What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-11 compared with 2025-05-08 · 217 added, 128 removed, 1057 unchanged (25% of the section changed)

32 unchanged sentences

Common stock — no par value, 15,000,000 shares authorized:

issued and outstanding 7,408,010 shares in 2025 and 7,424,893 shares in 2024

issued and outstanding 7,361,684 shares at June 30, 2025 and 7,424,893 shares at December 31, 2024

124,607 126,224

8 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Interest income

27 unchanged sentences

FDIC insurance premiums 267 280 570 532

Other losses 339 416 454 561

Other 1,106 1,171 2,348 2,321

11 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Net income $ 5,031 $ 3,481 $ 8,980 $ 6,612

Unrealized gains (losses) on AFS securities 3,879 703 8,893 ( 2,223 )

Reclassification adjustment for net (gains) losses included in net income — —

Tax effect (1)

2 unchanged sentences

Comprehensive income (loss) $ 8,083 $ 4,035 $ 15,948 $ 4,872

(1) See “Note 6 – Capital Ratios and Shareholders' Equity” for tax effect reconciliation.

(1) See “Note 6 – Capital Ratios and Shareholders' Equity” of these consolidated financial statements for tax effect reconciliation.

See notes to interim condensed consolidated financial statements (unaudited).

7 unchanged sentences

Income (Loss) Totals

April 1, 2024 7,488,101 $ 126,656 $ 3,890 $ 98,318 $ ( 28,190 ) $ 200,674

Comprehensive income (loss) — — — 3,481 554 4,035

Issuance of common stock 21,524 393 — — — 393

Share-based payment awards under the Directors Plan — 61 — — 61

Share-based compensation expense recognized in earnings under the RSP — 20 — — — 20

Common stock purchased for deferred compensation obligations — ( 281 ) — — — ( 281 )

Common stock repurchased ( 35,609 ) ( 662 ) — — — ( 662 )

Cash dividends paid ($ 0.28 per common share)

— — — ( 1,991 ) — ( 1,991 )

June 30, 2024 7,474,016 $ 126,126 $ 3,951 $ 99,808 $ ( 27,636 ) $ 202,249

April 1, 2025 7,408,010 $ 125,547 $ 2,508 $ 104,940 $ ( 17,439 ) $ 215,556

Comprehensive income (loss) — — — 5,031 3,052 8,083

Issuance of common stock 11,498 340 — — — 340

Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 211 ( 211 ) — — —

Share-based payment awards under the Directors Plan — — 34 — — 34

Share-based compensation expense recognized in earnings under the RSP — 14 — — — 14

Common stock repurchased ( 57,824 ) ( 1,505 ) — — — ( 1,505 )

Cash dividends paid ($ 0.28 per common share)

— — — ( 2,022 ) — ( 2,022 )

June 30, 2025 7,361,684 $ 124,607 $ 2,331 $ 107,949 $ ( 14,387 ) $ 220,500

Common Shares

Outstanding Amount Common Shares to be

Obligations Retained

Earnings Accumulated

Comprehensive

Income (Loss) Totals

December 31, 2023 7,485,889 $ 127,323 $ 3,693 $ 97,282 $ ( 25,896 ) $ 202,402

9 unchanged sentences

— — — ( 4,086 ) — ( 4,086 )

March 31, 2024 7,488,101 $ 126,656 $ 3,890 $ 98,318 $ ( 28,190 ) $ 200,674

June 30, 2024 7,474,016 $ 126,126 $ 3,951 $ 99,808 $ ( 27,636 ) $ 202,249

December 31, 2024 7,424,893 $ 126,224 $ 2,383 $ 103,024 $ ( 21,355 ) $ 210,276

5 unchanged sentences

Share-based compensation expense recognized in earnings under the RSP — 21 — — — 21

Common stock purchased for deferred compensation obligations — — — — — —

Common stock repurchased ( 103,406 ) ( 2,650 ) — — — ( 2,650 )

1 unchanged sentence

— — — ( 4,055 ) — ( 4,055 )

March 31, 2025 7,408,010 $ 125,547 $ 2,508 $ 104,940 $ ( 17,439 ) $ 215,556

June 30, 2025 7,361,684 $ 124,607 $ 2,331 $ 107,949 $ ( 14,387 ) $ 220,500

See notes to interim condensed consolidated financial statements (unaudited).

