 1 capital requirement, and established criteria that instruments must meet in order to be considered common equity Tier 1 capital, additional Tier 1 capital, or Tier 2 capital. The final rules provide for increased minimum capital ratios as follows: (a) a common equity Tier 1 capital ratio of 4.5%; (b) a Tier 1 capital ratio of 6%; (c) a total capital ratio of 8%; and (d) a Tier 1 leverage ratio to average consolidated assets of 4%. Under these rules, in order to avoid certain limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity Tier 1 capital above its minimum risk-based capital requirements (equal to 2.5% of total risk-weighted assets). The capital conservation buffer is designed to absorb losses during periods of economic stress. Pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act ("EGRRCPA"), the FRB adopted a final rule, effective August 31, 2018, amending the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (the “policy statement”) to increase the consolidated assets threshold to qualify to utilize the provisions of the policy statement from $1 billion to $3 billion. Bank holding companies, such as the Company, are subject to capital adequacy requirements of the FRB; however, bank holding companies which are subject to the policy statement are not subject to compliance with the regulatory capital requirements until they hold $3 billion or more in consolidated total assets. As a consequence, as of December 31, 2018, the Company was not required to comply with the FRB’s regulatory capital requirements until such time that its consolidated total assets equal $3 billion or more or if the FRB determines that the Company is no longer deemed to be a small bank holding company. However, if the Company had been subject to these regulatory capital requirements, it would have exceeded all regulatory requirements. In August of 2020, the Federal banking agencies adopted the final version of the community bank leverage ratio framework rule (the “CBLR”), implementing two interim final rules adopted in April of 2020. The rule provides an optional, simplified measure of capital adequacy. Under the optional CBLR framework, the CBLR was 8.5% through calendar year 2021 and is 9% thereafter. The rule is applicable to all non-advanced approaches FDIC-supervised institutions with less than $10 billion in total consolidated assets. Banks not electing the CBLR framework will continue to be subject to the generally applicable risk-based capital rule. On November 25, 2025, the US federal banking regulators proposed changes to the CBLR framework intended to encourage additional community banks to opt into the CBLR framework. This proposal would reduce the CBLR requirement from 9% to 8% and extend the grace period for qualifying institutions that fall below the 8% ratio to return to compliance from the current two quarters to four quarters, provided they maintain a 7% leverage ratio. At the present time, the Company and the Bank do not intend to elect to use the CBLR framework. 98 Table of Contents Management believes, as of December 31, 2025 , that the Bank met all capital adequacy requirements to which it is subject. As of December 31, 2025 , the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as "well capitalized" the Bank must meet the minimum ratios as set forth below. As of the date hereof, there have been no conditions or events since that notification that management believes have changed the institution’s category. The Bank had Tier I Leverage, Common Equity Tier 1, Tier I Risk-Based and Total Risk-Based capital above the “well capitalized” levels at December 31, 2025 and 2024 , respectively, as set forth in the following table (calculated in accordance with the Basel III capital rules): The Bank Adequately Well 2025 2024 Capitalized Capitalized Capital Ratio Capital Ratio Ratio* Ratio Tier 1 Leverage Capital (to Average Assets) $ 220,704 11.3 % $ 205,326 10.5 % 4.0 % 5.0 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) 220,704 17.6 % 205,326 16.4 % 4.5 % 6.5 % Tier 1 Capital (to Risk-Weighted Assets) 220,704 17.6 % 205,326 16.4 % 6.0 % 8.0 % Total Risk-Based Capital (to Risk-Weighted Assets) 236,352 18.9 % 220,977 17.7 % 8.0 % 10.0 % * Ratio for regulatory requirement excludes the capital conservation buffer of 2.50%. Banks chartered under California law, such as the Bank, generally may only pay cash dividends to the extent such payments do not exceed the lesser of retained earnings of the bank’s net income for its last three fiscal years (less any distributions to shareholders during such period). In the event a bank desires to pay cash dividends in excess of such amount, the bank may pay a cash dividend with the prior approval of the DFPI in an amount not exceeding the greatest of the bank’s retained earnings, the bank’s net income for its last fiscal year, or the Bank’s net income for its current fiscal year. 99 Table of Contents ( 13 ) Fair Value Measurement The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale and trading securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a non-recurring basis, such as loans held-for-sale, loans held-for-investment and certain other assets. These non-recurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process. Assets Recorded at Fair Value on a Recurring Basis The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 . Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs December 31, 2025 Total (Level 1) (Level 2) (Level 3) U.S. Treasury securities $ 87,556 $ 87,556 $ — $ — Securities of U.S. government agencies and corporations 85,344 — 85,344 — Obligations of states and political subdivisions 75,003 — 75,003 — Collateralized mortgage obligations 92,284 — 92,284 — Mortgage-backed securities 277,056 — 277,056 — Total investments at fair value $ 617,243 $ 87,556 $ 529,687 $ — Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs December 31, 2024 Total (Level 1) (Level 2) (Level 3) U.S. Treasury securities $ 105,545 $ 105,545 $ — $ — Securities of U.S. government agencies and corporations 95,684 — 95,684 — Obligations of states and political subdivisions 67,591 — 67,591 — Collateralized mortgage obligations 94,945 — 94,945 — Mortgage-backed securities 270,088 — 270,088 — Total investments at fair value $ 633,853 $ 105,545 $ 528,308 $ — 100 Table of Contents Assets Recorded at Fair Value on a Non-recurring Basis Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of December 31, 2025 and 2024. (in thousands) December 31, 2025 Carrying Value Level 1 Level 2 Level 3 Collateral dependent loans $ 835 $ — $ — $ 835 Total assets at fair value $ 835 $ — $ — $ 835 (in thousands) December 31, 2024 Carrying Value Level 1 Level 2 Level 3 Collateral dependent loans $ 139 $ — $ — $ 139 Total assets at fair value $ 139 $ — $ — $ 139 There were no liabilities measured at fair value on a recurring or non-recurring basis at December 31, 2025 and 2024 . Key methods and assumptions used in measuring the fair value of collateral dependent loans as of December 31, 2025 were as follows: Valuation Techniques Assumption Inputs Collateral dependent loans Fair value of underlying collateral, market, income, enterprise, liquidation External appraised values, management assumptions regarding market trends or other relevant factors, selling costs generally ranging from 6% to 10% The following section describes the valuation methodologies used for assets recorded at fair value. Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, if available. If quoted market prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions, and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets where valuations include significant unobservable assumptions. Collateral Dependent Loans The Company does not record loans at fair value on a recurring basis. Loans that do not share similar risk characteristics are individually evaluated by management. Included in loans individually evaluated are collateral dependent loans. A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. Collateral dependent loans are considered to have unique risk characteristics and are individually evaluated. The ACL on collateral dependent loans is measured using the fair value of the underlying collateral, adjusted for costs to sell when applicable, less the amortized cost basis of the financial asset. If the value of underlying collateral is determined to be less than the recorded amount of the loan, a charge-off will be taken. Collateral dependent loans where a charge-off is recorded based on the fair value of collateral require classification in the fair value hierarchy. When a loan is evaluated based on the fair value of the underlying collateral securing the loan, the Company records the collateral dependent loan as non-recurring Level 3 given the valuation includes significant unobservable assumptions. 101 Table of Contents Disclosures about Fair Value of Financial Instruments The following table summarizes fair value estimates for financial instruments for the years ended December 31, 2025 and 2024 , excluding financial instruments recorded at fair value on a recurring basis (summarized in the first table in this note). 2025 2024 Level Carrying amount Fair value Carrying amount Fair value Financial assets: Cash and cash equivalents 1 $ 145,554 $ 145,554 $ 119,448 $ 119,448 Certificates of deposit 2 10,180 10,243 16,074 16,129 Stock in Federal Home Loan Bank and other equity securities, at cost 3 10,871 10,871 10,518 10,518 Loans receivable: Net loans 3 1,050,473 990,239 1,046,852 974,746 Interest receivable 2 7,348 7,348 7,660 7,660 Mortgage servicing rights 3 1,159 1,748 1,312 1,910 Financial liabilities: Time deposits 3 141,661 141,713 149,970 149,752 Interest payable 2 724 724 1,215 1,215 Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument and expected exit prices. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include deferred tax liabilities and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in many of the estimates. 102 Table of Contents ( 14 ) Outstanding Shares and Earnings Per Share All income per share amounts have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026 , payable on March 25, 2026 , to shareholders of record as of February 27, 2026 . Earnings Per Share Basic and diluted earnings per share for the years ended December 31, were computed as follows: 2025 2024 Basic earnings per share: Net income $ 21,128 $ 20,034 Weighted average common shares outstanding 16,291,309 16,663,530 Basic earnings per share $ 1.30 $ 1.20 Diluted earnings per share: Net income $ 21,128 $ 20,034 Weighted average common shares outstanding 16,291,309 16,663,530 Effect of dilutive shares 279,972 223,193 Adjusted weighted average common shares outstanding 16,571,281 16,886,723 Diluted earnings per share $ 1.27 $ 1.19 Options not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 7,312 shares and 260,115 shares for the years ended December 31, 2025 and 2024 , respectively. Restricted stock not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 302 shares and 2,139 shares for the years ended December 31, 2025 and 2024 , respectively. 103 Table of Contents ( 15 ) Stock Compensation Plans The total number of shares authorized, number of shares outstanding, weighted average exercise prices, exercise prices and weighted average grant date fair value have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026, payable on March 25, 2026 to shareholders of record as of February 27, 2026. On May 13, 2025, the Company's shareholders approved the 2026 Stock Incentive Plan, which became effective on February 1, 2026 concurrent with the termination of the 2016 Stock Incentive Plan. There are 472,974 shares authorized under the 2026 Stock Incentive Plan. The total number of shares authorized has been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026 , payable on March 25, 2026 to shareholders of record as of February 27, 2026 . The 2026 Stock Incentive Plan will terminate on March 15, 2036. The Compensation Committee of the Board of Directors is authorized to prescribe the terms and conditions of each option, including exercise price, vestings, or duration of the option. Generally, option grants vest at a rate of 25 % per year after the first anniversary of the date of grant and restricted stock awards vest at a rate of 100 % after four years. Options expire 10 years after the date of grant. Options are granted with an exercise price of the fair value of the related common stock on the date of grant. Stock option activity under the 2016 Stock Incentive Plan during the year ended December 31, 2025 , was as follows: Stock Options Number of shares Weighted average exercise price Balance at December 31, 2024 538,850 $ 7.61 Granted — $ — Exercised ( 116,307 ) $ 6.92 Cancelled/Forfeited — $ — Expired — $ — Balance at December 31, 2025 422,543 $ 7.80 The following table presents information on stock options for the year ended December 31, 2025 : Number of Shares Weighted average exercise price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term Options exercised 116,307 $ 6.92 $ 268 — Stock options outstanding and expected to vest: 422,543 $ 7.80 $ 2,082 3.08 Stock options vested and currently exercisable: 409,484 $ 7.77 $ 2,026 2.98 There were no stock options granted by the Company during the year ended December 31, 2025 and December 31, 2024 . The intrinsic value of options exercised during the years ended December 31, was $ 268 in 2025 and $ 90 in 2024 . The fair value of awards vested during the years ended December 31 was $ 25 in 2025 and $ 88 in 2024 . As of December 31, 2025 , there was $ 6 of total unrecognized compensation related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 0.2 years. For the years ended December 31, 2025 and 2024 , there was $ 25 and $ 35 , respectively, of recognized compensation related to stock options. 104 Table of Contents The Company determines fair value at grant date using the Black-Scholes-Merton pricing model that takes into account the stock price at the grant date, the exercise price, the risk-free interest rate, the volatility of the underlying stock and the expected life of the option. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on both the implied volatilities from the traded option on the Company’s stock and historical volatility on the Company’s stock. The Company expenses the fair value of the option on a straight line basis over the vesting period. The Company estimates forfeitures and only recognizes expense for those shares that actually vest. In addition to stock options, the Company also grants restricted stock awards to directors, certain officers and employees. The restricted shares awarded become fully vested after four years of continued employment or service from the date of grant. Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. The following table presents information about non-vested restricted stock awards outstanding for the year ended December 31, 2025 : Restricted Stock Awards Number of Shares Weighted average grant date fair value Balance at December 31, 2024 286,355 $ 7.73 Granted 75,645 $ 9.24 Vested ( 78,066 ) $ 8.06 Cancelled/Forfeited — $ — Balance at December 31, 2025 283,934 $ 8.05 The aggregate intrinsic value of restricted stock awards vested in calendar years 2025 and 2024 , was $ 725 and $ 687 , respectively. The weighted average fair value per share of restricted stock awards granted during the years ended December 31, was $ 9.24 in 2025 and $ 7.58 in 2024 . As of December 31, 2025 , there was $ 876 of total unrecognized compensation related to non-vested restricted stock awards. This cost is expected to be recognized over a weighted average period of approximately 2.6 years. For the years ended December 31, 2025 and 2024 , there was $ 763 and $ 761 , respectively, of recognized compensation related to restricted stock awards. Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan ("ESPP"). On May 13, 2025, the Company's shareholders approved the 2026 ESPP, which became effective on November 23, 2025 concurrent with the termination of the 2016 ESPP. There are 315,000 shares authorized under the 2026 ESPP, which include authorized but unissued shares under the 2016 ESPP. The total number of shares authorized has been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026, payable on March 25, 2026 to shareholders of record as of February 27, 2026. The 2026 ESPP will expire on March 15, 2036. The ESPP is implemented by participation periods of not more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. An eligible employee is one who has been continually employed for at least ninety ( 90 ) days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85 % of the lower of the fair value on the last trading day before the Date of Participation or the fair value on the last trading day during the participation period. Approximately 45 % of eligible employees are participating in the ESPP in the current participation period, which began December 2, 2025 and will end November 23, 2026. 105 Table of Contents Under the ESPP, at the annual stock purchase date of November 23, 2025, there were $ 93 in contributions, and 12,073 shares were purchased at a price of $ 7.70 . For the years ended December 31, 2025 and 2024 , there was $ 61 and $ 50 , respectively, of recognized compensation related to ESPP issuances. Compensation cost is reported in salaries and employee benefits expense in the Consolidated Statements of Income. The total number of shares authorized, number of shares purchased and stock price have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5 % stock dividend declared on January 22, 2026, payable March 25, 2026, to shareholders of record as of February 27, 2026. ( 16 ) Profit Sharing Plan The Bank maintains a profit sharing plan for the benefit of its employees. Employees who have completed 1,000 hours of service and are actively employed on the last day of the plan year are eligible. Under the terms of this plan, a portion of the Bank’s profits, as determined by the Board of Directors, will be set aside and maintained in a trust fund for the benefit of qualified employees. Contributions to the plan, included in salaries and employee benefits in the Consolidated Statements of Income, were $ 1,980 and $ 1,870 in 2025 and 2024 , respectively. The profit sharing plan also has a 401 (k) feature that allows employees to contribute to the profit sharing plan, even if they are not eligible for a contribution from the Bank. An employee is eligible to make contributions through the 401 (k) feature on the 1 st of the month following 90 days of employment. 106 Table of Contents ( 17 ) Supplemental Compensation Plans EXECUTIVE RETIREMENT PLAN Pension Benefit Plans The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees. The Salary Continuation Plan provides defined annual benefit levels between $ 50 and $ 100 depending on responsibilities at the Bank. The retirement benefits are paid for 10 years following retirement at age 65. Reduced retirement benefits are available after age 55 and 10 years of service. There are currently one active and three retired participants in the Salary Continuation Plan. Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board. Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. There are currently two active and one retired participant in the SERP. The SERP benefit is calculated using 3 -year average salary plus 7 -year average bonus (average compensation). For each year of service, the benefit formula credits 2 % to 2.5 % of average compensation up to a cumulative maximum of 50%. Therefore, for an executive serving 20 to 25 years, the target benefit is 50 % of average compensation. The target benefit is reduced for other forms of retirement income provided by the Bank. Reductions are made for 50 % of the social security benefit expected at age 65 and for the accumulated value of contributions the Bank makes to the executive’s profit sharing plan. For purposes of this reduction, contributions to the profit sharing plan are accumulated each year at a 3 -year average of the yields on 10 -year Treasury securities. Retirement benefits are paid monthly for 120 months, plus 6 months for each full year of service over 10 years, up to a maximum of 180 months. Reduced benefits are payable for retirement prior to age 65. Should retirement occur prior to age 65, the benefit determined by the formula described above is reduced 5% for each year payments commence prior to age 65. Therefore, the new SERP benefit is reduced 50% for retirement at age 55. No benefit is payable for voluntary terminations prior to age 55. The following table sets forth the status of the Salary Continuation Plan and SERP as of December 31, 2025 and December 31, 2024 : 107 Table of Contents 2025 2024 Change in benefit obligation Benefit obligation at beginning of year $ 4,500 $ 4,979 Service cost 122 138 Interest cost 241 258 Plan gain ( 17 ) ( 391 ) Benefits paid ( 441 ) ( 484 ) Benefit obligation at end of year $ 4,405 $ 4,500 Change in plan assets Employer contribution $ 441 $ 484 Benefits paid ( 441 ) ( 484 ) Fair value of plan assets at end of year $ — $ — Reconciliation of funded status Funded status $ ( 4,405 ) $ ( 4,500 ) Unrecognized net plan loss ( 339 ) ( 322 ) Unrecognized prior service cost 28 29 Net amount recognized $ ( 4,716 ) $ ( 4,793 ) Amounts recognized in the consolidated balance sheets consist of: Accrued benefit liability $ ( 4,405 ) $ ( 4,500 ) Accumulated other comprehensive loss ( 311 ) ( 293 ) Net amount recognized $ ( 4,716 ) $ ( 4,793 ) The Company expects to recognize approximately $ 2 of the unrecognized net actuarial loss and prior service cost as a component of net periodic benefit cost in 2026. 108 Table of Contents For the Year ended December 31, 2025 2024 Components of net periodic benefit cost Service cost $ 122 $ 138 Interest cost 241 258 Amortization of prior service cost 2 2 Recognized actuarial loss — — Net periodic benefit cost $ 365 $ 398 Additional Information Minimum benefit obligation at year end $ 4,405 $ 4,500 Decrease in minimum liability included in other comprehensive loss $ ( 18 ) $ ( 393 ) Assumptions used to determine benefit obligations at December 31 2025 2024 Discount rate used to determine net periodic benefit cost for years ended December 31 5.50 % 5.30 % Discount rate used to determine benefit obligations at December 31 5.35 % 5.50 % Future salary increases 5.00 % 5.30 % Plan Assets The Bank informally funds the liabilities of the Salary Continuation Plan through life insurance purchased on the lives of plan participants. This informal funding does not meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose are not disclosed as part of the Salary Continuation Plan. Cash Flows Contributions and Estimated Benefit Payments For unfunded plans, contributions to the Salary Continuation Plan are the benefit payments made to participants. The Bank paid $ 441 in benefit payments during fiscal 2025 . The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years: Year ending December 31, Pension Benefits 2026 $ 269 2027 309 2028 309 2029 309 2030 309 2031- 2035 1,466 Disclosure of settlements and curtailments: There were no events during fiscal 2025 that would constitute a curtailment or settlement. 