ISABELLA BANK CORP 10-Q

Item 1. Financial Statements. INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) September 30 2025 December 31 2024 ASSETS Cash and demand deposits due from banks $ 32,124 $ 22,830 Fed Funds sold and interest bearing balances due from banks 129,177 1,712 Total cash and cash equivalents 161,301 24,542 AFS securities, at fair value 511,970 489,029 FHLB stock 5,600 12,762 Mortgage loans HFS 737 242 Loans 1,431,905 1,423,571 Less allowance for credit losses 13,149 12,895 Net loans 1,418,756 1,410,676 Premises and equipment 28,659 27,659 Cash surrender value of BOLI 45,651 34,882 Goodwill and other intangible assets 48,282 48,283 Other assets 38,698 38,166 Total assets $ 2,259,654 $ 2,086,241 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Demand deposits $ 421,027 $ 416,373 Interest bearing demand deposits 248,666 237,548 Money market deposits 558,212 423,883 Savings 292,899 281,665 Certificates of deposit 404,798 387,591 Total deposits 1,925,602 1,747,060 Short-term borrowings 62,022 53,567 FHLB advances — 30,000 Subordinated debt, net of unamortized issuance costs 29,492 29,424 Total borrowed funds 91,514 112,991 Other liabilities 15,118 15,914 Total liabilities 2,032,234 1,875,965 Shareholders’ equity Common stock — no par value, 15,000,000 shares authorized: issued and outstanding 7,350,567 shares at September 30, 2025 and 7,424,893 shares at December 31, 2024 124,284 126,224 Shares to be issued for deferred compensation obligations 2,373 2,383 Retained earnings 111,172 103,024 Accumulated other comprehensive loss ( 10,409 ) ( 21,355 ) Total shareholders’ equity 227,420 210,276 Total liabilities and shareholders' equity $ 2,259,654 $ 2,086,241 See notes to interim condensed consolidated financial statements (unaudited). 4 Table of Contents INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands except per share amounts) Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Interest income Loans $ 20,583 $ 20,230 $ 59,763 $ 57,150 AFS securities 2,994 2,749 8,669 8,437 FHLB stock 70 168 355 472 Federal funds sold and other 1,235 194 1,970 750 Total interest income 24,882 23,341 70,757 66,809 Interest expense Deposits 8,012 7,631 22,866 22,107 Short-term borrowings 441 384 1,106 1,026 FHLB advances — 571 170 1,597 Subordinated debt 267 267 799 799 Total interest expense 8,720 8,853 24,941 25,529 Net interest income 16,162 14,488 45,816 41,280 Provision (reversal) for credit losses 209 946 ( 997 ) 1,508 Net interest income after provision for credit losses 15,953 13,542 46,813 39,772 Noninterest income Service charges and fees 2,352 2,133 6,397 6,089 Wealth management fees 1,074 1,003 3,137 2,990 Earnings on BOLI 468 252 1,140 748 Net gain on sale of mortgage loans 38 37 115 138 Other 376 103 733 639 Total noninterest income 4,308 3,528 11,522 10,604 Noninterest expenses Compensation and benefits 7,630 7,251 22,509 21,236 Occupancy and equipment 2,628 2,645 7,878 7,970 Other professional services 851 588 2,425 1,628 ATM and debit card fees 595 503 1,636 1,459 Marketing 514 403 1,442 1,254 FDIC insurance premiums 271 291 841 823 Other losses 47 347 501 908 Other 1,449 1,200 3,797 3,521 Total noninterest expenses 13,985 13,228 41,029 38,799 Income before income tax expense 6,276 3,842 17,306 11,577 Income tax expense 1,036 561 3,086 1,684 Net income $ 5,240 $ 3,281 $ 14,220 $ 9,893 Earnings per common share Basic $ 0.71 $ 0.44 $ 1.93 $ 1.32 Diluted 0.71 0.44 1.92 1.32 Cash dividends per common share 0.28 0.28 0.84 0.84 See notes to interim condensed consolidated financial statements (unaudited). 5 Table of Contents INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Dollars in thousands) Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Net income $ 5,240 $ 3,281 $ 14,220 $ 9,893 Unrealized gains on AFS securities 5,030 13,081 13,923 10,858 Tax effect (1) ( 1,052 ) ( 2,724 ) ( 2,977 ) ( 2,241 ) Unrealized gains on AFS securities, net of tax 3,978 10,357 10,946 8,617 Comprehensive income $ 9,218 $ 13,638 $ 25,166 $ 18,510 (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). 6 Table of Contents INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) (Dollars in thousands except per share amounts) Common Stock Common Shares Outstanding Amount Common Shares to be Issued for Deferred Compensation Obligations Retained Earnings Accumulated Other Comprehensive Income (Loss) Totals June 30, 2024 7,474,016 $ 126,126 $ 3,951 $ 99,808 $ ( 27,636 ) $ 202,249 Comprehensive income (loss) — — — 3,281 10,357 13,638 Issuance of common stock 17,580 350 — — — 350 Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 23 ( 23 ) — — — Share-based payment awards under the Directors Plan — — 53 — — 53 Share-based compensation expense recognized in earnings under the RSP — 26 — — — 26 Common stock purchased for deferred compensation obligations — ( 290 ) — — — ( 290 ) Common stock repurchased ( 52,876 ) ( 1,017 ) — — — ( 1,017 ) Cash dividends paid ($ 0.28 per common share) — — — ( 2,024 ) — ( 2,024 ) September 30, 2024 7,438,720 $ 125,218 $ 3,981 $ 101,065 $ ( 17,279 ) $ 212,985 June 30, 2025 7,361,684 $ 124,607 $ 2,331 $ 107,949 $ ( 14,387 ) $ 220,500 Comprehensive income (loss) — — — 5,240 3,978 9,218 Issuance of common stock 7,979 272 — — — 272 Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — ( 10 ) 10 — — — Share-based payment awards under the Directors Plan — — 32 — — 32 Share-based compensation expense recognized in earnings under the RSP — 24 — — — 24 Common stock repurchased ( 19,096 ) ( 609 ) — — — ( 609 ) Cash dividends paid ($ 0.28 per common share) — — — ( 2,017 ) — ( 2,017 ) September 30, 2025 7,350,567 $ 124,284 $ 2,373 $ 111,172 $ ( 10,409 ) $ 227,420 7 Table of Contents Common Stock Common Shares Outstanding Amount Common Shares to be Issued for Deferred Compensation Obligations Retained Earnings Accumulated Other Comprehensive Income (Loss) Totals December 31, 2023 7,485,889 $ 127,323 $ 3,693 $ 97,282 $ ( 25,896 ) $ 202,402 Comprehensive income (loss) — — — 9,893 8,617 18,510 Issuance of common stock 61,560 1,190 — — — 1,190 Common stock issued for deferred compensation under the RSP 16,240 — — — — — Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 44 ( 44 ) — — — Share-based payment awards under the Directors Plan — — 332 — — 332 Share-based compensation expense recognized in earnings under the RSP — 71 — — — 71 Common stock purchased for deferred compensation obligations — ( 991 ) — — — ( 991 ) Common stock repurchased ( 124,969 ) ( 2,419 ) — — — ( 2,419 ) Cash dividends paid ($ 0.84 per common share) — — — ( 6,110 ) — ( 6,110 ) September 30, 2024 7,438,720 $ 125,218 $ 3,981 $ 101,065 $ ( 17,279 ) $ 212,985 December 31, 2024 7,424,893 $ 126,224 $ 2,383 $ 103,024 $ ( 21,355 ) $ 210,276 Comprehensive income (loss) — — — 14,220 10,946 25,166 Issuance of common stock 36,809 1,031 — — — 1,031 Common stock issued for deferred compensation under the RSP 11,367 — — — — — Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 243 ( 243 ) — — — Share-based payment awards under the Directors Plan — — 233 — — 233 Share-based compensation expense recognized in earnings under the RSP — 45 — — — 45 Common stock repurchased ( 122,502 ) ( 3,259 ) — — — ( 3,259 ) Cash dividends paid ($ 0.84 per common share) — — — ( 6,072 ) — ( 6,072 ) September 30, 2025 7,350,567 $ 124,284 $ 2,373 $ 111,172 $ ( 10,409 ) $ 227,420 See notes to interim condensed consolidated financial statements (unaudited). 8 Table of Contents INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Nine Months Ended September 30 2025 2024 Operating activities Net income $ 14,220 $ 9,893 Reconciliation of net income to net cash provided by operating activities (Reversal of) provision for credit losses ( 997 ) 1,508 Depreciation 1,601 1,555 Net amortization of AFS securities 771 1,017 Net gain on sale of mortgage loans ( 115 ) ( 138 ) Increase in cash value of BOLI ( 1,125 ) ( 733 ) Share-based payment awards 278 403 Origination of loans HFS ( 4,881 ) ( 6,168 ) Proceeds from loan sales 4,501 5,802 Net changes in: Other assets ( 2,002 ) ( 895 ) Other liabilities 3,039 270 Net cash provided by (used in) operating activities 15,290 12,514 Investing activities Proceeds from maturities, calls and prepayments of AFS securities 52,359 31,183 Purchases of AFS securities ( 62,148 ) — Net change in loans HFI ( 8,008 ) ( 77,151 ) Purchases of premises and equipment ( 2,601 ) ( 1,590 ) Purchases of BOLI policies ( 10,225 ) — Proceeds from sale of FHLB stock 7,162 — Low income housing tax credit investments ( 3,767 ) ( 1,690 ) Net cash provided by (used in) investing activities ( 27,228 ) ( 49,248 ) Financing activities Net increase (decrease) in deposits 178,542 58,137 Net increase (decrease) in short-term borrowings 8,455 5,633 Net increase (decrease) in FHLB advances ( 30,000 ) ( 25,000 ) Cash dividends paid on common stock ( 6,072 ) ( 6,110 ) Proceeds from issuance of common stock 1,031 1,190 Common stock repurchased ( 3,259 ) ( 2,419 ) Common stock purchased for deferred compensation obligations — ( 991 ) Net cash provided by (used in) financing activities 148,697 30,440 Increase (decrease) in cash and cash equivalents 136,759 ( 6,294 ) Cash and cash equivalents at beginning of period 24,542 33,672 Cash and cash equivalents at end of period $ 161,301 $ 27,378 Supplemental cash flows information Interest paid $ 24,769 $ 25,203 Income taxes paid 1,900 1,800 Supplemental noncash information Transfers of loans to foreclosed assets 925 350 See notes to interim condensed consolidated financial statements (unaudited). 