What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-13 compared with 2025-11-12 · 150 added, 279 removed, 959 unchanged (31% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(Dollars in thousands) September 30,

(Dollars in thousands) March 31,

2026 December 31,

1 unchanged sentence

Interest bearing deposits in other financial institutions 102,997 101,382

Federal funds sold 563 654

Total cash and cash equivalents 118,755 119,647

16 unchanged sentences

Total 1,719,071 1,726,971

Repurchase agreements 48,426 40,116

Federal funds purchased and repurchase agreements 40,815 39,703

Borrowed funds 50,000 45,000

8 unchanged sentences

shares issued and outstanding:

September 30, 2025 - 4,327,511 December 31, 2024 - 4,313,698

March 31, 2026 - 4,330,486 December 31, 2025 - 4,326,747

Additional paid-in capital 70,397 70,331

6 unchanged sentences

Condensed Consolidated Statements of Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in thousands, except per share data) 2026 2025

6 unchanged sentences

Deposits 6,959 8,045

Repurchase agreements 392 435 1,110 1,204

Federal funds purchased and repurchase agreements 272 348

Borrowed funds 419 635

8 unchanged sentences

Gain (loss) on sale of loans held-for-sale, net 257 230

Gain (loss) on sale of securities, net - - - ( 531 )

Increase (decrease) in cash value of bank owned life insurance 210 205 628 610

Gain (loss) on sale of real estate ( 56 ) - ( 56 ) 11,873

Other 249 130 314 154

Bank owned life insurance 201 198

Total non-interest income 2,417 2,229

19 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended September 30 Nine Months Ended September 30

Three Months Ended March 31

(Dollars in thousands) 2026 2025

Net income $ 2,242 $ 455

Net change in net unrealized gains and losses on securities available-for-sale:

Unrealized gain (loss) arising during the period 10,912 13,957 11,601 3,907

reclassification adjustment for losses included in net income - - - 531

Net securities gain (loss) during the period 10,912 13,957 11,601 4,438

Tax effect ( 2,618 ) ( 3,259 ) ( 2,783 ) ( 1,066 )

Unrealized gains (losses) on securities available for sale:

Changes in unrealized gains (losses) on securities available for sale ( 5,330 ) ( 210 )

tax expense (benefit) ( 1,279 ) ( 50 )

Other comprehensive income (loss), net of tax ( 4,051 ) ( 160 )

9 unchanged sentences

Stockholders'

Balance at June 30, 2024 $ - $ 69,778 $ ( 58,939 ) $ 137,792 $ 148,631

Net income - - - 606 606

Other comprehensive income (loss), net of tax - - 10,698 - 10,698

Stock-based compensation expense - 138 - - 138

Cash dividends, $ 0.12 per share

- - - ( 518 ) ( 518 )

Balance at September 30, 2024 $ - $ 69,916 $ ( 48,241 ) $ 137,880 $ 159,555

Balance at January 1, 2025 $ - $ 70,034 $ ( 58,084 ) $ 139,464 $ 151,414

1 unchanged sentence

Other comprehensive income (loss), net of tax - - ( 160 ) - ( 160 )

Net surrender value of 3,364 restricted stock awards

- ( 82 ) - - ( 82 )

Stock-based compensation expense - 98 - - 98

Cash dividends, $ 0.36 per share

- - - ( 1,552 ) ( 1,552 )

Balance at September 30, 2024 $ - $ 69,916 $ ( 48,241 ) $ 137,880 $ 159,555

Balance at June 30, 2025 $ - $ 70,263 $ ( 57,560 ) $ 141,550 $ 154,253

Net income - - - 3,497 3,497

Other comprehensive income (loss), net of tax - - 8,294 - 8,294

Net surrender value of 5,328 restricted stock awards

- ( 146 ) - - ( 146 )

Stock-based compensation expense - 116 - - 116

Cash dividend, $ 0.12 per share

- - - ( 519 ) ( 519 )

Balance at September 30, 2025 $ - $ 70,233 $ ( 49,266 ) $ 144,528 $ 165,495

Balance at March 31, 2025 $ - $ 70,132 $ ( 58,244 ) $ 139,919 $ 151,807

Balance at January 1, 2026 $ - $ 70,331 $ ( 41,662 ) $ 145,994 $ 174,663

6 unchanged sentences

- - - ( 520 ) ( 520 )

Balance at September 30, 2025 $ - $ 70,233 $ ( 49,266 ) $ 144,528 $ 165,495

Balance at March 31, 2026 $ - $ 70,397 $ ( 45,713 ) $ 147,716 $ 172,400

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30,

Three months ended March 31,

(Dollars in thousands) 2026 2025

7 unchanged sentences

Cash payments for lease liabilities ( 404 ) ( 397 )

(Gain) loss on sale of securities, net - 531

(Gain) loss on sale of loans held-for-sale, net ( 276 ) ( 265 )

(Gain) loss on sale of real estate 56 ( 11,873 )

(Gain) loss on sale of foreclosed real estate - ( 1 )

(Increase) decrease of cash value of bank owned life insurance ( 201 ) ( 198 )

(Gain) loss on death benefits of bank-owned life insurance ( 236 ) -

(Gain) loss on derivatives 19 35

8 unchanged sentences

Proceeds from maturities and pay downs of securities available-for-sale 2,886 2,863

Proceeds from sales of securities available-for-sale - 14,698

Purchase of loans ( 10,312 ) -

Net change in loans receivable 5,402 16,946

Purchase of premises and equipment ( 135 ) ( 183 )

Proceeds from sale of premises and equipment 667 17,677

Proceeds from sale of foreclosed real estate - 72

Proceeds from death benefits of bank owned life insurance 535 -

Net cash provided by (used in) investing activities ( 2,159 ) 19,698

4 unchanged sentences

Net surrender value of restricted stock awards ( 60 ) -

Change in repurchase agreements 8,310 4,914

Change in federal funds purchased and repurchase agreements 1,112 4,937

Dividends paid ( 520 ) ( 518 )

6 unchanged sentences

Interest $ 8,621 $ 8,994

Income taxes - 385

Noncash activities:

Dividends declared not paid - 518

Right-of-use asset obtained in exchange for lease liability - 16,140

Transfer of premises and equipment to other assets 103 -

See accompanying notes to condensed consolidated financial statements.