1 unchanged sentence

(Dollars in thousands)

Three Months Ended

Six Months Ended

Operating activities

14 unchanged sentences

Investing activities

Proceeds from sales, maturities, calls and prepayments of AFS securities 21,058 7,284

Proceeds from maturities, calls and prepayments of AFS securities 47,819 19,587

Purchases of AFS securities ( 51,000 ) —

Proceeds from sale of FHLB Stock 7,162 —

Net change in loans HFI 27,053 ( 33,078 )

1 unchanged sentence

Purchases of BOLI policies ( 10,225 ) —

Proceeds from sale of FHLB Stock 7,162 —

Low income housing tax credit investments ( 3,767 ) ( 3 )

21 unchanged sentences

BASIS OF PRESENTATION AND CONSOLIDATION:

As used in these notes, as well as in Management's Discussion and Analysis of Financial Condition and Results of Operations, references to “the Corporation”, “Isabella”, “we”, “our”, “us”, and similar terms refer to the consolidated entity consisting of Isabella Bank Corporation and its subsidiary.

References to Isabella Bank or “the Bank” refers to Isabella Bank Corporation’s subsidiary, Isabella Bank.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

As used in these notes, as well as in Management's Discussion and Analysis of Financial Condition and Results of Operations, references to “we,” “our,” “us,” and “the Corporation” refer to Isabella Bank Corporation, a Michigan corporation and registered financial holding company, our wholly-owned banking subsidiary, Isabella Bank, and our other consolidated subsidiaries.

References to the “Bank” refer to Isabella Bank.

The accompanying unaudited interim condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the three and six-month periods ended June 30, 2025 (this “Form 10-Q”) have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In our opinion, all adjustments considered necessary for a fair presentation have been included.

Operating results for the three-month period ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2024.

Operating results for the three and six-month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 12, 2025 (the “2024 Annual Report on Form 10-K”).

OPERATING SEGMENTS:

13 unchanged sentences

Certain amounts reported in the interim 2024 consolidated financial statements have been reclassified to conform with the 2025 presentation.

Our accounting policies are materially the same as those discussed in Note 1 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Additionally, certain amounts reported as commercial and industrial loans have been reclassified as commercial real estate loans to conform to the June 30, 2025 presentation.

Our accounting policies are materially the same as those discussed in Note 1 to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K.

Note 2 – AFS Securities

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:

March 31, 2025

June 30, 2025

Treasury $ 210,588 $ — $ 6,282 $ 204,306

13 unchanged sentences

Total $ 515,516 $ 9 $ 26,496 $ 489,029

The amortized cost and fair value of AFS securities by contractual maturity at March 31, 2025 are as follows:

The amortized cost and fair value of AFS securities by contractual maturity at June 30, 2025 are as follows:

Maturing Securities with Variable Monthly Payments or Noncontractual Maturities

11 unchanged sentences

Fair value $ 118,985 $ 115,038 $ 25,551 $ 20,324 $ 220,662 $ 500,560

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities as issuers may have the right to call or prepay obligations.

As the auction rate money market preferred investments have continual call dates, they are not reported by a specific maturity group.

Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group.

The information in the following tables pertains to AFS securities with gross unrealized losses at March 31, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous loss position.

March 31, 2025

The information in the following tables pertains to AFS securities with gross unrealized losses at June 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous loss position.

June 30, 2025

Less Than Twelve Months Twelve Months or More

17 unchanged sentences

Number of securities in an unrealized loss position:

As of March 31, 2025, no allowance for credit losses has been recognized on AFS securities in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality.

As of June 30, 2025, no ACL has been recognized on AFS securities in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality.

This is based on our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our AFS securities and consideration of our historical credit loss experience and internal forecasts.

The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities.

Furthermore, management does not intend to sell any of the securities classified as AFS in the table above, and believes it is more likely than not that we will not have to sell any such securities before a recovery of cost.

Management does not currently intend to sell any of the securities classified as AFS in the table above, and believes it is more likely than not that we will not have to sell any such securities before a recovery of cost.

The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased.

3 unchanged sentences

The following table provides a detailed listing of our loan portfolio at:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Balance Percent of Total Balance Percent of Total

26 unchanged sentences

Substantially all of our consumer and residential real estate loans are secured by various items of property, while commercial loans are secured primarily by real estate, business assets, and personal guarantees.

A portion of loans are unsecured.

A small portion of loans are unsecured.

Loans that we have the intent and ability to hold in our portfolio are reported at their outstanding principal balance adjusted for any charge-offs, the ACL, and deferred fees or costs.

1 unchanged sentence

Loan origination fees and certain direct loan origination costs are capitalized and recognized as a component of interest income over the term of the loan using the appropriate amortization method.

Net unamortized deferred loan costs were $ 3,317 and $ 3,330 at March 31, 2025 and December 31, 2024, respectively.

Net unamortized deferred loan costs were $ 3,268 and $ 3,330 at June 30, 2025 and December 31, 2024, respectively.

Commercial and agricultural loans include loans for commercial real estate, commercial operating loans, advances to mortgage brokers, farmland and agricultural production, and loans to states and political subdivisions.

36 unchanged sentences

Loans may be returned to accrual status after six months of continuous performance and achievement of current payment status.