9 Table of Contents NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands except per share amounts and ratios, unless otherwise noted) Note 1 – Significant Accounting Policies 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 “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 nine-month periods ended September 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 and nine-month periods ended September 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”). All financial data presented in these notes, as well as in Management’s Discussion and Analysis of Financial Condition and Results of Operations, including financial data presented in the tables and explanations thereof, are expressed in thousands except per share amounts and ratios and unless otherwise noted. OPERATING SEGMENTS: Segment information is prepared on the same basis that our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), manages our segments, evaluates financial results, and makes key operating decisions. While the CODM monitors the revenue streams of our various products and services, operations are managed, and financial performance is evaluated on a corporate-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the banking-related operations are considered by management to be aggregated in one reportable operating segment. The segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products and services, and geographical regions are similar. The CODM will evaluate the financial performance of our business components by evaluating revenue streams, significant expenses, and budget to actual results in assessing our reportable segment and in the determination of allocating resources. Further, the CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. Consolidated net income is used to benchmark results against our competitors. Benchmarking and monitoring of budget to actual results are used in assessment performance and in establishing compensation. Revenue from banking operations consists primarily of loan and investment interest, deposit related fees, and wealth fees. Interest expense, provision for credit losses, compensation, and occupancy and equipment costs provide the significant expenses in our banking operations. All operations are domestic. RECLASSIFICATIONS: 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 2024 Annual Report on Form 10-K. SUBSEQUENT EVENTS: We evaluated subsequent events after September 30, 2025 through the date our interim condensed consolidated financial statements were issued for potential recognition and disclosure. We determined that no subsequent events require financial statement recognition or disclosure between September 30, 2025 and the date our interim condensed consolidated financial statements were issued. 10 Table of Contents Note 2 – AFS Securities The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at: September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury $ 210,462 $ — $ 4,421 $ 206,041 States and political subdivisions 74,042 26 2,966 71,102 Auction rate money market preferred 3,200 — 410 2,790 Mortgage-backed securities 24,696 — 1,299 23,397 Collateralized mortgage obligations 203,984 1,081 3,852 201,213 Corporate 8,150 — 723 7,427 Total $ 524,534 $ 1,107 $ 13,671 $ 511,970 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Treasury $ 230,807 $ — $ 10,236 $ 220,571 States and political subdivisions 81,135 9 4,576 76,568 Auction rate money market preferred 3,200 — 156 3,044 Mortgage-backed securities 29,068 — 2,182 26,886 Collateralized mortgage obligations 163,156 — 8,482 154,674 Corporate 8,150 — 864 7,286 Total $ 515,516 $ 9 $ 26,496 $ 489,029 The amortized cost and fair value of AFS securities by contractual maturity at September 30, 2025 are as follows: Maturing Securities with Variable Monthly Payments or Noncontractual Maturities Due in One Year or Less After One Year But Within Five Years After Five Years But Within Ten Years After Ten Years Total U.S. Treasury $ 160,417 $ 50,045 $ — $ — $ — $ 210,462 States and political subdivisions 12,796 18,459 20,048 22,739 — 74,042 Auction rate money market preferred — — — — 3,200 3,200 Mortgage-backed securities — — — — 24,696 24,696 Collateralized mortgage obligations — — — — 203,984 203,984 Corporate — — 8,150 — — 8,150 Total amortized cost $ 173,213 $ 68,504 $ 28,198 $ 22,739 $ 231,880 $ 524,534 Fair value $ 170,246 $ 66,903 $ 26,153 $ 21,268 $ 227,400 $ 511,970 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. 11 Table of Contents The information in the following tables pertains to AFS securities with gross unrealized losses at September 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous loss position for which an allowance for credit losses has not been recorded. September 30, 2025 Less Than Twelve Months Twelve Months or More Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Total Unrealized Losses U.S. Treasury $ — $ — $ 4,421 $ 206,041 $ 4,421 States and political subdivisions 449 6,642 2,517 31,820 2,966 Auction rate money market preferred — — 410 2,790 410 Mortgage-backed securities — — 1,299 23,397 1,299 Collateralized mortgage obligations 59 8,991 3,793 125,753 3,852 Corporate 60 1,640 663 5,787 723 Total $ 568 $ 17,273 $ 13,103 $ 395,588 $ 13,671 Number of securities in an unrealized loss position: 39 144 183 December 31, 2024 Less Than Twelve Months Twelve Months or More Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Total Unrealized Losses U.S. Treasury $ — $ — $ 10,236 $ 220,571 $ 10,236 States and political subdivisions 486 23,553 4,090 36,796 4,576 Auction rate money market preferred — — 156 3,044 156 Mortgage-backed securities — — 2,182 26,886 2,182 Collateralized mortgage obligations 185 5,646 8,297 149,028 8,482 Corporate — — 864 7,286 864 Total $ 671 $ 29,199 $ 25,825 $ 443,611 $ 26,496 Number of securities in an unrealized loss position: 175 178 353 As of September 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. 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 generally due to a continued elevated market interest rate environment compared to the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their respective maturity date or repricing date, or if the market yields for such investments decline. 12 Table of Contents Note 3 – Loans and ACL Loan Composition The following table provides a detailed listing of our loan portfolio at: September 30, 2025 December 31, 2024 Balance Percent of Total Balance Percent of Total Commercial and industrial Secured $ 186,306 13.01 % $ 177,239 12.45 % Unsecured 31,826 2.22 % 23,384 1.64 % Total commercial and industrial 218,132 15.23 % 200,623 14.09 % Commercial real estate Commercial mortgage owner occupied 220,233 15.38 % 213,086 14.97 % Commercial mortgage non-owner occupied 224,653 15.70 % 217,679 15.29 % Commercial mortgage 1-4 family investor 97,971 6.84 % 92,497 6.50 % Commercial mortgage multifamily 83,785 5.85 % 68,456 4.81 % Total commercial real estate 626,642 43.77 % 591,718 41.57 % Advances to mortgage brokers 5,056 0.35 % 63,080 4.43 % Agricultural Agricultural mortgage 67,726 4.73 % 67,550 4.75 % Agricultural other 30,068 2.10 % 32,144 2.26 % Total agricultural 97,794 6.83 % 99,694 7.01 % Residential real estate Senior lien 358,755 25.05 % 332,743 23.37 % Junior lien 10,674 0.75 % 8,655 0.61 % Home equity lines of credit 42,627 2.98 % 39,474 2.77 % Total residential real estate 412,056 28.78 % 380,872 26.75 % Consumer Secured - direct 29,952 2.09 % 35,050 2.46 % Secured - indirect 38,922 2.72 % 49,136 3.45 % Unsecured 3,351 0.23 % 3,398 0.24 % Total consumer 72,225 5.04 % 87,584 6.15 % Total $ 1,431,905 100.00 % $ 1,423,571 100.00 % We grant commercial, agricultural, residential real estate, and consumer loans to customers primarily in Bay, Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties in Michigan. The ability of borrowers to honor their repayment obligations is often dependent upon the real estate, agricultural, manufacturing, retail, gaming, tourism, health care, higher education, and general economic conditions of this region. 