109 Table of Contents DIRECTORS ’ RETIREMENT PLAN On July 19, 2001, the Company and the Bank approved an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank. The Directors' Retirement Plan provides a retirement benefit equal to $1 per year of service as a director, up to a maximum benefit amount of $15. The retirement benefit is payable for ten years following retirement at age 65. Reduced retirement benefits are available after age 55 and ten years of service. The following table sets forth the status of the Directors' Retirement Plan as of December 31, 2025 and December 31, 2024 : 2025 2024 Change in benefit obligation Benefit obligation at beginning of year $ 397 $ 424 Service cost — — Interest cost 19 20 Plan gain 8 ( 2 ) Benefits paid ( 44 ) ( 45 ) Benefit obligation at end of year $ 380 $ 397 Change in plan assets Employer contribution $ 44 $ 45 Benefits paid ( 44 ) ( 45 ) Fair value of plan assets at end of year $ — $ — Reconciliation of funded status Funded status $ ( 380 ) $ ( 397 ) Unrecognized net plan gain ( 100 ) ( 142 ) Net amount recognized $ ( 480 ) $ ( 539 ) Amounts recognized in the consolidated balance sheets consist of: Accrued benefit liability $ ( 380 ) $ ( 397 ) Accumulated other comprehensive gain ( 100 ) ( 142 ) Net amount recognized $ ( 480 ) $ ( 539 ) 110 Table of Contents For the Year Ended December 31, 2025 2024 Components of net periodic benefit cost Service cost $ — $ — Interest cost 19 20 Recognized actuarial gain ( 34 ) ( 33 ) Net periodic benefit cost ( 15 ) ( 13 ) Additional Information Minimum benefit obligation at year end $ 380 $ 397 Decrease in minimum liability included in other comprehensive loss $ 42 $ 30 Assumptions used to determine benefit obligations at December 31 2025 2024 Discount rate used to determine net periodic benefit cost for years ended December 31 5.10 % 5.00 % Discount rate used to determine benefit obligations at December 31 4.60 % 5.10 % Plan Assets The Bank informally funds the liabilities of the Directors’ Retirement Plan through life insurance purchased on the lives of plan participants. This informal funding does not meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose are not disclosed as part of the Directors’ Retirement Plan. Cash Flows Contributions and Estimated Benefit Payments For unfunded plans, contributions to the Directors’ Retirement Plan are the benefit payments made to participants. The Bank paid $ 44 in benefit payments during fiscal year 2025 . The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years: Year ending December 31, Pension Benefits 2026 $ 45 2027 31 2028 20 2029 39 2030 45 2031-2039 321 Disclosure of settlements and curtailments: There were no events during fiscal year 2025 that would constitute a curtailment or settlement. 111 Table of Contents EXECUTIVE ELECTIVE DEFERRED COMPENSATION PLAN — 2001 EXECUTIVE DEFERRAL PLAN On July 19, 2001, the Bank approved a revised Executive Elective Deferred Compensation Plan ( “2001 Executive Deferral Plan”) for certain officers to provide them the ability to make elective deferrals of compensation due to tax law limitations on benefit levels under qualified plans. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The 2001 Executive Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating officers. During the year ended December 31, 2001, the Bank purchased insurance making a single-premium payment aggregating $ 1,125 , which is reported in other assets on the Consolidated Balance Sheets. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of December 31, 2025 and 2024 totaled $ 3,043 and $ 2,966 , respectively. The net decrease in accrued liability for the 2001 Executive Deferral Plan totaled $ 62 and $ 60 for the years ended December 31, 2025 and 2024 , respectively. The net decrease was due to payments totaling $ 65 for each of the years ended December 31, 2025 and 2024 , which was partially offset by interest accrued totaling $ 3 and $ 5 for the years ended December 31, 2025 and 2024 , respectively. Interest expense for the 2001 Executive Deferral Plan totaled $ 3 and $ 5 for the years ended December 31, 2025 and 2024 , respectively. DIRECTOR ELECTIVE DEFERRED FEE PLAN — 2001 DIRECTOR DEFERRAL PLAN On July 19, 2001, the Bank approved a Director Elective Deferred Fee Plan ( “2001 Director Deferral Plan”) for directors to provide them the ability to make elective deferrals of director's fees. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The 2001 Director Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating directors. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of December 31, 2025 and 2024 totaled $ 172 and $ 167 , respectively. The net decrease in accrued liability for the 2001 Director Deferral Plan totaled $ 4 for each of the years ended December 31, 2025 and 2024 . The net decrease was due to payments totaling $ 4 for each of the years ended December 31, 2025 and 2024 , respectively. Interest expense for the 2001 Director Deferral Plan totaled $ 0 for each of the years ended December 31, 2025 and 2024 , respectively. 