Accrued interest receivable on loans was $ 6,494 and $ 6,384 at March 31, 2025 and December 31, 2024, respectively, which is included in other assets on the consolidated balance sheets.

Accrued interest receivable on loans was $ 5,858 and $ 6,384 at June 30, 2025 and December 31, 2024, respectively, which is included in other assets on the consolidated balance sheets.

The following table summarizes nonaccrual loan data by class of loans as of:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Total Nonaccrual Loans Nonaccrual Loans with No ACL Total Nonaccrual Loans Nonaccrual Loans with No ACL

Commercial and industrial

Secured $ 17 $ 17 $ — $ —

Commercial real estate

Commercial mortgage non-owner occupied 533 533 — —

Residential real estate

2 unchanged sentences

The following tables summarize the past due and current loans for the entire loan portfolio as of:

March 31, 2025

June 30, 2025

Accruing Loans 90 or More Days Past Due

53 unchanged sentences

The following tables display commercial and agricultural loans by credit risk ratings and year of origination as of:

March 31, 2025

June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

9 unchanged sentences

Total $ 13,508 $ 38,664 $ 26,887 $ 26,706 $ 12,807 $ 6,481 $ 50,344 $ — $ 175,397

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ 22 $ — $ — $ — $ — $ — $ 22

Commercial and industrial:

7 unchanged sentences

Total $ 6,761 $ 1,798 $ 3,588 $ 1,753 $ 756 $ 746 $ 16,920 $ — $ 32,322

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ 50 $ — $ — $ — $ — $ — $ — $ 50

Commercial real estate:

8 unchanged sentences

Total $ 15,216 $ 43,326 $ 30,655 $ 31,599 $ 49,064 $ 46,167 $ 2,511 $ — $ 218,538

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial real estate:

8 unchanged sentences

Total $ 26,094 $ 18,105 $ 39,345 $ 63,153 $ 42,403 $ 38,360 $ 1,260 $ — $ 228,720

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

March 31, 2025

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

10 unchanged sentences

Total $ 6,718 $ 10,272 $ 12,473 $ 11,238 $ 28,658 $ 17,005 $ 8,376 $ — $ 94,740

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial real estate:

7 unchanged sentences

Total $ 5,181 $ 3,474 $ 4,796 $ 22,479 $ 12,235 $ 23,911 $ 309 $ — $ 72,385

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Advances to mortgage brokers

Risk ratings 1-3 $ 3,005 $ — $ — $ — $ — $ — $ — $ — $ 3,005

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Agricultural mortgage

7 unchanged sentences

Total $ 4,180 $ 4,982 $ 5,097 $ 17,512 $ 14,234 $ 18,702 $ 2,440 $ — $ 67,147

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Agricultural other

7 unchanged sentences

Total $ 2,676 $ 3,526 $ 1,508 $ 1,635 $ 1,836 $ 952 $ 17,562 $ — $ 29,695

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

December 31, 2024

10 unchanged sentences

Total $ 42,364 $ 31,906 $ 30,077 $ 15,732 $ 6,441 $ 2,575 $ 48,144 $ — $ 177,239

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ 277 $ 33 $ — $ 17 $ — $ — $ — $ 327

Commercial and industrial:

7 unchanged sentences

Total $ 3,551 $ 4,016 $ 2,591 $ 458 $ 418 $ 414 $ 11,936 $ — $ 23,384

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 8 $ 1 $ — $ 9

Commercial real estate:

8 unchanged sentences

Total $ 40,716 $ 32,129 $ 35,189 $ 51,764 $ 24,994 $ 25,976 $ 2,318 $ — $ 213,086

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial real estate:

8 unchanged sentences

Total $ 18,783 $ 43,936 $ 67,736 $ 43,561 $ 10,951 $ 31,715 $ 997 $ — $ 217,679

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

December 31, 2024

11 unchanged sentences

Total $ 10,564 $ 13,216 $ 11,882 $ 29,529 $ 14,776 $ 4,704 $ 7,826 $ — $ 92,497

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial real estate:

7 unchanged sentences

Total $ 2,719 $ 5,340 $ 23,143 $ 12,582 $ 1,209 $ 23,249 $ 214 $ — $ 68,456

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Advances to mortgage brokers

Risk ratings 1-3 $ 63,080 $ — $ — $ — $ — $ — $ — $ — $ 63,080

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Agricultural mortgage

7 unchanged sentences

Total $ 5,543 $ 5,639 $ 18,551 $ 14,869 $ 8,287 $ 12,260 $ 2,401 $ — $ 67,550

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Agricultural other

7 unchanged sentences

Total $ 4,257 $ 2,023 $ 1,969 $ 2,120 $ 903 $ 760 $ 20,112 $ — $ 32,144

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

We have certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk.

The Board reviews and approves these policies and procedures on a regular basis.

