What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-27 compared with 2025-03-28 · 208 added, 336 removed, 1317 unchanged (29% of the section changed)

21 unchanged sentences

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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 separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses – Collectively Evaluated Loans

4 unchanged sentences

The collectively evaluated ACLL consists of quantitative and qualitative components.

The Company uses a discounted cash flow method for all of its pools except for bankcards, which are measured using the historical loss rate adjusted for the forecast.

These estimates consider large amounts of data in tabulating default, loss given default, and

prepayment speeds and require complex calculations as well as management judgment in the selection of appropriate inputs.

In addition to the quantitative component, the collectively evaluated ACLL also includes a qualitative component which aggregates management’s assessment of available information relevant to assessing collectability that is not captured in the quantitative loss estimation process.

The quantitative component of the ACLL is derived using a cash flow method for all loan pools with the exception of credit cards, which are measured using the historical loss rate adjusted for the forecast.

These estimates consider large amounts of data in tabulating default, loss given default, and prepayment speed assumptions and require complex calculations as well as management judgment in the selection of appropriate inputs.

In addition to the quantitative component, the collectively evaluated ACLL also

includes a qualitative component which aggregates management’s assessment of available information relevant to assessing collectability that is not captured in the quantitative loss estimation process.

Factors considered by management in developing its qualitative estimates include:

10 unchanged sentences

• Obtaining an understanding of the Company’s process for determining its ACLL, including the underlying methodology and significant inputs to the calculation.

• Substantively testing management’s process for measuring the collectively evaluated ACLL, including:

• Evaluating the conceptual soundness, assumptions, and key data inputs of the Company’s discounted cash flow methodology, including the identification of loan pools, the probability of default and loss given default rate inputs, and the prepayment/curtailment rate inputs for each pool.

• Substantively testing the collectively evaluated ACLL, including:

• Evaluating conceptual soundness, assumptions, and key data inputs to the Company’s methodology.

• Evaluating management’s selection of forecasting inputs and testing the accuracy of management’s incorporation of its forecasts in the collectively evaluated ACLL estimate.

• Evaluating the completeness and accuracy of data inputs used as a basis for the qualitative factors.

• Evaluating the qualitative factors for directional consistency in comparison to prior periods and for reasonableness in comparison to underlying supporting data.

• Testing the mathematical accuracy of the ACLL for collectively evaluated loans including both the discounted cash flow and qualitative factor components of the calculations.

Business Combinations – Fair Value of Acquired Loans

Description of the Matter

As described in Note 22 (Business Combination) to the financial statements, the Company completed its acquisition of

Frontier Community Bank (“FCB”) on June 1, 2024 for total consideration of $16.3 million.

The transaction was accounted for as a business combination using the acquisition method of accounting.

Accordingly, assets acquired and liabilities assumed were recorded at fair value on the acquisition date, including acquired loans with an aggregate fair value of $118.7 million.

Determining the acquired fair values, particularly in relation to the loan portfolio, is inherently subjective and involves significant judgment regarding the methods and assumptions used to estimate fair value.

In determining the fair value of loans acquired, management must determine whether or not acquired loans have evidence of more-than-insignificant credit deterioration at acquisition, the amount and timing of cash flows expected to be collected, and market discount rates, among other assumptions.

Changes in these assumptions could have a significant impact on the fair value of the loans acquired and the amount of goodwill recorded.

We identified the acquisition date fair value of acquired loans as a critical audit matter as auditing this estimate is especially complex and requires subjective auditor judgment.

Auditing this estimate required a high level of judgment in evaluating management’s identification of loans with evidence of credit deterioration, the need for specialized skill in development and application of subjective assumptions in estimated cash flows, and the size of the acquired loan portfolio.

The primary audit procedures we performed to address this critical audit matter included:

• Obtaining an understanding of the Company’s business combination accounting practices and internal controls, including the process of:

• The appropriateness of the valuation approach and methodology.

• Review of valuation specialist valuation, including financial information, data, assumptions utilized and key inputs, specifically as it relates to the valuation for acquired loans.

• Substantively testing management’s process, including the use of our own valuation specialist to assess the Company’s methods and significant assumptions utilized in determining the fair value of the acquired loan portfolio and evaluating whether the assumptions used were reasonable with respect to market participant views and other factors.

• Testing the completeness and accuracy of loans determined to have credit deterioration at acquisition and evaluating the reasonableness of the criteria utilized by management in making the determination.

• Testing the accuracy of the data utilized in the development of acquisition date fair values by confirming, on a sample basis, select data.

• Evaluating the magnitude of qualitative adjustments.

• Testing the mathematical accuracy and the application of assumptions within the ACLL for collectively evaluated loans, including both the quantitative and qualitative components of the calculation.

• Performing procedures to evaluate the overall allowance assessed with respect to a relevant peer group.

/s/ Yount, Hyde & Barbour, P.C .

4 unchanged sentences

(in thousands, except share and per share data)

December 31, 2024

December 31, 2023

Cash and due from banks

3 unchanged sentences

Securities available for sale, at fair value

Restricted stock, at cost

Mortgage loans held for sale

5 unchanged sentences

Consumer non-real estate loans

Less deferred fees and costs

deferred fees and costs

Loans, net of deferred fees and costs

allowance for credit losses

allowance for credit losses on loans

Premises and equipment, net

16 unchanged sentences

Common stock of $ 1.25 par value and additional paid-in capital.

Authorized 10,000,000

issued and outstanding 6,363,371 (including 4,961 unvested) shares as of

December 31, 2024 and 5,893,782 (including 4,095 unvested) shares as of

December 31, 2023

Authorized 10,000,000 shares;

issued and outstanding 6,368,410 (including 5,039 unvested) shares as of December 31, 2025 and 6,363,371 (including 4,961 unvested) shares as of December 31, 2024

Retained earnings

4 unchanged sentences

Consolidated Statements of Income

Year Ended December 31,

For the Year Ended December 31,

(in thousands, except share and per share data)

12 unchanged sentences

Net interest income

Provision for (recovery of) credit losses

Net interest income after provision for (recovery of) credit losses

(Recovery of) provision for credit losses

Net interest income after (recovery of) provision for credit losses

Noninterest Income

2 unchanged sentences

Credit and debit card fees, net

Gain on sale of investment

Gain on sale of mortgage loans

Realized securities loss, net

Gain on sale of mortgage loans held for sale

Total noninterest income

2 unchanged sentences

Occupancy, furniture and fixtures

Data processing and ATM

Data processing

FDIC assessment

Intangible asset amortization

Net costs of other real estate owned

Franchise taxes

Professional services

Merger-related expenses

Contract termination

Merger-related expense

Core system conversion expense

Other operating expenses

3 unchanged sentences

Basic net income per common share

Fully diluted net income per common share

Diluted net income per common share

Weighted average number of common shares outstanding, basic

Weighted average number of common shares outstanding, fully diluted

Weighted average number of common shares outstanding, diluted

Dividends declared per common share

Book value per common share

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

5 unchanged sentences

$ 124 for the periods ended December 31, 2025 and 2024, respectively

Reclassification adjustment for loss included in net income, net of tax of $ 700 in 2023

