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Item 8. Financial Statements and Supplementary Data

2026-03-13 compared with 2025-03-12 · 271 added, 230 removed, 1755 unchanged (22% of the section changed)

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The following consolidated financial statements accompanied by the report of our independent registered public accounting firm are set forth beginning on the following page of this report:

Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm, Plante & Moran, PLLC (PCAOB ID:

Report of Independent Registered Public Accounting Firm, Rehmann Robson LLC (PCAOB ID:

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Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Management’s Report on Internal Control Over Financial Reporting

We are responsible for the preparation and integrity of our published consolidated financial statements.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, include amounts based on judgments and estimates.

We also prepared the other information included in the Annual Report on Form 10-K and are responsible for the accuracy and consistency with the consolidated financial statements.

We are responsible for establishing and maintaining a system of internal control over financial reporting, which is intended to provide reasonable assurance to our management and Board of Directors regarding the reliability of our consolidated financial statements.

The system includes but is not limited to:

• A documented organizational structure and division of responsibility;

• Established policies and procedures, including a code of conduct to foster a strong ethical climate which is communicated throughout our Corporation;

• Internal auditors that monitor the operation of the internal control system and report findings and recommendations to management and the Audit Committee;

• Procedures for taking action in response to an internal audit finding or recommendation;

• Regular reviews of our consolidated financial statements by qualified individuals;

• The careful selection, training, and development of our people.

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls.

Also, the effectiveness of an internal control system may change over time.

We have implemented a system of internal control that was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

We have assessed our internal control system in relation to criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework ” issued by the Committee of Sponsoring Organizations (2013 framework) of the Treadway Commission.

Based upon these criteria, we believe that, as of December 31, 2025, our system of internal control over financial reporting was effective.

Our independent registered public accounting firm, Plante & Moran, PLLC (“Plante Moran”), has audited our 2025 consolidated financial statements and our internal control over financial reporting as of December 31, 2025.

Plante Moran was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors, and committees of the Board of Directors.

Plante Moran has issued an unqualified audit opinion on our 2025 consolidated financial statements and an unqualified opinion on the effectiveness of our internal controls as of December 31, 2025, as a result of the integrated audit.

Isabella Bank Corporation

/s/ Jerome E.

President and Chief Executive Officer

(Principal Executive Officer)

March 13, 2026

/s/ Gerald J.

Chief Financial Officer

(Principal Financial Officer)

March 13, 2026

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Isabella Bank Corporation

Mount Pleasant, Michigan

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Isabella Bank Corporation (the “Company”) as of December 31, 2025, the related consolidated statements of income, comprehensive income, changes in shareholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO framework”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the COSO framework.

Basis for Opinion

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Collectively Evaluated Loans – Refer to Notes 1 and 3 to the consolidated financial statements

Critical Audit Matters Description

Management’s estimate of the allowance for credit losses (ACL) at December 31, 2025, includes a reserve on collectively evaluated loans.

In the current year, significant assumptions in management’s estimate of the reserve on collectively evaluated loans include (i) the determination of the look-back period used in calculating the estimated loss percentage based on the probability of default and loss given default for each portfolio segment and (ii) qualitative factor adjustments.

In evaluating whether qualitative factor adjustments are necessary, management considers internal and external qualitative and credit market risk factors to reflect credit risks not fully captured by historical loss experience or forecast economic conditions.

Significant judgment was required by management in the selection and application of these subjective assumptions.

Accordingly, performing audit procedures to evaluate the Company’s estimated ACL involved a high degree of auditor judgment and required significant effort, including the involvement of professionals with specialized skill and knowledge.

How the Critical Audit Matter was Addressed in the Audit

Our audit procedures related to the Company’s estimate of the ACL on collectively evaluated loans included, but were not limited to, the following:

• Testing the design and operating effectiveness of management’s controls over key assumptions and judgments.

• Testing the completeness and accuracy of data utilized by management.

• Evaluating the relevance and reliability of information used by management in the development of the estimate.

• Evaluating the reasonableness of significant assumptions used in management’s estimate through a combination of evaluating the reasonableness of certain assumptions and developing an independent range of reasonable outcomes for the collectively evaluated component of the ACL for comparison to management’s estimate.

/s/ Plante & Moran, PLLC

Plante & Moran, PLLC

We have served as the Company’s auditor since 2025.

Grand Rapids, Michigan

March 13, 2026

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Isabella Bank Corporation (the “Corporation”)

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Corporation’s assets that could have a material effect on the consolidated financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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In doing so, we tested the operating effectiveness of review and approval controls in the Corporation’s governance process designed to identify and assess the qualitative factor adjustments which is meant to measure expected credit losses associated with factors not captured fully in the other components of the ACL.

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To test the reasonableness of the qualitative factor adjustments, we performed audit procedures that included, among others testing the appropriateness of the methodologies used by the Corporation to estimate the ACL, testing the completeness and accuracy of data and information used by the Corporation in estimating the components of the ACL, assessing the reasonableness of the Models, evaluating the appropriateness of assumptions used in estimating the qualitative factor adjustments, analyzing the changes in assumptions and various components of the ACL relative to changes in the Corporation’s loan portfolio and the economy and evaluating the appropriateness and level of the qualitative factor adjustments.

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Rehmann Robson LLC

We have served as Isabella Bank Corporation's independent auditor since 1996.