5 unchanged sentences

The Company has no other business activity other than being a holding company for the Bank and the Company’s earnings are primarily dependent upon the earnings of the Bank.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by U.S.

generally accepted accounting principles ("GAAP") for complete presentation of condensed consolidated financial statements.

In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary to present fairly the condensed consolidated balance sheets of the Company as of September 30, 2025, and December 31, 2024, and the condensed consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the three and nine months ended September 30, 2025, and 2024, and condensed consolidated statements of cash flows for the nine months ended September 30, 2025, and 2024.

The income reported for the nine months ended September 30, 2025, is not necessarily indicative of the results to be expected for the full year.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by GAAP for complete presentation of condensed consolidated financial statements.

In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary to present fairly the condensed consolidated balance sheets of the Company as of March 31, 2026, and December 31, 2025, and the condensed consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the three months ended March 31, 2026, and 2025, and condensed consolidated statements of cash flows for the three months ended March 31, 2026, and 2025.

The income reported for the three months ended March 31, 2026, is not necessarily indicative of the results to be expected for the full year.

The Company's revenue is primarily derived from the business of banking.

The Company's financial performance is monitored on a consolidated basis by the CEO, who is considered to be the Company's Chief Operating Decision Maker ("CODM").

The Company's financial performance is monitored on a consolidated basis by the CEO, who is considered to be the Company's CODM.

This review is supported by the Chief Financial Officer, Chief Revenue Officer, and Chief Operating Officer.

13 unchanged sentences

Note 3 – Accounting Pronouncements Recently Adopted or Issued

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative.

The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K.

The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K.

Any amendments the SEC

does not remove by June 30, 2027 will not be effective.

As we are currently subject to these SEC requirements, this ASU is not expected to have a material impact on our condensed consolidated financial statements or related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures.

This accounting standards update will be effective for us for fiscal year 2025, with early adoption permitted.

We are currently evaluating the impact of this accounting standard, but do not expect it to have a material impact on our condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt-Debt With Conversion and Other Options, which clarifies the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods beginning after December 15, 2025.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods

beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our condensed consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for all entities and an accounting policy election that is available to all entities other than public business entities related to applying ASC-320 to simplify the measurement of credit losses on current accounts receivable and current contract assets that occur from transactions accounted for under ASC 606.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods beginning after December 15, 2025.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):

Purchased Loans, which expands the gross-up approach for initial recognition and measurement of acquired financial assets to purchased seasoned loans.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods.

Early adoption is permitted.

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our condensed consolidated financial statements.

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our consolidated financial statements.

Note 4 - Securities

The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

The estimated fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

(Dollars in thousands)

Losses Estimated

September 30, 2025

government sponsored entities $ 8,884 $ - $ ( 498 ) $ 8,386

March 31, 2026

government agency securities(1) $ 8,884 $ - $ ( 401 ) $ 8,483

Collateralized mortgage obligations and residential mortgage-backed securities 120,947 - ( 19,045 ) 101,902

2 unchanged sentences

Total securities available-for-sale $ 367,815 $ - $ ( 60,129 ) $ 307,686

(1) Includes securities issued or backed by the U.S.

government and its agencies and U.S.

government sponsored entities.

(Dollars in thousands)

1 unchanged sentence

December 31, 2025

government sponsored entities $ 8,884 $ - $ ( 823 ) $ 8,061

government agency securities(1) $ 8,884 $ - $ ( 418 ) $ 8,466

Collateralized mortgage obligations and residential mortgage-backed securities 123,833 - ( 19,168 ) 104,665

2 unchanged sentences

Total securities available-for-sale $ 371,026 $ 2 $ ( 54,801 ) $ 316,227

The cost basis and estimated fair value of available-for-sale debt securities at September 30, 2025, by contractual maturity, were as follows.

(1) Includes securities issued or backed by the U.S.

government and its agencies and U.S.

government sponsored entities.

The cost basis and estimated fair value of available-for-sale debt securities at March 31, 2026, by contractual maturity, were as follows.

Securities not due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.

1 unchanged sentence

Available-for-sale

September 30, 2025 Cost

March 31, 2026 Cost

Basis Estimated

6 unchanged sentences

Sales of available-for-sale securities were as follows for the quarter ended:

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

Three Months Ended March 31

Proceeds $ - $ -

4 unchanged sentences

Unrealized loss

Beginning balance, June 30, 2025 $ ( 57,560 )

Period change 8,294

Ending balance, September 30, 2025 $ ( 49,266 )

(Dollars in thousands)

Unrealized loss

Beginning balance, June 30, 2024 $ ( 58,939 )

Current period change 10,698

Ending balance, September 30, 2024 $ ( 48,241 )

(Dollars in thousands)

Unrealized loss

Beginning Balance, January 1, 2026 $ ( 41,662 )

Period change ( 4,051 )

Ending Balance, September 30, 2025 $ ( 49,266 )

Ending Balance, March 31, 2026 $ ( 45,713 )

(Dollars in thousands)

2 unchanged sentences

Current period change ( 160 )

Ending balance, September 30, 2024 $ ( 48,241 )

Securities with market values of approximately $ 334.4 million and $ 326.5 million were pledged as of September 30, 2025 and December 31, 2024, respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law.