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 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. Unless a loan has a nonaccrual status, interest income is accrued over the term of the loan based on the principal amount outstanding. 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 $ 3,129 and $ 3,330 at September 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. Repayment of these loans is dependent upon the successful operation and management of a business. We minimize our risk by limiting the amount of direct credit exposure to any one borrower to $ 18,000 . Borrowers with direct credit needs of more than $ 18,000 may be serviced through the use of loan participations with other commercial banks. Commercial and agricultural real estate loans commonly 13 Table of Contents require loan-to-value limits of 80 % or less. Depending upon the type of loan, past credit history, and current operating results, we may require the borrower to pledge accounts receivable, inventory, property, or equipment. Government agency guarantee may be required. Personal guarantees and/or life insurance beneficiary assignments are generally required from the owners of closely held corporations, partnerships, and sole proprietorships. In addition, we may require annual financial statements, prepare cash flow analyses, and review credit reports. We offer adjustable-rate mortgages, construction loans, and fixed rate residential real estate loans which have amortization periods up to a maximum of 30 years. We consider the anticipated direction of interest rates, balance sheet duration, the sensitivity of our balance sheet to changes in interest rates, our liquidity needs, and overall loan demand to determine whether or not to sell fixed rate loans to Freddie Mac. Our lending policies generally limit the maximum loan-to-value ratio on residential real estate loans to 100 % of the lower of the appraised value of the property or the purchase price. Private mortgage insurance is typically required on loans with loan-to-value ratios in excess of 80 % unless the loan qualifies for government guarantees. Underwriting criteria for originated residential real estate loans generally include: • Evaluation of the borrower’s ability to make monthly payments. • Evaluation of the value of the property securing the loan. • Ensuring the payment of principal, interest, taxes, and hazard insurance generally does not exceed 28 % of a borrower’s gross income. • Ensuring all debt servicing does not exceed 40 % of income. • Verification of acceptable credit reports. • Verification of employment, income, and financial information. Appraisals are performed by independent appraisers and are reviewed for appropriateness. Generally, mortgage loan requests are reviewed by our mortgage loan committee or through a secondary market underwriting system; loans in excess of $ 1,000 require the approval of one or more of the following committees: Internal Loan Committee, the Executive Loan Committee, or the Board of Directors. Consumer loans include secured and unsecured personal loans. Loans are amortized for a period of up to 15 years based on the age and value of the underlying collateral. The underwriting emphasis is on a borrower’s perceived intent and ability to pay rather than collateral value. No consumer loans are sold to the secondary market. Nonaccrual and Past Due Loans The accrual of interest on commercial and agricultural loans, as well as residential real estate loans, is discontinued at the time a loan is 90 days or more past due unless the credit is well-secured and in the process of short-term collection. Upon transferring a loan to nonaccrual status, we perform an evaluation to determine the net realizable value of the underlying collateral. This evaluation is used to help determine if a charge-off is necessary. Consumer loans are typically charged off no later than 180 days past due. Past due status is based on the contractual term of the loan. In all cases, a loan is placed in nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed in nonaccrual status, all interest accrued in the current calendar year, but not collected, is reversed against interest income while interest accrued in prior calendar years, but not collected, is charged against the ACL. 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 $ 6,592 and $ 6,384 at September 30, 2025 and December 31, 2024, respectively, which is included in other assets on the consolidated balance sheets. 14 Table of Contents The following table summarizes nonaccrual loan data by class of loans as of: September 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 $ 16 $ 16 $ — $ — Commercial real estate Commercial mortgage 1-4 family investor 3,000 3,000 — — Residential real estate Senior lien 427 427 282 282 Total $ 3,443 $ 3,443 $ 282 $ 282 The following tables summarize the past due and current loans for the entire loan portfolio as of: September 30, 2025 Past Due: Accruing Loans 90 or More Days Past Due 30-59 Days 60-89 Days 90 Days or More Current Total Commercial and industrial Secured $ 100 $ — $ 16 $ 186,190 $ 186,306 $ — Unsecured — — — 31,826 31,826 — Total commercial and industrial 100 — 16 218,016 218,132 — Commercial real estate Commercial mortgage owner occupied — — — 220,233 220,233 — Commercial mortgage non-owner occupied 139 — — 224,514 224,653 — Commercial mortgage 1-4 family investor — 3,000 — 94,971 97,971 — Commercial mortgage multifamily — — — 83,785 83,785 — Total commercial real estate 139 3,000 — 623,503 626,642 — Advances to mortgage brokers — — — 5,056 5,056 — Agricultural Agricultural mortgage — — — 67,726 67,726 — Agricultural other — — — 30,068 30,068 — Total agricultural — — — 97,794 97,794 — Residential real estate Senior lien 51 125 18 358,561 358,755 18 Junior lien — — — 10,674 10,674 — Home equity lines of credit — — — 42,627 42,627 — Total residential real estate 51 125 18 411,862 412,056 18 Consumer Secured - direct 7 — — 29,945 29,952 — Secured - indirect 70 — — 38,852 38,922 — Unsecured 8 — — 3,343 3,351 — Total consumer 85 — — 72,140 72,225 — Total $ 375 $ 3,125 $ 34 $ 1,428,371 $ 1,431,905 $ 18 15 Table of Contents December 31, 2024 Past Due: Accruing Loans 90 or More Days Past Due 30-59 Days 60-89 Days 90 Days or More Current Total Commercial and industrial Secured $ 328 $ — $ — $ 176,911 $ 177,239 $ — Unsecured — 50 — 23,334 23,384 — Total commercial and industrial 328 50 — 200,245 200,623 — Commercial real estate Commercial mortgage owner occupied 25 304 — 212,757 213,086 — Commercial mortgage non-owner occupied 792 — — 216,887 217,679 — Commercial mortgage 1-4 family investor — — — 92,497 92,497 — Commercial mortgage multifamily — — — 68,456 68,456 — Total commercial real estate 817 304 — 590,597 591,718 — Advances to mortgage brokers — — — 63,080 63,080 — Agricultural Agricultural mortgage — — — 67,550 67,550 — Agricultural other — — — 32,144 32,144 — Total agricultural — — — 99,694 99,694 — Residential real estate Senior lien 3,846 148 163 328,586 332,743 — Junior lien 19 — — 8,636 8,655 — Home equity lines of credit 10 — — 39,464 39,474 — Total residential real estate 3,875 148 163 376,686 380,872 — Consumer Secured - direct 15 — 19 35,016 35,050 19 Secured - indirect 232 — — 48,904 49,136 — Unsecured 4 — — 3,394 3,398 — Total consumer 251 — 19 87,314 87,584 19 Total $ 5,271 $ 502 $ 182 $ 1,417,616 $ 1,423,571 $ 19 16 Table of Contents Credit Quality Indicators The following tables display commercial and agricultural loans by credit risk ratings and year of origination as of: September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial and industrial: Secured Risk ratings 1-3 $ 4,620 $ 10,717 $ 14,511 $ 2,312 $ 3,930 $ 2,927 $ 19,994 $ — $ 59,011 Risk rating 4 19,291 22,202 10,594 7,197 7,530 2,601 29,246 — 98,661 Risk rating 5 2,392 2,278 225 15,553 25 — 4,422 — 24,895 Risk rating 6 91 520 20 — 39 7 3,046 — 3,723 Risk rating 7 — — — 16 — — — — 16 Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 26,394 $ 35,717 $ 25,350 $ 25,078 $ 11,524 $ 5,535 $ 56,708 $ — $ 186,306 2025 year-to-date gross charge-offs $ — $ — $ 22 $ — $ — $ — $ — $ — $ 22 Commercial and industrial: Unsecured Risk ratings 1-3 $ 1,544 $ 348 $ 2,496 $ 160 $ 25 $ 412 $ 1,936 $ — $ 6,921 Risk rating 4 9,145 1,333 985 1,369 594 299 9,899 — 23,624 Risk rating 5 3 — 63 — 96 — 1,031 — 1,193 Risk rating 6 — 88 — — — — — — 88 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 10,692 $ 1,769 $ 3,544 $ 1,529 $ 715 $ 711 $ 12,866 $ — $ 31,826 2025 year-to-date gross charge-offs $ — $ 50 $ — $ — $ — $ — $ — $ — $ 50 Commercial real estate: Owner occupied Risk ratings 1-3 $ 2,627 $ 4,178 $ 8,979 $ 1,433 $ 10,697 $ 16,331 $ 838 $ — $ 45,083 Risk rating 4 17,653 34,711 20,676 28,358 37,301 26,896 1,907 — 167,502 Risk rating 5 1,497 193 452 1,259 69 1,369 372 — 5,211 Risk rating 6 — 2,060 304 — 73 — — — 