We served as Isabella Bank Corporation's independent auditor from 1996 to 2025.

Saginaw, Michigan

March 12, 2025

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CONSOLIDATED BALANCE SHEETS

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LIABILITIES AND SHAREHOLDERS’ EQUITY

Demand deposits $ 416,373 $ 428,505

Interest bearing demand deposits 341,366 320,737

Savings 601,730 628,079

Certificates of deposit 387,591 346,374

Noninterest bearing deposits $ 426,342 $ 416,373

Interest bearing deposits 1,393,312 1,330,687

Total deposits 1,819,654 1,747,060

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

issued and outstanding 7,424,893 shares in 2024 and 7,485,889 shares in 2023

issued and outstanding 7,322,207 shares at December 31, 2025 and 7,424,893 shares at December 31, 2024

123,204 126,224

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Retained earnings 113,849 103,024

Accumulated other comprehensive income (loss) ( 21,355 ) ( 25,896 )

Accumulated other comprehensive loss ( 8,023 ) ( 21,355 )

Total shareholders’ equity 231,396 210,276

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The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME

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Interest income

Loans $ 77,295 $ 65,670 $ 53,283

Loans, including fees $ 81,432 $ 77,295 $ 65,670

AFS securities

Taxable 9,633 8,748 9,514

Nontaxable 2,084 2,345 2,642

FHLB stock 418 640 355

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Net interest income 62,544 55,835 57,944

Provision for credit losses 1,884 629 483

Provision (reversal) for credit losses ( 563 ) 1,884 629

Net interest income after provision for credit losses 63,107 53,951 57,315

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Net gain on sale of mortgage loans 180 213 317

Net gains on sale of AFS securities — — 67

Other 1,056 1,040 1,162

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FDIC insurance premiums 1,180 1,132 922

Other losses 1,117 871 546

Memberships and subscriptions 1,067 928 1,042

Loan underwriting fees 866 927 1,004

Other losses 643 1,117 871

Other 4,038 3,953 4,092

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The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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Balance, December 31, 2022 7,559,421 $ 128,651 $ 5,005 $ 89,748 $ ( 37,194 ) $ 186,210

Cumulative effect of accounting change - adoption of ASC 326 — — — ( 2,417 ) — ( 2,417 )

Comprehensive income (loss) — — — 18,167 11,298 29,465

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

Cumulative effect of accounting change - adoption of ASC 326 — — — ( 2,417 ) — ( 2,417 )

Comprehensive income (loss) — — — 13,889 4,541 18,430

Issuance of common stock 75,341 1,523 — — — 1,523

Common stock issued for deferred compensation under the RSP 16,240 — — — — —

Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 1,691 ( 1,691 ) — — —

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Issuance of common stock 42,904 1,331 — — — 1,331

Issuance of common stock for vested shares under the RSP 16,240 — — — — —

Common stock issued for deferred compensation under the RSP 11,367 — — — — —

Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations — 294 ( 294 ) — — —

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Share-based compensation expense recognized in earnings under the RSP — 64 — — — 64

Common stock purchased for deferred compensation obligations — ( 1,332 ) — — — ( 1,332 )

Common stock repurchased ( 156,957 ) ( 4,709 ) — — — ( 4,709 )

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The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

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Reconciliation of net income to net cash provided by operating activities

Provision for credit losses 1,884 629 483

Provision (reversal) for credit losses ( 563 ) 1,884 629

Depreciation 2,138 2,086 1,978

Net amortization of AFS securities 967 1,332 1,474

Net gains on sale of AFS securities — — ( 67 )

Net gain on sale of mortgage loans ( 180 ) ( 213 ) ( 317 )

Change in OMSR valuation allowance 1 — ( 532 )

Increase in cash value of BOLI ( 1,607 ) ( 990 ) ( 904 )

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Investing activities

Proceeds from sales, maturities, calls and prepayments of AFS securities 48,526 75,090 68,956

Proceeds from maturities, calls and prepayments of AFS securities 74,208 48,526 75,090

Purchases of AFS securities ( 67,348 ) ( 5,400 ) ( 10,866 )

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Purchases of premises and equipment ( 3,479 ) ( 2,106 ) ( 4,064 )

Purchases of BOLI policies ( 10,225 ) — —

Proceeds from sale of FHLB stock 7,162 — —

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Interest paid $ 33,483 $ 33,982 $ 21,052

Income taxes paid 2,060 2,350 4,425

Federal income taxes paid 2,200 2,060 2,350

Supplemental noncash information

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The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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All intercompany balances and accounts have been eliminated in consolidation.

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.

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.

For additional information, see “Note 15 – Related Party Transactions.”

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Consolidated net income is used to benchmark results against our competitors.

Benchmarking and the monitoring of budget to actual results are used in assessment performance and in establishing compensation.

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.

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Certain amounts reported in the 2024 and 2023 consolidated financial statements have been reclassified to conform with the 2025 presentation.

The most significant of these changes related to amounts that were previously reported as commercial and industrial loans being reclassified as commercial real estate loans.

USE OF ESTIMATES:

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Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ACL, the fair value of AFS investment securities, and the valuation of goodwill and other intangible assets.

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the ACL, the fair value of AFS investment securities, and the carrying value of goodwill.

SUBSEQUENT EVENTS:

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We may choose to measure eligible items at fair value at specified election dates.

For assets and liabilities recorded at fair value, it is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements for those financial instruments for which there is an active

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In cases where the market for a financial asset or liability is not active, we include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when developing fair value measurements.