Securities with unrealized losses at September 30, 2025, and December 31, 2024 not recognized in income are as follows:

Ending balance, March 31, 2025 $ ( 58,244 )

Securities with market values of approximately $ 306.9 million and $ 315.5 million were pledged as of March 31, 2026 and December 31, 2025, respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law.

Securities with unrealized losses not recognized in income at March 31, 2026, and December 31, 2025, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

(Dollars in thousands)

8 unchanged sentences

in Loss Position

September 30, 2025

government sponsored entities $ - $ - $ 8,386 $ ( 498 ) $ 8,386 $ ( 498 ) 100.0 %

March 31, 2026

government agency securities $ - $ - $ 8,483 $ ( 401 ) $ 8,483 $ ( 401 ) 100.0 %

Collateralized mortgage obligations and residential mortgage-backed securities - - 101,902 ( 19,045 ) 101,902 ( 19,045 ) 100.0 %

1 unchanged sentence

Collateralized debt obligations - - 1,891 ( 247 ) 1,891 ( 247 ) 100.0 %

Total temporarily impaired $ - $ - $ 335,150 $ ( 64,813 ) $ 335,150 $ ( 64,813 ) 100.0 %

Total $ 1,819 $ ( 55 ) $ 305,867 $ ( 60,074 ) $ 307,686 $ ( 60,129 ) 100.0 %

Number of securities 3 367 370

10 unchanged sentences

December 31, 2025

government sponsored entities $ - $ - $ 8,061 $ ( 823 ) $ 8,061 $ ( 823 ) 100.0 %

government agency securities $ - $ - $ 8,466 $ ( 418 ) $ 8,466 $ ( 418 ) 100.0 %

Collateralized mortgage obligations and residential mortgage-backed securities - - 104,665 ( 19,168 ) 104,665 ( 19,168 ) 100.0 %

1 unchanged sentence

Collateralized debt obligations - - 1,882 ( 259 ) 1,882 ( 259 ) 100.0 %

Total temporarily impaired $ 3,310 $ ( 156 ) $ 330,244 $ ( 76,258 ) $ 333,554 $ ( 76,414 ) 100.0 %

Total $ - $ - $ 315,482 $ ( 54,801 ) $ 315,482 $ ( 54,801 ) 99.8 %

Number of securities - 369 369

2 unchanged sentences

The fair values are expected to recover as the securities approach maturity.

Collateralized debt obligations with a cost basis of $ 2.1 million and fair value of $ 1.6 million at September 30, 2025 and $ 1.4 million at December 31, 2024, had previously recorded impairment of $ 173 thousand, which will not be recoverable until maturity of the security.

Accrued interest receivable on AFS debt securities totaled $ 2.2 million at September 30, 2025, and $ 2.3 million at December 31, 2024.

Collateralized debt obligations with a cost basis of $ 2.1 million and fair value of $ 1.9 million at March 31, 2026 and a cost basis of $ 2.1 million and a fair value of $ 1.9 million at December 31, 2025, had previously recorded impairment of $ 173 thousand, which will not be recoverable until maturity of the security.

Accrued interest receivable on AFS debt securities totaled $ 2.0 million at March 31, 2026, and $ 2.0 million at December 31, 2025.

These amounts are excluded from the estimate of credit losses.

10 unchanged sentences

Fixed rate mortgage loans may be sold and/or classified as held for sale to control exposure to interest rate risk.

The Company’s Adjustable-Rate Mortgage Loans (“ARMs”) include offerings that have a three , five , seven or ten year fixed period.

The Company’s ARMs include offerings that have a three , five , seven or ten year fixed period.

The ability of the Company to successfully market ARM’s depends upon loan demand, prevailing interest rates, volatility of interest rates, and terms offered by competitors.

27 unchanged sentences

Generally if the loans are not owner occupied, these types of loans require proof of intent to lease and a confirmed end-loan takeout.

In general, loans made do not exceed 80 % of the appraised value of the property.

In general, loans made do not exceed 80 % of the appraised value of the

Commercial construction loans are typically made for periods not to exceed two years or date of occupancy, whichever is less.

21 unchanged sentences

The Company is permitted to purchase non-rated municipal securities, tax anticipation notes and warrants within the local market area.

Loans consist of the following as of September 30, 2025, and December 31, 2024:

(Dollars in thousands) September 30, 2025 December 31, 2024

Loans consist of the following as of March 31, 2026, and December 31, 2025:

(Dollars in thousands) March 31, 2026 December 31, 2025

Loans secured by real estate:

18 unchanged sentences

Loans Total Loans

September 30, 2025

March 31, 2026

Residential real estate $ 7,792 $ 1,677 $ - $ 9,469 $ 428,831 $ 438,300 $ 6,797 $ 445,097

19 unchanged sentences

Total $ 13,669 $ 6,964 $ - $ 20,633 $ 1,417,029 $ 1,437,662 $ 11,162 $ 1,448,824

The following table shows the amortized cost of loans, segregated by portfolio segment, credit quality rating and year of origination as of September 30, 2025, and December 31, 2024, and gross charge-offs for the nine months ended September 30, 2025, and for the year ended December 31, 2024.

September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Revolving

The following table shows the amortized cost of loans, segregated by portfolio segment, credit quality rating and year of origination as of March 31, 2026, and December 31, 2025, and gross charge-offs for the three months ended March 31, 2026, and for the year ended December 31, 2025.