2,437 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 21,777 $ 41,142 $ 30,411 $ 31,050 $ 48,140 $ 44,596 $ 3,117 $ — $ 220,233 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Non-owner occupied Risk ratings 1-3 $ 2,564 $ 283 $ 729 $ 6,060 $ 5,651 $ 65 $ 139 $ — $ 15,491 Risk rating 4 25,717 8,233 26,229 54,700 34,622 29,205 1,490 — 180,196 Risk rating 5 220 9,565 7,620 935 1,629 7,497 466 — 27,932 Risk rating 6 — — 988 — — 46 — — 1,034 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 28,501 $ 18,081 $ 35,566 $ 61,695 $ 41,902 $ 36,813 $ 2,095 $ — $ 224,653 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 17 Table of Contents September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial real estate: 1-4 family investor Risk ratings 1-3 $ 477 $ 1,135 $ 226 $ 2,679 $ 959 $ 1,432 $ 2,857 $ — $ 9,765 Risk rating 4 10,725 8,790 7,848 8,175 27,307 14,141 7,175 — 84,161 Risk rating 5 — — 139 219 — 123 — — 481 Risk rating 6 — — 521 — — 43 — — 564 Risk rating 7 — — 3,000 — — — — — 3,000 Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 11,202 $ 9,925 $ 11,734 $ 11,073 $ 28,266 $ 15,739 $ 10,032 $ — $ 97,971 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Multifamily Risk ratings 1-3 $ — $ 992 $ 2,378 $ 1,627 $ 874 $ 1,167 $ 188 $ — $ 7,226 Risk rating 4 16,633 4,466 1,893 20,533 10,235 19,371 137 — 73,268 Risk rating 5 — 484 — — — 2,807 — — 3,291 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 16,633 $ 5,942 $ 4,271 $ 22,160 $ 11,109 $ 23,345 $ 325 $ — $ 83,785 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Advances to mortgage brokers Risk ratings 1-3 $ 5,056 $ — $ — $ — $ — $ — $ — $ — $ 5,056 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agricultural mortgage Risk ratings 1-3 $ 2,169 $ 729 $ — $ 3,026 $ 2,000 $ 4,067 $ 35 $ — $ 12,026 Risk rating 4 2,544 4,039 3,934 11,242 6,029 12,025 1,681 — 41,494 Risk rating 5 550 271 1,097 511 5,836 645 1,048 — 9,958 Risk rating 6 535 — — 2,127 69 1,517 — — 4,248 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 5,798 $ 5,039 $ 5,031 $ 16,906 $ 13,934 $ 18,254 $ 2,764 $ — $ 67,726 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agricultural other Risk ratings 1-3 $ 874 $ 617 $ 434 $ 677 $ 221 $ 385 $ 2,989 $ — $ 6,197 Risk rating 4 1,682 864 769 830 576 89 9,970 — 14,780 Risk rating 5 206 244 133 31 910 391 2,282 — 4,197 Risk rating 6 3,625 — 103 — 61 — 1,105 — 4,894 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 6,387 $ 1,725 $ 1,439 $ 1,538 $ 1,768 $ 865 $ 16,346 $ — $ 30,068 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 18 Table of Contents December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial and industrial: Secured Risk ratings 1-3 $ 11,081 $ 10,173 $ 2,352 $ 4,483 $ 4,437 $ 368 $ 10,316 $ — $ 43,210 Risk rating 4 27,530 20,886 14,240 11,014 1,867 2,144 28,109 — 105,790 Risk rating 5 3,627 559 11,644 164 137 53 6,626 — 22,810 Risk rating 6 126 288 1,841 71 — 10 3,093 — 5,429 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 42,364 $ 31,906 $ 30,077 $ 15,732 $ 6,441 $ 2,575 $ 48,144 $ — $ 177,239 2024 year-to-date gross charge-offs $ — $ 277 $ 33 $ — $ 17 $ — $ — $ — $ 327 Commercial and industrial: Unsecured Risk ratings 1-3 $ 378 $ 1,967 $ 203 $ 69 $ 48 $ 414 $ 1,966 $ — $ 5,045 Risk rating 4 3,073 2,049 2,388 268 370 — 8,896 — 17,044 Risk rating 5 100 — — 121 — — 1,074 — 1,295 Risk rating 6 — — — — — — — — — Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 3,551 $ 4,016 $ 2,591 $ 458 $ 418 $ 414 $ 11,936 $ — $ 23,384 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 8 $ 1 $ — $ 9 Commercial real estate: Owner occupied Risk ratings 1-3 $ 4,185 $ 8,933 $ 1,994 $ 11,617 $ 13,300 $ 4,421 $ 221 $ — $ 44,671 Risk rating 4 34,980 21,586 32,319 39,439 9,924 20,260 1,626 — 160,134 Risk rating 5 197 487 876 72 653 791 372 — 3,448 Risk rating 6 1,354 1,123 — 636 1,117 504 99 — 4,833 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 40,716 $ 32,129 $ 35,189 $ 51,764 $ 24,994 $ 25,976 $ 2,318 $ — $ 213,086 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Non-owner occupied Risk ratings 1-3 $ 644 $ 795 $ 5,994 $ 5,178 $ 348 $ 1,781 $ — $ — $ 14,740 Risk rating 4 8,413 42,135 61,524 36,702 4,399 29,225 497 — 182,895 Risk rating 5 9,726 — 218 1,681 6,154 709 500 — 18,988 Risk rating 6 — 1,006 — — 50 — — — 1,056 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 18,783 $ 43,936 $ 67,736 $ 43,561 $ 10,951 $ 31,715 $ 997 $ — $ 217,679 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 19 Table of Contents December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial real estate: 1-4 family investor Risk ratings 1-3 $ 1,165 $ — $ 2,632 $ 791 $ 846 $ 965 $ 3,076 $ — $ 9,475 Risk rating 4 9,399 12,535 8,911 28,666 13,930 3,640 4,750 — 81,831 Risk rating 5 — 145 339 72 — 52 — — 608 Risk rating 6 — 536 — — — 47 — — 583 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 10,564 $ 13,216 $ 11,882 $ 29,529 $ 14,776 $ 4,704 $ 7,826 $ — $ 92,497 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Multifamily Risk ratings 1-3 $ 638 $ 3,383 $ 1,697 $ 936 $ 545 $ 746 $ 150 $ — $ 8,095 Risk rating 4 2,081 1,957 21,446 11,646 664 19,617 64 — 57,475 Risk rating 5 — — — — — — — — — Risk rating 6 — — — — — 2,886 — — 2,886 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 2,719 $ 5,340 $ 23,143 $ 12,582 $ 1,209 $ 23,249 $ 214 $ — $ 68,456 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Advances to mortgage brokers Risk ratings 1-3 $ 63,080 $ — $ — $ — $ — $ — $ — $ — $ 63,080 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agricultural mortgage Risk ratings 1-3 $ 792 $ — $ 2,700 $ 2,144 $ 2,550 $ 1,250 $ 34 $ — $ 9,470 Risk rating 4 4,410 4,118 12,959 6,968 5,737 8,586 1,322 — 44,100 Risk rating 5 281 1,521 1,342 5,757 — 1,364 1,045 — 11,310 Risk rating 6 60 — 1,550 — — 1,060 — — 2,670 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 5,543 $ 5,639 $ 18,551 $ 14,869 $ 8,287 $ 12,260 $ 2,401 $ — $ 67,550 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agricultural other Risk ratings 1-3 $ 634 $ 523 $ 106 $ 137 $ 2 $ 210 $ 3,635 $ — $ 5,247 Risk rating 4 1,940 1,328 1,863 1,893 463 550 13,531 — 21,568 Risk rating 5 1,683 — — — 438 — 608 — 2,729 Risk rating 6 — 172 — 90 — — 2,338 — 2,600 Risk rating 7 — — — — — — — — — Risk rating 8 — — — — — — — — — Risk rating 9 — — — — — — — — — Total $ 4,257 $ 2,023 $ 1,969 $ 2,120 $ 903 $ 760 $ 20,112 $ — $ 32,144 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — 20 Table of Contents We have certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. 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. Internally assigned credit risk ratings are reviewed, at a minimum, when loans are renewed or when management has knowledge of improvements or deterioration of the credit quality of individual credits. Descriptions of the internally assigned credit risk ratings for commercial and agricultural loans are as follows: 1. EXCELLENT – Substantially Risk Free Credit has strong financial condition and solid earnings history, characterized by: • High liquidity, strong cash flow, low leverage. • Unquestioned ability to meet all obligations when due. • Experienced management, with management succession in place. • Secured by cash. 2. HIGH QUALITY – Limited Risk Credit with sound financial condition and a positive trend in earnings supplemented by: • Favorable liquidity and leverage ratios. • Ability to meet all obligations when due. • Management with successful track record. • Steady and satisfactory earnings history. • If loan is secured, collateral is of high quality and readily marketable. • Access to alternative financing. • Well defined primary and secondary source of repayment. • If supported by guaranty, the financial strength and liquidity of the guarantor(s) are clearly evident. 3. HIGH SATISFACTORY – Reasonable Risk Credit with satisfactory financial condition and further characterized by: • Working capital adequate to support operations. • Cash flow sufficient to pay debts as scheduled. • Management experience and depth appear favorable. • Loan performing according to terms. • If loan is secured, collateral is acceptable, and loan is fully protected. 4. SATISFACTORY – Acceptable Risk Credit with bankable risks, although some signs of weaknesses are shown: • Would include most start-up businesses. • Occasional instances of trade slowness or repayment delinquency – may have been 10 - 30 days slow within the past year. • Management’s abilities are apparent yet unproven. • Weakness in primary source of repayment with adequate secondary source of repayment. • Loan structure generally in accordance with policy. • If secured, loan collateral coverage is marginal. 