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and (b) it is more likely than not we will not have to sell the security before recovery of its cost basis.

If either of these conditions are met, any previously recognized allowances are charged-off and the security's amortized cost is written down to fair value

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through income.

If either of these conditions are met, any previously recognized allowances are charged off and the security’s amortized cost is written down to fair value through income.

If these conditions are not met, the security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors.

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Accrued interest receivable on AFS securities was $ 1,723 and $ 1,701 at December 31, 2025, and 2024, which is included in other assets.

AFS securities are charged-off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by management, or when criteria regarding intent or requirement to sell is met.

Losses on AFS securities are charged off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible by management, or when criteria regarding intent or requirement to sell is met.

LOANS HELD FOR SALE:

Mortgage loans held for sale on the secondary market are carried at the lower of cost or fair value as determined by aggregating outstanding commitments from investors or current investor yield requirements.

Net unrealized losses, if any, would be recognized as a component of other noninterest expenses.

Mortgage loans held for sale are sold with the mortgage servicing rights retained by us.

Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold.

Loans held for investment are reported at amortized cost.

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Interest income on loans 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 yield methods.

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 interest method.

NONPERFORMING LOANS:

The accrual of interest on agricultural, commercial and mortgage loans is discontinued at the time the loan is 90 days or more past due unless the credit is well secured and in the process of collection.

The accrual of interest on agricultural, commercial, and residential mortgage loans is discontinued at the time the loan is 90 days or more past due unless the credit is well secured and in the process of 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.

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Interest income on loans in nonaccrual status is not recognized until qualifying for return to accrual status.

Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans may be returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

When a loan is returned to accrual status, the interest payments previously received continue to be reported as a reduction of the unpaid principal balance until the loan is paid off, at which time the interest payments are recognized in interest income.

For loans not classified as nonaccrual, interest income continues to be accrued over the term of the loan based on the principal amount outstanding.

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Loans are considered to have been modified when, due to a borrower’s financial difficulties, certain concessions are made to the borrower that would not otherwise consider.

Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid

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foreclosure or repossession of collateral.

Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.

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

LOANS HELD FOR SALE:

Net unrealized losses, if any, would be recognized as a component of other noninterest expenses.

Mortgage loans held for sale are sold with the mortgage servicing rights retained by us.

Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold.

ACCRUED INTEREST:

Accrued interest receivable balances are presented within other assets on the consolidated balance sheet.

Accrued interest is excluded from the measurement of the allowance for credit losses, including investments and loans.

Generally, accrued interest is reversed when a loan is placed in nonaccrual status or charged off.

Current year accrued interest is reversed through interest income while accrued interest from prior years is charged off through the ACL.

TRANSFERS OF FINANCIAL ASSETS:

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Foreclosed assets of $ 938 and $ 544 as of December 31, 2025 and 2024, respectively, are included in other assets.

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PREMISES AND EQUIPMENT:

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We hold equity securities without readily determinable fair values which include our holdings of FHLB stock and FRB stock.

No ready market exists for the stock, and it has no quoted market value.

The stock is redeemable at par and is therefore carried at cost and periodically evaluated for impairment.

Dividends are recorded as income.

Equity securities without readily determinable fair values, with the exception of FHLB stock, are included in other assets.

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Acquisition intangibles and goodwill are qualitatively evaluated to determine if it is more likely than not that the carrying balance is impaired.

On at least an annual basis we perform a cash flow, trading multiples, and acquisition multiples valuation to determine if the carrying balance is impaired and to what extent goodwill is impaired.

On at least an annual basis we perform a cash flow, trading multiples, and acquisition multiples valuation to determine if the carrying balance is impaired and to what extent

goodwill is impaired.

This valuation method requires a significant degree of our judgment.

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The estimate of expected credit losses considers both the likelihood that funding will occur and the amount expected to be funded over the estimated remaining life of the commitment.

The likelihood and expected amount of

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funding are based on historical utilization rates.

The likelihood and expected amount of funding are based on historical utilization rates.

No allowance is recognized if we have the unconditional right to cancel the obligation.

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For additional information, see “Note 8 – Benefit Plans.”

Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income.

Certain changes in assets and liabilities, however, such as unrealized gains and losses on available-for-sale securities and amounts recognized related to defined benefit pension and postretirement benefit plans (gains and losses, prior service costs, and transition assets or obligations), are reported as a direct adjustment to the equity section of the balance sheet.

Such items, along with net income, are considered components of comprehensive income.

MARKETING COSTS:

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Recently Adopted Accounting Standards

“Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”

2023-07, issued in November 2023, requires public business entities with a single reportable segment to provide the disclosures required by this standard and the existing segment disclosures in Topic 280 on an interim and annual basis.

The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.

The new authoritative guidance is effective for annual

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periods beginning after December 15, 2023.

We adopted the this standard on a retrospective basis, which did not have a material impact on our consolidated financial statements.

Pending Accounting Standards

“Income Tax (Topic 740):

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2023-09 was issued to enhance the transparency and decision usefulness of income tax disclosures.

The existing disclosure is being enhanced to provide information to help investors, lenders, creditors and all other allocators of capital asses how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The new authoritative guidance is effective for annual periods beginning after December 15, 2024 and will not have a significant impact on our operations or financial statement disclosures.