A reporting system supplements the review process by providing management and the Board with frequent reports related to loan production, loan quality, and concentration of credit, loan delinquencies, nonperforming loans and potential problem loans.

The Board of Directors reviews and approves these policies and procedures on a regular basis.

A reporting system supplements the review process by providing management and the Board of Directors with frequent reports related to loan production, loan quality, and concentration of credit, loan delinquencies, nonperforming loans and potential problem loans.

We seek to diversify the loan portfolio as a means of managing risk associated with fluctuations in economic conditions.

97 unchanged sentences

The following tables display residential real estate and consumer loans by payment status and year of origination as of:

March 31, 2025

June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

6 unchanged sentences

Total $ 27,522 $ 56,290 $ 38,365 $ 45,185 $ 71,000 $ 104,079 $ — $ 4,839 $ 347,280

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

Residential real estate:

4 unchanged sentences

Total $ 2,121 $ 3,797 $ 2,757 $ 652 $ 97 $ 341 $ — $ — $ 9,765

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential real estate:

5 unchanged sentences

Total $ — $ — $ — $ — $ — $ — $ 41,623 $ — $ 41,623

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Secured - direct

4 unchanged sentences

Total $ 4,727 $ 8,379 $ 7,239 $ 5,287 $ 3,127 $ 3,134 $ — $ — $ 31,893

Current year-to-date gross charge-offs $ — $ 1 $ 19 $ 36 $ — $ 12 $ — $ — $ 68

2025 year-to-date gross charge-offs $ — $ 4 $ 33 $ 36 $ 9 $ 53 $ — $ — $ 135

Secured - indirect

4 unchanged sentences

Total $ 1,276 $ 5,526 $ 18,529 $ 6,277 $ 4,214 $ 5,921 $ — $ — $ 41,743

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 13 $ — $ — $ 13

March 31, 2025

2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 13 $ — $ — $ 13

June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

5 unchanged sentences

Total $ 880 $ 1,080 $ 368 $ 81 $ 12 $ 3 $ 836 $ — $ 3,260

Current year-to-date gross charge-offs $ 80 $ 1 $ 9 $ — $ — $ — $ — $ — $ 90

2025 year-to-date gross charge-offs $ 328 $ 1 $ 10 $ 1 $ 1 $ — $ — $ — $ 341

December 31, 2024

7 unchanged sentences

Total $ 56,164 $ 35,267 $ 46,247 $ 74,057 $ 47,992 $ 64,437 $ — $ 8,579 $ 332,743

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 10 $ — $ — $ 10

Residential real estate:

4 unchanged sentences

Total $ 4,229 $ 3,092 $ 800 $ 105 $ 71 $ 358 $ — $ — $ 8,655

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Residential real estate:

5 unchanged sentences

Total $ — $ — $ — $ — $ — $ — $ 39,474 $ — $ 39,474

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Secured - direct

4 unchanged sentences

Total $ 10,990 $ 9,498 $ 6,550 $ 3,947 $ 2,185 $ 1,880 $ — $ — $ 35,050

Current year-to-date gross charge-offs $ — $ 62 $ — $ — $ — $ — $ — $ — $ 62

2024 year-to-date gross charge-offs $ — $ 63 $ — $ — $ 27 $ 2 $ — $ — $ 92

December 31, 2024

7 unchanged sentences

Total $ 6,568 $ 22,675 $ 7,732 $ 5,018 $ 4,072 $ 3,071 $ — $ — $ 49,136

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

2024 year-to-date gross charge-offs $ — $ 24 $ — $ — $ — $ — $ — $ — $ 24

Current $ 1,654 $ 656 $ 211 $ 22 $ 16 $ — $ 835 $ — $ 3,394

3 unchanged sentences

Total $ 1,654 $ 656 $ 213 $ 22 $ 16 $ — $ 837 $ — $ 3,398

Current year-to-date gross charge-offs $ 107 $ 7 $ 14 $ — $ — $ — $ — $ — $ 128

2024 year-to-date gross charge-offs $ 223 $ 11 $ 21 $ — $ — $ 1 $ — $ — $ 256

Loan Modifications

12 unchanged sentences

The following is a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty for the:

Three Months Ended March 31, 2025

Term Extension

Amortized Cost Basis % of Total Class of Financial Receivable

Three Months Ended June 30, 2025

Interest Rate Reduction Term Extension Other-Than-Insignificant Payment Delay and Term Extension

Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable

Commercial and industrial

Secured $ 20 0.01 % $ 2,600 1.12 % $ 602 0.26 %

Total $ 20 $ 2,600 $ 602

Six Months Ended June 30, 2025

Interest Rate Reduction Term Extension Other-Than-Insignificant Payment Delay and Term Extension

Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable

Commercial and industrial

Secured $ 20 0.01 % $ 3,114 1.34 % $ 602 0.26 %

Commercial real estate

1 unchanged sentence

Total $ 20 $ 4,625 $ 602

Three Months Ended March 31, 2024

Other-Than-Insignificant Payment Delay Term Extension

Three Months Ended June 30, 2024

Other-Than-Insignificant Payment Delay Other-Than-Insignificant Payment Delay and Term Extension

Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable

1 unchanged sentence

Secured $ 2,125 1.03 % $ — 0.00 %

Agricultural mortgage 1,345 2.00 % 60 0.09 %

Agricultural other — 0.00 % 507 1.82 %

Total $ 3,470 $ 567

Six Months Ended June 30, 2024

Other-Than-Insignificant Payment Delay Term Extension Other-Than-Insignificant Payment Delay and Term Extension

Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable Amortized Cost Basis % of Total Class of Financial Receivable

Commercial and industrial

Secured $ 2,125 1.03 % $ 11 0.01 % $ — 0.00 %

Commercial real estate

Commercial mortgage owner occupied 823 0.47 % — 0.00 % — 0.00 %

Agricultural mortgage 1,345 2.00 % — 0.00 % 60 0.09 %

Agricultural other — 0.00 % — 0.00 % 507 1.82 %

Secured - indirect — 0.00 % 2 0.00 % — — %

1 unchanged sentence

We do not modify any loans by forgiving principal or accrued interest.

We had committed to advance $ 0 and $ 43 in additional funds to be disbursed in connection with modified loans at March 31, 2025 and December 31, 2024, respectively, as displayed in the tables above.

We had committed to advance $ 41 and $ 43 in additional funds to be disbursed in connection with modified loans at June 30, 2025 and December 31, 2024, respectively, as displayed in the tables above.

The following is a summary of the financial effect of the modifications granted to borrowers experiencing financial difficulty for the:

Three Months Ended March 31

Weighted-Average Term Extension (Years) Payment Delay Term Weighted-Average Term Extension (Years)

Three Months Ended June 30

Weighted-Average Interest Rate Reduction Payment Delay Term Weighted-Average Term Extension (Years) Payment Delay Term Weighted-Average Term Extension (Years)

Commercial and industrial

Secured 4.4 years N/A 3 years

Secured 10.00 % 9.6 months 0.5 years 4 months N/A

Agricultural mortgage N/A N/A N/A 5 months 0.5 years

Agricultural other N/A N/A N/A 4 months 0.3 years

Six Months Ended June 30

Weighted-Average Interest Rate Reduction Payment Delay Term Weighted-Average Term Extension (Years) Payment Delay Term Weighted-Average Term Extension (Years)

Commercial and industrial

Secured 10.00 % 9.6 months 1.0 years 4 months 0.2 years

Commercial real estate

Commercial mortgage owner occupied 15 years 7 months N/A

Secured - indirect N/A N/A 1.3 years

Commercial mortgage owner occupied N/A N/A 15 years 7 months N/A

Agricultural mortgage N/A N/A N/A 5 months 0.5 years

Agricultural other N/A N/A N/A 4 months 0.3 years

Secured - indirect N/A N/A N/A N/A 1.3 years

We closely monitor the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of our modification efforts.

The following tables summarize the amortized cost basis of loans that have been modified within the past 12 months prior to:

March 31, 2025

June 30, 2025

Current 30-59 Days

9 unchanged sentences

Total $ 6,897 $ 99 $ — $ — $ 6,996

March 31, 2024

June 30, 2024

Current 30-59 Days

6 unchanged sentences

Commercial mortgage owner occupied 941 — — — 941

Commercial mortgage non-owner occupied 1,023 — — — 1,023

Commercial mortgage multifamily 2,947 — — — 2,947

Agricultural mortgage 1,405 — — — 1,405

Agricultural other 507 — — — 507

Secured - indirect 2 — — — 2

Total $ 7,938 $ — $ — $ — $ 7,938

We had no loans that defaulted in the three-month periods ended March 31, 2025 and 2024 which were modified within 12 months prior to the default date.

We had no loans that defaulted in each of the three and six-month periods ended June 30, 2025 and 2024 which were modified within 12 months prior to the default date.

The credit quality of our loan portfolio is continuously monitored and is reflected within the ACL for loans.

11 unchanged sentences

For a loan that does not share risk characteristics with other loans, an individual analysis is performed to measure an allowance.

Loans in nonaccrual status are individually evaluated for specific allocation of the allowance using the fair value of collateral,

less costs to sell if foreclosure is probable, or the discounted cash flow method.

We do not recognize interest income on loans in nonaccrual status.

Loans in nonaccrual status are individually evaluated for specific allocation of the allowance using the fair value of collateral, less costs to sell if foreclosure is probable, or the discounted cash flow method.

We do not recognize interest income on loans

in nonaccrual status.

For loans not classified as nonaccrual, interest income is recognized daily, as earned, according to the terms of the loan agreement and the principal amount outstanding.