Net pension gain arising during the period, net of tax of $ 255 in 2025 and $ 701 in 2024

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 2025 and 2024

(in thousands except per share data)

2 unchanged sentences

Balances at December 31, 2023

Adoption of ASU 2016-13

Acquisition of Frontier Community Bank

Cash dividends of $ 1.51 per share

2 unchanged sentences

Balances at December 31, 2024

Acquisition of FCB

Balances at December 31, 2024

Cash dividends of $ 1.51 per share

8 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for (recovery of) credit losses

Deferred income tax (benefit) expense

(Recovery of) provision for credit losses

Deferred income tax expense (benefit)

Depreciation of premises and equipment

Amortization of premiums and accretion of discounts on securities, net

Loss on sale of securities available for sale, net

Amortization of core deposit intangible

4 unchanged sentences

Gain on sale of mortgage loans held for sale

Gain on other real estate owned

Loss on disposal of repossessed assets

Increase in cash value of bank-owned life insurance

Loss on disposal of premises and equipment, net

(Gain) loss on disposal of premises and equipment, net

Contribution to defined benefit plan

Equity based compensation expense

Stock based compensation expense

Net change in:

6 unchanged sentences

Proceeds from calls, sales and maturities of securities available for sale

Purchases of available for sale securities

Net change in restricted stock

2 unchanged sentences

Loan originations and principal collections, net

Proceeds from disposal of other real estate owned

Proceeds from sale of repossessed assets

Recoveries on loans charged off

1 unchanged sentence

Proceeds from sale of premises and equipment

BOLI settlement

Cash acquired in the acquisition, net of cash paid

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash Flows from Financing Activities

2 unchanged sentences

Cash dividends paid

Repayment of borrowings

Net change in borrowings

Net cash used in financing activities

9 unchanged sentences

Loans charged against the allowance for credit losses

Loans transferred to repossessed assets

Unrealized holding gain on securities available for sale

17 unchanged sentences

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 allowance for credit losses, loans acquired in a business combination, evaluation of impairment of goodwill, evaluation of impairment of core deposit intangibles, and pension obligations.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses and pension obligations.

Reclassifications

3 unchanged sentences

For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and amounts due from banks, interest-bearing deposits and Fed funds sold.

The Company invests over-night funds in interest-bearing deposits at other banks, including the FHLB, the Federal Reserve and other entities.

The Company invests over-night funds in interest-bearing deposits at other banks, including the Federal Reserve and other entities.

Interest-bearing deposits are carried at cost.

2 unchanged sentences

Securities not classified as held to maturity or trading, are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income, net of tax.

The Company uses the interest method to

recognize in interest income purchase premiums and discounts over the term of the securities.

The Company uses the interest method to recognize in interest income purchase premiums through the earliest call date and discounts over the term of the securities.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

10 unchanged sentences

Accrued interest receivable is excluded from the estimate of credit losses.

Accrued interest receivable on securities of $ 3,171 as of December 31, 2024 and $ 3,281 as of December 31, 2023, along with accrued interested receivable on loans, is included in accrued interest receivable in the Consolidated Balance Sheet.

Accrued interest receivable on securities of $ 3,177 as of December 31, 2025 and $ 3,171 as of December 31, 2024, along with accrued interested receivable on loans, is included in accrued interest receivable in the Consolidated Balance Sheets.

Equity Securities

Equity securities with readily-determinable fair values are measured at fair value using the “exit price notion”.

Equity securities with readily-determinable fair values are measured at fair value.

Changes in fair value are recognized in net income.

5 unchanged sentences

The Company, through its banking subsidiary, provides mortgage, commercial, and consumer loans to customers.

Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances adjusted for the allowance for credit losses, any purchase premium or discount, and deferred fees or costs.

Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances adjusted for the allowance for credit losses, discount on acquired loans of $ 5,551 at December 31, 2025 and $ 7,564 at December 31, 2024, and deferred fees or costs.

Interest income is accrued on the unpaid principal balance.

12 unchanged sentences

Construction loans are underwritten against projected cash flows from rental income, business and/or personal income from an owner-occupant or the sale of the property to an end-user.

Associated risks may be mitigated by requiring fixed-price

construction contracts, performance and payment bonding, controlled disbursements, and pre-sale contracts or pre-lease agreements.

Associated risks may be mitigated by requiring fixed-price construction contracts, performance and payment bonding, controlled disbursements, and pre-sale contracts or pre-lease agreements.

Risks specific to the borrower are also evaluated, including previous repayment history, debt service ability, and current and projected loan-to value ratios for the collateral.

32 unchanged sentences

Because these loans have a higher degree of risk, the Bank generally obtains collateral such as inventory, accounts receivables or equipment and personal guarantees from the borrowing entity’s principal owners.

The Bank’s policy limits lending up to 60% of the appraised value for inventory, up to 90% of the lower of cost of market value of equipment and up to 70% for accounts receivables less than 90 days old.

The Bank’s policy limits lending up to 60% of the appraised value for inventory, up to 90% of the lower of cost or market value of equipment and up to 70% for accounts receivables less than 90 days old.

Credit decisions are based upon an assessment of the financial capacity of the applicant, including the primary borrower’s ability to repay within proposed terms, a risk assessment, financial strength of guarantors and adequacy of collateral.

33 unchanged sentences

Credit quality indicators, which the Company terms risk grades, are assigned through the Company’s credit review function for larger loans and selective review of loans that fall below credit review thresholds.

Credit quality is rated based on the loan’s payment history, the borrower’s current financial situation and value of the underlying collateral.

Credit quality is graded based on the loan’s payment history, the borrower’s current financial situation and value of the underlying collateral.

Loans that do not indicate heightened risk are graded as “pass.” Loans that appear to have elevated credit risk because of frequent or persistent past due status, which is less than 75 days, or that show weakness in the borrower’s financial condition are risk graded “special mention.” Loans with frequent or persistent delinquency exceeding 75 days or that have a higher level of weakness in the borrower’s financial condition are graded “classified.” Classified loans have regulatory risk ratings of “substandard” and “doubtful.”

9 unchanged sentences

When a borrower requests a modification to a loan, the Company evaluates the request to determine whether the borrower is experiencing financial difficulty.

Loans modified for borrowers experiencing financial difficulty are risk rated according to credit quality indicators as discussed above, and are subject to the Company’s standard ACL process as discussed below.