112 Table of Contents ( 18 ) Income Taxes The provision for income tax expense consisted of the following for the years ended December 31: 2025 2024 Current: Federal $ 3,930 $ 4,525 State 2,702 2,678 6,632 7,203 Deferred: Federal ( 489 ) 324 State 134 279 ( 355 ) 603 $ 6,277 $ 7,806 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 , consisted of: 2025 2024 Deferred tax assets: Allowance for credit losses $ 4,586 $ 4,903 Deferred compensation 25 45 Retirement compensation 1,510 1,575 Stock based compensation 490 467 Current state franchise taxes 572 578 Loan deferral 475 426 Lease liability 1,675 1,065 Investment securities unrealized loss 6,520 14,337 General business credits 1,732 — Other 480 394 Deferred tax assets 18,065 23,790 Deferred tax liabilities: Fixed assets depreciation 421 761 FHLB dividends 182 184 Low Income Housing Tax Credit & Other Partnerships 756 824 Deferred loan costs 1,025 848 Mortgage servicing rights 338 388 Right of Use Asset 1,574 933 Postretirement benefits 120 129 Other 684 681 Total deferred tax liabilities 5,100 4,748 Net deferred tax assets (see Note 6) $ 12,965 $ 19,042 Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are deductible, management believed it is more-likely-than- not the Company will realize the benefits of these deductible differences. 113 Table of Contents At December 31, 2025 , the Company had no state net operating loss carry forwards. At December 31, 2025, the Company had federal tax credit carry forwards totaling $ 1,732 . A reconciliation of income taxes computed at the federal statutory rate and the provision for income taxes for the years ended December 31, is as follows: 2025 2024 Federal income tax expense computed at the statutory rate 5,755 21.0 % 5,846 21.0 % State income tax expense, net of federal tax offset* 2,273 8.3 % 2,337 8.4 % Purchased tax credits ( 1,215 ) ( 4.4 )% — — % Nontaxable and nondeductible items: Tax exempt interest, net of disallowance ( 375 ) ( 1.4 )% ( 300 ) ( 1.1 )% Other ( 85 ) ( 0.3 )% ( 48 ) ( 0.2 )% Other adjustments ( 76 ) ( 0.3 )% ( 29 ) ( 0.1 )% Provision for income tax expense and effective tax rate 6,277 22.9 % 7,806 28.0 % * State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category. Federal income taxes paid totaled $ 16,060 and $ 4,920 for the years ended December 31, 2025 and 2024, respectively. California income taxes paid totaled $ 2,720 and $ 2,750 as of December 31, 2025 and 2024, respectively. Accounting for Uncertainty in Income Taxes The Company had no unrecognized tax benefits for the years ended December 31, 2025 and 2024 . The Company recognized no changes in unrecognized tax benefits during 2025 and 2024 , due to the expiration of a statute of limitations. The Company had no significant uncertain tax positions as of December 31, 2025 and December 31, 2024 . The Company does not currently anticipate any significant increase or decrease in unrecognized tax benefits during 2026. The Company classifies interest and penalties as a component of the provision for income taxes. At December 31, 2025 , there were no unrecognized interest and penalties. The tax years ended December 31, 2024 , 2023 , and 2022 remain subject to examination by the Internal Revenue Service. The tax years ended December 31, 2024 , 2023 , 2022 , and 2021 remain subject to examination by the California Franchise Tax Board. The deductibility of these tax positions will be determined through examination by the appropriate tax authorities or the expiration of the tax statute of limitations. 114 Table of Contents ( 19 ) Accumulated Other Comprehensive Income/(Loss) The following table details activity in accumulated other comprehensive income/(loss) for the year ended December 31, 2025 . Unrealized Losses on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Loss Balance at December 31, 2024 $ ( 34,157 ) $ 207 $ 99 $ ( 33,851 ) Current period other comprehensive income (loss), net of tax 18,388 14 ( 29 ) 18,373 Balance at December 31, 2025 $ ( 15,769 ) $ 221 $ 70 $ ( 15,478 ) The following table details activity in accumulated other comprehensive income/(loss) for the year ended December 31, 2024 . Unrealized Gains (Losses) on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance at December 31, 2023 $ ( 33,778 ) $ ( 70 ) $ 121 $ ( 33,727 ) Current period other comprehensive income (loss), net of tax ( 379 ) 277 ( 22 ) ( 124 ) Balance at December 31, 2024 $ ( 34,157 ) $ 207 $ 99 $ ( 33,851 ) 115 Table of Contents ( 20 ) Supplemental Consolidated Statements of Cash Flows Information Supplemental disclosures to the Consolidated Statements of Cash Flows for the years ended December 31, are as follows: 2025 2024 Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 15,325 $ 14,644 Income taxes 18,780 7,670 Supplemental disclosure of non-cash investing and financing activities: Stock dividend distributed 7,510 6,392 Fair value adjustment of securities available for sale, net of tax of $ 7,816 and $( 157 ) for the years ended December 31, 2025 and 2024, respectively 18,388 ( 379 ) Recognition of right-of-use assets