March 31, 2026 2026 2025 2024 2023 2022 Prior Revolving Revolving

Total Loans Receivable $ 81,826 $ 198,143 $ 135,564 $ 134,662 $ 263,157 $ 640,068 $ - $ - $ 1,453,420

19 unchanged sentences

Pass (1-6) $ 12,107 $ 43,234 $ 9,525 $ 8,653 $ 280 $ 131 $ - $ - $ 73,930

Special Mention (7) 486 - - - - - - - 486

Substandard (8) - - - 936 - 1,230 - - 2,166

67 unchanged sentences

Pass (1-6) $ - $ - $ - $ 1,733 $ 10,383 $ 11,493 $ - $ - $ 23,609

Special Mention (7) - - - - - 28 - - 28

Substandard (8) - - - - 46 25 - - 71

57 unchanged sentences

Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty.

These loans have all of the weaknesses of those classified as Substandard;

These loans have all of the

weaknesses of those classified as Substandard;

however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable.

2 unchanged sentences

Loans classified as substandard or worse were individually evaluated for impairment and specific reserves were established, if applicable.

gradings for loans with balances greater than $ 1 million are updated every 12 months through analysis during origination, renewals, modifications, or regular annual review.

Risk gradings for loans with balances greater than $ 1 million are updated every 12 months through analysis during origination, renewals, modifications, or regular annual review.

Risk gradings for loans with balances less than $ 1 million are updated primarily through analysis during origination, renewals, modifications, or periodic review.

9 unchanged sentences

Because the effect of most modifications to borrowers experiencing financial difficulty is already included in the allowance for credit losses, no change to the allowance for credit losses is generally recorded for these modifications.

The following table shows the amortized cost basis of loans at September 30, 2025, that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2025, segregated by portfolio segment and type of modification.

The following table shows the amortized cost basis of loans at March 31, 2026 and March 31, 2025, that were both experiencing financial difficulty and modified during the three months ended March 31, 2026 and March 31, 2025, segregated by portfolio segment and type of modification.

The percentage of the amortized cost of loans that were modified to borrowers in financial distress as compared to the amortized cost of each segment of financing receivable is also presented below.

For the three months ended September 30, 2025

(Dollars in thousands) Payment

Extension Interest

Reduction Combination

Term Extension

and Interest Rate

Reduction % of Total

Residential real estate $ - $ 307 $ - $ - 0.07 %

Commercial real estate - 390 - - 0.07 %

Total $ - $ 697 $ - $ - 0.05 %

For the three months ended September 30, 2024

(Dollars in thousands) Payment

Extension Interest

Reduction Combination

Term Extension

and Interest Rate

Reduction % of Total

Residential real estate $ 121 $ 332 $ - $ - 0.10 %

Total $ 121 $ 332 $ - $ - 0.03 %

For the nine months ended September 30, 2025

Three Months Ended March 31, 2026

(Dollars in thousands) Payment

5 unchanged sentences

Residential real estate $ 676 $ 1,402 $ - $ - 0.47 %

Commercial real estate 135 390 - - 0.09 %

Construction and land development 654 - - - 0.82 %

Commercial business 1,053 - - - 1.09 %

Total $ 1,842 $ 862 $ - $ - 0.18 %

For the nine months ended September 30, 2024

Three Months Ended March 31, 2025

(Dollars in thousands) Payment

5 unchanged sentences

Residential real estate $ - $ 172 $ - $ - 0.04 %

Total $ 253 $ 1,807 $ - $ - 0.14 %

The financial effects of payment delay modifications and term extension modifications had a forbearance average of five months and one hundred eighty-seven months weighted average extension to life of loan, respectively.

There were no commitments to lend additional amounts to the borrowers included in the previous tables.

The borrowers with term extension have had their maturity dates extended and as a result their monthly payments were reduced or had payments added to the end of the loan which resulted in payment relief.

For the three months ended September 30, 2025

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Residential real estate $ - — % 7 -

Commercial real estate $ - — % 180 -

For the three months ended September 30, 2024

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Residential real estate $ - — % 4 7

For the nine months ended September 30, 2025

The borrowers with term extension have had their payments deferred which resulted in payment relief or maturity dates extended and as a result their monthly payments were reduced or had payments added to the end of the loan which resulted in payment relief.

Three Months Ended March 31, 2026

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Residential real estate $ - — % 3 8

Commercial real estate $ - — % 180 5

For the nine months ended September 30, 2024

Three Months Ended March 31, 2025

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

2 unchanged sentences

The following tables present the performance of such loans in the twelve months following modification.

September 30, 2025

March 31, 2026

(Dollars in thousands) Current 30-59 Days

Past Due 60-89

Due Greater Than 90

Past Due 60-89 Days

Past Due Greater Than 90

Days Past Due

Residential real estate $ 1,834 $ - $ - $ -

Home equity 30 - - -

Commercial real estate - 389 - -

Construction and land development - - - 654

Commercial business 2 - - 1,051

Total $ 1,834 $ 389 $ - $ -

September 30, 2024

March 31, 2025

(Dollars in thousands) Current 30-59 Days

7 unchanged sentences

All modified loans are deemed collectible.

As part of the normal course of business, the Company had $ 2.1 million in loans involved in the foreclosure process at September 30, 2025 compared to $ 700 thousand at December 31, 2024.

The Company had no other real estate owned as of September 30, 2025 and December 31, 2024.

As part of the normal course of business, the Company had $ 1.1 million in loans involved in the foreclosure process at both March 31, 2026 and December 31, 2025.

The Company had $ 89 thousand in other real estate owned as of both March 31, 2026 and December 31, 2025.

Acquired Loan Purchase Discounts

As part of the fair value of loans receivable, there was a net fair value discount for loans acquired of $ 3.9 million at September 30, 2025, compared to $ 4.4 million at December 31, 2024.