Loans modified for borrowers experiencing financial difficulty are risk graded according to credit quality indicators as discussed above, and are subject to the Company’s standard ACL process as discussed below.

Allowance for Credit Losses on Loans

2 unchanged sentences

Therefore, the Company has made a policy election to exclude accrued interest from the measurement of the ACLL.

Accrued interest receivable on loans of $ 3,299 as of December 31, 2024 and $ 3,032 as of December 31, 2023, along with accrued interested receivable on securities, is included in accrued interest receivable in the Consolidated Balance Sheet.

Intrinsic to the Company’s policy on estimating the ACLL are policies regarding loan pools, nonaccruals, past due status, collateral valuation, charge-offs and risk ratings.

Accrued interest receivable on loans of $ 3,361 as of December 31, 2025 and $ 3,298 as of December 31, 2024, along with accrued interested receivable on securities, is included in accrued interest receivable in the Consolidated Balance Sheets.

Intrinsic to the Company’s policy on estimating the ACLL are policies regarding loan pools, nonaccruals, past due status, collateral valuation, charge-offs and risk grades.

The Company measures expected credit losses on loans on a collective (pool) basis, when the loans share similar risk characteristics, such as collateral type and intended use, repayment source, and (if applicable) the borrower’s business model.

1 unchanged sentence

Real Estate Construction

Construction, residential

Construction, 1-4 family residential

Construction, other

10 unchanged sentences

Public Sector and IDA

Public sector and IDA

States and political subdivisions

Consumer Non-Real Estate

2 unchanged sentences

The difference between cash flow estimates and amortized cost is the ACLL.

The Company uses a discounted cash flow (“DCF”) method for all of its pools except for bankcards, which are measured using the historical loss rate adjusted for the forecast.

The Company uses a DCF method for all of its pools except for credit cards, which are measured using the historical loss rate adjusted for the forecast.

For loans using the DCF method, cash flows are projected at the instrument level and discounted using the loan’s effective interest rate.

35 unchanged sentences

The ACL on unfunded commitments is recorded as a liability on the Company’s Consolidated Balance Sheets, included in other liabilities, and is adjusted through the provision for credit loss expense in the Company’s Consolidated Statements of Income.

Estimation of the allowance for credit losses

The estimation of the allowance involves analysis of internal and external variables, methodologies, assumptions and management’s judgment and experience.

Key judgments used in determining the allowance for credit losses include internal risk rating determinations, market and collateral values, discount rates, loss rates, and management’s assessment of current economic conditions.

These judgments are inherently subjective and actual losses could be greater or less than the estimate.

Future estimates of the allowance could increase or decrease based on changes in the financial condition of individual borrowers, concentrations of various types of loans, economic conditions or the markets in which collateral may be sold.

The estimate of the allowance accrual determines the amount of provision expense and directly affects our financial results.

Please see Note 5 for additional information.

Other Real Estate Owned

Real estate acquired through or in lieu of foreclosure is held for sale and is initially recorded at fair value less estimated costs to sell at the date of foreclosure, establishing the cost basis of the asset.

Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell.

Revenue and expenses from operations and changes in the valuation allowance are included in net costs of other real estate owned in the Consolidated Statements of Income.

Rate Lock Commitments

55 unchanged sentences

Goodwill is subject to at least an annual assessment for impairment by applying a fair value based test.

For December 31, 2024, the Company performed a qualitative assessment, as permitted by ASC 350-20-35-3A, to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of NBB (“reporting unit”) is less than its carrying amount, including goodwill.

For each reporting date, the Company performed a qualitative assessment, as permitted by ASC 350-20-35-3A, to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of NBB (“reporting unit”) is less than its carrying amount, including goodwill.

The assessment included analysis of macroeconomic conditions, industry and market conditions, overall financial performance, share price considerations, and other relevant entity-specific events and events affecting the reporting unit.

2 unchanged sentences

Core deposit intangibles are subject to at least an annual assessment for impairment by applying a fair value based test.

For December 31, 2024, the Company performed a qualitative assessment to assess the likelihood of impairment of its core deposit intangibles.

For each reporting date, the Company performed a qualitative assessment to assess the likelihood of impairment of its core deposit intangibles.

The assessment included testing model assumptions surrounding deposit retention, deposit costs and noninterest income generated.

5 unchanged sentences

In the event of the death of an insured individual under these policies, the Company receives a death benefit which is also recorded as income from bank owned life insurance.

The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and recognizes changes in that funded status in the year in which the changes occur through other comprehensive income.

The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its consolidated balance sheet and recognizes changes in that funded status in the year in which the changes occur through other comprehensive income.

The funded status of a benefit plan is measured as the difference between plan assets at fair value and the projected benefit obligation.

44 unchanged sentences

Comprehensive income consists of net income and other comprehensive income.

Other comprehensive income includes unrealized gains and losses on debt securities available for sale and the defined benefit plan, net of taxes, which are also recognized as a separate component of equity.

Segment Reporting

The Company adopted Accounting Standards Update ("ASU") 2023-07 "Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosures" on January 1, 2024.

The Company has determined that all of its banking divisions meet the aggregation criteria of ASC 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar base of commercial and consumer clients utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company's Chief Executive Officer , who has been identified as the chief operating decision maker ("CODM").

The Company evaluated its internal divisions and subsidiaries under ASC 280, Segment Reporting, and determined that all of its divisions and subsidiaries meet the standard's aggregation criteria.

Current divisions and subsidiaries serve a similar base of commercial and consumer clients utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company's Chief Executive Officer , who has been identified as the chief operating decision maker ("CODM").

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company's consolidated statements of income and other comprehensive income.

1 unchanged sentence

Recent Accounting Pronouncements

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

Purchased Loans.” The amendments in this ASU expand the population of acquired financial assets accounted for using the gross-up approach.

Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met.

This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets.

This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods.

Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance.

If an entity adopts this ASU in an interim reporting period, it should apply it as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period.

The Company does not expect the adoption of ASU 2025-08 to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

2 unchanged sentences

In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

The FASB subsequently issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

The FASB subsequently issued ASU 2025-01, “Income

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

Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

2 unchanged sentences

The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

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

2 unchanged sentences

Lastly, the amendments in this ASU require an entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign.

This ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied on a prospective basis;

however, retrospective application is permitted.

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

The Company adopted ASU 2023-09 retrospectively and the adoption of ASU 2023-09 did not have a material impact on its consolidated financial statements.

Restriction on Cash

15 unchanged sentences

The deferred tax asset for the net unrealized loss on securities available for sale was $ 10,889 as of December 31, 2025 and $ 16,506 as of December 31, 2024.

The deferred tax asset is included in other assets on the Consolidated Balance Sheets.

The deferred tax asset along with other net deferred tax assets is included in other assets on the Consolidated Balance Sheets.