The existing disclosure is being enhanced to provide information to help investors, lenders, creditors and all other allocators of capital assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The new authoritative guidance was effective for annual periods beginning after December 15, 2024.

This ASU was adopted prospective on January 1, 2025 and did not have a significant impact on our financial statement disclosures, which are presented in “Note 12 – Federal Income Taxes.”

Pending Accounting Standards

“Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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2024-03 is not expected to have a significant impact on our operations or financial statement disclosures.

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Note 2 – AFS Securities

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Applicable income tax expense (benefit) — — 14

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

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Number of securities in an unrealized loss position:

As of December 31, 2024, 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 December 31, 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 have the intent 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.

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.

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Note 3 – Loans and ACL

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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.

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 interest method.

Net unamortized deferred loan costs were $ 2,989 and $ 3,330 at December 31, 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.

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Personal guarantees and/or life insurance beneficiary assignments are generally required from the owners of

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closely held corporations, partnerships, and sole proprietorships.

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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.

The following table summarizes nonaccrual loan data by class of loans as of December 31:

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Secured $ 442 $ 347 $ — $ —

Agricultural mortgage — — 38 38

Agricultural other — — 167 167

Commercial real estate

Commercial mortgage owner occupied 766 602 — —

Commercial mortgage 1-4 family investor 3,000 3,000 — —

Residential real estate

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Total $ 4,578 $ 4,319 $ 282 $ 282

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The following tables summarize the past due and current loans for the entire loan portfolio as of December 31:

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Total $ 6,532 $ 1,629 $ 3,000 $ 1,525,203 $ 1,536,364 $ —

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or More Current Total Accruing Loans 90 or More Days Past Due

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Total $ 5,271 $ 502 $ 182 $ 1,417,616 $ 1,423,571 $ 19

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Credit Quality Indicators

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Total $ 23,331 $ 32,669 $ 22,316 $ 22,995 $ 9,388 $ 3,755 $ 74,617 $ — $ 189,071

Current year-to-date gross charge-offs $ — $ 277 $ 33 $ — $ 38 $ — $ — $ — $ 348

2025 year-to-date gross charge-offs $ — $ — $ 22 $ 11 $ — $ — $ — $ — $ 33

Commercial and industrial:

7 unchanged sentences

Total $ 12,751 $ 1,063 $ 3,039 $ 1,396 $ 674 $ 586 $ 11,870 $ — $ 31,379

Current year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 8 $ 25 $ — $ 33

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

Commercial real estate:

8 unchanged sentences

Total $ 39,712 $ 39,789 $ 29,887 $ 30,075 $ 44,290 $ 41,982 $ 4,171 $ — $ 229,906

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

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

Commercial real estate:

8 unchanged sentences

Total $ 30,310 $ 17,511 $ 35,131 $ 60,734 $ 41,924 $ 36,211 $ 2,163 $ — $ 223,984

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

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

2025 2024 2023 2022 2021 Prior Revolving

10 unchanged sentences

Total $ 16,559 $ 10,250 $ 11,057 $ 10,720 $ 27,526 $ 14,899 $ 10,389 $ — $ 101,400

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

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

Commercial real estate:

7 unchanged sentences

Total $ 20,842 $ 6,395 $ 2,234 $ 20,495 $ 10,939 $ 23,055 $ 508 $ — $ 84,468

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

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

Advances to mortgage brokers

10 unchanged sentences

Total $ 8,460 $ 5,081 $ 4,951 $ 16,710 $ 13,752 $ 17,883 $ 2,932 $ — $ 69,769

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

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

Agricultural other

7 unchanged sentences

Total $ 7,272 $ 1,359 $ 1,393 $ 1,298 $ 1,654 $ 730 $ 18,634 $ — $ 32,340

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

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

2024 2023 2022 2021 2020 Prior Revolving

9 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 $ 200 $ — $ — $ — $ — $ — $ — $ — $ 200

2024 year-to-date gross charge-offs $ — $ 277 $ 33 $ — $ 38 $ — $ — $ — $ 348

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 $ 8 $ — $ — $ — $ — $ — $ 68 $ — $ 76

2024 year-to-date gross charge-offs $ — $ — $ — $ — $ — $ 8 $ 25 $ — $ 33

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 $ — $ — $ — $ — $ — $ — $ — $ — $ —

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

2024 2023 2022 2021 2020 Prior Revolving

10 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 $ — $ — $ — $ — $ — $ 4 $ — $ — $ 4

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 $ — $ — $ — $ — $ — $ — $ — $ — $ —

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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.

32 unchanged sentences

• If secured, loan collateral coverage is marginal.

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To be classified as less than satisfactory, only one of the following criteria must be met.

13 unchanged sentences

• Collateral or guaranty offers limited protection.

• Negative debt service coverage, however the credit is well collateralized and payments are current.

• Negative debt service coverage;

however, the credit is well collateralized and payments are current.

SUBSTANDARD – Classified

14 unchanged sentences

• Requires excessive attention of the loan officer.

• Borrower is uncooperative with loan officer.

• Borrower is uncooperative with the loan officer.

VULNERABLE – Classified

6 unchanged sentences

• Transition status, expect action will take place to collect loan without immediate progress being made.

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DOUBTFUL – Workout

20 unchanged sentences

• Over 120 days delinquent.

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Our primary credit quality indicator for residential real estate and consumer loans is the individual loan’s past due status.