Accretable yield, or income recorded for the nine months ended September 30, is as follows:

As part of the fair value of loans receivable, there was a net fair value discount for loans acquired of $ 3.4 million at March 31, 2026, compared to $ 3.6 million at December 31, 2025.

Accretable yield, or income recorded for the three months ended March 31, is as follows:

(Dollars in thousands) Total

5 unchanged sentences

Allowance for Credit Losses

The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio utilizing guidance in Accounting Standards Codification (ASC) Topic 326.

The allowance for credit losses is established for current expected credit losses on the Company’s loan portfolio utilizing guidance in ASC Topic 326.

The determination of the allowance requires significant judgment to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually.

4 unchanged sentences

The Company categorizes the loan portfolio into nine segments based on similar risk characteristics.

Loans within each segment are collectively evaluated using the probability of default (“PD”)/loss given default (“LGD”) methodology (PD/LGD).

In creating the “current expected credit loss (CECL)” model as required under ASC 326, the Company has established a two-year reasonable and supportable forecast period with a two-year straight line reversion to the long-term historical average.

Loans within each segment are collectively evaluated using the PD/LGD methodology.

In creating the CECL model as required under ASC 326, the Company has established a two-year reasonable and supportable forecast period with a two-year straight line reversion to the long-term historical average.

Due to its minimal loss history, the Company elected to use peer data for a more reasonable calculation.

The following tables show the changes in the allowance for credit losses, segregated by portfolio segment, for the three and nine months ended September 30, 2025, and 2024.

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended September 30, 2025:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

Allowance for credit losses:

Residential real estate $ 2,755 $ - $ 15 $ ( 22 ) $ 2,748

Home equity 738 - - ( 56 ) 682

Commercial real estate 9,150 - - 86 9,236

Construction and land development 1,495 - - ( 345 ) 1,150

Multifamily 2,301 - 1 226 2,528

Commercial business 1,603 ( 276 ) - 141 1,468

Consumer 2 ( 14 ) 6 9 3

Manufactured homes 125 - - ( 9 ) 116

Government 15 - - 31 46

Total $ 18,184 $ ( 290 ) $ 22 $ 61 $ 17,977

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended September 30, 2024:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

Allowance for credit losses:

Residential real estate $ 4,297 $ ( 28 ) $ 9 $ 170 $ 4,448

Home equity 727 - - 107 834

Commercial real estate 6,903 - 1 ( 622 ) 6,282

Construction and land development 3,067 - - ( 261 ) 2,806

Multifamily 879 - - 650 1,529

Commercial business 2,205 ( 2 ) 222 ( 179 ) 2,246

Consumer 5 ( 17 ) 1 16 5

Manufactured homes 157 - - 90 247

Government 90 - - 28 118

Total $ 18,330 $ ( 47 ) $ 233 $ - $ 18,516

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the nine months ended September 30, 2025:

The following tables show the changes in the allowance for credit losses, segregated by portfolio segment, for the three months ended March 31, 2026, and 2025.

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended March 31, 2026:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

10 unchanged sentences

Total $ 17,506 $ ( 19 ) $ 22 $ ( 224 ) $ 17,285

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the nine months ended September 30, 2024:

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended March 31, 2025:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

10 unchanged sentences

Total $ 16,911 $ ( 119 ) $ 86 $ 1,077 $ 17,955

A loan is individually evaluated for expected credit losses when, based on current information and events, it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement or will require close monitoring due to one or more factors which could lead to credit quality deterioration.

A collateral dependent financial loan relies solely on the operation or sale of the collateral for repayment.

3 unchanged sentences

However, as other sources of repayment become inadequate over time, the significance of the collateral's value increases and the loan may become collateral-dependent.

The table below presents the amortized cost basis and allowance for credit losses (“ACL”) allocated for collateral dependent loans in accordance with ASC 326, which are individually evaluated to determine expected credit losses.

(Dollars in thousands) September 30, 2025

Collateral dependent loans that do not share similar risk characteristics with other loans are individually evaluated under ASC 326.

Other collateral dependent loans that continue to share similar risk characteristics with the applicable portfolio segment remain included in the collectively evaluated allowance for credit losses.

The table below presents the amortized cost basis of collateral dependent loans, including loans evaluated individually and collectively, and the related ACL allocation, where applicable, in accordance with ASC 326.

(Dollars in thousands) March 31, 2026

Real Estate Equipment/Inventory Accounts Receivable Vehicles Total ACL Allocation

5 unchanged sentences

Commercial business - 1,126 137 36 1,299 -

Manufactured homes 90 - - - 90 -

Total $ 11,072 $ 1,126 $ 137 $ 36 $ 12,371 $ -

11 unchanged sentences

If the segment performs in line with expectations, the deferred cost reserve is paid as a premium to the third-party originator of the loan.

The unamortized balance of the deferred cost reserve totaled $ 2.5 million and $ 2.9 million as of September 30, 2025, and December 31, 2024, respectively, and is included in net deferred loan origination cost.

The unamortized balance of the deferred cost reserve totaled $ 2.3 million and $ 2.4 million as of March 31, 2026, and December 31, 2025, respectively, and is included in net deferred loan origination cost.

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans:

As of September 30, 2025 Nonaccrual with

As of March 31, 2026 Nonaccrual with

No Allowance for

10 unchanged sentences

Commercial business 945 354 1,299 -

Manufactured homes - 90 90 -

Total $ 3,372 $ 8,999 $ 12,371 $ -

12 unchanged sentences

Commercial business 391 1,048 1,439 -

Manufactured homes - 71 71 -

Total $ 4,771 $ 6,391 $ 11,162 $ -

Accrued interest receivable on loans totaled $ 5.3 million on September 30, 2025, as well as $ 5.3 million on December 31, 2024, and is excluded from the estimate of credit losses.