The amortized cost and fair value of single maturity securities available for sale, by contractual maturity as of the date indicated, are shown below.

10 unchanged sentences

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position as of the dates indicated, follows:

December 31, 2024

Less Than 12 Months

12 Months or More

December 31, 2025

government agencies and corporations

State and political subdivisions

States and political subdivisions

Mortgage-backed securities

1 unchanged sentence

Total temporarily impaired securities

December 31, 2023

Less Than 12 Months

12 Months or More

December 31, 2024

government agencies and corporations

State and political subdivisions

States and political subdivisions

Mortgage-backed securities

2 unchanged sentences

The Company evaluates securities available for sale that are in unrealized loss positions to determine whether the impairment is due to credit-related factors or noncredit-related factors.

Consideration is given to the extent to which the fair value is less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2025, the Company had 522 securities with a fair value of $ 601,783 in an unrealized loss position.

The Company reviews securities in an unrealized loss position to evaluate credit risk.

The Company considers payment history, risk ratings from external parties, financial statements for municipal and corporate securities, public statements from issuers and other available credible published sources in evaluating credit risk.

To evaluate credit risk, the Company considers payment history, risk ratings from external parties, financial statements for municipal and corporate securities, public statements from issuers and other available credible published sources in evaluating credit risk.

No credit risk was found and no ACL on securities available for sale was recorded as of December 31, 2025 or December 31, 2024.

The unrealized losses are attributed to noncredit-related factors, including changes in interest rates and other market conditions.

The unrealized losses are attributable to noncredit-related factors, including changes in interest rates and other market conditions.

The Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

2 unchanged sentences

Realized Securities Gains and Losses

There were no sales of securities in 2025.

During 2024, the Company sold securities acquired from FCB shortly after the acquisition date and no gain or loss was recognized.

During 2023, the Company sold securities and realized a net loss of $ 3,332 .

Information pertaining to realized gains and losses on sold securities for the period indicated follows:

2 unchanged sentences

Restricted Stock

The Company held restricted stock of $ 1,848 as of December 31, 2024 and $ 1,264 as of December 31, 2023.

Restricted stock is reported separately from available for sale securities.

The Company held restricted stock of $ 1,848 as of December 31, 2025 and December 31, 2024.

Restricted stock is included in other assets.

As a member of the Federal Reserve and the FHLB, NBB is required to maintain certain minimum investments in the common stock of those entities.

14 unchanged sentences

The Company held $ 15,889 in deposits for related parties as of December 31, 2025 and $ 15,583 as of December 31, 2024.

The Company has also contracted with a director's firm to prepare architectural plans for a new office in Roanoke, Virginia.

The Company contracted with a director's firm to prepare architectural plans for its new office in Roanoke, Virginia.

The arrangement is at arms-length and the Company paid the director's firm $ 60 in 2025 and $ 39 in 2024.

Upon his retirement on June 30, 2025, the Company entered into a one-year consulting agreement with Brad Denardo for transition and advisory services.

The Company paid Mr.

Denardo $ 30 in 2025 in relation to the consulting agreement.

Allowance for Credit Losses on Loans and Nonperforming Assets

3 unchanged sentences

Activity in the ACLL for the Year Ended December 31, 2025

Real Estate Construction

Consumer Real Estate

Commercial Real Estate

Commercial Non Real Estate

Public Sector and IDA

Consumer Non Real Estate

Balance, December 31, 2024

Provision for (recovery of) credit losses

Merger adjustment (1)

Balance, December 31, 2025

(1) Adjustment for PCD acquired loans.

Activity in the ACLL for the Year Ended December 31, 2024

Balance, December 31, 2023

Adoption of ASU 2016-13

(Recovery of) provision for

credit losses

Provision for (recovery of) credit losses

Merger adjustment (1)

Balance, December 31, 2024

(1) Adjustment for PCD acquired loans.

A detailed analysis showing the allowance and loan portfolio by segment and evaluation method as of the dates indicated follows:

35 unchanged sentences

Commercial real estate owner-occupied

Commercial Non Real Estate

Commercial and industrial

The following tables present the aging of past due loans, by loan pool, as of the dates indicated.

38 unchanged sentences

Collateral dependent loans are individually evaluated.

The Company measures the ACL on collateral dependent loans based upon the fair value of the collateral, as permitted by ASU 2016-13.

The Company measures the ACLL on collateral dependent loans based upon the fair value of the collateral.

Fair value of the collateral is adjusted for liquidation costs/discounts.

1 unchanged sentence

If the fair value of the collateral exceeds the amortized cost, no ACL is required.

As of December 31, 2024, three of the Company’s individually evaluated loans were considered collateral dependent, and all are secured by real estate.

As of December 31, 2025, two of the Company’s individually evaluated loans were considered collateral dependent, and both are secured by real estate.

The following table provides details on collateral dependent loans as of the dates indicated:

1 unchanged sentence

December 31, 2024

Consumer Real Estate

Residential closed-end first lien

Commercial Real Estate

4 unchanged sentences

collateral and financial information, historical payment experience, credit documentation and current economic trends, among other factors.

At origination, each loan is assigned a risk rating.

Ongoing analysis of the loan portfolio adjusts risk ratings on an individual loan basis to reflect updated information.

General descriptions of risk ratings are as follows:

loans with acceptable credit quality are rated pass.

At origination, each loan is assigned a risk grade.

Ongoing analysis of the loan portfolio adjusts risk grades on an individual loan basis to reflect updated information.

General descriptions of risk grades are as follows:

loans with acceptable credit quality.

• Special mention:

loans with potential weaknesses due to challenging economic or financial conditions are rated special mention.

loans with potential weaknesses due to challenging economic or financial conditions.

• Classified:

loans with well-defined weaknesses that heighten the risk of default are rated classified.

The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of the date indicated.

loans with well-defined weaknesses that heighten the risk of default.

The following tables presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of the date indicated.

Term Loans Amortized Cost Basis by Origination Year

6 unchanged sentences

Investor-owned residential real estate

Special Mention

Multifamily residential real estate

3 unchanged sentences

Commercial and industrial

YTD gross charge-offs

Public sector and IDA

YTD gross charge-offs

Special Mention

YTD gross charge-offs

Public sector and IDA

Other consumer

Special Mention

YTD gross charge-offs

Special Mention

YTD gross charge-offs

The following table presents the recorded investment of collectively evaluated loans by loan pool and credit quality as of the date indicated.