15 unchanged sentences

A summary of activity in the ACL by portfolio segment and the recorded investment in loans by segments follows for the:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total

April 1, 2025 $ 1,239 $ 5,174 $ 266 $ 4,600 $ 1,456 $ 12,735

Charge-offs ( 72 ) — — — ( 318 ) ( 390 )

Recoveries 4 50 — 16 1,752 1,822

Reversal of credit losses 147 53 50 57 ( 1,497 ) ( 1,190 )

June 30, 2025 $ 1,318 $ 5,277 $ 316 $ 4,673 $ 1,393 $ 12,977

Six Months Ended June 30, 2025

Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total

December 31, 2024 $ 1,316 $ 5,171 $ 287 $ 4,521 $ 1,600 $ 12,895

2 unchanged sentences

Reversal of credit losses ( 10 ) 54 29 123 ( 1,598 ) ( 1,402 )

March 31, 2025 $ 1,239 $ 5,174 $ 266 $ 4,600 $ 1,456 $ 12,735

Three Months Ended March 31, 2024

June 30, 2025 $ 1,318 $ 5,277 $ 316 $ 4,673 $ 1,393 $ 12,977

Three Months Ended June 30, 2024

Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total

April 1, 2024 $ 1,267 $ 5,903 $ 265 $ 4,308 $ 1,647 $ 13,390

Charge-offs ( 336 ) — — ( 9 ) ( 182 ) ( 527 )

Recoveries 2 29 — 28 75 134

Reversal of credit losses 331 ( 363 ) ( 7 ) 24 113 98

June 30, 2024 $ 1,264 $ 5,569 $ 258 $ 4,351 $ 1,653 $ 13,095

Six Months Ended June 30, 2024

Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total

December 31, 2023 $ 968 $ 5,878 $ 270 $ 4,336 $ 1,656 $ 13,108

2 unchanged sentences

Provision for credit losses 628 ( 344 ) ( 14 ) ( 67 ) 223 426

March 31, 2024 $ 1,267 $ 5,903 $ 265 $ 4,308 $ 1,647 $ 13,390

June 30, 2024 $ 1,264 $ 5,569 $ 258 $ 4,351 $ 1,653 $ 13,095

The following table illustrates the two main components of the ACL as of:

2025 March 31

2025 December 31

2024 September 30

2024 March 31

Individually evaluated $ — $ — $ — $ — $ 137

6 unchanged sentences

The following table presents loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by loan segment as of:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Loan Balance Specific Allocation Loan Balance Specific Allocation

8 unchanged sentences

Appraisals are updated every one to two years depending on the type of loan and the total exposure of the borrower.

Loans evaluated for expected credit losses on an individual basis as of March 31, 2025 include $ 145 in collateral dependent loans secured by residential real estate.

Loans evaluated for expected credit losses on an individual basis as of June 30, 2025 include $ 1,087 in collateral dependent loans secured by commercial real estate and residential real estate of $ 533 and $ 554 , respectively.

Note 4 – Borrowed Funds

Short-term borrowings

Short-term borrowings include securities sold under repurchase agreements without stated maturity dates, federal funds purchased, and FRB Discount Window advances, which all generally mature within one to four days from the transaction date.

A summary of short-term borrowed funds without stated maturity dates was as follows for the:

Three Months Ended March 31

Three Months Ended June 30

Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period

2 unchanged sentences

FRB Discount Window — 859 4.50 % — 15 5.52 %

Six Months Ended June 30

Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period

Securities sold under agreements to repurchase without stated maturity dates $ 47,310 $ 42,150 3.18 % $ 44,194 $ 40,607 3.16 %

Federal funds purchased — 11 5.43 % — 1 6.52 %

FRB Discount Window — 446 4.50 % — 8 5.52 %

Securities sold under agreements to repurchase are classified as secured borrowings and are reflected at the amount of cash received in connection with the transaction.

The securities underlying the agreements have a carrying value and a fair value of $ 58,094 and $ 67,539 at March 31, 2025 and December 31, 2024, respectively.

The securities underlying the agreements have a carrying value and a fair value of $ 58,119 and $ 67,539 at June 30, 2025 and December 31, 2024, respectively.

Such securities remain under our control.

1 unchanged sentence

Securities sold under repurchase agreements without stated maturity dates were as follows as of:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amount Rate Amount Rate

6 unchanged sentences

Total $ 531,425 $ 548,987

AFS securities pledged to repurchase agreements without stated maturity dates consisted of the following at:

AFS securities pledged to repurchase agreements consisted of the following at:

2025 December 31

5 unchanged sentences

In the event of maturities, calls, significant principal repayments, or significant decline in market values, we have an adequate level of AFS securities to pledge to satisfy collateral requirements.

As of March 31, 2025, we had the ability to borrow up to an additional $ 377,824 without pledging additional collateral.