Accrued interest receivable on loans totaled $ 5.6 million on March 31, 2026, as compared to $ 5.7 million on December 31, 2025, and is excluded from the estimate of credit losses.

The Company made the accounting policy election to not measure an ACL for accrued interest receivable.

5 unchanged sentences

(Dollars in thousands) Three months ended,

September 30, 2025 Three months ended,

September 30, 2024

Balance, beginning of period $ 2,027 $ 3,914

Provision for (benefit from) unfunded loan commitments ( 361 ) -

Balance, end of period $ 1,666 $ 3,914

(Dollars in thousands) Nine months ended,

September 30, 2025 Nine months ended,

September 30, 2024

March 31, 2026 Three months ended,

March 31, 2025

Balance, beginning of period $ 1,752 $ 2,739

4 unchanged sentences

Goodwill balance January 1, $ 22,395 $ 22,395

Goodwill balance September 30, $ 22,395 $ 22,395

Goodwill balance March 31, $ 22,395 $ 22,395

Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired.

4 unchanged sentences

In addition to goodwill, a core deposit intangible was established from previous acquisitions.

The Company had core deposit intangible balances of $ 1.3 million and $ 1.9 million as of September 30, 2025, and December 31, 2024, respectively.

The Company had core deposit intangible balances of $ 1.1 million and $ 1.2 million as of March 31, 2026, and December 31, 2025, respectively.

The table below summarizes the intangibles amortization:

The amortization recorded for the quarter ended September 30, is as follows:

(Dollars in thousands) Total

The amortization recorded for the nine months ended September 30, is as follows:

The amortization recorded for the quarter ended March 31, is as follows:

(Dollars in thousands) Total

6 unchanged sentences

The Company’s end-of-period deposit portfolio balances were as follows:

(Dollars in thousands) September 30, 2025 December 31, 2024

(Dollars in thousands) March 31, 2026 December 31, 2025

Checking $ 587,575 $ 592,214

3 unchanged sentences

Total deposits $ 1,719,071 $ 1,726,971

The aggregate amount of retail and brokered certificates of deposit with a balance of $250 thousand or more was approximately $ 120.7 million at September 30, 2025 and $ 141.4 million at December 31, 2024.

At September 30, 2025, selected maturities of retail and brokered certificate of deposits were as follows:

The aggregate amount of retail and brokered certificates of deposit with a balance of $250 thousand or more was approximately $ 108.3 million at March 31, 2026 and $ 104.5 million at December 31, 2025.

At March 31, 2026, selected maturities of retail and brokered certificate of deposits were as follows:

(Dollars in thousands)

2025 $ 242,577

Thereafter 100

7 unchanged sentences

Earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding.

A reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2025 and 2024, are as follows:

A reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three months ended March 31, 2026 and 2025, are as follows:

Three months ended

September 30, Nine months ended

September 30,

(dollars in thousands except per share data) 2026 2025

11 unchanged sentences

The Company replaced its expired 2015 Stock Option and Incentive Plan with a new equity incentive plan named the Finward Bancorp 2025 Omnibus Equity Incentive Plan (the “Plan”), which was adopted by the Company’s Board of Directors on March 21, 2025, and approved by the Company’s shareholders on May 22, 2025.

The maximum number of shares of common stock cumulatively available for issuance under the 2025 Omnibus Plan is 265,174 shares.

The maximum number of shares of common stock cumulatively available for issuance under the Plan is 270,727 shares.

Awards granted under the Plan may be in the form of incentive stock options, non-qualified stock options, restricted stock, unrestricted stock, restricted stock units, performance shares, stock appreciation rights, or any combination thereof, as provided in the Plan.

2 unchanged sentences

As required by the Stock Compensation Topic, companies are required to record compensation cost for stock options and awards provided to employees in return for employment service.

For the three months ended September 30, 2025, stock based compensation expense of $ 116 thousand was recorded, compared to $ 138 thousand for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, stock based compensation expense of $ 345 thousand was recorded, compared to $ 443 thousand for the nine months ended September 30, 2024.

For the three months ended March 31, 2026, stock

based compensation expense of $ 126 thousand was recorded, compared to $ 98 thousand for the three months ended March 31, 2025.

It is anticipated that current outstanding unvested awards will result in additional compensation expense of approximately $ 640 thousand with a weighted average life of 1.7 years.

1 unchanged sentence

Forfeiture provisions exist for personnel that separate employment before the vesting period expires.

A summary of restricted stock activity under the Company’s Plan described above for the nine months ended September 30, 2025, follows:

A summary of restricted stock activity under the Company’s Plan described above for the three months ended March 31, 2026, follows:

Non-vested Shares Shares Weighted

3 unchanged sentences

Forfeited ( 120 ) 29.79

Non-vested at September 30, 2025 46,458 $ 36.24

Non-vested at March 31, 2026 44,558 $ 36.23

Note 11 – Derivative Financial Instruments

11 unchanged sentences

The following table shows the amounts of non-hedging derivative financial instruments:

September 30, 2025

March 31, 2026

Asset derivatives Liability derivatives

(Dollars in thousands) Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value

(Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value

Interest rate swap contracts $ 99,145 Other assets $ 3,445 Other liabilities $ 3,445

3 unchanged sentences

Asset derivatives Liability derivatives

(Dollars in thousands) Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value

(Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value

Interest rate swap contracts $ 96,275 Other assets $ 3,641 Other liabilities $ 3,641

2 unchanged sentences

The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments:

Three Months Ended September 30,

(Dollars in thousands) Statement of Income Classification 2025 2024

Interest rate swap contracts Fees and service charges $ 170 $ 179

Interest rate lock commitments Gain on sale of loans held-for-sale, net ( 17 ) 65

Total $ 153 $ 244

Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in thousands) Statement of Income Classification 2026 2025

8 unchanged sentences

Condition Financial Instruments Cash Collateral Received Net Amount

September 30, 2025

March 31, 2026

Interest rate swap contracts $ 3,445 $ - $ 3,445 $ - $ 2,510 $ 935

16 unchanged sentences

Condition Financial Instruments Cash Collateral Pledged Net Amount

September 30, 2025

March 31, 2026

Interest rate swap contracts $ 3,445 $ - $ 3,445 $ - $ - $ 3,445

24 unchanged sentences

If any improvements in credit exceed the amount of previously reduced amortized cost bases, recoveries will be recorded through the income statement in the period received.