8 unchanged sentences

Total $ 72,966 $ 43,386 $ 35,884 $ 42,796 $ 66,778 $ 96,254 $ — $ 14,223 $ 372,287

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

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

Residential real estate:

4 unchanged sentences

Total $ 4,786 $ 3,264 $ 2,075 $ 507 $ 67 $ 271 $ — $ — $ 10,970

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

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

Residential real estate:

5 unchanged sentences

Total $ — $ — $ — $ — $ — $ — $ 44,582 $ 41 $ 44,623

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

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

Secured - direct

4 unchanged sentences

Total $ 7,870 $ 6,374 $ 5,512 $ 4,097 $ 2,238 $ 2,557 $ — $ — $ 28,648

Current year-to-date gross charge-offs $ 16 $ 93 $ 9 $ — $ 27 $ 8 $ — $ — $ 153

2025 year-to-date gross charge-offs $ 19 $ 15 $ 93 $ 38 $ 9 $ 53 $ — $ — $ 227

Secured - indirect

4 unchanged sentences

Total $ 4,327 $ 4,539 $ 14,730 $ 5,133 $ 3,609 $ 5,118 $ — $ — $ 37,456

Current year-to-date gross charge-offs $ — $ 67 $ 64 $ — $ — $ 3 $ — $ — $ 134

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2025 year-to-date gross charge-offs $ — $ 8 $ — $ — $ — $ 13 $ — $ — $ 21

2025 2024 2023 2022 2021 Prior Revolving

5 unchanged sentences

Total $ 1,691 $ 689 $ 171 $ 34 $ 5 $ — $ 797 $ — $ 3,387

Current year-to-date gross charge-offs $ 2,047 $ 15 $ 21 $ — $ — $ 2 $ 21 $ — $ 2,106

2025 year-to-date gross charge-offs $ 540 $ 4 $ 14 $ 1 $ 1 $ — $ — $ — $ 560

2024 2023 2022 2021 2020 Prior Revolving

6 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 $ — $ — $ — $ — $ — $ 2 $ — $ — $ 2

2025 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 $ — $ — $ — $ — $ — $ — $ — $ — $ —

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

Residential real estate:

5 unchanged sentences

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

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

2025 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 $ 139 $ 12 $ 6 $ — $ 3 $ — $ — $ — $ 160

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2025 year-to-date gross charge-offs $ 16 $ 93 $ 9 $ — $ 27 $ 8 $ — $ — $ 153

2024 2023 2022 2021 2020 Prior Revolving

6 unchanged sentences

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

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

2025 year-to-date gross charge-offs $ — $ 67 $ 64 $ — $ — $ 3 $ — $ — $ 134

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 $ 344 $ 21 $ 13 $ 2 $ — $ 1 $ 1 $ — $ 382

2025 year-to-date gross charge-offs $ 2,047 $ 15 $ 21 $ — $ — $ 2 $ 21 $ — $ 2,106

Loan Modifications

11 unchanged sentences

• The borrower is unlikely to continue as a going concern (if the entity is a business).

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The following is a summary of the amortized cost basis of loan modifications granted to borrowers experiencing financial difficulty for the years ended December 31:

7 unchanged sentences

Agricultural other — 0.00 % — 0.00 % 776 2.40 % — 0.00 %

Secured - indirect — 0.00 % — 0.00 % 1 0.00 % — 0.00 %

Residential real estate

Senior lien — 0.00 % 85 0.02 % — 0.00 % — 0.00 %

Total $ 18 $ 1,474 $ 5,403 $ 975

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

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

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 % $ 1,782 0.80 % $ 10 0.00 % $ — 0.00 %

Commercial real estate

Commercial mortgage owner occupied — 0.00 % 818 0.46 % 1,353 0.76 % — 0.00 %

Commercial mortgage non-owner occupied — 0.00 % 1,030 0.48 % — 0.00 %

Commercial mortgage multifamily 2,977 3.81 % — 0.00 % — 0.00 %

Agricultural mortgage — 0.00 % 1,305 1.93 % 281 0.42 % — 0.00 %

Agricultural other 132 0.41 % — 0.00 % — 0.00 % 1,107 3.44 %

Residential real estate

Senior lien — 0.00 % 5 0.00 % — 0.00 %

Secured - indirect — 0.00 % — 0.00 % 1 0.00 % — 0.00 %

Total $ 132 $ 3,905 $ 1,645 $ 1,107

1 unchanged sentence

We had committed to advance $ 221 and $ 43 in additional funds in connection with modified loans at December 31, 2025 and 2024, respectively, as displayed in the tables above.

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The following tables summarize the financial effect of the modifications granted to borrowers experiencing financial difficulty for the years ended December 31:

1 unchanged sentence

Commercial and industrial

Secured 8 months 10.00 % 1.03

Commercial real estate

Commercial mortgage owner occupied N/A N/A 15.00

Agricultural mortgage 4 months N/A N/A

Agricultural other N/A N/A 0.50

Residential real estate

Senior lien 6 months N/A N/A

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

Commercial and industrial

Secured 4 months N/A 3.00

4 unchanged sentences

Secured - indirect N/A N/A 1.33

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

Commercial real estate

Commercial mortgage owner occupied 6 months N/A N/A

Commercial mortgage non-owner occupied N/A N/A 3.00

Commercial mortgage multifamily 6 months N/A N/A

Agricultural mortgage N/A 4.50 % 1.08

Agricultural other N/A N/A 1.00

Residential real estate

Senior lien N/A N/A 2.60

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

10 unchanged sentences

Agricultural other 776 — — — 776

Secured - indirect 1 — — — 1

Residential real estate

Senior lien — 85 — — 85

Total $ 6,900 $ 85 $ 885 $ — $ 7,870

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Current 30-59 Days

2 unchanged sentences

More Past Due Total

Commercial and industrial

Secured $ 1,782 $ 10 $ — $ — $ 1,792

Commercial real estate

Commercial mortgage owner occupied 2,171 — — — 2,171

Commercial mortgage non-owner occupied 1,030 — — — 1,030

Commercial mortgage multifamily 2,977 — — — 2,977

Agricultural mortgage 1,586 — — — 1,586

Agricultural other 1,239 — — — 1,239

Residential real estate

Senior lien — — — 5 5

Secured - indirect 1 — — — 1

Total $ 6,779 $ 10 $ — $ — $ 6,789

1 unchanged sentence

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 an estimate of expected losses over the contractual life of 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.

9 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.

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 recognize interest income on loans in nonaccrual status.

2 unchanged sentences

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.

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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.

16 unchanged sentences

Recoveries 93 60 4 99 2,012 2,268

Credit loss expense 687 ( 1,062 ) 11 67 1,984 1,687

Provision (reversal) for credit losses ( 190 ) 718 36 440 ( 1,548 ) ( 544 )

December 31, 2025 $ 1,136 $ 5,949 $ 327 $ 5,059 $ 1,256 $ 13,727

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

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

Impact of the adoption of ASC 326 ( 58 ) 5,532 ( 247 ) 3,535 356 ( 6,374 ) 2,744

Charge-offs ( 381 ) — — ( 10 ) ( 2,393 ) ( 2,784 )

Recoveries 42 355 6 128 353 884

Credit loss expense 363 ( 141 ) ( 68 ) ( 143 ) 618 — 629

Provision (reversal) for credit losses 687 ( 1,062 ) 11 67 1,984 1,687

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

3 unchanged sentences

Total $ 13,727 $ 12,895

ACL to gross loans

Individually evaluated 0.02 % 0.00 %

1 unchanged sentence

Total 0.89 % 0.91 %

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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 December 31:

9 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 include $ 254 in collateral dependent loans.

Loans evaluated for expected credit losses on an individual basis include $ 4,578 in collateral dependent loans secured by commercial equipment, commercial real estate, and residential real estate of $ 442 , $ 3,766 , and $ 370 , respectively.

Note 4 – Premises and Equipment

17 unchanged sentences

Amortization expense associated with identifiable intangible assets was $ 1 , $ 1 , and $ 3 in 2025, 2024, and 2023, respectively.

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Note 6 – Deposits

The following table displays deposit balances as of December 31:

Noninterest bearing demand deposits $ 426,342 $ 416,373

Interest bearing deposits

Interest bearing demand deposits 266,187 237,548

Money market deposits 436,631 423,883

Savings 280,429 281,665

Certificates of deposit 410,065 387,591

Total $ 1,819,654 $ 1,747,060

Scheduled annual maturities of time deposits for each of the next five years, and thereafter, are as follows:

1 unchanged sentence

2026 $ 376,807

Thereafter 64

Total $ 410,065

Interest expense on time deposits greater than $250 was $ 5,540 in 2024, $ 3,419 in 2023, and $ 621 in 2022.

Time deposits greater than $250 totaled $ 139,924 and $ 133,691 at December 31, 2025 and 2024, respectively.

Note 7 – Borrowed Funds

Short-term borrowings

Securities sold under repurchase agreements without stated maturity dates, federal funds purchased, and FRB Discount Window advances generally mature within one to four days from the transaction date.

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

A summary of borrowed funds without stated maturity dates was as follows for the years ended December 31:

15 unchanged sentences

Total $ 581,252 $ 548,987

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AFS securities pledged to repurchase agreements without stated maturity dates consisted of the following at December 31:

12 unchanged sentences

Fixed rate due 2026 45,000 3.92 % — 0.00 %

FHLB advances outstanding as of December 31, 2024 were short-term, with maturities within one week after December 31, 2024.

FHLB advances outstanding as of December 31, 2025 were short-term, with maturities in the first quarter of 2026.

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 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.

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

The following table summarizes our outstanding notes at December 31:

1 unchanged sentence

Fixed rate at 3.25 % to floating, due 2031

$ 30,000 3.25 % $ 30,000 3.25 %

Unamortized issuance costs ( 486 ) ( 576 )

9 unchanged sentences

As a result of the curtailment, future salary increases are no longer considered (the projected benefit obligation is equal to the accumulated benefit obligation), and plan benefits are based on years of service and the individual employee’s five highest consecutive years of compensation out of the last ten years of service through March 1, 2007.

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Changes in the projected benefit obligation and plan assets during each year, the funded status of the plan, and the net amount recognized in our consolidated balance sheets using an actuarial measurement date of December 31, are summarized as follows during the years ended December 31:

32 unchanged sentences

Pro rata settlement losses, which can occasionally occur as a result of these lump-sum distributions, are recognized only in years when the total of such distributions exceed the sum of the service and interest expense components of net periodic benefit cost.

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The components of accumulated other comprehensive income are as follows for the years ended December 31:

36 unchanged sentences

Total $ 7,577 $ 7,577 $ 7,303 $ 7,303

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The following is a description of the valuation methodologies used for assets measured at fair value.