Term Loans Amortized Cost Basis by Origination Year

2 unchanged sentences

Construction, other

Residential closed-end first

YTD gross charge-offs

Residential closed-end junior

Investor-owned residential real

Multifamily residential real

Commercial real estate, owner

Residential closed-end first liens

Special mention

Residential closed-end junior liens

Investor-owned residential real estate

Special mention

Multifamily residential real estate

Commercial real estate, owner-occupied

Special mention

Commercial real estate, other

Commercial and industrial

YTD gross charge-offs

Public sector and IDA

YTD gross charge-offs

Special mention

Other Consumer

Special mention

YTD gross charge-offs

Special mention

YTD gross charge-offs

The following tables presents gross charge offs during the year indicated, by year of origination and loan class.

Gross Charge Offs by Origination Year for the Year Ended December 31, 2025

Residential closed-end first liens

Commercial and industrial

Other consumer

Total Gross Charge-Offs

Gross Charge Offs by Origination Year for the Year Ended December 31, 2024

Commercial and industrial

Other Consumer

Total YTD gross charge-offs

Loan Modifications to Borrowers Experiencing Financial Difficulty

3 unchanged sentences

If the loan exceeds $ 400 , if it is placed in nonaccrual, or if foreclosure is probable, the loan is individually evaluated for the ACLL.

The Company did not modify any loans to borrowers experiencing financial difficulty during the year ended December 31, 2025.

The Company modified one loan to a borrower experiencing financial difficulty during the year ended December 31, 2024.

7 unchanged sentences

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty.

As of December 31, 2024 , the loan was in current status, risk rated special mention and individually evaluated using the fair value of collateral method, resulting in no specific reserve.

The Company modified one loan to a borrower experiencing financial difficulty during the year ended December 31, 2023.

The following table presents information on the modification.

December 31, 2023

Financial Effect

Commercial Real Estate

Commercial real estate owner-occupied

Interest only

6 months of interest only payments, after which remaining balance will be re-amortized to the contractual maturity date.

As of December 31, 2023 , the loan was in current status, was rated special mention and individually evaluated using the discounted cash flow method, resulting in a specific reserve of $ 347 .

As of December 31, 2025 , the loan was in current status, risk graded special mention and individually evaluated using the fair value of collateral method, resulting in no specific reserve.

The Company analyzed its modified loan portfolio for loans that defaulted during the 12 month period ended December 31, 2025 , and that were modified within 12 months prior.

6 unchanged sentences

Balance, December 31, 2024

Adoption of ASU 2016-13

Provision for credit losses

Provision of credit losses

Balance, December 31, 2025

Balance, December 31, 2023

Recovery of credit losses

9 unchanged sentences

Premises includes construction in process.

The amount for a new location in Roanoke, Virginia included in construction in process totaled $ 4,387 as of December 31, 2024 and $ 1,822 as of December 31, 2023 .

The Company expects the building will be completed and placed in service during the first quarter of 2025.

As of December 31, 2024 , construction in process included $ 4,387 for a new branch building in Roanoke, Virginia.

The building was completed and placed in service during the first quarter of 2025.

The aggregate amounts of time deposits in denominations of $250 or more as of December 31, 2025 and 2024 were $ 78,980 and $ 87,639 , respectively.

4 unchanged sentences

As of December 31, 2025 and 2024, overdraft demand deposits reclassified to loans totaled $ 303 and $ 383 , respectively.

There were no deposit relationships that exceed 5% of total deposits.

As of December 31, 2025 , the Company's largest deposit relationship was 5.05 % of total deposits.

No other deposit relationships exceeded 5 % of total deposits.

Employee Benefit Plans

11 unchanged sentences

Upon reaching age 55 with 10 years of plan participation, a vested participant has the right to diversify 50 % of his or her allocated ESOP shares, and NBI or the ESOP, with the agreement of the trustee, is obligated to purchase those shares.

The ESOP contains a put option which allows a withdrawing participant to require the Company or the ESOP, if the plan administrator agrees, to purchase his or her allocated shares if the shares are not readily tradable on an established market at the time of distribution.

Salary Continuation Plan

7 unchanged sentences

The Company's defined benefit pension plan covers substantially all employees.

The plan benefit formula is based upon the length of service of retired employees and a percentage of qualified W-2 compensation during their final years of employment.

The plan benefit formula is based upon the length of service of retired employees and a percentage of qualified W-2 compensation during the highest-earning five years of their final ten years of employment.

Information pertaining to activity in the plan during the years indicated, is as follows:

3 unchanged sentences

Interest cost (2)

Actuarial (gain) loss (3)

Actuarial loss (gain) (3)

Benefits paid

Settlement gain

Projected benefit obligation at end of year

10 unchanged sentences

Amounts recognized in accumulated other comprehensive loss, net

Net loss (gain)

Deferred tax (liability) asset

Deferred tax liability

Amount recognized

2 unchanged sentences

Fair value of assets

Unrecognized net actuarial (gain) loss

Unrecognized net actuarial gain

Deferred tax liability

Prepaid benefit cost included in other assets

Components of net periodic benefit cost

Prepaid pension cost included in other assets

For the Year Ended December 31,

Components of net periodic pension benefit

Service cost (1)

1 unchanged sentence

Expected return on plan assets (2)

Recognized net actuarial gain due to settlement (2)

Recognized net actuarial loss (2)

Net periodic benefit cost

Other changes in plan assets and benefit obligations recognized in other

comprehensive income

Net periodic benefit

Other changes in plan assets and benefit obligations recognized in other comprehensive income

Deferred income tax expense

Total recognized

Total recognized in net periodic benefit cost and other comprehensive

Total recognized in net periodic benefit and other comprehensive income

Weighted average assumptions at end of the year

5 unchanged sentences

(2) Cost is included in other operating expense on the Consolidated Statements of Income.

(3) Please see table below for detail on the components of actuarial (gain) loss.

The following table presents the components of actuarial (gain) loss:

(3) Please see table below for detail on the components of actuarial gain.

The following table presents the components of actuarial gain:

For the Year Ended December 31,

Components of actuarial loss (gain)

Loss due to demographic changes

Gain due to change in mortality table

(Gain) loss due to change in discount rate

Components of actuarial gain

(Gain) loss due to demographic changes

Loss (gain) due to change in discount rate

Loss due to change in rate of compensation increase

Actuarial (gain) loss

Actuarial loss (gain)

Gain due to asset return

Actuarial (gain) loss with asset return

Actuarial gain with asset return

Long-Term Rate of Return

43 unchanged sentences

The Company files United States federal income tax returns, and Virginia, West Virginia and North Carolina state income tax returns.

All of the Company's pre-tax earnings were derived from domestic sources.

The Company has not and does not expect to file income tax returns with foreign jurisdictions.

With few exceptions, the Company is no longer subject to U.S.

2 unchanged sentences

Year Ended December 31,

Deferred tax (benefit) expense

Total income tax expense

Current federal tax expense

Deferred federal tax expense (benefit)

Total federal income tax expense

The following reconciles the “expected” income tax expense, computed by applying the U.S.