The allowance for collateralized debt credit losses was at $ 173 thousand at September 30, 2025 and December 31, 2024.

The allowance for collateralized debt credit losses was at $ 173 thousand at March 31, 2026 and December 31, 2025.

The Company’s subordination for each collateralized debt obligation is calculated by taking the total performing collateral and subtracting the sum of the total collateral within the Company’s class and the total collateral within all senior classes, and then stating this result as a percentage of the total performing collateral.

2 unchanged sentences

Subordination assuming future default/deferral assumptions is calculated by deducting future defaults from the current performing collateral.

At September 30, 2025 and December 31, 2024, management reviewed the subordination levels for each security in context of the level of current collateral defaults and deferrals within each security;

At March 31, 2026 and December 31, 2025, management reviewed the subordination levels for each security in context of the level of current collateral defaults and deferrals within each security;

the potential for additional defaults and deferrals within each security;

1 unchanged sentence

and the Company’s class position within each security.

At September 30, 2025 and December 31, 2024, the collateralized debt obligations with a cost basis of $ 2.1 million and $ 2.2 million have been placed in “payment in kind” status.

At March 31, 2026 and December 31, 2025, the collateralized debt obligations with a cost basis of $ 2.1 million and $ 2.1 million have been placed in “payment in kind” status.

The Company’s securities that are classified as “payment in kind” are a result of not receiving the scheduled quarterly interest payments.

11 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

There were no transfers to or from Levels 1 and 2 during the nine months ended September 30, 2025 and the year ended December 31, 2024.

Changes in Level 3 assets relate to the result of change in estimated fair values, payments received, and sales of securities that have been classified as Level 3 during the nine months ended September 30, 2025 and all of 2024.

There were no transfers to or from Levels 1 and 2 during the three months ended March 31, 2026 and the year ended December 31, 2025.

Changes in Level 3 assets relate to the result of change in estimated fair values, payments received, and sales of securities that have been classified as Level 3 during the three months ended March 31, 2026 and all of 2025.

Assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurements at September 30, 2025 Using

Fair Value Measurements at March 31, 2026 Using

(Dollars in thousands) Estimated

38 unchanged sentences

Total unrealized gains, included in other comprehensive income (loss) 13

Ending balance, September 30, 2025 $ 1,616

Ending balance, March 31, 2026 $ 1,891

Beginning balance, January 1, 2025 $ 1,419

1 unchanged sentence

Total unrealized gains, included in other comprehensive income (loss) 215

Ending balance, September 30, 2024 $ 1,440

Ending balance, March 31, 2025 $ 1,630

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Collateral dependent loans are carried the fair value of the underlying collateral, based on the most recent independent appraisals or evaluations, adjusted for current market conditions and property-specific factors.

These measurements are classified as Level 3 due to the use of significant unobservable inputs.

Other real estate owned are measured at fair value less costs to sell and are classified as Level 3.

No valuation adjustments or write-offs related to the collateral dependent loans or other real estate owned were recorded during the three months ended March 31, 2026.

Assets measured at fair value on a non-recurring basis are summarized below.

Fair Value Measurements at September 30, 2025 Using

(Dollars in thousands) Estimated

Value Quoted Prices in

Active Markets for

Identical Assets

(Level 1) Significant Other

(Level 2) Significant

Collateral dependent loans $ - $ - $ - $ -

The table includes only those assets for which fair value adjustments were recorded during the period presented.

Fair Value Measurements at December 31, 2025 Using

6 unchanged sentences

Collateral dependent loans $ 6,535 $ - $ - $ 6,535

Other real estate owned $ 89 $ - $ - $ 89

Significant (Level 3) Inputs

1 unchanged sentence

(Dollars in thousands) Fair Value at

September 30, 2025 Valuation

March 31, 2026 Valuation

Technique Significant Unobservable Inputs Range Weighted-Average

Collateral dependent loans $ - Fair Value of Collateral Discount for type of property and current market conditions — % - — %

Collateralized debt obligations $ 1,891 Discounted cash flow model Default rates, loss severity assumptions, discount rates 7.9 % - 11.2 %

(Dollars in thousands) Fair Value at

1 unchanged sentence

Technique Significant Unobservable Inputs Range Weighted-Average

Collateralized debt obligations $ 1,882 Discounted cash flow model Default rates, loss severity assumptions, discount rates 7.9 % - 11.2 %

Collateral dependent loans $ 6,535 Fair Value of Collateral Discount for type of property and current market conditions — % - 80 %

Other real estate (1)

$ 89 Fair Value of Collateral Discount for type of property and current market conditions — % — %

(1) At March 31, 2026 and December 31, 2025, there was only one property, so no range or weighted-average range is reported.

The following table shows carrying values and related estimated fair values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of the dates indicated.

1 unchanged sentence

Items that are not financial instruments are not included.