21 Table of Contents To be classified as less than satisfactory, only one of the following criteria must be met. 5. SPECIAL MENTION – Criticized Credit constitutes an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific loan: • Downward trend in sales, profit levels, and margins. • Impaired working capital position. • Cash flow is strained in order to meet debt repayment. • Loan delinquency ( 30 - 60 days) and overdrafts may occur. • Shrinking equity cushion. • Diminishing primary source of repayment and questionable secondary source. • Management abilities are questionable. • Weak industry conditions. • Litigation pending against the borrower. • Loan may need to be restructured to improve collateral position or reduce payments. • Collateral or guaranty offers limited protection. • Negative debt service coverage, however, the credit is well collateralized, and payments are current. 6. SUBSTANDARD – Classified Credit is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged. There is a distinct possibility we will implement collection procedures if the loan deficiencies are not corrected. Any commercial loan placed in nonaccrual status will be rated “7” or worse. In addition, the following characteristics may apply: • Sustained losses have severely eroded the equity and cash flow. • Deteriorating liquidity. • Serious management problems or internal fraud. • Original repayment terms liberalized. • Likelihood of bankruptcy. • Inability to access other funding sources. • Reliance on secondary source of repayment. • Litigation filed against borrower. • Interest non-accrual may be warranted. • Collateral provides little or no value. • Requires excessive attention of the loan officer. • Borrower is uncooperative with loan officer. 7. VULNERABLE – Classified Credit is considered “Substandard” and warrants placing in nonaccrual status. Risk of loss is being evaluated and exit strategy options are under review. Other characteristics that may apply: • Insufficient cash flow to service debt. • Minimal or no payments being received. • Limited options available to avoid the collection process. • Transition status, expect action will take place to collect loan without immediate progress being made. 22 Table of Contents 8. DOUBTFUL – Workout Credit has all the weaknesses inherent in a “Substandard” loan with the added characteristic that collection and/or liquidation is pending. The possibility of a loss is extremely high, but its classification as a loss is deferred until liquidation procedures are completed, or reasonably estimable. Other characteristics that may apply: • Normal operations are severely diminished or have ceased. • Seriously impaired cash flow. • Original repayment terms materially altered. • Secondary source of repayment is inadequate. • Survivability as a “going concern” is impossible. • Collection process has begun. • Bankruptcy petition has been filed. • Judgments have been filed. • Portion of the loan balance has been charged off. 9. LOSS – Charge-off Credit is considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification is for charged-off loans but does not mean that the asset has absolutely no recovery or salvage value. These loans are further characterized by: • Liquidation or reorganization under bankruptcy, with poor prospects of collection. • Fraudulently overstated assets and/or earnings. • Collateral has marginal or no value. • Debtor cannot be located. • Over 120 days delinquent. 23 Table of Contents Our primary credit quality indicator for residential real estate and consumer loans is the individual loan’s past due status. The following tables display residential real estate and consumer loans by payment status and year of origination as of: September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Total Residential real estate: Senior lien Current $ 51,300 $ 49,468 $ 37,117 $ 43,219 $ 68,435 $ 98,849 $ — $ 9,746 $ 358,134 Past due 30-89 days — — — — — 176 — — 176 Past due 90 or more days — — — 18 — — — — 18 Nonaccrual — — — — 180 247 — — 427 Total $ 51,300 $ 49,468 $ 37,117 $ 43,237 $ 68,615 $ 99,272 $ — $ 9,746 $ 358,755 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1 Residential real estate: Junior lien Current $ 3,671 $ 3,681 $ 2,317 $ 603 $ 94 $ 308 $ — $ — $ 10,674 Past due 30-89 days — — — — — — — — — Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 3,671 $ 3,681 $ 2,317 $ 603 $ 94 $ 308 $ — $ — $ 10,674 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential real estate: Home equity lines of credit Current $ — $ — $ — $ — $ — $ — $ 42,585 $ 42 $ 42,627 Past due 30-89 days — — — — — — — — — Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ — $ — $ — $ — $ — $ — $ 42,585 $ 42 $ 42,627 2025 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer: Secured - direct Current $ 6,776 $ 6,952 $ 6,301 $ 4,560 $ 2,576 $ 2,780 $ — $ — $ 29,945 Past due 30-89 days — — 7 — — — — — 7 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 6,776 $ 6,952 $ 6,308 $ 4,560 $ 2,576 $ 2,780 $ — $ — $ 29,952 2025 year-to-date gross charge-offs $ 2 $ 3 $ 93 $ 38 $ 9 $ 53 $ — $ — $ 198 Consumer: Secured - indirect Current $ 2,500 $ 4,904 $ 16,456 $ 5,670 $ 3,891 $ 5,431 $ — $ — $ 38,852 Past due 30-89 days — — — — 18 52 — — 70 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 2,500 $ 4,904 $ 16,456 $ 5,670 $ 3,909 $ 5,483 $ — $ — $ 38,922 2025 year-to-date gross charge-offs $ — $ 8 $ — $ — $ — $ 13 $ — $ — $ 21 24 Table of Contents September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Total Consumer: Unsecured Current $ 1,302 $ 867 $ 256 $ 47 $ 9 $ — $ 862 $ — $ 3,343 Past due 30-89 days 4 4 — — — — — — 8 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 1,306 $ 871 $ 256 $ 47 $ 9 $ — $ 862 $ — $ 3,351 2025 year-to-date gross charge-offs $ 427 $ 4 $ 12 $ 1 $ 1 $ — $ — $ — $ 445 December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total Residential real estate: Senior lien Current $ 55,991 $ 35,105 $ 45,916 $ 73,607 $ 47,057 $ 62,303 $ — $ 8,579 $ 328,558 Past due 30-89 days 173 162 331 287 907 2,043 — — 3,903 Past due 90 or more days — — — — — — — — — Nonaccrual — — — 163 28 91 — — 282 Total $ 56,164 $ 35,267 $ 46,247 $ 74,057 $ 47,992 $ 64,437 $ — $ 8,579 $ 332,743 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 10 $ — $ — $ 10 Residential real estate: Junior lien Current $ 4,229 $ 3,092 $ 800 $ 86 $ 71 $ 358 $ — $ — $ 8,636 Past due 30-89 days — — — 19 — — — — 19 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 4,229 $ 3,092 $ 800 $ 105 $ 71 $ 358 $ — $ — $ 8,655 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential real estate: Home equity lines of credit Current $ — $ — $ — $ — $ — $ — $ 39,464 $ — $ 39,464 Past due 30-89 days — — — — — — 10 — 10 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ — $ — $ — $ — $ — $ — $ 39,474 $ — $ 39,474 2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer: Secured - direct Current $ 10,990 $ 9,498 $ 6,535 $ 3,947 $ 2,166 $ 1,880 $ — $ — $ 35,016 Past due 30-89 days — — 15 — — — — — 15 Past due 90 or more days — — — — 19 — — — 19 Nonaccrual — — — — — — — — — Total $ 10,990 $ 9,498 $ 6,550 $ 3,947 $ 2,185 $ 1,880 $ — $ — $ 35,050 2024 year-to-date gross charge-offs $ — $ 73 $ — $ — $ 27 $ 2 $ — $ — $ 102 25 Table of Contents December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total Consumer: Secured - indirect Current $ 6,526 $ 22,624 $ 7,682 $ 4,990 $ 4,018 $ 3,064 $ — $ — $ 48,904 Past due 30-89 days 42 51 50 28 54 7 — — 232 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 6,568 $ 22,675 $ 7,732 $ 5,018 $ 4,072 $ 3,071 $ — $ — $ 49,136 2024 year-to-date gross charge-offs $ — $ 43 $ — $ — $ — $ — $ — $ — $ 43 Consumer: Unsecured Current $ 1,654 $ 656 $ 211 $ 22 $ 16 $ — $ 835 $ — $ 3,394 Past due 30-89 days — — 2 — — — 2 — 4 Past due 90 or more days — — — — — — — — — Nonaccrual — — — — — — — — — Total $ 1,654 $ 656 $ 213 $ 22 $ 16 $ — $ 837 $ — $ 3,398 2024 year-to-date gross charge-offs $ 1,939 $ 12 $ 21 $ — $ — $ 1 $ 21 $ — $ 1,994 Loan Modifications A loan modification includes terms outside of normal lending practices to a borrower experiencing financial difficulty. Typical modifications granted include, but are not limited to: • Agreeing to interest rates below prevailing market rates for debt with similar risk characteristics. • Extending the maturity date or amortization period beyond typical lending guidelines for loans with similar risk characteristics. • Agreeing to an interest-only payment structure, delaying principal payments, or delaying payments. • Forgiving principal. To determine if a borrower is experiencing financial difficulty, factors we consider include: • The borrower is currently in default on any debt. • The borrower would likely default on any debt if the concession is not granted. • The borrower’s cash flow is insufficient to service all debt if the concession is not granted. • The borrower has declared, or is in the process of declaring, bankruptcy. • The borrower is unlikely to continue as a going concern (if the entity is a business). 