2 unchanged sentences

Computed “expected” income tax expense

Nondeductible or nontaxable items

Tax-exempt interest income

Nondeductible interest expense

Amortization of municipal bond premiums

Nondeductible merger related expenses

Other, net (1)

Reported income tax expense

(1) Other differences stem primarily from BOLI income, non-deductible merger expenses, amortization of municipal bond premiums and dividends paid to the Company's employee stock ownership program.

(1) Other differences stem primarily from dividends paid to the Company's employee stock ownership program.

The components of net deferred tax assets, included in other assets as of the dates indicated, are as follows:

1 unchanged sentence

Allowance for credit losses and deferred fees and costs

Defined benefit pension plan

Deferred compensation and other liabilities

8 unchanged sentences

Defined benefit pension plan

Premises and equipment

Core deposit intangibles

5 unchanged sentences

The Company determined that no valuation allowance for gross deferred tax assets was necessary as of December 31, 2025 and 2024.

The amount of cash income taxes paid by the Company during the years ended December 31, 2025 and 2024 was $ 2,209 and $ 715 , respectively.

All payments were for U.S.

federal income taxes.

Restrictions on Dividends

3 unchanged sentences

Bank regulatory agencies restrict, unless prior approval is obtained, the total dividend payments of a bank in any calendar year to the bank’s retained net income of that year to date, as defined, combined with its retained net income of the preceding two years , less any dividends paid.

During 2024 and 2023, the Bank applied to its primary regulator and was approved to dividend to NBI an amount in excess of the regulatory maximum.

The purpose in the excess dividend was to provide cash to pay regular dividends and a special one-time dividend in 2023, and provide operating cash for NBI.

As of December 31, 2024 , NBB has paid dividends in excess of the regulatory maximum in the amount of $ 5,743 .

The Bank remains in a highly capitalized position and the Company intends to request approval for additional dividends in 2025.

During 2024, the Bank applied to its primary regulator and was approved to dividend to NBI an amount in excess of the regulatory maximum.

The excess dividend provided cash for regular shareholder dividends and operating expenses of NBI.

As of December 31, 2025 , in order for NBB to dividend more than its current year net income, regulatory approval would be required.

Minimum Regulatory Capital Requirement

4 unchanged sentences

The capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

The Bank is subject to the Basel III Capital Rules as applied by the Office of the Comptroller of the Currency.

The Bank is subject to the Basel III Capital Rules as applied by the OCC.

The Basel III Capital Rules require the Bank to comply with minimum capital ratios plus a “capital conservation buffer” designed to absorb losses during periods of economic stress.

8 unchanged sentences

NBB’s risk-weighted assets were $ 1,188,194 as of December 31, 2025 and $ 1,232,207 as of December 31, 2024.

Management believes, as of December 31, 2024 and 2023, that NBB met all capital adequacy requirements to which it is subject.

As of December 31, 2024, the most recent notifications from the Office of the Comptroller of the Currency categorized NBB as well capitalized under the regulatory framework for prompt corrective action.

Management believes, as of December 31, 2025 and 2024, that NBB met all capital adequacy requirements to which it was subject.

As of December 31, 2025, the most recent notifications from the OCC categorized NBB as well capitalized under the regulatory framework for prompt corrective action.

To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, CET1 risk-based and Tier 1 leverage ratios, as set forth in the following tables.

40 unchanged sentences

Dividends from subsidiaries

Gain on sale of private equity investment

Other expenses

Income before income tax benefit and equity in undistributed net income of

Income before income tax benefit and equity (deficit) in undistributed net income of

Applicable income tax benefit

Income before (deficit) equity in undistributed net income of subsidiaries

(Deficit) equity in undistributed net income of subsidiaries

Income before equity (deficit) in undistributed net income of subsidiaries

Equity (deficit) in undistributed net income of subsidiaries

Condensed Statements of Cash Flows

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Deficit (equity) in undistributed net income of subsidiaries

(Equity) deficit in undistributed net income of subsidiaries

Net change in refundable income taxes due from subsidiaries

39 unchanged sentences

This potential default period is approximately 12 months after sale of a loan to the investor.

As of December 31, 2024, the Company had locked-rate commitments to originate mortgage loans of $ 140 and loans held for sale of $ 619 .

As of December 31, 2025 , the Company did no t have any locked-rate commitments to originate mortgage loans or any loans held for sale.

Risks arise from the possible inability of counterparties to meet the terms of their contracts.

5 unchanged sentences

NBB’s primary service area is defined as the Virginia counties of Albemarle, Augusta, Bedford, Bland, Botetourt, Buchanan, Carroll, Craig, Floyd, Franklin, Giles, Grayson, Montgomery, Pulaski, Roanoke, Rockbridge, Rockingham, Russell, Tazewell, Smyth, Washington, Wythe, and the cities of Bristol, Buena Vista, Charlottesville, Galax, Harrisonburg, Lexington, Lynchburg, Radford, Roanoke, Salem, Staunton, and Waynesboro.

The service area also includes the West Virginia counties of Mercer, Monroe and McDowell and the Tennessee city of Bristol and counties of Sullivan and Washington.

The service area also includes the West Virginia counties of Mercer, Monroe and McDowell and the Tennessee city of Bristol and counties of Sullivan and Washington, as well as the counties of Surry and Allegheny in North Carolina.

Substantially all of NBB’s loans are made in its primary service area.

40 unchanged sentences

Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2).

The carrying value of restricted Federal Reserve Bank of Richmond and FHLB stock approximates fair value based upon the redemption provisions of each entity and is therefore excluded from the following tables.

The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates indicated:

19 unchanged sentences

Level 2 inputs are subject to a certain degree of uncertainty and changes in these assumptions or methodologies in the future, if any, may impact securities fair value, deferred tax assets or liabilities, or expense.

Interest Rate Loan Contracts and Forward Sale Commitment

The Company originates consumer real estate loans which it intends to sell to a correspondent lender.

Interest rate loan contracts and forward sale commitments result from originating loans held for sale and are derivatives reported at fair value.

The Company enters interest rate lock commitments with customers who apply for a loan which the Company intends to sell to a correspondent lender.

The interest rate loan contract ends when the loan closes or the customer withdraws their application.

Fair value of the interest rate loan contract is based upon the correspondent lender’s pricing quotes at the report date.

Fair value is adjusted for the estimated probability of the loan closing with the borrower.

At the time the Company enters into an interest rate loan contract with a customer, it also enters into a best efforts forward sales commitment with the correspondent lender.

If the loan is closed and funded, the best efforts commitment converts to a mandatory forward sales commitment.

Fair value is based on the gain or loss that would occur if the Company were to pair-off the transaction with the investor at the measurement date.

This is a Level 3 input.