September 30, 2025 Estimated Fair Value Measurements

at September 30, 2025 Using

March 31, 2026 Estimated Fair Value Measurements

at March 31, 2026 Using

(Dollars in thousands) Carrying

7 unchanged sentences

Cash and cash equivalents $ 118,755 $ 118,755 $ 118,755 $ - $ -

Loans held-for-sale 2,641 2,781 - 2,781 -

Loans receivable, net 1,437,833 1,395,102 - - 1,395,102

4 unchanged sentences

Interest bearing deposits 1,440,366 1,439,105 951,552 487,553 -

Repurchase agreements 48,426 48,415 40,680 7,735 -

Federal funds purchased and repurchase agreements 40,815 40,732 38,686 2,046 -

Borrowed funds 50,000 49,723 - 49,723 -

21 unchanged sentences

Accrued interest payable 958 958 - 958 -

The following methods were used to estimate the fair value of financial instruments presented in the preceding table at September 30, 2025 and December 31, 2024:

The following methods were used to estimate the fair value of financial instruments presented in the preceding table at March 31, 2026 and December 31, 2025:

Cash and cash equivalent carrying amounts approximate fair value.

9 unchanged sentences

Longer-term repurchase agreements, with contractual maturity dates of quarter or more, are based on estimates of the rate the Company would pay on similar deposits, applied for the time period until maturity (Level 2).

Federal funds purchased carrying value is a reasonable estimate of fair value because of the relatively short time between the origination of the instrument and its expected realization (Level 2).

Short-term borrowings are generally only held overnight, therefore, their carrying amount is a reasonable estimate of fair value (Level 1).

2 unchanged sentences

Note 13 - Borrowings

At September 30, 2025, and December 31, 2024, borrowed funds are summarized below:

At March 31, 2026, and December 31, 2025, borrowed funds are summarized below:

(Dollars in thousands)

September 30,

2026 December 31,

FHLB Fixed rate advance with outstanding rate of 4.85 %, maturing May 16, 2025

FHLB Fixed rate advance with outstanding rate of 4.77 %, maturing May 19, 2025

FHLB Variable rate advance with outstanding rate of 3.79 %, maturing June 24, 2026

FHLB Fixed rate advance with outstanding rate of 3.63 %, maturing March 7, 2028 (1)

10,000 10,000

FHLB Fixed rate advance with outstanding rate of 3.46 %,

maturing June 26, 2028 (1)

FHLB Fixed rate advance with outstanding rate of 3.38 %, maturing August 7, 2028 (1)

FHLB Fixed rate advance with outstanding rate of 3.84 %, maturing February 28, 2029 (1)

2 unchanged sentences

10,000 10,000

FHLB Fixed rate advance with outstanding rate of 3.22 %, maturing August 7, 2029 (1)

FHLB Fixed rate advance with outstanding rate of 2.95 %, maturing April 29, 2030 (1)

Total $ 50,000 $ 45,000

(1) FHLB retains putable option to call these advances after a period of time.

At September 30, 2025, scheduled maturities of borrowed funds were as follows:

At March 31, 2026, scheduled maturities of borrowed funds were as follows:

(Dollars in thousands)

2026 $ 15,000

Total $ 50,000

1 unchanged sentence

The Company also maintains a $ 25 million line of credit with the Federal Home Loan Bank of Indianapolis.

The Company did not have a balance at September 30, 2025, or as of December 31, 2024.

The Company did not have other borrowings at September 30, 2025, or as of December 31, 2024.

The Company did not have a balance at March 31, 2026, or as of December 31, 2025.

The Company did not have other borrowings at March 31, 2026, or as of December 31, 2025.

Note 14 - Leases

Under ASC 842, operating lease expense is generally recognized on a straight-line basis over the term of the lease.

On February 22, 2024, the Bank closed its previously announced sale-leaseback transaction with MountainSeed Real Estate Services, LLC (the “Buyer”), pursuant to which the Bank sold to the Buyer five properties owned and operated as branch locations (the “Properties”) for an aggregate purchase price of $ 17.2 million, including customary closing adjustments.

Under the Sale Agreement, the Bank also entered into triple net lease agreements (the “Lease Agreements”) with the Buyer under which the Bank leases each of the Properties, and pursuant to which the Bank is responsible for the insurance, real estate taxes, and maintenance and repairs for each of the properties.

Each of the Lease Agreements became effective upon

the closing of the sale-leaseback transaction and have an initial term of 15 years.

The Bank’s obligations under the Lease Agreements are guaranteed by the Company.

As the rate implicit in the leases generally is not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term.

2 unchanged sentences

The following table summarizes supplemental cash flow and other information related to our operating leases:

(Dollars in thousands) Nine Months Ended September 30,

Gain on sale-leaseback transaction, net $ - $ ( 11,772 )

(Dollars in thousands) Three Months Ended March 31,

Operating cash flows

Cash paid for amounts included in the measurement of lease liabilities for leases $ 404 $ 397

ROU assets obtained in exchange for lease liabilities - operating leases (1) - 16,140

Weighted-average remaining lease terms (in years) - operating leases 13 14

3 unchanged sentences

Total lease costs (1) $ 551 $ 551

(1) Right of Use Asset included in Premises and equipment on the consolidated balance sheet

(1) Included in occupancy and equipment costs on the condensed consolidated statements of income

The following table represents the maturity of the Company's operating lease liabilities as of September 30, 2025:

The following table represents the maturity of the Company's operating lease liabilities as of March 31, 2026:

(Dollars in thousands)

4 unchanged sentences

Lease liability $ 14,404

At March 31, 2026, operating lease right of use assets were $ 14.9 million and are included in premises and equipment on the consolidated balance sheet.

Operating lease liabilities of $ 14.4 million were included in other liabilities on the consolidated balance sheet.

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

What changed 10-Q

Item 1. Financial Statements