26 Table of Contents The following is a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty for the: Three Months Ended September 30, 2025 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 $ — 0.00 % $ — 0.00 % $ 443 0.18 % Agricultural Agricultural mortgage 914 1.35 % — 0.00 % — 0.00 % Agricultural other — 0.00 % 925 3.08 % — 0.00 % Total $ 914 $ 925 $ 443 Nine Months Ended September 30, 2025 Interest Rate Reduction 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 Amortized Cost Basis % of Total Class of Financial Receivable Commercial and industrial Secured $ 19 0.01 % $ — 0.00 % $ 3,087 1.26 % $ 1,006 0.41 % Commercial real estate Commercial mortgage owner occupied — 0.00 % — 0.00 % 1,497 0.84 % — 0.00 % Agricultural Agricultural mortgage — 0.00 % 914 1.35 % — 0.00 % — 0.00 % Agricultural other — 0.00 % — 0.00 % 925 3.08 % — 0.00 % Total $ 19 $ 914 $ 5,509 $ 1,006 Three Months Ended September 30, 2024 Interest Rate Reduction Amortized Cost Basis % of Total Class of Financial Receivable Agricultural Agricultural other $ 181 0.60 % Total $ 181 27 Table of Contents Nine Months Ended September 30, 2024 Interest Rate Reduction 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 Amortized Cost Basis % of Total Class of Financial Receivable Commercial and industrial Secured $ — 0.00 % $ 1,926 0.88 % $ 11 0.01 % $ — 0.00 % Commercial real estate Commercial mortgage owner occupied — 0.00 % 823 0.48 % — 0.00 % — 0.00 % Agricultural Agricultural mortgage — 0.00 % 1,305 1.95 % — 0.00 % — 0.00 % Agricultural other 181 0.60 % — 0.00 % — 0.00 % 1,038 3.46 % Consumer Secured - indirect — 0.00 % — 0.00 % 1 0.00 % — 0.00 % Total $ 181 $ 4,054 $ 12 $ 1,038 We do not modify any loans by forgiving principal or accrued interest. We had committed to advance $ 79 and $ 43 in additional funds to be disbursed in connection with modified loans at September 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 September 30 2025 2024 Payment Delay Term Weighted-Average Term Extension (Years) Weighted-Average Interest Rate Reduction Commercial and industrial Secured 6 months 1.08 N/A Agricultural Agricultural mortgage 4 months N/A N/A Agricultural other N/A 0.50 0.50 % Nine Months Ended September 30 2025 2024 Weighted-Average Interest Rate Reduction Payment Delay Term Weighted-Average Term Extension (Years) Weighted-Average Interest Rate Reduction Payment Delay Term Weighted-Average Term Extension (Years) Commercial and industrial Secured 10.00 % 8.1 months 1.05 N/A 4 months 3.00 Commercial real estate Commercial mortgage owner occupied N/A N/A 15.00 N/A 7 months N/A Agricultural Agricultural mortgage N/A 4 months N/A N/A 5 months 0.50 Agricultural other N/A N/A 0.50 0.50 % 4 months 0.33 Consumer Secured - indirect N/A N/A N/A N/A N/A 1.33 28 Table of Contents 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: September 30, 2025 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Commercial and industrial Secured $ 4,114 $ — $ — $ — $ 4,114 Commercial real estate Commercial mortgage owner occupied 2,832 — — — 2,832 Agricultural Agricultural mortgage 1,185 — — — 1,185 Agricultural other 925 — — — 925 Total $ 9,056 $ — $ — $ — $ 9,056 September 30, 2024 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Commercial and industrial Secured $ 1,937 $ — $ — $ — $ 1,937 Commercial real estate Commercial mortgage owner occupied 823 — — — 823 Commercial mortgage multifamily 2,917 — — — 2,917 Agricultural Agricultural mortgage 1,305 — — — 1,305 Agricultural other 1,219 — — — 1,219 Consumer Secured - indirect 1 — — — 1 Total $ 8,202 $ — $ — $ — $ 8,202 We had no loans that defaulted in each of the three and nine-month periods ended September 30, 2025 and 2024 which were modified within 12 months prior to the default date. ACL - Loans The credit quality of our loan portfolio is continuously monitored and is reflected within the ACL for loans. The ACL is an estimate of expected losses inherent within our loan portfolio. The ACL is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. The ACL is evaluated on a regular basis for appropriateness. Our periodic review of the collectability of a loan considers historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The primary factors behind the determination of the level of the ACL are specific allocations for loans individually evaluated, historical loss percentages, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods. The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a component of individual loans that do not share risk characteristics with other loans; and a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. 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 over established dollar thresholds 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 29 Table of Contents 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. In determining the allowance for credit losses, we derive an estimated credit loss assumption from a model that categorizes loan pools based on loan type and credit risk ratings or delinquency bucket. This model calculates an expected loss percentage for each loan class by considering the probability of default, based on the migration of loans from performing to loss by credit risk ratings or delinquency buckets using life-of-loan analysis, and the historical severity of loss, based on the aggregate net lifetime losses incurred per loan class. The default and severity factors used to calculate the allowance for credit losses for loans that share similar risk characteristics with other loans are adjusted for differences between the historical period used to calculate historical default and loss severity rates and expected conditions over the remaining lives of the loans in the portfolio. These qualitative factors are used to adjust the historical probabilities of default and severity of loss so that they reflect management's expectation of future conditions based on a reasonable and supportable forecast. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the model reverts back to the historical rates of default and severity of loss. Qualitative factors include: • Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, recovery practices not considered elsewhere in estimating credit losses; • Changes in the experience, ability, and depth of lending management and other relevant staff; • Changes in interest rates; • Changes in international, national, regional, and local economic factors; • Changes in the nature and volume of the portfolio and in the terms of loans; • Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans; • Lack of current financial information; • Competition, legal, and regulatory; and • Changes in the value of underlying collateral. A summary of activity in the ACL for loans, excluding unfunded commitments, by portfolio segment and the recorded investment in loans by segments follows for the: Three Months Ended September 30, 2025 Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total June 30, 2025 $ 1,318 $ 5,277 $ 316 $ 4,673 $ 1,393 $ 12,977 Charge-offs — — — — ( 175 ) ( 175 ) Recoveries 6 4 — 16 75 101 Provision for credit losses 29 102 1 107 7 246 September 30, 2025 $ 1,353 $ 5,383 $ 317 $ 4,796 $ 1,300 $ 13,149 Nine Months Ended September 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 Charge-offs ( 72 ) — — ( 1 ) ( 664 ) ( 737 ) Recoveries 90 56 — 46 1,955 2,147 Reversal of credit losses 19 156 30 230 ( 1,591 ) ( 1,156 ) September 30, 2025 $ 1,353 $ 5,383 $ 317 $ 4,796 $ 1,300 $ 13,149 30 Table of Contents Three Months Ended September 30, 2024 Commercial and Industrial Commercial Real Estate Agricultural Residential Real Estate Consumer Total June 30, 2024 $ 1,264 $ 5,569 $ 258 $ 4,351 $ 1,653 $ 13,095 Charge-offs — — — — ( 1,767 ) ( 1,767 ) Recoveries 6 318 — 20 64 408 Provision for credit losses ( 46 ) ( 710 ) — ( 40 ) 1,695 899 September 30, 2024 $ 1,224 $ 5,177 $ 258 $ 4,331 $ 1,645 $ 12,635 Nine Months Ended September 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 Charge-offs ( 336 ) — — ( 10 ) ( 2,139 ) ( 2,485 ) Recoveries 10 353 2 112 210 687 Provision for credit losses 582 ( 1,054 ) ( 14 ) ( 107 ) 1,918 1,325 September 30, 2024 $ 1,224 $ 5,177 $ 258 $ 4,331 $ 1,645 $ 12,635 The following table illustrates the two main components of the ACL as of: September 30 2025 June 30 2025 March 31 2025 December 31 2024 September 30 2024 ACL Individually evaluated $ — $ — $ — $ — $ — Collectively evaluated 13,149 12,977 12,735 12,895 12,635 Total $ 13,149 $ 12,977 $ 12,735 $ 12,895 $ 12,635 ACL to gross loans Individually evaluated 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Collectively evaluated 0.92 % 0.93 % 0.93 % 0.91 % 0.89 % Total 0.92 % 0.93 % 0.93 % 0.91 % 0.89 % 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: September 30, 2025 December 31, 2024 Loan Balance Specific Allocation Loan Balance Specific Allocation Commercial and industrial $ — $ — $ — $ — Commercial real estate 3,000 — — — Agricultural — — — — Residential real estate 426 — 254 — Consumer — — — — Total $ 3,426 $ — $ 254 $ — We have designated loans classified as collateral dependent for which we apply the practical expedient to measure the ACL based on the fair value of the collateral less cost to sell when the repayment is expected to be provided substantially by the sale or operation of the collateral and the borrower is experiencing financial difficulty. The fair value of the collateral is based on appraisals, which may be adjusted due to their age, and the type, location, and condition of the property or area or general market conditions to reflect the expected change in value between the effective date of the appraisal and the measurement date. 