The Company measures and reports best efforts commitments at fair value.

Interest rate loan contracts and forward sale commitments are valued based on quotes from the correspondent lender at the reporting date.

Pricing changes daily and if a loan has not been sold to the correspondent by the next reporting date, the fair value may be different from that reported currently.

Changes in fair value measurement impacts net income.

The Company had one rate lock commitment as of December 31, 2024, resulting in a liability for the interest rate loan contract and an asset for the forward sales commitment, and three funded loans resulting in a forward sales commitment.

The Company had one rate lock commitment as of December 31, 2023, resulting in an asset for the interest rate loan contract and a liability for the forward sales commitment, and one funded loan resulting in a liability for the forward sales commitment.

The following tables present information on the interest rate loan contracts and forward sale commitments as of the date indicated:

Fair Value Measurement Using

December 31, 2024

Forward sale commitment

Interest rate loan contract

December 31, 2024

Valuation Technique

Unobservable Input

Range (Weighted Average)

Interest rate loan contract

Market approach

Pull-through rate

96.00 % (1)(2)

Forward sale commitment

Market approach

Pull-through rate

96.00 % (1)(2)

Interest rate loan contract

Market approach

Current reference price

100.44 % (1)(2)

Forward sale commitment

Market approach

Current reference price

100.44 % (1)(2)

(1) All contracts are valued using the same pull-through rate

(2) Comprised of only one loan.

Fair Value Measurement Using

December 31, 2023

Interest rate loan contract

Forward sale commitment

December 31, 2023

Valuation Technique

Unobservable Input

Range (Weighted Average)

Interest rate loan contract

Market approach

Pull-through rate

Forward sale commitment

Market approach

Pull-through rate

Interest rate loan contract

Market approach

Current reference price

Forward sale commitment

Market approach

Current reference price

101.60 % - 102.64 % ( 101.98 %) (3)

(1) All contracts are valued using the same pull-through rate

(2) Comprised of only one loan.

(3) Current reference prices were weighted by the relative amount of the loan

Financial Instruments Measured at Fair Value on a Non-Recurring Basis

4 unchanged sentences

Loans held for sale are carried at the lower of cost or fair value.

These loans currently consist of one-to-four family residential loans originated for sale in the secondary market.

The Company did not hold any loans for sale as of December 31, 2025 .

As of December 31, 2024, these loans consist of one-to-four family residential loans originated for sale in the secondary market.

Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2).

2 unchanged sentences

Collateral Dependent Loans

Collateral dependent loans are measured on a non-recurring basis for the ACL.

Collateral dependent loans are measured on a non-recurring basis for the ACLL.

If the fair value of the collateral is lower than the loan’s amortized cost basis, the shortfall is recognized in the ACLL.

When repayment is expected from the operation of the collateral, fair value is estimated as the present value of expected cash flows.

When repayment is expected from the sale of the collateral, fair value is estimated using measurement techniques discussed below and discounted by the estimated cost to sell.

The ACLL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

For loans secured by real estate, fair value of collateral is determined by the “as-is” value of appraisals or third party evaluations that are less than 24 months of age.

5 unchanged sentences

Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3).

As of December 31, 2024 , three commercial real estate loans totaling $ 9,259 were measured under the fair value of collateral method using third party appraisals (Level 2).

As of December 31, 2025 , two commercial real estate loans totaling $ 6,921 were measured under the fair value of collateral method using third party appraisals (Level 2).

None of the measurements resulted in a specific allocation.

1 unchanged sentence

None of the loans had a specific allocation.

Restricted Stock

The carrying value of restricted Federal Reserve Bank of Richmond and FHLB stock approximates fair value based upon the redemption provisions of each entity.

Fair Value Summary

6 unchanged sentences

Cash and due from banks

Federal funds sold

Interest-bearing deposits

1 unchanged sentence

Restricted stock, at cost

Mortgage loans held for sale

Accrued interest receivable

Bank-owned life insurance

Forward sale commitment

Financial liabilities:

Accrued interest payable

Interest rate loan contract

Estimated Fair Value

4 unchanged sentences

Interest-bearing deposits

Federal funds sold

Securities available for sale

3 unchanged sentences

Bank-owned life insurance

Interest rate loan contract

Financial liabilities:

Accrued interest payable

Forward sale commitment

Components of Accumulated Other Comprehensive Loss

3 unchanged sentences

Unrealized holding gain on available for sale securities, net of

tax of $ 4,315

Reclassification adjustment, net of tax of $ 700

Net pension gain, net of tax of $ 701

Balance at December 31, 2024

Unrealized holding gain on available for sale securities, net of

tax of $ 5,617

Net pension gain, net of tax of $ 255

Balance at December 31, 2025

The following table provides detail on reclassifications out of accumulated other comprehensive loss for the years indicated:

Component of Accumulated Other Comprehensive Loss

Reclassification out of unrealized gain on available for sale securities:

Realized securities loss, net

Income tax benefit

Realized loss on available for sale securities, net of tax, reclassified out of

accumulated other comprehensive loss

Goodwill and Other Intangibles

5 unchanged sentences

Core deposit intangible

In accounting for goodwill and core deposit intangibles, the Company conducts an impairment review at least annually and more frequently if certain impairment indicators are evident.

T he Company conducts an impairment review of goodwill and core deposit intangibles at least annually and more frequently if certain impairment indicators are evident.

Testing for 2025 and 2024 did no t indicate impairment.

The aggregate amortization expense for the year ended December 31, 2024 was $ 237 .

As of December 31, 2024, estimated future remaining amortization of the core deposit intangible within the years ending December 31, is as follows:

Core deposit intangible amortization expense for the years ended December 31, 2025 and 2024 was $ 373 and $ 237 , respectively.

Estimated future amortization of the core deposit intangible is as follows:

Amortization Expense

10 unchanged sentences

Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM.

ATM fees are generated when a Company cardholder uses a non-Company ATM.

Wire transfer fees, overdraft and nonsufficient funds fees and other deposit account related fees are transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at the time of the transaction.

Other Service Charges and Fees

Other service charges include safe deposit box rental fees, check ordering charges, and other service charges.

Other service charges include safe deposit box rental fees, check ordering charges, ATM fees to holders of cards issued by other banks and other service charges.

Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment.

The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

Check ordering charges are transactional based, and therefore the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time.

Check ordering charges, ATM fees to holders of cards issued by other banks and other service charges are transaction based, and therefore the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time.

Credit and Debit Card Fees

2 unchanged sentences

Merchant services income mainly represents commission fees based upon merchant processing volume.

The Company’s performance obligation for interchange fee income and merchant services income are largely satisfied, and related revenue recognized, when the services are rendered or upon completion.

The Company’s performance

obligation for interchange fee income and merchant services income are largely satisfied, and related revenue recognized, when the services are rendered or upon completion.