obtained in exchange for operating lease liabilities 3,163 — Market value of shares tendered in-lieu of cash to pay for exercise of options 805 348 Transfer of premises and equipment to other real estate owned 1,241 — Acquisition of intangible asset 1,742 — 116 Table of Contents ( 21 ) Parent Company Financial Information This information should be read in conjunction with the other notes to the consolidated financial statements. The following presents summary balance sheets and summary statements of income and cash flows information for the years ended December 31: Balance Sheets 2025 2024 Assets Cash $ 2,021 $ 1,097 Investment in wholly-owned subsidiary 209,558 174,796 Interest receivable and other assets 439 439 Total assets $ 212,018 $ 176,332 Liabilities and stockholders’ equity Liabilities — — Stockholders’ equity 212,018 176,332 Total liabilities and stockholders’ equity $ 212,018 $ 176,332 Statements of Income 2025 2024 Dividends from subsidiary 5,000 3,000 Other operating expenses ( 370 ) ( 318 ) Income tax benefit 109 94 Loss before undistributed earnings of subsidiary 4,739 2,776 Equity in undistributed earnings of subsidiary 16,389 17,258 Net income $ 21,128 $ 20,034 Statements of Cash Flows 2025 2024 Net income $ 21,128 $ 20,034 Adjustments to reconcile net income to net cash provided by operating activities Stock-based compensation 849 846 Increase in interest receivable and other assets — ( 215 ) Equity in undistributed earnings of subsidiary ( 16,389 ) ( 17,258 ) Net cash provided by operating activities 5,588 3,407 Cash flows from financing activities: Common stock issued 93 102 Stock repurchases ( 4,749 ) ( 3,764 ) Cash dividends paid in lieu of fractional shares ( 8 ) ( 7 ) Net cash provided by financing activities ( 4,664 ) ( 3,669 ) Net change in cash 924 ( 262 ) Cash at beginning of year 1,097 1,359 Cash at end of year $ 2,021 $ 1,097 117 Table of Contents ( 22 ) Related Party Transactions The Bank, in the ordinary course of business, has loan and deposit transactions with directors and executive officers. In management’s opinion, these transactions were on substantially the same terms as comparable transactions with other customers of the Bank. The amount of such deposits totaled approximately $ 4,582 and $ 3,963 at December 31, 2025 and 2024 , respectively. The following is an analysis of the activity of loans to executive officers and directors for the years ended December 31: 2025 2024 Outstanding balance, beginning of year $ 1,557 $ 2,422 Outstanding balance, new director 92 — Credit granted 155 — Repayments / Reductions ( 283 ) ( 865 ) Outstanding balance, end of year $ 1,521 $ 1,557 ( 23 ) Segment Disclosures The Company has one reportable segment: banking operations. The Company is engaged in a single line of business, indicative of a traditional banking institution, gathering deposits and originating loans in its primary market areas. Loans, interest bearing accounts, investment securities, deposits, and non-interest income provide the revenues of the banking operation. Loan products offered to customers generate a majority of the Company’s interest and dividend income. Deposit products offered to customers generate non-interest income such as fees and service charges. Interest income on securities, net gains on sales of loans, and debit card income are other sources of revenue. Interest expense, provisions for credit losses, salaries and employee benefits, occupancy and equipment, and data processing provide significant expenses in banking operations. The Company manages its operations, allocates resources and monitors and reports its financials as a single operating segment. The Company's Chief Executive Officer is considered the Chief Operating Decision Maker. The Chief Operating Decision Maker evaluates segment performance using consolidated net income. Accounting policies for segments are the same as those described in Note 1 of Notes to Consolidated Financial Statements. For the Year Ended December 31 2025 2024 Interest and dividend income $ 82,307 $ 78,652 Reconciliation of revenue: Other revenues 6,097 6,019 Total consolidated revenue 88,404 84,671 Less: Interest expense 14,835 14,292 Segment net interest income and noninterest income 73,569 70,379 Less: Reversal of provision for credit losses — ( 250 ) Salaries and employee benefits 25,375 23,850 Occupancy and equipment 5,067 4,736 Data processing 4,573 4,224 Other banking segment items 11,149 9,979 Provision for income taxes 6,277 7,806 Segment net income/consolidated net income $ 21,128 $ 20,034 Reconciliation of assets: Total assets for reportable segment $ 1,910,950 $ 1,891,722 Other assets — — Total consolidated assets $ 1,910,950 $ 1,891,722 118 Table of Contents ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.