As of June 30, 2025, we had the ability to borrow up to an additional $ 376,974 without pledging additional collateral.

FHLB advances

1 unchanged sentence

The following table lists the maturities and weighted average interest rates of FHLB advances as of:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amount Rate Amount Rate

2 unchanged sentences

We have $30,000 in aggregate principal amount of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 (the "Notes").

The Notes will initially bear a fixed interest rate of 3.25% until June 15, 2026, after which time until maturity on June 15, 2031, the interest rate will reset quarterly to an annual floating rate equal to the then-current 3-month SOFR plus 256 basis points.

The Notes are redeemable by us at our option, in whole or in part, on or after June 15, 2026.

The Notes initially bear a fixed interest rate of 3.25% until June 15, 2026, after which time until maturity on June 15, 2031, the interest rate will reset quarterly to an annual floating rate equal to the then-current 3-month SOFR plus 256 basis points.

The Notes are redeemable by us at any time at our option, in whole or in part, on or after June 15, 2026.

The Notes are not subject to redemption at the option of the holders.

The following table summarizes our outstanding notes as of:

March 31, 2025 December 31, 2024

Additionally, the Notes are intended to qualify for Tier 2 capital treatment, subject to regulatory limitations.

The following table summarizes our outstanding subordinated notes as of:

June 30, 2025 December 31, 2024

Amount Rate Amount Rate

8 unchanged sentences

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Average number of common shares outstanding for basic calculation 7,383,338 7,477,310 7,400,370 7,485,743

6 unchanged sentences

Note 6 – Capital Ratios and Shareholders' Equity

As of March 31, 2025 and December 31, 2024, the most recent notifications from the FRB and the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action.

To be categorized as well capitalized, an institution must maintain total risk-based, Tier 1 risk-based, Common Equity Tier 1, and Tier 1 leverage ratios as set forth in the following tables.

The minimum requirements presented below include the minimum required capital levels based on the Basel III Capital Rules.

Capital requirements to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

As of June 30, 2025 and December 31, 2024, the most recent notifications from the FRB and the FDIC categorized us as “well capitalized” under the FDIC's regulatory framework for prompt corrective action and the Basel III capital guidelines.

To be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1, and Tier 1 leverage ratios as set forth in the following tables.

The minimum requirements presented below include the minimum required capital levels based on the Basel III capital guidelines.

Capital requirements to be considered “well capitalized” are based upon the FDIC's prompt corrective action regulations, as amended to reflect the changes under the Basel III capital guidelines.

There were no conditions or events since the notifications that we believe have changed our categories.

The following tables set forth these requirements and our ratios as of:

March 31, 2025

The following tables set forth these requirements and our ratios, both on a bank-only and on a consolidated basis, as of:

June 30, 2025

Actual Minimum Capital

37 unchanged sentences

There are no significant regulatory constraints placed on our capital.

At March 31, 2025, the Bank exceeded all minimum capital requirements.

At June 30, 2025, the Bank exceeded all minimum Basel III risk-based capital requirements with the capital conservation buffer.

State banking regulations place certain restrictions on dividends paid by banks to their shareholders.

Dividends paid by the Corporation’s bank subsidiary would be prohibited if the effect thereof would cause the bank subsidiary’s capital to be reduced below applicable minimum capital requirements.

The following table summarizes the changes in AOCI by component for the:

Three Months Ended March 31

Three Months Ended June 30

Securities Defined

2 unchanged sentences

Pension Plan Total

Balance, April 1 $ ( 17,042 ) $ ( 397 ) $ ( 17,439 ) $ ( 27,493 ) $ ( 697 ) $ ( 28,190 )

OCI before reclassifications 3,879 — 3,879 703 — 703

Tax effect ( 827 ) — ( 827 ) ( 149 ) — ( 149 )

OCI, net of tax 3,052 — 3,052 554 — 554

Balance, June 30 $ ( 13,990 ) $ ( 397 ) $ ( 14,387 ) $ ( 26,939 ) $ ( 697 ) $ ( 27,636 )

Six Months Ended June 30

Securities Defined

Pension Plan Total Unrealized

Securities Defined

Pension Plan Total

Balance, December 31 $ ( 20,958 ) $ ( 397 ) $ ( 21,355 ) $ ( 25,199 ) $ ( 697 ) $ ( 25,896 )

OCI before reclassifications 8,893 — 8,893 ( 2,223 ) — ( 2,223 )

Amounts reclassified from AOCI — — — — — —

Subtotal 5,014 — 5,014 ( 2,926 ) — ( 2,926 )

Tax effect ( 1,925 ) — ( 1,925 ) 483 — 483

OCI, net of tax 6,968 — 6,968 ( 1,740 ) — ( 1,740 )

Balance, March 31 $ ( 17,042 ) $ ( 397 ) $ ( 17,439 ) $ ( 27,493 ) $ ( 697 ) $ ( 28,190 )

Included in OCI for the three-month periods ended March 31, 2025 and 2024 are changes in unrealized gains and losses related to certain auction rate money market preferred stocks.