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 September 30, 2025 include $ 3,426 in collateral dependent loans secured by commercial real estate and residential real estate of $ 3,000 and $ 426 , respectively. 31 Table of Contents 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 three days from the transaction date. A summary of short-term borrowed funds without stated maturity dates was as follows for the: Three Months Ended September 30 2025 2024 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 $ 62,022 $ 52,700 3.17 % $ 56,051 $ 48,151 3.18 % Federal funds purchased — — 0.00 % — — 0.00 % FRB Discount Window — — 0.00 % 5,300 153 5.18 % Nine Months Ended September 30 2025 2024 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 $ 62,022 $ 45,705 3.18 % $ 56,051 $ 43,140 3.17 % Federal funds purchased — 7 5.43 % — 1 6.52 % FRB Discount Window — 296 4.50 % 5,300 56 5.21 % 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 $ 87,641 and $ 67,539 at September 30, 2025 and December 31, 2024, respectively. Such securities remain under our control. We may be required to provide additional collateral based on the fair value of underlying securities. Securities sold under repurchase agreements without stated maturity dates were as follows as of: September 30, 2025 December 31, 2024 Amount Rate Amount Rate Securities sold under agreements to repurchase without stated maturity dates $ 62,022 3.45 % $ 53,567 3.18 % We had pledged AFS securities and 1-4 family residential real estate loans in the following amounts at: September 30 2025 December 31 2024 Pledged to secure borrowed funds $ 413,680 $ 395,286 Pledged to secure repurchase agreements 87,641 67,539 Pledged for public deposits and for other purposes necessary or required by law 68,847 86,162 Total $ 570,168 $ 548,987 AFS securities pledged to repurchase agreements consisted of the following at: September 30 2025 December 31 2024 U.S. Treasury $ 78,547 $ 57,271 Mortgage-backed securities 7,192 7,979 Collateralized mortgage obligations 1,902 2,289 Total $ 87,641 $ 67,539 32 Table of Contents AFS securities pledged to repurchase agreements are monitored to ensure the appropriate level is collateralized. 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 September 30, 2025, we had the ability to borrow up to an additional $ 384,555 without pledging additional collateral. FHLB advances FHLB advances are collateralized by a blanket lien on all qualified 1-4 family residential real estate loans, specific AFS securities, and FHLB stock. The following table lists the maturities and weighted average interest rates of FHLB advances as of: September 30, 2025 December 31, 2024 Amount Rate Amount Rate Fixed rate due 2025 $ — 0.00 % $ 30,000 4.52 % Subordinated notes We have $ 30,000 in aggregate principal amount of 3.25 % Fixed-to-Floating Rate Subordinated Notes due 2031 (the "Notes"). 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. 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: September 30, 2025 December 31, 2024 Amount Rate Amount Rate Fixed rate at 3.25 % to floating, due 2031 $ 30,000 3.25 % $ 30,000 3.25 % Unamortized issuance costs ( 508 ) ( 576 ) Total subordinated debt, net $ 29,492 $ 29,424 Note 5 – Computation of Earnings Per Common Share Basic earnings per common share represents income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued relate solely to outstanding shares in the Directors Plan and grant awards under the RSP. Earnings per common share have been computed based on the following for the: Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Average number of common shares outstanding for basic calculation 7,357,977 7,454,097 7,385,813 7,475,571 Average potential effect of common shares in the RSP 13,675 19,087 13,628 16,833 Average number of common shares outstanding used to calculate diluted earnings per common share 7,371,652 7,473,184 7,399,441 7,492,404 Net income $ 5,240 $ 3,281 $ 14,220 $ 9,893 Earnings per common share Basic $ 0.71 $ 0.44 $ 1.93 $ 1.32 Diluted 0.71 0.44 1.92 1.32 33 Table of Contents Note 6 – Capital Ratios and Shareholders' Equity As of September 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, both on a bank-only and on a consolidated basis, as of: September 30, 2025 Actual Minimum Capital Required Plus Capital Conservation Buffer Minimum Capital Required To Be Considered Well Capitalized (1) Amount Ratio Amount Ratio Amount Ratio Common equity Tier 1 capital to risk weighted assets Isabella Bank $ 187,258 12.26 % $ 106,874 7.00 % $ 99,240 6.50 % Consolidated 189,547 12.37 % 107,266 7.00 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 187,258 12.26 % 129,776 8.50 % 122,142 8.00 % Consolidated 189,547 12.37 % 130,251 8.50 % N/A N/A Total capital to risk weighted assets Isabella Bank 201,078 13.17 % 160,311 10.50 % 152,677 10.00 % Consolidated 232,859 15.20 % 160,898 10.50 % N/A N/A Tier 1 capital to average assets Isabella Bank 187,258 8.63 % 86,788 4.00 % 108,486 5.00 % Consolidated 189,547 8.71 % 87,019 4.00 % N/A N/A December 31, 2024 Actual Minimum Capital Required Plus Capital Conservation Buffer Minimum Capital Required To Be Considered Well Capitalized (1) Amount Ratio Amount Ratio Amount Ratio Common equity Tier 1 capital to risk weighted assets Isabella Bank $ 172,589 11.53 % $ 104,783 7.00 % $ 97,299 6.50 % Consolidated 183,348 12.21 % 105,136 7.00 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 172,589 11.53 % 127,237 8.50 % 119,753 8.00 % Consolidated 183,348 12.21 % 127,665 8.50 % N/A N/A Total capital to risk weighted assets Isabella Bank 185,997 12.43 % 157,175 10.50 % 149,691 10.00 % Consolidated 226,179 15.06 % 157,703 10.50 % N/A N/A Tier 1 capital to average assets Isabella Bank 172,589 8.36 % 82,602 4.00 % 103,252 5.00 % Consolidated 183,348 8.86 % 82,803 4.00 % N/A N/A (1) "Well-capitalized" minimum common equity Tier 1 to risk-weighted and leverage ratio are not formally defined under applicable regulations for bank holding companies. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital includes a permissible portion of the allowances for credit losses and subordinated debt, net of unamortized issuance costs. There are no significant regulatory constraints placed on our capital. At September 30, 2025, the Bank exceeded all minimum Basel III risk-based capital requirements with the capital conservation buffer. 34 Table of Contents 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 September 30 2025 2024 Unrealized Gains (Losses) on AFS Securities Defined Benefit Pension Plan Total Unrealized Gains (Losses) on AFS Securities Defined Benefit Pension Plan Total Balance, July 1 $ ( 13,990 ) $ ( 397 ) $ ( 14,387 ) $ ( 26,939 ) $ ( 697 ) $ ( 27,636 ) OCI before reclassifications 5,030 — 5,030 13,081 — 13,081 Tax effect ( 1,052 ) — ( 1,052 ) ( 2,724 ) — ( 2,724 ) OCI, net of tax 3,978 — 3,978 10,357 — 10,357 Balance, September 30 $ ( 10,012 ) $ ( 397 ) $ ( 10,409 ) $ ( 16,582 ) $ ( 697 ) $ ( 17,279 ) Nine Months Ended September 30 2025 2024 Unrealized Gains (Losses) on AFS Securities Defined Benefit Pension Plan Total Unrealized Gains (Losses) on AFS Securities Defined Benefit Pension Plan Total Balance, December 31 $ ( 20,958 ) $ ( 397 ) $ ( 21,355 ) $ ( 25,199 ) $ ( 697 ) $ ( 25,896 ) OCI before reclassifications 13,923 — 13,923 10,858 — 10,858 Tax effect ( 2,977 ) — ( 2,977 ) ( 2,241 ) — ( 2,241 ) OCI, net of tax 10,946 — 10,946 8,617 — 8,617 Balance, September 30 $ ( 10,012 ) $ ( 397 ) $ ( 10,409 ) $ ( 16,582 ) $ ( 697 ) $ ( 17,279 ) Included in OCI for the three and nine-month periods ended September 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 September 30 2025 2024 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 ) $ 5,094 $ 5,030 $ 109 $ 12,972 $ 13,081 Tax effect — ( 1,052 ) ( 1,052 ) — ( 2,724 ) ( 2,724 ) Unrealized gains (losses), net of tax $ ( 64 ) $ 4,042 $ 3,978 $ 109 $ 10,248 $ 10,357 Nine Months Ended