19 unchanged sentences

The Directors Plan does not allow for cash settlement, and therefore, such share-based payment awards qualify for classification as equity.

We may use authorized but unissued shares or purchase shares of common stock on the open market to meet our obligations under the Directors Plan.

We may use authorized but unissued shares or purchase shares of common stock in the open market to meet our obligations under the Directors Plan.

We maintain the Rabbi Trust to fund the Directors Plan.

15 unchanged sentences

Expenses related to this plan for 2025, 2024, and 2023 were $ 249 , $ 103 , and $ 53 respectively.

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Employee Cash Incentive Plan

38 unchanged sentences

Regulatory capital is divided by the risk adjusted assets with the resulting ratio compared to the minimum standard to determine whether a corporation has adequate capital.

The common equity tier 1 capital ratio has a minimum requirement of 4.50%.

The minimum standard for primary, or Tier 1 capital is 6.00% and the minimum standard for total capital is 8.00%.

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As of December 31, 2024 and 2023, the most recent notifications from the FRB and the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action.

As of December 31, 2025 and 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 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 Basel III Capital Rules.

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 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 December 31:

The following tables set forth these requirements and our ratios, both on a bank-only and on a consolidated basis, as of December 31:

Actual Minimum Capital

36 unchanged sentences

There are no significant regulatory constraints placed on our capital.

At December 31, 2024, the Bank exceeded all minimum capital requirements.

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At December 31, 2025, the Bank exceeded all minimum Basel III risk-based capital requirements with the capital conservation buffer.

The following table provides a roll-forward of the changes in AOCI by component for the years ended December 31, 2023, 2024, and 2025 (net of tax):

20 unchanged sentences

Balance, December 31, 2025 $ ( 7,985 ) $ ( 38 ) $ ( 8,023 )

Included in OCI are changes in unrealized gains and losses related to auction rate money market preferred stocks.

Auction rate money market preferred stocks, for federal income tax purposes, have no deferred federal income taxes related to unrealized gains or losses given the nature of the investments.

Included in OCI 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 years ended December 31:

2025 2024 2023

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

Auction Rate Money Market Preferred All Other AFS Securities Total 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 $ ( 631 ) $ 17,220 $ 16,589 $ 113 $ 5,226 $ 5,339 $ 589 $ 12,776 $ 13,365

3 unchanged sentences

Unrealized gains (losses), net of tax $ ( 631 ) $ 13,604 $ 12,973 $ 113 $ 4,128 $ 4,241 $ 589 $ 10,040 $ 10,629

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The following table details reclassification adjustments and the related affected line items in our consolidated statements of income for the years ended December 31:

20 unchanged sentences

Average potential effect of common shares in the Directors Plan (1)

— 34,962 70,329

Average potential effect of common shares in the RSP 13,428 17,031 28,939

16 unchanged sentences

We estimate no returns or allowances for the years ended December 31, 2025, 2024 and 2023.

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Our contracts with customers define our performance obligations with clearly established pricing which did not require us to allocate or disaggregate revenue by performance obligation.

3 unchanged sentences

Trust service fees 3,522 3,438 3,110

Investment advisory fees 603 447 383

Customer overdraft fees 2,267 2,199 2,051

ATM income 1,066 1,078 988

Service charges and fees related to deposit accounts 946 633 539

Investment advisory fees 725 603 447

Other 540 392 351

A significant portion of our revenue consists of interest income which is not subject to the requirements set forth in ASC 606.

Note 12 – Federal Income Taxes

Cash taxes paid for the year ended December 31:

Federal $ 2,200

Components of the consolidated provision for federal income taxes are summarized as follows for the years ended December 31:

3 unchanged sentences

Income tax expense $ 5,213 $ 2,509 $ 3,665

The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 21 % of income before federal income tax expense is as follows for the years ended December 31:

We did not have any income tax expense (benefit) in state or foreign jurisdictions.

Income tax expense for the year ended December 31, 2025 differed from the federal statutory rate applied to income before income taxes for the following reasons in accordance with ASU 2023-09:

Amount % of Pretax Income

federal statutory tax rate $ 5,066 21.00 %

Low income housing (1)

( 181 ) ( 0.75 ) %

Other ( 68 ) ( 0.28 ) %

Nontaxable or nondeductible Items

Tax-exempt interest ( 387 ) ( 1.60 ) %

BOLI income ( 240 ) ( 0.99 ) %

Other 53 0.22 %

Other adjustments

Deferred tax write off (2)

Other 28 0.11 %

Total $ 5,213 21.61 %

(1) Company has adopted proportional amortization for low income housing tax credits.

Therefore, the tax credits category includes the tax credit and other tax benefits, net of the proportional amortization.

(2) Prior period adjustment relates to deferred tax assets no longer realizable due to statute expiration.

Income tax expense for the years ended December 31, 2024 and 2023 differed from the federal statutory rate applied to income before income taxes for the following reasons before the adoption of ASU 2023-09:

Income taxes at statutory rate $ 3,444 $ 4,585

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The sale of this investment resulted in a capital loss carryforward that is unlikely to be recognized in the foreseeable future.

As such, we did not recognize a deferred tax asset as of December 31, 2024 and 2023 related to our low income housing tax credit investment.