Balance, June 30 $ ( 13,990 ) $ ( 397 ) $ ( 14,387 ) $ ( 26,939 ) $ ( 697 ) $ ( 27,636 )

Included in OCI for the three and six-month periods ended June 30, 2025 and 2024 are changes in unrealized gains and losses related to certain auction rate money market preferred stocks.

These investments, for federal income tax purposes, have no deferred federal income taxes related to unrealized gains or losses given the nature of the investments.

A summary of the components of unrealized gains on AFS securities included in OCI follows for the:

Three Months Ended March 31

Three Months Ended June 30

Auction Rate Money Market Preferred All Other AFS Securities Total Auction Rate Money Market Preferred All Other AFS Securities Total

Unrealized gains (losses) arising during the period $ ( 64 ) $ 3,943 $ 3,879 $ ( 5 ) $ 708 $ 703

Reclassification adjustment for net (gains) losses included in net income — — — — — —

Net unrealized gains (losses) ( 215 ) 5,229 5,014 82 ( 3,008 ) ( 2,926 )

Tax effect — ( 827 ) ( 827 ) — ( 149 ) ( 149 )

Unrealized gains (losses), net of tax $ ( 64 ) $ 3,116 $ 3,052 $ ( 5 ) $ 559 $ 554

Six Months Ended June 30

Auction Rate Money Market Preferred All Other AFS Securities Total Auction Rate Money Market Preferred All Other AFS Securities Total

Unrealized gains (losses) arising during the period $ ( 279 ) $ 9,172 $ 8,893 $ 77 $ ( 2,300 ) $ ( 2,223 )

Tax effect — ( 1,925 ) ( 1,925 ) — 483 483

Unrealized gains (losses), net of tax $ ( 279 ) $ 7,247 $ 6,968 $ 77 $ ( 1,817 ) $ ( 1,740 )

Note 7 – Fair Value

28 unchanged sentences

The following tables list the quantitative information about loans measured at fair value on a nonrecurring basis as of:

March 31, 2025

June 30, 2025

Valuation Technique Fair Value Unobservable Input Actual Range Weighted Average

11 unchanged sentences

The following table lists the quantitative information about OMSR fair value measurement as of:

March 31, 2025

June 30, 2025

Valuation Technique Fair Value Unobservable Input Rate

12 unchanged sentences

The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis were as follows as of:

March 31, 2025

June 30, 2025

Value Estimated

41 unchanged sentences

The table below presents the recorded amount of assets and liabilities measured at fair value on:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

11 unchanged sentences

Foreclosed assets 667 — — 667 544 — — 544

OMSR 2,261 — — 2,261 2,185 — — 2,185

Total $ 504,575 $ — $ 500,560 $ 4,015 $ 492,012 $ — $ 489,029 $ 2,983

Percent of assets and liabilities measured at fair value 0.00 % 99.20 % 0.80 % 0.00 % 99.39 % 0.61 %

We recorded an impairment related to foreclosed assets of $ 63 through earnings for the three month periods ended March 31, 2025 and $ 0 for the three month period ended March 31, 2024.

We had no other assets or liabilities recorded at fair value with changes in fair value recognized through earnings, on a recurring basis or nonrecurring basis, as of March 31, 2025.

We recorded an impairment related to foreclosed assets of $ 0 and $ 63 through earnings for the three and six-month periods ended June 30, 2025.

No impairments related to foreclosed assets were recorded for the three and six month period ended June 30, 2024.

We recorded an impairment related to OMSR of $ 2 through earnings for each of the three and six month periods ended June 30, 2025.

No impairments related to OMSR were recorded for the three and six month period ended June 30, 2024.We had no other assets or liabilities recorded at fair value with changes in fair value recognized through earnings, on a recurring basis or nonrecurring basis, as of June 30, 2025.

Further, we had no unrealized gains and losses included in OCI for recurring Level 3 fair value measurements held at the end of the reporting period.

Note 8 – Subsequent Events

On April 2, 2025, we recovered the full contractual balance of overdrawn deposit accounts from one customer.

These accounts were charged off during the third quarter of 2024 in the amount of $1,622.

Additionally, we collected all legal fees associated with the loss and the full contractual balance of all commercial loans outstanding with this customer.

The recovery of losses and fees will be reflected in our second quarter 2025 results.

We evaluated subsequent events after March 31, 2025 through the date our interim condensed consolidated financial statements were issued for potential recognition and disclosure.

No other subsequent events require financial statement recognition or disclosure between March 31, 2025 and the date our interim condensed consolidated financial statements were issued.

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