September 30 2025 2024 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 ) $ 14,202 $ 13,923 $ 186 $ 10,672 $ 10,858 Tax effect — ( 2,977 ) ( 2,977 ) — ( 2,241 ) ( 2,241 ) Unrealized gains (losses), net of tax $ ( 279 ) $ 11,225 $ 10,946 $ 186 $ 8,431 $ 8,617 35 Table of Contents Note 7 – Fair Value Under fair value measurement and disclosure authoritative guidance, we group assets and liabilities measured at fair value into three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value, based on the prioritization of inputs in the valuation techniques. These levels are: Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. Transfers between measurement levels are recognized at the end of reporting periods. Fair value measurement requires the use of an exit price notion which may differ from entrance pricing. Generally, we believe our assets and liabilities classified as Level 1 or Level 2 approximate an exit price notion. Following is a description of the valuation methodologies, key inputs, and an indication of the level of the fair value hierarchy in which the assets or liabilities are classified. AFS securities: AFS securities are recorded at fair value on a recurring basis. Level 1 fair value measurement is based upon quoted prices for identical instruments. Level 2 fair value measurement is based upon quoted prices for similar instruments. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss and liquidity assumptions. The values for Level 1 and Level 2 investment securities are generally obtained from an independent third party. On a quarterly basis, we compare the values provided to alternative pricing sources. Loans: We do not record loans at fair value on a recurring basis. However, some loans are individually evaluated for ACL purposes, and a specific ACL may be established. To measure reserve, the fair value of the loan is estimated using the fair value of the collateral, less costs to sell if foreclosure is probable, or the present value of expected future cash flows discounted at the loan’s effective interest rate. Loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. We review the net realizable values of the underlying collateral for collateral dependent loans on at least a quarterly basis for all loan types. To determine the collateral value, we utilize independent appraisals, broker price opinions, or internal evaluations. We review these valuations to determine whether an additional discount should be applied given the age of market information that may have been considered as well as other factors such as costs to sell an asset if it is determined that the collateral will be liquidated in connection with the ultimate settlement of the loan. We use these valuations to determine if any specific reserves or charge-offs are necessary. We may obtain new valuations in certain circumstances, including when there has been significant deterioration in the condition of the collateral, if the foreclosure process has begun, or if the existing valuation is deemed to be outdated. 36 Table of Contents The following tables list the quantitative information about loans measured at fair value on a nonrecurring basis as of: September 30, 2025 Valuation Technique Fair Value Unobservable Input Actual Range Weighted Average Collateral Dependent Loans Discount applied to collateral: Discounted value $ 3,426 Real Estate 25 % 25 % December 31, 2024 Valuation Technique Fair Value Unobservable Input Actual Range Weighted Average Collateral Dependent Loans Discount applied to collateral: Discounted value $ 254 Real Estate 20 % 20 % Collateral discount rates may have ranges to accommodate differences in the age of the independent appraisal, broker price opinion, or internal evaluation. OMSR: OMSR (which are included in other assets) are subject to impairment testing. To test for impairment, we utilize a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and discount rates. If the valuation model reflects a value less than the carrying value, OMSR are adjusted to fair value through a valuation allowance as determined by the model. As such, we classify OMSR subject to nonrecurring fair value adjustments as Level 3. The following table lists the quantitative information about OMSR fair value measurement as of: September 30, 2025 Valuation Technique Fair Value Unobservable Input Rate Discounted cash flow $ 2,164 Constant prepayment rate 7 % Discount rate 11 % December 31, 2024 Valuation Technique Fair Value Unobservable Input Rate Discounted cash flow $ 2,483 Constant prepayment rate 7 % Discount rate 11 % The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. Estimated Fair Values of Financial Instruments Not Recorded at Fair Value in their Entirety on a Recurring Basis Disclosure of the estimated fair values of financial instruments, which differ from carrying values, often requires the use of estimates. In cases where quoted market values in an active market are not available, we use present value techniques and other valuation methods to estimate the fair values of our financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. 37 Table of Contents 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: September 30, 2025 Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 ASSETS Cash and cash equivalents $ 161,301 $ 161,301 $ 161,301 $ — $ — FHLB stock (1) 5,600 N/A — — — Mortgage loans HFS 737 737 — 737 — Gross loans 1,431,905 1,395,921 — — 1,395,921 Less allowance for credit losses 13,149 13,149 — — 13,149 Net loans 1,418,756 1,382,772 — — 1,382,772 Accrued interest receivable 8,901 8,901 8,901 — — Equity securities without readily determinable fair values (1) 3,086 N/A — — — LIABILITIES Deposits without stated maturities 1,520,804 1,520,804 1,520,804 — — Deposits with stated maturities 404,798 403,407 — 403,407 — Short-term borrowings 62,022 59,196 — 59,196 — FHLB advances — — — — — Subordinated debt, net of unamortized issuance costs 29,492 28,417 — 28,417 — Accrued interest payable 980 980 980 — — December 31, 2024 Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 ASSETS Cash and cash equivalents $ 24,542 $ 24,542 $ 24,542 $ — $ — FHLB stock (1) 12,762 N/A — — — Mortgage loans HFS 242 247 — 247 — Gross loans 1,423,571 1,363,883 — — 1,363,883 Less allowance for credit losses 12,895 12,895 — — 12,895 Net loans 1,410,676 1,350,988 — — 1,350,988 Accrued interest receivable 8,085 8,085 8,085 — — Equity securities without readily determinable fair values (1) 3,086 N/A — — — LIABILITIES Deposits without stated maturities 1,359,469 1,359,469 1,359,469 — — Deposits with stated maturities 387,591 385,200 — 385,200 — Short-term borrowings 53,567 53,503 — 53,503 — FHLB advances 30,000 30,000 — 30,000 — Subordinated debt, net of unamortized issuance costs 29,424 27,658 — 27,658 — Accrued interest payable 1,051 1,051 1,051 — — (1) Due to the characteristics of equity securities without readily determinable fair values, they are not disclosed under a specific fair value hierarchy. When an impairment or write-down related to these securities is recorded, such amount would be classified as a nonrecurring Level 3 fair value adjustment. 38 Table of Contents Financial Instruments Recorded at Fair Value The table below presents the recorded amount of assets and liabilities measured at fair value on: September 30, 2025 December 31, 2024 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Recurring items AFS securities U.S. Treasury $ 206,041 $ — $ 206,041 $ — $ 220,571 $ — $ 220,571 $ — States and political subdivisions 71,102 — 71,102 — 76,568 — 76,568 — Auction rate money market preferred 2,790 — 2,790 — 3,044 — 3,044 — Mortgage-backed securities 23,397 — 23,397 — 26,886 — 26,886 — Collateralized mortgage obligations 201,213 — 201,213 — 154,674 — 154,674 — Corporate 7,427 — 7,427 — 7,286 — 7,286 — Total AFS securities 511,970 — 511,970 — 489,029 — 489,029 — Nonrecurring items Collateral dependent (net of ACL) 3,426 — — 3,426 254 — — 254 OMSR 2,164 — — 2,164 2,185 — — 2,185 Foreclosed assets 1,018 — — 1,018 544 — — 544 Total $ 518,578 $ — $ 511,970 $ 6,608 $ 492,012 $ — $ 489,029 $ 2,983 Percent of assets and liabilities measured at fair value 0.00 % 98.73 % 1.27 % 0.00 % 99.39 % 0.61 % We recorded an impairment related to OMSR of $ 1 and $ 3 through earnings for the three and nine month periods ended September 30, 2025, respectively, and $ 21 for each of the three and nine month periods ended September 30, 2024. We recorded impairments related to foreclosed assets of $ 26 and $ 89 for three and nine month periods ended September 30, 2025, respectively. No impairments related to foreclosed assets were recorded for three and nine month periods ended September 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 September 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. 39 Table of Contents