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did not recognize a deferred tax asset as of December 31, 2025 and 2024 related to our low income housing tax credit investment.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for federal income tax purposes.

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Life insurance death benefit payable 576 497

Contract incentives 451 46

Lease liability 213 273

Other 505 494

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Core deposit premium and acquisition expenses ( 813 ) ( 1,059 )

Deferred loan costs, net ( 628 ) ( 699 )

Right of use asset ( 213 ) ( 273 )

Other ( 576 ) ( 190 )

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There are no material uncertain tax positions requiring recognition in our consolidated financial statements.

We do not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.

We recognize interest and/or penalties related to income tax matters in income tax expense.

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Generally, we believe our assets and liabilities classified as Level 1 or Level 2 approximate an exit price notion.

The 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.

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:

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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.

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We review the net realizable values of the underlying collateral for collateral dependent loans on at least a quarterly basis for all loan types.

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Discounted value $ 4,319 Real Estate 20 % - 25 %

Liquor license 75 % 75 %

Furniture, fixtures & equipment 40 % 40 %

Valuation Technique Fair Value Unobservable Input Actual Range Weighted Average

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Discounted value $ 254 Real Estate 20 % 20 %

Equipment 25 % - 35 %

Accounts receivable 25 % 25 %

Collateral discount rates may have ranges to accommodate differences in the age of the independent appraisal, broker price opinion, or internal evaluation.

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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 December 31:

The following tables list the quantitative information about OMSR fair value measurement as of December 31:

Valuation Technique Fair Value Unobservable Input Rate

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Discount rate 11 %

During the third quarter of 2024, the classification of OMSR was changed from Level 2 to Level 3.

We elected to reevaluate our process for testing for impairment, which included a change in the third-party provider for the valuation.

Our valuation is generated using a model-based approach that relies upon significant assumptions not observable in the market.

As such, the Level 3 classification is most appropriate based on the valuation approach.

As a result of the change described above, Level 3 transfers in and Level 2 transfer out totaled $ 2,483 as of December 31, 2024.

There were no other transfers to or from Levels 1, 2, or 3 as of December 31, 2024 or December 31, 2023.

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.

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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.

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.

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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 December 31:

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Mortgage loans HFS 423 429 — 429 —

Gross loans 1,423,571 1,363,883 — — 1,363,883

Loans 1,536,364 1,502,009 — — 1,502,009

Less allowance for credit losses 13,727 13,727 — — 13,727

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3,086 N/A — — —

OMSR 2,185 2,483 — — 2,483

Deposits without stated maturities 1,409,589 1,409,589 1,409,589 — —

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Mortgage loans HFS 242 247 — 247 —

Gross loans 1,349,463 1,292,458 — — 1,292,458

Loans 1,423,571 1,363,883 — — 1,363,883

Less allowance for credit losses 12,895 12,895 — — 12,895

3 unchanged sentences

3,086 N/A — — —

OMSR 2,422 3,164 — 3,164 —

Deposits without stated maturities 1,359,469 1,359,469 1,359,469 — —

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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 .

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Financial Instruments Recorded at Fair Value

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Percent of assets and liabilities measured at fair value 0.00 % 98.55 % 1.45 % 0.00 % 99.39 % 0.61 %

We recorded losses of $ 1 and $ 0 through earnings related to fair value changes in OMSR for the years ended December 31, 2024 and 2023.

We also recorded losses of $ 0 and $ 132 through earnings related to fair value changes in foreclosed assets for the years ended December 31, 2024 and 2023.

We recorded impairments of $ 3 and $ 1 through earnings related to fair value changes in OMSR for the years ended December 31, 2025 and 2024.

We also recorded impairments of $ 89 and $ 0 through earnings related to fair value changes in foreclosed assets for the years ended December 31, 2025 and 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 December 31, 2025 and 2024.

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Commercial and standby letters of credit are conditional commitments we issued to guarantee the performance of a customer to a third-party.

Those guarantees are primarily issued to support private borrowing arrangements, including commercial paper,

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bond financing, and similar transactions.

Those guarantees are primarily issued to support private borrowing arrangements, including commercial paper, bond financing, and similar transactions.

These commitments to extend credit and letters of credit generally mature within one year .

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Conversely, if interest rates decrease, the value of these loan commitments increase.

There were no undesignated interest rate lock commitments at December 31, 2024 and 2023.

There were undesignated interest rate lock commitments of $ 230 and $ 0 at December 31, 2025 and 2024, respectively.

Forward Loan Sale Commitments

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Adjustments to the allowance are reported in our income statement as a component of provision for credit losses.

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Other Matters

Correspondent banks may require us to maintain minimum cash reserve balances.

The reserve balances related to correspondent banks amounted to $ 450 and $ 250 for the years ended December 31, 2024 and 2023.

The reserve balances related to correspondent banks amounted to $ 450 for the years ended December 31, 2025 and 2024.

Banking regulations limit the transfer of assets in the form of dividends, loans, or advances from the Bank to the Corporation.

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Total liabilities and shareholders’ equity $ 261,287 $ 239,787

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Condensed Statements of Income

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Net income $ 18,910 $ 13,889 $ 18,167

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Condensed Statements of Cash Flows

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Investing activities

Purchase of equity investments — — ( 250 )

Net (purchases) sales of premises and equipment — — ( 77 )

9 unchanged sentences

Cash and cash equivalents at end of period $ 31,119 $ 34,498 $ 25,010

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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data