Payment is typically received immediately or in the following month.

2 unchanged sentences

The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate.

Payment is generally received a few days after the end of the month through a direct charge to customers’ accounts.

Payment is generally received a few days after month end through a direct charge to customers’ accounts.

The Company does not earn performance-based incentives.

6 unchanged sentences

Shortly after the insurance policy is issued, the carrier remits the commission payment to the Company, and the Company recognizes the revenue.

Investment income consists of recurring revenue streams such as commissions from sales of mutual funds and other investments.

Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation.

Investment income consists of recurring revenue streams such as commissions from sales of mutual funds, annuities and other investments.

Commissions from the sale of mutual funds, annuities and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation.

The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value.

Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined.

OREO Gains and Losses

The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed.

When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable.

Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended December 31, 2025 and 2024.

6 unchanged sentences

Insurance and Investment (1)

Gain on sale of OREO (2)

Noninterest Income (in-scope of Topic 606)

2 unchanged sentences

(1) Included within other income in the Consolidated Statements of Income.

(2) Included within net costs of other real estate owned on the Consolidated Statements of Income .

The Company’s leases are recorded under ASC Topic 842, “Leases”.

The Company categorizes leases as short-term, operating or finance leases.

2 unchanged sentences

Right-of-use assets, included in other assets, represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor.

Lease liabilities, included in other liabilities, represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows.

Lease liabilities, included in other liabilities, represent the Company’s obligation to make lease payments and are reported at the net present value of the remaining contractual cash flows.

Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease.

1 unchanged sentence

Counterparties for the Company’s lease contracts are external to the Company and not related parties.

On June 1, 2024, the Company’s acquisition of FCB added two long-term branch leases.

At the acquisition date, the leases were remeasured using the Company’s incremental borrowing rate and remaining lease terms, resulting in an increase of $ 548 to the right of use asset and the lease liability.

In 2025, the Company entered into one new lease and renewed two leases, adding $ 937 to the right of use asset and lease liability.

The Company’s acquisition of FCB in 2024 added two long-term branch leases, which were remeasured using the Company’s incremental borrowing rate and remaining lease terms on the acquisition date, adding $ 548 to the right of use asset and the lease liability.

Lease payments

30 unchanged sentences

Stock Based Compensation

The Company’s 2023 Stock Incentive Plan (“the Plan”) was approved by shareholders at the annual shareholder’s meeting on May 9, 2023.

The Plan provides for the grant of various forms of stock-based compensation awards that may be settled in, or based upon the value of, the Company’s common stock.

The Company’s 2023 Stock Incentive Plan (the "Plan”) provides for the grant of various forms of stock-based compensation awards that may be settled in, or based upon the value of, the Company’s common stock.

The maximum number of shares available for issuance under the Plan is 120,000 shares.

The restricted stock has voting rights and rights to dividends, which are paid upon vest date.

The restricted stock has voting rights and rights to dividends, which are paid upon the vest date.

For further information on the Plan, refer to the Company’s Proxy Statement filed with the SEC on March 10, 2023 and the Company’s S-8 filed with the SEC on June 7, 2023.

Restricted Stock Awards

Under the Plan, part of the 2023 and 2024 semi-annual retainer for non-employee directors was paid in restricted stock awards (“RSAs”).

A summary of changes in the Company’s nonvested RSAs under the Plan for the year ended December 31, 2024 follows:

Restricted Stock Awards and Units

Under the Plan, restricted stock awards ("RSAs") with a one-year vesting period were granted to non-employee directors as part of the 2024 and 2025 semi-annual retainer.

In February 2025, the Company awarded 4,545 shares of restricted stock units ("RSUs") with a three year vesting period to employees designated in the incentive compensation plan.

The RSAs and RSUs were valued at the closing stock price on the grant date.

A summary of changes in the Company’s nonvested RSAs and RSUs under the Plan for the year ended December 31, 2025 follows:

Weighted-Average

2 unchanged sentences

Nonvested at December 31, 2025

The RSAs are valued at the closing stock price on the grant date and expensed over the one-year vesting period.

Expense for the awards is recorded over the respective vesting periods.

Stock based compensation expense was $ 193 for the year ended December 31, 2025 and $ 128 for the year ended December 31, 2024.

As of December 31, 2024 , expense of $ 102 related to the non-vested RSAs is expected to be recognized over the coming 11 months.

As of December 31, 2025, expense of $ 143 related to the non-vested RSAs and RSUs is expected to be recognized over the coming 12 months.

Earnings Per Share

6 unchanged sentences

Basic net income per

Dilutive shares for restricted stock

Dilutive shares (1)

Diluted net income per

RSA grants are disregarded in the computation of diluted earnings per share if they are determined to be anti-dilutive.

(1) R SA grants are disregarded in the computation of diluted earnings per share if they are determined to be anti-dilutive.

There were no anti-dilutive RSAs for the years ended December 31, 2025 or December 31, 2024 .

Business Combination

On June 1, 2024, the Company acquired 100 % of FCB, a Virginia chartered commercial bank, in accordance with the definitive merger agreement that was entered into on January 23, 2024, by and among the Company, the Bank and FCB.

The acquisition enabled to Company to expand its branch footprint and improve market penetration in attractive banking markets, increase earnings and realize cost synergies.

The acquisition enabled the Company to expand its branch footprint and improve market penetration in attractive banking markets, increase earnings and realize cost synergies.

Immediately following the acquisition, FCB was merged with and into NBB.

1 unchanged sentence

The acquisition of FCB was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and accordingly, assets acquired, liabilities assumed, and consideration paid were recorded at fair value on the acquisition date.

The fair values of assets and liabilities were preliminary and subject to refinement for up to one year after acquisition date as additional information relative to the acquisition date fair values becomes available.

The excess of the purchase price over the fair value of the net assets was recorded as provisional goodwill and represents the benefit from the transaction that is not otherwise quantifiable, including expected management and operational synergies and intangible assets that do not qualify for separate recognition.

20 unchanged sentences

Total identifiable liabilities assumed

Provisional fair value of net assets acquired

Provisional goodwill

Fair value of net assets acquired

(1) The Company issued 464,855 shares of its common stock valued at $ 30.76 per share, which was the closing price of the Company’s common stock on May 31, 2024, the last day of trading prior to the consummation of the acquisition.

14 unchanged sentences

PD/LGD rates were tailored to PCD or non-PCD status.

Other fair value indicators were quantified using a discounted cash flow methodology, with discounts applied for current market rates, credit risk and liquidity.

Other fair value indicators were quantified using a DCF methodology, with discounts applied for current market rates, credit risk and liquidity.

Cash flows were generated based upon the loans’ underlying characteristics and estimated prepayment speeds.

25 unchanged sentences

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